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, 1994
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
incorporation or organization) Identification No.)
Two Pennsylvania Plaza, New York, N.Y. 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)
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. [X]
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, 1995 was as follows:
Common Stock, par value $.50 per share $ 969,312,218
$1.875 Cumulative Convertible
Preferred Stock (Series A) $ 5,970,668
The number of shares of the registrant's Common Stock outstanding as of March
1, 1995 was 48,792,109 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, 1994 (Parts II and IV).
(2) Portions of the Registrant's 1995 Proxy Statement to be filed with the
Securities and Exchange Commission (Part III).
<PAGE>
<TABLE>
INDEX
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PART I PAGE
<S> <C> <C>
Business 1 - 35
Services 3 - 13
Projects 14 - 26
Other Information 27 - 35
Markets, Competition and General Business Conditions 27 - 28
Equal Employment Opportunity 29
Employee and Labor Relations 29
Environmental Regulatory Laws 29 - 31
Public Utility Regulatory Policies Act 32 - 33
Flow Control 33 - 34
Ash Residue and Other Matters 34 - 35
Properties 36 - 38
Legal Proceeding and Environmental Matters 39 - 40
Submission of Matters to a Vote of Security Holders 40
Executive Officers of Ogden 40 - 43
PART II
Market For Ogden's Common Equity and Related
Stockholder Matters 43
Selected Financial Data 43
Management's Discussion and Analysis of Financial
Condition and Results of Operations 43
Financial Statements and Supplementary Data 43
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 43
PART III
Directors and Executive Officers of Ogden 44
Executive Compensation 44
Security Ownership of Certain Beneficial Owners
and Management 44
Certain Relationships and Related Transactions 44
PART IV
Exhibits, Financial Statement Schedules and Reports on
Form 8-K 44 - 49
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<PAGE>
PART I
Item 1. BUSINESS
Ogden Corporation, a Delaware corporation (hereinafter together with its
consolidated subsidiaries referred to as "Ogden" or the "Company"), has its
executive offices located at Two Pennsylvania Plaza, New York, New York
10121, pursuant to a lease that expires on April 30, 2008 and which contains
an option by Ogden to renew for an additional five years.
Ogden is a diversified company primarily engaged in providing a wide
range of services through the various operating groups within each of its two
business segments.
At December 31, 1993, Ogden owned approximately 84% of the issued and
outstanding shares of common stock of Ogden Projects, Inc. ("OPI"). During
1994, pursuant to an offer made by Ogden to purchase OPI's remaining 16% of
outstanding shares, Ogden and OPI entered into an Amended and Restated
Agreement and Plan of Merger dated as of September 27, 1994 (the "Merger").
The Merger was approved by the OPI shareholders on December 29, 1994 at which
time OPI became a wholly-owned subsidiary of Ogden. The merger provided that
OPI shareholders of record on November 22, 1994 (except Ogden and
shareholders exercising dissenter's rights) would be entitled to receive 0.84
of a share of Ogden common stock for each share of OPI common stock and cash
for any fractional shares. The transaction required the issuance of
5,139,939 shares of Ogden common stock valued at $18.375 per share on
December 29, 1994 for a total purchase price of $94,446,000.
At December 31, 1994, in connection with Ogden's acquisition of the
publicly traded shares of OPI, Ogden reclassified its business segments.
Ogden now classifies its business segments as Services (formerly "Operating
Services") and Projects, (formerly "Waste-to-Energy Operations").
Independent power activities, formerly part of Operating Services, are now
part of Projects, reflecting consolidation of the overall management of these
activities within OPI. Projects now includes the Waste-to-Energy,
Independent Power, Water and Wastewater groups, and certain Construction
Activities. Within the Services segment, certain business activities have
been reclassified. The Environmental Services group no longer includes
independent power; the Government Services group has been renamed Technology
Services; and all facility management service contracts for government
customers have been transferred to the Facility Management Services group.
The following table and the discussions that follow reflect these
reclassifications.
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Set forth in the following table is the amount of revenue attributable
to each of the groups within Ogden's Services and Projects business segments
for each of the last three fiscal years (In Thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1992 1993 1994
<S> <C> <C> <C>
SERVICES:
AVIATION SERVICES $371,704 $389,201 $413,337
ENTERTAINMENT SERVICES 211,910 242,347 245,187
ENVIRONMENTAL SERVICES 119,128 122,262 140,745
TECHNOLOGY SERVICES 169,812 181,870 212,098
FACILITY MANAGEMENT
SERVICES 397,600 382,056 357,272
OTHER SERVICES 8,561 12,368 10,811
TOTAL SERVICES $1,278,715 $1,330,104 $1,379,450
PROJECTS:
WASTE-TO-ENERGY $ 371,669 $ 432,609 $ 459,478
INDEPENDENT POWER 24,063 28,173 32,006
WATER AND WASTEWATER 0 0 0
CONSTRUCTION ACTIVITIES 86,687 248,451 213,125
GAIN ON SALE OF LIMITED
PARTNERSHIP INTERESTS 7,681 0 26,126
TOTAL PROJECTS $ 490,100 $ 709,233 $ 730,735
TOTAL SERVICES AND PROJECTS $1,768,815 $2,039,337 $2,110,185
</TABLE>
The amounts of revenue, operating profit or loss and identifiable assets
attributable to each of Ogden's two business segments for each of the last
three fiscal years are set forth on page 44 of Ogden's 1994 Annual Report to
Shareholders, certain specified portions of which are incorporated herein by
reference.
<PAGE>
SERVICES
The operations of Ogden's Services business segment are performed by Ogden
Services Corporation and its subsidiaries ("Ogden Services") through its five
major operating groups as follows: Aviation Services; Entertainment
Services; Environmental Services; Technology Services; and Facility
Management Services.
Ogden Services, through joint ventures, partnerships and wholly-owned
subsidiaries within each of the foregoing major operating groups, provides a
wide range of services to private and public facilities throughout the United
States and many foreign countries. 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.
Many customers are billed on cost-plus, fixed-price or time and materials
basis. Where services are performed on a cost-plus basis, the customer
reimburses the appropriate Ogden Services' group for all acceptable
reimbursable expenditures made in connection with the job 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 costs.
Many of the contracts in the Aviation and Facility Management Services'
groups 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.
AVIATION SERVICES
Aviation Services provides specialized support services to 185 airlines
at 90 locations throughout the United States, Canada, Europe, Latin America
and the Pacific Rim. The specialized support services provided by this group
include comprehensive ground handling, ramp, passenger, cargo and warehouse,
aviation fueling and in-flight catering services. These services are
performed through contracts with individual airlines, through consolidated
agreements with several airlines, and contracts with various airport
authorities.
During 1994 Aviation Services began to pursue opportunities associated with
the privatization of airport operations and related airport projects. To
capitalize on these opportunities, Ogden intends to combine its Aviation
Services skills with the development, financing and construction management
expertise of its Projects business segment.
Ground Handling and Specialized Support Services
Ground handling services include diversified ramp operations such as
baggage unloading and loading, aircraft cleaning, aircraft maintenance,
flight planning, de-icing, cargo handling, warehouse operations and
passenger-related services such as ticketing, check-in, porter ("sky-cap")
service, passenger lounge operations and other miscellaneous services.
Global expansion by the Aviation group has resulted in providing
comprehensive ground handling and related services at many international
locations throughout Europe, Canada, South America and other countries.
These locations include eight different airports throughout Germany; Heathrow
Airport in England; Schiphol International Airport in the Netherlands;
Auckland International Airport in New Zealand; the Czech Republic through a
50% interest in a Prague-based airport handling company; Pearson
International Airport in Toronto and the Mirabel and Dorval Airports in
Montreal; the Simon Bolivar International Airport in Caracas, Venezuela; VIP
lounge operation and ground handling services at the Arturo Merino Benitez
Airport in Santiago, Chile and the Mexico International Airport in Mexico
City. Ogden Aviation continues to perform services at St. Maarten's and Air
Aruba's aviation ground service operations at Reina Beatrix International
Airport in Aruba through a corporation jointly owned by Ogden and Air Aruba.
During 1994 Aviation Services: (i) began providing ground handling services
at Jorge Chavez International Airport in Lima, Peru and airports located in
Chicago, Los Angeles and Vancouver, British Columbia, (ii) added ramp
handling services to its existing ground handling services operations at
Guarulhos International Airport in Sao Paulo and Galeao International Airport
in Rio de Janeiro, Brazil, (iii) sold its ground handling operations at
Gatwick and four other United Kingdom regional airports and acquired an air
cargo ground handling company which provides services at the London Heathrow
Airport, (iv) formed joint ventures with the Kashmirwala Group in Pakistan to
begin ground handling services at Karachi International Airport and with a
Turkish company to provide aircraft cleaning, security and commissary
supplies to carriers at Ataturk Airport in Istanbul and other locations in
Turkey, and (v) expanded its cargo/warehouse services in North America
through contract awards at four new airports.
Fueling Services
Aviation 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, Aviation has signed a 10-year contract to
serve as sole fueling handling agent at Tocumen International Airport in
Panama City, Panama and has been awarded a 5-year contract to fuel aircraft
at the Luis Munoz International Airport in San Juan, Puerto Rico commencing
in 1995.
In-Flight Catering
Aviation operates 18 in-flight kitchens for over 85 airline customers at
a number of locations, including 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. The Aviation in-flight kitchen at Honolulu International also
provides catering services to two cruise ships owned by NAVATEK, a Hawaiian
cruise line. During 1994, Aviation acquired inflight catering kitchens in
the Canary Islands and Palma de Mallorca in Spain.
Airport Privatization and Related Projects
During 1994 Aviation Services and one of its partners,the Macau Services
Corporation (a subsidiary of the Civil Aviation Authority of China) led a
consortium which was awarded a 19-year contract, with a 16-year exclusivity
arrangement, to provide ramp and cargo handling, passenger services, and
aircraft line maintenance at the new Macau International Airport, expected to
be operational in November 1995. The consortium, of which Aviation Services
is the managing partner with a 29% participation, will provide all necessary
passenger and ramp equipment and build cargo and engineering facilities, an
aircraft hangar and a state-of-the-art training center at the airport. The
consortium's investment in infrastructure improvements and equipment in the
new Macau airport is expected to exceed $40 million.
ENTERTAINMENT SERVICES
The Entertainment Services group provides total facility management
services; presentation of concerts and family shows; food, beverage and
novelty concessions; and janitorial, security, parking, and other maintenance
services. These services are provided to a wide variety of public and private
facilities including more than 100 stadiums, convention and exposition
centers, arenas, parks, amphitheaters, and fairgrounds located in the United
States, Mexico, Canada, Brazil, Spain and the United Kingdom. Entertainment
also operates a racetrack and five off-track betting parlors in Illinois.
The facility management and concession arrangements under which this group
operates are individually negotiated and vary widely as to terms and
duration. Concession contracts and leases usually provide for payment by
Entertainment of commissions or rentals based on a stipulated percentage of
gross sales or net profits, sometimes with a minimum rental or payment. Most
of the facility management contracts are on a cost-plus-a-fee basis but a
number of such contracts provide for a sharing of profits and losses between
Entertainment and the facility owner.
Entertainment offers its customers a wide range of project-development
options, including the operational design review, consultation during
construction, and assistance with financing arrangements, as well as
operations of facilities, usually in return for long-term services and
concession contracts. In some cases Ogden Corporation guarantees
Entertainment's performance of these contracts as well as the financing
arrangements.
Food, Beverage and Novelty Services at Stadiums and Arenas
Food, beverage and novelty services are provided by Entertainment in the
United States at a number of locations including the following: Rich Stadium
(Buffalo, New York); the USAir Arena (Landover, Maryland); the Milwaukee
Exposition and Convention Center (Milwaukee, Wisconsin); the Los Angeles
Convention Center (Los Angeles, California); the Kingdome (Seattle,
Washington); Veterans Stadium (Philadelphia, Pennsylvania); Market Square
Arena (Indianapolis, Indiana); McNichols Arena (Denver, Colorado); Cobo Hall
(Detroit, Michigan); Tempe Diablo Stadium (Tempe, Arizona); University of
Oklahoma Stadium (Norman, Oklahoma); and the MGM Grand Gardens Arena (Las
Vegas, Nevada). In 1994 Entertainment was awarded a 5-year contract to
provide food and beverage and merchandise services for Wrigley Field in
Chicago, Illinois and began providing food and beverage services at 110,000-
seat Maracano Stadium, located in Rio de Janeiro, Brazil.
In Canada, food, beverage and novelty concessions are provided at the Saint
John Regional Exhibition Centre located in New Brunswick, Canada and at
Lansdowne Park in Ottawa, Canada. During 1994, Entertainment was awarded a
20-year contract to provide food and beverage services at General Motors
Place, a new sports and entertainment arena under construction in Vancouver,
British Columbia which is scheduled to open in late 1995. This facility will
be the home of the National Hockey League's Vancouver Canucks and the newly
awarded National Basketball Association franchise, the Vancouver Grizzlies.
<PAGE>
Food, Beverage and Novelty Services at Amphitheaters
Entertainment also provides food and beverage services at amphitheaters
throughout the United States including the Starlake Amphitheater (near
Pittsburgh, Pennsylvania); the Fiddler's Green Amphitheatre (Englewood,
Colorado); and the Sandstone Amphitheatre (Kansas City, Missouri). During
1994 Entertainment was awarded several new amphitheater contracts, including
the following: (i) a 10-year food and beverage contract at the Mega Star
Amphitheater located in Eufaula, Oklahoma; (ii) a 15-year food and beverage
contract at the all-seasons Connecticut Center for Performing Arts in
Hartford, Connecticut, (iii) a 10-year exclusive food and beverage contract
at the all-seasons Camden Amphitheater located in Camden, New Jersey which is
expected to open in May 1995; (iv) a 20-year agreement pursuant to which
Entertainment will provide food and beverage services and support for the
long-term financing at the Polaris Amphitheater in Columbus, Ohio; and (v) a
20-year contract to provide food and beverage services, parking and support
for the long-term financing at the Cellar Door Amphitheater located near
Manassas, Virginia, expected to open during 1995.
Facility Management and Concession Services
Entertainment, through long-term management and concession agreements,
provides management services, food, beverage and novelty concessions and
maintenance services at 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; the Rosemont
Horizon, near Chicago, Illinois; the Target Center in Minneapolis; The Great
Western Forum in Los Angeles; and Anaheim Stadium, a 70,000 seat stadium
located in Anaheim, California.
During 1994 Entertainment provided design and consulting services at the
19,000 seat Victoria Station Arena in Manchester, England scheduled to open
during 1995, which Entertainment will manage and operate, upon completion,
pursuant to a 20-year lease. During early 1995, Entertainment secured a 20-
year contract to provide total facility management services at the 10,000-
seat Newcastle Arena, a new sports and entertainment arena located in
Newcastle, England which will feature ice hockey, concerts and other events.
Entertainment will provide consulting services during the design and
development phase of the arena which is scheduled to open in November 1995.
During 1994 this service group was also awarded a 20-year contract to
provide complete facility management and concession services at the 12,000-
seat Oberhausen Arena located in Oberhausen, Germany which is scheduled to
open in 1996. The arena will feature ice hockey, handball, basketball and
concerts. During August 1994 Entertainment began providing facility
management services to the Northlands Coliseum in Edmonton, Alberta pursuant
to a 5-year contract. The Coliseum is home to the Edmonton Oilers of the
National Hockey League.
During 1994 Entertainment arranged for the financing and assisted in the
design and construction of the Ottawa Palladium, a 19,000-seat multipurpose
indoor arena under construction in Ottawa, Canada, which is owned by a third
party and which is scheduled to open in 1996. Entertainment has been awarded
a 30-year contract to provide complete facility management and concession
services at the arena which will be the home of the Ottawa Senators of the
National Hockey League. Ogden has agreed that the Ottawa Palladium, under
Entertainment's management, will generate a minimum amount of revenues
computed in accordance with its 30-year contract. The owners of the Ottawa
Palladium have entered into a 30-year license agreement with the owner of the
<PAGE>
Ottawa Senators, pursuant to which the Ottawa Senators are expected to play
their home games at the arena commencing in 1996.
Pursuant to a management agreement between the City of Anaheim, California
and a wholly owned subsidiary of Ogden, Entertainment manages and operates
the Arrowhead Pond, a facility owned by and located within the City of
Anaheim. The Arrowhead 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.
Ogden has agreed that the Arrowhead Pond, under Entertainment's management,
will generate a minimum amount of revenues computed in accordance with the
30-year management agreement with the City. Entertainment also has a 30-year
lease agreement with The Walt Disney Company at the Arrowhead Pond where the
Anaheim Mighty Ducks, a National Hockey League team owned by The Walt Disney
Company, plays its home games.
In Mexico, Entertainment owns a 27% equity interest in a Mexican 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
Autodrome Fundidora Amphitheater in Monterey, Mexico that is able to
accommodate 18,000 people. Entertainment also owns 51% of a company that
provides food and beverage concessions at the Sports Palace and the new
Autodrome amphitheater referred to above.
Other Activities
During 1994 Entertainment acquired an equity interest in Parques
Tecnocultiroles, S.A. ("Partecsa"), a Spanish Corporation based in Seville,
Spain. Partecsa has been awarded a 30-year contract with an 8-year renewal
option to convert, remodel, manage and operate Cartuja, a multi-attraction
theme park located on a 200 acre site in Seville, Spain where the 1992
Exposition Fair was held. Partecsa has requested Entertainment to perform
advisory services relating to the conversion and future operation of Cartuja.
Upon completion of its conversion Partecsa has agreed to award Entertainment,
subject to the execution of a definitive agreement, the exclusive rights to
provide the food and beverage concessions at Cartuja for a four (4) year
period.
Entertainment also leases and operates a thoroughbred and harness racetrack
and six 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 Entertainment at these facilities. A large
portion of the track's revenue is derived from its share of the pari-mutuel
handle, which can be adjusted by state legislation. Other income is derived
from admission charges, parking, programs and concessions.
Entertainment also provides concessions at zoos located in Seattle,
Washington and Cleveland, Ohio.
ENVIRONMENTAL SERVICES
The Environmental Services group provides a comprehensive range of
environmental, infrastructure and energy consulting, engineering and design
services to industrial and commercial companies, electric utilities and
governmental agencies. The Environmental group's services include analysis
and characterization, remedial investigations, analytical testing,
engineering and design, data management, project management, and regulatory
assistance. These services are provided to detect, evaluate, solve and
monitor environmental problems and health and safety risks, environmental,
civil, geotechnical, transportation and sanitary engineering, urban and
regional planning and storm water management, as well as regulatory
assistance, nuclear safety and engineering, and consulting services relating
to nuclear waste management, security engineering and design services.
Environmental provides services 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 33% of
Environmental's revenues are 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
Environmental under the contract plus a fee based upon work completed.
As of December 31, 1994, Environmental's backlog of orders amounted to
approximately $143 million, of which approximately $40 million represented
government orders that were not yet funded; as of December 31, 1993, the
comparable amounts were $120 million and $37 million, respectively.
The Environmental group continues to provide professional environmental
engineering services, including program management, environmental analysis,
testing and restoration to the United States Navy CLEAN Program
(Comprehensive Long Term Environmental Action Navy) pursuant to a 10-year
contract awarded during 1991. Thus far the Environmental group has provided
these services at Navy bases in Hawaii, Guam, Japan, Hong Kong, the
Philippines, Australia and Korea.
Pursuant to its three year contract with the U.S. Air Force Center for
Environmental Excellence, the Environmental group continues to oversee the
removal of storage tanks and contaminated soil from Air Force bases across
the United States and in U.S. territories. The Environmental group also
remains as one of four contractors selected by the U.S. Air Force to
competitively bid for work over a five year period to identify, investigate
and remediate environmental contamination problems at Kelly Air Force Base,
Texas. Environmental also performs remediation services and environmental
studies for the U.S. Army Corps. of Engineers in Alaska and Texas, and
environmental compliance and training services pursuant to a 5-year contract
with the National Guard Bureau and the Air National Guard Readiness Center.
The Environmental group continues to develop its mixed waste analytical
business through 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
cleanup of government facilities.
Environmental is continuing to pursue international markets through its
wholly-owned environmental, and geotechnical consulting firm in Spain; its
environmental services contract with the U.S. Army Corps of Engineers,
European District,to provide environmental site assessments in Germany; its
contract to work with the Chevron Overseas Petroleum, Inc.'s Tengizchevroil
Joint Venture Project; its discussions with the Republic of Kazakhstan to
develop an environmental protection public health and safety plan; and its
IEAJ affiliate in Japan, a leading consultant to the nuclear industry.
<PAGE>
TECHNOLOGY SERVICES
The Technology Group provides services through its five technology-based
operating units: Atlantic Design Company, Inc. (Atlantic Design); Applied
Data Technology, Inc. (ADTI), acquired in 1995; W.J. Schafer Associates, Inc.
(WJSA); Systems Engineering, Applied Engineering; and Biomedical. These
operating units produce a broad range of technology and scientific solutions
for public and private industry, including the development and manufacture of
commercial technology products, the development of new applications for
advanced technologies, and analysis, integration, testing and implementation
services. Principal business areas are: computer hardware/software systems
and technologies, telecommunications systems, advanced communications and
sensor systems and technologies, management and logistics services,
biomedical research and repository services, air combat maneuvering
instrumentation systems, and after-action reporting and display systems.
Atlantic Design
This unit, with principal offices located in Charlotte, North Carolina and
engineering facilities located in Fairfield, New Jersey and locations within
New York state, 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 customers primarily in the computer,
medical and electronic industries, including IBM, General Electric, Seiko,
Compaq, Martin Marietta, AT&T, EMC2 Corporation, Netrix Corporation 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.
ADTI
During January 1995, Technology Services strengthened its group through the
acquisition of ADTI located in San Diego, California. ADTI is a leading
supplier of air combat maneuvering instrumentation systems and after-action
reporting and display systems. ADTI's range systems are installed at Navy
and Air Force aircraft training ranges to facilitate air-to-air combat
exercises and monitor, record and graphically display the exact maneuvers of
the aircraft on the ranges and simulate the various weapons systems aboard
the aircraft. These range automated systems are used by the U.S. Navy and
Air Force to train pilots for combat conditions and by the Department of
Defense in training pilots to avoid "friendly fire" incidents. ADTI's
systems are currently installed at four of the 14 domestic ranges, including
the range at the Top Gun school at Miramar, California. The range systems
business includes new ranges, expansion and upgrade of existing ranges,
product support and related programs.
ADTI also developed a proprietary flight line test set designed to test and
trouble-shoot the Auxiliary Power Unit ("APU") on-board a Boeing air-to-air
refueling aircraft. The APU tester was developed to fill the military's
demand for a practical low cost flightline support unit that will isolate
faults within the APU on-board the Boeing aircraft.
<PAGE>
WJSA
This unit provides technology and engineering services and consultation in
space-based and free electron laser technology and high energy systems
research to the Ballistic Missile Defense Organization as well as technical
research to the other agencies within the Department of Defense and the U.S.
Government. This unit is also currently working under contract with the
Defense Nuclear Agency to define and analyze sensor architectures that assess
bomb damage to underground targets. WJSA is also involved in a program with
the Department of Energy to develop an advanced technique for producing
large-scale electric power. WJSA continues its efforts under contract with
the Coleman Research Corporation to provide system engineering and technical
assistance support for the Theater High Altitude Area Defense Project.
Systems Engineering, Applied Engineering
This units provides systems and software engineering and
computer/telephone-related products and services to Government agencies and
private industry. Some of their largest clients are the U.S. General
Services Administration (GSA), the Department of Defense, and the Office of
Personnel Management. During 1994, these units were awarded several large
contracts ranging from one to five years in duration. This included two
information technology (IT) contracts with GSA; one to provide IT
requirements studies for automated business systems to agencies located in
and around Washington, D.C. and another to analyze, design and develop
business, scientific and mathematical systems for agencies located throughout
the Western United States; another contract was awarded with the U.S. Navy to
provide engineering and technical services for advanced strategic and
tactical communications systems and systems integration programs on major
Navy combat vessels.
Biomedical
This unit provides biomedical research, support and biological repository
services for such customers as the National Institute of Health, the Walter
Reed Army Institute of Research, the U.S. Food and Drug Administration, the
Center for Disease Control and Prevention, the National Cancer Institute and
other health agencies, commercial firms and not-for-profit organizations
sponsoring research, primarily in the area of new drug development and
testing.
FACILITY MANAGEMENT SERVICES
The Facility Management Services group 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. Beginning in 1995 the
facility management services operations of the Technology Services group were
transferred to Facility Management Services.
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.
This service group's commercial and office building customers include the
World Trade Center and the American Express Tower in New York, Phillips
Petroleum Headquarters in Bartlesville, Oklahoma, various governmental
agencies and AT&T at several sites in New Jersey. Facility's industrial and
manufacturing customers include IBM, Chrysler, Colgate Palmolive, Goodyear,
BF Goodrich, US West, Exxon, Dow Chemical, American Cyanamid, MITRE
Corporation and Martin Marietta.
The group continues its support to the institutional and educational
marketplace whose customers include the University of Miami; New York
University; Clark Atlanta University in Georgia; and Concordia University in
Montreal, Canada.
Facility Management Services, in conjunction with Projects, 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.
<PAGE>
PROJECTS
The operations of Ogden's Projects business segment are conducted by Ogden's
wholly owned subsidiary Ogden Projects, Inc. and its subsidiaries ("OPI")
whose principal business is conducted through it's four major operating
groups: Waste-to-Energy; Independent Power; Water and Wastewater; and
Construction Activities.
WASTE-TO-ENERGY
The Waste-to-Energy group operates facilities which combust municipal solid
waste to make saleable energy in the form of electricity or steam. This group
completed construction of its first waste-to-energy facility in 1986 and
currently operates 27 waste-to-energy facilities at 26 locations. Waste-to-
Energy has one facility under construction, is the owner or lessee of 17 of
its facilities, has been awarded three additional facilities that are not yet
under construction, and has taken steps toward expanding its waste-to-energy
business internationally.
In most cases, the Waste-to-Energy group, 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"). The
group has projects currently under development for which there is no
sponsoring Client Community and may in the future undertake other such
projects.
(a) Terms and Conditions of Service Agreements. Projects generally have
been awarded by Client Communities pursuant to competitive procurement.
However, Waste-to-Energy has also built and is operating projects that were
not competitively bid.
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, purchasing or leasing 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 is not wholly within this group's control
and, accordingly, implementation of an awarded project is not assured, or may
occur only after substantial delays. Waste-to-Energy 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 Waste-to-Energy has made contractual
arrangements with communities that provide partial recovery of development
costs if the project fails to go into construction for reasons beyond its
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: (i) the Operating Subsidiary designs the
facility, generally applies for the principal permits required for its
construction and operation, and helps to arrange for financing, and 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 by unforeseen circumstances beyond its 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; (ii) 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 by Unforeseen
Circumstances) may result in liquidated damages to the Operating Subsidiary
or, if the breach is substantial, continuing, and unremedied, the termination
of the Service Agreement. In the case of such Service Agreement termination,
the Operating Subsidiary may be obligated to discharge project indebtedness;
(iii) the Client Community is generally required 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. Generally, the Client Community also provides or arranges for
debt financing. Additionally, the Client Community bears the costs 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; (iv) Ogden typically guarantees each Operating Subsidiary's
performance under its respective Service Agreement.
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 Service Agreement including taxes,
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 due to be paid on the bonds
issued to finance the facility. At most facilities, Waste-to-Energy may earn
additional fees from accepting waste from the Client Community or others
utilizing the capacity of the facility which exceeds the amount of waste
committed by the Client Community.
Waste-to-Energy operates transfer stations in connection with some of its
waste-to-energy facilities and, in connection with the Montgomery County,
Maryland, project, OPI will use a railway system to transport MSW and ash
residue to and from the facility. Waste-to-Energy 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.
(b) Other Arrangements for Providing Waste-to-Energy Services. Waste-
to-Energy owns two facilities that 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. In these cases, Waste-to-Energy 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.
This group's current contracts with waste suppliers for these two facilities
provide that the fee charged for waste disposal service is subject to limited
increases in the event that costs of operation increase as a result of
Unforeseen Circumstances. On the other hand, in these cases, Waste-to-Energy
generally retains all of the energy revenues from sales of power to utilities
or industrial power users 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.
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 the Waste-to-Energy group.
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, Waste-to-Energy may be entitled to fee
adjustments to reflect certain Unforeseen Circumstances.
(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 the 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 Ogden's consolidated financial statements. Generally, such
debt is secured by the revenues pledged under the respective indenture and is
collateralized by the assets of the Operating Subsidiary and otherwise
provides no recourse to Ogden, subject to construction and operating
performance guarantees and commitments.
<PAGE>
(d) Waste-to-Energy Projects. Certain information with respect to
projects as of February 28, 1995 is summarized in the following table:
<TABLE>
WASTE-TO-ENERGY PROJECTS
<CAPTION>
Tons Boiler Commencement
In Operation Per Day Units of Operations
<S> <C> <C> <C>
Tulsa,OK(I)<F1>............ 750 2 1986
Haverhill/Lawrence,
MA-RDF<F8>................ 950 1 1984
Marion County, OR.......... 550 2<F2> 1987
Hillsborough County, FL<F3> 1,200 3<F2> 1987
Tulsa, OK(II)<F1><F4>...... 375 1 1987
Bristol, CT................ 650 2<F2> 1988
Alexandria/Arlington, VA... 975 3 1988
Indianapolis, IN........... 2,362 3<F2> 1988
Hennepin County, MN <F1><F5> 1,000 2 1990
Stanislaus County, CA...... 800 2 1989
Babylon, NY................ 750 2<F2> 1989
Haverhill, MA-Mass Burn.... 1,650 2 1989
Warren County, NJ <F5>..... 400 2 1990
Kent County, MI<F3>........ 625 2<F2> 1990
Wallingford, CT<F5>........ 420 3<F2> 1990
Fairfax County, VA......... 3,000 4<F2> 1990
Huntsville, AL<F3>......... 690 2<F2> 1990
Lake County, FL............ 528 2<F2> 1990
Lancaster County, PA<F3>... 1,200 3<F2> 1991
Pasco County, FL<F3>....... 1,050 3<F2> 1991
Huntington, NY <F6>........ 750 3<F2> 1991
Hartford, CT <F3><F7><F8>.. 2,000 3 1989
Detroit, MI <F1><F8><F9>... 3,300 3 1989
Honolulu, HI <F1><F8>...... 2,160 2 1990
Union County, NJ<F3>....... 1,440 3 1994
Lee County, FL <F3>........ 1,200 3<F2> 1994
Onondaga, NY<F6><F10>...... 990 3 1995
Total................ 31,765
<CAPTION>
Unrecognized
Construction
Revenues as
of 12/31/94
Scehduled (In
Tons Boiler Commencement thousands
Under Construction Per Day Units of Operations of dollars)
<S> <C> <C> <C> <C>
Montgomery County, MD <F3> 1,800 3(2) 1995 $ 44,764
<CAPTION>
Estimated
Construction
Revenues
Expected (In
Awarded - Not Yet Tons Boiler Commencement thousands
Under Construction Per Day Units of Construction of dollars)
<S> <C> <C> <C> <C>
Mercer County, NJ <F3>..... 1,450 2 1995 $185,120
Halifax, Nova Scotia <F3> 550 2 <F11> $ 99,620*
Clark County, OH 1,750 2 <F12> $ N/A
Total................. 3,750
*Expressed in Canadian Dollars
NOTES:
<F1> Facility is owned by an owner/trustee pursuant to a sale/leaseback
arrangement.
<F2> Facility has been designed (or, with respect to awarded facilities and
facilities under construction, will be designed) to allow for the
addition of another unit.
<F3> Facility is owned (or, with respect to facilities not under
construction, is to be owned) by the Client Community.
<F4> Phase II of the Tulsa facility, which was financed as a separate
project, expanded the capacity of the facility from two to three units.
<F5> Operating Subsidiaries were purchased after completion, and use a mass-
burn technology that is not the Martin Technology.
<F6> Owned by a limited partnership in which the limited partners are not
affiliated with OPI.
<F7> Under contracts with the Connecticut Resource Recovery Authority and
Northeast Utilities, OPI operates only the boiler and turbine for this
facility.
<F8> Operating contracts were acquired after completion. Facility uses a
refuse-derived fuel technology and does not employ the Martin
Technology.
<F9> In addition, Waste-to-Energy is presently constructing environmental
improvements to the Detroit Facility. The total price for this project
is approximately $117,800,000 (subject to escalation), and Waste-to-
Energy expects construction to be completed in 1995.
<F10> This facility is substantially complete and is processing waste.
<F11> During 1994, the Minister of the Environment for the Province of Nova
Scotia disapproved the project for economic, not environmental,
reasons, and the Metropolitan Authority purported to terminate its
contract with OPI on that basis. OPI has challenged the minister's
decision as being beyond his authority. If OPI is successful in its
challenge, the Metropolitan Authority may still terminate development
of the project, subject to certain obligations to reimburse OPI for
certain of its costs.
<F12> In 1993, OPI negotiated major project agreements with Clark County,
Ohio, for the disposal of MSW and 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 and
satisfactory resolution of litigation described below. Contracts
related to the project are the subject of litigation brought by a local
landfill in which an intermediate appellate court recently enjoined
performance by the County. The Ohio Supreme Court has agreed to hear
OPI's appeal of this decision, probably in the Spring of 1995. When
this litigation is resolved, OPI will evaluate whether to attempt to
procure additional waste contracts for this facility.
</TABLE>
(e) 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. Moreover, 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.
There are several unexpired patents related to the Martin Technology
including: (i) Grate Bar for Grate Linings, Especially in Incinerators -
expires 2/9/99; (ii) Method and Arrangement for Reducing NOx Emissions from
Furnaces - expires 7/19/00; (iii) Method and Apparatus for Regulating the
Furnace Output of Incineration Plants - expires 9/4/07; (iv) Method for
Regulating the Furnace Output in Incineration Plants - expires 1/1/08; and
(v) Feed Device with Filling Hopper and Adjoining Feed Chute for Feeding
Waste to Incineration Plants - expires 4/23/08. More importantly, OPI
believes that it is Martin's know-how in manufacturing grate components and
in designing and operating mass-burn facilities, Martin's worldwide
reputation in the waste-to-energy field, and OPI's know-how in designing,
constructing and operating waste-to-energy facilities, rather than the use of
patented 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 or
patents on other portions of the Martin Technology will have a material
adverse effect on OPI's financial condition or competitive position.
(f) The Cooperation Agreement. Under an agreement between Martin GmbH
fur Umuelt-und Energietechnik of Germany ("Martin") and OPI (the "Cooperation
Agreement"), OPI has the exclusive rights to market the proprietary
technology (the "Martin Technology") of Martin 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, but only on a full service
design, construct, and operate basis. The Cooperation Agreement provides
that OPI may acquire, own, commission, and/or operate facilities that use
technology other than the Martin Technology that have been constructed by
entities other than OPI or its affiliates. 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 of
control (as defined in the Cooperation Agreement) of Ogden Martin Systems,
Inc. ("OMS"), a wholly-owned subsidiary of OPI 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.
(g) International Business Development. In 1994, Waste-to-Energy
continued the development of its waste-to-energy business in selected
international markets. An office in Munich, Germany, was opened in 1993 and,
as indicated above, extended its right to use the Martin Technology to
develop full service projects in much of Europe. 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. Waste-to-Energy 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. For example,
Germany has enacted legislation which would prevent the landfilling of
untreated raw municipal waste by the end of the decade.
The trend toward privatization of municipal services in Latin America
continues to remain strong. The market for waste-to-energy is in a formative
stage and, with few exceptions, continues to lag behind other infrastructure
project development in most Latin American countries. Waste-to-energy
services in Latin America will be offered through strategic alliances with
Latin American firms and by coordinating marketing efforts with other
business development efforts of Ogden's Services segment.
Ogden plans to open an office in Hong Kong in 1995. OPI has entered into
an agreement with CTCI Corporation in Taiwan to jointly pursue waste-to-
energy operation and maintenance contracts in that country. Certain other
Asia Pacific countries are seeking alternatives to landfilling and are also
moving toward privatization of municipal services. The development of this
market by OPI will be managed through the Hong Kong office, with emphasis on
establishing teaming agreements with local firms to pursue select project
opportunities.
(h) Backlog. Waste-to-Energy's backlog as of December 31, 1994, is set
forth under (d) above. As of the same date of the prior year, the estimated
unrecognized construction revenues for projects under construction was
$224,257,000, and the estimated construction revenues for projects awarded
but not yet under construction was $254,486,000 (including U.S. dollar
equivalent of $99,620,000 expressed in Canadian Dollars). The change in the
amount for projects under construction reflects construction progress on two
projects. Generally, the construction period for a waste-to-energy facility
is approximately 28 to 34 months.
INDEPENDENT POWER
The Independent Power group, through wholly-owned subsidiaries, develops,
operates and, in some cases, owns power projects ("alternative energy
projects") which cogenerate electricity and steam or generate electricity
alone for sale to utilities both in the United States and abroad. In 1994,
the independent power business of Projects and of Services' Environmental
Services group were combined under Projects' Independent Power group. The
Independent Power group intends to develop additional projects which use,
among other fuels, wood, tires, other wastes, coal, oil, natural gas, or
water. Independent Power is currently pursuing further opportunities to own
and/or operate independent power projects domestically and abroad.
Independent Power will seek to participate in the operation of the
independent power project facilities pursuant to long-term operations and
maintenance contracts from which it will seek operating profits. In many
cases, capital may be invested in the ownership of the project (usually
through acquiring an interest in a corporate or partnership entity that owns
the power production facilities and the contracts for the supply of fuel and
the purchase of power from these facilities), to derive investment earnings
and possibly tax benefits. In some cases, if Independent Power has expended
funds in and dedicated resources to development of the project, it will seek
a developers fee at the time the construction financing of the project is
completed.
Many alternate energy projects are awarded to private power producers on
the basis of open, competitive bidding, in which pricing of capacity and
electric energy is the dominant selection criterion. Because these awards
are often vigorously contested by a number of independent power producers,
the returns on such projects are often driven to very low levels. The
Independent Power group therefore seeks opportunities in which power purchase
contract terms can be set by negotiations and in which the group is able to
stress its abilities to operate facilities in a highly reliable manner and to
provide operational guarantees of performance that may be attractive to the
power purchaser.
The Independent Power group, through Catalyst New Martinsville
Hydroelectric Corporation, manages and operates a hydroelectric power
generating facility 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. The Independent Power group, as a 50/50 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 Independent Power group subsidiary
and Centennial Field, Inc., an unaffiliated company. The Independent Power
group also has the contracts to operate and maintain both the geothermal
field, which currently produces approximately eight million pounds per hour
of fluid, and the power plant.
During December 1994 the acquisition of the Second Imperial Geothermal
Company (SIGC) and its principal asset, a leasehold interest in a 48 megawatt
geothermal power plant located in Heber, California, was completed. SIGC is
a party to a 30-year power purchase contract with Southern California Edison.
Prior to the acquisition, the Independent Power group (through the
Environmental group) was the operations and maintenance contractor at SIGC.
This acquisition will compliment the geothermal field operated by the
Independent Power group in Heber, California.
During 1994 the Independent Power group's operations were expanded into the
Latin American market through the acquisition of an equity interest in
Energia Global, Inc. (EGI) which resulted in a long term contract to operate
two hydroelectric plants owned by EGI's Costa Rica subsidiary and which are
under construction in Costa Rica. During the design and construction phase
of these two plants, the Independent Power group will serve as a consultant.
WATER AND WASTEWATER
The Water and Wastewater group, through Ogden Water Systems, Inc., 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 the 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. In 1994, Ogden Water Systems, Inc. formed a
joint venture, the Ogden Yorkshire Water Company, with a wholly-owned
subsidiary of Yorkshire Water, plc, a major British water and wastewater
utility. The purpose of the joint venture is to develop, design, construct,
maintain, operate, and in some cases own, water and wastewater treatment
facilities in the United States, Canada, and Latin America. The joint
venture is actively bidding on public procurements for such services and
seeking acquisition opportunities. Ogden Water Systems, Inc., is also
pursuing opportunities in water and wastewater treatment facilities in
countries outside of the territory of the joint venture.
CONSTRUCTION ACTIVITIES
The construction of each of Projects' waste-to-energy facilities is the
responsibility of its Construction Activities group. Construction of
Independent Power, Water and Wastewater projects and any other construction
activities undertaken in connection with Ogden's Services business are
expected to be the responsibility of this group. A 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.
The Construction Activities group generally directs the procurement of all
major equipment utilized in a project, which equipment is also generally
readily available from many suppliers. The stoker grates utilized Waste-to-
Energy in facilities constructed by the group are required to be obtained
from Martin pursuant to the Cooperation Agreement.
During the construction period for waste-to-energy 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.
PROJECTS' FOREIGN BUSINESS DEVELOPMENT
Projects' Waste-to-Energy, Independent Power, Water and Wastewater and
Construction groups are involved in the development of projects in foreign
countries where opportunities for the services provided by these groups are
highly dependent upon the elimination of historic legal and political
barriers to the participation of foreign capital and foreign companies in the
financing, construction, ownership and operation of waste-to-energy, power
production and water and wastewater facilities. For example, in many
countries, the production, distribution and delivery of electricity has
traditionally been provided by governmental or quasi-governmental agencies.
Although a number of these countries have recently liberalized their laws and
policies with regard to the participation of private interests and foreign
capital in their electric sectors, not all have done so, and not all that
have done so may afford acceptable opportunities for Projects.
The development, construction, ownership and operation of waste-to-energy,
independent power production, and water and wastewater facilities in foreign
countries also exposes Projects to several potential risks that typically are
not involved in such activities in the United States.
Many of the countries in which Projects is or intends to be active in
developing its waste-to-energy, independent power, water and wastewater and
construction projects are lesser developed countries or developing countries.
The financial condition and creditworthiness of the potential purchasers of
power and services provided by Projects--which may be a governmental or
private utility or industrial consumer--or of the suppliers of fuel for
alternate energy projects or of waste for waste-to-energy projects in these
countries may not be as strong as those of similar entities in the developed
countries. The obligations of the purchaser under the power purchase
agreement, the services recipient under the related service agreement and the
supplier under the fuel supply agreement may not be guaranteed by any host
country governmental or other creditworthy agency.
Waste-to-Energy and Independent Power projects in particular, are keenly
dependent on the reliable and predictable delivery of fuel, municipal solid
waste in the case of waste-to-energy, meeting the quantity and quality
requirements of the project facilities. Projects will in all cases seek to
negotiate long-term contracts for the supply of fuel with creditworthy and
reliable suppliers under terms that will permit it to project the future cost
of fuel through the life of the contract. However, the reliability of fuel
deliveries may be compromised by one or more of several factors that may be
more acute or may occur more frequently in developing countries than in
developed countries, including a lack of sufficient infrastructure to support
deliveries under all circumstances, bureaucratic delays in the import,
transportation and storage of fuel in the host country, customs and tariff
disputes and local or regional unrest or political instability .
Payment for electricity to project companies in which Projects may invest,
and for related operating services that it may provide, will often be made in
whole or part in the domestic currencies of the host countries. Conversion
of such currencies into U.S. dollars may not be assured by a governmental or
other creditworthy host country agency, and may be subject to limitations in
the currency markets, as well as restrictions of the host country. In
addition, fluctuations in value of such currencies against the value of the
U.S. dollar may cause the group's participation in such projects to yield
less return than expected. Transfer of earnings and profits in any form
beyond the borders of the host country may be subject to special taxes or
limitations imposed by host country laws.
In addition, Projects will generally participate in projects, the
facilities for which will be fixed and practically immovable. The provision
of electric power, waste disposal and water and wastewater services are
treated as a matter of national or key economic importance by the laws and
politics of many host countries. There is therefore some risk that the
assets constituting the facilities of the projects in which it participates
could be temporarily or permanently expropriated or nationalized by a host
country, or made subject to martial or exigent law or control.
Projects will seek to manage and mitigate these risks through all available
means that it deems appropriate. They will include: careful political and
financial analysis of the host countries and the key participants in each
project; guarantees of relevant agreements with creditworthy entities;
political risk and other forms of insurance; participation by international
finance institutions, such as affiliates of the World Bank, in financing of
projects in which it participates; and joint ventures with other companies to
pursue the development, financing and construction of these projects.
GAIN ON SALE OF LIMITED PARTNERSHIP INTERESTS
In 1991, limited partnership interests in, and the related tax benefits of,
the partnership that owns the Huntington, New York, facility were sold by
Waste-to-Energy to third-party investors. In 1992 Waste-to-Energy sold the
subsidiary that held the remaining limited partnership interests in, and
certain related tax benefits of, that partnership. During 1994, an Operating
Subsidiary of the Waste-to-Energy group that is the owner of the Onondaga
County, New York, facility sold limited partnership interests and tax
benefits to third party investors. Under both the Huntington and Onondaga
limited partnership agreements, Operating Subsidiaries are general partners
and retain responsibility for the operation and maintenance of the
facilities.
OTHER ACTIVITIES
Projects also intends to develop, operate and, in some cases, own projects
that process recyclable paper products into containerboard for reuse in the
commercial sector. As with it's Waste-to-Energy group, such projects involve
various contractual arrangements with a variety of private and public
entities, including municipalities, lenders, joint venture partners (which
may provide some of the financing or technical support), purchasers of the
plant output, 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 the Waste-to-Energy group.
In 1993, Projects discontinued the fixed-site hazardous waste business
conducted through American Envirotech, Inc., an indirect subsidiary. In light
of substantial and adverse changes in the market for hazardous waste
incineration services and regulatory uncertainty stemming from EPA
pronouncements, Projects ceased all development activities. Although
Projects continues to hold permits and certain related assets pending
resolution of certain litigation, any other related assets have been disposed
of or otherwise abandoned. (See "Item 3. Legal Proceedings and Environmental
Matters" of this Form 10-K.)
<PAGE>
OTHER INFORMATION
MARKETS, COMPETITION AND GENERAL BUSINESS CONDITIONS
Ogden's Services and Projects business segments can be adversely affected
by general economic conditions, war, inflation, adverse competitive
conditions, governmental restrictions 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 also adversely affect several of Ogden's Services'
operations, including, but not limited to, fewer airline flights, reduced
inflight meals and flight cancellations in Services' Aviation group; cost
cutting and budget reductions in Services' Technology group and Facility
group; and, reduced event attendance in Services' Entertainment group. In
addition, disputes between owners of professional sports organizations and
the professional players of such organizations have affected and may continue
to affect the operations of the Entertainment group.
Ogden's Projects business segment, through its Waste-to-Energy group,
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 municipal solid waste
("MSW"). Since 1989 there has been a decline in the number of communities
requesting proposals for waste-to-energy facilities. Ogden 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: declining prices at which energy can be sold;
declining alternative disposal costs; uncertainties about the impact of
recycling on the waste stream; and continuing concerns arising from the Clean
Air Act Amendments of 1990 and the regulatory actions currently being
proposed pursuant to its terms. Ogden believes that waste-to-energy
facilities and recycling are complimentary methods of managing a community's
waste disposal needs. The fact that many of Ogden's Client Communities have
recycling rates in excess of national averages demonstrates that a properly
sized waste-to-energy facility does not hinder achievement of aggressive
recycling goals. Ogden does not believe there will be a near term return to
frequent public procurement for waste-to-energy facilities.
MSW is typically supplied to Ogden's waste-to-energy facilities pursuant
to long-term contracts. In most of the markets that Projects' Waste-to-
Energy group currently serve, the cost of waste-to-energy services to its
current Client Communities is competitive with the cost of other disposal
alternatives, mainly landfilling.
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
(less than 5 years). Accordingly, landfill pricing tends to be more volatile
as a result of periodic changes in waste generation and available capacity
than Ogden's pricing, which is based on long-term contracts. Ogden believes
that landfills have not been required to comply with permitting requirements
relating to the emission of air pollutants and that this provides landfills
with a competitive advantage. Another factor affecting the competitiveness of
waste-to-energy fees are the additional charges imposed by Client Communities
and included in such fees 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. Another factor
affecting the demand for new waste-to-energy projects was a 1994 United
States Supreme Court decision invalidating state and local laws and
regulations mandating that waste generated within a given jurisdiction be
taken to a designated facility. Waste-to-energy facilities also compete with
other disposal technologies such as mixed solid-waste composting. Mixed
waste composting is not a proven technology, and Ogden believes that it has
not been applied successfully to date in a large scale facility.
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. Ogden 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. Other technologies utilized in mass-burn type
facilities in the United States include those of Von Roll, W+E, Takuma,
Volund, Steinmueller, Deutsche Babcock, O'Connor, and Detroit Stoker.
There is substantial competition within the waste-to-energy field. Ogden
competes with a number of firms, some of which have greater financial
resources than Ogden. 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.
Competition for projects is intense in all markets in which Projects does
business or intends to do business. There are numerous companies in the
United States and in several foreign countries that pursue these projects.
Many of these companies have more experience, capital and other resources
than does Ogden.
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, 1995, Ogden and its subsidiaries employed approximately
45,000 people.
Certain employees of Ogden are employed pursuant to collective bargaining
agreements with various unions. During 1994 Ogden successfully renegotiated
collective bargaining agreements in certain of its business sectors with no
strike-related loss of service. Ogden considers relations with its employees
to be good and does not anticipate any significant labor disputes in 1995.
ENVIRONMENTAL REGULATORY LAWS
Ogden'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 to air and water. Other federal, state, and local laws, such as
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 Response Compensation and Liability
Act ("CERCLA") (collectively, "Environmental Remediation Laws"), make Ogden
potentially liable on a joint and several basis for any environmental
contamination which may be associated with its activities 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.
The Environmental Regulatory Laws require that many permits be obtained
before the commencement of construction and operation of any waste-to-energy
facility, including: air quality 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.
Failure to meet conditions of these permits or of the Environmental
Regulatory Laws and the corresponding regulations can subject an Operating
Subsidiary to regulatory enforcement actions by the appropriate governmental
unit, which could include monetary penalties, and orders requiring certain
remedial actions or limiting or prohibiting operation. To date, OPI has not
incurred material penalties, been required to incur material capital costs or
additional expenses, nor been subjected to material restrictions on its
operations as a result of violations of environmental laws, regulations, or
permits. 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 federal and state governmental
regulations and 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. Thus, as new technology is developed and proven,
it may be required to be incorporated into new facilities or major
modifications to existing facilities. This new technology may often be more
expensive than that used previously.
The Clean Air Act Amendments of 1990 required EPA to promulgate New Source
Performance Standards ("NSPS") and Emission Guidelines ("EG") applicable to
new and existing municipal waste combustion units for particulate matter
(total and fine), opacity (as appropriate), sulfur dioxide, hydrogen
chloride, oxides of nitrogen, carbon monoxide, dioxins and dibenzofurans.
The EPA proposed NSPS and EG regulations on September 20, 1994, incorporating
all the requirements mandated by the 1990 Amendments. OPI, as well as other
individual members of the industry, the industry trade association, affected
client communities and their organizations and environmental groups have all
submitted extensive comments to EPA on these proposed regulations. EPA is
developing the regulations under a court order which requires that they be in
their final form by September 1, 1995. Due to the extensive nature of the
comments submitted, as well as developments in the Congress which could
suspend new regulations, it is not clear at what time nor in what form the
final regulations will indeed be published. The form of the proposed rules
would require that most of Ogden's existing facilities be retrofitted for
control equipment to achieve some or all of the mercury, nitrogen oxide,
organics and acid gases emissions limits.
The NSPS and EG, which OPI believes will be issued in final form in 1995,
will require capital improvements or operating changes to most of the
facilities operated by Ogden. The exact timing and cost of such
modifications cannot be stated definitively because State regulations
embodying these have generally not been finally adopted. The costs to meet
new rules for existing facilities owned by Client Communities will be borne
by the Client Communities. For projects owned or leased by Ogden and
operated under a Service Agreement, the Client Community has the obligation
to fund such capital improvements, to which Ogden must make an equity
contribution, generally 20%. Such equity contributions are likely to range,
in total for all such facilities, from $9 million to $15 million. With
respect to a project owned by Ogden and not operated pursuant to a Service
Agreement, such capital improvements may cost between $8 million and $15
million. Ogden believes that most costs incurred to meet EG and operating
permit requirements at facilities it operates may be recovered from Client
Communities and other users of its facilities through increased tipping fees
permitted under applicable contracts.
The Clean Air Act also requires each state to implement a state
implementation plan that outlines how areas out of compliance with federally-
established national ambient air quality standards will be returned to
compliance. The state plans must include an operating permit program. Most
states are now in the process of implementing these requirements. The state
implementation plans and the operating permits to be 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 5 years.
The Environmental Remediation Laws prohibit disposal of hazardous waste
other than in small, household-generated quantities at Ogden's municipal
solid waste facilities. 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.
<PAGE>
PUBLIC UTILITY REGULATORY POLICIES ACT
Ogden's 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, or
the financial and organizational activities of, electric utilities. PURPA
was promulgated in 1978 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 and most aspects of state electric utility
regulation are of great importance to OPI 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 Ogden'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 the 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 January and February, 1995, the FERC issued two orders in which it
modified its previous interpretation of PURPA and held that state laws and
regulatory orders directing utilities to purchase electricity from qualifying
facilities at rates in excess of the utility's projected avoided costs were
preempted by PURPA and that contracts providing for such above-avoided cost
rates were void. Such laws and regulations have been used in the past by
states to encourage the development of environmentally beneficial facilities
such as waste-to-energy facilities. The FERC stated in both orders that it
intends to apply its reinterpretation of PURPA only on a prospective basis
and that it will not entertain requests by utilities to invalidate power
sales agreements entered into pursuant to such state laws and regulatory
orders unless the purchasing utility raised the issue of the legality of the
rate at the time of contract execution. Ogden does not believe any of the
power sales agreements related to its waste-to-energy facilities is subject
to challenge based on the prospective nature of the orders. However,
numerous petitions have been filed with the FERC seeking rehearing of its
January, 1995 order, including by electric utilities challenging the
prospective nature of the relief granted by the FERC. Ogden cannot predict
the ultimate outcome of these proceedings or whether any of the agreements
for the sale of electricity from its facilities will be affected thereby.
FLOW CONTROL
Many states have mandated local and regional solid waste planning, and
require that new solid waste facilities may be constructed only in conformity
with these 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. In 1994, the
United States Supreme Court ruled that the flow control ordinance of
Clarkstown, New York was unconstitutional as a local regulation of interstate
commerce that is unauthorized by Congress and therefore violative of the
United States Constitution. The Court's decision has been applied by other
courts to invalidate or question other similar laws and ordinances.
Ogden does not believe this decision would materially impact Ogden's
existing facilities or its ability to develop new ones. This view is based
on a number of considerations. Most of the contracts pursuant to which Ogden
provides disposal services require the Client Community to deliver stated
minimum quantities of waste on a put-or-pay basis. Furthermore, only a few
of the Client Communities served by Ogden relied solely on legal flow control
to provide waste to Ogden'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 adopted alternative measures. Ogden
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 and which will
be operated by Ogden in Montgomery County, Maryland.
Congressional action authorizing flow control was brought at the end of the
1994 Congressional session, but passage was defeated on the last day of the
session by a single vote. Legislation is again pending in the current
session of Congress.
