<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
OGDEN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
Ogden Corporation
Two Pennsylvania Plaza
New York, NY 10121
[LOGO]
April 10, 1998
TO OUR SHAREHOLDERS:
On behalf of the Board of Directors, it is my pleasure to invite you to
attend Ogden's 1998 Annual Meeting to be held at the Villas of Grand Cypress,
One North Jacaranda, Orlando, Florida, at 9:00 A.M. (Eastern Daylight Savings
Time), on Wednesday, May 20, 1998.
I am pleased to advise you of the adoption of certain changes regarding our
Board of Directors, as more fully discussed in the attached Proxy Statement. We
have adopted a Director retirement program pursuant to which no one will be
eligible for election as a Director who has reached age 72 and current Directors
who were elected when they were 72 or older will be retiring. We have also
established a Governance Committee composed of outside independent Directors and
have eliminated interlocking relationships between Directors and Ogden.
As a result of the retirement program several senior and long time Directors
will be leaving the Ogden Board and their insight and guidance will be greatly
missed. However, as we go forward our goal is to create a collective blend of
talent within our Board that will assist Ogden in achieving its long-term
objectives. In particular our newly created Governance Committee, with input