Furthermore, in most of the municipalities where OPI provides services,
information available to Ogden indicates that the cost to the Client
Community of waste to energy is competitive with alternative disposal
facilities, and therefore Ogden'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.
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 authorize such designations
and restrictions. Bills of this nature have been introduced in the current
session of Congress.
ASH RESIDUE
In 1994, the United States Supreme Court held that municipal solid waste
ash residue having hazardous characteristics is subject to RCRA's provisions
for management as a hazardous waste relating to transportation, disposal and
treatment downstream of the point of generation. No ash residue from a fully
operational facility operated by Ogden has been characterized as hazardous
under the present or past EPA prescribed test procedures and such ash residue
is currently disposed of in permitted landfills as non-hazardous waste. In
certain states, ash residue from certain waste-to-energy facilities of other
vendors or communities has, on occasion, been found to have hazardous
characteristics under these test procedures. The Supreme Court's ruling has
not had a significant impact on Ogden's business. Following that decision
and related EPA actions made adjustments to its operations and, as required
by EPA guidance, did tests that show that the ash residue leaving its
facilities is not hazardous.
The trade association of which Ogden is a member, Ogden and other industry
members have filed an action against the EPA in federal court challenging
certain actions taken by EPA since the Court's ruling which could require
some waste-to-energy facilities to obtain permits under RCRA in connection
with the conditioning of ash. Ogden believes that pending EPA rulings will
resolve this issue so that such permitting is not required at its facilities.
However, a conclusion must await final agency action.
OTHER MATTERS
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
cannot be fully known because Federal and State regulatory agencies are still
engaged in the process of developing policies and promulgating 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.
<PAGE>
Item 2. PROPERTIES
(a) Services
The principal physical properties of 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, 2008 and which contains an option by Ogden
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 and several foreign
countries which house office, laboratory and warehousing operations. The
leases range from a month-to-month term to as long as five years.
The Aviation 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.
Entertainment owns and operates Fairmount Park racetrack, which conducts
thoroughbred and harness racing on a 150-acre site with a long-term lease
expiring in 2017 located in Collinsville, Illinois, eight miles from downtown
St. Louis. Entertainment 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.
Technology 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.
Environmental's headquarters is located in Fairfax, Virginia, where
Environmental currently occupies approximately 27,000 square feet of space in
the headquarters building of ERC International, Inc. ("ERCI"), a wholly-owned
subsidiary of Ogden. Environmental's lease payments include the cost of
certain services and allocations which are shared with ERCI. Environmental
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.
Environmental also 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. These 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, Environmental maintains
regional headquarters in San Diego, California and Nashville, Tennessee.
Many of the other Services segment facilities operate from
leased premises located principally within the United States.
(b) Projects
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.
<TABLE>
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, 1995<F1>.
<CAPTION>
Approx.
Site
Size
Location in Acres 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 <F2>
Alexandria/Arlington, facility
Virginia 3.3 Waste-to-energy Acquiring the Alexandria
factility Authority's and the
Arlington Authority's
interest under Site lease
(expires Oct. 1, 2025)
pursuant to Conditional
Sale Agreement
Bristol, Connecticut 18.2 Waste-to-energy Own <F2>
facility
Bristol, Connecticut 35.0 Landfill Site lease(expires Jul.
1, 2014)
Indianapolis, Indiana 23.5 Waste-to-energy Site lease (expires Dec.,
facility 2008 subject to four 5-
year renewal options)<F2>
Stanislaus County, 16.5 Waste-to-energy Site lease (expires Aug.
California facility 20, 2021 subject to 15-
year renewal option) <F2>
Babylon, New York 9.5 Waste-to-energy Site lease (expires Dec.
facility 19, 2010, with renewal
options)
Haverhill, Massachusetts 12.7 Waste-to-energy Site lease (expires Mar.
facility 16, 1997, subject to
sixteen 5-year renewal
options) <F2>
Haverhill, Massachusetts 16.8 RDF processing Site lease (expires Mar.
facility 16, 1997, subject to
sixteen 5-year renewal
options) <F2>
Haverhill, Massachusetts 20.2 Landfill Site lease (expires Mar.
16, 1997, subject to
sixteen 5-year renewal
options) <F2>
Lawrence, Massachusetts 11.8 RDF power plant Own <F2>
Lake County, Florida 15.0 Waste-to-energy Own <F2>
facility
Wallingford, Connecticut 10.3 Waste-to-energy Site lease (expires Dec.
facility 1, 2026) <F2>
Fairfax County, Virginia 22.9 Waste-to-energy Acquiring Fairfax
facility Authority's interest
under Site Lease (expires
Mar. 10, 2016) pursuant
to Conditional Sale
Agreement
Imperial County, 83.0 Undeveloped Own
California land
Montgomery County 35.0 Waste-to-energy Site lease (expires Nov.
facility 16, 2030) <F2>
Huntington, New York 13.0 Waste-to-energy Site lease (expires Oct.
facility 28, 2012, subject to
successive renewal terms
through Jan. 28, 2029)
<F2>
Warren County, 19.8 Waste-to-energy Site lease (expires Nov.
New Jersey facility 16, 2005 subject to two
ten-year renewals) <F2>
Hennepin County, 14.6 Waste-to-energy Leases of site and
Minnesota facility facility (expires Oct. 1,
2017 subject to renewal
options to December 20,
2024) <F2><F3>
Stockton, California 4.5 Contaminated Site lease (expired
soil remediation remediation February 1,
facility 1994)
(discontinued)
Tulsa, Oklahoma 22.0 Waste-to-energy Leases of site and
facility facility (expires April
30, 2012 subject to
renewal options to August
2, 2026) <F2><F3>
Harris County, Texas 14.0 Undeveloped Own
land
Onondaga, New York 12.0 Facility site Site lease expires
contemporaneously with
service agreement,
subject to renewal
options to May 9, 2020
<F2>
NOTES:
<F1> Two Facilities not listed in the table were initially owned by political
subdivisions and were sold to a leveraged lessor. The leverage lessor
entered into lease agreements with the respective Operating subsidiaries
as accommodation leases. All of the lease obligations, including the
obligation to pay rent, are passed through to the client communities.
<F2> The Operating Subsidiary's ownership or leasehold interest is subject to
material liens in connection with the financing of the related project.
<F3> Sublease of site expires contemporaneously with facility lease.
</TABLE>
Item 3. LEGAL PROCEEDINGS AND ENVIRONMENTAL MATTERS
(a) Legal Proceedings
The Company is a party to various legal proceedings involving matters
arising in the ordinary course of business. The Company does not believe
that there are any pending legal proceedings for damages against the Company,
including the legal proceeding described below, the outcome of which would
have a material adverse effect on the Company on a consolidated basis.
In December 1993 and January 1994, individuals who had been shareholders
of American Envirotech, Inc. ("AEI"), a company which in 1992 had been
acquired in a merger by a subsidiary of the Company, sued the Company and
several of its subsidiaries in state courts in Fort Worth and Houston, Texas.
The plaintiffs claim that AEI's termination of its project development in
1993 breached the merger agreement, and that in connection with the
termination the Company and its subsidiaries breached fiduciary duties and
committed fraud. The Fort Worth plaintiffs seek damages in an unspecified
amount. The Houston plaintiffs seek $37 million in actual damages as well as
significant punitive damages. Both cases are in pre-trial proceedings. On
March 2, 1995, the Fort Worth court indicated that it would grant plaintiffs'
summary judgement motion, and find that the defendants breached the contract.
The Company believes that AEI properly terminated its contract in
accordance with its terms, that it acted at all times fairly and in
compliance with its obligations; and, based on the advice of counsel, that it
has meritorious defenses. The Company also believes, based on the advice of
counsel, that questions of fact exist and therefore, the Fort Worth court
erred in granting summary judgment. The Company intends to take whatever
actions are necessary, at the appropriate time, to overcome the impact of the
summary judgment ruling, and if it is successful all issues will be tried by
a jury. Otherwise the case will be tried as to non-contractual claims and
damages only. The Company believes that plaintiffs have not been damaged
because the project could not have been completed on a successful basis, and
under the merger agreement payments to the plaintiffs were contingent upon
successful financing and profitable operations. The Company will vigorously
defend these lawsuits and pursue all appropriate appeal rights, if necessary.
No assurances can be given as to the ultimate outcome of either case.
(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.
<PAGE>
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 or private parties under these
laws relate to alleged technical violations of regulations, licenses, or
permits pursuant to which the subsidiary operates. Ogden believes that such
proceedings 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 1994.
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, 1995:
<TABLE>
<CAPTION>
CONTINUALLY
AN OGDEN
POSITIONS & AGE AS OF OFFICER
NAME OFFICE HELD 3/31/95 SINCE
===========================================================================
<S> <C> <C> <C>
Ralph E. Ablon Chairman of 78 1962
the Board
R. Richard Ablon President & 45 1987
Chief Executive
Officer
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTINUALLY
AN OGDEN
POSITIONS & AGE AS OF OFFICER
NAME OFFICE HELD 3/31/95 SINCE
===========================================================================
<S> <C> <C> <C>
Constantine G.Caras Executive Vice 56 1991
President & Chief
Administrative Officer
Scott G. Mackin President & Chief 38 1992
Operating Officer,
Ogden Projects, Inc.,
a wholly-owned
subsidiary of Ogden
Philip G. Husby Senior Vice 48 1991
President, Treasurer &
Chief Financial Officer
Lynde H. Coit Senior Vice 40 1991
President & General
Counsel
David L. Hahn Senior Vice President 43 1995
Rodrigo Arboleda Senior Vice President 54 1995
Robert M. DiGia Vice President, 70 1965
Controller & Chief
Accounting Officer
Nancy R. Christal Vice President- 36 1992
Investor Relations
Kathleen Ritch Vice President & 52 1981
Secretary
</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, 1990:
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.,
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 has been considered an Executive Officer of Ogden since
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 at
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.
David L. Hahn was elected Senior Vice President of Ogden in January 1995.
He has served as Vice President-Marketing of Ogden Services Corporation for
more than the past five years.
Rodrigo Arboleda was elected Senior Vice President of Ogden in January
1995. Since 1992, he has served as Senior Vice President-Business
Development for Latin America of Ogden Services Corporation. From 1989 to
1992 he owned and served as the President and Chief Executive Officer of
Interamerican Consulting Group, Inc., a consulting firm located in Miami,
Florida specializing in management, financing, and restructuring of
troubled companies.
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>
Part II
Item 5. MARKET FOR OGDEN'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Pursuant to General Instruction G (2), the information called for by this
item is hereby incorporated by reference from Page 49 of Ogden's 1994 Annual
Report to Shareholders.
As of March 1, 1995, 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 26 of Ogden's 1994 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 24 and 25 of Ogden's 1994
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 26 through 46 and Page 49
of Ogden's 1994 Annual Report to Shareholders.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable.
<PAGE>
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 1995
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 1995 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."
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 1995 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 1995 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 27 through 46 and the
Independent Auditors' Report on page 47 of Ogden's 1994 Annual
Report to Shareholders are incorporated herein by reference.
2). Financial statement schedules as follows:
(i) Schedule II - Valuation and Qualifying Accounts for the years ended
December 31, 1994, 1993 and 1992.
3). Those exhibits required to be filed by Item 601 of Regulation S-K:
<PAGE>
EXHIBITS
2.0 Plans of Acquisition, Reorganization, Arrangement, Liquidation or
Succession.
2.1 Agreement and Plan of Merger, dated as of October 31, 1989, among
Ogden, ERCI Acquisition Corporation and ERC International, Inc.*
2.2 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.*
2.3 Amended and Restated Agreement and Plan of Merger among Ogden
Corporation, OPI Acquisition Corp. and Ogden Projects, Inc., dated
as of September 27, 1994.*
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.*
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 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.*
10.2 Stock Purchase Agreement, dated May 31, 1988, between Ogden and
Ogden Projects, Inc.*
10.3 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.*
10.4 Stock Purchase Option Agreement, dated June 14, 1989, between Ogden
and Ogden Projects, Inc. as amended on November 16, 1989.*
10.5 Preferred Stock Purchase Agreement, dated July 7, 1989, between
Ogden Financial Services, Inc. and Image Data Corporation.*
10.6 Rights Agreement between Ogden Corporation and Manufacturers
Hanover Trust Company, dated as of September 20, 1990.*
10.7 Executive Compensation Plans and Arrangements
(a) Ogden Corporation 1986 Stock Option Plan.*
(b) Ogden Corporation 1990 Stock Option Plan.*
(i) Ogden Corporation 1990 Stock Option Plan as Amended and
Restated as of January 19, 1994.*
(c) Ogden Services Corporation Executive Pension Plan.*
(d) Ogden Services Corporation Select Savings Plan.*
(i) Ogden Services Corporation Select Savings Plan Amendment
and Restatement as of January 1, 1995. Transmitted
herewith as Exhibit 10.7 (d)(i).
(e) Ogden Services Corporation Select Savings Plan
Trust.*
(i) Ogden Services Corporation Select Savings Plan Trust
Amendment and Restatement dated as of January 1, 1995.
Transmitted herewith as Exhibit 10.7 (e)(i).
(f) Ogden Services Corporation Executive Pension Plan Trust.*
(g) Changes effected to the Ogden Profit Sharing Plan effective
January 1, 1990.*
(h) Employment Letter Agreement between Ogden and Lynde H. Coit
dated January 30, 1990.*
(i) Employment Agreement between Ogden and R.
Richard Ablon dated as of May 24, 1990.*
(i) Letter Amendment Employment Agreement between Ogden and
R. Richard Ablon dated as of October 11, 1990.*
(j) Employment Agreement between Ogden and C. G. Caras dated as of
July 2, 1990.*
(i) Letter Amendment to Employment Agreement between Ogden
Corporation and C.G. Caras, dated as of October 11,
1990.*
(k) Employment Agreement between Ogden and Philip G. Husby as of
July 2, 1990.*
(l) Termination Letter Agreement between Maria P. Monet and Ogden
dated as of October 22, 1990.*
(m) Letter Agreement between Ogden Corporation and Ogden's
Chairman of the Board, dated as of January 16, 1992.*
(n) Employment Agreement between Ogden and Ogden's Chief
Accounting Officer dated as of December 18, 1991.*
(o) Employment Agreement between Scott G. Mackin and Ogden
Projects, Inc. dated as of January 1, 1994.*
(p) Ogden Corporation Profit Sharing Plan.*
(i) Ogden Profit Sharing Plan as amended and restated January
1, 1991 and as in effect through January 1, 1993.*
(ii) Ogden Profit Sharing Plan as amended and restated
effective as of January 1, 1995. Transmitted herewith as
Exhibit 10.7 (p)(ii).
(q) Ogden Corporation Core Executive Benefit Program.*
(r) Ogden Projects Pension Plan.*
(s) Ogden Projects Profit Sharing Plan.*
(t) Ogden Projects Supplemental Pension and Profit Sharing Plans.*
(u) Ogden Projects Employee's Stock Option Plan.*
(i) Amendment, dated as of December 29, 1994 to the Ogden
Projects Employees' Stock Option Plan. Transmitted
herewith as Exhibit 10.7 (u)(i).
(v) Ogden Projects Core Executive Benefit Program.*
(w) Form of amendments to the Ogden Projects, Inc. Pension Plan
and Profit Sharing Plans effective as of January 1, 1994.*
(i) Form of Amended Ogden Projects, Inc. Profit Sharing Plan,
effective as of January 1, 1994. Transmitted herewith as
Exhibit 10.7 (w)(i).
(ii) Form of Amended Ogden Projects, Inc. Pension Plan,
effective as of January 1, 1994. Transmitted herewith as
Exhibit 10.7 (w)(ii).
10.8 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.*
10.9 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, 1994, 1993 and 1992. Transmitted herewith as
Exhibit 11.
13 Those portions of the Annual Report to Stockholders for the
year ended December 31, 1994, which are incorporated herein by
reference. Transmitted herewith as Exhibit 13.
21 Subsidiaries of Ogden. Transmitted herewith as Exhibit 21.
23 Consent of Deloitte & Touche LLP. Transmitted herewith as
Exhibit 23.
27 Financial Data Schedule (EDGAR Filing Only). Transmitted
herewith as Exhibit 27.
* 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 1994. However, on January 3, 1995 Ogden filed a Form 8-K
Current Report pursuant to the merger transaction resulting in
Ogden Projects, Inc. becoming a wholly-owned subsidiary of Ogden
effective December 29, 1994.
<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
Date: March 16, 1995 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.
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, Treasurer and
PHILIP G. HUSBY Chief 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/ Attallah Kappas Director
ATTALLAH KAPPAS
(i)
<PAGE>
/S/ Terry Allen Kramer Director
TERRY ALLEN KRAMER
/S/ Maria P. Monet Director
MARIA P. MONET
/S/ Judith D. Moyers Director
JUDITH D. MOYERS
/S/ Homer A. Neal Director
HOMER A. NEAL
/S/ Stanford S. Penner Director
STANFORD S. PENNER
/S/ Jesus Sainz Director
JESUS SAINZ
/S/ Frederick Seitz Director
FREDERICK SEITZ
/S/ Robert E. Smith Director
ROBERT E. SMITH
/S/ Helmut F. O. Volcker Director
HELMUT F.O. VOLCKER
/S/ Abraham Zaleznik Director
ABRAHAM ZALEZNIK
(ii)
<PAGE>
INDEPENDENT AUDITORS' REPORT
Ogden Corporation:
We have audited the consolidated financial statements of Ogden Corporation
and subsidiaries as of December 31, 1994 and 1993 and for each of the three
years in the period ended December 31, 1994, and have issued our report
thereon dated February 3, 1995, which report includes an explanatory
paragraph relating to the adoption of Statements of Financial Accounting
Standards No. 106, 109, 112, and 115; such consolidated financial statements
and report are included in your 1994 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 LLP
New York, New York
February 3, 1995
<PAGE>
<TABLE>
SCHEDULE II
OGDEN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1994
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:
Doubtful receivables - current $25,547,000 $ 5,869,000 $10,241,000 <F1> $ 9,047,000 <F4> $32,783,000
31,000 <F2>
142,000 <F3>
Deferred charges on projects 750,000 5,650,000 1,350,000 <F2> 750,000 <F5> 7,000,000
TOTAL $26,297,000 $11,519,000 $11,764,000 $ 9,797,000 $39,783,000
Allowances not deducted:
Provision for consolidation of facilities $ 4,720,000 $ 1,320,000 <F7> $ 3,400,000
Estimated cost of disposal of discontinued
operations 1,008,000 $ 1,485,000 <F6> 1,548,000 <F8> 945,000
Reserves relating to tax indemnification
and other contingencies in connection
with the sale of limited partnership
interests in and related tax benefits of
a waste-to-energy facilty $ 6,000,000 6,000,000
Other 1,477,000 3,500,000 (1,350,000) <F2> 23,000 <F7> 3,604,000
TOTAL $ 7,205,000 $ 9,500,000 $ 135,000 $ 2,891,000 $13,949,000
Notes:
<F1> Reserve for contract billing adjustments.
<F2> Transfer from other accounts.
<F3> Recoveries of amounts previously written off.
<F4> Write-offs of receivables considered uncollectible.
<F5> Write-offs of unsuccessful development costs.
<F6> Net proceeds from operations and sale of assets relating to discontinued
operations.
<F7> Payments charged to allowances.
<F8> Gain from on-site remediation business utilizing mobile technology.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
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:
Doubtful receivables - current $19,730,000 $7,682,000 $4,073,000 <F1> $ 6,034,000 <F4> $25,547,000
119,000 <F2> 94,000 <F5>
71,000 <F3>
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:
Provision for consolidation of facilities $ 6,040,000 $ 1,320,000 <F7> $ 4,720,000
Estimated cost of disposal of discontinued
operations 7,620,000 $1,706,000 $4,061,000 <F6> 12,379,000 <F8> 1,008,000
Other 285,000 1,350,000 158,000 <F7> 1,477,000
TOTAL $13,945,000 $3,056,000 $4,061,000 $13,857,000 $ 7,205,000
Notes:
<F1> Reserve for contract billing adjustments.
<F2> Transfer from other accounts.
<F3> Recoveries of amounts previously written off.
<F4> Write-offs of receivables considered uncollectible.
<F5> Transfer to other accounts.
<F6> 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.
<F7> Payments charged to allowances.
<F8> Gain from on-site remediation business utilizing mobile technology.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
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:
Doubtful receivables - current $15,498,000 $3,279,000 $4,121,000 <F1> $ 5,027,000 <F4> $19,730,000
1,841,000 <F2>
18,000 <F3>
Deferred charges on projects 6,500,000 5,750,000 <F5> 750,000
TOTAL $21,998,000 $3,279,000 $5,980,000 $10,777,000 $20,480,000
Allowances not deducted:
Provision for consolidation of facilities $ 7,360,000 $ 1,320,000 <F1> $ 6,040,000
Estimated cost of disposal of discontinued
operations 7,090,000 $ 530,000 <F6> 7,620,000
Other 1,225,000 940,000 <F7> 285,000
TOTAL $15,675,000 $ 530,000 $ 2,260,000 $13,945,000
Notes:
<F1> Reserve for contract billing adjustment.
<F2> Transfer from other accounts.
<F3> Recoveries of amounts previously written off.
<F4> Write-offs of receivables considered uncollectible.
<F5> Write-offs of unsuccessful development efforts.
<F6> Net proceeds from discontinued operations.
<F7> Payments charged to allowances.
</TABLE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
2 Plan of Acquisition,
Reorganization Arrangement,
Liquidation or Succession.
2.1 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.
2.2 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.
2.3 Amended and Restated Agreement Filed as Exhibit 2 to Ogden's
and Plan of Merger among Ogden Form S-4 Registration Statement
Corporation, OPI Acquisition File No. 33-56181 and
Corporation sub. and Ogden incorporated herein by
Projects, Inc. dated as of reference.
September 27, 1994.
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 Filed as Exhibit No. 3.2 to
through March 17, 1994. Ogden's Form 10-K for the fiscal
year ended December 31, 1993
and incorporated herein by
reference.
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.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
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 Credit Agreement by and among Filed as Exhibit No. 10.2 to
Ogden, The Bank of New York, as Ogden's Form 10-K for fiscal
Agent and the signatory Lenders year ended December 31, 1993,
thereto dated as of September 20, and incorporated herein by
1993. reference.
10.2 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.
10.3 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.
10.4 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.
10.5 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.
10.6 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.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
10.7 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.
(i) Ogden Corporation 1990 Filed as Exhibit 10.6(b)(i) to
Stock Option Plan as Ogden's Form 10-Q for the
Amended and Restated as of quarterly period ended
January 19, 1994. September 30, 1994 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.
(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.
(i) Ogden Services Corporation Transmitted herewith as
Select Savings Plan Exhibit 10.7(d)(i).
Amendment and Restatement
as of January 1, 1995.
(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.
(i) Ogden Services Corporation Transmitted herewith as
Select Savings Plan Trust Exhibit 10.7(e)(i).
Amendment and Restatement
as of January 1, 1995.
(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.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
(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.
(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.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
(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 Filed as Exhibit 10.8(o) to
Scott G. Mackin and Ogden Ogden's Form 10-K for fiscal
Projects, Inc. dated as of year ended December 31, 1993
January 1, 1994. and incorporated herein by
reference.
(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 Filed as Exhibit 10.8(p)(i) to
as amended and restated Ogden's Form 10-K for fiscal
January 1, 1991 and as in year ended December 31, 1993
effect through January 1, and incorporated herein by
1993. reference.
(ii) Ogden Profit Sharing Plan Transmitted herewith as
as amended and restated Exhibit 10.7(p)(ii).
effective as of January 1,
1995.
(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.
(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.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
(u) Ogden Projects Employees' 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.
(i) Amendment dated as of Transmitted herewith as
December 29, 1994, to the Exhibit 10.7(u)(i).
Ogden Projects Employees'
Stock Option Plan.
(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 Filed as Exhibit 10.8(w) to
Projects, Inc. Pension Plan and Ogden's Form 10-K for fiscal
Profit Sharing Plans effective as year ended December 31, 1993
of January 1, 1994. and incorporated herein by
reference.
(i) Form of amended Ogden Transmitted herewith as
Projects Profit Sharing Exhibit 10.7(w)(i).
Plan effective as of
January 1, 1994 and
incorporated herein by
reference.
(ii) Form of amended Ogden Transmitted herewith as
Projects Pension Plan, Exhibit 10.7(w)(ii).
effective as of January 1,
1994 and incorporated
herein by reference.
10.8 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.
10.9 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.
<PAGE>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
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, 1994, 1993 and 1992.
13 Those portions of the Annual Transmitted herewith as
Report to Stockholders for the Exhibit 13.
year ended December 31, 1994,
which are incorporated herein
by reference.
21 Subsidiaries of Ogden. Transmitted herewith as
Exhibit 21.
23 Consent of Deloitte & Touche. Transmitted herewith as
Exhibit 23.
27 Financial Data Schedule. Transmitted herewith as
Exhibit 27.
EXHIBIT 10.7(d)(i)
OGDEN SELECT SAVINGS PLAN
ARTICLE I
PURPOSE
1.1 PURPOSE. The purpose of the Ogden Select Savings Plan
is to enable eligible employees of the Company to enhance their
retirement security by permitting them to elect to defer receipt
of a portion of their compensation to a later date or event. The
Ogden Select Savings Plan was originally effective as of October
1, 1990, the amendment and restatement of the Ogden Select
Savings Plan shall be January 1, 1995.
ARTICLE II
DEFINITIONS
When used herein the following terms shall have the
following meanings:
2.1 "Board" shall mean the Board of Directors of the
Company.
2.2 "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
2.3 "Committee" shall mean the Administrative Committee of
the Ogden Profit Sharing Plan as appointed by the Board to
administer the Plan.
2.4 "Company" shall mean Ogden Services Corporation along
with certain of its designated subsidiaries and affiliates.
2.5 "Compensation" shall mean a Participant's annual salary
including any bonuses, any car allowance or other current cash
compensation paid by the Company but excluding Discretionary
Profit Sharing Cash Payments, any Select Awards, imputed income,
salary gross-ups, non-cash compensation and severance pay.
2.6 "Compensation Committee" shall mean the Compensation
Committee of the Ogden Corporation Board of Directors.
2.7 "Deferral Year" shall mean each Plan Year as to which
an election is made to defer Compensation in accordance with the
provisions of Section 3.3 of the Plan.
2.8 "Disability" shall mean the inability of a Participant
to perform the duties of his position with the Company due to a
physical or mental ailment, as determined by the Committee in its
sole discretion, such physical or mental ailment to result in the
Executive's termination of employment or retirement.
2.9 "Discretionary Profit Sharing Cash Payment" shall mean
the cash payment awarded to a Participant out of Company profits
by the Compensation Committee in its sole discretion. Any
Discretionary Profit Sharing Cash Payment awarded shall be paid
from the profits of the Company and not be Compensation.
2.10 "Distribution Date" shall mean, as determined by a
Participant, either (i) the last business day of the calendar
quarter immediately following such Participant's Termination of
Service; or (ii) the December 31 immediately following such
Participant's Termination of Service.
2.11 "Effective Date" shall mean January 1, 1995.
2.12 "Executive" shall mean any officer or other member of
the management group of the Company whose Compensation is within
the top 4% of all employees of the Company.
2.13 "Investment Committee" shall mean the Investment
Committee of the Ogden Profit Sharing Plan as appointed by the
Board to manage and direct the investment of the assets of the
Plan.
2.14 "Participant" shall mean any Executive who becomes a
Participant in the Plan as provided in Section 3.2 of the Plan.
2.15 "Payment Event" shall mean Termination of Service,
death, or Disabality, in accordance with Section 5.2 of the Plan.
2.16 "Plan" shall mean this Ogden Select Savings Plan, as
amended and restated herein, and as amended from time to time.
2.17 "Plan Year" shall mean calendar year.
2.18 "Select Award" shall mean an amount determined by the
Compensation Committee in its sole discretion and contributed by
the Company to the deferral account of a Participant in
accordance with Section 3.4 of the Plan.
2.19 "Trust" shall mean the trust established under the
Trust Agreement.
2.20 "Trust Agreement" shall mean as of the Effective Date
the agreement between the Company and The Bank of New York dated
as of October 1, 1990, and as in effect through December 31, 1994
and the agreement with American Express Trust dated as of January
1, 1995, as amended from time to time or an agreement between the
Company and such other trustee as may be appointed by the Board
from time to time.
2.21 "Termination of Service" shall mean termination of
employment with the Company and all of its affiliates including
any form of retirement other than by reason of Disability or
death.
2.22 "Valuation Date" shall mean each business day of the
Plan Year that the New York Stock Exchange is open for business
and shall be the date upon which the Participant's account
balances are determined in accordance with Section 4.1(c).
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Participation in the Plan shall be
limited to those Executives who (i) are eligible to participate
in the Ogden Profit Sharing Plan, or any other defined
contribution plan sponsored by any affiliate or subsidiary of the
Company, and (ii) have received written notification from either
(1) the Company or (2) from a person designated by the Company,
that they are eligible to participate in the Plan.
3.2 PARTICIPATION.
(a) An Executive eligible to participate in the Plan
under Section 3.1 may become a Participant for any Plan Year by
executing an irrevocable deferral election (on a form prescribed
by the Committee) with respect to his Compensation, his
Discretionary Profit Sharing Cash Payment, or both, for such Plan
Year. Except as provided in Section 3.2(b), such election must
be executed and delivered to the Committee on or before the last
day of December of the preceding Plan Year.
(b) With respect to an Executive who first becomes
eligible to participate in the Plan under Section 3.1 after the
beginning of a Plan Year, such Executive may participate in the
Plan for the remainder of such Plan Year by executing an
irrevocable deferral election (on a form prescribed by the
Committee) with respect to such Executive's Compensation,
Discretionary Profit Sharing Cash Payment, or both, earned on or
after the date the deferral election is made, within 30 days of
the date such Executive receives notice from the Committee that
the Executive is eligible to participate.
(c) An Executive eligible to participate in the Plan
under Section 3.1 will become a Participant for any Plan Year in
which the Compensation Committee grants a Select Award on behalf
of such Participant.
3.3 DEFERRAL ELECTION.
(a) As a condition of participation under Sections 3.2
(a) and (b) of the Plan, an Executive must agree to defer from 1%
to 10% of Compensation, or 1% to 100% of his Discretionary Profit
Sharing Cash Payment, or both, for each Plan Year as to which
such Executive elects to defer Compensation or Discretionary
Profit Sharing Cash Payment. The amount so deferred must be in
increments of 1%. The Executive may make separate elections with
respect to base salary, bonus payments, or both. The Committee
may from time to time provide another manner of specifying the
amount of Compensation or Discretionary Profit Sharing Cash
Payment to be deferred, including, but not limited to, a specific
dollar amount.
(b) An election made under the Plan shall relate only
to Compensation, a Discretionary Profit Sharing Cash Payment, or
both for the Plan Year, or to Compensation, Discretionary Profit
Sharing Cash Payment, or both for the remainder of a Plan Year if
Section 3.2(b) applies. A separate election must be made in
order to defer Compensation or a Discretionary Profit Sharing
Cash Payment for each subsequent Plan Year. In the event of a
failure to make a timely deferral election for any Plan Year, no
portion of the Participant's Compensation or Discretionary Profit
Sharing Cash Payment for such Plan Year may be deferred under the
Plan.
(c) Each deferral election under Sections 3.2 and 3.3
shall (in accordance with Section 5.2) also designate:
(1) the Distribution Date the payment shall
commence; and
(2) the method of payment. The Participant may
choose between a lump sum distribution and
annual installments to a maximum of five years;
(3) the investment fund or funds the deferral is
to be initially invested under; and
(4) the beneficiary to receive any payments if
the Participant dies before receiving all
amounts to which the Participant is entitled
under the Plan.
3.4 SELECT AWARD. The Compensation Committee may
contribute directly to the Plan on behalf of any Executive or
group of Executives a discretionary amount in a given Plan Year.
Each Select Award shall be a bookkeeping entry on the Company's
records. The Participant shall be a general unsecured creditor
of the Company with respect to the amount of any Select Award
credited to his account. The Compensation Committee may
establish a vesting schedule for any Select Award. The vesting
schedule will be determined at the time the Select Award is
determined.
ARTICLE IV
PARTICIPANT'S ACCOUNT
4.1 ACCOUNTS.
(a) The Company shall establish written bookkeeping
accounts to record the deferrals of Compensation, Discretionary
Profit Sharing Cash Payments and any Select Award and earnings,
increases and decreases thereon under the Plan.
(b) During the Deferral Year, the Company shall credit
each Participant's account for that Deferral Year with the
amount deferred under Sections 3.2 3.3 and 3.4 by each
Participant Any deferral of Compensation, Discretionary Profit
Sharing Cash Payments or Select Awards will be credited to such
Participant's account as soon as it is received by the Trustee.
Generally, this will be in the month immediately following the
month in which the deferral, or Select Award is payable.
(c) The amounts determined in accordance with Section
4.1(b) shall be deemed to be invested by the Investment Committee
in accordance with the Participant's election. The Committee
shall maintain written records of such investments. If a
Participant does not make a written election, he shall be deemed
to have directed the investment of his funds into the investment
fund with the highest price stability and the least volatile
total return potential. Income, gains and losses on such
investments shall be credited to or charged against each
Participant's account as of the Valuation Date.
(d) A Participant's account shall be reduced by any
payments made to the Participant, or his beneficiary, estate or
representative. The Company's obligation to make payments
pursuant to the Plan to any Participant, his beneficiary, estate
or representative shall be limited to the amount credited to such
Participant's account as of the date of such payment. Neither
the Plan nor any action taken pursuant thereto guarantees any
fixed dollar amount of payments to the Participant, his
beneficiary, estate or representative. The amount of payment
under the Plan shall vary in accordance with the performance of
the investment of amounts deferred under the Plan in the
investment fund or funds selected by the Participant. The
Company, the Committee, the Investment Committee, the
Compensation Committee, and the Board shall not be responsible
for any decrease in value of any Participant's account due to
such investment.
(e) With respect to the employee benefit or welfare
plans sponsored by the Company under which the amount of any
benefit is based on the rate of salary paid to an employee, a
Participant's rate of salary for the purposes of such employee
benefit or welfare plan shall include any amount of Compensation
deferred under the Plan, unless otherwise specifically provided
in such plan.
4.2 FUNDING PROHIBITIONS. All entries in a Participant's
account shall be bookkeeping entries only and shall not represent
a special reserve or otherwise constitute a funding of the
Company's unsecured promise to pay any amounts hereunder. All
payments to be made under the Plan shall be paid from the general
funds of the Company. All such assets shall be the property
solely of the Company and shall be subject to the claims of the
Company's unsecured general creditors. To the extent a
Participant or any other person acquires a right to receive
payments from the Company under the Plan, such right shall be no
greater than the right of any unsecured general creditor of the
Company and such person shall have only the unsecured promise of
the Company that such payments shall be made. In its sole
discretion, the Company may authorize the creation of an
irrevocable grantor trust or other arrangement to meet the
obligations created under the Plan. The existence of such trust
or other arrangement shall be consistent with the "unfunded"
status of the Plan.
ARTICLE V
PAYMENT
5.1 PAYMENT OF ACCOUNT. Payment of amounts credited to a
Participant's account shall be made in the manner and at the time
or times specified herein. All payments shall be made by Company
check or by other arrangements.
5.2 COMMENCEMENT OF PAYMENT.
Notwithstanding any provisions of the Plan to the
contrary, upon the occurrence of a Payment Event, the balance in
the Participant's account shall be valued on the last Valuation
Date of the calendar quarter or of the Plan Year as elected in
accordance with Section 3.3 and paid to the Participant (or, in
the case of death, to the Participant's beneficiary) on or
before the first day of the month following 90 days from the
Valuation Date in accordance with Section 5.3.
5.3 METHOD OF PAYMENT.
(a) For all Payment Events, the method of payment
selected by the Participant will be irrevocable. Selection of
method of payment shall be made at the time the Participant first
elects to participate in the Plan. Any Participant who was a
Participant prior to January 1, 1995 may elect a method of
payment before January 1, 1995 other than a lump sum for those
amounts deferred (and earnings thereof) on or after January 1,
1995. The method of payments shall be:
(i) lump sum; or
(ii) substantially equal annual installments not to exceed
five years. Earnings or losses credited to a Participant's
account as of the Valuation Date preceding the date of the next
distribution shall be added to the Participant's account and
distributed as a part of the next installment. Distribution
shall be made or commence as specified in Section 5.2 of the
Plan. Subsequent installments will be made each year in the
month of the first installment. Each such installment shall
include earnings or losses credited to the balance of the
Participant's accounts. The final installment will be the
balance of the Participant's deferred compensation account and
earnings or losses credited to the account.
(b) Notwithstanding any other provision of the Plan to
the contrary, a Participant may withdraw an amount from his
account only in the event of "financial hardship". To be a
financial hardship, the hardship must be unforeseeable and beyond
the control of the Participant. The Committee shall have the
right to require such Participant to submit such documentation as
it deems appropriate for the purpose of determining that the
Participant has incurred a financial hardship. The amount
withdrawn shall not exceed the amount reasonably needed to
satisfy such financial hardship.
ARTICLE VI
ADMINISTRATION
6.1 ADMINISTRATION. The Plan shall be administered by the
Committee. The Committee shall have all powers necessary to
carry out the provisions of the Plan, including, without
limitation, the power to delegate administrative matters to other
persons, to interpret the Plan and to adopt guidelines for its
administration.
6.2 INVESTMENT. The investment of funds within the Trust
shall be the responsibility of the Investment Committee.
ARTICLE VII
MISCELLANEOUS
7.1 TERMINATION OF PLAN. The Company may at any time by
action of the Board terminate the Plan. Upon termination of the
Plan, no further deferrals will be permitted, and the
Participant's Compensation and Discretionary Profit Sharing Cash
Payment will be restored on a nondeferred basis.
7.2 AMENDMENT. The Company may at any time amend the Plan
in any respect, (i) in the case of amendments which have a
material effect on the cost to the Company of maintaining the
Plan, by action of the Compensation Committee of the Board or,
(ii) with respect to any other amendments, by action of the
Committee; provided, however, that no such amendment shall
adversely affect the rights of Participants or their
beneficiaries to any amounts credited or to be credited to the
Participants' accounts with respect to any Deferral Year which
has commenced prior to the adoption of any such amendment or any
funds held in the Trust at the time of such amendment.
7.3 PAYMENTS TO PERSONS OTHER THAN PARTICIPANTS. If the
Committee shall find that any person to whom any amount is
payable under the Plan is unable to care for such person's
affairs because of illness or accident, or is a minor, or has
died, then any payment due to such person or such person's estate
(unless a prior claim therefore has been made by a duly appointed
legal representative) may, if the Committee so directs the
Company, be paid to such person's spouse, child, a relative, an
institution maintaining or having custody of such person, or any
other person deemed by the 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
Company, the Committee, the Investment Committee and the Board.
7.4 BENEFICIARY. Each Participant shall designate a
beneficiary to whom any balance in each account under the Plan
shall be payable on his death. A Participant may also designate
an alternate beneficiary to receive such payment in the event
that the designated beneficiary cannot receive payment for any
reason. In the event no designated or alternate beneficiary can
receive such payment for any reason, payment will be made to the
Participant's estate. Each Participant may at any time change
any beneficiary designation. A change of beneficiary designation
must be made in writing and delivered to the Committee or its
delegate for such purposes. The interest of any beneficiary who
dies before the Participant will terminate unless otherwise
specified by the Participant.
7.5 NO LIABILITY OF MEMBERS. No member of the Committee,
the Investment Committee, Compensation Committee of the Board,
nor any employee of the Company shall be personally liable by
reason of any contract or other instrument executed by such
member or employee or on such member's or employee's behalf in
his capacity as a member of the Committee, the Investment
Committee, the Compensation Committee of the Board or as an
employee, or for any mistake of judgment made in good faith, and
the Company shall indemnify and hold harmless each employee,
officer or director of the Company to whom any duty or power
relating to the administration or interpretation of the Plan or
investment of the funds may be allocated or delegated, against
any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) 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.
7.6 SUCCESSOR CORPORATION. The obligations of the Company
under the Plan shall be binding upon any successor corporation or
organization resulting from the merger, consolidation or other
reorganization of the Company, or upon any successor corporation
or organization succeeding to substantially all of the assets and
business of the Company. The Company agrees that it will make
appropriate provisions for the preservation of Participants'
rights under the Plan in any agreement or plan which it may enter
into or adopt to effect any such merger, consolidation,
reorganization or transfer of assets.
7.7 NO ALIENATION OF BENEFITS. To the extent permitted by
law, Participants and beneficiaries shall not have the right to
alienate, anticipate, commute, sell, assign, transfer, pledge,
encumber or otherwise convey the right to receive any payments
under the Plan, and any payments under the Plan or rights thereto
shall not be subject to the debts, liabilities, contracts,
engagements or torts of Participants or beneficiaries nor to
attachment, garnishment or execution, nor shall they be
transferable by operation of law in the event of bankruptcy or
insolvency. Any attempt, whether voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
7.8 NO RIGHTS TO CONTINUED EMPLOYMENT. Nothing contained
herein shall be construed as conferring upon an Executive the
right to continue in the employ of the Company as an Executive or
in any other capacity.
7.9 HEADINGS. The headings are included solely for
convenience of reference and shall not control the meaning or
interpretation of any of the provisions of the Plan.
7.10 APPLICABLE LAW. The Plan shall be construed and
administered in accordance with the laws of the State of New
York, without reference to the principles of conflicts of law
thereof.
EXHIBIT 10.7(e)(i)
THE OGDEN SELECT SAVINGS PLAN TRUST AGREEMENT
THIS TRUST AGREEMENT made and entered into as of the 1st day
of January, 1995, by and between Ogden Services Corporation, a
State of Delaware Corporation ("Company") and certain of the
Company's designated subsidiaries and affiliates (individually
known as a "Participating Company" and collectively "Employer")
and American Express Trust Company, a Minnesota trust company
(Trustee);
(a) WHEREAS, the Company has adopted the nonqualified
deferred compensation plan known as the Ogden Select Savings Plan
("Plan") for the benefit of a select group of management or
highly compensated employees;
b) WHEREAS, the Employer has incurred and expects to
continue to incur liability under the terms of such Plan with
respect to the individuals participating in such Plan;
(c) WHEREAS, the Company has established a trust (Trust)
with The Bank of New York, a New York banking corporation
("BONY"), such Trust being established pursuant to a trust
agreement effective October 1, 1990 and as amended and restated
effective as of November 1, 1991 ("BONY Trust Agreement") and
contributed to the Trust assets that have been held therein,
subject to the claims of the Employer's creditors in the event of
the Company's or a Participating Company's insolvency, as herein
defined, until paid to Plan participants and their beneficiaries
in such manner and at such times as specified in the Plan;
(d) WHEREAS, pursuant to Sections 5.8 and 5.9 of the BONY
Trust Agreement, the Company has appointed the Trustee as a
successor trustee to BONY;
(e) WHEREAS, it is the intention of the parties that the
Trust shall constitute an unfunded arrangement and shall not
affect the status of the Plan(s) as an unfunded plan maintained
for the purpose of providing deferred compensation for a select
group of management or highly compensated employees for purpose
of Title I of the Employee Retirement Income Security Act of 1974
("ERISA");
(f) WHEREAS, it is the intention of the Company to direct
BONY to deliver the trust fund, established under the BONY Trust
Agreement, to the Trustee and the Trustee acknowledges receipt of
such trust fund, and to continue to make contributions to the
Trust to provide itself with a source of funds to assist in the
meeting of its liabilities under the Plans;
NOW, THEREFORE, the parties do hereby establish the Trust
and agree that the Trust shall be comprised held and disposed of
as follows:
SECTION 1. ESTABLISHMENT OF TRUST
(a) The Company hereby deposits, in addition to the trust
fund delivered by BONY, with Trustee in trust $100, together
which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in this Trust
Agreement.
(b) The Trust hereby established is irrevocable by the
Company.
(c) The Trust is intended to be a grantor trust, of which
the Company is the grantor, within the meaning of subpart E, part
I, subchapter J, chapter 1, subtitle A of the Internal Revenue
Code of 1986, as amended, and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon
shall be held separate and apart from other funds of the Company
and shall be used exclusively for the uses and purposes of Plan
participants and general creditors as herein set forth. Plan
participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of
the Trust. Any rights created under the Plan and this Trust
Agreement shall be mere unsecured contractual rights of Plan
participants and their beneficiaries against the Company. Any
assets held by the Trust will be subject to the claims of the
Employer's general creditors under federal and state law in the
event of Insolvency, as defined in Section 3(a) herein.
(e) The Company, in its sole discretion, may at any time,
or from time to time, make additional deposits of cash or other
property in trust with Trustee to augment the principal to be
held, administered and disposed of by Trustee as provided in this
Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional
deposits.
(f) The Company represents that it shall restrict
participation in the nonqualified plan(s) relating to or
supported by the Trust to a "select group of management or highly
compensated employees", as that phrase is used in and defined
under Sections 201, 301, and 401 of ERISA. The Company
represents to the Trustee that the Trust is exempt from Parts 2,
3, and 4 of Title 1 of ERISA. The Company agrees to indemnify
against and hold harmless from any and all claims, judgements,
settlements and related costs or damages incurred by the Trustee
resulting from Trustee's reliance on these representations.
SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR
BENEFICIARIES.
(a) The Company shall deliver to Trustee a schedule
("Payment Schedule") that indicates the amounts payable in
respect of each Plan participant (and his or her beneficiaries),
that provides a formula or other instructions acceptable to
Trustee for determining the amounts so payable, the form in which
such amount is to be paid (as provided for or available under the
Plans), and the time of commencement for payment of such amounts.
Except as otherwise provided herein, Trustee shall make payments
to the Plan participants and their beneficiaries in accordance
with such Payment Schedule. The Trustee shall make provision for
the reporting and withholding of any federal, state or local
taxes that may be required to be withheld with respect to the
payment of benefits pursuant to the terms of the Plan and shall
pay amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and paid
by the Company.
(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined by
the Company or such party as it shall designate under the
Plan(s), and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan.
(c) The Company may make payment of benefits directly to
Plan participants or their beneficiaries as they become due under
the terms of the Plan. The Company shall notify the Trustee of
its decision to make payment of benefits directly prior to the
time amounts are payable to participants or their beneficiaries.
In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Plan, the Company shall make the
balance of each such payment as it falls due. The Trustee shall
notify the Company where principal and earnings are not
sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO
TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is Insolvent.
The Company shall be considered "Insolvent" for purposes of this
Trust Agreement if (i) the Company is unable to pay its debts as
they become generally due, or (ii) the Company is subject to a
pending proceeding as a debtor under the United States Bankruptcy
Code.
(b) At times during the continuance of this Trust, as
provided in Section 1(d) hereof, the principal and income of the
Trust shall be subject to claims of general creditors of the
Company under federal and state law as set forth below:
(1) The Chief Executive Officer ("CEO") of the Company
shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of
the Company alleges in writing to the Trustee that the Company
has become Insolvent, Trustee shall determine whether the Company
is Insolvent and, pending such determination, the Trustee shall
discontinue payment of benefits to Plan participants or their
beneficiaries.
(2) Unless Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the Company or
a person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the
Company is Insolvent. The Trustee may in all events rely on such
evidence concerning the Company's solvency as may be furnished to
the Trustee and that provides the Trustee with a reasonable basis
for making a determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments to
Plan participants or their beneficiaries and shall hold the
assets of the Trust for the benefit of the Company's general
creditors. Nothing in this Trust Agreement shall in any way
diminish any right of Plan participants or their beneficiaries to
pursue their rights as general creditors of the Company with
respect to benefits due under the Plan or otherwise.
(4) The Trustee shall resume the payment of benefits
to Plan participants or their beneficiaries in accordance with
Section 2 of this Trust Agreement only after the Trustee has
determined that the Company is not Insolvent (or is no longer
Insolvent).
(c) Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust
pursuant to Section 3(b) hereof and subsequently resumes such
payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan
for the period of such discontinuance, less the aggregate amount
of any payments made to Plan participants or their beneficiaries
by the Company in lieu of the payment provided for hereunder
during any such period of discontinuance, plus earnings if any,
thereon.
SECTION 4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, the Company shall
have no right or power to direct Trustee to return to the Company
or to divert to others any of the Trust assets before all payment
of benefits have been made to Plan participants and their
beneficiaries pursuant to the terms of the Plan.
SECTION 5. INVESTMENT AUTHORITY.
(a) The Trustee shall have the authority, as directed by
the Company, to provide the following authorized investment
vehicles: government securities, common stocks, preferred
stocks, bonds, notes, commercial paper, fixed time deposits,
money market instruments, mutual funds including any investment
offered by the Trustee or its affiliates. The Company can
delegate to each participant the right to direct the Trustee as
to the appropriate allocation within the authorized investments
selected by the Company. The Trustee nevertheless retains the
authority to override a Participant's direction.
(b) In no event may the Trustee invest in securities
(including stock or right to acquire stock) or obligations issued
by the Company, other than a de minimis amount held in common
investment vehicles in which the Trustee invests. All rights
associated with assets of the Trust shall be exercised by Trustee
or the person designated by the Trustee, and shall in no event be
exercisable by or rest with Plan participants, except that voting
rights with respect to Trust assets will be exercised by the
Company.
SECTION 6. DISPOSITION OF INCOME.
During the term of the Trust, all income received by the
Trust, net of expenses and taxes, if any, shall be accumulated
and reinvested.
SECTION 7. ACCOUNTING BY TRUSTEE.
The Trustee shall keep accurate and detailed records of all
investments, receipts , disbursements, and all other transactions
required to be made, including such specific records as shall be
agreed upon in writing between the Company and the Trustee.
Within 60 days following the close of each calendar year and
within 60 days after the removal or resignation of Trustee, the
Trustee shall deliver to the Company a written account of its
administration of the Trust during such year or during the period
from the close of the last preceding year to the date of such
removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a
description of all securities and other investments purchased and
sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust
at the end of such year or as of the date of such removal or
resignation, as the case may be.
SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) The Trustee shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
material would use in the conduct of an enterprise of alike
character and with like aims, provided, however, that the Trustee
shall incur no liability to any person for any action taken
pursuant to a written direction, request or approval given by the
Company which is contemplated by, and in reasonable conformity
with, the terms of the Plan or this Trust Agreement and this
given in writing by Company. In the event of a dispute between
Company and a party, Trustee may apply to a court of competent
jurisdiction to resolve the dispute.
(b) If the Trustee, after discussion with the Company,
undertakes or defends any litigation arising in connection with
this Trust Agreement, the Company agrees to indemnify the Trustee
against the Trustee's costs, expenses and liabilities (including,
without limitation, reasonable attorneys' fees and expenses)
relating thereto and to be primarily liable for such payments.
If the Company does not pay such cost, expenses and liabilities
in a reasonably timely manner, Trustee may, upon written notice
to the Company, obtain payment from the Trust.
(c) The Trustee may consult with legal counsel (who may
also be counsel for the Company or the Trustee generally) with
respect to any of its duties or obligations hereunder.
(d) The Trustee may, hire agents, accountants, actuaries,
investment advisors, financial consultants or other professionals
to assist it in performing any of its duties or obligations
hereunder.
(e) The Trustee shall have, without exclusion, all powers
conferred on Trustees by applicable law, unless expressly
provided otherwise herein, provided, however, that if an
insurance policy is held as an asset of the Trust, Trustee shall
have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor trustee, or
to loan to any person the proceeds of any borrowing against such
policy.
(f) Notwithstanding any powers granted to the Trustee
pursuant to this Trust Agreement or to applicable law, the
Trustee shall not have any power that could give this Trust
Agreement the objective of carrying on a business and dividing
the gains from, within the meaning of section 301.7701-2 of the
Procedure and Administrative Regulations promulgated pursuant to
the Internal Revenue Code.
(g) The Trustee shall on a timely basis deliver or cause to
be executed and delivered, to the Employer, all notices,
prospectuses, finance statements proxies and proxy soliciting
materials relating to investments held hereunder. The Trustee
shall not vote any proxy or tender offer election, participate in
any voting trust, exercise any options or subscription right or
join in, dissent from or oppose any merger, reorganization,
consolidation, liquidation or sale with respect to any asset held
hereunder except in accordance with the timely written
instructions of the Company. If no such written instructions are
timely received such proxies, elections and voting trust shall
not be voted; such option or subscription rights shall not be
exercises; and such mergers, reorganization, consolidation,
acquisitions or sales hall not be joined, dissented from or
opposed.
(h) The Trustee may, in the exercise of its discretion,
invest and reinvest the assets of any trust created under this
Trust Agreement in assets issued or distributed by American
Express Finanacial Advisors or any of its successors,
subsidiaries or affiliates, even though American Express
Financial Advisors and its successors, subsidiaries or affiliates
are affiliated with the Trustee. Assets that the Trustee may
acquire pursuant to the authority granted by this paragraph
includes, but are not limited to load and no-load mutual funds.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
The Company shall pay all administrative and the Trustee's
fees and expenses. If not so paid within a reasonable time and
after written notice, the Trustee shall deduct the fees and
expenses directly from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) The Trustee may resign at any time by written notice to
the Company, which shall be effective 60 days after receipt of
such notice unless the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on 60 days
notice or upon shorter notice accepted by the Trustee.
(c) Upon resignation or removal of the Trustee and
appointment of a successor trustee, subject to Trustee's rights
to deduct fees and expenses pursuant to Section 9, all assets
shall subsequently be transferred to the successor trustee. The
transfer shall be completed within 60 days after receipt of
notice of resignation, removal or transfer, unless the Company
extends the time limit. In the event of such resignation or
removal, the Trustee and its successors or assigns shall file
with the Company a final accounting pursuant to provisions of
Section 7.
(d) If Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 thereof, by the
effective date of resignation or removal under paragraph (a) or
(b) of this section. If no such appointment has been made,
Trustee may apply to a court of competent jurisdiction for
appointment or a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR.
(a) If Trustee resigns or is removed in accordance with
Sections 10(a) or (b) hereof, the Company may appoint any third
party, such as a bank trust department or other party that may be
granted corporate trustee powers under state law, as a successor
to replace the Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the
new Trustee, who shall have all of the rights and powers of the
Trustee, including ownership rights in the Trust assets. The
Trustee shall execute any instrument necessary or reasonable
requested by the Company or the successor trustee to evidence the
transfer.
(b) The successor trustee need not examine the records and
acts of any prior trustee and may retain or dispose of existing
Trust assets, subject to Sections 7 and 8 hereof. The successor
trustee shall not be responsible for and Company shall indemnify
and defend the successor trustee from any claim or liability
resulting from any action or inaction of any prior trustee or
from any other past event, or any condition existing at the time
it becomes successor trustee.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written
instrument executed by the Trustee and the Company.
Notwithstanding the foregoing, no such amendment shall conflict
with the terms of the Plan or shall make the Trust revocable.
(b) The Trust shall not terminate until the date on which
Plan participants and their beneficiaries are no longer entitled
to benefits pursuant to the terms of the Plan, unless sooner
revoked in accordance with Section 1(b) hereof. Upon termination
of the Trust any assets remaining in the Trust shall be returned
to the Company.
(c) Upon written approval of participants or beneficiaries
entitled to payment of benefits pursuant to the terms of Plan,
the Company may terminate this Trust Agreement prior to the time
all benefit payments under the Plan have been made. All assets
in the Trust at termination shall be returned to the Company.
SECTION 13. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.
(b) Benefits payable to Plan participants and their
beneficiaries under this Trust Agreement may not be anticipated,
assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed
in accordance with the laws of Minnesota.
SECTION 14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be of
January 1, 1995.
IN WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to be effective as of the day and year first
above written.
OGDEN SERVICES CORPORATION
By:
Title: Vice President
Date:
AMERICAN EXPRESS TRUST COMPANY
By:
Title:
Date:
EXHIBIT 10.7(p)(i)
OGDEN
PROFIT SHARING PLAN
<PAGE>
OGDEN
PROFIT SHARING PLAN
TABLE OF CONTENTS
Section Page
1. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.1. "Account" . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.2. "Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.3. "Actual Contribution Percentage". . . . . . . . . . . . . . . .2
2.4. "Actual Contribution Ratio" . . . . . . . . . . . . . . . . . 2
2.5. "Actual Deferral Percentage". . . . . . . . . . . . . . . . . .2
2.6. "Actual Deferral Ratio" . . . . . . . . . . . . . . . . . . . .2
2.7. "Administrative Committee". . . . . . . . . . . . . . . . . . .2
2.8. "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.9. "Base Compensation" . . . . . . . . . . . . . . . . . . . . . .3
2.10. "Base Contribution Percentage". . . . . . . . . . . . . . . . .3
2.11. "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . . . .3
2.12. "Board of Directors". . . . . . . . . . . . . . . . . . . . . .3
2.13. "Break in Service" . . . . . . . . . . . . . . . . . . . . . .3
2.14. "Code". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.15. "Committee" . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.16. "Company" . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.17. "Company Contribution Account". . . . . . . . . . . . . . . . .3
2.18. "Company Discretionary Contributions" . . . . . . . . . . . . .3
2.19. "Company Matched Contributions" and
"Company Matched Contribution Account". . . . . . . . . . . . .4
2.20. "Compensation". . . . . . . . . . . . . . . . . . . . . . . . .4
2.21. "Contributions" . . . . . . . . . . . . . . . . . . . . . . . .4
2.22. "Direct Rollover" . . . . . . . . . . . . . . . . . . . . . . .4
2.23. "Disability". . . . . . . . . . . . . . . . . . . . . . . . . .5
2.24. "Distributee" . . . . . . . . . . . . . . . . . . . . . . . . .5
2.25. "Early Retirement Age". . . . . . . . . . . . . . . . . . . . .5
2.26. "Early Retirement Date" . . . . . . . . . . . . . . . . . . . .5
2.27. "Effective Date". . . . . . . . . . . . . . . . . . . . . . . .5
2.28. "Eligible Employee" . . . . . . . . . . . . . . . . . . . . . .5
2.29. "Eligible Retirement Plan". . . . . . . . . . . . . . . . . . .5
2.30. "Eligible Rollover Distribution". . . . . . . . . . . . . . . .5
2.31. "Employee". . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.32. "Employer". . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.33. "Excess Compensation" . . . . . . . . . . . . . . . . . . . . .6
2.34. "Excess Contribution Percentage". . . . . . . . . . . . . . . .6
2.35. "Family Member" . . . . . . . . . . . . . . . . . . . . . . . .6
2.36. "Highly Compensated Employee" or
"Highly Compensated Participant". . . . . . . . . . . . . . . .6
2.37. "Hours of Service". . . . . . . . . . . . . . . . . . . . . . .7
2.38. "Individual Retirement Account Rollover
Contribution" . . . . . . . . . . . . . . . . . . . . . . . . .8
2.39. "Investment Committee". . . . . . . . . . . . . . . . . . . . .8
2.40. "Investment Funds". . . . . . . . . . . . . . . . . . . . . . .8
2.41. "IRS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.42. "Labor Department". . . . . . . . . . . . . . . . . . . . . . .8
2.43. "Normal Retirement Age" . . . . . . . . . . . . . . . . . . . .8
2.44. "Normal Retirement Date". . . . . . . . . . . . . . . . . . . .8
2.45. "Participant" . . . . . . . . . . . . . . . . . . . . . . . . .8
2.46. "Participating Company" . . . . . . . . . . . . . . . . . . . .8
2.47. "Pre-tax Contributions" . . . . . . . . . . . . . . . . . . . .9
2.48. "Pre-tax Contribution Account". . . . . . . . . . . . . . . . .9
2.49. "Plan". . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.50. "Plan Year" . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.51. "Prior Plan". . . . . . . . . . . . . . . . . . . . . . . . . .9
2.52. "Qualified Domestic Relations Order". . . . . . . . . . . . . .9
2.53. "Qualified Plan Rollover Contribution". . . . . . . . . . . . .9
2.54. "Regulations" . . . . . . . . . . . . . . . . . . . . . . . . 10
2.55. "Rollover Contribution" . . . . . . . . . . . . . . . . . . . 10
2.56. "Salary". . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.57. "Surviving Spouse". . . . . . . . . . . . . . . . . . . . . . 10
2.58. "Taxable Year". . . . . . . . . . . . . . . . . . . . . . . . 10
2.59. "Trust" or "Trust Fund" . . . . . . . . . . . . . . . . . . . 10
2.60. "Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.61. "Valuation Date". . . . . . . . . . . . . . . . . . . . . . . 11
2.62. "Vesting Service" . . . . . . . . . . . . . . . . . . . . . . 11
2.63. "Year of Service" . . . . . . . . . . . . . . . . . . . . . . 11
2.64. "Years of Vesting Service". . . . . . . . . . . . . . . . . . 11
3. PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1. Date of Participation . . . . . . . . . . . . . . . . . . . . 11
3.2. Participation and Adjustments . . . . . . . . . . . . . . . . 12
3.3. Duration. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.4. Reemployment. . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5. Establishment and Maintenance of Separate
Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4. SAVINGS FEATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.1. Pre-tax Contributions . . . . . . . . . . . . . . . . . . . . 12
4.2. Distribution of Excess Pre-tax Contributions. . . . . . . . . 13
4.3. Election to Institute, Change, or
Resume Contributions. . . . . . . . . . . . . . . . . . . . . 13
4.4. Limitation on Pre-tax Contributions . . . . . . . . . . . . . 14
4.5. Refund of Excess Contributions. . . . . . . . . . . . . . . . 15
4.6. Rollover Contributions. . . . . . . . . . . . . . . . . . . . 17
5. COMPANY CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . 17
5.1. Company Matched Contributions . . . . . . . . . . . . . . . . 17
5.2. Company Discretionary Contributions . . . . . . . . . . . . . 17
5.3. Time of Payment of Company Contributions. . . . . . . . . . . 18
5.4. Form of Payment of Company Contributions. . . . . . . . . . . 18
5.5. Maintenance of Accounts Shall Not Vest
any Right in Assets . . . . . . . . . . . . . . . . . . . . . 18
5.6. Limitation on Company Matched Contributions . . . . . . . . . 18
6. ALLOCATION OF COMPANY AND MATCHING CONTRIBUTIONS . . . . . . . . . . 21
6.1. Allocation of Discretionary Company Contributions . . . . . . 21
6.2. Discretionary Company Contribution Formula. . . . . . . . . . 21
6.3. Allocation of Matching Contribution . . . . . . . . . . . . . 22
7. INVESTMENT OF CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . 22
7.1. Investment by Trustees. . . . . . . . . . . . . . . . . . . . 22
7.2. Investment Funds. . . . . . . . . . . . . . . . . . . . . . . 22
7.3. Investment Elections. . . . . . . . . . . . . . . . . . . . . 23
8. VALUATIONS AND ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . 24
8.1. Separate Accounts . . . . . . . . . . . . . . . . . . . . . . 24
8.2. Allocation of Earnings and Losses Valuation
of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.4. Allocation of Forfeitures . . . . . . . . . . . . . . . . . . 25
9. ELIGIBILITY FOR BENEFITS . . . . . . . . . . . . . . . . . . . . . . 25
9.1. Retirement Date . . . . . . . . . . . . . . . . . . . . . . . 25
9.2. Distribution of Participant's Account on
Retirement, Death, or Disability. . . . . . . . . . . . . . . 25
9.3. Distribution on other Termination of Service. . . . . . . . . 26
9.4. In-Service and Hardship Withdrawals . . . . . . . . . . . . . 26
9.5. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.6. Restrictions on Distributions . . . . . . . . . . . . . . . . 30
10. VESTED INTERESTS. . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.1. Pre-tax Contributions. . . . . . . . . . . . . . . . . . . . 30
10.2. Company Contributions. . . . . . . . . . . . . . . . . . . . 30
10.3. Transferred Accounts . . . . . . . . . . . . . . . . . . . . 30
10.4. Break in Service for Vesting . . . . . . . . . . . . . . . . 30
11. METHOD OF PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . 31
11.1. Payment of Benefits. . . . . . . . . . . . . . . . . . . . . 31
11.2. Commencement of Payment. . . . . . . . . . . . . . . . . . . 31
11.3. Time of Payment. . . . . . . . . . . . . . . . . . . . . . . 32
11.4. Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . 33
12. MAXIMUM AMOUNT OF ALLOCATION. . . . . . . . . . . . . . . . . . . . 33
12.1. Application of Section 12. . . . . . . . . . . . . . . . . . 33
12.2. Maximum Additions to Account . . . . . . . . . . . . . . . . 33
12.3. Order of Reduction . . . . . . . . . . . . . . . . . . . . . 34
12.4. Additional Account Limitations . . . . . . . . . . . . . . . 34
13. DESIGNATION OF BENEFICIARIES. . . . . . . . . . . . . . . . . . . . 35
13.1. Beneficiary Designation. . . . . . . . . . . . . . . . . . . 35
13.2. Failure to Designate Beneficiary . . . . . . . . . . . . . . 35
14. ADMINISTRATION OF THE PLAN. . . . . . . . . . . . . . . . . . . . . 36
14.1. Powers and Duties of Administrative Committee. . . . . . . . 36
14.2. Powers and Duties of Investment Committee. . . . . . . . . . 36
14.3. Powers and Duties of Trustee . . . . . . . . . . . . . . . . 36
14.4. Agents, Report of Committees to Board. . . . . . . . . . . . 36
14.5. Structure of Committees. . . . . . . . . . . . . . . . . . . 37
14.6. Adoption of Procedures of Committees . . . . . . . . . . . . 37
14.7. Demands for Money. . . . . . . . . . . . . . . . . . . . . . 37
14.8. Claims for Benefits. . . . . . . . . . . . . . . . . . . . . 38
14.9. Hold Harmless. . . . . . . . . . . . . . . . . . . . . . . . 38
14.10. Service of Process . . . . . . . . . . . . . . . . . . . . . 38
14.11. Specific Powers and Duties . . . . . . . . . . . . . . . . . 39
15. WITHDRAWAL OF PARTICIPATING COMPANY . . . . . . . . . . . . . . . . 39
15.1. Withdrawal of Participating Company. . . . . . . . . . . . . 39
15.2. Distribution after Withdrawal. . . . . . . . . . . . . . . . 39
15.3. Transfer to Successor Plan . . . . . . . . . . . . . . . . . 40
16. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST. . . . . . . . . 40
16.1. Right to Amend, Suspend or Terminate Plan. . . . . . . . . . 40
16.2. Retroactivity. . . . . . . . . . . . . . . . . . . . . . . . 41
16.3. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
16.4. No Further Contribution. . . . . . . . . . . . . . . . . . . 41
16.5. Partial Termination. . . . . . . . . . . . . . . . . . . . . 42
16.6. Exclusive Benefit of Participants and
Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . 42
17. GENERAL LIMITATIONS AND PROVISIONS. . . . . . . . . . . . . . . . . 42
17.1. All Risk on Participants and Beneficiaries . . . . . . . . . 42
17.2. Trust is Sole Source of Benefits . . . . . . . . . . . . . . 42
17.3. No Right to Continued Employment . . . . . . . . . . . . . . 42
17.4. Payment on Behalf of Payee . . . . . . . . . . . . . . . . . 42
17.5. No Alienation. . . . . . . . . . . . . . . . . . . . . . . . 43
17.6. Missing Payee. . . . . . . . . . . . . . . . . . . . . . . . 43
17.7. Required Information . . . . . . . . . . . . . . . . . . . . 43
17.8. Subject to Trust Agreement . . . . . . . . . . . . . . . . . 43
17.9. Communications to Committees . . . . . . . . . . . . . . . . 44
17.10. Communications from Participating
Company or Committees . . . . . . . . . . . . . . . . . . . 44
17.11. Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
17.12. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 44
17.13. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . 44
17.14. Mistake of Fact. . . . . . . . . . . . . . . . . . . . . . . 44
17.15. Qualification of Plan. . . . . . . . . . . . . . . . . . . . 44
17.16. Deductibility of Contributions . . . . . . . . . . . . . . . 45
18. TOP HEAVY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 45
18.1. Top Heavy Plan . . . . . . . . . . . . . . . . . . . . . . . 45
18.2. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 45
18.3. Top Heavy Vesting. . . . . . . . . . . . . . . . . . . . . . 47
18.4. Minimum Contribution . . . . . . . . . . . . . . . . . . . . 48
18.5. Limitations on Contributions . . . . . . . . . . . . . . . . 48
18.6. Other Plans. . . . . . . . . . . . . . . . . . . . . . . . . 48
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
<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.
Subsequently, the Atlantic Design Profit Sharing Plan (effective
January 1, 1992), and the Lenzar Electro-Optics, Inc. Profit
Sharing Plan (effective April 1, 1994) were 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 effective as
herein provided, 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 hereafter 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
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 on the date of the person's retirement or
other termination of employment.
<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; and Company Discretionary Account,
pursuant to Sections 5.1 and 5.2; Pre-tax Contribution Account,
pursuant to Section 4.1, Rollover Account 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. "Actual Contribution Percentage" means, for any
Plan Year, the Plan's Actual Contribution Ratio of the sum of (A)
the Company Matched Contributions made on account of 401(k) Matched
Contributions made during the Plan Year and allocated to the
Participant's Company Match Account during such Plan Year
(excluding any Company Matched Contributions which are
nonforfeitable when made and are subject to the IRS Regulations
Section 1.401(k) - 1(b) and are used to meet the Actual Deferral
Percentage test under Section 4), and (B) at the Administrative
Committee's election in accordance with IRS Regulations, Pre-tax
Contributions (including excess contributions under Section 4, if
the contribution would have been received in cash by the
Participant for the Plan Year) to the amount of the Participant's
Salary for such Plan Year.
2.4. "Actual Contribution Ratio" means the average of
the contribution ratios for each specified group of Eligible
Employees as determined by the Administrative Committee.
2.5. "Actual Deferral Percentage" means, for any Plan
Year, the Plan's Actual Deferral Ratio of the amount of
contributions allocated to the Participant's Pre-tax Contribution
Account (and any Company Matched Contributions which meet the
requirements of Section 1.401(k)-1(b)(5) of the IRS Regulations)
during the Plan Year to the amount of the Participant's Salary for
such Plan Year.
2.6. "Actual Deferral Ratio" means the average of the
deferral ratios for each specified group of eligible Employees, as
determined by the Administrative Committee.
2.7. "Administrative Committee" means the Administrative
Committee provided for in Section 14.
2.8. "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.
2.9. "Base Compensation" means Compensation paid to a
Participant that does not exceed the annual Social Security taxable
wage base.
2.10. "Base Contribution Percentage" means the contribution
percentage as calculated in Section 6.2 which is applied to the Base
Compensation.
2.11. "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.
2.12. "Board of Directors" means the Board of Directors
of the Company.
2.13. "Break in Service" means a 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 individual would have completed but for
a maternity or paternity absence, as determined by the
Administrative Committee in accordance with this Section 2.13, the
Code and the Regulations; provided, however, that the total Hours
of Service so credited shall not exceed 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 2.13, 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.
2.14. "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.
2.15. "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.
2.16. "Company" means Ogden Services Corporation or any
successor to the Company.
2.17. "Company Contribution Account" means the
Participant's Company Matched Contribution Account.
2.18. "Company Discretionary Contributions" and "Company
Discretionary Contribution Account" means those Employer
contributions made pursuant to Section 5.2 and that portion of the
Participant's Account to which such contributions are credited.
2.19. "Company Matched Contributions" and "Company
Matched Contribution Account" means those Employer contributions
made pursuant to Section 5.1 and that portion of the Participant's
Account to which such contributions are credited.
2.20. "Compensation" means, for each Plan Year beginning
before January 1, 1994, an Employee's first $200,000 (as adjusted
for cost of living to the extent permitted by the Code and IRS
Regulations), and for each Plan Year beginning on or after January
1, 1994, an Employee's first $150,000 (as adjusted by the
Commissioner of the IRS , for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code) (the "annual
compensation limit") of 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 profit sharing payments
(an annual cash payment determined by the Compensation Committee of
the Board and paid to the Employee), 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. 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, the term 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 annual compensation limit is exceeded, then the limit
shall be prorated among the affected individuals in proportion to
each such individual's Compensation as determined under this
Section 2.20 prior to the application of the annual compensation
limit.
2.21. "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 Sections 5.1 and 5.2, Pre-tax Contributions
made by a Participant on a pre-tax basis pursuant to Section 4.1,
Rollover Contributions pursuant to Section 4.6, and any other
contribution made in accordance with Appendix A.
2.22. "Direct Rollover" means (i) a distribution by the
Plan to an Eligible Retirement Plan as specified by a Distributee
and (ii) a payment by another employee retirement plan to the Plan
as a Rollover Contribution as specified by an Eligible Employee.
<PAGE>
2.23. "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.
2.24. "Distributee" means a Participant or a former
Participant, a Participant's or former Participant's Surviving
Spouse or a former spouse of a Participant or former Participant
who is a payee under a Qualified Domestic Relations Order to which
a distribution is to be made under the Plan shall also be deemed to
be a Distributee.
2.25. "Early Retirement Age" means the date a
Participant attains age 55 and completes 10 Years of Service.
2.26. "Early Retirement Date" means the first day of the
month coincident with or next following the Participant's Early
Retirement Age.
2.27. "Effective Date" of this amendment and restatement
means January 1, 1994. The original effective date of the Plan is
January 1, 1982.
2.28. "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.
2.29. "Eligible Retirement Plan" means (i) an individual
retirement account, as described in Section 408(a) of the Code,
(ii) an individual retirement annuity, as described in Section
408(b) of the Code, (iii) an annuity plan, as described in Section
403(a) of the Code, and (iv) a qualified plan and trust, as
described in Sections 401(a) and 501(a) of the Code; provided,
however, that in the case of an Eligible Rollover Distribution to
a Surviving Spouse, an Eligible Retirement Plan means an individual
retirement account or an individual retirement annuity, as
described in Sections 408(a) and 408(b) of the Code, respectively.
2.30. "Eligible Rollover Distribution" means any
distribution from the Plan of all or any portion of the balance to
the credit of a Distributee, except that an Eligible Rollover
Distribution shall not include: (i) any distribution to the extent
such distribution is required under Section 11.2(b) and Section
401(a)(9) of the Code, (ii) any distribution that is one of a
series of the substantially equal periodic payments (not less
frequently than annually) made for the life of the Distributee or
the joint lives (or joint life expectancies) of the Distributee or
the joint lives (or joint life expectancies) of the Distributee and
the Distributee's Beneficiary, or for a period of ten years or
more, (iii) the portion of any distribution that is not includible
in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities), and
(iv) after tax contributions made in accordance with Appendix A.
2.31. "Employee" means an individual in the employ of
the Employer who is employed on an hourly or salaried basis.
2.32. "Employer" means the Company and each other
Participating Company, or any of them.
2.33. "Excess Compensation" means Compensation paid that
exceeds the annual Social Security taxable wage base.
2.34. "Excess Contribution Percentage" means the
Contribution percentage as calculated in Section 6.2 and which is
applied to the Excess Compensation.
2.35. "Family Member" means a spouse, lineal ascendants
and descendants of an Employee or former Employee and the spouses
of such lineal ascendants and descendants.
2.36. "Highly Compensated Employee" or "Highly Compensated
Participant" means an Employee or Participant 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 and who,
during the look-back year (i) received Salary from the Employer in
excess of $75,000 (as adjusted pursuant to Section 415(d) of the
Code); (ii) received Salary 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 Salary 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 (1) Employees who are both
described in the preceding sentence if the term determination year
is substituted for the term look-back year and the Employee is one
of the 100 Employees who received the most Salary from the Employer
or an Affiliate during the determination year, (2) Employees who
are five percent owners at any time during the look-back year or
determination year, and (3) Employees who have separated from
Service or deemed to have separated from Service prior to the
determination year, 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 Salary received during the determination
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
Salary 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 Section 2.36, the "determination year" shall be the Plan 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), or, if elected,
the calendar year immediately preceding the calendar year 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 Salary 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 or top 10 Highly Compensated
Employee shall be treated as a single Employee receiving Salary and
contributions or benefits, as applicable, equal to the sum of such
Salary 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 Salary that is
considered, will be made in accordance with Section 414(q) of the
Code and IRS Regulations. Notwithstanding the foregoing, the
Administrative Committee may elect the simplified definition of
Highly Compensated Employee and Highly Compensated Participant
contained in Section 414(q)(12) of the Code. If the Administrative
Committee so elects such definition, then $50,000 (as adjusted
pursuant to Section 415(d) of the Code) shall be substituted for
$75,000 in (i) above and (ii) above will be disregarded.
2.37. "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.
2.38. "Individual Retirement Account Rollover Contribution"
means the entire amount received by an Eligible Employee from
an individual retirement account representing the entire amount in
the account (the "qualifying amount") if no part of the amount in
the account is attributable to any source other than (i) an
employer's plan and trust described in Section 401(a) of the Code,
that is exempt from federal income tax under Section 501(a) of the
Code, or (ii) a qualified annuity plan meeting the requirements of
Section 403(a) of the Code, and any earnings on such sums. An
Individual Retirement Account Rollover Contribution shall be
accepted only if the entire qualifying amount was received by the
Eligible Employee in cash, and only such cash amount is included in
the Individual Retirement Account Rollover Contribution. The
Eligible Employee may transfer any portion of such cash amount to
the Trust on or before the 60th day after the day on which the
Participant received the qualifying amount.
2.39. "Investment Committee" means the Investment
Committee provided for in Section 14.2.
2.40. "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.
2.41. "IRS" means the United States Internal Revenue
Service.
2.42. "Labor Department" means the United States
Department of Labor.
2.43. "Normal Retirement Age" means the Participant's
65th birthday.
2.44. "Normal Retirement Date" means the first day of
the month coincident with or next following the Participant's
Normal Retirement Age.
2.45. "Participant" means any Employee who begins to
participate in the Plan as provided in Section 3, and whose
participation is not terminated.
2.46. "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.
2.47. "Pre-tax Contributions" means 401(k) matched
contributions and 401(k) unmatched contributions as described in
Section 4.1.
2.48. "Pre-tax Contribution Account" means the 401(k)
matched account and the 401(k) unmatched account as described in
Section 4.1.
2.49. "Plan" means this Ogden Profit Sharing Plan, as
the same may be amended from time to time.
2.50. "Plan Year" means the calendar year.
2.51. "Prior Plan" means, individually or collectively,
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, effective as of January 1, 1992, Atlantic Design
Profit Sharing Plan and effective as of April 1, 1994, the Lenzar
Electro-Optics, Inc. Profit Sharing Plan.
2.52. "Qualified Domestic Relations Order" means any
judgment, decree or order (including approval of a 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.
2.53. "Qualified Plan Rollover Contribution" means,
(a) For Rollover Contributions made prior to
January 1, 1993, the balance to the credit of an Eligible Employee
under an employee retirement plan meeting the requirements of
Section 401(a) of the Code, paid to an Eligible Employee in one or
more distributions which constitute a "lump sum distribution"
within the meaning of Section 402(d)(4)(A) of the Code (determined
without reference to Sections 402(d)(4)(B) and (F) of the Code) or
within one taxable year of the Eligible Employee on account of a
termination of such plan or, in the case of a profit sharing plan
or stock bonus plan, a complete discontinuance of contributions
under such plan. The maximum amount which may be transferred prior
to January 1, 1993 shall not exceed the fair market value of all
the property received in the distribution reduced by:
(i) the Eligible Employee's own
contributions under such plan and any other amounts considered as
contributed by him (determined by applying Section 72(f) of the
Code); less
(ii) any amounts previously distributed to
him from such other plan and not includible in his gross income.
(b) For Rollover Contributions made after January
1, 1993, a Qualified Plan Rollover Contribution means any
distribution paid to an Eligible Employee from an employee
retirement plan meeting the requirements of Section 401(a) of the
Code, of all or any portion of the balance to the credit of an
Eligible Employee, except that a Qualified Plan Rollover
Contribution shall not include: (i) any distribution to the extent
such distribution is required under Section 11.2(b) and Section
401(a)(9) of the Code, (ii) any distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life of the Distributee or
the joint lives (or joint life expectancies) of the Distributee and
the Distributee's Beneficiary, or for a period of ten years or
more, and (iii) the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities). A Participant must transfer any portion of his
distribution to be rolled over to the Trust on or before the 60th
day after the day on which he received the distribution.
2.54. "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.
2.55. "Rollover Contribution" and "Rollover Contribution
Account" means any contribution made by an Eligible Employee
pursuant to Section 4.6 and that portion of the Participant's
Account to which such contributions are credited.
2.56. "Salary" means for each Plan Year beginning before
January 1, 1994, an Employee's first $200,000 (as adjusted for cost
of living to the extent permitted by the Code and IRS Regulations)
of total remuneration paid or payable for Service while an Eligible
Employee, without giving effect to any reduction therein pursuant
to an election under Section 4.1 nor any contributions by the
Employer to the Plan or any other retirement plan maintained by the
Employer, as reported on IRS Form W-2. For each Plan Year
beginning on or after January 1, 1994, Salary means an Employee's
first $150,000 (as adjusted by the Commissioner of the IRS, for
years beginning after December 31, 1993, for increases in the cost
of living in accordance with Section 401(a)(17)(B) of the Code) of
total remuneration paid or payable for Service while an Eligible
Employee, without giving effect to any reduction therein pursuant
to an election under Section 4.1 nor any contributions by the
Employer to the Plan or any other retirement plan maintained by the
Employer, as reported on IRS Form W-2.
2.57. "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.
2.58. "Taxable Year" means the calendar year.
2.59. "Trust" or "Trust Fund" means the trust established
by the Company as a part of the Plan.
2.60. "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.
2.61. "Valuation Date" means the last day of each
calendar month and such other date or dates specified by the
Administrative Committee.
2.62. "Vesting Service" means Years of Vesting Service
counted from each anniversary beginning on an Eligible Employee's
date of hire to termination date.
2.63. "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 Committee,
then, for purposes of determining whether such Employee was
participating in the Plan, as provided in Section 3, he shall be
credited with a Year of Service for such 12 consecutive month
period.
2.64. "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.
SECTION 3. PARTICIPATION
3.1. Date of Participation. Each person who is a
Participant on the Effective Date shall continue to be a
Participant in the Plan on such Effective Date. An Eligible
Employee in the employ of Lenzar Electro-Optics, Inc. on March 31,
1994 shall become a Participant on April 1, 1994. Each other
Eligible Employee who shall have attained age 21 shall become a
Participant in the Plan on the first day of the month coincident
with or next following 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.
3.5. Establishment and Maintenance of Separate Accounts.
(a) The Administrative Committee shall establish
and maintain or cause to be established and maintained in respect
to each Participant an Account showing his interest under the Plan
and in the Trust Fund (including separate accounts showing his
respective interests, if any, in each of the Investment Funds) with
respect to (i) Pre-tax Contributions made under Section 4.1, (ii)
Company Contributions made under Sections 5.1 and 5.2, (iii) Roll-over
Contributions made pursuant to Section 4.6, (iv) other
Accounts (as set forth in Appendix A), and (v) such other accounts
as may be needed from time to time, and all other relevant data
pertaining thereto. Each Participant shall be furnished with a
written statement of his Account and the value of each such
separate interest at least annually and upon any distribution to
him. In maintaining the Accounts under the Plan or causing them to
be maintained, the Administrative Committee may conclusively rely
on the valuations of the Trust Fund made in accordance with the
Plan and the terms of the Trust Agreement.
(b) 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.
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 in whole percentages 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 $9,240, as adjusted, for Plan Years beginning after December
31, 1994, 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. Notwithstanding the foregoing and as
described in Section 4.4, the Administrative Committee reserves the
right, with or without notice, to limit a Highly Compensated
Participant's Pre-tax Contributions as may be necessary in order to
comply with the requirements of the Code. 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. In
the event that the aggregate amount of Pre-tax Contributions
exceeds the limitation set forth in Section 4.1, the amount of such
excess, increased by any income and decreased by any loss allocable
thereto shall be distributed to the Participant making such excess
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 designates, 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,
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 excess deferrals
distributed pursuant to this Section 4.2 shall be equal to 10% of
the income or loss for the period between the end of the Plan Year
and the date of such distribution multiplied by the number of
calendar months which have elapsed since the end of the Plan Year.
For purposes of determining a calendar month, a distribution made
on or before the 15th day of the month will be treated as being
made on the last day of the preceding month; a distribution made
after the 15th day of the month will be treated as being made on
the last day of such month. The amount of excess deferrals that
may be distributed with respect to a Participant shall be reduced
by any excess contributions previously distributed pursuant to
Section 4.6 with respect to such Participant for the Plan Year
beginning with or within the Calendar Year to which such excess
deferrals relate.
4.3. Election to Institute, Change, or Resume Contributions.
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. The Administrative Committee may, in
its discretion and in a uniform and nondiscriminatory manner, waive
its right to such written notice at any time and from time to time.
4.4. Limitation on Pre-tax Contributions. Notwithstanding
the Pre-tax Contributions made pursuant to Section 4.1,
the Actual Deferral Percentage of the Highly Compensated Employees
shall not exceed the greater of (i)and (ii), where (i) is the
Actual Deferral Percentage for such Plan Year for the Eligible
Employees who are not Highly Compensated Employees multiplied by
1.25; and (ii) is the Actual Deferral Percentage for such Plan Year
for the Eligible Employees who are not Highly Compensated Employees
multiplied by 2.0; provided that the Actual Deferral Percentage of
the Highly Compensated Employees does not exceed the Actual
Deferral Percentage for such other Eligible Employees by more than
two percentage points or that the aggregate test described in
Section 4.5(d)(ii) is passed. 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 4.5.
(a) 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 relates
to Compensation that either (i) would have been received by the
Participant during the Plan Year, but for the election pursuant to
Section 4.1 or (ii) is attributable to Hours of Service performed
by such Participant during the Plan Year and would have been
received by the Participant within two and one-half months after
the close of the Plan Year, but for the election pursuant to
Section 4.1. 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 4.4. The Actual Deferral Ratio under this
Section 4.4 for any Highly Compensated Employee who participates in
two or more Code Section 401(k) 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 of such Highly
Compensated Employee shall include the Pre-tax Contributions and
salary of his Family Members, and such Family Members shall not be
considered as separate Eligible Employees in determining the Actual
Deferral Ratio.<PAGE>
4.5. Refund of Excess Contributions.
(a) 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 Deferral Percentage tests 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 4.1. In
the event that neither of such Actual Deferral Percentage tests is
satisfied, the Administrative Committee shall, to the extent
permissible under the Code and IRS Regulations, refund the excess
contributions in the manner described in this Section 4.5.
(b) Excess Contributions shall be 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 Deferral 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 4.5 and his salary. 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 Pre-tax Contributions,
shall be determined by reducing the Actual Deferral Ratio in
accordance with the leveling method described in this Section 4.5
and the excess Pre-tax 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 Pre-tax
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 Pre-tax
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 4.5, the amount of excess Pre-tax Contributions to be
distributed pursuant to Section 4.2 with respect to a Participant
for a Plan Year shall be reduced by any excess Pre-tax
Contributions distributed to such Participant for such Plan Year
pursuant to Section 4.1. In no case may the amount of excess Pre-
tax 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.
(c) The distribution of any excess Pre-tax
Contributions shall include the gains and losses allocable thereto
for the Plan Year. The gain or loss allocable to the excess Pre-
tax Contributions for the period between the end of the Plan Year
and the distribution date is equal to 10% of the income allocated
to such excess contributions for the Plan Year multiplied by the
number of calendar months which have elapsed since the end of the
Plan Year. For purposes of determining the number of calendar
months, a distribution occurring on or before the 15th day of the
month will be treated as having been made on the last day of the
preceding month, a distribution made after the 15th day of the
month will be treated as having been made on the first day of the
next month. Notwithstanding the foregoing provisions of this
Section, the amount of excess Pre-tax Contributions to be
distributed with respect to a Highly Compensated Employee for a
Plan Year, shall be reduced by any excess Pre-tax Contributions
distributed to such Participant for such Plan Year pursuant to
Section 4.1. In no case may the amount of such distributed excess
Pre-tax Contributions exceed the amount of Pre-tax Contributions
made on behalf of the Highly Compensated Employee for the Plan
Year.
(d) (i) Notwithstanding any other provision of
the Plan, the sum of the Actual Deferral Percentage of those
Eligible Employees who are Highly Compensated Employees and the
Actual Contribution Percentage of those Eligible Employees who are
Highly Compensated Employees shall not exceed the aggregate limit
determined in accordance with Section 4.5(d)(ii).
(ii) For purposes of this Section
4.5(d)(ii), the "aggregate limit" for a Plan Year means the greater
of (A) and (B) where (A) is the sum of (1) 1.25 multiplied by the
greater of the Actual Deferral Percentage or the Actual
Contribution Percentage of those Eligible Employees who are not
Highly Compensated Employees, and (2) two plus the lesser of the
Actual Deferral Percentage or the Actual Contribution Percentage of
those Eligible Employees who are not Highly Compensated Employees,
provided that the amount shall not exceed twice the lesser of the
Actual Deferral Percentage or the Actual Contribution Percentage of
those Eligible Employees who are not Highly Compensated Employees
and (B) is the sum of (1) 1.25 multiplied by the lesser of the
Actual Deferral Percentage or the Actual Contribution Percentage of
those Eligible Employees who are not Highly Compensated Employees,
and (2) two plus the greater of the Actual Deferral Percentage or
the Actual Contribution Percentage of those Eligible Employees who
are not Highly Compensated Employees, provided that this amount
shall not exceed twice the greater of the Actual Deferral
Percentage or the Actual Contribution Percentage of those Eligible
Employees who are not Highly Compensated Employees.
(iii) The Administrative Committee shall
determine as of the end of the Plan Year, and at such time or times
in its discretion whether the aggregate limit has been exceeded.
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 4.1, then determining the treatment of
excess contributions under Section 4.1, and then determining the
treatment of excess aggregate contributions under Section 5.1(d).
In the event that the aggregate limit is exceeded the Actual
Contribution percentage of those Eligible Employees who are Highly
Compensated Employees shall be reduced in the same manner as
described in Sections 5.1 until the aggregate limit is no longer
exceeded.
<PAGE>
4.6. Rollover Contributions.
(a) A Participant may make a Rollover
Contribution to the Plan at any time of a Qualified Plan Rollover
Contribution or an Individual Retirement Account Rollover Contribution.
The Plan will also accept a Direct Rollover of an amount
paid to the Plan on behalf of a Participant which would qualify as
a Qualified Plan Rollover Contribution if paid to the Eligible
Employee. If a Participant elects to make a Rollover Contribution,
the Participant shall supply the Administrative Committee with
evidence, assurances, opinions and certifications it may deem
necessary to establish to its satisfaction that the amounts to be
contributed qualify as a Qualified Plan Rollover Contribution, an
Individual Retirement Account Rollover Contribution or a Direct
Rollover and will not affect the qualification of the Plan or the
tax-exempt status of the Trust under Sections 401(a) and 501(a) of
the Code, respectively. The amount so transferred must consist of
cash distributed from such other plan or any portion of the cash
proceeds from the sale of distributed property other than cash, to
the extent permitted by Section 402(a)(6)(D) of the Code.
(b) Any Rollover Contribution shall be allocated
to the appropriate Participant's Rollover Contribution Account
which shall be established and separately accounted for, shall be
invested in accordance with the direction of the Participant pursuant
to Section 7, be debited or credited in accordance with Section
8, and shall be distributed in the same manner and at the same time
as described in Sections 9 and 11 with respect to a distribution of
benefits under the Plan to such Eligible Employee.
(c) Each request by any Eligible Employee to make
a Rollover Contribution shall be subject to review by the
Administrative Committee which shall make a case by case determination
that each Rollover Contribution meets the requirements set
forth in Section 4.6(a) and such other requirements or conditions
as the Administrative Committee may, from time to time and in its
sole discretion, impose; provided, however, that any determination
made by the Administrative Committee pursuant to this Section
4.6(c) shall not have the effect of discriminating in favor of
Employees who are officers, shareholders or Highly Compensated
Employees.
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 paid 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 e 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 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.
5.6. 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 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. 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 5.6. The
Actual Contribution Ratio taken into account under this Section 5.6
for any Highly Compensated Employee who is eligible to receive
Company Matched Contributions 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 Highly Compensated
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 salary of such Participant shall
include the Company Matched Contributions and Company Discretionary
Contributions and salary 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 5.6 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
Pre-tax Contributions under Section 4.5. 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 5.6.
(c) For purposes of this Section 5.6, "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 5.6(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 5.6(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 5.6(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 Salary. 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 the family
aggregation rules, the amount of excess aggregate contributions, as
defined in this Section 5.6(c), shall be determined by reducing the
Actual Contribution Ratio in accordance with the leveling method
described in this Section 5.6(c) and the excess aggregate contributions
are allocated among the Family Members in proportion to the
contributions of each Family Member that have been combined.
(d) 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 5.6(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 Account, 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 5.6(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 gain
or loss allocable to the excess aggregate contributions for the
period between the end of the Plan Year and the distribution date
is equal to 10% of the income allocated to such excess aggregate
contributions for the Plan Year multiplied by the number of
calendar months which have elapsed since the end of the Plan Year.
For purposes of determining the number of calendar months, a
distribution occurring on or before the 15th day of the month will
be treated as having been made on the last day of the preceding
month, a distribution made after the 15th day of the month will be
treated as having been made on the first day of the next month.
The amount of any forfeitures made pursuant to the Section 5.6
shall be used to reduce Company Contributions in accordance with
Section 8.4.
SECTION 6. ALLOCATION OF COMPANY AND MATCHING CONTRIBUTIONS
6.1. Allocation of Discretionary Company Contributions.
(a) The Administrative Committee shall allocate
the contribution of each Participating Company made in accordance
with Section 5.2 among all Participants who are (i) 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 Participant based upon
the formula described in Section 6.2.
(b) If he was not employed by the Employer on the
last day of the Plan Year, then a contribution will be allocated
with respect to a Participant whose participation in the Plan
terminated during the Plan Year solely 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. 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 the formula
described in Section 6.2.
6.2. Discretionary Company Contribution Formula.
(a) The Discretionary Company Contribution will
be allocated to the Participants' Accounts by multiplying the
Participant's Base Compensation by the Base Contribution Percentage
and adding to the product his Excess Compensation multiplied by the
Excess Contribution Percentage.
(b) The Base Contribution Percentage shall equal
the Company Discretionary Contribution divided by the sum of the
Base Compensation of all Participants plus 2 times the Excess
Compensation of all Participants. The Excess Contribution
Percentage shall equal 2 times the Base Contribution Percentage,
but in no event shall it be more than 5.7 percentage points above
the base contribution percentage or such other maximum as may be
announced by the IRS.
<PAGE>
6.3. Allocation of Matching Contribution. A Participating
Company's Company Matching Contributions 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 of such Participating
Company on whose behalf a Matching Contribution has been made.
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. Interest, dividends and other
distributions received and gains realized on securities or other
property held in any Investment Fund shall be reinvested in such
Investment Fund.
(b) The Investment Funds shall consist of the
following investments:
(1) A "Company Stock Fund" which shall be
invested in the common stock of Ogden Corporation and cash;
(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 or bank investment contracts or
synthetic guaranteed interest or investment contracts, with the
earnings of such contracts being blended for allocation purposes;
(4) A "Merrill Lynch Treasury Fund", a
mutual fund which invests in a portfolio of United States Treasury
securities and equivalents; and, effective October 1, 1994,
(5) The "Fidelity Magellan Fund" which shall
be invested by a professional manager or managers in common stock
and securities convertible into common stock of domestic, foreign
and multinational issuers of all sizes that offer potential for
growth; and
(6) The "T. Rowe Price International Stock
Fund" which shall be invested by Rowe Price-Fleming International
Inc. in primarily common stocks of established non-United States
companies in the Far East, Europe, South Africa, Australia, Canada
and other areas.
7.3. Investment Elections.
(a) A Participant's Pre-tax 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 in multiples of 5%. If a
Participant does not make a written election, he shall be deemed to
have elected to have his Account invested 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 Section
7.3(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 5%.
(d) The net credit balances in Participants'
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.
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 (i) all payments made to him or on his behalf, (ii) any
amounts forfeited by him in accordance with Section 10.4, and
(iii) 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
9.4(b), 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 may be needed and 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, investment
manager, 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
10.4(a), any forfeitures arising under the Plan shall be used to
reduce the Company Contributions specified in Section 5.
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, or Disability.
(a) Upon the termination of service of a
Participant on or after his Normal Retirement Date, Early
Retirement Date, (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.
(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.
9.3. Distribution on other Termination of Service. Upon
the termination of employment 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 the Valuation Date coincident with
or next following the later of (i) the effective date of
termination of employment, (ii) the date of termination from the
payroll and (iii) the receipt by the Company of the appropriate
forms requesting a distribution.
9.4. In-Service and Hardship Withdrawals.
(a) Notwithstanding the provisions of Section 9.2
and Section 9.3 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.
Notwithstanding the provisions of Section 9.2 and
Section 9.3, the Administrative Committee may distribute to a
Participant on the first day of any month following the receipt of
a written application, in a lump sum an amount equal to all or any
part of the value of the Participants' After-Tax Account (as
provided for in Appendix A).
(b) 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 an immediate and heavy financial need 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 9.4(b) 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, and (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 9.4(b) may be requested by a
Participant only after he has (i) withdrawn all employee
contributions permitted to be withdrawn under this or 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 9.4(b) shall not exceed the amount required to meet the
financial emergency (including all applicable income taxes and
penalties). Subject to the provisions of this Section 9.4(b), 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 $500. Withdrawals shall become effective on the last day of
the 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 the withdrawal is requested. Payment of any
withdrawals pursuant to this Section 9.4(b) shall be made solely in
cash. A Participant who makes a hardship withdrawal pursuant to
this Section 9.4(b) 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 9.4(b) 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 9.4(b) was
made.
For purposes of this Section, the term "immediate
and heavy financial need" means a situation in which a Participant
or his dependents are confronted by extreme financial need that
cannot be satisfied from other sources and shall be limited to the
need of Funds for: (i) the payment of medical expenses described
in Section 213(d) of the Code incurred by, or necessary (even
though not yet incurred)/or the treatment of, the Participant, the
Participant's spouse, or any dependents of the Participant (as
defined in Section 152 of the Code); (ii) the Purchase (excluding
mortgage payments) of a principal residence for the Participant;
(iii) the payment of tuition and related educational expenses for
the 12 months following the date of the withdrawal for post-
secondary education of the Participant, his spouse, children, or
dependents (as defined in Section 152 of the Code); (iv) the
prevention of the eviction of the Participant from his principal
residence or the prevention of foreclosure on the mortgage of the
Participant's principal residence; or (v) such other immediate and
heavy financial emergency as determined by the Administrative
Committee pursuant to uniformly applicable guidelines and IRS
Regulations.
9.5. Loans.
(a) 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 15 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, 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 increments with $500 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, nondiscriminatory rules consistently
applied to all Participants. Effective January 1, 1995, only two
outstanding loans are permissible under the Plan. There will be an
administration fee charged for any second loan. Such
administration fee will be paid directly by the Participant to the
Company. For any loan approved prior to December 31, 1994, 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.
(b) 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 first
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. A loan
may not have a maturity date of less than six months 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.
(c) 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 salary. 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.
(d) A loan shall be deemed an investment of the
borrowing Participant's Account and shall not reduce the amount
credited to his Account. At the time a loan is made, the amount
loaned shall first be deemed an investment of, and allocated to,
the Participant's Vested Interest in his Company Matched
Contribution Account; to the extent the loan is in excess of such
amounts, it shall then be deemed an investment of, and allocated to
the Participant's 401(k) Matched Account not already allocated to
a loan; to the extent it is in excess of such amounts, it shall
then be deemed an investment of, and allocated to, the
Participant's 401(k) Unmatched Account not already allocated to a
loan; for those Participants that participated in the Lenzar
Electro-Optic, Inc. Profit Sharing Plan, to the extent it is in
excess of such amounts, it shall be deemed an investment of and
allocated to such Participants' Prior 401(k) Account, as described
in Appendix A, not already allocated to a loan; to the extent it is
in excess of such amounts, it shall then be deemed an investment
of, and allocated to, the Participant's Vested Interest in his
Company Discretionary Account not already allocated to a loan and,
for those Participants who participated in the Prior Plans, to the
extent it is in excess of such amounts, it shall be deemed an
investment of and allocated to their (i) Prior Company Accounts,
(ii) Rollover Contribution Accounts and (iii) After-Tax Accounts,
in such order, to extent the loan is in excess of such amounts.
(e) The Investment Funds in which the Participant's
Account is invested in accordance with Section 7 of the Plan
shall be reduced by the amount of any loan made hereunder in the
ratio that the value of each such Investment Fund bears to the
value of all Investment Funds in which the Participant's Accounts
are invested; provided, however, that the Company Stock Fund may
not be reduced for any loan made hereunder.
(f) The Administrative Committee shall, in
accordance with its established standards, review and approve or
disapprove a completed application as soon as practicable after its
receipt thereof, and shall promptly notify the applicant of such
approval or disapproval. In addition, in the event the Trustee, in
its sole discretion, determines that it is not reasonably and prudently
able, in the interests of Participants and Beneficiaries, to
liquidate the necessary amount from any of the Investment Funds,
the Trustee shall notify the Administrative Committee, and the
amount to be paid to each Participant whose completed application
designated that a loan be made from such Investment Fund shall be
reduced in proportion to the ratio which the aggregate amount that
the Trustee has advised the Administrative Committee may prudently
be liquidated bears to the aggregate amount which all such
Participants designated to be paid from such Investment Fund.
(g) The right to receive loan repayments,
including interest thereon, shall be considered an asset of the
Plan and all loan repayments of principal and interest shall be
credited to the Investment Funds that the Participant's future
contributions are allocated on the date of such repayment in the
same proportion as that in which each was liquidated and credited
to the Account in the order reversed to the order used to make
payment of the loan proceeds to the Participant.
(h) Outstanding loans shall share in Plan
expenses in a manner determined by the Administrative Committee.
The Administrative Committee shall apply these rules on a uniform
and nondiscriminatory basis. With appropriate notice, the Administrative
Committee may amend these rules, including amendments that
affect outstanding loans, as may be required to conform to
applicable law or regulation.
9.6. Restrictions on Distributions. Notwithstanding
any other provision of the Plan, a Participant's Pre-tax Contribution
Account may not be distributed earlier than upon one of the
following events: (i) The Participant's Retirement, death,
Disability or termination of employment; (ii) 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); (iii) the Participant's
attainment of age 59-1/2 or upon the Participant's Hardship as
described in Section 9.4(b); or (iv) the sale or disposition by the
Employer to an unrelated corporation of (1) substantially all of
the assets used in a trade of business or (2) 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.
SECTION 10. VESTED INTERESTS
10.1. Pre-tax Contributions. A Participant will be 100%
vested and have a nonforfeitable right to the value of his Pre-tax
Contribution Account.
10.2. Company Contributions. A Participant will become
100% vested and have a nonforfeitable right to the value of the
Company Contribution Account upon his (i) Normal Retirement Age,
(ii) Early Retirement Date, (iii) death, (iv) Disability, or (v)
completion of five Years of Vesting Service. Any Participant who
was eligible to participate in the Plan on December 31, 1990 shall
be 100% vested in his Account. An Eligible Employee in the employ
of Lenzar Electro-Optics, Inc. who became a Participant on April 1,
1994, shall be 100% vested in his Account.
10.3. Transferred Accounts. A Participant will be 100%
vested in any account transferred to the Plan as referenced in
Appendix A.
10.4. Break in Service for Vesting.
(a) If a terminated Participant incurs five
consecutive Breaks in Service before he returns to the employment
of the Employer, 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, or upon receipt of his Vested Interest upon termination
of service, whichever is earlier.
(b) If the terminated Participant returns to the
employment of the Employer 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 Company
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 reallocation
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 employment as if such amount had been held in
the Trust since the date of distribution as provided in Section 8,
and then (ii) multiplying his Vested Interest by such adjusted
total account, and then (iii) subtracting the amount of his
distribution on his most recent termination of employment, 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 employment.
Any amount repaid pursuant to this Section 10.4(b) 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
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;
provided, however, that a Participant may elect to receive the
value of his Company Stock Fund in shares of Ogden Corporation
Common Stock; further, provided, that with respect to a
Participant's March 31, 1994 account balance under the Lenzar
Electro-Optics, Inc. Profit Sharing Plan, such Participant may
elect to have said account balance distributed by any method of
payment which was available under such Plan as in effect on March
31, 1994.
11.2. Commencement of Payment.
(a) Any benefit payable to a Participant under
Section 11.1 shall be paid within 60 to 90 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 the Participant retires. Such benefit
shall be paid, in accordance with the IRS 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 Administrative 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 IRS Regulations). If such
Participant's Surviving Spouse dies after such Participant's death
but before distributions to such Surviving Spouse commence, this
Section 11.2(d) shall be applied to require payment of any further
benefits as if such Surviving Spouse were the Participant.
(e) Pursuant to IRS 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.
(f) If a Participant who is a 5% 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 Section 11.2(f), a 5% 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.
(g) All distributions made hereunder shall be
made in accordance with the provisions of Section 401(a)(9) of the
Code and IRS Regulations thereunder.
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 and
prior to the date that payments commence pursuant to the provisions
of the Plan. Subject to Section 11.3(b), payments shall be made no
later than the 90th 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 IRS 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
and, during the period of deferral mandated by the absence of
receipt of written consent, the Participant may change his
investment direction under Section 7.
(c) Benefits payable under the Plan to a
Participant or Beneficiary from the Company Stock Fund, other than
for a withdrawal due to an immediate and heavy financial need, an
after-tax withdrawal, or loans, made pursuant to Section 9, shall
be paid in 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 Administrative 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.
11.4. 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.
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 Salary. 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
and all elective contributions made under any cash or deferred
arrangement within the meaning of Section 1.401(k)-1(g)(3) of IRS
Regulations including excess deferrals; (iii) voluntary employee
after-tax contributions made under any qualified employee pension
benefit plan; (iv) forfeitures, if applicable; (v) contributions
allocated to any individual medical account defined in Section
415(l)(2) of the Code that is part of a defined benefit plan
maintained by the Company or Affiliate; and (vi) the amount allocated
to a separate account established for post-retirement medical
or life insurance benefits described in Section 419A(d)(1) of the
Code.419A(d)(1) of the Code for such Participant, provided that the
Participant is a "Key employee" as defined in Section 419A(d)(3) of
the Code. The term Annual Additions shall include, whether or not
refunded, excess deferrals, excess contributions and excess
aggregate contributions, as described in Sections 4.2 and 4.5.
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 but shall
exclude Rollover Contributions.
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,
allocation of forfeitures, 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, first, pursuant
to Section 5.1 and, second, pursuant to 5.2, and 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 IRS
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 Employer.
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)), and 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 Section 12.4(a), the
following terms shall have the following meanings:
(1) "Defined Contribution Fraction" shall
mean, as to any Participant for any Plan Year, a fraction, (A) the
numerator of which is the sum of the Annual Additions, for the Plan
Year and all prior Plan Years, as of the close of the Plan Year and
(B) 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 IRS
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 IRS Regulations) of the
Participant under any defined benefit plan (as defined in Sections
414(j) and 415(k) of the Code) maintained by the Company or any of
its Affiliates 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 for his high three years within the meaning
of Section 415(b)(3) of the Code for such Plan Year.
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 Participant'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.
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
Investment Committee 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 subcommittee 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 Committee 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.
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 Participating 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.
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 Section 16.1(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 thereunder.
(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 his Account, except as provided in
Section 16.2 below.
<PAGE>
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 a 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.
<PAGE>
16.5. Partial Termination. In the event 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,
16.4 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.
16.6. Exclusive Benefit of Participants and Beneficiaries.
Except as provided in Sections 17.4, 17.15 and 17.16 or as
required by a Qualified Domestic Relations Order, 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 and Surviving Spouses under the Plan. Upon the
transfer by a Participating Company of any money to the Trustee,
all interest of the Participating Company therein shall cease and
terminate.
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. The prohibition against assignment or alienation of
benefits contained in this Section 17.5 shall not apply to any loan
to a Participant made under Section 9.5.
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. Gender. Whenever used in the Plan the masculine
gender includes the feminine.
17.12. 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.
17.13. 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.
17.14. 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.
17.15. 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 IRS 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.
17.16. 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 IRS 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.
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 Salary
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 and its
Affiliates but only if he received Salary 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
5% of the Company's outstanding shares of stock or at least 5% of
the total combined voting power of Ogden Corporation's shares of
stock, or owned at least 1% of Ogden Corporation's shares of stock,
and whose annual Salary from Ogden Corporation exceeds $150,000.<PAGE>
(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
Section 18.2(b)(i)(A). If there are more officers than are counted
under the preceding sentence, only those who had the highest
aggregate Salary 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 employment as
an administrative executive of the Company or Participating
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 1% or 5% owner of Ogden
Corporation, his ownership interest in any entity related to Ogden
Corporation solely by reason of Sections 414(b), (c) or (m) of the
Code will be disregarded. (iv) For purposes of determining whether
a person receives an annual Salary in excess of $150,000, Salary
received from each Company and Affiliate shall be taken into
account.
(c) "Non-Key Employee" means: (i) any Employee
who is not a Key Employee, or (ii) 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 (i) in which a Key Employee participates or (ii) 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 account balances and cumulative annual
accrued benefits of a Participant (i) who is a Non-Key Employee but
who was a Key Employee in a prior Plan Year, or (ii) who has not
been credited with one Hour of Service with any Employer at any
time during the Five Year period ending on the Determination Date
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: (i) for all defined benefit
plans, the present value calculated as provided in those plans; and
(ii) for all defined contribution plans, the fair market value of
each Participant's account (including amounts attributable to
voluntary employee contributions from a qualified employee pension
benefit plan sponsored by the Company or an Affiliate) determined
as of the most recent Determination Date increased by: (A)
distributions made during the five Plan Years ending on the Determination
Date (except distributions already included in determining
the Value of the Accounts distributions made during the Five Plan
Years preceding the Determination Date under a terminated plan
which, if it had not been terminated, would have been required to
be included in the Required Aggregation Group); and (B) all
rollover contributions distributed from the plans to a qualified
employee benefit plan not sponsored by the Company or an
Affiliate, and decreased by; (C) any deductible employee contributions;
(D) 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 (E) rollover
contributions distributed from the Plan to a qualified employee
pension benefit plan by the Company or an Affiliate.
18.3. Top Heavy Vesting.
(a) If a Plan is a Top Heavy Plan with respect to
any Plan Year, a Participant's nonforfeitable percentage of his
Company Contribution Account shall not be less than the amount
determined in accordance with the following vesting schedule:
<TABLE>
<CAPTION>
Years of Vesting Service Percentage
<C> <C>
less than 3 0%
3 or more 100%
</TABLE>
(b) In the event the vesting provisions of
Section 10.2 are amended, or changed on account of the Plan becoming
or ceasing to be a Top Heavy Plan, any Participant who has
completed at least three Years of Service, for purposes of determining
a Participant's nonforfeitable right to his Company Contribution
Account, may elect to have the nonforfeitable percentage
of such Company Contribution Account computed under the Plan
without regard to such amendment or change by notifying the
Administrative Committee in writing within the election period
hereinafter described. The election period shall begin on the date
such amendment is adopted or the date such change is effective, as
the case may be, and shall end no earlier than the latest of the
following dates: (i) the date which is 60 days after the day such
amendment is adopted; (ii) the date which is 60 days after the day
such amendment or change becomes effective; or (iii) the date which
is 60 days after the day the Participant is given written notice of
such amendment or change by the Administrative Committee. Any
election made pursuant to this Section 18.3(b) shall be
irrevocable.
18.4. Minimum Contribution. 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 Non-Key Employee who
has satisfied the eligibility requirements of Section 3.1, whether
or not a Participant in the Plan and who is in the employ of the
Employer at the end of the Plan Year, regardless of his Salary,
shall not be less than the lesser of (i) 3% of such Non-Key
Employee's Salary, 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.
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 Section
18.5(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
"4%" for "3%".
18.6. Other Plans. The Administrative Committee shall,
to the extent permitted by the Code and in accordance with IRS
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 inappropriate omissions or
required duplication of minimum benefits or contributions.
<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, as in
effect on January 1, 1995, that were transferred from plans and
trusts sponsored and maintained by Affiliates of the Company or
Ogden Corporation and that were qualified and tax exempt under
Sections 401(a) and 501(c) of the Code. These accounts are subject
to all of the provisions of 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 will be credited to this account
under any circumstances. Any Participant on 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 the (i) Company 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 and (ii) the company
contributions (and earnings thereon) credited to the accounts of
employees who formerly participated in the Lenzar Electro-Optics,
Inc. Profit Sharing Plan. No further contributions will be
credited to this account under any circumstances. Any Participant
on 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 qualified employees
retirement plan other than the Plan. Effective January 1, 1994,
this account was merged into the Plan's Rollover Contribution
Account.
4. PRIOR 401(k) ACCOUNT - This account was established
to receive the 401(k) contributions (and earnings thereon credited
to the accounts of employees who formerly participated in the
Lenzar Electro-Optics, Inc. Profit Sharing Plan. No further
contributions will be credited to this account under any
circumstances. Any Participant on whose behalf such an account was
established shall be fully vested in such account at all times.
EXHIBIT 10.7(u)(i)
AMENDMENT
This Amendment, dated as of December 29th, 1994, to the
Employees' Stock Option Plan (the "Plan") of Ogden Projects, Inc.
("OPI").
WHEREAS, OPI has entered into an Amended and Restated
Agreement and Plan of Merger, dated as of September 27, 1994 (the
"Merger Agreement"), by and among Ogden Corporation, a Delaware
corporation ("Ogden"), OPI Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Ogden ("Acquisition"),
and OPI, whereby Acquisition will merge with and into OPI (the
"Merger") and OPI will become a wholly-owned subsidiary of Ogden;
and
WHEREAS, the Merger will become effective upon the filing of
a Certificate of Merger with the Office of the Secretary of State
of the State of Delaware in accordance with the Delaware General
Corporation Law (the "Effective Date"); and
WHEREAS, on the Effective Date, the holders of shares of
common stock of OPI, par value $.50 per share (the "OPI Common
Stock"), outstanding on the Effective Date will be entitled to
receive 0.84 of a share of common stock of Ogden, par value $.50
per share (the "Ogden Common Stock"), in exchange for each
outstanding share of OPI Common Stock (the "Exchange Ratio"); and
WHEREAS, Section 3.1 (d) of the Merger Agreement provides that
upon the Effective Date, each option granted under the Plan to
purchase shares of OPI Common Stock which is outstanding prior to
the Effective Date will be converted into an option to purchase
shares of Ogden Common Stock on the terms set forth below.
NOW, THEREFORE, OPI hereby amends the Plan as follows:
1. Conversion of Options under the Plan. Pursuant to
Section 3.1 (d) of the Merger Agreement, each option granted under
the Plan to purchase shares of OPI Common Stock (the "OPI Stock
Options") which are outstanding immediately prior to the Effective
Date will be converted into the right to purchase a number of
shares of Ogden Common Stock equal to the number of whole shares of
Ogden Common Stock (rounded down to nearest whole number) into
which the number of shares of OPI Common Stock subject to such OPI
Stock Option immediately prior to the Effective Date would have
been converted, had they been converted in the Merger, at an option
price per share equal to the option price per share immediately
prior to the Effective Date divided by the Exchange Ratio.
Fractional shares of Ogden Common Stock will not be issuable upon
the exercise of such options; any fractions will be rounded down to
the nearest whole number. No options, other than OPI Stock Options
which are outstanding immediately prior to the Effective Date, may
be granted under the Plan on or after the Effective Date.
2. Except as set forth above, each OPI Stock Option that is
outstanding immediately prior to the Effective Date will otherwise
be exercisable upon the same terms and conditions as set forth in
each option agreement relating to such OPI Stock Option.
IN WITNESS WHEREOF, the undersigned has caused this Amendment
to be executed as of the day and year first above written and
certifies that the provisions of this Amendment, as set forth in
the Merger Agreement, were unanimously approved by the Board of
Directors of OPI on September 27, 1994.
OGDEN PROJECTS, INC.
By: /s/J.L. Effinger
J. L. Effinger, Assistant
Secretary
EXHIBIT 10.7(w)(i)
OGDEN PROJECTS
PROFIT SHARING PLAN
<PAGE>
OGDEN PROJECTS PROFIT SHARING PLAN
Table of Contents
Section Page
SECTION 1. PURPOSE . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . 2
SECTION 3. PARTICIPATION . . . . . . . . . . . . . . . . . . 11
3.1 Date of Participation. . . . . . . . . . . . . . . . 11
3.2 Participation and Adjustments. . . . . . . . . . . . 12
3.3 Duration. . . . . . . . . . . . . . . . . . . . . . 12
3.4 Reemployment. . . . . . . . . . . . . . . . . . . . 12
3.5 Establishment and Maintenance of Separate Account. 12
3.6 Maintenance of Accounts Shall Not Vest Any
Right in Plan Assets. . . . . . . . . . . . . . . . 13
SECTION 4. PRE-TAX CONTRIBUTIONS AND
AFTER-TAX CONTRIBUTIONS . . . . . . . . . . . . 13
4.1 Pre-Tax Contributions. . . . . . . . . . . . . . . . 13
4.2 Refund of Excess Contributions. . . . . . . . . . . 17
4.3 After-Tax Contributions. . . . . . . . . . . . . . . 17
4.4 Institute, Change, Resume, Suspend,
Contributions. . . . . . . . . . . . . . . . . . . . 17
4.5 Rollover Contributions. . . . . . . . . . . . . . . 17
SECTION 5. PARTICIPATING COMPANY CONTRIBUTIONS . . . . . . . 18
5.1 Participating Company Contributions. . . . . . . . . 18
5.2 Limitation on After-Tax Contributions. . . . . . . . 18
5.3 Allocation of Participating Company
Contributions. . . . . . . . . . . . . . . . . . . . 21
5.4 Time of Payment of Participating Company
Contributions. . . . . . . . . . . . . . . . . . . . 22
5.5 Form of Payment of Participating Company
Contributions. . . . . . . . . . . . . . . . . . . . 22
5.6 Return of Employer Contributions. . . . . . . . . . 22
SECTION 6. INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . 22
6.1 Investment by Trustees. . . . . . . . . . . . . . . 22
6.2 Investment Funds. . . . . . . . . . . . . . . . . . 22
6.3 Investment Elections. . . . . . . . . . . . . . . . 23
6.4 Company Liability. . . . . . . . . . . . . . . . . . 24
SECTION 7. VALUATIONS AND ADJUSTMENTS OF
PARTICIPANTS' ACCOUNTS. . . . . . . . . . . . . 24
7.1 Allocation of Earnings and Losses - Valuation
of Trust. . . . . . . . . . . . . . . . . . . . . . 24
7.2 Expenses.. . . . . . . . . . . . . . . . . . . . . . 25
7.3 Allocation of Forfeitures. . . . . . . . . . . . . . 25
<PAGE>
SECTION 8. ELIGIBILITY FOR BENEFITS. . . . . . . . . . . . . 26
8.1 Distribution of Participant's Account on
Retirement and Disability. . . . . . . . . . . . . . 26
8.2 Distribution of Participant's Account on
Death. . . . . . . . . . . . . . . . . . . . . . . 26
8.3 Distribution on other Termination of
Service. . . . . . . . . . . . . . . . . . . . . . . 26
8.4 Hardship Withdrawals; In-Service
Withdrawals. . . . . . . . . . . . . . . . . . . . . 26
8.5 Loans. . . . . . . . . . . . . . . . . . . . . . . . 28
8.6 Restrictions on Distributions. . . . . . . . . . . . 30
SECTION 9. VESTING . . . . . . . . . . . . . . . . . . . . . 31
9.1 Vesting. . . . . . . . . . . . . . . . . . . . . . . 31
9.2 Vesting Schedule. . . . . . . . . . . . . . . . . . 31
9.3 Break in Service for Vesting.. . . . . . . . . . . . 31
9.4 Full Vesting. . . . . . . . . . . . . . . . . . . . 32
SECTION 10. METHOD OF PAYMENT OF BENEFITS . . . . . . . . . . 32
10.1 Payment of Benefits. . . . . . . . . . . . . . . . 32
10.2 Commencement of Benefits. . . . . . . . . . . . . . 32
10.3 Time of Payment. . . . . . . . . . . . . . . . . . 34
10.4 Latest Commencement Date. . . . . . . . . . . . . . 34
10.5 Direct Rollover. . . . . . . . . . . . . . . . . . 35
10.6 Special Tax Notice. . . . . . . . . . . . . . . . . 35
SECTION 11. DESIGNATION OF BENEFICIARIES . . . . . . . . . . 35
11.1 Beneficiary Designation. . . . . . . . . . . . . . 35
11.2 Failure to Designate Beneficiary. . . . . . . . . . 35
SECTION 12. ADMINISTRATION OF THE PLAN. . . . . . . . . . . . 36
12.1 Powers and Duties of Administrative
Committee. . . . . . . . . . . . . . . . . . . . . 36
12.2 Powers and Duties of the Investment
Committee.. . . . . . . . . . . . . . . . . . . . . 36
12.3 Powers and Duties of Trustees. . . . . . . . . . . 36
12.4 Agents, Reports of Committees. . . . . . . . . . . 37
12.5 Structure of the Committees. . . . . . . . . . . . 37
12.6 Adoption of Procedures of Committees. . . . . . . . 37
12.7 Demands for Money. . . . . . . . . . . . . . . . . 37
12.8 Hold Harmless; Indemnification. . . . . . . . . . . 38
12.9 Claims for Benefits. . . . . . . . . . . . . . . . 38
12.10 Communications. . . . . . . . . . . . . . . . . . . 39
12.11 Participant Information. . . . . . . . . . . . . . 40
12.12 Service of Process. . . . . . . . . . . . . . . . . 40
12.13 Specific Powers and Duties. . . . . . . . . . . . . 40
SECTION 13. TERMINATION OR WITHDRAWAL OF
PARTICIPATING COMPANY PARTICIPATION . . . . . . 40
13.1 Termination or Withdrawal of Participating
Company. . . . . . . . . . . . . . . . . . . . . . . 40
13.2 Distributions Upon Termination or Withdrawal . . . . 40
13.3 Transfer to Successor Plan. . . . . . . . . . . . . 41
SECTION 14. AMENDMENT OR TERMINATION OF THE
PLAN AND THE TRUST. . . . . . . . . . . . . . . 42
14.1 Right to Amend, Suspend or Terminate Plan. . . . . 42
14.2 Retroactivity. . . . . . . . . . . . . . . . . . . 42
14.3 Notice. . . . . . . . . . . . . . . . . . . . . . . 42
14.4 No Further Contributions. . . . . . . . . . . . . . 42
14.5 Partial Termination. . . . . . . . . . . . . . . . 43
14.6 Exclusive Benefit.. . . . . . . . . . . . . . . . . 43
SECTION 15. GENERAL LIMITATIONS AND PROVISIONS. . . . . . . . 44
15.1 All Risk on Participants and Beneficiaries. . . . . 44
15.2 No Right to Continued Employment. . . . . . . . . . 44
15.3 Payment of Behalf of Payee. . . . . . . . . . . . . 44
15.4 No Alienation. . . . . . . . . . . . . . . . . . . 44
15.5 Missing Payee. . . . . . . . . . . . . . . . . . . 45
15.6 Subject to Trust Agreement. . . . . . . . . . . . . 45
15.7 Gender; Singular. . . . . . . . . . . . . . . . . . 45
15.8 Captions. . . . . . . . . . . . . . . . . . . . . . 45
15.9 Applicable Law. . . . . . . . . . . . . . . . . . . 45
SECTION 16. MAXIMUM AMOUNT OF ALLOCATION. . . . . . . . . . . 45
16.1 Application of Section 16. . . . . . . . . . . . . 45
16.2 Maximum Annual Additions to Account. . . . . . . . 45
16.3 Order of Reduction. . . . . . . . . . . . . . . . . 46
16.4 Additional Account Limitations. . . . . . . . . . . 47
SECTION 17. TOP HEAVY PROVISIONS. . . . . . . . . . . . . . . 48
17.1 Top Heavy Plan. . . . . . . . . . . . . . . . . . . 48
17.2 Top Heavy Plan Definitions. . . . . . . . . . . . . 49
17.3 Top Heavy Plan Minimum Contribution. . . . . . . . 51
17.4 Top Heavy Plan Annual Addition Limitations. . . . . 52
17.5 Other Plans. . . . . . . . . . . . . . . . . . . . 52
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . 53
APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . . 55
<PAGE>
SECTION 1. PURPOSE
The purpose of the Ogden Projects Profit Sharing Plan
(the "Plan") is to continue to provide retirement benefits and
certain other benefits to eligible employees of Ogden Projects,
Inc. and its participating subsidiaries and other participating
companies, or to the beneficiaries of such employees, and thereby
to continue to encourage employees to make and continue careers
with Ogden Projects, Inc., all as set forth herein and in the
trust adopted as a part of the Plan.
Prior to the adoption of the Plan, Ogden Projects, Inc.
and several other subsidiaries of Ogden Corporation were each a
"Participating Company" under the Ogden corporation Profit Sharing
Plan (the "Prior Plan"), and the related trust thereunder
(the "Prior Plan Trust"). As a result of the Tax Reform Act of
1986, Ogden Corporation, parent of the sponsor of the Prior Plan,
determined that it would be in the best interest of all Prior
Plan Participating Companies, and their respective employees, to
elect whether to continue to be a Participating Company under the
Prior Plan or to establish a separate defined contribution plan.
Effective as of January 1, 1989, Ogden Projects, Inc. determined
that it was in the best interest of Ogden Projects, Inc., its
subsidiaries, affiliated companies and the employees of such
companies to adopt the Plan, such plan being substantially similar
and a continuation of the Prior Plan. All service credited to an
individual as a participant under the Prior Plan was credited to
such individual under the Plan; provided, that such individual
became a Participant of the Plan on or after January 1, 1989, and
further provided, that such service was credited solely in
accordance with the terms and provisions of the Plan. With the
adoption of the Plan, the trustee of the Prior Plan Trust
segregated a proportional share of the assets of the Prior Plan,
including any earnings, and transferred such assets to the trustee
of the Plan's trust to be held in trust for the Participants of
the Prior Plan who continue to be participants of the Plan. By
letter dated June 19, 1991, the District Director of Internal
Revenue, Baltimore, Maryland determined that (i) the adoption of
the Plan and its related trust, (ii) the spinoff and transfer of
assets and liabilities from the Prior Plan and Prior Plan Trust
to the Plan and the Plan's trust, and (iii) the crediting of
service, as described herein, satisfied the requirements of
Sections 401(a), 401(k) and 501(a) of the Internal Revenue Code of
1986.
Subsequent to the issuance of the District Director's
favorable determination letter, effective December 31, 1991, the
Ogden Environmental Services ("OES") Profit Sharing Plan merged
with the Plan. In addition to OES (now known as Ogden Waste
Treatment Services, Inc.), Ogden Yorkshire Water Co. participates
in the Plan.
The Plan, as set forth herein, constitutes an amendment
and restatement of the Plan through January 1, 1994. Although
this restatement is generally effective January 1, 1989, the
enactment of the Unemployment Compensation Amendments of 1992, and
the Omnibus Budget Reconciliation Act of 1993, as well as the
adoption of miscellaneous administrative and operational changes,
necessitates different effective dates for different Plan Sections.
The Plan, as amended and restated, and maintained
hereunder, is intended to continue to qualify as a plan and a trust
which meet the requirements of Sections 401(a), 401(k) and 501(a)
of the Internal Revenue Code of 1986, as now in effect or hereafter
amended, or any other applicable provisions of law, including,
without limitation, the Employee Retirement Income Security
Act of 1974.
The rights of any person who terminated employment or
who retired on or before the effective date of a particular
amendment, including his eligibility for benefits and the time
and form in which benefits, if any, will be paid, and the actuarial
assumptions used to compute such benefits, shall be determined
solely under the terms of the Prior Plan or the Plan as in
effect on the date of his termination of employment or retirement,
unless such person is thereafter reemployed and again becomes a
participant in the Plan.
SECTION 2. DEFINITIONS
When used herein the following terms shall have the
following meanings:
2.1 "Account" or "Participant's Account" means the
Account established and maintained on behalf of a Participant,
including such Participant's Company Contribution Account, Pre-Tax
Contribution Account, After-Tax Contribution Account, Roll-over
Contribution Account and any other account establishing
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 OPI
Administrative Committee as provided for in Section 12. For
purposes of the Act, the Administrative Committee shall be the
administrator of the Plan and its members shall be named
fiduciaries with respect to matters for which they are responsible
under the Plan.
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) which is under
common control with 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 required to be
aggregated with the Company pursuant to the IRS Regulations under
Section 414(o) of the Code; except that for purposes of applying
the provisions of Sections 16 and 17 with respect to the
limitations on contributions, Section 415(h) of the Code shall
apply.
2.5 "After-Tax Contributions" and "After-Tax
Contribution Account" means those After-Tax contributions made
pursuant to Section 4.3 and that portion of the Participant's
Account to which such contributions are credited.
2.6 "Annual Net Profit" means current and accumulated
net income and earnings of each Participating Company, as
determined by each Participating Company, in accordance with
generally accepted accounting principles, without regard to any
federal, state, and local income taxes. If any Participating
Company is prevented from making a contribution by reason of having
insufficient Annual Net Profit, then any other Participating
Company who, along with such Participating Company, is a member of
an "affiliated group" within the meaning of Section 1504 of the
Code and does have sufficient Annual Net Profit, may make a
contribution on behalf of such Participating Company, up to the
amount so prevented.
2.7 "Beneficiary" means the beneficiary or beneficiaries
designated by a Participant pursuant to Section 11 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 a 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 individual would have
completed but for a maternity or paternity absence, as determined
by the Administrative Committee in accordance with this Section 2.9
and the Labor Department Regulations; provided, however, that the
total Hours of Service so credited shall not exceed 501 Hours of
Service and that the individual timely provides the Administrative
Committee with such information as it may 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 2.9, 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 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.
2.12 "Company" means Ogden Projects, Inc., a State of
Delaware corporation.
2.13 "Company Contributions" and "Company Contribution
Account" means those Company Contributions made pursuant to Section
5.1 and that portion of the Participant's Account to which such
contributions are credited.
2.14 "Compensation" means for each Plan Year beginning
before January 1, 1994, an Employee's first $200,000 (as adjusted
for cost of living to the extent permitted by the Code and IRS
Regulations) and for each Plan Year beginning on or after January
1, 1994, Compensation means an Employee's first $150,000 (as
adjusted by the Commissioner of the IRS, for years beginning after
December 31, 1993, for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code) (the "annual
compensation limit"), of remuneration paid or payable for Service
while an Employee and a Participant and performed during the Plan
Year and, but for the Eligible Employee's Pre-Tax Contributions,
would have been received by such Employee by the March 15 following
the close of the Plan Year, without giving effect to any reduction
therein pursuant to such Participant's election under Section 4.1.
Compensation includes any deferred income earned by the Employee,
salary deferrals made pursuant to Section 4.1 and Section 125 of
the Code, but excludes imputed income, other non-cash compensation,
amounts of special discretionary cash compensation, severance
payments, contributions to the Plan or any other pension, profit
sharing or benefit plan maintained by a Participating Company, any
benefit payment under the Plan, or any other similar plan,
reimbursed expenses and withholding taxes remitted by a
Participating Company on behalf of the Employee with respect to
imputed income. 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) of the Code shall apply, except that in
applying such rules, the term 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 annual compensation limit is exceeded, then the limit
shall be prorated among the affected individuals in proportion to
each such individual's Compensation as determined under this
Section 2.14 prior to the application of the annual compensation
limit.
2.15 "Direct Rollover" means (i) a distribution by the
Plan to an Eligible Retirement Plan as specified by a Distributee
and (ii) a payment by another employee retirement plan to the
Plan as a Rollover Contribution as specified by an Eligible
Employee.
2.16 "Disability" means an Employee's physical or
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 Company 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.
2.17 "Distributee" means a Participant or a former
Participant. A Participant's or former Participant's Surviving
Spouse or a former spouse of a Participant or former Participant
who is a payee under a Qualified Domestic Relations Order to
which a distribution is to be made under the Plan shall also be
deemed to be a Distributee.
2.18 "Early Retirement Age" means the date on which a
Participant has attained age 55 and has completed five Years of
Service.
2.19 "Early Retirement Date" means the first day of
the month coincident with or next following a Participant's
retirement after reaching his Early Retirement Age but prior to his
Normal Retirement Age.
2.20 "Effective Date" means, for this amendment and
restatement, January 1, 1994. The original effective date of the
Plan is January 1, 1989.
2.21 "Eligible Employee" means any Employee excluding
(i) any nonresident alien, (ii) any Employee who is included in a
unit of Employees covered by a collective bargaining agreement
which does not provide for his participation in the Plan, (iii)
any Employee paid on a hourly basis and who are in the employ of
units that have been designated by the Company as being ineligible
to participate in the Plan, and for the 1994 Plan Year,
(iv) any Highly Compensated Employee designated by the
Administrative Committee to be ineligible to participate in the
Plan, unless or until the Administrative Committee rescinds such
prohibition.
2.22 "Eligible Retirement Plan" means (i) an individual
retirement account, as described in Section 408(a) of the
Code, (ii) an individual retirement annuity, as described in
Section 408(b) of the Code, (iii) an annuity plan, as described in
Section 403(a) of the Code, and (iv) a qualified plan and trust,
as described in Sections 401(a) and 501(a) of the Code; provided,
however, that in the case of an Eligible Rollover Distribution to
a Surviving Spouse, an Eligible Retirement Plan means an individual
retirement account or an individual retirement annuity, as
described in Sections 408(a) and 408(b) of the Code, respectively.
2.23 "Eligible Rollover Distribution" means any
distribution from the Plan of all or any portion of the balance to
the credit of a Distributee, except that an Eligible Rollover
Distribution shall not include: (i) any distribution to the extent
such distribution is required under Section 10.2(c) and Section
401(a)(9) of the Code, (ii) any distribution that is one of
a series of substantially equal periodic payments (not less
frequently than annually) made for the life of the Distributee or
the joint lives (or joint life expectancies) of the Distributee
and the Distributee's Beneficiary, or for a period of ten years
or more, and (iii) the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities), and (iv) After-Tax Contributions made in accordance
with the Plan.
2.24 "Employee" means an individual in the employ of
the Employer.
2.25 "Employer" means the Company and each other
Participating Company, or any of them.
2.26 "Family Member" means a spouse, lineal ascendants
and descendants of the Employee or former Employee and the
spouses of such lineal ascendants and descendants.
2.27 "Highly Compensated Employee" or "Highly
Compensated Participant" means an Employee or Participant 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 and
who, during the look-back year (i) received Salary from the
Employer in excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code); (ii) received Salary 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
Salary 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 (1) Employees who
are both described in the preceding sentence if the term
determination year is substituted for the term look-back year and
the Employee is one of the 100 Employees who received the most
Salary from the Employer or an Affiliate during the determination
year, (2) Employees who are five percent owners at any time during
the look-back year or determination year, and (3) Employees who
have separated from Service or deemed to have separated from
Service prior to the determination year, 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 Salary
received during the determination 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 Salary 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 Section 2.27,
the "determination year" shall be the Plan Year unless the
Employer elects a calendar year and the "look-back" year shall be
the 12-month period immediately preceding the determination year,
or, if elected by the Employer, 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), or, if elected, the
calendar year immediately preceding the calendar year 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 Salary 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 or top 10
Highly Compensated Employee shall be treated as a single Employee
receiving Salary and contributions or benefits, as applicable,
equal to the sum of such Salary 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
Salary that is considered, will be made in accordance with Section
414(q) of the Code and IRS Regulations.
2.28 "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. (These 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
Affiliate as provided by Labor Department Regulations under the
Act, with no duplication of credit for hours.)
(b) One hour for each hour, in addition to the
hours in Section 2.28(a), above, for which he is directly or
indirectly paid, or entitled to payment, by the Company or
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. (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 he is on leave
of absence from work with the Company or 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 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 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. Notwithstanding the foregoing, an Employee shall be
credited with 45 Hours of Service with respect to each week for
which he is entitled to be credited with at least one Hour of
Service.
2.29 "Individual Retirement Account Rollover
Contribution" means the entire amount received by an Eligible
Employee from an individual retirement account representing the
entire amount in the account (the "qualifying amount") if no part
of the amount in the account is attributable to any source other
than (i) an employer's plan and trust described in Section 401(a)
of the Code, that is exempt from federal income tax under Section
501(a) of the Code, or (ii) a qualified annuity plan meeting the
requirements of Section 403(a) of the Code, and any earnings on
such sums. An Individual Retirement Account Rollover Contribution
shall be accepted only if the entire qualifying amount was
received by the Eligible Employee in cash, and only such cash
amount is included in the Individual Retirement Account Rollover
Contribution. The Eligible Employee may transfer any portion of
such cash amount to the Trust on or before the 60th day after the
day on which the Participant received the qualifying amount.
2.30 "Investment Committee" means the OPI Investment
Committee as provided for in Section 12.
2.31 "Investment Fund" means the investment fund or
funds, or any additional funds which the Investment Committee may
establish or adopt from time to time by written notice to the
Trustee.
2.32 "Investment Manager" means an Investment Manager,
as that term is defined in Section 3(38) of the Act, appointed by
the Investment Committee in accordance with Section 12.2 hereof.
2.33 "IRS" means the United States Internal Revenue
Service.
2.34 "Labor Department" means the United States
Department of Labor.
2.35 "Normal Retirement Age" means the date which is
the Participant's 65th birthday. Upon attainment of Normal
Retirement Age, the Participant shall have a nonforfeitable right
to his entire Account balance.
2.36 "Normal Retirement Date" means the first day of
the month coincident with or next following a Participant's
attainment of his Normal Retirement Age.
2.37 "Participant" means any Eligible Employee who
participates in the Plan as provided in Section 3.
2.38 "Participating Company" means an Affiliate of the
Company, designated by the Board of Directors as such, the board
of directors or equivalent governing body of which shall adopt
the Plan and the Trust Agreement by appropriate action and the
Employees of which shall be eligible to participate in the Plan
in the manner and to the extent determined by the Board of
Directors so long as such Affiliate remains so designated. Any
such Affiliate so designated and which adopts the Plan shall be
deemed thereby to appoint the Company, the Administrative
Committee, the Investment Committee and the Trustee its exclusive
agents to exercise on its behalf all of the powers and authority
conferred hereby, or by the Trust Agreement, upon the Company, and
shall make its allocable contributions to the Plan. The authority
of the Company, the Administrative Committee, the Investment
Committee and the Trustee to act as such agent shall continue until
the Plan has terminated as to such Affiliate and the relevant Trust
Fund assets have been distributed by the Trustee as provided in
Section 14.4 hereof.
2.39 "Plan" means the OPI Profit Sharing Plan, as set
forth herein and as the same may be amended from time to time.
2.40 "Plan Year" means the calendar year.
2.41 "Pre-Tax Contributions" and "Pre-Tax Contribution
Account" mean those contributions made by the Employer on behalf
of a Participant in accordance with such Participant's election
pursuant to Section 4.1 and that portion of the Participant's
Account to which such contributions are credited.
2.42 "Prior Plan" means the Ogden Profit Sharing Plan,
as in effect on January 1, 1989.
2.43 "Qualified Domestic Relations Order" means any
judgment, decree or order (including approval of a 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.
2.44 "Qualified Plan Rollover Contribution" means,
(a) For Rollover Contributions made prior to January
1, 1993, the balance to the credit of an Eligible Employee under
an employee retirement plan meeting the requirements of Section
401(a) of the Code, paid to an Eligible Employee in one or more
distributions which constitute a "lump sum distribution" within
the meaning of Section 402(d)(4)(A) of the Code (determined without
reference to Sections 402(d)(4)(B) and (F) of the Code) or
within one taxable year of the Eligible Employee on account of a
termination of such plan or, in the case of a profit sharing plan
or stock bonus plan, a complete discontinuance of contributions
under such plan. The maximum amount which may be transferred
prior to January 1, 1993 shall not exceed the fair market value
of all the property received in the distribution reduced by:
(i) the Eligible Employee's own contributions
under such plan and any other amounts con-
sidered as contributed by him (determined by
applying Section 72(f) of the Code); less
(ii) any amounts previously distributed to him
from such other plan and not includible in
his gross income.
(b) For Rollover Contributions made on or after January
1, 1993, a Qualified Plan Rollover Contribution means any
distribution paid to an Eligible Employee from an employee
retirement plan meeting the requirements of Section 401(a) of the
Code, of all or any portion of the balance to the credit of an
Eligible Employee, except that a Qualified Plan Rollover
Contribution shall not include: (i) any distribution to the extent
such distribution is required under Section 10.2 and Section
401(a)(9) of the Code, (ii) any distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life of the Distributee or
the joint lives (or joint life expectancies) of the Distributee and
the Distributee's Beneficiary, or for a period of ten years or
more, and (iii) the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities). A Participant must transfer any portion of his
distribution to be rolled over to the Trust on or before the 60th
day after the day on which he received the distribution.
2.45 "Regulations" means the applicable regulations
issued under the Code (referred to herein as "IRS Regulations"),
the Act (referred to herein as "Labor Department Regulations") or
other applicable law, by the IRS, the Labor Department or any
other governmental authority and any temporary regulations or
rules promulgated by such authorities pending the issuance of
such regulations.
2.46 "Rollover Contribution" and "Rollover Contribution
Account" means any contribution made by a Participant pursuant to
Section 4.5 and that portion of the Participant's Account
to which such contributions are credited.
2.47 "Salary" means for each Plan Year beginning before
January 1, 1994, an Employee's first $200,000 (as adjusted
for cost of living to the extent permitted by the Code and IRS
Regulations) of total remuneration paid or payable for Service
while an Eligible Employee, without giving effect to any reduction
therein pursuant to an election under Section 4.1(a) nor any
contributions by the Employer to the Plan or any other retirement
plan maintained by the Employer, as reported on IRS Form W-2.
For each Plan Year beginning on or after January 1, 1994, Salary
means an Employee's first $150,000 (as adjusted by the Commissioner
of the IRS, for years beginning after December 31, 1993,
for increases in the cost of living in accordance with Section
401(a)(17)(B) of the Code) of total remuneration paid or payable
for Service while an Eligible Employee, without giving effect to
any reduction therein pursuant to an election under Section
4.1(a) nor any contributions by the Employer to the Plan or any
other retirement plan maintained by the Employer, as reported on
IRS Form W-2.
2.48 "Service" means employment or reemployment (whether
or not as an Eligible Employee) with the Company, any Participating
Company or with any subsidiary of or other corporation
or entity affiliated or associated with the Company which is a
member of the same controlled group of corporations (within the
meaning of Section 1563(a) of the Code), including all periods of
employment rendered by an individual from his date of employment
or reemployment, as the case may be, with the Employer and all
Service credited to a Participant while a participant under the
Prior Plan, in accordance with the terms and conditions of the
Prior Plan.
2.49 "Surviving Spouse" means the survivor of a deceased
Participant or a deceased former Participant to whom such
deceased Participant or deceased former Participant had been
legally married (as determined by the Administrative Committee) on
the date of the Participant's death or at the time payments
commence, whichever is earlier.
2.50 "Trust" or "Trust Fund" means the trust established
by the Company pursuant to the Trust Agreement as a part
of the Plan.
2.51 "Trustee" means the trustee of the Trust.
2.52 "Trust Agreement" means the agreement entered into
between the Company and the Trustee regarding the investment
and holding of Plan assets as provided in the Plan, as amended or
restated from time to time.
2.53 "Valuation Date" means the last day of each Plan
Year and the last day of any calendar month or months in a Plan
Year and any other date as the Administrative Committee in its
discretion may specify or determine from time to time.
2.54 "Vested Interest" means the portion of a
Participant's Account which has become nonforfeitable pursuant to
Section 9.2.
2.55 "Year of Service" means any Plan Year during
which an Employee completed at least 1,000 Hours of Service as
determined by the Administrative Committee in accordance with the
Regulations. In addition, solely for purposes of determining
whether an Eligible Employee is enrolled as a Participant as
provided in Section 3, if an Employee does not complete 1,000 Hours
of Service during the Plan Year in which his Service commenced
but does complete at least 1,000 Hours of Service during the 12
consecutive month period beginning on the date his Service
commenced, as determined by the Administrative Committee, then, he
shall be credited with a Year of Service for such 12 consecutive
month period. In determining the number of Years of Service a
Participant is to be credited with all years of service credited
to such Participant, as of December 31, 1988, under the Prior
Plan.
SECTION 3. PARTICIPATION
3.1 Date of Participation. Each Employee who is an
Eligible Employee on the Effective Date and who was a Participant
in the Plan on Effective Date shall continue to be a Participant
on such Effective Date. Each Employee who was an Eligible Employee
on the Effective Date but who was not a Participant in the
Plan prior to that date, shall become a Participant in the Plan
on the earliest of (i) the date the Eligible Employee would
become a Participant under the terms of the Plan prior to the
Effective Date or (ii) the first day of the month coincident with
or next following the later of (1) date on which the Eligible
Employee has completed six months of Service, or (2) the date on
which the Eligible Employee has completed 1,000 Hours of Service
with the Employer, commencing on the day such Eligible Employee
completed one Hours of Service provided that such Eligible Employee
is employed by the Employer on that date. Each other Employee who
is an Eligible Employee hired on or after the Effective Date shall
become a Participant in the Plan on the first day of the month
coincident with or next following the later of (i) the date on
which the Eligible Employee has completed six months of Service or
(ii) the date on which the Employee has completed 1,000 Hours of
Service with the Employer, commencing on the day such Eligible
Employee completed one Hour of Service, provided such Eligible
Employee is employed by the Employer on that date.
3.2 Participation and Adjustments. A Participant
shall file with the Administrative Committee a written application
form which shall include an election to reduce the Participant's
Compensation, specifying the amount of contributions elected under
Section 4 and authorizing any necessary payroll deductions,
investment direction, beneficiary designation and an agreement to
be bound by all the terms and conditions of the Plan and the Trust
and any agreement with any other funding agency, including an
insurance company, constituting a part of the Plan and the Trust
Fund.
3.3 Duration. The participation of a Participant
shall end when no further benefits are payable to him or his
Beneficiary from his Account under the Plan.
3.4 Reemployment.
(a) Subject to Section 3.4(b), 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. If he had fulfilled the service
requirements of Section 3.1 at the time of his prior termination,
but terminated employment prior to becoming a Participant, he shall
become a Participant on the first day of the month following the
date of his reemployment. If he had not fulfilled such service
requirement at the time of his termination, he shall become a
Participant as provided in Section 3.1.
3.5 Establishment and Maintenance of Separate Account.
(a) The Administrative Committee shall establish and maintain or
cause to be established and maintained in respect to each
Participant an Account showing his interest under the Plan and in
the Trust Fund (including, but not limited to, separate accounts
showing his respective interests, if any, in each of the Investment
Funds) with respect to (i) Pre-Tax Contributions made under
Section 4.1, (ii) Company Contributions made under Section 5.1,
(iii) After-Tax Contributions made under Section 4.1 and (iv)
Rollover Contributions made pursuant to Section 4.5, such other
accounts as described in Appendix A, and all other relevant data
pertaining thereto. Each Participant shall be furnished with a
written statement of his Account and the value of each such
separate interest at least annually and upon any distribution to
him. In maintaining the Accounts under the Plan or causing them
to be maintained, the Administrative Committee may conclusively
rely on the valuations of the Trust Fund made in accordance with
the Plan and the terms of the Trust Agreement.
3.6 Maintenance of Accounts Shall Not Vest Any Right
in Plan 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.
SECTION 4. PRE-TAX CONTRIBUTIONS AND
AFTER-TAX CONTRIBUTIONS
4.1 Pre-Tax Contributions. (a) A Participant may
elect to reduce his Compensation by an amount not less than one
percent and not more than ten percent of such Compensation for a
Plan Year in any whole percentage in accordance with procedures
adopted by the Administrative Committee, and the Employer shall
contribute such amount to the Plan on behalf of the Participant
as a Pre-Tax Contribution. Notwithstanding the foregoing, such
Pre-Tax Contributions in any calendar year shall not exceed
$9,240, as adjusted, for years beginning after December 31, 1993,
for increases in the cost of living in accordance with Section
402(g)(5) of the Code. In the event that the aggregate amount of
Pre-Tax Contributions for a Participant exceeds the limitation in
the previous sentence, the amount of such excess, increased by
any gains and decreased by any losses attributable thereto, shall
be refunded to the Participant no later than the April 15th of
the calendar year following the calendar year for which the Pre-Tax
Contributions were made. If a Participant also participates,
in any calendar year, in any other plans subject to the limitation
set forth in Section 402(g) of the Code and has made deferrals
under the Plan when combined with the other plans subject to
such limits in excess of the limitation described above, to the
extent the Participant designates, 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, any Pre-Tax Contributions under the Plan
as excess deferrals, the amount of such designated excess,
increased by any gains and decreased by any losses attributable
thereto, shall be refunded to the Participant no later than the
April 15 of the calendar year following the calendar year for which
the Pre-Tax Contributions were made. The amount of such excess
gains or losses is determined by multiplying the gain or loss for
the calendar year allocable to the excess deferrals of the
Participant by a fraction, the numerator of which is the excess
deferral amount made by the Participant for the calendar year and
the denominator of which is the balance of the Pre-Tax Contribution
Account as of the end of such calendar year, without regard to
any gain or loss, allocable to such Account for the calendar
year. The gain or loss allocable to the excess deferrals for the
period between the end of the Plan Year and the distribution date
is equal to 10% of the income allocated to such excess deferrals
for the Plan Year multiplied by the number of calendar months
which have elapsed since the end of the Plan Year. For purposes
of determining the number of calendar months, a distribution
occurring on or before the 15th day of the month will be treated
as having been made on the last day of the preceding month, a
distribution made after the 15th day of the month will be treated
as having been made on the first day of the next month. The
amount of excess deferrals that may be distributed pursuant to
this Section 4.1(a) with respect to a Participant shall be reduced
by any excess contributions (as defined in Section 4.1(b)(ii))
previously distributed to the Participant for the Plan Year
beginning with or within the calendar year to which such excess
deferrals relate. Notwithstanding the foregoing, in no event may
the total of the Participant's Pre-Tax Contributions and After-Tax
Contributions, as described in Section 4.3, in any Plan Year exceed
ten percent of his Compensation.
(b)(i) Notwithstanding any other provision of this
Section 4.1, the actual deferral percentage for the Plan Year for
Highly Compensated Employees shall not exceed the greater of the
following actual deferral percentage tests: (a) the actual deferral
percentage for such Plan Year of those Eligible Employees who
are not Highly Compensated Employees multiplied by 1.25, or (b)
the actual deferral percentage for the Plan Year of those Eligible
Employees who are not Highly Compensated Employees multiplied
by 2.0; provided that the actual deferral percentage for Highly
Compensated Employees does not exceed the actual deferral
percentage for such other Eligible Employees by more than two
percentage points. For purposes of this Section 4.1, the "actual
deferral 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 deferral ratio") of (A) the amount of contributions
allocated to the Participant's Pre-Tax Contribution Account (and
any contribution under Section 5.1(a) which meets the requirements
of Section 1.401(k)-1(b)(5) of the IRS Regulations) during the Plan
Year, to (B) the amount of the Participant's Salary 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 relates to
Compensation that either would have been received by the Employee
during the Plan Year, but for the election pursuant to Section
4.1(a), or is attributable to Service performed by the Employee
during the Plan Year and would have been received by the Employee
within two and one-half months after the close of the Plan Year,
but for the election pursuant to Section 4.1(a). A 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. For purposes of the actual deferral percentage
test described herein, 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 Participant's 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 Contributions are 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 4.1(b).
The actual deferral ratio taken into account under this Section
4.1(b) for any Highly Compensated Employee who is a participant
under 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 such Employee is either a
five-percent owner or one of the ten most Highly Compensated
Employees as described in Section 414(q)(6) of the Code, the
Pre-Tax Contributions and Salary of such Participant shall include
Pre-Tax Contributions and Salary of Family Members, and such Family
Members shall not be considered as separate Eligible Employees in
determining actual deferral percentages.
(ii) 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 deferral percentage tests
specified in Section 4.1(b)(i) 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 4.1(a). The Administrative
Committee may, in its sole discretion, and without the consent of
a Participant, reduce or suspend the Salary Reduction Contributions
of a Highly Compensated Employee, or return excess Salary Reduction
Contributions, such Contributions increased by any income
and decreased by any losses to the extent necessary to satisfy
one of the actual deferral percentage tests. In the event that
neither of such actual deferral percentage tests is satisfied,
the Administrative Committee shall, to the extent permissible
under the Code and IRS Regulations, refund the excess contributions
in the manner described in Section 4.1(b)(iii). For purposes of
this Section 4.1, "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 Pre-Tax Contribution Accounts of Highly Compensated
Participants 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 4.1(b)(i), determined for each such Highly Compensated
Participant by reducing Pre-Tax Contributions made on
behalf of Highly Compensated Participants 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 deferral 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 as determined pursuant to this Section
4.1(b)(ii) and his Salary. This process shall be known as
the leveling method, as described in IRS Regulation Section
1.401(k)-1(f)(2).
(iii) If required in order to comply with the provisions
of Section 4.l(b)(i) and the Code, the Administrative Committee
shall refund excess contributions for a Plan Year. The
distribution of such excess contributions shall be made to Highly
Compensated Participants 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 14, no later than the end of the 12-month period
immediately following the date of such termination. Any such
distribution shall be made to each Highly Compensated Participant
on the basis of the respective portions of such amounts
attributable to each such Highly Compensated Participant determined
under Section 4.1(b)(ii). The distribution of any excess
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 contributions for a Plan Year is the gain or
loss allocable to the Participant's Pre-Tax Contribution Account
for the Plan Year multiplied by a fraction, the numerator of which
is the Participant's Pre-Tax Contributions for the year and the
denominator of which is the Participant's Pre-Tax Contribution
Account as of the end of such Plan Year without regard to any gain
or loss for the Plan Year. The gain or loss allocable to the
excess contributions for the period between the end of the Plan
Year and the distribution date is equal to 10% of the income
allocated to such excess contributions for the Plan Year multiplied
by the number of calendar months which have elapsed since the end
of the Plan Year. For purposes of determining the number of
calendar months, a distribution occurring on or before the 15th day
of the month will be treated as having been made on the last day of
the preceding month, a distribution made after the 15th day of the
month will be treated as having been made on the first day of the
next month. In the case of a Highly Compensated Employee whose
actual deferral percentage is determined under the family
aggregation rules, the amount of excess contributions, as defined
in Section 4.1(b)(ii), shall be determined by reducing the actual
deferral percentage in accordance with the leveling method
described in Section 4.1(b)(ii) and the excess contributions are
allocated among the Family Members in proportion to the
contributions of each Family Member that have been combined.
(iv) Notwithstanding the foregoing provisions of
this Section 4.1(b), the amount of excess contributions to be
distributed pursuant to Section 4.1 with respect to a Highly
Compensated Employee for a Plan Year, shall be reduced by any
excess deferrals distributed to such Participant for such Plan Year
pursuant to Section 4.1(a). In no case may the amount of such
distributed excess contributions exceed the amount of Pre-Tax
Contributions made on behalf of the Highly Compensated Employee for
the Plan Year.
(v) Notwithstanding any other provision of the
Plan, the sum of the actual deferral percentage determined in
accordance with Section 4.l(b)(i) of those Eligible Employees who
are Highly Compensated Employees and the actual contribution
percentage determined in accordance with Section 5.2(a) of those
Eligible Employees who are Highly Compensated Employees shall not
exceed the aggregate limit determined in accordance with this
Section 4.1(b)(iv). The "aggregate limit" for a Plan Year means
the greater of (A) or (B) where (A) is the sum of (1) 1.25
multiplied by the greater of the actual deferral percentage or the
actual contribution percentage of those Eligible Employees who
are not Highly Compensated Employees, and (2) two plus the lesser
of the actual deferral percentage or the actual contribution
percentage of those Eligible Employees who are not Highly
Compensated Employees, provided that the amount shall not exceed
twice the lesser of the actual deferral percentage or the actual
contribution percentage of those Eligible Employees who are not
Highly Compensated Employees; and (B) is the sum of (1) 1.25
multiplied by the lesser of the actual deferral percentage or the
actual contribution percentage of those Eligible Employees who
are not Highly Compensated Employees, and (2) two plus the
greater of the actual deferral percentage or the actual
contribution percentage of those Eligible Employees who are not
Highly Compensated Employees, provided that this amount shall not
exceed twice the greater of the actual deferral percentage or the
actual contribution percentage of those Eligible Employees who are
not Highly Compensated Employees.
4.2 Refund of Excess Contributions. The Administrative
Committee shall determine as of the end of the Plan Year,
and at such time or times in its discretion whether the aggregate
limit has been exceeded. 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 4.1. In the
event that the aggregate limit is exceeded the actual deferral
percentage of those Eligible Employees who are Highly Compensated
Employees shall be reduced in the same manner as described in
Section 4.1 until the aggregate limit is no longer exceeded.
4.3 After-Tax Contributions. Subject to the
provisions of Section 5.2, a Participant may elect to make
After-Tax Contributions to the Plan of an amount of up to ten
percent of his Compensation in any whole percentage through payroll
deductions, in accordance with procedures adopted by the
Administrative Committee.
4.4 Institute, Change, Resume or Suspend Contributions.
A Participant may suspend Pre-Tax Contributions made on
his behalf or his After-Tax Contribution, or both, or institute
or change the rate of the reduction of his Compensation pursuant
to Section 4.1, or the rate of his After-Tax Contribution, or
both, upward or downward within the percentage limitations set
forth in Section 4.1, without terminating his participation in
the Plan, upon 30 days advance written notice thereof to the
Administrative Committee. Such change shall be effective as of
the first day of any calendar quarter. A suspension shall be
effective as of the first day of any calendar month. A Participant
may not change the rate of the reduction of his Compensation
or the rate of his After-Tax Contribution more frequently than
once every three months. The Administrative Committee may, in
its discretion and in a uniform and nondiscriminatory manner,
waive its right to such written notice at any time and from time
to time.
4.5 Rollover Contributions. (a) A Participant may
make a Rollover Contribution to the Plan at any time of a Qualified
Plan Rollover Contribution or an Individual Retirement Account
Rollover Contribution. If the Participant elects to make a
Rollover Contribution, the Participant shall supply the
Administrative Committee with evidence, assurances, opinions and
certifications it may deem necessary to establish to its
satisfaction that the amounts to be contributed qualify as a
Qualified Plan Rollover Contribution, an Individual Retirement
Account Rollover Contribution or a Direct Rollover and will not
affect the qualification of the Plan or the tax-exempt status of
the Trust under Sections 401(a) and 501(a) of the Code,
respectively. The amount so transferred must consist of cash
distributed from such other plan or any portion of the cash
proceeds from the sale of distributed property other than cash, to
the extent permitted by Section 402(a)(6)(D) of the Code.
(b) Any Rollover Contribution shall be allocated to
the appropriate Participant's Rollover Contribution Account which
shall be established and separately accounted for, shall be
invested in accordance with the direction of the Participant
pursuant to Section 6, be debited or credited in accordance with
Section 7, and shall be distributed in the same manner and at the
same time as described in Sections 8 and 10 with respect to a
distribution of benefits under the Plan to such Participant.
(c) Each request by any Eligible Employee to make a
Rollover Contribution shall be subject to review by the
Administrative Committee which shall make a case by case
determination that each Rollover Contribution meets the
requirements set forth in this Section 4.5 and such other
requirements or conditions as the Administrative Committee may,
from time to time and in its sole discretion, impose; provided,
however, that any determination made by the Administrative
Committee shall not have the effect of discriminating in favor of
Employees who are officers, shareholders or Highly Compensated
Employees.
SECTION 5. PARTICIPATING COMPANY CONTRIBUTIONS
5.1 Participating Company Contributions. For each
Plan Year, a Participating Company may contribute to the Plan a
fixed dollar amount or a percentage of the total Compensation
earned by such Participating Company to its Eligible Employees
who participated in the Plan for such Plan Year. Such amount or
percentage, if any, shall be determined by resolution of the
board of directors of such Participating Company as soon as
practical following the close of the 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 close of the 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 determining the annual contribution, the
Administrative Committee shall be advised of the amount of such
annual contribution upon which its allocation is to be calculated.
Any Participating Company contributions made hereunder shall be
reduced to the extent necessary to comply with the requirements of
Section 415 of the Code.
5.2 Limitation on After-Tax Contributions. (a)
Notwithstanding any other provision of this Section 5.1, the actual
contribution percentage for the Plan Year for Highly Compensated
Employees 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 5.2, 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) After-Tax
Contributions credited to his After-Tax Contribution Account if
such After-Tax Contributions are paid to the Trust during the
Plan Year or paid to an agent of the Plan and transmitted to the
Trust within a reasonable period after the end of the Plan Year
and if the Administrative Committee so elects in accordance with
and to the extent permitted by IRS Regulations, (II) Pre-Tax
Contributions (including excess contributions under Section 4.1(b)
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(a)) credited to his Pre-Tax Contribution
Account, to (B) the amount of the Participant's Salary 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, After-Tax Contributions or Company
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, After-Tax Contributions or Company Contributions
of such plans shall be treated as being made under a single plan
for purposes of this Section 5.2. The actual contribution ratio
taken into account under this Section 5.2 for any Highly
Compensated Employee who is eligible to make After-Tax
Contributions or receive Employer 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 Employer contributions and
After-Tax Contributions and Salary of such Participant shall
include the Employer contributions and After-Tax Contributions
and Salary of Family Members, and such Family Members shall not
be considered as separate Eligible Employees in determining
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 5.2(a) 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 4.1(a) and then determining the
treatment of excess contributions under Section 4.1(b). 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 5.2(c). For purposes of this Section 5.2, "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 After-Tax Contribution Account 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 5.2(a) of Highly Compensated
Participants for such Plan Year, over the maximum amount of
such contributions that could be made to the After-Tax Contribution
Account and Pre-Tax Contribution Account of such Participants
without violating the requirements of Section 5.2(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 5.2(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 Salary. This process shall be known as the
leveling 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 the family
aggregation rules, the amount of excess aggregate contributions, as
defined in this Section 5.2(b) shall be determined by reducing
the actual contribution ratio in accordance with the leveling
method described in this Section 5.2(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 5.2(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 14, 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) by distributing
amounts contributed to the After-Tax Contribution Account, and
earnings thereon; and (B) by distributing amounts contributed to
the Pre-Tax Contribution Account (to the extent such amounts are
included in the actual contribution percentage), 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 After-Tax Contributions
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 5.2(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 After-Tax Contributions Account
(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 for the Plan
Year and the denominator is the Participant's After-Tax
Contributions (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 gain or loss allocable to
the excess aggregate contributions for the period between the end
of the Plan Year and the distribution date is equal to 10% of the
income allocated to such excess aggregate contributions for the
Plan Year multiplied by the number of calendar months which have
elapsed since the end of the Plan Year. For purpose of determining
the number of calendar months, a distribution occurring on
or before the 15th day of the month will be treated as having
been made on the last day of the preceding month, a distribution
made after the 15th day of the month will be treated as having
been made on the first day of the next month.
5.3 Allocation of Participating Company Contributions.
(a) The Administrative Committee shall allocate the
contribution of each Participating Company made in accordance
with Section 5.1 among all Participants who were employed by such
Participating Company or an Affiliate as of the last day of the
Plan Year. The contribution shall be allocated to the Company
Contribution Account of each Employee of the Participating Company
who was a Participant in the Plan for a Plan Year in the
same proportion that his Compensation bears to the Compensation
of all Employees of the Participating company who were Participants
in the Plan for such Plan Year. Notwithstanding the foregoing, (i)
no contribution shall be allocated in respect of a Participant who
did not complete at least one Hour of Service with a Participating
Company during such Plan Year; and (ii) a contribution shall be
allocated with respect to a Participant whose participation in the
Plan terminated during the Plan Year because of (1) the attainment
of his Early Retirement Date or his Normal Retirement Date, (2) his
death, or (3) his Disability, even if he was not employed by a
Participating Company on the last day of the Plan Year.
(b) In the event that a Participating Company is unable
to make its full contribution because of the limitations specified
in Section 2.6 (to the extent such contribution is not paid on such
Participating Company's behalf pursuant to such Section) the amount
allocated to such Participant in respect of his employment during
such Plan Year with such Participating Company shall be reduced
proportionately so that the total amounts allocable to Participants
in respect of employment with the Participating Company do not
exceed the actual amount of the contribution made by such
Participating Company. If the Plan fails to satisfy Section
401(a)(26) of the Code, Participating Company contributions under
Section 5.1 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.
5.4 Time of Payment of Participating Company
Contributions. The Company Contributions made by a Participating
Company under Section 5.1 shall be paid as soon as practicable to
the Trustee following the approval of such contribution by the
Board of Directors; provided that the total amount of the
contribution under the Plan 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.
5.5 Form of Payment of Participating Company
Contributions. The Pre-Tax Contributions made for a taxable year
pursuant to Section 4.1, the Company Contributions made for a
taxable year pursuant to Section 5.4 and the Participants'
After-Tax Contributions under Section 4.3, shall be paid directly
by the Company to the Trustee in cash, or, at the option of the
Company, in whole or in part in other property acceptable to the
Trustee.
5.6 Return of Employer Contributions. Any contribution
made by an Employer because of a mistake of fact shall be returned
to the Employer which made such contribution within one year of
such contribution. Any contribution made by an Employer is
conditioned upon the contribution's deductibility or the Plan's
initial qualification under the Code, and if either the deduction
or the initial qualification is denied, such contribution shall be
returned to the Employer which made such contribution within one
year after the date such deduction or qualification is denied.
SECTION 6. INVESTMENT OF CONTRIBUTIONS
6.1 Investment by Trustees. All amounts of money,
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.
6.2 Investment Funds. (a) The Trustee shall cause to
be established and maintained separate 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. Interest, dividends and other distributions received
and gains realized on securities or other property held in any
Investment Funds shall be reinvested in such Investment Funds.
(b) The Investment Funds shall consist of the
following investments:
(1) A "Company Stock Fund" which shall be
invested 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 or bank investment contracts or
synthetic guaranteed interest or investment contracts, with the
earnings of such contracts being blended for allocation purposes;
(4) A "Merrill Lynch Treasury Fund" a mutual
fund which shall invest in a portfolio of United States Treasury
securities and equivalents;
(5) Effective October 1, 1994, the "Fidelity
Magellan Fund" which shall be invested by a professional manager
or managers in common stock and securities convertible into common
stock of domestic, foreign and multinational issuers of all
sizes that offer potential for growth; and
(c) Effective October 1, 1994, the "T. Rowe
Price International Stock Fund" which shall be invested by Rowe
Price-Fleming International Inc. in primarily common stocks of
established non-United States companies in the Far East, Europe,
South Africa, Australia, Canada and other areas.
6.3 Investment Elections. (a) A Participant's Pre-Tax
Contributions, Company Contributions, After-Tax Contributions
and Rollover 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 in multiples of
five percent. If a Participant does not make a written election,
he shall be deemed to have elected to have his Account invested
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 Section
6.3 (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 amy 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 Participants'
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 the 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.
6.4 Company Liability. Any losses related to the
compliance by the Company with respect to the Participant's
investment direction shall be borne by the Participant's Account.
The Company, each Participating Company, the Investment Committee
and the Administrative Committee shall not be liable for any loss
or expense which may arise from or result from compliance with any
investment direction from a Participant.
SECTION 7. VALUATIONS AND ADJUSTMENTS OF
PARTICIPANTS' ACCOUNTS
7.1 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 8.4, any
loan under Section 8.5, any Direct Rollover under Section 10.5,
or transfer under Appendix A, but before giving effect to the
receipt and allocation of any Company Contribution, Pre-Tax
Contributions or After-Tax Contributions, and before giving effect
to any repayments of loans under Section 8.5, the participation
of any new Participants in the Plan, any adjustments, or any
distributions under Section 10, 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 account, 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 6.2(b)(1), 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 may be needed
and 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.
7.2 Expenses. The expenses of administering the Plan,
including (i) the fees and expenses of (1) any Employee, (2) the
Trustee and (3) any Investment Manager, for the performance of
their duties under the Plan and the Trust, (ii) the expenses
incurred by the members of the Administrative Committee and of the
Investment Committee 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 members of
either the Administrative Committee or the Investment Committee
(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 Participants' Accounts by the
Administrative Committee in accordance with the provisions of
Section 7.1 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
7.1 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.
7.3 Allocation of Forfeitures. As of the last day of
each Plan Year, any forfeitures arising under the Plan during
such Plan Year shall be allocated by the Administrative Committee
to Participants' Accounts in the same manner as contributions
provided in Section 5. For this purpose, all Participants of all
Participating Companies shall be treated as Eligible Employees of
a single employer.
SECTION 8. ELIGIBILITY FOR BENEFITS
8.1 Distribution of Participant's Account on Retirement
and Disability. Upon termination of a Participant's Service on or
after his Normal Retirement Date or his Early Retirement Date or by
reason of his Disability and subject to Sections 10.2 and 10.4, a
benefit equal to the value of the Participant's Account (less any
unpaid loans) as of the Valuation Date coincident with or next
following the date on which his Service is terminated shall be paid
from the Trust Fund; provided that the Administrative Committee has
received all the necessary forms from the Participant. Such
payment shall be made by a method of distribution described and at
the time specified in Section 10.
8.2 Distribution of Participant's Account on Death.
(a) Upon the death of a Participant while an Employee, benefits
equal to the value of the Participant's Account (reduced by any
unpaid loans) as of the Valuation Date coincident with or next
following the date of his death shall be payable to the Beneficiary
of such Participant (as determined in Section 11) from the Trust by
a method of distribution described and at the time specified in
Section 10; provided that the Administrative Committee has received
all the necessary forms from the Beneficiary.
(b) If a former Employee who was a 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 as of the Valuation Date coincident with or next following
the date of his death shall be paid to the Beneficiary of
such former Participant (as determined under Section 11) in
accordance with a method of distribution described and at the
time specified in Section 10; provided that the Administrative
Committee has received all necessary forms from the Beneficiary.
8.3 Distribution on other Termination of Service.
(a) Upon the termination of employment of any
Participant which occurs other than on his Normal Retirement Date
or his Early Retirement Date or for any reason other than death
or Disability and subject to Sections 10.2 and 10.4, the
Participant shall be paid an amount equal to the value of his
Account, after reduction for the amount of any unpaid loans, as
of the Valuation Date coincident with or next following the date
on which his Service is terminated and all necessary forms are
received by the Administrative Committee, of the sum of the
Participant's (i) Pre-Tax Contribution Account, (ii) After-Tax
Contribution Account, (iii) Vested Interest (as determined in
Section 9.2) in his Company Contribution Account, and (iv) Rollover
Contribution Account; provided the Administrative Committee
receives all of the necessary forms from the Participant. Such
distribution shall be made as soon as practicable thereafter by a
method of distribution described and at the time specified in
Section 10. Any excess of the amount credited to such
Participant's Company Contribution Account over his Vested Interest
in such Account shall be forfeited.
8.4 Hardship Withdrawals; In-Service Withdrawals.
(a) 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 an immediate and heavy financial need 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 8.4(a) 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, and (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 8.4(a) 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 8.5 or under any other plan maintained by
the Employer. The amount of any withdrawal pursuant to this
Section 8.4(a) shall not exceed the amount required to meet the
financial emergency (including amounts needed to pay any taxes or
penalties as a result of such withdrawal). Subject to the
provisions of this Section 8.4(a), 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.
(b) A Participant shall give the Administrative
Committee written notice of a request for a withdrawal pursuant
to the provisions of this Section 8.4 in accordance with such
procedures as the Administrative Committee shall establish. No
withdrawal pursuant to this Section 8 shall be of an aggregate
amount less than $500. Withdrawals shall become effective on the
last day of the 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 8.4 shall be
made solely in cash. A Participant who makes a hardship withdrawal
pursuant to this Section 8.4 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 this Section 8.4 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 this Section 8.4 was made.
(c) For purposes of this Section, the term
immediate and "heavy financial need" means a situation in which a
Participant or his dependents are confronted by extreme financial
need that cannot be satisfied from other sources and shall be
limited to the need of funds for: (i) the payment of medical
expenses described in Section 213(d) of the Code incurred by, or
necessary (even though not yet incurred/or the treatment of, the
Participant, the Participant's spouse, or any dependents of the
Participant (as defined in Section 152 of the Code); (ii) the
purchase (excluding mortgage payments) of a principal residence
for the Participant, (iii) the payment of tuition and related
educational expenses for the next 12 months following the date of
the withdrawal for post-secondary education of the Participant,
his spouse, children, or dependents (as defined in Section 152 of
the Code), (iv) the prevention of the eviction of the Participant
from his principal residence or the prevention of foreclosure on
the mortgage of the Participant's principal residence, or (v)
such other immediate and heavy financial emergency as determined
by the Administrative Committee pursuant to uniformly applicable
guidelines and IRS Regulations.
(d) Notwithstanding Sections 8.1, 8.2 and 8.3,
the Administrative Committee may distribute to a Participant on
the first day of any month following the receipt of a written
application, the balance then credited to his After-Tax
Contribution Account.
8.5 Loans. (a) 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 and the Stock Bonus
Account); 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 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 increments with $1,000 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, nondiscriminatory
rules consistently applied to all Participants. Effective January
1, 1995, only two outstanding loans are permissible under the
Plan. For any loan approved prior to December 31, 1994, 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.
(b) 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 one percent as in effect on the
first 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. A loan may not have a maturity date of less than 12
months 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.
(c) 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 salary. 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
10. 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
10 (to conform to the requirements of Section 415 of the Code) are
exceeded.
(d) A loan shall be deemed an investment of the
borrowing Participant's Account and shall not reduce the amount
credited to his Account. At the time a loan is made, the amount
loaned shall first be deemed an investment of, and allocated to,
the Participant's Vested Interest and his Company Contribution
Account; to the extent the loan is in excess of such amounts, it
shall then be deemed an investment of, and allocated to the
Participant's Pre-Tax Contribution Account not already allocated to
a loan; to the extent it is in excess of such amounts, it shall
then be deemed an investment of, and allocated to, the
Participant's After-Tax Contribution Account not already allocated
to a loan; to the extent it is in excess of such amounts, it shall
be deemed an investment of and allocated to such Participants'
Roll-over Contribution Account; to the extent it is in excess of
such amounts, it shall then be deemed an investment of, and
allocated to, the Participant's Vested Interest in any account
(except as provided to the contrary herein) described in Appendix
A, not already allocated to a loan.
(e) The Investment funds in which the Participant's
Account is invested in accordance with Section 6 of the Plan shall
be reduced by the amount of any loan made hereunder in the ratio
that the value of each such Investment Fund bears to the value of
all Investment Funds in which the Participant's Account are
invested; provided, however, that the Company Stock Fund and Stock
Bonus Fund may not be reduced for any loan made hereunder.
(f) The Administrative Committee shall, in
accordance with its established standards, review and approve or
disapprove a completed application as soon as practicable after
its receipt thereof, and shall promptly notify the applicant of
such approval or disapproval. In addition, in the event the
Trustee, in its sole discretion, determines that it is not
reasonably and prudently able, in the interests of Participants and
Beneficiaries, to liquidate the necessary amount from any of the
Investment Funds, the Trustee shall notify the Administrative
Committee, and the amount to be paid to each Participant whose
completed application designated that a loan be made from such
Investment Fund shall be reduced in proportion to the ratio which
the aggregate amount that the Trustee has advised the
Administrative Committee may prudently be liquidated bears to the
aggregate amount which all such Participants designated to be paid
from such Investment Fund.
(g) The right to receive loan repayments, including
interest thereon, shall be considered an asset of the Plan and all
loan repayments of principal and interest shall be credited to the
Investment Funds that the Participant's future contributions are
allocated on the date of such repayment in the same proportion as
that in which each was liquidated and credited to the Account in
the order reversed to the order used to make payment of the loan
proceeds to the Participant.
(h) Outstanding loans shall share in Plan expenses
in a manner determined by the Administrative Committee. The
Administrative Committee shall apply these rules on a uniform and
nondiscriminatory basis. With appropriate notice, the
Administrative Committee may amend these rules, including
amendments that affect outstanding loans, as may be required to
conform to applicable law or regulation.
8.6 Restrictions on Distributions. Notwithstanding
the foregoing, a Participant's Pre-Tax Contribution Account may
not be distributed earlier than upon one of the following events:
(a) The Participant's retirement, death, Disabil-
ity or termination of Service;
(b) The termination of the Plan without the
establishment or maintenance of another de-
fined 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, if so per-
mitted by the Plan; 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 subsidi-
ary, 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 deposition.
<PAGE>
SECTION 9. VESTING
9.1 Vesting. At all times, each Participant shall
have a nonforfeitable right to 100% of the value of his Pre-Tax
Contribution Account, his After-Tax Contribution Account and his
Rollover Contribution Account, if any, and such other accounts as
set forth in Appendix A, except as otherwise provided therein.
9.2 Vesting Schedule. A Participant's interest in his
Company Contribution Account shall vest according to the following
vesting schedule:
<TABLE>
<CAPTION>
Nonforfeitable
Full Years of Service Percentage
<S> <C>
less than 1 Year of Service 0%
1 but less than 2 Years of Service 20%
2 but less than 3 Years of Service 40%
3 but less than 4 Years of Service 60%
4 but less than 5 Years of Service 80%
5 or more Years of Service 100%
</TABLE>
9.3 Break in Service for Vesting. (a) If a terminated
Participant incurs five consecutive Breaks in Service before he
returns to the employment of the Employer, 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, or upon receipt of his Vested
Interest upon termination of employment, whichever is earlier.
(b) If the terminated Participant returns to the
employment of the Employer 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 Company
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 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 employment as if such amount had been held in the
Trust since the date of distribution as provided in Section 8, and
then (ii) multiplying his Vested Interest by such adjusted total
account, and then (iii) subtracting the amount of his distribution
on his most recent termination of employment, 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 employment.
Any amount repaid pursuant to this Section 9.3(b) 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 6.3.
9.4 Full Vesting. Notwithstanding the foregoing, a
Participant or his Beneficiary, whichever is appropriate, shall
be fully vested in the entire value of the Participant's Account
upon the Participant's attainment of his Normal Retirement Age,
Early Retirement Age, or upon such Participant's Disability or
death.
SECTION 10. METHOD OF PAYMENT OF BENEFITS
10.1 Payment of Benefits. Subject to the provisions of
this Section 10, any benefit payable under Section 8 of the Plan
shall be paid in one of the following methods of distribution, as
the Participant (or in the case of his death, either the
Participant or his Beneficiary as provided in Section 8) may elect:
(1) One lump sum payment from the Trust Fund;
or
(2) With respect to any benefit earned or
accrued on or before December 31, 1988 under the Prior Plan, a
Participant may elect either a lump sum payment in accordance
with this Section 10.1 or any method of payment which was available
under the Prior Plan as in effect on December 31, 1988, consisting
of equal monthly, quarterly and annual installments. If the
Participant elects to receive the December 31, 1988 value of his
Account in such installments, in no event may the present value of
such installments be less than 50% of the installments projected to
be paid to the Participant and his Beneficiary.
10.2 Commencement of Benefits. (a) If the Participant
or Beneficiary fails to select a distribution method at least 30
days prior to the date by which distribution must commence, such
benefits shall be paid in one lump sum payment. If a Participant
has elected an installment method of payment pursuant to Section
10.1(2) and such Participant dies before the distribution of his
entire Account has been made, his Beneficiary shall be entitled to
a lump sum payment of such remaining Account balance.
(b) Any Disability benefit payable to a Participant
under Section 8, shall be paid in accordance with the following
provisions:
(i) If a disabled Participant files
appropriate forms requesting a distribution from the Plan by the
end of the month in which he suffered his Disability, the
Administrative Committee shall distribute the proceeds of his
Account, valued as of the last Valuation Date of the month in which
the Participant suffered such Disability, by the next succeeding
month, or as soon as administratively practicable thereafter.
(ii) If the disabled Participant files
appropriate forms after the end of the month in which he suffered
his Disability, the Administrative Committee shall distribute the
proceeds of his Account, valued as of the last Valuation Date of
the month such form is received, by the next succeeding month, or
as soon as administratively practicable thereafter.
(c) 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
in Section 10.2(e), 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 calendar year in which the Participant
retires. Such benefit shall be paid, in accordance with IRS
Regulations, over a period not extending beyond the life expectancy
of such Participant or the joint life expectancies of such
Participant and his Beneficiary. Life expectancy for purposes of
this Section shall not be recalculated annually in accordance with
IRS Regulations.
(d) 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.
(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; provided, however, at the Beneficiary's irrevocable
election, duly filed with the Administrative 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 died or, in the event such Beneficiary is
the Participant's Surviving Spouse, on or before the December
31st of the calendar year in which such Participant would have
attained age 70 1/2, if later (or, in either case, on any later
date prescribed by IRS Regulations). If such Participant's
Surviving Spouse dies after the Participant's death but before
distributions to such Surviving Spouse commence, this Section
10.2(e) shall be applied to require payment of any further benefits
as if the Surviving Spouse were the Participant.
(f) Pursuant to IRS 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 IRS 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 five
percent owner or (B) the calendar year in which the Participant
retires. For purposes of this Section 10.2(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 1/2 or any
subsequent Plan Year.
(h) All distributions made hereunder shall be
made in accordance with the provisions of Section 401(a)(9) of
the Code and IRS Regulations thereunder.
(i) Notwithstanding the foregoing, distributions
to a Participant may be made in accordance with a written
designation made before January 1, 1984 by the Participant if such
designation satisfied the requirements of Section 242(b)(2) of
the Tax Equity and Fiscal Responsibility Act of 1982.
10.3 Time of Payment. (a) Any election under Section
10.1 must be made by the payee prior to the 60th day following
the date of the Participant's termination of employment by reason
of his retirement, death, or Disability and prior to the date
that payments commence pursuant to the provisions of the Plan.
Subject to Section 10.3(b), 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 IRS Regulations, (i)
if the value of a Participant's Account does not or never has
exceeded $3,500, a distribution may be made to such Participant
prior to the date he attains his Normal Retirement Age without
his written consent and (ii) if the value of a Participant's
Account exceeds or has ever exceeded $3,500, no distribution may
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 shall commence
as soon as practicable after the Participant's attainment of Normal
Retirement Age, which benefit shall be in an amount equal to the
value of the Participant's distributable Account as of the
Valuation Date coincident with or immediately following the
Participant's attainment of Normal Retirement Age. During the
period of deferral mandated by the absence of receipt of consent,
the Participant may change his investment direction under Section
6.
(c) Benefits payable under the Plan to a
Participant or Beneficiary from the Company Stock Fund, other than
a withdrawal due to an immediate and heavy financial need or loans
made pursuant to Section 8, shall be paid in cash unless the
participant elects to receive such distributions 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 Administrative 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.
10.4 Latest Commencement Date. Unless the Participant
elects otherwise, the payment of benefits under the Plan shall
commence not later than the 60th day after the latest of the
close of the Plan Year in which (i) the Participant obtains age
65, (ii) occurs the 10th anniversary of the year the Participant
commenced participation under the Plan, and (iii) the Participant
terminates employment with the Company or an Affiliate.
10.5 Direct Rollover. (a) Effective on or after
January 1, 1993, a Distributee may elect, at a time and manner
prescribed by the Administrative Committee, to have any portion
of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by such Distributee in the form of a
Direct Rollover.
10.6 Special Tax Notice. Notwithstanding any other
provision of the Plan, no distribution may be made to a Participant
unless the Participant receives from the Administrative Committee
an officially approved tax notice (pursuant to the Code and IRS
Regulations) which specifies certain information regarding the
federal income tax treatment of Plan benefits paid in the form of
a lump cash sum no less than 30 days and no more than 90 days
before the date benefits are to be distributed. Such distribution
may commence less than 30 days after the required notice is given,
provided that (i) the Administrative Committee clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice to consider the decision
of whether or not to elect a distribution, and (ii) the
Participant, after receiving the notice, affirmatively elects a
distribution.
SECTION 11. DESIGNATION OF BENEFICIARIES
11.1 Beneficiary Designation. Each Participant shall
file with the Administrative Committee a written designation of
one or more persons (which may include the Participant's spouse)
as the Beneficiary who 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. Notwithstanding
the foregoing, if the Participant is married, his spouse must
consent, in writing, to the designation of a Beneficiary other
than the Participant's spouse (unless the Administrative Committee
makes a written determination in accordance with the Code and
IRS Regulations that no such consent is required). 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.
11.2 Failure to Designate Beneficiary. If no such
Beneficiary designation is in effect at the time of a Participant's
death, or if no designated Beneficiary survives the Participant,
the Participant shall be deemed to have designated his Surviving
Spouse, if any, as Beneficiary, or if the Participant has no
Surviving Spouse, then 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
therefor.
SECTION 12. ADMINISTRATION OF THE PLAN
12.1 Powers and Duties of Administrative Committee.
The Administrative Committee shall have general responsibility
and discretionary authority for the administration, establishment
and interpretation of the Plan (including but not limited to
complying with reporting and disclosure requirements, establishing
and maintaining Plan records, adopting amendments to the Plan as
described in Section 14.1, deciding all questions arising in
connection with the Plan including eligibility, benefit payments,
vesting and factual questions). The Administrative Committee
shall engage such 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 have sole discretionary authority to determine, a
Participant's or Beneficiary's benefit eligibility. 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.
12.2 Powers and Duties of the 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, and may
appoint and remove or change the Trustee and any such funding
agency. The Investment Committee shall have the power to appoint
or remove one or more Investment Managers and to delegate to such
Investment Manager the authority and discretion to manage
(including the power to acquire and dispose of) the assets of the
Plan, provided that (i) each Investment Manager 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
Investment Manager 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.
12.3 Powers and Duties of Trustees. 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 advisor pursuant to Section 12.2.
12.4 Agents, Reports of Committees. The Administrative
Committee and the Investment Committee (collectively the
"Committees") may arrange for the engagement of such legal counsel
who may be counsel for the Company, 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 Committee and may delegate to any such agent or to
any subcommittee or member of such Committee its authority to
perform any act hereunder, including, without limitation, those
matters involving the exercise of discretion (including the
appointment of an Investment Manager), provided that such
delegation shall be subject to revocation at any time at the
discretion of such Committee. Each of the Committees shall report
to the Board of Directors, or to a committee of the Board of
Directors designated for that purpose, no less frequently than at
each annual meeting as shall be specified by the Board of
Directors, or such committee with regard to the Board of Directors
the matters for which it is responsible under the Plan.
12.5 Structure of the Committees. The Administrative
Committee and the Investment Committee shall consist of at least
three 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. Any member of the Committees
may resign at any time. No member of either of said 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. The
members of the Administrative Committee and of the Investment
Committee 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 Administrative Committee
or the Investment Committee or any member thereof in any
jurisdiction. Any person may serve on both Committees, and any
member of either Committee, any subcommittee or agent to whom
either Committee 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.
12.6 Adoption of Procedures of Committees. Each
Committee shall elect or designate its own Chairman, 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 Committee at a meeting or, at the
direction of its Chairman, without a meeting, by mail, telegraph,
telex, telecopier or telephone, provided that all of the members
of the Committee are informed by mail, telex, telecopier or
telegraph of their right to vote on the proposal and of the outcome
of the vote thereon.
12.7 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 and
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 Committee.
12.8 Hold Harmless; Indemnification. All benefits and
other amounts payable hereunder shall be paid exclusively from
the Trust Fund, and neither the Company, Participating Company,
any Affiliate, any Trustee, nor any director, officer, Employee
or agent of the Company or the Participating Company assumes any
responsibility or liability therefor. The Trust Fund may be
commingled for investment purposes with like separate trust funds
of any other plans and trusts of the Company, Participating
Company, or any Affiliate which meet the requirements of Sections
401(a) and 501(a) of the Code. Each Participant, each Beneficiary
or each other person who shall claim the right to any payment under
the Plan shall look exclusively to the Trust Fund therefor and
shall not have any right or claim therefor against the Company,
any Participating Company, any Trustee, or any director, officer,
Employee or agent of the Company. Except as otherwise required
by the Act, neither the Company, Participating Company, nor any
member of the Administrative Committee or the Investment Committee,
any director, officer, Employee or agent of the Company or
the Participating Company shall be required to inquire into or be
responsible for any act or failure to act of any Trustee or any
Participant. To the maximum extent permitted by the Act and
applicable state law, each Trustee, each member of the
Administrative Committee and the Investment Committee, each
director and officer of the Company, any Participating Company and
each Employee who performs service on behalf of the Plan or the
Trust, shall be indemnified and saved harmless by the Company or by
the Participating Company out of its own assets (including the
proceeds of any insurance policy the premiums of which are paid by
the Company) from and against any and all losses, costs and expense
(including any amounts paid in settlement of a claim with
the Company or Administrative Committee's approval) to which any
of them may be subjected by reason of any act done or omitted to
be done in good faith in their official capacities with respect
to the Plan or the Trust Agreement, including all expenses
reasonably incurred in their defense.
12.9 Claims for Benefits. (a) All claims for benefits
under the Plan shall be submitted in writing to and within a
reasonable period of time decided by, a person or persons
designated in writing by the Administrative Committee. If the
claim is wholly or partially denied, written notice of the denial
shall be furnished within 90 days after receipt of the claim;
provided that, if special circumstances require an extension of
time for processing the claim, an additional 90 days from the end
of the initial period shall be allowed for processing the claim, in
which event the claimant shall be furnished with a written notice
of the extension prior to the termination of the initial 90-day
period indicating the special circumstances requiring an extension.
The written notice denying the claim shall set forth the reasons
for the denial, including specific reference to pertinent
provisions of the Plan on which the denial is based, a description
of any additional information necessary to perfect the claim
and information regarding review of the claim and its denial.
(b) A claimant may review all pertinent documents
and may request a review by the Administrative Committee of a
decision denying the claim. Such a request shall be made in
writing and filed with the Administrative Committee within 60 days
after delivery to the claimant of written notice of the decision.
Such written request for review shall contain all additional
information which the claimant wishes the Administrative Committee
to consider. The Administrative Committee may hold a hearing or
conduct an independent investigation, 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 furnished to the claimant within
60 days after receipt by the Administrative Committee of a request
for review, unless special circumstances require an extension of
time for processing, in which event an additional 60 days
shall be allowed for review and the claimant shall be so notified
in writing. Written notice of the decision on review shall include
specific reasons for the decision. For all purposes under the
Plan, such decision on claims (where no review is requested)
and decision on review (where review is requested) shall be in
the sole discretion of the Administrative Committee, final, binding
and conclusive on all interested persons as to participation
and benefits eligibility, the amount of benefits and as to any
other matter of fact or interpretation relating to the Plan.
12.10 Communications. Any notice, election,
application, instruction, designation or other form of
communication required to be given or submitted by any Participant,
other Employee or Beneficiary shall be in such form as is
prescribed from time to time by the Administrative Committee or
Investment Committee, sent by first class mail or delivered in
person, and shall be deemed to be duly given only upon actual
receipt thereof by such Committee. Any notice, statement, report
and other communication from the Company or either Committee to any
Participant, other Employee, or Beneficiary required or permitted
by the Plan shall be deemed to have been duly given when delivered
to such person or mailed by first class mail to such person at his
address last appearing on the records of the Company or the
Administrative Committee. Each person entitled to receive a
payment under the Plan shall file in accordance herewith his
complete mailing address and each change therein. A check or
communication mailed to any person at his address on file with
the Company or the appropriate Committee shall be deemed to have
been received by such person for all purposes of the Plan, and no
Employee or agent of the Company, of a Participating Company or
member of the Administrative Committee or the Investment Committee
shall be obliged to search for or ascertain the location of
any such person except as required by the Act. If the
Administrative Committee shall be in doubt as to whether payments
are being received by the person entitled thereto, it may, by
registered mail addressed to such person at his address last known
to the Administrative Committee notify such person that all
future payments will be withheld until such person submits to the
Administrative Committee his proper mailing address and such
other information as the Administrative Committee may reasonably
request.
12.11 Participant Information. Each Participant shall
file with the Administrative Committee such pertinent information
concerning himself and his Beneficiary, and each Beneficiary
shall file with the Administrative Committee such information
concerning himself, as the Administrative Committee may specify,
and in such manner and form as the Administrative Committee may
specify or provide, and no Participant or Beneficiary shall have
any right or be entitled to any benefits or further benefits
under the Plan unless such information is filed by him or on his
behalf.
12.12 Service of Process. The agent for the service
of legal process of the Plan shall be the Secretary of the Company
or such other person as may from time to time be designated
by the Board of Directors.
12.13 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 Committee 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.
SECTION 13. TERMINATION OR WITHDRAWAL OF
PARTICIPATING COMPANY PARTICIPATION
13.1 Termination or Withdrawal of Participating
Company. Any Participating Company may withdraw from participation
in the Plan by giving the Administrative Committee prior written
notice specifying a termination date which shall be the last day of
a month at least 60 days subsequent to the date such notice is
received by the Administrative Committee. The Administrative
Committee may terminate any Participating Company's participation
in the Plan, as of any termination 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 terminate a Participating
Company's participation upon complete and final discontinuance of
the contributions. In the event of any such termination, 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.
13.2 Distributions Upon Termination or Withdrawal.
Upon termination of the Plan as to any Participating 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 13. 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 separate trust whose
terms are identical to the terms 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 13.3 will apply. The decision of the Trustee
shall be final as to the assets to be allocated to such separate
plan and trust in accordance herewith. To the maximum extent
permitted by the Act, any rights of Participants no longer employed
by such Participating Company and of former Participants and their
Beneficiaries and Surviving Spouses under the Plan shall be
unaffected by such termination and any transfers, distributions or
other dispositions of the assets of the Plan as provided in this
Section 13 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.
The interest of each such Participant in Service with
such Participating Company as of the termination date in the
amount, if any, credited to his Account after payment of or
provision for expenses and charges and appropriate adjustment of
the Accounts of all such Participants for expenses, charges,
forfeitures and profits and losses as described in Section 14.4,
shall be nonforfeitable as of the termination date, and upon
receipt by the Administrative Committee of IRS approval of such
termination, the full current value of such amount, reduced by any
unpaid loans, shall be paid from the Trust Fund in the manner
described in Section 14.4 or transferred to a successor employee
benefit plan which is qualified under Section 401(a) of the Code;
provided, however, that in the event of any transfer of assets to
a successor employee benefit plan the provisions of Section 13.3
will apply.
All determinations, approvals and notifications referred
to above shall be in form and substance from a source satisfactory
to counsel for the Plan. To the maximum extent permitted by the
Act, the termination of the Plan as to any Participating Company
shall not in any way affect any other Participating Company's
participation in the Plan.
13.3 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 or the Investment Committee or both of the Committees may
request appropriate indemnification from the employer or employers
maintaining such successor plan before making such a transfer.
SECTION 14. AMENDMENT OR TERMINATION OF THE
PLAN AND THE TRUST
14.1 Right to Amend, Suspend or Terminate Plan. (a)
Subject to the provisions of Section 14.1(c), the Board of
Directors reserves the right at any time, by majority consent in
writing or by a meeting, to amend, suspend or terminate the Plan,
any contributions thereunder, the Trust, in whole or in part, for
any reason and without the consent of any Participating Company,
Participant, other Employee, 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
and the Administrative Committee. The Plan shall automatically
be terminated upon complete and final discontinuance of
contributions thereunder.
(b) The Administrative Committee may adopt
amendments, by majority consent in writing or by a meeting, which
may be necessary or appropriate to facilitate the administration,
management, or 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),
401(k) and 501(a) of the Code or any other applicable section of
law (including the Act) and the Regulations, provided that any
such amendment does not materially increase the cost to the
Employers of maintaining the Plan.
(c) No amendment or modification shall be made
which would retroactively impair any right to any benefit under
the Plan which any Participant, Beneficiary or Surviving Spouse
would otherwise have had at the date of such amendment by reason
of the contributions theretofore made and credited to his
Account, except as provided in Section 14.2 below.
14.2 Retroactivity. Subject to the provisions of
Section 14.1, any amendment, modification, suspension or
termination of any provisions of the Plan may be made retroactively
if necessary or appropriate to qualify or maintain the Plan and the
Trust 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.
14.3 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 and, where and to the extent required by
law, to Participants and other interested parties.
14.4 No Further Contributions. Upon termination of
the Plan, the Employer shall not make any further contributions
under the Plan and no amount shall thereafter be payable under
the Plan in respect of any Participant except as provided in this
Section 14. To the maximum extent permitted by the Act,
transfers, distributions or other dispositions of the assets of
the Plan as provided in this Section 14 shall constitute a
complete discharge of all liabilities under the Plan. The
Administrative and Investment Committees shall remain in
existence and all of the provisions of the Plan which in the
opinion of the Administrative Committee are necessary for the
execution of the Plan and the administration and distribution,
transfer or other disposition of the assets of the Plan in
accordance with this Section 14.4 shall remain in force. After
(i) payment of or provision for all expenses and charges referred
to in Section 7.2 and appropriate adjustment of all Accounts for
such expenses and charges in the manner described in Section 7.2,
(ii) appropriate adjustment of the Accounts of Participants who
are employed as of the date of such termination in the manner
described in Section 7.3 for any forfeitures arising under the
Plan prior to such date (treating, for this purpose, any
Participant who had a termination of Service but who had not
incurred five consecutive Breaks in Service prior to such date as
having incurred such Break 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 7.1, the
interest of each Participant in Service as of the date of such
termination in the amount, if any, credited to his Account shall be
nonforfeitable as of such date.
The full current value of such adjusted amount, reduced
by the amount of any unpaid loans to the Participant, shall be
paid from the Trust to each Participant and former Participant,
(or, in the event of the death of such Participant or former
Participant, the Beneficiary or Surviving Spouse thereof) in any
manner of distribution specified in Section 10 above, including
payments which are deferred until the Participant's termination
of Service, as the Administrative Committee shall determine in a
nondiscriminatory manner. Without limiting the foregoing, any
such distributions may be made in cash 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.
14.5 Partial Termination. In the event a partial
termination (within the meaning of the Act) of the Plan has
occurred then (i) the interest of each Participant affected
thereby in his Account shall be nonforfeitable as of the date of
such partial termination and (ii) the provisions of Sections
14.2, 14.3 and 14.4 and Section 13.2 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.
14.6 Exclusive Benefit. Except as provided in Section
5.6 of the Plan, Section 414(p) of the Code, or any other federal
law, 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 expenses
as provided in Section 7) be used for or diverted to any purposes
other than for the exclusive benefit of Participants and their
Beneficiaries and Surviving Spouses under the Plan.
SECTION 15. GENERAL LIMITATIONS AND PROVISIONS
15.1 All Risk on Participants and Beneficiaries. Each
Participant, former Participant, Beneficiary and Surviving Spouse
shall assume all risk in connection with any decrease in the
value of the assets of the Trust and the Participants' Accounts
or special accounts and neither the Employer nor the Administrative
Committee nor the Investment Committee shall be liable or
responsible therefor.
15.2 No Right to Continued Employment. Nothing
contained in the Plan shall give any Employee the right to be
retained in the employment of the Company, any Participating
Company 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 an Employer and any Employee or
consideration for, or an inducement to or condition of, the
employment of any Employee.
15.3 Payment of Behalf of Payee. If the
Administrative Committee shall find that any person to whom any
amount is payable under the Plan is found by a court of competent
jurisdiction to be 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 therefor 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.
15.4 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. The
prohibition against assignment or alienation of benefits
contained in this Section 15.4 shall not apply to any loan to a
Participant made under the Plan.
15.5 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 or upon the termination of the Plan in
accordance with Section 16, 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 advice 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
Employer or, in the case of the termination of the Plan,
allocated on a pro rata basis among the Participants of the Plan,
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
10.
15.6 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.
15.7 Gender; Singular. Whenever used in the Plan the
masculine gender includes the feminine gender and the singular
includes the plural, unless the context indicates otherwise.
15.8 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.
15.9 Applicable Law. The Plan and all rights
thereunder shall be governed by and construed in accordance with
the Act and the laws of the State of New York.
SECTION 16. MAXIMUM AMOUNT OF ALLOCATION
16.1 Application of Section 16. The provisions of
this Section 18 shall govern notwithstanding any other provisions
of the Plan.
16.2 Maximum Annual Additions to Account. Annual
Additions to a Participant's Account in respect of any Plan Year
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 for such Plan
Year; or
<PAGE>
(b) 25% of the Participant's Salary for such Plan
Year.
For this purpose, the term "Annual Additions" shall
mean the sum of the following amounts which, without regard to
this Section 16, 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 and all elective
contributions made under any cash or deferred arrangement within
the meaning of Section 1.401(k)-1(g)(3) of the IRS Regulations
including excess deferrals; (iii) After-Tax Contributions made
under the Plan and any other qualified employee pension benefit
plan; (iv) forfeitures, if applicable; and, with respect to any
plan maintained by the Employer or an Affiliate (v) contributions
allocated to any individual medical account defined in Section
415(l)(2) of the Code that is part of a defined benefit plan
maintained by the Employer; and (vi) in the case of a Participant
who is a "key employee," as defined in Section 419A(d)(3) 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 under a
welfare benefit fund as defined in Section 419(e) of the Code, and
as maintained by the Employer. The term Annual Additions shall not
include any Rollover Contributions made pursuant to Section 4.5 but
shall include, whether or not refunded, excess deferrals as
described in Section 4.1, excess contributions as defined in
Section 4.1, and excess aggregate contributions as defined in
Section 5.1. Solely for the purposes of Section 16.4(a), Annual
Additions shall include a Participant's contributions under a
qualified cost-of-living arrangement described in Section 415(k)(2)
of the Code.
16.3 Order of Reduction. If the limitations of
Section 16.2 are violated as a result of the allocation of (i)
forfeitures, (ii) a reasonable error in estimating a
Participant's Compensation or Salary, (iii) or under such other
facts and circumstances as determined by the IRS, amounts which
would otherwise be allocated to a Participant's Account must be
reduced by reason of the limitations of Section 16.2, such
reduction shall be made in the following order of priority, but
only to the extent necessary:
1. The amount of the Participant's After-Tax
Contributions, exclusive of any earnings of
the Trust Fund attributable thereto, shall be
refunded to the Participant; then
2. Forfeitures arising under the Plan and
allocable to such Participant in respect of
such Plan Year shall be allocated to the
Accounts of other Participants as of the end
of the Plan Year for which such reduction is
made in the manner provided under Section 7.3
and then allocated to such Participant in
respect of such Plan year; and then
3. Company Contributions made pursuant to
Section 5.1 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
4. To the extent permitted by the Code and IRS
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
Participant's Employer for the next Plan Year
and in the event of termination of the Plan
shall be returned to the Participant's
Employer.
16.4 Additional Account Limitations. (a) Subject to
Sections 16.4(c) and 16.4(d), in the event that, in any Plan Year
and with respect to any Participant, the sum of the "Defined
Contribution Fraction" (as defined in Section 16.4(b)) and the
"Defined Benefit Fraction" (as defined in Section 16.4(b)) would
otherwise exceed 1.0, then the benefit payable under the defined
benefit plan or plans shall be reduced in accordance with the
provisions of that plan or those plans, but only to the extent
necessary to ensure that such limitation is not exceeded. If
this reduction does not ensure that the limitation set forth in
this Section 16.4 is not exceeded, then the Annual Addition to
any defined contribution plan, other than the 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 this Section 16.4, the
following terms shall have the following meanings:
1. "Defined Contribution Fraction" shall mean,
as to any Participant for any Plan Year, a
fraction, (A) 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 (B) the denominator of
which is the sum of the lesser of the follow-
ing amounts, determined for such Plan Year
and for each prior Year of Service (i) the
product of 1.25 multiplied by the dollar
limitation in effect for such Year under Sec-
tion 16.2(a) or (ii) the product of 1.4
multiplied by the amount which may be taken
into account under Section 16.2(b) with
respect to the Participant for such 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 IRS Regulations
thereunder; and
2. "Defined Benefit Fraction" shall mean, as to
any Participant for any Plan Year, a frac-
tion, (A) the numerator of which is the pro-
jected annual benefit (determined as of the
close of the Plan Year and in accordance with
IRS Regulations) of the Participant under any
defined benefit plan (as defined in Sections
414(j) and 415(k) of the Code) maintained by
the Company or any of its Affiliates and (B)
the denominator is the lesser of (i) 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 (ii)
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.
(c) In the case of a Participant with respect to
whom the sum of the Defined Contribution Fraction and the Defined
Benefit Fraction exceeds 1.0 with respect to the last Plan Year
beginning before January 1, 1983, an amount, determined in
accordance with IRS Regulations, may be subtracted from the
numerator of the Defined Contribution Fraction (not exceeding such
numerator) so that the sum of such Participant's Defined
Contribution Fraction and his Defined Benefit Fraction computed
under Section 16.4(a) does not exceed 1.0 for the last Plan Year
beginning before January 1, 1983.
(d) Notwithstanding the foregoing provisions of
this Section 16.4, in determining the maximum Annual Addition for
any Plan Year beginning before January 1, 1987, the Annual Addition
shall not be recomputed to treat all After-Tax Contributions as an
Annual Addition.
SECTION 17. TOP HEAVY PROVISIONS
17.1 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, when appropriate, 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 its 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 of
the Plan, the provisions of this Section 17 shall apply and
supersede all other provisions of the Plan during each Plan Year
with respect to which the Plan is determined to be a Top Heavy
Plan.
17.2 Top Heavy Plan Definitions. For purposes of this
Section 17 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
(i) each person (and his Beneficiary) who at any
time during the five Plan Years ending on the Determination Date:
(A) was an officer of the Company or an
Affiliate having an annual Salary greater than 50% of the amount
in effect under Section 415(b)(1)(A) of the Code for any such
Plan Year;
(B) was one of the 10 Employees owning the
largest interest of the Company and its Affiliates but only if he
received Salary 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;
(C) owned at least five percent of the an
Employer's outstanding shares of stock or at least five percent
of the total combined voting power of the Employer's shares of
stock; or
(D) owned at least one percent of the
Employer's shares of stock or at least one percent of the total
combined voting power of an Employer's shares of stock, and whose
annual Salary from the Employer exceeds $150,000.
(ii) The following special rules apply to this
definition:
(A) No more than 50 officers, or, if less,
the greater of three or 10% of all Employees will be Key
Employees under Section 17.2(b)(i)(A). If there are more
officers than are counted under the preceding sentence, only
those who had the highest aggregate Salary, during the five Plan
Years ending on the Determination Date will be considered Key
Employees.
(B) A person is an officer only if he is in
regular and continued service as an administrative executive of
the Company or a Participating Company.
(C) 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.
<PAGE>
(D) A person will be treated as owning all
shares of stock which he owns directly or constructively by
application of Section 318 of the Code.
(E) For purposes of determining whether a
person is a one percent or five percent owner of the Company or
any Affiliate, his ownership interest in any entity related to
the Company solely by reason of Sections 414(b), (c) and (m) of
the Code shall be disregarded.
(F) For purposes of determining whether a
person receives an annual Salary of more than $150,000, Salary
received from each Employer required to be aggregated under
Sections 414(b), (c) and (m) of the Code shall be taken into
account.
(c) "Non-Key Employee" means (i) any Employee who is
not a Key Employee, or (ii) 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
Company or an Affiliate 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 that was
sponsored during the five year period ending on the applicable
Determination Date by the Company or an Affiliate (i) in which a
Key Employee participates or (ii) 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 Company and its Affiliates in the
Required Aggregation Group and any other qualified employee
benefit plan of the Company and its Affiliates which the Company
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 this computation,
the account balances and cumulative annual accrued benefits of a
Participant (i) who is a Non-Key Employee but who was a Key
Employee in a prior Plan Year, or (ii) who has not been credited
with at least one Hour of Service with any Employer at any time
during the five year period ending on the Determination Date 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 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 Accounts 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 Plan 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"
(i) for all defined benefit plans, the present
value calculated as provided in those plans; and
(ii) for all defined contribution plans, the fair
market value of each Participant's account (including amounts
attributable to voluntary employee contributions from a qualified
employee pension benefit plan sponsored by the Company or an
Affiliate) determined as of the most recent Determination Date
increased by:
(A) distributions made during the five Plan
Years ending on the Determination Date (except distributions
already included in determining the Value of the accounts and
distributions made during the five Plan Years preceding the
Determination Date under a terminated plan which, if it had not
been terminated, would have been required to be included in the
Required Aggregation Group); and
(B) all rollover contributions distributed
from the plans to a qualified employee benefit plan not sponsored
by the Company or an Affiliate, and decreased by;
(C) any deductible Employee contributions;
and
(D) rollover contributions received by the
plans from a qualified employee benefit plan not sponsored by the
Company or an Affiliate; and
(E) rollover contributions distributed from
the Plan to a qualified employee pension benefit plan sponsored
by the Company or an Affiliate.
17.3 Top Heavy Plan Minimum Contribution. Subject to
Section 17.4, for each Plan Year that the Plan is a Top Heavy
Plan, the Employer's contribution allocable to the Account of
each Non-Key Employee, regardless of his Salary, who has
satisfied the eligibility requirements of Section 3.1, whether or
not a Participant in the Plan, and who is in Service at the end
of the Plan Year shall not be less than the lesser of (i) three
percent of such Non-Key Employee's Salary (or to the extent
required by the Code or Section 1.415-2(d) of the IRS
Regulations), or (ii) the percentage at which contributions 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
an Aggregation Group shall be treated as one plan. Clause (ii)
shall not be applicable if the Plan is required to be included in
an Aggregation Group which enables a defined benefit plan also
required to be included in said Aggregation Group to satisfy
Sections 401(a)(4) or 410 of the Code.
17.4 Top Heavy Plan Annual Addition Limitations. (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 16.4.
(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 Section
17.4(a) shall not be applicable if the minimum contribution by
the Employer allocable to the Account of any Participant who is a
Non-Key Employee as specified in Section 17.3 is determined by
substituting "four percent" for "three percent".
17.5 Other Plans. If, with respect to a Non-Key
Employee who benefits in a Plan Year under both a defined
contribution and defined benefit plan which are Top Heavy Plans
maintained by the Employer, a top-heavy minimum benefit is not
provided for such Plan Year under both plans, then such
determination for such Plan Year shall be made in conformity with
the comparability analysis described in Q&A M-12 of Section
1.416-1 of the IRS Regulations. Such analysis shall be modified,
where a factor of 1.25 is utilized for such Plan Year in
connection with the satisfaction of the limitations set forth in
Section 415(e) of the Code, in accordance with the last sentence
of Q&A M-14 of Section 1.416-1 of the IRS Regulations.
OGDEN PROJECTS PROFIT SHARING PLAN
APPENDIX A
This Appendix A serves to identify the various accounts
maintained under the Plan that were transferred from Ogden
Corporation retirement plans that are qualified under Code
Section 401(a) 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 PRE-87 ACCOUNT - This account was
established to receive the after-tax contributions (and earnings
thereon) of employees who formerly participated in the Ogden
Allied Services Savings and Security 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) COMPANY MATCHING CONTRIBUTION ACCOUNT - This
account was established to receive matching contributions (and
earnings thereon) credited to the accounts of employees who
formerly participated in the Ogden Allied Services Savings and
Security Plan. No further contributions may be credited to this
account under any circumstances. Any Participant in whose behalf
such an account was established shall continue to vest in such
account in accordance with the vesting schedule set forth in
Section 9.2 of the Plan.
(3) RETIREMENT A ACCOUNT - This account was
established to receive company contributions credited to the
accounts of employees who participated in the Ogden Food Service
Corporation Pension plan and the Nedicks Pension Plan. No
further contributions may be credited to this account under any
circumstances. All funds credited to this account are fully
vested at all times.
(4) RETIREMENT B ACCOUNT - This account was
established to receive employee contributions credited to the
accounts of those employees who participated in the Ogden Food
Service Corporation Pension Plan and the Nedicks Pension 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.
(5) PENSION SUPPLEMENT ACCOUNT - This account was
established to receive supplemental contributions (and earnings
thereon) credited to the accounts of employees who formerly
participated in the Ogden Allied Services Saving and Security
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.
(6) ATLANTIC DESIGN COMPANY PRIOR ACCOUNT - This
account was established to receive profit sharing contributions
(and earnings thereon) credited to the accounts of employees who
formerly participated in the Atlantic Design Profit Sharing and
Retirement Plan. No further contributions may be credited to
this account under any circumstances. Any Participant in whose
behalf such an account was established shall continue to vest in
such account in accordance with the vesting schedule set forth in
Section 9.2 of the Plan.
(7) STOCK BONUS 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 and the Ogden Allied Services Saving and
Security 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.
<PAGE>
OGDEN PROJECTS PROFIT SHARING PLAN
APPENDIX B
METHOD OF PAYMENT OF RETIREMENT AND
DEATH BENEFITS FROM CERTAIN ACCOUNTS
Introduction. The purpose of this Appendix B is to
establish the rules concerning the distribution of benefits from
the Retirement A Account, Retirement B Account and the Atlantic
Design Company Prior Account. Any reference in this Appendix B
to accounts or benefits shall only apply to these three accounts
and the benefits derived from these three accounts.
B1.01. Payment of Benefits. Any distribution from the
Retirement A Account, Retirement B Account or Atlantic Design
Company Prior Account to which a Participant is entitled under
Sections 8.1, 8.2 or 8.4 of the Plan shall be paid as follows:
(a) Subject to Section B1.02, a Participant who
is married on the date his benefits are scheduled to begin, will
receive his benefits in the form of a nontransferable annuity
contract which provides a survivor benefit equal to 50% of the
rate at which such benefit was payable to the Participant during
his lifetime ("Retirement Annuity").
(b) Subject to Section B1.02, a Participant who
is unmarried on the date his benefits are scheduled to begin,
will receive his benefits in the form of an annuity payable for
his lifetime ("Life Annuity").
(c) Subject to Section B1.02, if a Participant
(who is married on the date of his death) dies before receiving a
distribution from the Plan, his interest shall be distributed to
his surviving spouse in the form of an annuity which is payable
for the spouse's lifetime ("Preretirement Annuity").
(d) If a Participant (who is unmarried on the
date of his death) dies before receiving a distribution from the
Plan, his interest shall be distributed to his Beneficiary in one
lump sum payment.
B1.02. Procedures Concerning Waiver of Annuities.
(a) Within a reasonable time of a Participant's
Normal Retirement Date, the Administrative Committee will provide
the Participant with a general written explanation of the
Retirement Annuity (or, as the case may be, Life Annuity) form of
payment and the financial effect on the Participant's benefit if
he decides to waive the annuity. With the consent of his spouse
(if there is one), pursuant to Section B1.02(d) below, a
Participant may waive the Retirement Annuity within the 90 day
period prior to the date on which his payments are scheduled to
commence. A Participant who waives the Retirement Annuity or Life
Annuity under this Section may cancel his waiver at any time
prior to the date on which payments begin, by submitting a written
cancellation to the Administrative Committee.
(b) The Administrative Committee will provide the
Participant with a general written explanation of the
Preretirement Annuity form of payment and the financial effect on
the Participant's benefit if he decides to waive the annuity. A
Participant may elect to waive the Preretirement Annuity, provided
his spouse (if there is one), consents, pursuant to Section
B1.02(d) below, from the first day of the Plan Year during which
the Participant attains age 32 until his death. If a Participant
terminates employment, he shall have the same election period as
though he had not terminated. A Participant who waives the
Preretirement Annuity under this Section, may cancel his waiver
at any time during the election period.
(c) Any explanation distributed by the
Administrative Committee under Sections B1.02(a) or (b) above shall
include the terms and conditions of the Retirement Annuity, Life
Annuity or the Preretirement Annuity; the Participants right to
make, and the effect of, an election to waive a Retirement Annuity,
Life Annuity or Preretirement Annuity; the rights of the
Participant's spouse with regard to the election to waive the
Retirement Annuity or Preretirement Annuity; and the right of the
Participant to revoke the election to waive the Retirement Annuity,
Life Annuity or the Preretirement Annuity, and the effect of such
a revocation.
(d) Any election to waive a Retirement Annuity or
Preretirement Annuity will not be effective unless the
Participant's spouse consents in writing to such election or to the
alternate beneficiary, or both, and the spouse's consent
acknowledges the effect of the election and is witnessed by a Plan
representative or a notary public. Notwithstanding the foregoing,
the consent of the Participant's spouse to the waiver will
not be required if it is established to the Administrative
Committee's satisfaction that there is no spouse, or that the
spouse cannot be located.
(e) Subject to Section B1.02(d) above, if a
Participant elects to waive the annuity form or benefit specified
in Sections B1.01(a), (b) or (c) above, his accounts shall be
distributed to him in one lump sum payment in accordance with
Section 10.1(a) herein.
(f) If a Participant dies without having waived
the Preretirement Annuity, his spouse may waive the annuity
within one year of his death, and elect a lump sum payment in lie
thereof.
B1.03. Timing of Distribution.
(a) Subject to Section B1.03(b) below, if a
Participant terminates employment before attaining his Normal
Retirement Age, and files appropriate forms requesting a
distribution from the Plan by the end of the month in which he
terminated, the Administrative Committee shall distribute his
interest by the next succeeding month or as soon as practicable
thereafter. If such Participant files such forms after the month
in which he terminated employment, but prior to the last day of the
calendar year in which he terminated, the Administrative Committee
shall distribute his interest as soon as practicable after the last
day of the calendar year in which he terminated. However, if such
Participant does not file such forms until after the calendar year
in which he terminated employment, the Administrative Committee
shall distribute his interest upon his attainment of the Plan's
Normal Retirement Age, or as soon as practicable thereafter.
(b) No such distributions under Section B1.03(a)
of this Section may be made unless the Participant's spouse (if
there is one) consents in writing to such distribution.
EXHIBIT 10.7(w)(ii)
OGDEN PROJECTS PENSION PLAN
<PAGE>
OGDEN PROJECTS PENSION PLAN
TABLE OF CONTENTS
Section Page
1 INTRODUCTION AND PURPOSE . . . . . . . . . . . . . . . . . . . 1
2 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 MEMBERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Date of Membership . . . . . . . . . . . . . . . . . . . 10
3.2 Enrollment and Adjustment. . . . . . . . . . . . . . . . 11
3.3 Duration . . . . . . . . . . . . . . . . . . . . . . . . 11
3.4 Reemployment . . . . . . . . . . . . . . . . . . . . . . 11
4 RETIREMENT DATE. . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Normal Retirement and Deferred
Retirement Dates. . . . . . . . . . . . . . . . . . . . . 11
4.2 Early Retirement Date . . . . . . . . . . . . . . . . . . 11
5 ACCRUED BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . 12
5.1 Computation of Accrued Benefit . . . . . . . . . . . . . 12
5.2 Effect of Reemployment on Accrued
Benefit. . . . . . . . . . . . . . . . . . . . . . . . . 12
6 NORMAL RETIREMENT BENEFIT. . . . . . . . . . . . . . . . . . . 12
6.1 Normal Retirement Benefit. . . . . . . . . . . . . . . . 12
7 EARLY RETIREMENT BENEFIT . . . . . . . . . . . . . . . . . . . 12
7.1 Early Retirement Benefit . . . . . . . . . . . . . . . . 12
7.2 Deferral of Payment After Early
Retirement Age . . . . . . . . . . . . . . . . . . . . . 12
8 TERMINATION OF SERVICE BEFORE RETIREMENT . . . . . . . . . . . 13
8.1 Vesting. . . . . . . . . . . . . . . . . . . . . . . . . 13
8.2 Payments After Termination of
Service at Early Retirement Date . . . . . . . . . . . . 13
8.3 Consent of Member. . . . . . . . . . . . . . . . . . . . 13
8.4 Forfeitures. . . . . . . . . . . . . . . . . . . . . . . 13
9 DISABILITY BEFORE RETIREMENT. . . . . . . . . . . . . . . . . . . . 14
9.1 Disability Prior to Retirement. . . . . . . . . . . . . . . . 14
10 DEATH BENEFITS BEFORE RETIREMENT. . . . . . . . . . . . . . . . . . 14
10.1 Death Benefit Before Retirement. . . . . . . . . . . . . . . 14
10.2 Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
11 METHOD OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . 14
11.1 Payment of Benefits. . . . . . . . . . . . . . . . . . . . . 14
11.2 Optional Forms of Benefits . . . . . . . . . . . . . . . . . 15
11.3 Preretirement Survivor Annuity . . . . . . . . . . . . . . . 16
11.4 Commencement of Payment. . . . . . . . . . . . . . . . . . . 17
11.5 Explanation of Annuities . . . . . . . . . . . . . . . . . . 18
11.6 Small Amounts. . . . . . . . . . . . . . . . . . . . . . . . 18
11.7 Suspension of Retirement Benefits. . . . . . . . . . . . . . 19
11.8 Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.9 Deemed Distribution. . . . . . . . . . . . . . . . . . . . . 19
11.10 Automatic Payment of Retirement Benefits . . . . . . . . . . 19
11.11 Direct Rollover. . . . . . . . . . . . . . . . . . . . . . . 19
12 MAXIMUM AMOUNT OF RETIREMENT BENEFIT. . . . . . . . . . . . . . . . 20
12.1 Application of Section 12. . . . . . . . . . . . . . . . . . 20
12.2 Maximum Benefit. . . . . . . . . . . . . . . . . . . . . . . 20
12.3 Adjustment to Maximum Benefit. . . . . . . . . . . . . . . . 20
12.4 Inapplicability of Section 12. . . . . . . . . . . . . . . . 21
12.5 Limitation Prior to October 3, 1973. . . . . . . . . . . . . 22
12.6 Limitation Prior to December 31, 1982. . . . . . . . . . . . 22
12.7 Additional Limitations . . . . . . . . . . . . . . . . . . . 22
12.8 Maximum Limitations. . . . . . . . . . . . . . . . . . . . . 23
13 DESIGNATION OF BENEFICIARIES. . . . . . . . . . . . . . . . . . . . 24
13.1 Beneficiary Designation. . . . . . . . . . . . . . . . . . . 24
13.2 Failure to Designate Beneficiary . . . . . . . . . . . . . . 24
14 FUNDING AND CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 24
14.1 Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.2 Actuarial Assumptions. . . . . . . . . . . . . . . . . . . . 25
14.3 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.5 Return of Contributions. . . . . . . . . . . . . . . . . . . 25
15 ADMINISTRATION OF THE PLAN. . . . . . . . . . . . . . . . . . . . . 26
15.1 Powers and Duties of Administrative
Committee. . . . . . . . . . . . . . . . . . . . . . . . . . 26
15.2 Powers and Duties of Investment Committee. . . . . . . . . . 26
15.3 Agents; Reports to Board of Directors. . . . . . . . . . . . 26
15.4 Structure of Committees. . . . . . . . . . . . . . . . . . . 27
15.5 Adoption of Procedures of Committee. . . . . . . . . . . . . 27
15.6 Demands for Money. . . . . . . . . . . . . . . . . . . . . . 27
15.7 Trust Agreement; Powers and Duties of
Trustee; Trust Fund. . . . . . . . . . . . . . . . . . . . . 28
15.8 Hold Harmless; Indemnification . . . . . . . . . . . . . . . 28
15.9 Claims for Benefits. . . . . . . . . . . . . . . . . . . . . 28
15.10 Communications . . . . . . . . . . . . . . . . . . . . . . . 29
15.11 Agent for Service of Process . . . . . . . . . . . . . . . . 30
15.12 Specific Powers and Duties . . . . . . . . . . . . . . . . . 30
16 TERMINATION OF PARTICIPATING COMPANY PARTICIPATION. . . . . . . . . 30
16.1 Termination of Participating Company Participation. . . . . . 30
16.2 Rights of Former Members. . . . . . . . . . . . . . . . . . . 30
16.3 Transfer to Successor Plan. . . . . . . . . . . . . . . . . . 30
17 AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST. . . . . . . . . 31
17.1 Right to Amend, Suspend or Terminate Plan . . . . . . . . . . 31
17.2 Retroactivity . . . . . . . . . . . . . . . . . . . . . . . . 32
17.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
17.4 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 32
17.5 Not a Title IV Termination. . . . . . . . . . . . . . . . . . 32
17.6 Title IV Termination. . . . . . . . . . . . . . . . . . . . . 32
17.7 Asset Allocation by Court . . . . . . . . . . . . . . . . . . 34
17.8 Partial Termination . . . . . . . . . . . . . . . . . . . . . 34
18 TOP HEAVY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 34
18.1 Top Heavy Plan. . . . . . . . . . . . . . . . . . . . . . . . 34
18.2 Definition for Section 18 . . . . . . . . . . . . . . . . . . 35
18.3 Minimum Vesting . . . . . . . . . . . . . . . . . . . . . . . 37
18.4 Minimum Benefits. . . . . . . . . . . . . . . . . . . . . . . 38
18.5 Limitations on Benefits . . . . . . . . . . . . . . . . . . . 38
18.6 Other Plans . . . . . . . . . . . . . . . . . . . . . . . . . 38
19 LIMITATIONS ON DISTRIBUTIONS TO
CERTAIN HIGHLY PAID EMPLOYEES . . . . . . . . . . . . . . . . . . . 39
19.1 Limitations of Section 19 . . . . . . . . . . . . . . . . . . 39
19.2 Application of Section 19 . . . . . . . . . . . . . . . . . . 39
19.3 Limitation on Benefits. . . . . . . . . . . . . . . . . . . . 39
19.4 Unrestricted Benefits . . . . . . . . . . . . . . . . . . . . 40
19.5 Use of Reserves Resulting from Limitations. . . . . . . . . . 40
20 GENERAL LIMITATIONS AND PROVISIONS. . . . . . . . . . . . . . . . . 40
20.1 No Right to Continued Employment . . . . . . . . . . . . . . 40
20.2 Trust is Sole Source of Benefits . . . . . . . . . . . . . . 40
20.3 Payment on Behalf of Payee . . . . . . . . . . . . . . . . . 41
20.4 No Alienation. . . . . . . . . . . . . . . . . . . . . . . . 41
20.5 Missing Payee. . . . . . . . . . . . . . . . . . . . . . . . 41
20.6 Subject to Trust Agreement . . . . . . . . . . . . . . . . . 42
20.7 Required Information . . . . . . . . . . . . . . . . . . . . 42
20.8 Subject to Insurance Contract. . . . . . . . . . . . . . . . 42
20.9 Communications to Committees . . . . . . . . . . . . . . . . 42
20.10 Communications from Participating Company
or Committees. . . . . . . . . . . . . . . . . . . . . . . . 42
20.11 Gender; Tense. . . . . . . . . . . . . . . . . . . . . . . . 42
20.12 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 42
20.13 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . 42
APPENDIX I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43<PAGE>
SECTION 1. INTRODUCTION AND PURPOSE
1.1 The purpose of the Ogden Projects Pension Plan
(the "Plan") is to provide retirement benefits and certain other
benefits to eligible employees of Ogden Projects, Inc. and its
participating subsidiaries and other participating companies, or
to the beneficiaries of such employees, and thereby to continue
to encourage employees to make and continue careers with Ogden
Projects, Inc., all as set forth herein and in the related trust
thereunder (the "Trust") adopted as a part of the Plan.
1.2 Prior to the adoption of the Plan, Ogden
Projects, Inc. was a "Participating Company" under the Ogden
Corporation Pension Plan (the "Prior Plan"), as such term is
defined therein, and the related trust thereunder (the "Prior
Plan Trust"). As a result of the Tax Reform Act of 1986, the
sponsor of the Prior Plan, Ogden Corporation, determined that it
would be in the best interest of all Prior Plan Participating
Companies, and their respective employees, to elect whether to
continue to be a Participating Company under the Prior Plan or to
establish a separate defined benefit plan. Effective as of
January 1, 1989, Ogden Projects, Inc. determined that it was in
the best interest of Ogden Projects, Inc. and its employees to
adopt the Plan, such plan being substantially similar to, and a
continuation of, the Prior Plan. All service credited to an
individual as a participant under the Prior Plan was credited to
such individual under the Plan; provided that such individual
becomes a participant of the Plan on or after January 1, 1989,
and further provided, that such service be credited solely in
accordance with the terms and provisions of the Plan. With the
adoption of the Plan, the trustee of the Prior Plan Trust
segregated a proportional share of the assets of the Prior Plan,
including surplus and any earnings, and held in trust for the
participants of the Prior Plan who continue to be participants of
the Plan.
1.3 Simultaneously with the establishment of the
Plan, another Participating Company under the Prior Plan, Ogden
Environmental Services Corporation ("OES") determined that it
would be in the best interest of OES' employees to establish a
separate defined benefit plan. Effective January 1, 1989, OES
adopted the Ogden Environmental Services Pension Plan ("OES
Plan"), such plan being substantially similar to, and a
continuation of, the Prior Plan. All service credited to an
individual as a participant under the Prior Plan was credited to
such individual under the OES Plan under certain conditions and
requirements, all as contained within the OES Plan. With the
adoption of the OES Plan, the trustee of the Prior Plan Trust
segregated a proportional share of the assets of the Prior Plan,
including surplus and earnings, and held in trust for the
employees of OES who participated in the OES Plan.
1.4 As a result of a corporate reorganization, OES
was merged into Ogden Projects, Inc. Effective January 1, 1992,
the OES Pension Plan was merged into, and became a part of, the
Plan. OES became a participating company as defined herein (a
"Participating Company") and all service credited to a
participant, and all benefits accrued by the participant, under
the OES Plan, was credited and transferred to the Plan.
1.5 As a result of the enactment of the Tax Reform
Act of 1986, and the establishment of the Plan and the Trust, an
application was filed with the District Director of Internal
Revenue, requesting a determination that the Plan and the Trust,
continued to be a qualified and tax-exempt plan and trust under
Sections 401(a) and 501(a) of the Internal Revenue Code of 1986
(the "Code"). By letter dated May 5, 1993, the District Director
determined that the Plan and Trust was qualified and tax-exempt.
1.6 With the passage of the Unemployment Compensation
Amendments of 1992, and the Omnibus Budge Reconciliation Act of
1993, the issuance of Treasury Regulations and related rulings
and procedures, the Plan has been amended and restated. The
Plan, as hereby amended and restated, and the Trust, are intended
to continue to qualify as a plan and a trust which meet the
requirements of Sections 401(a) and 501(a), respectively, of the
Code, amended, or any other applicable provisions of law,
including, without limitation, the Employee Retirement Income
Security Act of 1974, as now in effect or hereafter amended.
1.7 The Plan, as set forth herein, constitutes a
restatement of the Plan through January 1, 1994. Although this
restatement is generally effective January 1, 1994, the inclusion
of amendments to conform with the Tax Reform Act of 1986 and
other applicable laws necessitates different effective dates for
certain Plan provisions. Accordingly, notwithstanding the
general effective date of this restatement, Plan sections as
amended, shall be effective as indicated therein.
1.8 The rights of any person who terminated
employment or who retired on or before the effective date of a
particular amendment, including his eligibility for benefits and
the time and form in which benefits, if any, will be paid, shall
be determined solely under the terms of the Prior Plan, the OES
Plan or the Plan as in effect on the date of his termination of
employment or retirement, unless such person is thereafter
reemployed and again becomes a Member.
SECTION 2. DEFINITIONS
When used herein the following terms shall have the
following meanings:
2.1 "Accrued Benefit" means a Ten Year Certain and
Life Annuity commencing at age 65 or at any later date specified
under the Plan, whichever is applicable.
2.2 "Act" means the Employee Retirement Income
Security Act of 1974, as now in effect or as hereafter amended.
2.3 "Actuary" means the enrolled actuary (within the
meaning of the Act) engaged by the Administrative Committee.
2.4 "Administrative Committee" means the OPI
Administrative Committee as provided for in Section 15. For
purposes of the Act, the Administrative Committee shall be the
administrator of the Plan and its members shall be named
fiduciaries with respect to matters for which they are responsible
under the Plan.
2.5 "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)
which is under common control with 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
required to be aggregated with the Company pursuant to
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 limitations on benefits, Section 415(h) of the
Code shall apply.
2.6 "Beneficiary" means the beneficiary or
beneficiaries designated by a Member pursuant to Section 13 to
receive the amount, if any, payable under the plan upon the death
of such Member.
2.7 "Board of Directors" means the Board of Directors
of the Company.
2.8 "Break in Service" means a 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 individual would have
completed but for a maternity or paternity absence, as determined
by the Administrative Committee in accordance with this Section
2.8 and the Labor Department Regulations; provided, however, that
the total Hours of Service so credited shall not exceed 501 Hours
and that the individual 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 2.8, 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 adoption of the
child by such individual, or for purposes of caring for a child
for the period immediately following such birth or placement.
2.9 "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.
2.10 "Committee" means the Administrative Committee
and the Investment Committee.
2.11 "Company" means Ogden Projects, Inc., a Delaware
corporation.
2.12 "Compensation" means for each Plan Year beginning
before January 1, 1994, an Employee's first $200,000 (as adjusted
for cost of living to the extent permitted by the Code and IRS
Regulations) of total remuneration paid or payable for Service
while an Employee, without giving effect to any reduction therein
pursuant to an election under Sections 125 and 401(k) of the Code
nor any contributions by the Employer to the Plan as reported on
IRS Form W-2. For each Plan Year beginning on or after January
1, 1994, Compensation means an Employee's first $150,000 (as
adjusted by the Commissioner of the IRS, for years beginning
after December 31, 1993, for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code) ("annual
salary limit") of total remuneration paid or payable for Service
while an Employee, without giving effect to any reduction therein
pursuant to an election under Sections 125 and 401(k) of the
Code. Compensation does not include imputed income or other
noncash compensation, severance pay, any contributions to the
Plan, reimbursed expenses and contributions to the plan
maintained by the Employer except to Section 125 or 401(k) Plan.
If less than a full Plan Year of Salary is taken into account,
then the annual salary limit shall be multiplied by the ratio
obtained by dividing the number of full months in the period by
12. In determining the Salary of a Member for purposes of the
annual salary limit, the rules of Section 414(q)(6) of the Code
shall apply, except that in applying such rules, the term Family
Member shall include only the spouse of the Member and any lineal
descendants of the Member 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 annual salary limit is exceeded, then the
limit shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined
under this Section 2.12 prior to the application of the annual
salary limit.
2.13 "Credited Service" means the number of full years
and months of employment beginning on the date the Employee first
performed an Hour of Service with the Employer and ending on the
date of his retirement or other termination of employment. If an
Employee was a participant of the Prior Plan on December 31, 1988
and thereafter becomes a Participant of the Plan, Credited
Service shall also include his period of Service under the Prior
Plan, as defined by such Prior Plan. Years and months of
employment shall be determined by the Administrative Committee in
accordance with the Regulations.
2.14 "Direct Rollover" means (i) a distribution by the
Plan to an Eligible Retirement Plan as specified by a
Distributee.
2.15 "Disabled" or "Disability" means a Member's
inability to perform the duties of employment with an Employer as
would constitute disability under the Employer's long term
disability plan.
2.16 "Distributee" means a Member or a former Member.
A Member's or former Member's spouse or a former spouse of a
Member or former Member who is a payee under a Qualified Domestic
Relations Order to which a distribution is to be made under the
Plan shall also be deemed to be a Distributee.
2.17 "Early Retirement Age" means the date on which a
Member has attained age 55 and has completed 10 years of Credited
Service.
2.18 "Early Retirement Date" means the first day of
the month coincident with or next following a Member's retirement
after reaching his Early Retirement Age but prior to his Normal
Retirement Age.
2.19 "Effective Date" means, for this amendment and
restatement, January 1, 1994, and for the Plan, January 1, 1989.
2.20 "Eligible Employee" means any Employee and any
leased employee who completes at least 1,000 Hours of Service
during a Plan Year, but excluding (i) any nonresident alien, and
(ii) any Employee who is included in a unit of Employees covered
by a collective bargaining agreement which does not provide for
his membership in the Plan, and for the 1994 Plan Year, (iii) any
Highly Compensated Employee designated by the Administrative
Committee to be ineligible to participate in the Plan unless the
Administrative Committee rescinds such prohibition. A director
of the Employer is not eligible for membership in the Plan unless
he is also an Eligible Employee. For all purposes of the Plan, a
"leased employee" means (i) any individual who provides services
pursuant to an agreement between the Employer and any other
person, (ii) such individual performs such services for the
Employer on a substantially full time basis for a period of at
least one year, and (iii) such services are of a type
historically performed, in the business field of the Employer, by
Employees. Notwithstanding the foregoing, if such leased
employees constitute less than 20% of the Employer's nonhighly
compensated work force within the meaning of Section
414(n)(5)(C)(ii) of the Code, such leased employees are not
Employees if they are covered by a plan meeting the requirements
of Section 414(n)(5)(B) of the Code.
2.21 "Eligible Retirement Plan" means (i) an
individual retirement account, as described in Section 408(a) of
the Code, (ii) an individual retirement annuity, as described in
Section 408(b) of the Code, (iii) an annuity plan, as described
in Section 403(a) of the Code, and (iv) a qualified plan and
trust, as described in Sections 401(a) and 501(a) of the Code;
provided, however, that in the case of an Eligible Rollover
Distribution to a spouse, an Eligible Retirement Plan means an
individual retirement account or an individual retirement
annuity, as described in Sections 408(a) and 408(b) of the Code,
respectively.
2.22 "Eligible Rollover Distribution" means any
distribution from the Plan of all or any portion of the balance
to the credit of a Distributee, except that an Eligible Rollover
Distribution shall not include: (i) any distribution to the
extent such distribution is required under Section 11.4 and
Section 401(a)(9) of the Code, (ii) any distribution that is one
of a series of substantially equal periodic payments (not less
frequently than annually) made for the life of the Distributee or
the joint lives (or joint life expectancies) of the Distributee
and the Distributee's Beneficiary, or for a period of ten years
or more, and (iii) the portion of any distribution that is not
includible in gross income.
2.23 "Employee" means any individual in the employ of
the Employer.
2.24 "Employer" means the Company and each other
Participating Company, or any of them.
2.25 "Equivalent Actuarial Value" or "Actuarial
Equivalent" means, unless otherwise specified in the Plan, a
benefit of equivalent value to another form of benefit, computed
on the basis of the actuarial tables and interest rates specified
in Appendix I attached hereto; provided, however, that the
interest rate used to determine the Equivalent Actuarial Value of
any lump sum payment that may be made under the Plan shall not be
greater than:
(i) the applicable interest rate if the accrued
benefit (using such rate) is not in excess of $25,000; or
(ii) 120 percent of the applicable interest rate
if the accrued benefit exceeds $25,000 (as determined under
clause (i)). In no event shall the present value determined
under clause (i) be less than $25,000.
For purposes of clauses (i) and (ii), the applicable
interest rate shall mean the interest rate or rates announced by
the PBGC as of the first day of each Plan Year in which a
distribution occurs for purposes of determining the present value
of a Member's benefits under the Plan if the Plan had terminated
on the date distribution commences with insufficient assets to
provide benefits guaranteed by the PBGC on that date. In no
event shall the amount of any benefit or annuity determined
hereunder exceed the maximum benefit permitted under Section 415
of the Code.
2.26 "Family Member" means a spouse, lineal ascendants
and descendants of the Employee or former Employee and the
spouses of such lineal ascendants and descendants.
2.27 "Final Average Compensation" means a Member's
average annual Compensation for the five consecutive calendar
years out of his last 10 (or fewer) consecutive Years of Service
rendered immediately prior to his Normal Retirement Date, or his
earlier retirement or other termination of employment, as the
case may be, during which his Compensation was the highest.
2.28 "High-3 Year Average Compensation" means the
average annual amount of the Participant's total renumeration
from the Company for the three consecutive Years of Service
during which such renumeration was the highest.
2.29 "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. (These 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 the 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. (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 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 Regulations, which are incorporated herein by this
reference thereto. Notwithstanding the foregoing, an Employee
shall be credited with 45 Hours of Service with respect to each
week for which he is entitled to be credited with at least one
Hours of Service. The Administrative Committee may, on a
uniform, nondiscriminatory basis, give credit to Participants for
Hours of Service for employment with employers other than the
Company or an Affiliate.
2.30 "IRS" means the United States Internal Revenue
Service.
2.31 "Investment Committee" means the OPI Investment
Committee as provided for in Section 15. For purposes of the
Act, the members of the Investment Committee shall be the named
fiduciaries (with respect to the matters for which they are
hereby made responsible under the Plan) of the Plan.
2.32 "Labor Department" means the United States
Department of Labor.
2.33 "Member" means any Eligible Employee who is
enrolled in the membership of the Plan as provided in Section 3.
2.34 "Normal Retirement Age" means the date which is
the Member's 65th birthday.
2.35 "Normal Retirement Date" means the first day of
the month coincident with or next following a Member's attainment
of his Normal Retirement Age.
2.36 "Participating Company" means an Affiliate of the
Company, designated by the Board of Directors as such, the board
of directors or equivalent governing body of which shall adopt
the Plan and the Trust Agreement by appropriate action and the
Employees of which shall be eligible to participate in the Plan
in the manner and to the extent determined by the Board of
Directors so long as such Affiliate remains so designated. Any
such Affiliate so designated and which adopts the Plan shall be
deemed thereby to appoint the Company, the Administrative
Committee, the Investment Committee and the Trustee its exclusive
agents to exercise on its behalf all of the powers and authority
conferred hereby, or by the Trust Agreement, upon the Company and
shall make its allocable contributions to the Plan. The
authority of the Company, the Administrative Committee, the
Investment Committee, and the Trustee to act as such agent shall
continue until the Plan has terminated as to such Affiliate and
the relevant Trust Fund assets have been distributed by the
Trustee as provided in Section 16 of the Plan.
2.37 "PBGC" means the Pension Benefit Guaranty
Corporation.
2.38 "Plan" means the Ogden Projects Pension Plan, as
set forth herein and as may be amended from time to time.
2.39 "Plan Year" means the calendar year.
2.40 "Preretirement Survivor Annuity" means a benefit
providing for payment of a survivor annuity to a Member's
Surviving Spouse, if any, for the life of such Surviving Spouse
equal to 50% of the annuity which would have been payable for the
life of the Member under a Qualified Joint and Survivor Annuity.
2.41 "Prior Plan" means the Ogden Corporation Pension
Plan.
2.42 "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.
2.43 "Qualified Joint and Survivor Annuity" means a
benefit providing an annuity for the life of the Member, ending
with the payment due on the first day of the month coincident
with or preceding the date of his death, and, if the Member dies
leaving a Surviving Spouse, a survivor annuity for the life of
such Surviving Spouse equal to 50% of the annuity payable for the
life of the Member under his Qualified Joint and Survivor
Annuity, commencing on the first day of the month following the
date of the Member's death and ending with the payment due on the
first day of the month coincident with or preceding the date of
such Surviving Spouse's death.
2.44 "Regulations" means the applicable regulations
issued under the Code (referred to herein as "IRS Regulations"),
the Act (referred to herein as "Labor Department Regulations") or
other applicable law, by the IRS, the PBGC, the Labor Department
or any other governmental authority and any temporary regulations
or rules promulgated by such authorities pending the issuance of
such regulations.
2.45 "Retirement Benefit" means a benefit payable on
the dates, in the forms and in the amounts specified in Sections
6, 7, and 8, whichever is applicable.
2.46 "Retirement Date" means a Member's Early
Retirement Date, Normal Retirement Date or any other retirement
date that has become effective in lieu thereof pursuant to
Section 4.
2.47 "Salary" means for each Plan Year beginning
before January 1, 1994 an Employee's first $200,000 and for Plan
Years beginning on or after January 1, 1994, an Employee's first
$150,000 (adjusted for cost of living in accordance with Section
401(a)(17) of the Code) of total salary and other compensation
earned (whether or not received by an Employee during such Plan
Year) for the benfit of an Employee by 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 or benefit payments under a plan under Section 125 of
the Code, but does not include imputed income or other non-cash
compensation, severance pay, any contributions to the Plan other
than such contributions under Section 401(k) of the Code or
benefit payments under a plan under Section 125 of the Code or
reimbursed expenses.
2.48 "Service" means employment or reemployment
(whether or not as an Eligible Employee) with the Company, any
Participating Company or with any subsidiary of or other
corporation or entity affiliated or associated with the Company
which is a member of the same controlled group of corporations
(within the meaning of Section 1563(a) of the Code). Service
includes all periods of employment credited to a Member while a
participant under the Prior Plan.
2.49 "Straight Life Annuity" means an annuity payable
for the life of a Member, ending with the payment due on the
first day of the month coincident with or preceding the date of
the annuitant's death.
2.50 "Surviving Spouse" means the survivor of a
deceased Member or a deceased former Member to whom such deceased
Member or deceased former Member has been legally married (as
determined by the Administrative Committee) throughout the one-
year period ending on the earlier of (i) the date as of which
payments commence under the Plan, or (ii) the date of the
Member's death. For purposes of Section 11, if a Member marries
within one year of the date as of which payments commence under
the Plan and was married to that spouse for at least a one-year
period ending on or before the date of the Member's death, such
Member and his spouse shall be treated as having been married
throughout the one-year period ending on the date as of which
payments commence.
2.51 "Ten Year Certain and Life Annuity" means a
benefit providing an annuity for the life of the Member, ending
with the payment due on the first day of the month coincident
with or preceding the date of his death, with a guaranteed
payment period of 120 months.
2.52 "Trust" or "Trust Fund" means the Trust established
by the Company pursuant to the Trust Agreement as a part of the Plan.
2.53 "Trustee" means the trustee or trustees of the Trust.
2.54 "Trust Agreement" means the agreement entered
into between the Company and the Trustee regarding the investment
and holding of Plan assets, as provided in the Plan, as amended
or restated from time to time.
2.55 "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, solely for purposes of determining
whether an Eligible Employee is enrolled as a Member as provided
in Section 3 and his vested interest under Section 8.1 and 18.3,
if an Employee does not complete 1,000 Hours of Service during
the Plan Year in which his Service commenced but does complete at
least 1,000 Hours of Service during the 12 consecutive month
period beginning on the date his Service commenced, as determined
by the Administrative Committee, then, he shall be credited with
a Year of Service for such 12 consecutive month period. In
determining the number of Years of Service a Member is credited
with, he shall be credited with all years of service he had
completed, as of December 31, 1988, under the Prior Plan.
SECTION 3. MEMBERSHIP
3.1 Date of Membership. (a) Each Eligible Employee
who was a Member of the Plan on December 31, 1993, shall continue
to be enrolled in the membership of the Plan, and each Eligible
Employee in Service on December 31, 1993, but who was not then a
Member of the Plan shall be enrolled in the membership of the
Plan on the first day of the month coincident with or next
following the earlier of:
(i) the date on which he satisfies the
requirements for membership in the Plan as in
effect on December 31, 1993; and
(ii) the date on which he satisfies the
requirements of Section 3.1(b) for enrollment
in the membership of the Plan.
(b) Each Eligible Employee who commences Service
on or after the January 1, 1994 shall be automatically enrolled
in the membership of the Plan on the first day of the month
coincident with or next following the date on which the Eligible
Employee has (i) attained age 21, and (ii) the later of (a) the
completion of one Year of Service, and (b) the date which is the
anniversary of the Eligible Employee's date of hire; provided, he
is an Eligible Employee on such date.
3.2 Enrollment and Adjustment. The Administrative
Committee shall take any necessary or appropriate action to
enroll each Eligible Employee who has met the requirements of
this Section 3 and, if it is determined that an Eligible Employee
has for any reason not been enrolled in the membership of the
Plan or, if an administrative adjustment is required, such
Employee shall be retroactively enrolled or such administrative
adjustment shall be made.
3.3 Duration. The membership of a Member shall
cease upon his Retirement Date or death or upon any Break in
Service. The membership of a Member who, without any Break in
Service, ceases to be an Eligible Employee shall not cease on
account thereof but, notwithstanding Section 2.48, no subsequent
Service shall be treated as Credited Service unless and until he
again becomes an Eligible Employee.
3.4 Reemployment. (a) If a Member without any
nonforfeitable right to his Retirement Benefit (as determined
under Section 8.1) incurs any Break in Service and if the number
of consecutive Plan Years in which he incurred a Break in Service
equals or exceeds the greater of five or the aggregate number of
his Years of Service prior to such Break in Service (excluding
any Years of Service previously disregarded under this Section),
then, in the event that he returns to Service, he shall be
treated as a new Employee for all purposes of the Plan.
(b) In all other cases following a Break in
Service, if a former Member completes one Year of Service he
shall again be enrolled in the membership of the Plan as of the
first day of the month coincident with or next following the date
such Year of Service commenced, except that, if he is not then an
Eligible Employee, he shall again be enrolled in the membership
of the Plan as of the first day of the month coincident with or
next following the date, if any, on which he again becomes an
Eligible Employee.
SECTION 4. RETIREMENT DATE
4.1 Normal Retirement and Deferred Retirement Dates.
Any Member may retire on his Normal Retirement Date.
Notwithstanding the previous sentence, a Member may elect to
defer his Normal Retirement Date. A retiring Member shall submit
a written application for benefits to the Administrative
Committee not less than 30 days nor more than 90 days prior to
the day the Member will retire from Service. The Deferred
Retirement Date of a Member shall be the first day of the month
coincident with or next following the date of his termination of
Service following this Normal Retirement Age. Notwithstanding
any provision in the Plan to the contrary, a Member shall have a
100% vested right to his Retirement Benefit upon attaining his
Normal Retirement Age.
4.2 Early Retirement Date. A Member may retire on
his Early Retirement Date. A Member must make written
application to the Administrative Committee specifying an Early
Retirement Date which is the first day of a month and not less
than 30 nor more than 90 days following the date of the filing of
the application.
SECTION 5. ACCRUED BENEFIT
5.1 Computation of Accrued Benefit. As of any date,
a Member's Accrued Benefit is equal to (a) less (b) where:
(a) is 1.5% of his Final Average Compensation
multiplied by his years of Credited Service; and
(b) is the amount of his Prior Plan accrued benefit
determined as of December 31, 1988.
5.2 Effect of Reemployment on Accrued Benefit. If a
Member who incurs a Break in Service for any reason returns to
Service and is treated as a new Eligible Employee pursuant to
Section 3.4, then on his subsequent retirement or termination of
Service, his Accrued Benefit shall be based only upon his
Credited Service subsequent to his return to Service. In all
other cases following a Break in Service, a Member's Accrued
Benefit shall be based on his total Credited Service (provided
this does not decrease his Accrued Benefit), reduced by the
Equivalent Actuarial Value of any payments to him before his
return to Service.
SECTION 6. NORMAL RETIREMENT BENEFIT
6.1 Normal Retirement Benefit. Subject to Section
11.4, a Member who retires from Service on his Normal Retirement
Date shall be entitled to receive a Retirement Benefit equal to
his Accrued Benefit (or any larger Retirement Benefit he could
have received commencing on any date which could have been his
Early Retirement Date), commencing on the first day of the month
in which his Normal Retirement Date occurs.
SECTION 7. EARLY RETIREMENT BENEFIT
7.1 Early Retirement Benefit. A Member who retires
from Service on an Early Retirement Date shall be entitled to
receive, commencing on the first day of the month in which his
Early Retirement Date occurs, a Retirement Benefit which is the
Actuarial Equivalent of the Retirement Benefit which would be
payable on his Normal Retirement Date reduced by an early
retirement factor of .5% for each month between the day on which
his payments would have commenced if he had not retired until the
first date of the month coincident with or next following the
Member's Normal Retirement Age.
7.2 Deferral of Payment After Early Retirement Age.
Subject to Section 11.4, a Member who retires on an Early
Retirement Date may elect, at least 60 days prior to his Early
Retirement Date, to defer commencement of the payment of his
Retirement Benefit until the first day of any month after his
Early Retirement Date but no later than the first month in which
his Normal Retirement Date could have occurred. Such an election
may be revoked only with the consent of the Administrative
Committee. If a Member makes such an election and dies before
the payment of his Retirement Benefit commences, then except as
provided in Section 10 or 11.3 no benefit shall be payable under
the Plan.
SECTION 8. TERMINATION OF SERVICE BEFORE RETIREMENT
8.1 Vesting. Subject to Section 11.4, a Member
whose Service terminates, after his completion of five Years of
Service, for any reason other than death, Disability or
retirement shall have a nonforfeitable right to a Retirement
Benefit equal to his Accrued Benefit as of the date of his
termination of Service and shall be entitled to receive his
Retirement Benefit commencing on the first day of the month
following the month in which he attains his Normal Retirement
Age.
8.2 Payment after Termination of Service at Early
Retirement Date. A Member who has completed 10 years of Credited
Service and who has terminated his Service as described in
Section 8.1 may elect, by written notice to the Administrative
Committee at least 30 days prior to his Early Retirement Date, to
commence payment of his Retirement Benefit on his Early
Retirement Date or on the first day of any subsequent month, but
not later than the first day of the month in which the first date
which could have been his Normal Retirement Date occurs,
actuarially reduced. Such an election may be revoked only with
the consent of the Administrative Committee.
8.3 Consent of Member. Notwithstanding any other
provisions of this Section 8, to the extent required by the Code
and IRS Regulations, if the Equivalent Actuarial Value of the
Retirement Benefit of a Member is in excess of $3,500 at the time
of the distribution or any prior distribution, no benefit shall
be paid pursuant to this Section 8 prior to his Normal Retirement
Date without the Member's written consent, and if the Member is
married at the date payments would otherwise commence and his
benefit is to be paid in a form other than a Qualified Joint and
Survivor Annuity, the written consent of the Member's Surviving
Spouse. Absence of any required consent shall be deemed to be an
election under Section 8.2 to receive the Actuarial Equivalent of
the Member's Retirement Benefit commencing at the earlier of (i)
the later of (A) the first day of the month following receipt of
the required consent by the Administrative Committee or (B) the
date otherwise designated under Section 8.2, or (ii) the Member's
Normal Retirement Date.
8.4 Forfeitures. If a Member's Service terminates
for any reason other than death, Disability or retirement (as
provided in Sections 6, 7, 9 and 10) prior to his completion of
five Years of Service, no benefit shall be payable under the
Plan. In determining whether a Member has completed five Years
of Service for this purpose, his Years of Service before any
Break in Service shall be disregarded if he had not then
completed five Years of Service and if the number of consecutive
Plan Years in which he incurred a Break in Service equals or
exceeds the greater of five or the aggregate number of his Years
of Service prior to such Break in Service (excluding any Years of
Service previously disregarded under this Section).
SECTION 9. DISABILITY BEFORE RETIREMENT
9.1 Disability Prior to Retirement. A Member who is
Disabled shall have a nonforfeitable right to a Retirement
Benefit, determined as of the date of the Member's Disability, in
accordance with the provisions of Section 5.1 and shall not
thereafter be credited with Credited Service. Such Retirement
Benefit shall commence on his Normal Retirement Date.
SECTION 10. DEATH BENEFITS BEFORE RETIREMENT
10.1 Death Benefit Before Retirement. Subject to
11.3, the Beneficiary of a Participant who dies before the
payment of his Retirement Benefit commences shall have a
nonforfeitable right to a Retirement Benefit equal to the
Participant's Accrued Benefit, such Retirement Benefit to
commence on his Early Retirement Date, reduced as provided in
Section 7.1. A Participant shall receive any death benefit to
which he was entitled under the Prior Plan as in effect on
December 31, 1984 for benefits accrued prior to January 1, 1985.
10.2 Consent. Notwithstanding the foregoing Section
10.1 to the extent required by the Code and IRS Regulations, if,
immediately prior to his death, the Member had a Retirement
Benefit and the Equivalent Actuarial Value of such Retirement
Benefit is in excess of $3,500 at the time of the distribution or
any prior distribution, no lump sum cash payment shall be made
under Section 10.1 to the Member's Surviving Spouse prior to the
date which was or would have been the Member's Normal Retirement
Date (had he lived) without the Surviving Spouse's written
consent.
SECTION 11. METHOD OF PAYMENT
11.1 Payment of Benefits. The Retirement Benefit to
which an unmarried Member or a Member who has not been legally
married for at least one year ending on the date as of which
payment of his Retirement Benefit commences, is entitled under
the Plan shall, except as otherwise provided in this Section 11,
be payable in the form of a Ten Year Certain and Life Annuity.
The Equivalent Actuarial Value of the Retirement Benefit to which
a Member who has been legally married for at least one year
ending on the date as of which payment of his Retirement Benefit
commences is entitled under the Plan shall, except as otherwise
provided in this Section 11, be payable in the form of a
Qualified Joint and Survivor Annuity with a Ten Year Certain
Payment Period. A "Qualified Joint and Survivor Annuity with a
Ten Year Certain Payment Period" is a Qualified Joint and
Survivor Annuity that provides a guaranteed 120 month payments.
If the Member dies after the date his Retirement Benefit begins
but prior to receiving 120 monthly payments, the remainder of
such 120 payments shall be paid to his Surviving Spouse. After
receiving the remainder of such 120 payments, the Surviving
Spouse shall receive a monthly payment for life equal to 50% of
such amount.
11.2 Optional Forms of Benefits. (a) Subject to the
provisions of Sections 11.4 and 11.5, in lieu of receiving his
Retirement Benefit in the form described in Section 11.1, a
Member may elect to receive his Retirement Benefit in any one of
the optional forms described in Sections 11.2(a)(i) through (v)
below; provided, however, that the benefits under such options
shall be the Equivalent Actuarial Value of the Retirement
Benefits described in Section 11.1.
(i) Ten Year Certain and Life Annuity. In lieu
of receiving the continuing monthly payments as provided by a Ten
Year Certain and Life Annuity, the Member's Beneficiary may
elect, within 60 days after the date of the Member's death, to
receive in one lump cash sum the Actuarial Equivalent of such
payments.
(ii) Qualified Joint and Survivor Annuity. A
married Member with a Surviving Spouse may elect to receive the
Equivalent Actuarial Value of his Retirement Benefit in the form
of a Qualified Joint and Survivor Annuity.
(iii) Contingent Annuitant Option. A Member may
elect a benefit of Equivalent Actuarial Value payable to him for
life with payments to be made, after his death, in 100% of such
amount or 50% of such amount, to the Beneficiary designated by
such Member, if living, for the life of such Beneficiary. The
designation of a Beneficiary may be revoked or changed at any
time prior to the date the Member's Retirement Benefit is to
begin. In the event of the death of either the Member or the
Beneficiary prior to the date such Retirement Benefit is to
begin, the election of this option shall be inoperative.
(iv) Contingent Annuitant Option; Ten Year Certain
Payment Period. A Member may elect a benefit of Equivalent
Actuarial Value payable to him for life with monthly payments to
be made, after his death, in the same amount, or 50% of such
amount, to the Beneficiary designated by him, if living, for the
life of such Beneficiary. If the Participant dies after the date
his Retirement Benefit commences but prior to receiving 120
monthly payments, the remainder of such 120 monthly payments will
be paid to his Beneficiary (or, in the event of the death of the
Beneficiary after the death of the Member, to the Beneficiary's
estate). After such 120 monthly payments have been made, the
Beneficiary shall receive monthly payments for life in the same
amount, or 50% of such amount, in accordance with the Member's
election. The designation of a Beneficiary may be revoked or
changed at any time prior to the date payment of such Retirement
Benefit commences. In the event of the death of the Member prior
to the date payment of the Member's Retirement Benefit begins,
the election of the contingent annuitant portion of this option
shall be inoperative.
<PAGE>
(v) Straight Life Annuity. A Participant may
elect to receive the Equivalent Actuarial Value of his Retirement
Benefit in the form of a Straight Life Annuity.
(b) If a Member has elected an option in
accordance with this Section 11.2 and dies prior to the date
payment of his Retirement Benefit commences (i) without leaving a
Surviving Spouse, or (ii) leaving a Surviving Spouse and having
made a valid election to waive the Preretirement Survivor Annuity
in accordance with Section 11.5, then such optional form of
benefit shall become payable to his Beneficiary in the same
amount, if any, that would have been payable to such Beneficiary
if the payments thereunder had commenced to the Member on the
first day of the month coincident with or preceding the date of
the Member's death. If such Member dies prior to the date
payment of his Retirement Benefit commences, leaving a Surviving
Spouse and without having made a valid election to waive the
Preretirement Survivor Annuity in accordance with Section 11.5,
then the election under this Section 11.2 shall be null and void,
and the Surviving Spouse shall receive the Preretirement Survivor
Annuity in accordance with Section 11.3.
(c) If a person entitled to receive payments
under this Section 11.2 is not the spouse of the Member, the
Equivalent Actuarial Value of the benefits allocated to such
person shall not be greater than one-half of the Equivalent
Actuarial Value of the Retirement Benefit which the Member could
otherwise have received.
11.3 Preretirement Survivor Annuity. Subject to
Section 11.5, a Preretirement Survivor Annuity shall be paid to
the Surviving Spouse of a Member or former Member who, after
earning a nonforfeitable right to his Accrued Benefit, dies
before the commencement of payment of his Retirement Benefit. In
the case of a Member who dies on or after the first date which
could have been his Early Retirement Date but before payment of
his Retirement Benefit has commenced, the Preretirement Survivor
Annuity shall be based on the Qualified Joint and Survivor
Annuity which would have been payable if the Member had retired
and payments under the Qualified Joint and Survivor Annuity had
commenced on the first day of the month coincident with or
preceding the date of his death. In the case of a Member who
dies before the first date which could have been his Early
Retirement Date, the Preretirement Survivor Annuity shall be
based on the Qualified Joint and Survivor Annuity which would
have been payable if the Member had terminated Service on the
date of death, survived until the first date which could have
been his Early Retirement Date, immediately began receiving
payments under the Qualified Joint and Survivor Annuity and died
on the day following such Early Retirement Date. Payment of a
Preretirement Survivor Annuity shall commence on the last day of
the month following the later of (i) the first month in which the
Member could have attained his Normal Retirement Date (had he
lived), or (ii) the month in which the Member dies; provided,
however, to the extent required by the Code and IRS Regulations,
if the Equivalent Actuarial Value of a Preretirement Survivor
Annuity is in excess of $3,500 at the time of distribution or any
prior distribution, it shall not commence to be paid prior to the
date which was or would have been the Member's Normal Retirement
Date (had the Member lived) without the written consent of the
Member's Surviving Spouse. In the absence of consent, payment of
the Preretirement Survivor Annuity shall not be made until the
earlier of (i) the first day of the month following receipt of
the required consent by the Administrative Committee, or (ii) the
date which would have been the Member's Normal Retirement Date
had the Member lived.
11.4 Commencement of Payment. (a) Notwithstanding
any other provision of the Plan, unless otherwise provided by
law, any benefit payable to a Member shall commence no later than
the April 1st of the calendar year following the calendar year in
which such Member attains age 70-1/2; provided, however, if a
Member attained age 70-1/2 prior to January 1, 1988, except as
otherwise provided in Section 11.4(e), any benefit payable to
such Member shall commence no later than the April 1st of the
calendar year following the later of (i) the calendar year in
which the Member attains age 70-1/2; or (ii) the calendar year in
which the Member retires. Such benefit shall be paid, in
accordance with IRS Regulations, over a period not extending
beyond the life expectancy of such Member or the joint life
expectancies of such Member and his Beneficiary. Life expectancy
for purposes of this Section shall not be recalculated annually
in accordance with the Regulations.
(b) If distribution of a Member's benefit has
commenced prior to a Member's death, and such Member dies before
his entire benefit is distributed to him, distribution of the
remaining portion of the Member's benefit to the Member's
Beneficiary shall be made at least as rapidly as under the method
of distribution in effect as of the date of the Member's death.
(c) If a Member 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 Member's
death; provided, however, at the Beneficiary's irrevocable
election, duly filed with the Administrative Committee before the
applicable commencement date set forth in the following sentence,
any distribution to a Beneficiary may be made over the life of
the Beneficiary or 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 Member died or, in the
event such Beneficiary is the Member's spouse, on or before the
December 31st of the calendar year in which such Member would
have attained age 70-1/2, if later (or, in either case, on any
later date prescribed by IRS Regulations). If such Member's
spouse dies after such Member's death but before distributions to
such spouse commence, this Section 11.4(c) shall be applied to
require payment of any further benefits as if such spouse were
the Member.
(d) Pursuant to IRS Regulations, any benefit paid
to a child shall be treated as if paid to a Member's spouse if
such amount will become payable to such spouse on the child's
attaining majority, or other designated event permitted by the
Regulations.
(e) If a Member who is a five percent owner
attained age 70-1/2 before January 1, 1988, any benefit payable
to such Member shall commence no later than the April 1st of the
calendar year following the later of (i) the calendar year in
which the Member attains age 70-1/2 or (ii) the earlier of (A)
the calendar year within which the Member becomes a five percent
owner or (B) the calendar year in which the Member retires. For
purposes of this Section 11.4(e), a five percent owner shall mean
a five percent owner of such Member's Employer as defined in
Section 416(i) of the Code at any time during the Plan Year in
which such owner attains age 66-1/2 or any subsequent Plan Year.
(f) All distributions made hereunder shall be
made in accordance with the provisions of Section 401(a)(9) of
the Code and IRS Regulations thereunder.
(g) Notwithstanding the foregoing, distributions
to a Member may be made in accordance with a written designation
made before January 1, 1984 by the Member if such designation
satisfied the requirements of Section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act of 1982.
11.5 Explanation of Annuities. The Administrative
Committee shall furnish or cause to be furnished to each married
Member, to the extent required by the Code and IRS Regulations at
least 30 days but no more than 90 days prior to the date a
distribution is to be made under the Plan, explanations of the
Qualified Joint and Survivor Annuity and the Preretirement
Survivor Annuity under procedures developed by the Administrative
Committee in accordance with the Code and IRS Regulations. A
Member may, with the written consent of his Surviving Spouse
(unless the Administrative Committee makes a written
determination in accordance with the Code and IRS Regulations
that no such consent is required), elect in writing (i) to
receive his Retirement Benefit in one of the optional forms
described in Section 11.2 in lieu of a Qualified Joint and
Survivor Annuity within the 90-day period ending on the date
payment of his Retirement Benefit commences, or (ii) to waive the
Preretirement Survivor Annuity within the period beginning on the
first day of the Plan Year in which the Member attains age 35 and
ending on the date of his death. Any election made pursuant to
this Section 11.5 may be revoked by a Member, without spousal
consent, at any time within which such election could have been
made. Such an election or revocation must be made in accordance
with procedures developed by the Administrative Committee in
accordance with the Code and IRS Regulations.
11.6 Small Amounts. Notwithstanding any other
provisions of this Section 11, any annuity amounting to less than
$10 per month shall be paid in quarterly or semi-annual
installments, and payment of any Retirement Benefit with an
Equivalent Actuarial Value of $3,500 or less at the time of the
distribution or any prior distribution shall be made in a lump
sum cash payment in full settlement of the Plan's liability
therefor, provided, however, that in the case of an Member, no
such lump sum payment shall be made after benefits have commenced
without the consent of the Member and, if the Member is married
at the time such payment would otherwise commence, the consent of
the Member and his spouse or, if the Member has died, the
Member's Surviving Spouse or Beneficiary.
<PAGE>
11.7 Suspension of Retirement Benefits. Except as
may be otherwise required in Section 11.4 and notwithstanding any
other provisions of this Section 11, if a Member for any reason
returns to Service, payment of his Retirement Benefit, if any,
shall, to the extent permitted under the Regulations, be
suspended until his subsequent termination of Service or
retirement. To the extent that the application of this Section
11.7 constitutes a suspension of benefits, such suspension shall
be in accordance with the Act, the Code and the Regulations.
11.8 Consent. Notwithstanding any other provisions
of this Section 11, to the extent required by the Code and IRS
Regulations, if the Equivalent Actuarial Value of the Retirement
Benefit of a Member who retires is, or has been, in excess of
$3,500, no benefit shall be paid until the Member's Normal
Retirement Date without the Member's written consent, and if the
Member is married at the date payment would otherwise commence
and his benefit is to be paid in a form other than a Qualified
Joint and Survivor Annuity, no benefit shall be paid without the
written consent of the Member's Surviving Spouse, unless it is
paid on the Member's Normal Retirement Date.
11.9 Deemed Distribution. If the Member's non-forfeitable
Retirement Benefit on the date he terminates Service equals zero, such
Member shall be deemed to have received his Retirement Benefit on the
date he terminates Service.
11.10 Automatic Payment of Retirement Benefits.
Notwithstanding any other provision of the Plan, unless a Member
elects to otherwise defer his distribution, payment of his
Retirement Benefit shall commence on the 60th day after the close
of the Plan Year following (i) the date the Member reaches his
Normal Retirement Date, (ii) the 10th anniversary of the date the
Member's membership in the Plan began, or (iii) the date the
Member terminates Service with the Employer, whichever is the
latest to occur.
11.11 Direct Rollover. (a) A Distributee may elect,
at a time and manner prescribed by the Administrative Committee,
to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by such
Distributee in the form of a Direct Rollover. A Distributee may
not elect to make a Direct Rollover if the total Eligible
Rollover Distributions to which the Distributee is entitled
during the calendar year equal, or are reasonable expected to
equal, less than $200. A Distributee may not elect to make a
Direct Rollover of any portion of an Eligible Rollover
Distribution if that portion is not at least $500 or more. A
Distributee may not make a Direct Rollover of less than the
entire amount of an Eligible Rollover Distribution if the entire
Eligible Rollover Distribution equals less than $500.
(b) The provisions of this Section 11.11 shall be
effective January 1, 1993, with respect to distributions made on
or after that date.
<PAGE>
SECTION 12. MAXIMUM AMOUNT OF RETIREMENT BENEFIT
12.1 Application of Section 12. The provisions of
this Section 12 shall govern the benefits to which it is
applicable notwithstanding any other provision of the Plan. The
benefits to which this Section 12 is applicable are: (i) any
annuity payable to a Member for life as part of a Qualified Joint
and Survivor Annuity or as part of a survivorship option elected
by the Member under Section 11.2 and having the effect of a
Qualified Joint and Survivor Annuity (excluding in either case
any survivor annuity payable to a Surviving Spouse thereunder);
(ii) any Single Life Annuity payable to a Member under Section
11.1 or elected by a Member under Section 11.2; and (iii) any
other option elected by a Member under Section 11.2 (including
both the annuity payable to the Member and any other annuity or
benefit payable thereunder).
12.2 Maximum Benefit. The benefits to which this
Section 12 is applicable may not exceed the Actuarial Equivalent
of a Single Life Annuity equal to the lesser of (i) $90,000 (the
"Dollar Limitation"), or (ii) 100 percent of the Member's High-3
Year Average Compensation (the "Compensation Limitation"),
subject, however, to the following provisions of Section 12.
12.3 Adjustments to Maximum Benefit. The limitations
on the maximum amount of benefits contained in Section 12.2 shall
be adjusted as follows:
(a) The Dollar Limitation shall be adjusted
annually, for Plan Years beginning after December 31, 1987, for
increases in the cost-of-living in accordance with IRS
Regulations and, in the case of Members who have separated from
Service, the Compensation Limitation shall be adjusted annually
for increases in the cost-of-living in accordance with IRS
Regulations. As a result of such an adjustment, a benefit which
had been limited by the provisions of this Section in a previous
Plan Year may be increased with respect to future payments to the
least of (i) the adjusted Dollar Limitation amount, (ii) the
adjusted Compensation Limitation or (iii) the amount of benefit
which would have been payable under the Plan without regard to
the provisions of this Section 12.
(b) In the case of a benefit beginning prior to a
Member's "social security retirement age", as defined in Section
415(b)(8) of the Code, but on or after age 62, the Dollar
Limitation applicable to such benefit shall be reduced as
follows:
(i) If a member's social security retirement
age is 65, the Dollar Limitation for benefits
commencing on or after age 62 is determined by
reducing the Dollar Limitation by 5/9 of one
percent for each month by which benefits commence
before the month in which the Member attains age
65.
(ii) If a Member's social security
retirement age is greater than 65, the Dollar
Limitation for benefits commencing on or after age
62 is determined by reducing the Dollar Limitation
by 5/9 of one percent for each of the first 36
months and 5/12 of one percent for each of the
additional months (up to 24 months) by which
benefits commence before the month of the Member's
social security retirement age.
The adjustment provided for in the preceding sentence
shall be made in such manner as IRS Regulations may prescribe
which is consistent with the reduction for old-age insurance
benefits commencing before the social security retirement age
under the Social Security Act.
(c) If the annual benefit of a Member commences
prior to age 62, the Dollar Limitation shall be the actuarial
equivalent of an annual benefit beginning at age 62 reduced for
each month by which benefits commence before the month in which
the Member attains age 62. A decrease in the Dollar Limitation
determined in accordance with this Section 12.3(c) shall not
reflect the mortality decrement to the extent that benefits will
not be forfeited upon the death of the Member.
(d) In the case of a benefit beginning after the
Member's social security retirement age, the Dollar Limitation
shall be adjusted in accordance with IRS Regulations to an amount
which is equal to a Straight Life Annuity commencing at the same
time, which is the Actuarial Equivalent of a Single Life Annuity
equal to the Dollar Limitation commencing at social security
retirement age. For the purposes of this Section 12.3, actuarial
equivalence shall have the same meaning as described in Section
2.25, except the interest rate assumptions for the purposes of
Sections 12.3(b) and (c) shall not be less than the greater of
the interest rate assumptions provided in the Plan or five
percent, and the interest rate assumption for the purposes of
this Section 12.3(d) shall not be greater than the lesser of five
percent or the rate specified in the Plan.
(e) If a Member has fewer than 10 years of Plan
participation, the Dollar Limitation shall be multiplied by a
fraction, the numerator of which is the number of years (computed
to fractional parts of a year) of participation in the Plan, and
the denominator of which is 10. If the Member has fewer than 10
Years of Service, the Compensation Limitation shall be multiplied
by a fraction, the numerator being the Member's Years of Service
(computed to fractional parts of a year) and the denominator of
which is 10.
(f) In no event shall Section 12.3(e) above
reduce the Dollar Limitation and the Compensation Limitation to
an amount less than one-tenth of the applicable limitation
(determined without regard to Section 12.3(e)). To the extent
provided by IRS Regulations and pronouncements, Section 12.3(e)
above shall be applied separately with respect to each change in
the benefit structure of the Plan.
12.4 Inapplicability of Section 12. The limitations
contained in Section 12.2 shall not be applicable if (i) the
annual benefits subject to Section 12 with respect to the Member
do not exceed $10,000 and (ii) the Member has not participated in
any defined contribution plan (within the meaning of Section
414(i) of the Code) maintained by the Company; provided, however,
that the $10,000 limitation contained in this Section 12.4 shall
be reduced in the same manner as the Compensation Limitation is
reduced under Section 12.3(d).
12.5 Limitation Prior to October 3, 1973. In the
case of any individual who was a Member prior to October 3, 1973
the benefits to which Section 12 is applicable may not exceed the
greater of (i) the limitations contained in either Section 12.2
or Section 12.4, adjusted as described in Section 12.3, or (ii)
the smallest of (A) the Actuarial Equivalent of a Single Life
Annuity (as described in Section 11.2) equal to 100% of the
Member s annual rate of Compensation on October 2, 1973 (or the
date of his termination of Service, if earlier), (B) the
Actuarial Equivalent of the benefits which would have been
provided under the Plan as in effect on October 2, 1973 without
taking account of any increases in his annual rate of
compensation after such date, or (C) in the case of a Member
whose Service terminated prior to October 2, 1973, the Actuarial
Equivalent of his nonforfeitable benefits after his termination
of Service.
12.6 Limitation Prior to December 31, 1982.
Notwithstanding the foregoing provisions of this Section 12, the
maximum limitation on a Member's Retirement Benefits, with
respect to any person who was a Member prior to December 31, 1982
and whose Retirement Benefit (determined without regard to any
changes in the Plan after July 1, 1982 and without regard to
cost-of-living adjustments, if any, occurring after July 1, 1982)
as of December 31, 1982, exceeds the limitations set forth in
Section 12.2, shall be such Member's Retirement Benefit as of
December 31, 1982; provided that, such Member's Retirement
Benefit did not exceed the maximum limitation thereon as of
December 31, 1982.
12.7 Additional Limitations. (a) Notwithstanding
the foregoing provisions of this Section 12, and subject to the
provisions of Section 12.7(c), if a Member in the Plan also
participates or ever participated in any defined contribution
plan (as defined in Sections 414(i) and 415(k) of the Code)
currently or formerly maintained by the Company or any of its
Affiliates, the sum of the Member's "Defined Benefit Fraction"
(as defined in Section 12.7(b)(1)) and the Member's "Defined
Contribution Fraction" (as defined in Section 12.7(b)(2)) shall
not exceed 1.0. If the Plan satisfied the applicable
requirements of Section 415 of the Code as in effect for all
Limitation Years beginning before January 1, 1987, an amount
shall be subtracted from the numerator of the Defined
Contribution Fraction (not exceeding such numerator) as
prescribed by IRS Regulations so that the sum of the defined
benefit plan fraction and defined contribution plan fraction
computed under Section 415(e)(1) of the Code does not exceed 1.0
for such Limitation Year. In the event that in any Plan Year the
sum of a Member's Defined Benefit Fraction and the Member's
Defined Contribution Fraction exceeds 1.0, then the Retirement
Benefit payable under the Plan shall be reduced so that the sum
of such fractions in respect of that Member will not exceed 1.0.
(b) For purposes of Section 12.7(a) the following
terms shall have the meanings set forth below:
(1) "Defined Benefit Fraction" shall mean as to any
Member for any Plan Year, a fraction, (A) the numerator of
which is the projected annual Retirement Benefit the Member
is expected to receive under the Plan determined as of the
end of the Plan Year and in accordance with the IRS
Regulations and (B) the denominator of which is the lesser
of (i) the product of 1.25 multiplied by the dollar
limitation in effect under clause (i) of Section 12.2 for
the Plan Year, or (B) the product of 1.4 multiplied by the
amount which may be taken into account under clause (ii) of
Section 12.2 with respect to the Member for the Plan Year;
and
(2) "Defined Contribution Fraction" shall mean, as to
any Member for any Plan Year, a fraction, (A) the numerator
of which is the sum of the annual additions (as defined in
Section 415(c)(2) of the Code) credited to the accounts of
the Member under any defined contribution plan (as defined
in Sections 414(i) and 415(k) of the Code) maintained by the
Company or any of its Affiliates for the Plan Year and for
all prior Plan Years, and (B) the denominator of which is
the sum of the lesser of the following amounts, determined
for such Plan Year and for each prior Year of Service
(regardless of whether the Member was a participant in the
defined contribution plan during any such prior Year of
Service) (i) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of the Code
for such year, or (ii) the product of 1.4 multiplied by the
amount which may be taken into account under Section
415(c)(1)(B) of the Code with respect to the Member for such
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;
further provided, that the Administrative Committee, in
determining the Defined Contribution Fraction, with respect
to defined contribution plans in existence on July 1, 1982,
for Plan Years ending after December 31, 1982, may elect to
use the special transitional rule provided for in Section
415(e)(6) of the Code.
(c) In the case of a Member with respect to whom
the sum of the Defined Benefit Fraction and the Defined
Contribution Fraction exceed 1.0 with respect to the last Plan
Year beginning before January 1, 1983, an amount, determined in
accordance with IRS Regulations, may be subtracted from the
numerator of the Defined Contribution Fraction (not exceeding
such numerator) so that the sum of such Member's Defined Benefit
Fraction and his Defined Contribution Fraction computed under
Section 12.7(b) does not exceed 1.0 for the last Plan Year
beginning before January 1, 1983.
12.8 Maximum Limitations. Notwithstanding the
foregoing provisions of this Section 12, the maximum limitation
on Retirement Benefits, with respect to any person who is a
Member prior to January 1, 1987 and whose Retirement Benefit
(determined without regard to any changes in the Plan after May
6, 1986 and without regard to cost of living adjustments
occurring after December 31, 1986), exceeds the limitations set
forth in Section 12.2, then, for purposes of such section and
Section 415(b) and (e) of the Code, the Dollar Limitation with
respect to such Member shall be equal to such Member's accrued
Retirement Benefit as of December 31, 1986; provided that such
Member's Retirement Benefit did not exceed the maximum limitation
as in effect for all Plan Years commencing prior to January 1,
1987.
SECTION 13. DESIGNATION OF BENEFICIARIES
13.1 Beneficiary Designation. Each Member shall file
with the Administrative Committee a written designation of one or
more persons as the Beneficiary who, subject to Section 11.5,
shall be entitled to receive the amount, if any, payable under
the Plan upon his death. Subject to the requirements of Section
11, a Member 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. 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 Member's death, and in no event shall it be effective as
of a date prior to such receipt. However, if a Member is
married, his Beneficiary shall be his spouse unless such spouse
has consented in writing to such other designation, on a form
supplied by the Administrative Committee and has waived her
rights pursuant to Section 11.5 of the Plan.
13.2 Failure to Designate Beneficiary. If no such
Beneficiary designation is in effect at the time of a Member's
death, or if no designated Beneficiary survives the Member, the
payment of the amount, if any, payable under the Plan upon his
death shall be made to the Member's Surviving Spouse, if any, or
if the Member has no Surviving Spouse, then the following persons
(if then living) in the following order of priority; (i)
children, in equal shares, (ii) parents, in equal shares, and
(iii) the Member'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 therefor.
SECTION 14. FUNDING AND CONTRIBUTIONS
14.1 Funding. Subject to the provisions of Sections
16 and 17, the Company shall contribute to the Trust, not less
frequently than quarterly during each Plan Year, the amounts
recommended by the Actuary to the Administrative Committee as
necessary to maintain the Plan on a sound actuarial basis, in
accordance with the Act and the Code. The Administrative
Committee shall arrange for the establishment and maintenance by
the Actuary, or in accordance with his recommendations, of such
funding accounts as are required by the Act.
14.2 Actuarial Assumptions. The Administrative
Committee shall adopt and may change from time to time, in
accordance with the provisions of the Act and the Code, such
actuarial assumptions and methods as are recommended by the
Actuary for purposes of actuarial valuations of the Plan. The
Actuary shall make an annual actuarial valuation of the Plan and
shall estimate the contributions required under Section 14.1 on
the basis thereof. At least once in each three year period the
Actuary shall make an actuarial study of the mortality, Service
and compensation experience of the Members of the Plan and the
investment experience and any other relevant experience gains and
losses under the Plan, including such calculations as may be
necessary to determine whether the Plan is adequately funded, and
shall report the results of its study to the Administrative
Committee. Prior to termination of the Plan, forfeitures of
benefits arising from termination of Service, death or any other
reason under the Plan shall not be applied to increase the
benefits that any Member would otherwise be entitled to receive
under the Plan, but may be anticipated in estimating costs under
the Plan and shall be applied to reduce the Company's
contributions under the Plan.
14.3 Trustee. All monies, securities or other
property received as contributions under the Plan shall be
delivered to the Trustee under the Trust, to be managed,
invested, reinvested and distributed 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.
14.4 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 Trust,
(ii) the expenses incurred by the members of the Administrative
Committee and of the Investment Committee in the performance of
their duties under the Plan (including reasonable compensation
for any legal counsel, certified public accountants and any
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 Administrative Committee and of the
Investment Committee (including settlements of claims or legal
actions approved by counsel to the Plan) are to be paid out of
the Trust unless the Participating Companies pay such expenses
directly in such proportions as shall be determined by the
Administrative Committee. In estimating costs under the Plan,
administrative costs may be anticipated.
14.5 Return of Contributions. Any contribution made
by an Employer because of a mistake of fact shall be returned to
the Employer which made such contribution within one year of such
contribution. Any contribution made by an Employer that is
conditioned upon the contribution's deductibility or the Plan's
initial qualification under the Code, and if either the deduction
or the initial qualification is denied, such contribution shall
be returned to the Employer which made such contribution within
one year after the date such deduction or qualification is
denied.
<PAGE>
SECTION 15. ADMINISTRATION OF THE PLAN
15.1 Powers and Duties of Administrative Committee.
The Administrative Committee shall have general responsibility
and discretionary authority for the administration, establishment
and interpretation of the Plan (including, but not limited to,
complying with reporting and disclosure requirements,
establishing and maintaining Plan records, adopting amendments to
the Plan as described in Section 17.1, deciding all questions
arising in connection with the Plan, including eligibility,
benefit payments, vesting and factual questions). The
Administrative Committee shall engage the Actuary and such
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 have sole discretionary
authority to determine, a Member's or Beneficiary's
benefit eligibility. 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 and the Trust.
15.2 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 and may
appoint and remove or change the Trustee and any such funding
agency. The Investment Committee shall have the power to appoint
or remove one or more Investment Managers and to delegate to such
Investment Manager authority and discretion to manage (including
the power to acquire and dispose of) the assets of the Plan, or
any portion thereof, provided that (i) each Investment Manager
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 Investment Manager with such
authority and discretion. The Administrative Committee shall
communicate any requirements and objectives of the Plan
(including any interest rate or other actuarial assumptions)
which may be pertinent to the investment of Plan assets, to the
Investment Committee which shall establish investment standards
and policies incorporating such requirements and objectives and
communicate the same to the Trustee (or other funding agencies
under the Plan). If annuities are to be purchased under the
Plan, the Investment Committee shall determine what contracts
should be made available to terminated Members or purchased by
the Trust.
15.3 Agents; Reports to Board of Directors. The
Administrative Committee and the Investment Committee may arrange
for the engagement of legal counsel, who may be counsel for the
Company, 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. The Committees may rely upon the written
opinion of such counsel and the Actuary and accountants engaged
by the Administrative Committee and may delegate to any 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 (including the
appointment of an Investment Manager), provided that such
delegation shall be subject to revocation at any time at the
discretion of the Committee. The Committees shall report to the
Board of Directors, or to a committee of the Board of Directors
designated for that purpose, no less frequently than at each
annual meeting as shall be specified by the Board of Directors,
or such committee with respect to the Board of Directors with
regard to the matters for which it is responsible under the Plan.
15.4 Structure of Committees. The Administrative
Committee and the Investment Committee shall consist of at least
three 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. Any member of either of said
Committees may resign at any time. No member of either of said
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. The members of the Administrative Committee and of the
Investment Committee 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 Administrative
Committee or the Investment Committee or any member thereof in
any jurisdiction. Any person may serve on both Committees, and
any member of either Committee, any sub-committee or agent to
whom either Committee 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.
15.5 Adoption of Procedures of Committee. Each
Committee shall elect or designate its own Chairman, 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 such Committee at a meeting or, at the
direction of its Chairman, without a meeting by mail, telegraph,
telex, telecopier or telephone, provided that all of the members
of such Committee are informed by mail, telegraph, telex,
telecopier or telephone, of their right to vote on the proposal
and of the outcome of the vote thereon.
15.6 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 and
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 such Committee.
15.7 Trust Agreement; Powers and Duties of Trustee;
Trust Fund. The Company has entered into the Trust Agreement
with the Trustee providing for the administration and management
of the Trust Fund. The Trustee shall have responsibility under
the Plan for the management and control of the assets of the Plan
but shall have no discretionary responsibility for the investment
and management of such assets unless, and if so, only to the
extent that the Trustee has been appointed an investment adviser
pursuant to Section 15.2. All benefits and other amounts payable
hereunder shall be paid exclusively from the Trust Fund, and
neither the Company, any Affiliate, any Trustee, nor any
director, officer, Employee or agent of the Company assumes any
responsibility or liability therefor. The Trust Fund may be
commingled for investment purposes with like separate trust funds
of any other plans and trusts of the Company or any Affiliate
which meet the requirements of Sections 401(a) and 501(a) of the
Code.
15.8 Hold Harmless; Indemnification. Each Member,
each Beneficiary or each other person who shall claim the right
to any payment under the Plan shall look exclusively to the Trust
Fund therefor and shall not have any right or claim therefor
against the Company, any Participating Company, any Trustee, or
any director, officer, Employee or agent of the Company. Except
as otherwise required by the Act, neither the Company, nor any
member of the Administrative Committee or the Investment
Committee, any director, officer, Employee or agent of the
Company shall be required to inquire into or be responsible for
any act or failure to act of any Trustee or any Member. To the
maximum extent permitted by the Act and applicable state law,
each Trustee, each member of the Administrative Committee and the
Investment Committee, each director and officer of the Company,
any Participating Company and each Employee who performs service
on behalf of the Plan or the Trust, shall be indemnified and
saved harmless by the Company and by the Participating Company
out of their own assets (including the proceeds of any insurance
policy the premiums of which are paid by the Company) from and
against any and all losses, costs and expense (including any
amounts paid in settlement of a claim with the Company's or
Administrative Committee's approval) to which any of them may be
subjected by reason of any act done or omitted to be done in good
faith in their official capacities with respect to the Plan or
the Trust Agreement, including all expenses reasonably incurred
in their defense.
15.9 Claims for Benefits. (a) All claims for
benefits under the Plan shall be submitted to, and within a
reasonable period of time decided by, a person or persons
designated in writing by the Administrative Committee. If the
claim is wholly or partially denied, written notice of the denial
shall be furnished within 90 days after receipt of the claim;
provided that, if special circumstances require an extension of
time for processing the claim, an additional 90 days from the end
of the initial period shall be allowed for processing the claim,
in which event the claimant shall be furnished with a written
notice of the extension prior to the termination of the initial
90 day period indicating the special circumstances requiring an
extension. The written notice denying the claim shall set forth
the reasons for the denial, including specific reference to
pertinent provisions of the Plan on which the denial is based, a
description of any additional information necessary to perfect
the claim and information regarding review of the claim and its
denial.
(b) 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 60
days after delivery to the claimant of written notice of the
decision. Such written request for review shall contain all
additional information which the claimant wishes the
Administrative Committee to consider. The Administrative
Committee may hold a hearing or conduct any independent
investigation, 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 furnished to the claimant within 60 days after receipt
by the Administrative Committee of a request for review, unless
special circumstances require an extension of time for
processing, in which event an additional 60 days shall be allowed
for review and the claimant shall be so notified in writing.
Written notice of the decision on review shall include specific
reasons for the decision. 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
benefits eligibility, the amount of benefits and as to any other
matter of fact or interpretation relating to the Plan.
15.10 Communications. Any notice, election,
application, instruction, designation or other form of
communication required to be given or submitted by any Member,
other Employee or Beneficiary shall be in such form as is
prescribed from time to time by the Administrative Committee or
Investment Committee, sent by first class mail or delivered in
person, and shall be deemed to be duly given only upon actual
receipt thereof by such Committee. Any notice, statement, report
and other communication from the Company or either Committee to
any Member, other Employee or Beneficiary required or permitted
by the Plan shall be deemed to have been duly given when
delivered to such person or mailed by first class mail to such
person at his address last appearing on the records of the
Company or the Committee. Each person entitled to receive a
payment under the Plan shall file in accordance herewith his
complete mailing address and each change therein. A check or
communication mailed to any person at his address on file with
the Company or the appropriate Committee shall be deemed to have
been received by such person for all purposes of the Plan, and no
Employee or agent of the Company, of a Participating Company or
member of the Administrative Committee or the Investment
Committee shall be obliged to search for or ascertain the
location of any such person except as required by the Act. If
the Administrative Committee shall be in doubt as to whether
payments are being received by the person entitled thereto, it
may, by registered mail addressed to such person at his address
last known to the Administrative Committee notify such person
that all future payments will be withheld until such person
submits to the Administrative Committee his proper mailing
address and such other information as the Administrative
Committee may reasonably request.
15.11 Agent for Service of Process. The agent for the
service of legal process of the Plan shall be the Secretary of
the Company or such other person as may from time to time be
designated by the Board of Directors.
15.12 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 Committee 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 the other Committee or of another fiduciary.
SECTION 16. TERMINATION OF PARTICIPATING COMPANY PARTICIPATION
16.1 Termination of Participating Company
Participation. Any Participating Company may terminate its
participation in the Plan by giving the Administrative Committee
prior written notice specifying a termination date which shall be
the last day of a month at least 60 days subsequent to the date
such notice is received by the Administrative Committee. The
Administrative Committee may terminate any Participating
Company's participation in the Plan, as of any termination 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. In the event of any such
termination, 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.
16.2 Rights of Former Members. To the maximum extent
permitted by the Act, any rights of Members no longer employed by
the Participating Company, former Member's and their Beneficiaries,
Surviving Spouses and other eligible survivors under the
Plan shall be unaffected by a termination of the Plan as to any
Participating Company. Subject to the provisions of Section
17.8, the benefits provided under the Plan with respect to each
member who is employed by such Participating Company as of the
termination date will be paid or forfeited in accordance with the
Plan as if such termination had not occurred except that the
Administrative Committee may direct the Trustee to segregate such
portion of the assets of the Trust (the "Distributable Reserve")
as the Actuary shall determine to be properly allocable in
accordance with the Act to the Members who are Employees of such
Participating Company and direct the Trustee to apply the
Distributable Reserve for the benefit of the Participants
employed by the Participating Company as of the termination date
in such matter as the Administrative Committee shall determine
including, without limitation, payment to such Members in lump
cash sums, cash installments, or the purchase of immediate or
deferred annuities, a transfer to a successor employee benefit
plan which is qualifie3d under Section 401(a) of the Code, or any
combination thereof; provided, however, that in the event of any
transfer of assets to a successor employee benefit plan the
provisions of Section 16.3 will apply. Any such payments or
transfers of the Distributable Reserve shall constitute a
complete discharge of all liabilities under the Plan with respect
to such Participating Company's participation in the Plan and any
Member then employed by such Participating Company. To the
maximum extent permitted by the Act, the termination of the Plan
as to any Participating Company shall not in any way affect any
other Participating Company's participation in the Plan.
16.3 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 Member 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 or the Investment Committee or both of
the Committees may also request appropriate indemnification from
the employer or employers maintaining such successor plan before
making such a transfer.
SECTION 17. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST
17.1 Right to Amend, Suspend or Terminate Plan.
(a) Subject to the provisions of Section 17.1(b),
the Board of Directors reserves the right at any time, by
majority consent in writing or by a meeting, 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 reason and without the
consent of any Participating Company, Member, other Employee
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 and the Administrative
Committee.
(b) The Administrative Committee may adopt amendments, by
majority consent in writing or by a meeting, which may be necessary or
appropriate to facilitate the administration,
management, or 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, provided that any such
amendment does not materially increase the cost to the Employer
of maintaining the Plan.
(c) No amendment or modification shall be made
which would retroactively impair any right to any benefit under
the Plan which any Member, Beneficiary or Surviving Spouse would
otherwise have had at the date of such amendment by reason of the
contributions theretofore made, except as provided in Section
17.2 below, or (ii) make it possible for any part of the funds of
the Plan (other than such part as is required to pay taxes, if
any, and administrative expenses as provided in Section 13.4) to
be used for or diverted to any purposes other than for the
exclusive benefit of Members and their Beneficiaries and
Surviving Spouses under the Plan prior to the satisfaction of all
liabilities with respect thereto.
17.2 Retroactivity. Subject to the provisions of
Section 17.1, any amendment, modification, suspension or
termination of any provisions 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) and 501(a) of the Code or any
other applicable section of law (including the Act) and the
Regulations issued thereunder.
17.3 Notices. 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 and, where and to the extent required by
law, to Members and other interested parties.
17.4 Termination. Upon termination of the Plan, no
amount shall thereafter be payable under the Plan to or in
respect of any Member except as provided in this Section 17. To
the maximum extent permitted by the Act, transfers, distributions
or other disposition of the assets of the Plan as provided in
this Section 17 shall constitute a complete discharge of all
liabilities under the Plan. The Administrative and Investment
Committees shall remain in existence and all of the provisions of
the Plan which in the opinion of the Administrative Committee are
necessary for the execution of the Plan and the administration
and distribution transfer or other disposition of the assets of
the Plan in accordance with this Section 17.4 shall remain in
force.
17.5 Not a Title IV Termination. If the termination
of the Plan does not constitute a plan termination for purposes
of Title IV of the Act, the assets of the Plan shall be applied
for the benefit of Members, former Members, Beneficiaries and
Surviving Spouses in such manner as the Administrative Committee
shall determine; provided, however, that in the event of any
transfer of assets to a successor employee benefit plan the
provisions of Section 16.3 will apply.
17.6 Title IV Termination. (a) If the termination of
the Plan does constitute a plan termination for purposes of Title
IV of the Act, then the rights of all Members to their Retirement
Benefits accrued to the date of such termination shall thereupon
be nonforfeitable, but only to the extent that such Retirement
Benefits have then been funded by contributions made prior to
such termination and that such funds are available to provide
such Retirement Benefits upon the allocations hereinafter
provided in this Section 17.6.
(b) Upon receipt by the Administrative Committee
of all necessary PBGC regulatory approvals with respect to the
sufficiency of the assets of the Plan to discharge when due all
obligations thereunder with respect to benefits which are
guaranteed by the PBGC under Title IV of the Act, the assets of
the Plan which remain after reservation of an amount sufficient
to pay all expenses of final administration shall be allocated,
to the extent sufficient, in the following order of priority:
(i) To provide for the benefits payable under Section
11 of the Plan or, if the Plan existed on December 31, 1975, the
corresponding Section or Sections of the Plan as in effect on
December 31, 1975, to or in respect of Members who retired or
died, who could have retired, or who, having terminated Service,
either began receiving payments of such benefits or could have
begun receiving such payments if they had not elected to defer
commencement of such payments, at least three years prior to the
termination date, determined in each case on the basis of the
provisions of the Plan at any time during the five year period
ending on the termination date when such benefits were or would
have been the lowest and without regard to any increases in such
benefits which accrued less than three years prior to the
termination date; then
(ii) To provide all other benefits under the Plan which
are guaranteed by the PBGC under Title IV of the Act, or which
would be guaranteed if Sections 4022(B)(a) and 4022(b)(5) of the
Act were not applicable, but which have not been allocated under
(i) above; then
(iii) To provide all other benefits which had become
nonforfeitable under the Plan prior to the termination date but
which have not been allocated under (i) or (ii) above; then
(iv) To provide all other benefits which had accrued
under the Plan prior to the termination date but which have not
been allocated under (i), (ii) or (iii) above; then
(v) Any surplus assets of the Plan remaining after the
payment of all expenses of final administration and after the
satisfaction of all liabilities accrued to the termination date
with respect to Members, former Members, Beneficiaries and
Surviving Spouses under the Plan shall revert to the Company.
(c) The foregoing allocations shall be made by
the Administrative Committee in accordance with determinations
made pursuant to the Labor Department Regulations. If the
balance remaining for allocation under any of the foregoing
Sections 17.6(b)(i), (ii), (iii), (iv) or (v) is insufficient to
provide in full the allocations under such Section, allocations
to individuals under such Section shall be reduced pro rata
(except that, under Section 17.6(b)(iii) only, such balance shall
first be allocated to provide the benefits described therein
determined on the basis of the provisions of the Plan which were
in effect at the beginning of the five year period ending on the
termination date and then, if the balance remaining for
allocation is sufficient, to provide the benefits described
therein which result from each successive amendment to the Plan
during such five year period until the first such amendment as to
which such balance is insufficient before reducing such
allocation pro rata) and no allocations shall be made under a
subsequent Section. The assets of the Plan allocated in
accordance with Sections 17.6(b)(i), (ii), (iii) and (iv) above
shall be distributed in such manner as the Administrative
Committee shall determine, including without limitation, lump sum
cash payments, cash installments, the purchase of immediate or
deferred annuities or any combination of the foregoing as the
PBGC and, if applicable, the IRS, may approve.
17.7 Asset Allocation by Court. Notwithstanding the
provisions of Section 17.6, if the PBGC notifies the
Administrative Committee that it is unable to determine whether
the assets of the Plan are sufficient (or that such assets are
insufficient) to discharge when due all obligations thereunder
with respect to benefits which are guaranteed by the PBGC under
Title IV of the Act, then the assets of the Plan shall be
allocated and distributed only as a court having competent
jurisdiction over the Plan and the Trust, or a trustee appointed
by such court, shall direct or permit.
17.8 Partial Termination. In the event of a partial
termination (within the meaning of the Act) of the Plan has
occurred then (i) the rights of all Members affected thereby to
their Accrued Benefits accrued to the date of such partial
termination shall thereupon be nonforfeitable, but only to the
extent that such Accrued Benefits have then been funded by such
portion of the assets of the Trust as are determined to be
properly allocable to such Members and that such portion of
assets is available to provide such Retirement Benefits upon the
allocations provided in Section 17.6, and (ii) the provisions of
Sections 16.3, 17.2, 17.3, 17.4 and 17.7 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. If a partial termination of the Plan has
occurred as to any Participating Company, then to the maximum
extent permitted by the Act, only the Participating Company as to
which the partial termination of the Plan has occurred shall be
liable to the PBGC for any insufficiency of assets.
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, when appropriate, 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 its Affiliates shall be used. Such
actuarial assumptions shall be the same assumptions used to
determine benefits under Section 11. The present value of a
Member's Accrued Benefit shall be determined as of the last
Valuation Date used for computing Plan costs for minimum funding
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 Member within the four
preceding Plan Years. Notwithstanding any other provisions of
the Plan, the provisions of this Section 18 shall apply and
supersede all other provisions of the Plan during each Plan Year
with respect to which the Plan is determined to be a Top Heavy
Plan.
<PAGE>
18.2 Definition for Section 18. 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
(i) each person (and his Beneficiary) who at
any time during the five Plan Years ending on the Determination
Date:
(A) was an officer of the Company or an
Affiliate having an annual Salary greater than 50% of the amount
in effect under Section 415(b)(1)(A) of the Code for any such
Plan Year;
(B) was one of the 10 Employees owning
the largest interest of the Company and its Affiliates but only
if he received Salary 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;
(C) owned at least five percent of an
Employer's outstanding shares of stock or at least five percent
of the total combined voting power of an Employer's shares of
stock; or
(D) owned at least one percent of an
Employer's shares of stock or at least one percent of the total
combined voting power of an Employer's shares of stock, and whose
annual Salary from the Employer exceeds $150,000.
(ii) The following special rules apply to
this definition:
(A) No more than 50 officers, or, if
less, the greater of three or 10% of all Employees will be Key
Employees under Section 18.2(b)(i)(A). If there are more
officers than are counted under the preceding sentence, only
those who had the highest aggregate Salary, during the five Plan
Years ending on the Determination Date will be considered Key
Employees.
(B) A person is an officer only if he
is in regular and continued service as an administrative
executive of the Company or a Participating Company.
(C) 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.
(D) A person will be treated as owning
all shares of stock which he owns directly or constructively by
application Section 318 of the Code.
(E) For purposes of determining whether
a person is a one percent or five percent owner of the Company or
any Affiliate, his ownership interest in any entity related to
the Company solely by reason of Sections 414(b), (c) and (m) of
the Code shall be disregarded.
(F) For purposes of determining whether
a person receives an annual Salary of more than $150,000, Salary
received from each Employer required to be aggregated under
Sections 414(b), (c) and (m) of the Code shall be taken into
account.
(c) "Non-Key Employee" means (i) any Employee who
is not a Key Employee, or (ii) 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 Company or an Affiliate 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 that was
sponsored during the five year period ending on the applicable
Determination Date by the Company or an Affiliate (i) in which a
Key Employee participates or (ii) 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 Company and its Affiliates
in the Required Aggregation Group and any other qualified
employee benefit plan of the Company and its Affiliates which the
Company 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 this
computation, the account balances and cumulative annual accrued
benefits of a Member (i) who is a Non-Key Employee but who was a
Key Employee in a prior Plan Year, or (ii) who has not been
credited with at least one Hour of Service with any Employer at
any time during the five year period ending on the Determination
Date 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 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 cumulative accrued
benefits under the Plan for Key Employees exceeds 60% of the
Value of the cumulative accrued benefits under the Plan for all
Employees. For purposes of the comparison, the cumulative
accrued benefits 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 Plan 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:
(i) for all defined benefit plans, the
present value calculated as provided in those plans; and
(ii) for all defined contribution plans, the
fair market value of each Member's account (including amounts
attributable to voluntary employee contributions from a qualified
employee pension benefit plan sponsored by the Company or an
Affiliate) determined as of the most recent Determination Date
increased by:
(A) distributions made during the five
Plan Years ending on the Determination Date (except distributions
already included in determining the Value of the accounts and
distributions made during the five Plan Years preceding the
Determination Date under a terminated plan which, if it had not
been terminated, would have been required to be included in the
Required Aggregation Group); and
(B) all rollover contributions
distributed from the plans to a qualified employee benefit plan
not sponsored by the Company or an Affiliate, and decreased by;
(C) any deductible employee
contributions; and
(D) rollover contributions received by
the plans from a qualified employee benefit plan not sponsored by
the Company or an Affiliate; and
(E) rollover contributions distributed
from the Plan to a qualified employee pension benefit plan
sponsored by the Company or an Affiliate.
18.3 Minimum Vesting. (a) If a Plan is a Top Heavy
Plan with respect to any Plan Year, the nonforfeitable percentage
of the Accrued Benefit derived from Company contributions of each
Member who is credited with at least one Hour of Service on or
after the date the Plan becomes Top Heavy shall not be less than
the amount determined in accordance with the following vesting
schedule:
<TABLE>
<CAPTION>
Years of Service Percentage
<S> <C>
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 or more 100%
</TABLE>
(b) In the event the vesting provisions of
Section 8.1 are amended, or changed on account of the Plan
becoming or ceasing to be a Top Heavy Plan, any Member who has
completed at least three Years of Service may elect to have the
amount of his nonforfeitable right to his Retirement Benefit
computed under the Plan without regard to such amendment or
change by notifying the Administrative Committee in writing
within the election period hereinafter described. The election
period shall begin on the date such amendment is adopted or the
date such change is effective, as the case may be, and shall end
no earlier than the latest of the following dates: (i) the date
which is 60 days after the day such amendment is adopted; or (ii)
the date which is 60 days after the day such amendment or change
becomes effective; or (iii) the date which is 60 days after the
day the Member is given written notice of such amendment or
change by the Administrative Committee. Any election made
pursuant to this Section 18.3(b) shall be irrevocable.
18.4 Minimum Benefits. (a) Subject to the
provisions of Section 18.5, if the Plan is a Top Heavy Plan at
any point in time, the Accrued Benefit derived from the Company's
contributions for each Member who has completed a Year of Service
regardless of whether he is employed by the Employer on the last
day of the Plan Year and who is a Non-Key Employee shall not,
regardless of the Member's Salary, at such point, be less than
such Member's Average Compensation, multiplied by the lesser of
(i) two percent multiplied by the number of Years of Service or
(ii) 20%. For purposes of the preceding sentence, Years of
Service shall not include any Year of Service credited with
respect to Plan Years which began prior to January 1, 1984, or
any other Year of Service credited with respect to a Plan Year
during which the Plan was not a Top Heavy Plan.
(b) For purposes of this Section 18.4, "Average
Compensation" shall mean the average of a Member's Salary (or to
the extent required by the Code or Section 1.415-2(d) of the IRS
Regulations) for the period of five consecutive years (or, if the
Member does not have five consecutive years, his actual number of
consecutive years) during which the Member had the greatest
Salary (or to the extent required by the Code or Section 1.415-2(d)
of the IRS Regulations).
18.5 Limitations on Benefits. (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 12.
(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 then the provisions of Section
18.5(a) shall not be applicable if the Accrued Benefit of any
Member who is a Non-Key Employee is determined in accordance with
Section 18.4(a) by substituting "three percent" for "two percent"
in Section 18.4(a) and increasing "20%" in Section 18.4(a) by one
for each Plan Year described in the last sentence of Section
18.4(a), but not beyond "30%".
18.6 Other Plans. If, with respect to a Non-Key
Employee who benefits in a Plan Year under both a defined
contribution and defined benefit plan which are Top Heavy Plans
maintained by the Employer, a top heavy minimum benefit is not
provided for such Plan Year under both plans, then such
determination for such Plan Year shall be made in conformity with
the comparability analysis described in Q&A M-12 of Section
1.416-1 of the IRS Regulations. Such analysis shall be modified,
where a factor of 1.25 is utilized for such Plan Year in
connection with the satisfaction of the limitations set forth in
Section 415(e) of the Code, in accordance with the last sentence
of Q&A M-14 of Section 1.416-1 of the IRS Regulations.
SECTION 19. LIMITATIONS ON DISTRIBUTIONS TO
CERTAIN HIGHLY PAID EMPLOYEES
19.1 Limitations of Section 19. In order to qualify
the Plan and the Trust as a qualified plan and trust under the
Code the benefits to be provided to certain Members will be
subject to the limitations set forth in this Section 19.
19.2 Application of Section 19. The provisions of
this Section 19.2, and Sections 19.3, 19.5 and 19.6 shall apply
for Plan Years prior to January 1, 1994, to any Member who on any
"Commencement Date" is one of the 25 highest paid employees of
the Employer and whose anticipated annual benefit under the Plan,
commencing at his Normal Retirement Date, provided by
contributions of the Employer will be in excess of $1,500
annually. Commencement Date for purposes of this Section 19
shall mean the Effective Date of the Plan or any subsequent
amendment to the Plan which increases the benefits of the Plan.
19.3 Limitation on Benefits. Notwithstanding any
other provision of the Plan, if during the first 10 years
following a Commencement Date, the Plan is terminated or benefits
become payable to a Member described in Section 19.2 above during
such 10 year period, the amount of contributions (or funds
attributable thereto) by the Employer which may be applied for
the benefit of any such Member shall be limited so that such
amount so applied under the Plan shall not exceed the largest of:
(a) The Employer's contributions (or funds
attributable thereto) which would have been applied to provide
benefits for the Member if the Plan, as in effect on the day
immediately preceding the Commencement Date, had been continued
without change;
(b) $20,000;
(c) The sum of (i) the Employer's contributions
(or funds attributable thereto) which would have been applied to
provide benefits for the Member if the Plan had been terminated
on the day immediately preceding such Commencement Date, plus
(ii) an amount computed by multiplying the smaller of $10,000 or
20% of the Member's average annual Salary during his last five
Years of Service by the number of years since such Commencement
Date;
(d) if the Plan is subject to Section 4021(a) of
the Act and if the Member is a "substantial owner" (as defined in
Section 4022(b)(5) of the Act), the present value of the benefit
guaranteed for such Member under Section 4022 of the Act (or
which would have been guaranteed under such section if the Plan
had terminated on the date payment of the Retirement Benefit
commenced); or
(e) if the Plan is subject to Section 4021(a) of
the Act and if the Member is not a substantial owner the present
value of the maximum benefit guaranteed under Section
4022(b)(3)(B) of the Act (or which would have been guaranteed
under such section if the Plan had terminated on the date payment
of his Retirement Benefit commenced) without regard to any other
limitation imposed by Section 4022 of the Act.
19.4 Unrestricted Benefits. The limitations
established under this Section 19 shall not restrict either the
payment of any monthly benefit due prior to the termination of
the Plan, or the payment of benefits to a Member's Surviving
Spouse under the Plan at any time if such payment shall have
commenced prior to the date of such termination. If the
foregoing limitations would otherwise become applicable the
Administrative Committee may, if it so elects, nevertheless pay
full benefits to or in respect of any Member who executes an
agreement with the Trustee, in form and in substance satisfactory
to the Administrative Committee, which is adequately secured and
which guarantees the repayment of any payment subject to such
limitations.
19.5 Use of Reserves Resulting from Limitations. Any
additional reserves arising by the application of the foregoing
limitations shall be used and applied for the benefit of the
other Members and their Beneficiaries and Surviving Spouses under
the Plan; provided, however, that if sufficient funds are
available to provide in full for the benefits accrued for all
such other Members and their Beneficiaries and Surviving Spouses
under the Plan, then such additional reserves shall be used, to
the extent available, to provide the benefits under the Plan of
the Members whose benefits would otherwise have been restricted
by operation of this Section 19.
SECTION 20. GENERAL LIMITATIONS AND PROVISIONS
20.1 No Right to Continued Employment. Nothing
contained in the Plan shall give any Employee the right to be
retained in the employment of the Company, any Participating
Company 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.
20.2 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, the
Administrative Committee, and the Investment Committee, assume no
liability or responsibility for payment of such benefits, and
each Member, 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, or
the Administrative Committee or the Investment Committee or any
member thereof or any Employee or director of the Employer.
20.3 Payment on Behalf of Payee. If the
Administrative Committee shall find that any person to whom any
amount is payable under the Plan is found by a court of competent
jurisdiction to be 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 therefor 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.
20.4 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 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.
20.5 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 advice 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,
that had employed the Member, 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.
<PAGE>
20.6 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.
20.7 Required Information. Each Member shall file
with the Administrative Committee such pertinent information
concerning himself, his spouse, his Beneficiary or any other
person as the Administrative Committee may specify and in such
manner and form as the Administratice Committee may specify or
provide, and no Member, Surviving Spouse or Beneficiary, or other
person shall have any rights or be entitled to any benefits or
further benefits under the Plan unless such information is filed
by or with respect to, him.
20.8 Subject to Insurance Contract. 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 be subject
to all the provisions of such contract.
20.9 Communications to Committees. All elections,
designations, requests, notices, instructions, and other
communications from a Participating Company, a Member,
Beneficiary, Surviving Spouse or other person to the
Administrative Committee required or permitted under the Plan
shall be in such form as is prescribed from time to time by the
Administrative Committee, shall be mailed by first-class mail or
delivered to such location as shall be specified by the
Administrative Committee, and shall be deemed to have been given
and delivered only upon actual receipt thereof by the
Administrative Committee at such location.
20.10 Communications from Participating Company or
Committees. All notices, statements, reports and other
communications from a Participating Company or either Committee
to any Eligible Employee, Member, 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 Eligible Employee, Member,
Beneficiary or other person at his address last appearing on the
records of the Administrative Committee.
20.11 Gender; Tense. Whenever used in the Plan the
masculine gender includes the feminine gender and the singular
includes the plural, unless the content indicates otherwise.
20.12 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.
20.13 Applicable Law. The Plan and all rights
thereunder shall be governed by and construed in accordance with
the Act and the laws of the State of New York.
<PAGE>
OGDEN PROJECTS PENSION PLAN
APPENDIX I
ACTUARIAL ASSUMPTIONS AND TABLES
Except as limited in Section 2.25, the actuarial tables
and interest rates used to calculate the Equivalent Actuarial Value
or Actuarial Equivalent of a particular form of benefit shall be as
follows:
Interest: Eight percent, compounded annually.
Mortality: 1983 Group Annuity Table weighted to reflect
80% of the male and 20% of the female annuity
rates.
Provided, however, that for purposes of calculating Equivalent Actuarial
Values under Section 11.6, the interest rate shall be equal to the rate
promulgated by the Pension Benefit Guaranty Corporation for valuing annuities
of pension plans terminating as the first day of the Plan Year that contains
the proposed distribution date.
<TABLE>
EXHIBIT 11
OGDEN CORPORATION AND SUBSIDIARIES
DETAIL OF COMPUTATION OF EARNINGS
APPLICABLE TO COMMON STOCK
FOR THE THREE YEARS ENDED DECEMBER 31, 1994
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
NUMBER OF SHARES USED FOR COMPUTATION
OF EARNINGS PER SHARE:
Average number of common shares 43,610,000 43,378,000 43,086,000
NUMBER OF SHARES USED FOR COMPUTATION
OF EARNINGS PER SHARE ASSUMING FULL
DILUTION:
Average number of common shares 43,610,000 43,378,000 43,086,000
Issuable for options-treasury
stock method
Shares issuable for conversion of
preferred stock 329,000 356,000 382,000
Shares issuable for conversion of
debentures 42,000 115,000
Number of shares used for computation 43,939,000 43,776,000 43,583,000
COMPUTATION OF EARNINGS APPLICABLE
TO COMMON SHARES:
Income from continuing operations
before cumulative effect of changes
in accounting principles $67,826,000 $62,130,000 $60,767,000
Add (deduct):
Adjustments arising from minority
interest in consolidated subsidiaries 10,000 32,000 13,000
Dividends on Ogden preferred stock (184,000) (199,000) (213,000)
Consolidated income applicable to
Ogden common stock $67,652,000 $61,963,000 $60,567,000
Cumulative effect of changes in
accounting principles ($1,520,000) ($5,340,000) ($5,186,000)
COMPUTATION OF EARNINGS APPLICABLE
TO COMMON SHARE ASSUMING FULL
DILUTION:
Income from continuing operations
before cumulative effect of
changes in accounting principles $67,826,000 $62,130,000 $60,767,000
Add:
Adjustments arising from minority
interest in consolidated subsidiaries 10,000 32,000 13,000
Debenture interest (net of applicable
income taxes) 16,000 49,000
Consolidated income applicable to
Ogden common stock $67,836,000 $62,178,000 $60,829,000
Cumulative effect of changes in
accounting principles ($1,520,000) ($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>
EXHIBIT 13
Ogden Corporation and Subsidiaries
Management's Discussion and Analysis of Consolidated Operations
At December 31, 1994, in connection with Ogden's acquisition of the
publicly traded shares of Ogden Projects, Inc. (OPI), Ogden reclassified its
business segments. Ogden now classifies its business segments as Services
(formerly "Operating Services") and Projects (formerly "Waste-to-Energy
Operations"). Independent power activities, formerly part of Operating
Services, are now part of Projects, reflecting consolidation of the overall
management of these activities within OPI. Projects now includes
waste-to-energy activities, the independent power business, water and
wastewater projects, and Ogden's construction activities. Within the
Services segment, certain business activities have been reclassified.
The Environmental Services group no longer includes independent power; the
Government Services group has been renamed Technology Services; and all
facility management service contracts for government customers have been
transferred to the Facility Management Services group. The discussion and
analysis that follow reflect these reclassifications.
Operations: Revenues for 1994 were $70,800,000 higher than the
comparable period of 1993, primarily due to increased revenues of
$24,100,000 in Aviation Services reflecting the start-up of operations in
Brazil and increased activity in Venezuela, Chile, and European operations;
$30,200,000 in Technology Services, primarily in the Atlantic Design group
and the Systems Engineering group reflecting several new contracts and
increased customer activity; $18,500,000 in Environmental Services,
primarily reflecting increased activity in the consulting group;
$26,900,000 in waste-to-energy services due primarily to increased revenues
at the Detroit, Michigan; Hartford, Connecticut; and Honolulu, Hawaii,
facilities acquired in January 1993 and the start-up and full
operation of the Union County, New Jersey, facility; $3,800,000 in the
independent power group, reflecting increased geothermal power
production; and $26,100,000, relating to the gain on the sale of limited
partnership interests in and related tax benefits of the Onondaga County,
New York, facility. These increases were partially offset by lower revenues
of $24,800,000 in the Facility Management Services group due primarily to
the loss of several building cleaning contracts and certain utility
maintenance contracts and a reduction in construction revenues of
$35,300,000, primarily due to reduced construction
activity at the Union County facility completed in May 1994, and the Lee
County, Florida, facility completed in December 1994.
Consolidated operating income was $16,200,000 higher than 1993,
primarily due to an increase of $3,500,000 in Technology Services reflecting
several new contracts and increased customer activity in the Atlantic Design
group; an increase of $1,600,000 in waste-to-energy services (service revenues
less operating costs and debt service charges), chiefly associated with the
start-up and full commercial operations of the Union County facility and
partially offset by additional maintenance work at the Detroit facility,
additional provisions totaling $8,000,000 for deferred proposal costs,
litigation and contractor settlement costs, and increased debt service
charges of $1,700,000; an increase of $1,700,000 in independent power,
primarily reflecting increased activity; an increase in construction income
(construction revenues less construction costs) of $2,600,000, primarily due
to increased activity at the Montgomery County, Maryland, facility; and a
gain of $26,100,000 from the sale of limited partnership interests in and
related tax benefits of the Onondaga County facility. These increases were
partially offset by lower earnings of $5,000,000 in Facility Management
Services, reflecting the loss of several building cleaning and utility
maintenance contracts; lower earnings of $2,500,000 in Aviation Services,
reflecting lower margins in the in-flight catering group and a loss on the
devaluation of the Mexican peso, partially offset by increased
earnings in overseas ground services operations; and lower earnings of
$2,200,000 in Entertainment Services, primarily reflecting the effect of
the baseball strike and hockey lockout and start-up of overseas operations,
partially offset by the opening of Arrowhead Pond of Anaheim and several
new customers. Selling, administrative, and general expenses increased
$10,600,000 due primarily to increased overhead costs including marketing
efforts related to new industries and international markets for both the
Projects and Services segments. Debt service charges increased $1,700,000.
This increase was due to higher interest rates resulting from the conversion
of one series of adjustable-rate project debt to fixed rates in 1993 and
higher interest rates resulting from two fixed interest rate swap agreements
entered into as hedges against two series of adjustable-rate project debt.
The swap agreements resulted in additional debt service charges of
$1,400,000 and $1,500,000 in 1994 and 1993, respectively.
Interest income for 1994 was $3,500,000 higher than in 1993, primarily
reflecting interest earned on loans made in the second half of 1994 and
higher interest rates on earnings from investments. Interest expense for 1994
was $3,400,000 higher than in 1993, reflecting higher borrowings and a
reduction of $2,600,000 in income received on two interest rate swap agreements
covering notional amounts of $100,000,000 each. One swap agreement expired in
March 1994. The other swap agreement expires on December 16, 1998. These
swap agreements were entered into in order to convert Ogden's fixed-rate
$100,000,000 9.25% debentures to variable-rate debt. Income received on
these swaps was $800,000 and $3,400,000 in 1994 and 1993, respectively.
The effective income tax rate for 1994 was 44.4%, compared with 45.0%
for 1993. This decrease reflects a charge of $4,100,000 in 1993 reflecting the
adjustment of prior years' deferred income tax balances to the new 35% rate
enacted in 1993 in accordance with Statement of Financial Accounting
Standards (SFAS) 109, offset by $3,600,000 in 1994 due to the recapture of
investment tax credits relating to the sale of certain tax benefits with
respect to the Onondaga County facility. Note 20 to the Consolidated
Financial Statements contains a more detailed reconciliation of the
variances from the Federal statutory income tax rate.
Revenues for 1993 were $270,500,000 higher than the comparable period of
1992, 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 due to increased customer activity and the start-up of operations
at Schiphol Airport in Holland; and $3,200,000 in Environmental Services,
reflecting the acquisition of a Spanish environmental services company in
1993. Waste-to-energy 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; independent power production increased $4,100,000,
chiefly associated with increased activity; and construction revenues
increased $161,800,000 due to increased construction activity at the Lee
County, Detroit, and Montgomery County waste-to-energy facilities. These
increases were partially offset by a reduction of $7,700,000, arising from
the sale of limited partnership interests in and related tax benefits of the
Huntington, New York, waste-to-energy facility in 1992.
Consolidated operating income was $8,800,000 higher than 1992, primarily
reflecting an increase in waste-to-energy service income (service
revenues less operating costs and debt service charges) of $9,100,000, chiefly
associated with increased activity at existing facilities, the addition of
three RRS plants in January 1993, and a decrease in debt service charges of
$1,100,000; $500,000 in independent power operations, reflecting increased
production; $14,000,000 in construction income due to increased activity;
$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 $300,000 in Environmental Services, primarily due to the
acquisition of a Spanish environmental services company.
These increases were partially offset by a reduction of $7,700,000,
reflecting the gain in 1992 from the sale of limited partnership interests
in and related tax benefits of the Huntington waste-to-energy facility.
Selling, administrative, and general expenses for both the Projects and
Services segments increased $14,300,000 due to increased overhead costs
including marketing efforts relating to new industries and international
markets. Debt service charges were $1,100,000 lower due primarily to a
repayment of project debt from excess construction proceeds as part of a
refinancing. This decrease was partially offset by higher interest rates
on certain variable-rate debt and higher interest expense resulting from
two interest rate swap agreements entered into in May 1993 as hedges against
interest rate exposure on two series of adjustable-rate project debt.
The interest rate swap agreements resulted in an additional $1,500,000 of
debt service charges in 1993.
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
operating costs and expenses. See Note 21 to the Consolidated Financial
Statements for a more detailed discussion of Discontinued Operations.
Interest income for 1993 was $200,000 lower than 1992, primarily
reflecting income from the investment of the proceeds from the 9.25%
debentures issued in March 1992, partially offset by lower interest rates on
investments and the collection of a subordinated note bearing interest above
the prime rate. Interest expense for 1993 was $600,000 higher than 1992,
primarily reflecting interest costs on the 9.25% debentures issued in March
1992, partially offset by lower interest costs on the Corporation's
variable-rate debt and increased income received on two interest rate swap
agreements covering notional amounts of $100,000,000 each. One swap was
entered into in November 1993. These swaps were entered into in order to
convert Ogden's fixed-rate $100,000,000 9.25% debentures to variable-rate
debt. Income received on these swaps amounted to $3,400,000 and $2,300,000
in 1993 and 1992, respectively.
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. As a consequence, deferred income tax
balances were adjusted to reflect the new tax rate as required by SFAS 109,
which resulted in a one-time charge for Federal income taxes of $4,100,000
in 1993. Note 20 to the Consolidated Financial Statements contains a more
detailed reconciliation of the variances from the Federal statutory income
tax rate.
Capital Investments, Commitments, and Liquidity: During 1994, capital
investments amounted to $119,700,000, of which $76,700,000, inclusive of
restricted funds transferred from funds held in trust, was for Projects'
waste-to-energy operations and $43,000,000 was for normal replacement and
growth in Services, Projects, and for Corporate equipment.
At December 31, 1994, capital commitments amounted to $49,900,000, which
includes commitments for equity investments (over and above restricted
funds provided by revenue bonds issued by municipalities) of $2,600,000 for
Projects' waste-to-energy facilities and $47,300,000 for normal replacement,
modernization, and growth in Services' and Projects' operations.
In 1994, Ogden Corporation's Board of Directors increased from 2,000,000
to 3,200,000 the number of shares authorized to be repurchased by the
Corporation from time to time in the open market. The Corporation has not
purchased any of its shares.
Ogden and certain of its subsidiaries have issued or are party to
performance bonds and guarantees and related contractual obligations undertaken
mainly pursuant to agreements to construct and operate certain waste-to-energy,
entertainment, and other facilities. In the normal course of business,
they are involved in legal proceedings in which damages and other remedies are
sought. Management does not expect that these contractual obligations, legal
proceedings, or any other contingent obligations incurred in the normal
course of business will have a material adverse effect on Ogden's Consolidated
Financial Statements.
During 1994, a subsidiary of the Corporation has entered into a 30-year
facility management contract pursuant to which it has agreed to advance
funds to a customer, if necessary and only upon satisfactory completion of
construction of the facility, to assist refinancing senior secured debt
incurred in connection with construction of the facility. Such refinancing
requirements are not expected to exceed $67,000,000 at maturity of the
senior secured debt, which is expected to be on or about March 1, 2001.
Ogden continues as guarantor of surety bonds and letters of credit totaling
approximately $19,200,000 on behalf of International Terminal Operating Co.
Inc. and has guaranteed borrowings of certain customers amounting to
approximately $20,300,000. Management does not expect that these
arrangements will have a material adverse effect on Ogden's
Consolidated Financial Statements.
Ogden's obligation as guarantor on behalf of Avondale Industries, Inc.,
with respect to $36,000,000 of Industrial Revenue Bonds as well as other
contingent obligations under which Ogden may have been required to purchase
Avondale preferred stock, ended June 1, 1994.
Projects' waste-to-energy facilities are financed to a large degree by
revenue bonds issued by the municipalities for facility construction. Other
capital commitments and payments, if any, required by guarantees, 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, 1994, the Corporation had $204,000,000 in cash,
cash equivalents, and marketable securities and unused revolving credit lines
of $162,000,000.
Ogden expects to continue its strategy of developing and offering new
services to an increasing number of customers. This strategy includes the
expansion of the waste-to-energy business, independent power generating
capabilities, and the development of water and wastewater treatment projects
as well as the continued development of the Corporation's services product
lines, both in the United States and abroad. Acquisitions are expected to
be a continuing factor in the future growth of Ogden.
<TABLE>
Ogden Corporation and Subsidiaries
Selected Financial Data
<CAPTION>
December 31, 1994 1993 1992 1991 1990
(In thousands of dollars, except per-share amounts)
<S> <C> <C> <C> <C> <C>
Total Revenues $2,110,185 $2,039,337 $1,768,815 $1,567,568 $1,556,406
Income (Loss) From:
Continuing operations 67,826 62,130 60,767 57,604 58,072
Discontinued operations ---- ---- ---- (13,880) (2,160)
Cumulative effect of
changes in
accounting principles (1,520) (5,340) (5,186) --- ---
Net income 66,306 56,790 55,581 43,724 55,912
Earnings (Loss) Per
Common Share:
Continuing operations 1.55 1.43 1.41 1.33 1.36
Discontinued operations --- --- --- (0.32) (0.05)
Cumulative effect of
changes in
accounting principles (0.03) (0.12) (0.12) --- ---
Total 1.52 1.31 1.29 1.01 1.31
Earnings (Loss) Per
Common Share-
Assuming Full Dilution:
Continuing operations 1.54 1.42 1.40 1.32 1.34
Discontinued operations --- --- --- (0.32) (0.05)
Cumulative effect of
changes in
accounting principles (0.03) (0.12) (0.12)
Total 1.51 1.30 1.28 1.00 1.29
Total Assets 3,644,886 3,340,729 3,187,826 2,846,254 2,690,448
Long-Term Obligations 2,047,031 1,946,547 2,003,091 1,781,576 1,682,354
Shareholders' Equity 596,818 l486,267 481,084 478,122 484,482
Shareholders' Equity Per
Common Share 12.21 11.15 11.11 11.09 11.26
Cash Dividends Declared
Per Common Share $1.25 $1.25 $1.25 $1.25 $1.31
Net income in 1993 was reduced by $.08 per share, reflecting the
retroactive effect of the increased Federal income tax rate that was enacted
in August 1993 on the prior years' deferred income tax balances.
</TABLE>
<TABLE>
Ogden Corporation and Subsidiaries
Statements of Consolidated Income
<CAPTION>
For the years ended December 31, 1994 1993 1992
<S> <C> <C> <C>
Service revenues $1,414,348,000 $1,367,557,000 $1,283,453,000
Net sales 456,586,000 423,329,000 390,994,000
Construction revenues 213,125,000 248,451,000 86,687,000
Gain on sale of limited
partnership interests 26,126,000 --- 7,681,000
Total revenues 2,110,185,000 2,039,337,000 1,768,815,000
Operating costs and expenses 1,125,303,000 1,073,684,000 989,771,000
Costs of goods sold 405,190,000 376,553,000 359,736,000
Construction costs 194,022,000 231,956,000 84,212,000
Selling, administrative,
and general expenses 135,852,000 125,219,000 110,872,000
Debt service charges 100,358,000 98,664,000 99,734,000
Total costs and expenses 1,960,725,000 1,906,076,000 1,644,325,000
Consolidated operating income 149,460,000 133,261,000 124,490,000)
Interest income 12,709,000 9,181,000 9,359,000
Interest expense (23,655,000) (20,289,000) (19,721,000)
Other income (deductions)-net 850,000 3,348,000 (1,253,000)
Income before income taxes
and minority interests 139,364,000 125,501,000 112,875,000
Less: income taxes 61,883,000 56,526,000 45,255,000
minority interests 9,655,000 6,845,000 6,853,000
Income before cumulative effect
of changes in accounting
principles 67,826,000 62,130,000 60,767,000
Cumulative effect of changes
in accounting principles
(net of income taxes of
$1,100,000 and $3,710,000
for 1994 and 1993, respectively,
and including minority interest
of $6,582,000 for 1992) (1,520,000) (5,340,000) (5,186,000)
Net income $66,306,000 $56,790,000 $55,581,000
Earnings (Loss) Per
Common Share:
Income before cumulative
effect of changes in
accounting principles $1.55 $1.43 $1.41
Cumulative effect of changes
in accounting principles (0.03) (0.12) (0.12)
Total $1.52 $1.31 $1.29
Earnings (Loss) Per Common
Share-Assuming Full Dilution:
Income before cumulative effect
of changes in
accounting principles $1.54 $1.42 $1.40
Cumulative effect of changes in
accounting principles (0.03) (0.12) (0.12)
Total $1.51 $1.30 $1.28
See Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
Ogden Corporation and Subsidiaries
Consolidated Balance Sheets
<CAPTION>
Assets December 31, 1994 1993
<S> <C> <C>
Current Assets:
Cash and cash equivalents $117,359,000 $109,097,000
Marketable securities available
for sale 86,676,000 94,247,000
Restricted funds held in trust 104,700,000 132,273,000
Receivables (less allowances: 1994,
$32,783,000 and 1993, $25,547,000) 585,959,000 506,727,000
Deferred income taxes 26,451,000 28,219,000
Other 74,752,000 61,995,000
Total current assets 995,897,000 932,558,000
Property, plant, and equipment-net 1,884,774,000 1,693,801,000
Restricted funds held in trust 203,244,000 227,143,000
Unbilled service and other receivables 171,441,000 145,542,000
Unamortized contract acquisition costs 133,172,000 111,681,000
Goodwill and other intangible assets 100,416,000 83,552,000
Other assets 155,942,000 146,452,000
Total Assets $3,644,886,000 $3,340,729,000
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of long-term debt $3,483,000 $3,070,000
Current portion of project debt 45,279,000 32,632,000
Dividends payable 13,637,000 13,594,000
Accounts payable 93,362,000 84,917,000
Federal income taxes payable 10,141,000 453,000
Accrued expenses, etc. 346,997,000 295,181,000
Total current liabilities 512,899,000 429,847,000
Long-term debt 304,393,000 276,063,000
Project debt 1,593,988,000 1,518,734,000
Deferred income taxes 281,065,000 227,275,000
Other liabilities 196,305,000 176,682,000
Minority interest 10,768,000 74,111,000
Convertible subordinated debentures 148,650,000 151,750,000
Total Liabilities 3,048,068,000 2,854,462,000
Shareholders' Equity 596,818,000 486,267,000
Total Liabilities and Shareholders'
Equity $3,644,886,000 $3,340,729,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Ogden Corporation and Subsidiaries
Statements of Shareholders' Equity
<CAPTION>
For the years ended December 31, 1994 1993 1992
<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 $57,000 $62,000 $68,000
Shares converted into common stock (3,000) (5,000) (6,000)
Balance at end of year (shares
outstanding: 54,000 in 1994, 57,000
in 1993, 62,000 in 1992; aggregate
involuntary liquidation value-1994,
$1,078,000) l54,000 l57,000 l62,000
Common Stock, Par Value $.50 Per
Share; Authorized, 80,000,000
Shares:
Balance at beginning of year 21,750,000 21,595,000 21,497,000
Acquisition of Ogden Projects,
Inc., minority interests 2,570,000 --- ---
Exercise of stock options, less
common stock utilized 57,000 95,000 76,000
Conversion of preferred shares 11,000 14,000 18,000
Conversion of 5% debentures --- 46,000 4,000
Balance at end of year
(shares outstanding: 48,777,000
in 1994, 43,499,000 in 1993,
43,190,000 in 1992) 24,388,000 21,750,000 21,595,000
Capital Surplus:
Balance at beginning of year 100,223,000 94,659,000 90,551,000
Acquisition of Ogden Projects,
Inc., minority interests 91,876,000 --- ---
Exercise of stock options, less
common stock utilized 2,164,000 3,640,000 2,623,000
Capital transactions of subsidiary
companies-net 241,000 696,000 1,379,000
Conversion of preferred shares (8,000) (10,000) (12,000)
Conversion of 5% debentures --- 1,238,000 118,000
Balance at end of year 194,496,000 100,223,000 l94,659,000
Earned Surplus:
Balance at beginning of year 370,231,000 367,908,000 366,410,000
Net income 66,306,000 56,790,000 55,581,000
Total 436,537,000 424,698,000 421,991,000
Preferred dividends-per share 1994,
1993, and 1992, $3.35 184,000 199,000 213,000
Common dividends-per share 1994,
1993, and 1992, $1.25 54,489,000 54,268,000 53,870,000
Total dividends 54,673,000 54,467,000 54,083,000
Balance at end of year 381,864,000 370,231,000 367,908,000
Cumulative Translation Adjustment-Net (1,399,000) (4,639,000) (2,544,000)
Pension Liability Adjustment (441,000) (928,000) ---
Net Unrealized Loss on Securities
Available For Sale (2,144,000) --- ---
Net Unrealized Loss on Noncurrent
Marketable Equity Securities --- (427,000) (596,000)
Total Shareholders' Equity $596,818,000 $486,267,000 $481,084,000
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Ogden Corporation and Subsidiaries
Statements of Consolidated Cash Flows
<CAPTION>
For the years ended December 31, 1994 1993 1992
<S> <C> <C> <C>
Cash Flows From Operating
Activities:
Net income $66,306,000 $56,790,000 $55,581,000
Adjustments to Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization 90,545,000 85,643,000 77,048,000
Deferred income taxes 37,704,000 47,598,000 37,547,000
Cumulative effect of changes in
accounting principles 1,520,000 5,340,000 5,186,000
Other 44,062,000 24,653,000 20,322,000
Management of Operating Assets
and Liabilities:
Decrease (Increase) in Assets:
Accounts receivable (72,067,000) (61,559,000) (72,751,000)
Other assets (58,727,000) (36,450,000) (29,684,000)
Increase (Decrease) in Liabilities:
Accounts payable 3,153,000 8,087,000 383,000
Accrued expenses 17,629,000 38,481,000 12,993,000
Deferred income 1,222,000 (1,152,000) (926,000)
Other liabilities 35,218,000 24,315,000 (6,864,000)
Net cash provided by
operating activities 166,565,000 191,746,000 98,835,000
Cash Flows From Investing
Activities:
Entities purchased, net of
cash acquired (32,404,000) (54,224,000) (7,940,000)
Proceeds from sale of marketable
securities available for sale 63,545,000 88,775,000 136,154,000
Purchase of marketable securities
available for sale (56,418,000) (83,084,000) (199,178,000)
Proceeds from sale of business 12,516,000 --- ---
Proceeds from sale of property,
plant, and equipment 2,824,000 8,185,000 1,234,000
Investments in waste-to-energy
facilities (76,686,000) (77,777,000) (29,856,000)
Other capital expenditures (42,961,000) (38,423,000) (34,201,000)
Decrease (increase) in other
receivables (21,127,000) (7,920,000) 12,490,000
Other 268,000 7,111,000 7,658,000
Net cash used in investing
activities (150,443,000) (157,357,000) (113,639,000)
Cash Flows From Financing
Activities:
Borrowings for waste-to-energy
facilities --- --- 225,686,000
Decrease (increase) in funds
held in trust
for waste-to-energy facilities 52,337,000 60,347,000 (132,428,000)
Other new debt 31,589,000 680,000 114,125,000
Payment of debt (38,455,000) (49,973,000) (116,248,000)
Dividends paid (54,630,000) (54,347,000) (54,054,000)
Proceeds from exercise of
stock options 3,524,000 5,366,000 5,000,000
Other (2,043,000) (3,488,000) (1,932,000)
Net cash provided (used) by
financing activities (7,678,000) (41,415,000) 40,149,000
Effect of foreign currency
exchange rate changes
on cash and cash equivalents (182,000) (334,000) (493,000)
Net Increase (Decrease) in Cash
and Cash Equivalents 8,262,000 (7,360,000) 24,852,000
Cash and Cash Equivalents at
Beginning of Year 109,097,000 116,457,000 91,605,000
Cash and Cash Equivalents at
End of Year $117,359,000 $109,097,000 $116,457,000
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). Companies in which Ogden has equity investments of
50% or less are accounted for using the "Equity Method," if appropriate.
All intercompany transactions and balances have been eliminated.
On December 29, 1994, in a transaction accounted for as a purchase,
Ogden acquired the minority interest in Ogden Projects, Inc. (OPI), for .84 of
an Ogden common share for each OPI share. The transaction required the
issuance of 5,139,939 shares of Ogden common stock valued at $18.375 per
share on the closing date, for a total purchase price of $94,446,000.
The excess purchase price over the net book value of the minority interest
acquired was allocated to the fair value of the net assets acquired.
During 1994 in other transactions accounted for as purchases, Ogden
subsidiaries acquired the shares of SkyCare Cargo Limited, a cargo
handling company at Heathrow Airport in the United Kingdom; Second Imperial
Geothermal Company; and 60% of the common stock of a Brazilian company
involved in airport, entertainment, and industrial feeding activities
for a total cost of $32,404,000. The operations of these companies have been
included in the accompanying financial statements from the dates of
acquisition. If Ogden had acquired these companies at January 1, 1993,
total revenues, net income, and earnings per share would have been
$2,165,000,000, $76,483,000, and $1.57 and $2,073,000,000, $62,305,000,
and $1.28 for 1994 and 1993, respectively.
Cash and Cash Equivalents: Cash and cash equivalents include all cash
balances and highly liquid investments having original maturities of
three months or less.
Marketable Securities: Ogden adopted Statement of Financial Accounting
Standards (SFAS) 115, "Accounting for Certain Investments in Debt and
Equity Securities," at January 1, 1994. In accordance with SFAS 115,
prior years' financial statements have not been restated to reflect the change
in accounting method. Under this Statement, the Corporation's marketable
securities have been classified as available for sale and are recorded
at current market value with an offsetting adjustment to Shareholders'
Equity. The adoption of this Statement did not have a significant effect
on the Corporation's consolidated financial position. At December 31, 1993,
marketable securities were carried at the lower of cost or market. Net
unrealized losses on noncurrent marketable equity securities were
charged to Shareholders' Equity (see Note 2).
Contracts and Revenue Recognition: Service revenues 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 costs
and expenses exclude reimbursed expenditures of $439,195,000,
$432,891,000, and $405,362,000 for the years ended December 31, 1994, 1993,
and 1992, 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. Service revenues
also include the fees earned under contracts to operate and maintain the
waste-to-energy facilities and to service the facilities' debt, with
additional fees earned based on excess tonnage processed and energy
generation. Long-term unbilled service receivables related to
waste-to-energy operations are discounted in recognizing the present value
for services performed currently. Such unbilled receivables amounted to
$92,522,000 and $81,082,000 at December 31, 1994 and 1993, respectively.
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. Revenues include the gain on sales of limited
partnership interests in and related tax benefits of waste-to-energy
facilities.
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.
Contract Acquisition Costs: Costs associated with the acquisition of
specific contracts are amortized over their respective terms.
Bond Issuance Costs: Costs incurred in connection with the issuance of
revenue bonds are amortized over the terms of the respective debt issues.
Deferred Charges on Projects: Costs incurred in connection with certain
project development efforts are deferred until the award of the related
project is determined. Costs on awarded projects are deferred until the
commencement of construction, at which time they are either capitalized
in property, plant, and equipment for privately owned facilities or charged
to construction costs for municipally owned facilities. Costs associated
with projects, which are no longer under consideration, are charged to
operating costs.
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, 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, these costs were not significant.
Ogden adopted SFAS 106, "Employers' Accounting for Postretirement Benefits
Other than Pensions," as of January 1, 1993. The effect of adopting SFAS 106
is shown in the accompanying financial statements for 1993 as a cumulative
effect of a change in accounting principle and is reflected as a charge
to income of $5,340,000 (see Note 17).
Ogden adopted SFAS 112, "Employers' Accounting for Postemployment
Benefits," as of January 1, 1994. The effect of adopting SFAS 112 is
shown as a cumulative effect of a change in accounting principle and is
reflected as a charge to income of $1,520,000 in 1994.
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 109, "Accounting for Income Taxes," as of January 1,
1992. The effect of adopting SFAS 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 20).
Reclassification: The accompanying financial statements have been
reclassified to conform with the 1994 presentation.
2. Investments in Marketable Securities Available for Sale
Ogden adopted SFAS 115, "Accounting for Certain Investments in Debt and
Equity Securities," at January 1, 1994, and has classified its
marketable securities as available for sale and recorded them at current market
value with an offsetting adjustment to Shareholders' Equity. In accordance
with SFAS 115, prior years' financial statements have not been restated to
reflect this change in accounting. At December 31, 1993, marketable
securities were carried at the lower of cost or market. Net unrealized
losses on noncurrent marketable equity securities were charged to
Shareholders' Equity. At December 31, 1993, noncurrent marketable
securities having a cost of $5,549,000 and a market value of $4,846,000
resulted in an unrealized loss of $703,000, which was offset by deferred
income taxes of $276,000. The net valuation allowance of $427,000 was
charged to Shareholders' Equity.
At December 31, 1994 and 1993, marketable equity and debt securities
available for current operations are classified in the balance sheet as
current assets while securities held for noncurrent uses such as
nonqualified pension liabilities and a deferred compensation plan are
classified as long-term assets.
Marketable securities at December 31, 1994 (expressed in thousands of
dollars), include the following:
<TABLE>
<CAPTION>
Market
Value Cost
<S> <C> <C>
Classified as Current Assets:
United States government securities $1,567 $1,736
Tax-exempt municipal bonds 52,158 53,295
Mortgage-backed securities 31,146 31,669
Other securities 1,805 1,954
Total current 86,676 88,654
Classified as Noncurrent Assets:
United States government securities 236 236
Corporate debt securities 12,174 14,122
Total noncurrent 12,410 14,358
Total $99,086 $103,012
</TABLE>
Unrealized holding losses at December 31, 1994, amounted to $3,926,000.
Deferred tax benefits on these losses amounted to $1,782,000, resulting
in a net charge of $2,144,000 to Shareholders' Equity.
Proceeds and realized gains and losses from the sales of securities
classified as available for sale for the year ended December 31, 1994,
were $63,545,000, $256,700, and $476,700, respectively. For the purpose of
determining realized gains and losses, the cost of securities sold is
based on specific identification.
3. 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, capitalized interest for payment of interest generally
during the construction period, and deposits of revenues received. 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>
1994 1993
Current Noncurrent Current Noncurrent
<S> <C> <C> <C> <C>
Construction funds $20,734 --- $52,596 $19,129
Debt service funds 36,803 $165,938 35,851 161,798
Capitalized interest funds 8,847 --- 10,442 8,847
Revenue funds 21,013 --- 19,292 ---
Other funds 17,303 37,306 14,092 37,369
Total $104,700 $203,244 $132,273 $227,143
</TABLE>
4. Property, Plant, and Equipment
Property, plant, and equipment (expressed in thousands of dollars)
consisted of the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Land $6,698 $6,853
Waste-to-energy facilities 1,577,147 1,539,373
Geothermal power plant 105,738 ---
Buildings and improvements 155,904 143,165
Machinery and equipment 313,404 285,066
Landfills 9,841 8,464
Construction in progress 161,303 95,789
Total 2,330,035 2,078,710
Less accumulated depreciation and
amortization 445,261 384,909
Property, plant, and equipment-net $1,884,774 $1,693,801
</TABLE>
5. Other Assets
Other assets (expressed in thousands of dollars) consisted of the
following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Investment in and advances to joint ventures $38,926 $30,239
Unamortized bond issuance costs 29,290 35,581
Spare parts 13,915 12,753
Noncurrent securities available for sale 12,410 5,549
Deferred charges on projects 5,708 12,704
Insurance deposits 5,388 5,388
Other 50,305 44,238
Total $155,942 $146,452
</TABLE>
6. Accrued Expenses, etc.
Accrued expenses, etc. (expressed in thousands of dollars), consisted of
the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Debt service charges and interest $38,278 $38,527
Payroll 31,493 28,212
Deferred income 26,843 25,620
Insurance 25,983 24,380
Construction costs 25,442 27,314
Operating expenses 21,802 17,656
Billings in excess of costs 19,167 17,938
Municipalities' share of energy revenues 17,756 18,747
Retainage payable 17,550 4,757
Lease payments 16,193 13,829
Payroll and other taxes 10,533 9,098
Pension and profit sharing 6,499 6,199
Professional fees 4,663 3,807
Other 84,795 59,097
Total $346,997 $295,181
</TABLE>
7. Long-Term Debt
Long-term debt (expressed in thousands of dollars) consisted of the
following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Adjustable-rate revenue bonds
due 2014 through 2024 $124,755 $124,755
9.25% debentures due 2022 100,000 100,000
Variable-rate revolving credit
lines due 1997 26,820 20,680
Other long-term debt 52,818 30,628
Total $304,393 $276,063
</TABLE>
The adjustable-rate revenue bonds are adjusted periodically to reflect
current market rates for similar issues, generally with an upside cap of
15%. The average rate for this debt was 2.79% and 2.24% in 1994 and
1993, respectively. These bonds 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, 1994,
Ogden had $196,818,000 in excess of the required amount.
At December 31, 1994, Ogden had a long-term interest rate swap
agreement, covering a notional amount of $100,000,000, which expires
December 16, 1998. This swap was entered into to convert Ogden's fixed-rate
$100,000,000 9.25% debentures due in 2022 to variable-rate debt. Ogden
receives a fixed rate of 5.52% 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, 1994, the three-month LIBOR rate was 6.50%. The
counterparty to this interest rate swap is a major financial
institution. Management believes its credit risk associated with
nonperformance by the counterparty is not significant.
Other long-term debt includes an obligation for approximately
$28,400,000, representing the proceeds of a sale and leaseback arrangement
relating to a waste-to-energy facility. This arrangement is accounted for as a
financing, has an effective interest rate of 5%, and extends through
2017. Additionally, in November 1994, limited partnership interests in and
related tax benefits of the Onondaga County, New York, waste-to-energy
facility were sold. As part of this transaction, $22,450,000 of the
proceeds relating to the sale of the partnership interests have been
accounted for as a financing for accounting purposes. This obligation
has an effective interest rate of 10% and extends through 2015.
The maturities on long-term debt (expressed in thousands of dollars) at
December 31, 1994, were as follows:
<TABLE>
<S> <C>
1995 $3,483
1996 7,652
1997 20,784
1998 824
1999 529
Later years 274,604
Total 307,876
Less current portion 3,483
Total long-term debt $304,393
</TABLE>
8. Project Debt
Project debt (expressed in thousands of dollars) consisted of the
following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Revenue Bonds Issued by and Prime
Responsibility of Municipalities:
4.4-10% serial revenue bonds
due through 2005 $222,036 $239,180
5.4-10% term revenue bonds due through 2019 939,740 934,685
Adjustable-rate revenue bonds
due through 2013 10,875 15,526
Total 1,172,651 1,189,391
Revenue Bonds Issued by Municipal Agencies
with Sufficient Service Revenues Guaranteed
by Third Parties:
4.95-8.9% serial revenue bonds
due through 2007 78,591 85,040
7.25-7.4% term revenue bonds
due 1999 through 2011 106,109 105,610
Adjustable-rate revenue bonds
due through 2011 133,467 138,693
Total 318,167 329,343
Other project debt 103,170 ---
Total long-term project debt $1,593,988 $1,518,734
</TABLE>
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 and related third-party power purchase
agreements 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 revenue bonds, 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, 1994, such revenue bonds were
collateralized by property, plant, and equipment with a net carrying
value of $1,568,747,000, credit enhancements of approximately $193,000,000 for
which Ogden has certain reimbursement obligations, and substantially all
restricted funds (see Note 3).
The adjustable-rate revenue bonds are adjusted periodically to reflect
current market rates for similar issues, generally with an upside cap of
15%. The average rate for such revenue bonds was 3.33% and 2.65% in
1994 and 1993, respectively.
At December 31, 1994, Ogden had two interest rate swap agreements
relating to the revenue bonds. These interest rate swaps had notional
amounts at December 31, 1994, of $91,070,000 and $43,765,000, respectively,
which are reduced periodically and expire in May 1999. Under the former swap
agreement, Ogden 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, Ogden pays
a fixed rate of 5.25% per annum on a semi-annual basis and receives a
floating rate based on a defined commercial paper rate. At December 31,
1994, the floating rates on the two swaps were 5.53% and 6.03%,
respectively. These swap agreements were entered into to convert from
floating rates to fixed interest rates $91,070,000 of tax-exempt,
adjustable-rate revenue bonds due 1995 to 2011 and $43,765,000 of
taxable adjustable-rate revenue bonds due 1995 to 2011. The counterparties to
these interest rate swaps are major financial institutions. Management
believes the credit risk associated with nonperformance by the
counterparties is not significant.
Other project debt is an obligation of a special-purpose limited
partnership acquired by two special-purpose subsidiaries of Ogden in
December 1994 and represents the lease of a geothermal power plant,
which has been accounted for as a financing. This obligation has an effective
interest rate of 5.3% and extends through 2008 with options to renew for
additional periods and has a fair market value purchase option at the
conclusion of the initial lease term. Payment obligations under this
lease arrangement are limited to assets of the limited partnership and
revenues derived from a power purchase agreement with a third party, which are
expected to provide sufficient revenues to make rental payments. Such
payment obligations are secured by all the assets, revenues, and other
benefits derived from the geothermal power plant, which had a net
carrying value of approximately $114,093,000 at December 31, 1994.
The maturities on project debt (expressed in thousands of dollars) at
December 31, 1994, were as follows:
<TABLE>
<S> <C>
1995 $45,279
1996 56,296
1997 61,065
1998 67,338
1999 74,613
Later years 1,334,676
Total 1,639,267
Less current portion 45,279
Total long-term project debt $1,593,988
</TABLE>
9. Debt Service Charges
Debt service charges for Ogden's project debt (expressed in thousands of
dollars) consisted of the following:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Interest incurred on taxable and
tax-exempt borrowings $109,586 $107,846 $99,828
Interest earned on temporary
investment of borrowings
during construction, etc. 6,782 9,985 6,095
Net interest incurred 102,804 97,861 93,733
Interest capitalized during
construction in property,
plant, and equipment 8,893 5,538 753
Interest expense-net 93,911 92,323 92,980
Amortization of bond issuance costs 6,447 6,341 6,754
Debt service charges $100,358 $98,664 $99,734
</TABLE>
10. Credit Arrangements
At December 31, 1994, Ogden had unused revolving credit lines amounting
to $162,000,000, 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 .30%, or certificate-of-deposit
rates plus .425%. Ogden is not required to maintain compensating balances;
however, Ogden pays a facility fee of 3/16 of 1% on its principal
revolving credit line of $175,000,000, which expires October 29, 1997.
11. Convertible Subordinated Debentures
Convertible subordinated debentures (expressed in thousands of dollars)
consisted of the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
6% debentures due June 1, 2002 $85,000 $85,000
5 3/4% debentures due October 20, 2002 63,650 66,750
Total $148,650 $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% of
principal amount during the year commencing June 1, 1994, 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 1994, the Corporation purchased $3,100,000 face
value of these debentures at prevailing market rates. The net gain on the
acquisition of these securities amounted to $620,000 and is included in
Other Income.
12. 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
1994, 1993, and 1992, 3,694, 4,697, and 6,013 preferred shares were converted
into 22,054, 28,046, and 35,908 shares of common stock, respectively.
13. 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. At December 31,
1994, all of the authorized shares of this plan had been granted.
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, which was amended in 1994 to
increase the number of shares available by 3,200,000 shares, an
aggregate of 6,200,000 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; 2,382,500 shares were
available for grant at December 31, 1994.
Under the foregoing plans, Ogden issued 4,713,000 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.
In connection with the acquisition of the minority interest of OPI,
Ogden assumed the pre-existing OPI stock option plan then outstanding and
converted these options into options to acquire shares of Ogden common
stock. No further options will be granted under this plan.
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, 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
Granted 22.50 115,500 --- (115,500)
Became exercisable --- --- 134,000 ---
Exercised 14.98 (18,644) (18,644) ---
December 31, 1994,
balance $14.98-28.54 1,127,543 878,043 ---
1990 Plan:
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
Increase in authorized
option shares --- --- --- 3,200,000
Granted 21.50-22.50 1,169,500 --- (1,169,500)
Became exercisable --- --- 507,500 ---
Exercised 18.31-20.31 (109,000) (109,000) ---
Cancelled $18.31-23.56 (115,000) (32,000) 115,000)
December 31, 1994,
balance $18.31-23.56 3,585,500 1,799,800 2,382,500
Conversion of ERCI Plan:
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 and 1994,
balance --- --- --- ---
Conversion of OPI Plan:
December 29, 1994 $14.17-29.46 266,561 266,561 ---
December 31, 1994,
balance $14.17-29.46 266,561 266,561 ---
Total
December 31, 1994 $14.17-29.46 4,979,604 2,944,404 2,382,500
</TABLE>
At December 31, 1994, there were 11,380,791 shares of common stock
reserved for the exercise of stock options and the conversion of
preferred shares and debentures.
14. 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, 1994, 48,777,000 preferred stock purchase rights were
outstanding.
15. Sale of Limited Partnership Interests
1994 revenues include $26,100,000 from the sale of limited partnership
interests in and related tax benefits of the Onondaga County waste-to-
energy facility, which was partially offset by the recapture of
investment tax credits and minority interests.
In 1992, revenues included $7,700,000 from the sale of the remaining
limited partnership interests in and related tax benefits of the
Huntington, New York, waste-to-energy facility.
16. 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>
1994 1993
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
Benefits Assets Benefits Assets
<S> <C> <C> <C> <C>
Accumulated Benefit
Obligation:
Vested $5,408 $ 7,800 $5,356 $8,888
Nonvested 311 413 879 1,511
Total $5,719 $8,213 $6,235 $10,399
Projected benefit
obligation for services
rendered to date $8,278 $11,733 $8,723 $12,889
Plan assets at fair value 7,832 5,138 7,903 7,880
Underfunded projected
benefits $446 $6,595 $820 $5,009
Source of Underfunded
Status:
Unrecognized net (loss)
from past experience
different from that
assumed and effects
of changes
in assumptions $(1,251) $(625) $(1,356) $(1,415)
Unrecognized net
transition asset
(obligation) at
January 1, 1986, being
recognized over 13 years 566 (390) 728 (300)
(Pension liability)
prepaid pension costs (412) (1,997) (192) 228
Unrecognized prior
service costs 651 (3,583) --- (3,522)
Underfunded projected
benefits $446 $6,595 $820 $5,009
</TABLE>
At December 31, 1994 and 1993, the accumulated benefit obligation of
certain pension plans exceeded plan assets. As required by SFAS 87, the
Corporation's liability for such excess was $1,677,000 and $2,765,000
at December 31, 1994 and 1993, respectively. These liabilities were
offset by intangible assets and reductions in Shareholders' Equity, net
of income taxes of $441,000 and $928,000 at December 31, 1994 and 1993,
respectively.
Pension costs for Ogden's defined benefit plans included the following
components (expressed in thousands of dollars):
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Service cost on benefits
earned during the period $1,979 $1,610 $1,592
Interest cost on projected
benefit obligation 1,629 1,457 1,301
Net amortization and deferral (436) 40 161
Actual return on plan assets 32 (979) (1,227)
Net periodic pension cost $3,204 $2,128 $1,827
</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 8 1/4% and 5% for 1994, 7 1/2% and
4 1/2% for 1993, and 8 1/2% and 5% for 1992, 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 $12,052,000, $13,061,000, and
$11,397,000 in 1994, 1993, and 1992, respectively. Plan assets at
December 31, 1994, 1993, and 1992, 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 amount charged to expense for such
plans during 1994, 1993, and 1992 was $30,100,000, $32,000,000, and
$32,000,000, respectively.
17. 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 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions,"
as of January 1, 1993. SFAS 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
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 years ended December 31, 1994 and 1993, the components of the
periodic expense for these benefits were as follows:
<TABLE>
Recognition of Components of Net Periodic Postretirement Benefit Costs
for the Years Ended December 31:
<CAPTION>
1994 1993
<S> <C> <C>
Service costs $162,107 $140,157
Interest 775,142 747,665
Amortization of unrecognized
net loss 67,820 ---
Total $1,005,069 $887,822
</TABLE>
As of December 31, 1994 and 1993, the actuarial recorded liabilities for
these postretirement benefits, none of which have been funded, were as
follows:
<TABLE>
Accumulated Postretirement Benefit Obligation:
<S> <C> <C>
Retirees $3,884,885 $3,948,954
Eligible active participants 4,581,234 4,957,341
Other active 1,480,725 1,654,000
Total accumulated
postretirement obligation 9,946,844 $10,560,295
Unrecognized net loss 117,947 1,135,080
Accrued postretirement
benefit liability $9,828,897 $9,425,215
</TABLE>
The accumulated postretirement benefit obligation was determined using
discount rates of 8 1/4% and 7 1/2%; an estimated increase in
compensation levels of 5% and 4 1/2% for 1994 and 1993, respectively; and a
health care cost rate of approximately 14 1/2%, 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 $69,248 and $652,360, respectively.
18. Foreign Exchange
Foreign exchange translation adjustments for 1994, 1993, and 1992,
amounting to $3,240,000, $(2,095,000), and $(2,931,000), respectively,
have been credited (charged) directly to Shareholders' Equity. Foreign
exchange transaction adjustments for 1994, amounting to $1,844,000, have
been charged directly to income.
19. Leases
Total rental expense amounted to $77,190,000, $73,138,000, and
$65,822,000 (net of sublease income of $328,000, $2,606,000, and $3,633,000)
for 1994, 1993, and 1992, respectively. Included in rental expense are
amounts based on contingent factors (principally sales) in excess of minimum
rentals, amounting to $15,181,000, $19,836,000, and $14,332,000 for
1994, 1993, and 1992. 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 required under operating leases that
have initial or remaining noncancelable lease terms in excess of one
year as of December 31, 1994:
<TABLE>
<S> <C>
1995 $49,978
1996 47,160
1997 42,378
1998 36,660
1999 35,717
Later years 272,174
Total $484,067
</TABLE>
These future minimum rental payment obligations include $114,153,000 of
future nonrecourse rental payments that relate to a waste-to-energy facility,
which are supported by third-party commitments to provide sufficient service
revenues to meet such obligations. Also included are $96,520,000 of
nonrecourse rental payments relating to a hydroelectric power generating
facility operated by a special-purpose subsidiary, which are supported by
contractual power purchase obligations of a third party and which are
expected to provide sufficient revenues to make the rent payments. These
nonrecourse rental payments (in thousands of dollars) are due as follows:
<TABLE>
<S> <C>
1995 $16,695
1996 18,698
1997 19,197
1998 19,492
1999 20,797
Later years 115,794
Total $210,673
</TABLE>
20. Income Taxes
Ogden adopted the provisions of SFAS 109, "Accounting for Income Taxes,"
as of January 1, 1992. SFAS 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. As a consequence, deferred Federal
income tax balances were adjusted to this new rate as required by SFAS 109,
which resulted in a one-time charge for Federal income taxes of $4,066,000 in
1993.
The components of the provision for income taxes (expressed in thousands
of dollars) were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Current:
Federal $10,141 $453 ---
State 11,616 6,999 $5,498
Foreign 2,422 1,476 2,210
Total current $24,179 $8,928 $7,708
Deferred:
Federal $36,520 $43,295 $32,392
State 1,184 4,303 5,155
Total deferred 37,704 47,598 37,547
Total provision for
income taxes $61,883 $56,526 $45,255
</TABLE>
The current provision for Federal income tax results principally from
the alternative minimum tax.
The provision for income taxes (expressed in thousands of dollars)
varied from the Federal statutory income tax rate due to the following:
<TABLE>
<CAPTION>
1994 1993 1992
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 $48,777 35.0% $43,925 35.0% $38,378 34.0%
Adjustment of
deferred income
tax balances --- --- 4,066 3.2 --- ---
State income taxes,
net of Federal
tax benefit 8,320 6.0 7,346 5.8 7,030 6.2
Recapture (benefit)
of investment
tax credits 1,807 1.3 (1,807) (1.4) --- ---
Other-net 2,979 2.1 2,996 2.4 (153) (.1)
Provision for
income taxes $61,883 44.4% $56,526 45.0% $45,255 40.1%
</TABLE>
The components of the net deferred income tax liability (expressed in
thousands of dollars) as of December 31, 1994 and 1993, were as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Deferred Tax Assets:
Deferred income $16,291 $18,922
Accrued expenses 51,055 46,465
Other liabilities 16,779 17,758
Investment tax credits 31,064 33,844
Alternative minimum tax credits 19,387 9,246
Net operating loss carryforwards 137,488 185,210
Total deferred tax assets 272,064 311,445
Deferred Tax Liabilities:
Unbilled accounts receivable 47,119 44,784
Property, plant, and equipment 445,699 435,580
Other 33,860 30,137
Total deferred tax liabilities 526,678 510,501
Net deferred tax liability $254,614 $199,056
</TABLE>
Deferred tax assets and liabilities are presented as follows in the
accompanying balance sheets:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Net deferred tax liability-
noncurrent $281,065 $227,275
Less net deferred tax
asset-current 26,451 28,219
Net deferred tax liability $254,614 $199,056
</TABLE>
At December 31, 1994, for Federal income tax purposes, the Corporation
had investment and energy tax credit carryforwards of approximately
$31,064,000 and net operating loss carryforwards of approximately
$336,744,000, which will expire in 2004 through 2008. Deferred Federal
income taxes have been reduced by the tax effect of these amounts.
21. Discontinued Operations
In December 1991, the Corporation discontinued 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.
In December 1993, the Corporation discontinued its fixed-site hazardous
waste business. Provision was made in 1993 for the write-down of
assets, primarily development costs, resulting in a pretax loss of $12,629,000.
For the year ended December 31, 1993, the $250,000 net loss from both
discontinued operations is reported as Operating Costs and Expenses in
the Statements of Consolidated Income.
22. 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>
1994 1993 1992
<S> <C> <C> <C>
Primary 43,610,000 43,378,000 43,086,000
Assuming full dilution 43,939,000 43,776,000 43,583,000
</TABLE>
23. Commitments and Contingent Liabilities
Ogden and certain of its subsidiaries have issued or are party to
performance bonds and guarantees and related contractual obligations
undertaken mainly pursuant to agreements to construct and operate
certain waste-to-energy, entertainment, and other facilities. In the normal
course of business, they are involved in legal proceedings in which
damages and other remedies are sought. Management does not expect that
these contractual obligations, legal proceedings, or any other
contingent obligations incurred in the normal course of business will have a
material adverse effect on Ogden's Consolidated Financial Statements.
During 1994, a subsidiary of the Corporation has entered into a 30-year
facility management contract pursuant to which it has agreed to advance
funds to a customer, if necessary and only upon satisfactory completion
of construction of the facility, to assist refinancing senior secured debt
incurred in connection with construction of the facility. Such
refinancing requirements are not expected to exceed $67,000,000 at
maturity of the senior secured debt, which is expected to be on or about
March 1, 2001. 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) and has guaranteed borrowings of
certain customers amounting to approximately $20,300,000. Management does not
expect that these arrangements will have a material adverse effect on
Ogden's Consolidated Financial Statements.
Ogden's obligation as guarantor on behalf of Avondale Industries, Inc.,
with respect to $36,000,000 of Industrial Revenue Bonds as well as other
contingent obligations under which Ogden may have been required to
purchase Avondale preferred stock, ended June 1, 1994.
As of December 31, 1994, capital commitments amounted to $49,900,000,
which includes commitments for equity investments (over and above
restricted funds provided by revenue bonds issued by municipalities) of
$2,600,000 for waste-to-energy facilities and $47,300,000 for normal
replacement, modernization, and growth in Services and Projects.
24. Information Covering Business Segments
In connection with Ogden's acquisition of the publicly traded shares of
OPI, Ogden's business segments have been reclassified. Ogden now
classifies its business segments as Services and Projects. The Services
segment (formerly "Operating Services") includes principally ground
services, fueling, cargo, food catering, and related services to the
aviation industry; food and beverage, janitorial, maintenance, and other
services related to the management and operations of arenas, stadiums,
amphitheaters, and parks; management, maintenance, security, janitorial,
and related services to commercial office buildings and industrial and
other facilities; and professional technical and environmental
consulting services to a wide range of customers. Independent power
activities, namely, the operation of two geothermal power stations and
related well field activities and a hydroelectric power station, formerly
part of Operating Services, are now included in the Projects segment because
the activities and strategic direction of the business activities of the
Projects segment largely involve power generation.
The Projects segment (formerly "Waste-to-Energy Operations") now
includes all of Ogden's waste-to-energy activities, its independent power
business, its water and wastewater project business, and its construction
activities, all of which activities are now commonly managed by OPI.
The information that follows reflects this reclassification.
Revenues and income from continuing operations (expressed in thousands
of dollars) for the years ended December 31, 1994, 1993, and 1992, were as
follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Revenues:
Services $1,379,450 $1,330,104 $1,278,715
Projects 730,735 709,233 490,100
Total revenues $2,110,185 $2,039,337 $1,768,815
Income from Operations:
Services. $52,719 $63,611 $58,661
Projects 109,775 83,749 75,354
Total income from operations 162,494 147,360 134,015
Corporate unallocated income
and expenses-net (12,184) (10,751) (10,778)
Corporate interest-net (10,946) (11,108) (10,362)
Consolidated Income from
Continuing Operations
Before Income Taxes and
Minority Interest $139,364 $125,501 $112,875
</TABLE>
Services' revenues include $248,500,000, $245,100,000, and $251,300,000
from United States government contracts for the years ended December 31,
1994, 1993, and 1992, 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 for the years ended
December 31, 1994, 1993, and 1992, is as follows:
<TABLE>
<CAPTION>
Identifiable Depreciation and Capital
Assets Amortization Additions
<S> <C> <C> <C>
1994
Services $800,011 $39,658 $37,207
Projects 2,556,655 49,061 82,418
Corporate 288,220 1,826 22
Consolidated $3,644,886 $90,545 $119,647
1993
Services $719,964 $35,973 $33,877
Projects 2,361,499 47,186 81,852
Corporate 259,266 2,484 471
Consolidated $3,340,729 $85,643 $116,200
1992
Services $650,030 $32,272 $30,691
Projects 2,261,764 42,166 33,341
Corporate 276,032 2,610 25
Consolidated $3,187,826 $77,048 $64,057
</TABLE>
<TABLE>
25. Supplemental Disclosure of Cash Flow Information
<CAPTION>
(Expressed in thousands of dollars) 1994 1993 1992
<S> <C> <C> <C>
Cash Paid for Interest and Income Taxes:
Interest (net of amounts capitalized) $119,997 $117,733 $115,316
Income taxes 8,298 3,197 6,328
Noncash Investing and Financing
Activities:
Conversion of preferred
shares for common shares 3 5 6
Conversion of debentures
for common shares --- 1,287 122
Adjustment to property, plant,
and equipment and deferred
income taxes in connection
with adoption of SFAS 109 --- --- 38,051
Contract acquisition costs, etc. --- 22,539 ---
Future contract obligations --- (22,539) ---
Acquisition of net assets in
connection with merger --- --- 4,375
Purchase of Minority Interest:
Common stock issued 94,446 --- ---
Adjustment to net assets for excess
of purchase price over book value
of net assets acquired 21,589 --- ---
Detail of Entities Acquired:
Fair value of assets acquired 158,212 76,875 9,420
Liabilities assumed (125,808) (22,651) (1,480)
Net cash paid for acquisitions 32,404 54,224 7,940
</TABLE>
26. 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 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 would realize in a
current market exchange.
The estimated fair value (expressed in thousands of dollars) of
financial instruments at December 31, 1994 and 1993, is summarized as follows:
<TABLE>
<CAPTION>
1994 1993
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $117,359 $117,359 $109,097 $109,097
Marketable securities-
available for sale 99,086 99,086 98,953 98,792
Receivables 757,400 761,092 652,270 658,006
Restricted funds 307,944 306,876 359,416 366,006
Other assets 33,875 32,885 29,808 28,709
Liabilities:
Long-term debt 307,876 298,648 279,133 274,467
Convertible subordinated
debentures 148,650 119,770 151,750 142,919
Project debt 1,639,267 1,661,813 1,551,366 1,691,939
Other liabilities 34,906 34,906 30,839 29,714
Off Balance-Sheet
Financial Instruments:
Unrealized losses on
interest rate
swap agreements --- 9,355 --- 832
Unrealized gains on
interest rate
swap agreements --- 8,716 --- ---
</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, 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 were 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 based on third-party quotations. The fair value of
Ogden financial guarantees provided on behalf of ITO and customers (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, 1994 and 1993.
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.
<PAGE>
Independent Auditors' Report
Deloitte & Touche LLP Two World Financial Center
New York, NY 10281
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, 1994 and 1993 and the
related statements of shareholders' equity, consolidated income and cash flows
for each of the three years in the period ended December 31, 1994. 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, 1994
and 1993 and the results of their operations and cash flows for each of the
three years in the period ended December 31, 1994 in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the financial statements, in 1994 the
Corporation changed its methods of accounting for postemployment benefits to
conform with Statement of Financial Accounting Standards No. 112
and for certain investments in debt and equity securities to conform
with Statement of Financial Accounting Standards No. 115. 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.
February 3, 1995
<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.
R. Richard Ablon Philip G. Husby
President and Senior Vice President,
Chief Executive Officer Chief Financial Officer, and
Treasurer
<PAGE>
<TABLE>
Ogden Corporation and Subsidiaries
Quarterly Results of Operations
<CAPTION>
1994 Quarter Ended March 31 June 30 Sept. 30 Dec. 31
(In thousands of dollars, except per share amounts)
<S> <C> <C> <C> <C>
Total revenues $479,319 $527,718 $546,699 $556,449
Gross profit $ 87,946 $ 97,668 $ 98,578 $101,478
Income before cumulative effect
of change in accounting principle $ 15,328 $ 17,640 $ 18,742 $ 16,116
Cumulative effect of change in accounting principle (1,520)
Net Income $ 13,808 $ 17,640 $ 18,742 $ 16,116
Earnings (Loss) Per Common Share:
Income before cumulative effect of
change in accounting principle $ 0.35 $ 0.40 $ 0.43 $ 0.37
Cumulative effect of change in accounting principle (0.03)
Total $ 0.32 $ 0.40 $ 0.43 $ 0.37
Earnings (Loss) Per Common Share -
Assuming Full Dilution:
Income before cumulative effect of change in
accounting principle $ 0.34 $ 0.40 $ 0.43 $ 0.37
Cumulative effect of change in accounting principle (0.03)
Total $ 0.31 $ 0.40 $ 0.43 $ 0.37
1993 Quarter Ended March 31 June 30 Sept. 30 Dec. 31
(In thousands of dollars, except per-share amounts)
Total revenues $458,491 $516,157 $540,856 $523,833
Gross profit $ 82,240 $ 86,330 $ 94,105 $ 94,469
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 (Loss) Per Common Share:
Income before cumulative effect of change in
accounting principle $ 0.32 $ 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 (Loss) 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
Notes: Net income was reduced by $.10 per share ($4,300,000) 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 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," effective January 1, 1993, and SFAS 112, "Employers'
Accounting for Postemployment Benefits," effective January 1, 1994.
</TABLE>
<TABLE>
Ogden Corporation and Subsidiaries
Price Range of Stock and Dividend Data
<CAPTION>
1994 1993
High Low High Low
<S> <C> <C> <C> <C>
Common:
First Quarter 24 3/8 21 1/4 24 1/8 21 1/2
Second Quarter 23 3/8 19 7/8 26 1/2 22 1/8
Third Quarter 23 1/8 20 1/2 27 21 5/8
Fourth Quarter 21 5/8 17 3/4 26 22
Preferred:
First Quarter 137 137 Not Traded
Second Quarter 128 1/2 128 1/2 146 146
Third Quarter 131 1/2 131 1/2 145 131 1/2
Fourth Quarter 122 122 Not Traded
Quarterly common stock dividends of $.3125 per share were paid to shareholders
of record for the four quarters of 1994 and 1993, the dividends for the last
quarters of 1994 and 1993 being paid in January of the subsequent years.
Quarterly dividends of $.8376 were paid for the four quarters of 1994 and 1993
on the $1.875 preferred stock.
Ogden common and $1.875 preferred stocks are listed on the New York Stock
Exchange.
</TABLE>
EXHIBIT 21
<TABLE>
<CAPTION>
December 31, 1994
OGDEN CORPORATION - U.S. SUBSIDIARIES
(See Attachment A for foreign subsidiaries)
PERCENT DOMESTIC
COMPANY OWNERSHIP STATE
<S> <C> <C>
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
G A Technical Services, Inc. 100 Tennessee
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 Services Alaska Co., Inc. 100 Delaware
Ogden Power Corporation 100 Delaware
Geothermal, Inc. 100 Virginia
Imperial Power Services, Inc. 100 California
New Martinsville Hydro Operations Corporation 100 W. Virginia
Ogden Brandywine Operations, Inc. 100 Delaware
Ogden Geothermal Operations, Inc. 100 Delaware
Ogden Hydro Operations, Inc. 100 Tennessee
Ogden Oil & Gas, Inc. 100 Delaware
Ogden Power Equity Corporation 100 Delaware
Catalyst New Martinsville Hydroelectric
Corporation 100 Delaware
ERC Energy, Inc. 100 Delaware
Ogden Heber Field Energy, Inc. 100 Delaware
Ogden Hydro Energy, Inc. 100 Delaware
Ogden Power International Holdings, Inc. 100 Delaware
Ogden SIGC Energy, Inc. 100 Delaware
AMOR 14 Corporation 100 Delaware
Ogden SIGC Energy II, Inc. 100 California
Ogden SIGC Geothermal Operations, Inc. 100 California
Ogden Remediation Services Co., 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
Ogden Aviation Food Services (ALC), Inc. 100 New York
Ogden-Burtco Services, Inc. 100 Washington
Alpine Food Products, Inc. 100 Washington
Ogden Facility Management of Alaska, Inc. 100 Alaska<PAGE>
Ogden Corporation Page 2
Ogden Services Corporation
Ogden Entertainment Services, Inc. (con't.)
Ogden Entertainment Services of Indiana, Inc. 100 Delaware
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
ERC International Inc. 100 Delaware
Ogden Communications, 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
Ogden Professional Services Southwest, Inc. 100 Delaware
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
Ogden Facility Services, Inc. 100 Delaware
Ogden Industrial Services, Inc. 100 Delaware
OGDEN CISCO, INC. 100 Delaware
Ogden Allied Maintenance Corporation 100 New York
Atlantic Design Company, Inc. 100 New York
Atlantic Design Technicals, Inc. 100 New Jersey
Lenzar Electro-Optics, Inc. 100 Delaware
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
<PAGE>
Ogden Corporation Page 3
Ogden Services Corporation
Ogden Allied Maintenance Corporation (con't.)
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 Distributing Corp. 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 Penn.
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 Central and South America, Inc. 100 Delaware
Ogden Pacific Services, Inc. 100 Delaware
Ogden Aviation Terminal Services, Inc. 100 Mass.
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 Support Services, Inc. 100 Delaware
Tridon Supply Company, Inc. 100 New York
Ogden International Europe Inc. 100 Delaware
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. 100 Delaware
(See Attachment B for subsidiaries)
<PAGE>
Ogden Corporation (con't.) Page 4
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT A 12/31/94
OGDEN CORPORATION - FOREIGN SUBSIDIARIES
PERCENT DOMESTIC
COMPANY OWNERSHIP COUNTRY
<S> <C> <C>
Ogden Corporation
Ogden Projects, Inc. 100 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 Asia Pacific Limited 50 Hong Kong
(50% held by Ogden Power Systems, Inc.)
Ogden Projects GmbH 100 Germany
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
OPI Quezon, Inc. 100 Delaware
Ogden Quezon Power, Inc. 75 Cayman
Islands
Projets Ogden Quebec Inc. 100 Quebec
Ogden Services Corporation 100 DE/U.S.A.
Ogden Aviation Services Limited 100 U.K.
Ogden Aviation Engineering Limited 100 U.K.
Ogden Entertainment Services (UK) Ltd. 100 U.K.
SkyCare Cargo Limited 100 U.K.
SkyCare Limited 100 U.K.
Air Cargo Enterprises Limited 50 U.K.
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 Rep.
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 Cargo 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
Page 2
Ogden Corporation
Ogden Serivces Corporation (con't)
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 Palladium Services (Canada) Inc. 100 Canada
Ogden Entertainment Services de Mexico,
S.A. de C.V. 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 (NZ) Limited 100 New Zealand
Ogden Aviation Services (Venezuela), S.A. 100 Venezuela
Servicios de Despachos Garcia, C.A. 100 Venezuela
Ogden & Talma Aviation Services of Peru S.A. 54 Peru
Ogden Central and South America, Inc. 100 Delaware
Ogden Aviation Services (Chile) Limitada 99 Chile
(1% held by Ogden Pacific Services Inc.)
Aviation Services Leader S.A. 80 Chile
Ogden Aviation Services (Panama) Corp. 85 Panama
Ogden Ground Services of Panama Corp. 75 Panama
Ogden do Brazil Participacoes S/C Ltda. 100 Brazil
Ogden Hellen's International Ltda. 60 Brazil
Ogden - Servicos de Atendimento Aeroterrestre
Ltda. ("SERVAIR") 100 Brazil
Ogden Alimentos Comercio e Servicoes Ltda. 100 Brazil
Ogden Ground Services, Inc. 100 Virgin
(St. Thomas) Islands
Ogden Servair Servicios Aeroportuarios, S.A. 50 Mexico
Servicios Especializados Para la Industria del
Transporte, S.A. 94.9 Mexico
SEITSA Leasing, S.A. de C.V. 94.9 Mexico
Ogden Pacific Services, Inc. 100 DE/USA
Ogden Aviation Services (Australia) Pty. Ltd. 100 Australia
Ogden Aviation Service Company of New York, Inc. 100 NY/U.S.A.
Ogden Ground Services, Inc. 100 DE/U.S.A.
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
<PAGE>
Page 3
Ogden Corporation (con't.)
Ogden Services Corporation (con't.)
Ogden Allied Maintenance Corporation (con't.)
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT B 12/31/94
OGDEN PROJECTS, INC. - U.S. SUBSIDIARIES
(See Attachment A for foreign subsidiaries)
PERCENT DOMESTIC
COMPANY OWNERSHIP STATE
<S> <C> <C>
Ogden Projects, Inc. 100 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 Mass.
Ogden Projects of Lawrence, Inc. 100 Mass.
Ogden Power Systems, Inc. 100 Delaware
Ogden Power Systems 7, Inc. 100 Delaware
Ogden Projects Americas, Inc. 100 Delaware
Ogden Projects Holdings, Inc. 100 Delaware
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 Mass.
Ogden Engineering Services, Inc. 100 New Jersey
Ogden Marion Land Corp. 100 Oregon
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 Mass.
LMI, Inc. 100 Mass.
Ogden Omega Lease, Inc. 100 Delaware
Ogden Haverhill Properties, Inc. 100 Mass.
Ogden Martn 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
<PAGE>
Page 2
Ogden Projects, Inc.
Ogden Martin Systems, Inc. (con't.)
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 Penn.
Ogden Martin Systems of Lawrence, Inc. 100 Mass.
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 Martn 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
OMS Onondaga Operations, Inc. 100 Delaware
Ogden Martin Systems of Pasco, Inc. 100 Florida
Ogden Martin Systems of Rhode Island, Inc. 100 R.I.
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 Waste Treatment Services, Inc. 100 Delaware
Ogden Environmental Services of Houston, Inc. 100 Texas
American Envirotech,Inc. 100 Texas
Stockton Soil Treatment Facility, Inc. 100 California
Ogden Water Holdings, Inc. 100 Delaware
Ogden Water Systems, Inc. 100 Delaware
Ogden Water Systems of Jerusalem, Inc. 100 Delaware
Ogden Water Systems of Lee County, Inc. 100 Florida
OPI Quezon, Inc. 100 Delaware
RRS Holdings Inc. 100 Delaware
Michigan Waste Energy Recovery, 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
</TABLE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
Ogden Corporation:
We consent to the incorporation by reference in Registration
Statement Nos. 33-36658, 33-38489, 33-36667, 33-36657, 33-17558,
33-54143 of Ogden Corporation on Forms S-8 of our reports dated
February 3, 1995 (which express an unqualified opinion and include
an explanatory paragraph relating to the adoption of Statements of
Financial Accounting Standards Nos. 106, 109, 112 and 115)
appearing or incorporated by reference in this Annual Report on
Form 10-K of Ogden Corporation for the year ended December 31,
1994.
/s/Deloitte & Touche LLP
New York, New York
March 29, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 117,359
<SECURITIES> 86,676
<RECEIVABLES> 606,162
<ALLOWANCES> 32,783
<INVENTORY> 16,231
<CURRENT-ASSETS> 995,897
<PP&E> 2,330,035
<DEPRECIATION> 445,261
<TOTAL-ASSETS> 3,644,886
<CURRENT-LIABILITIES> 512,899
<BONDS> 2,047,031
<COMMON> 24,388
0
54
<OTHER-SE> 572,376
<TOTAL-LIABILITY-AND-EQUITY> 3,644,886
<SALES> 456,586
<TOTAL-REVENUES> 2,110,185
<CGS> 405,190
<TOTAL-COSTS> 1,413,814
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,869
<INTEREST-EXPENSE> 23,655
<INCOME-PRETAX> 139,364
<INCOME-TAX> 61,883
<INCOME-CONTINUING> 67,826
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (1,520)
<NET-INCOME> 66,306
<EPS-PRIMARY> $1.52
<EPS-DILUTED> $1.51
</TABLE>
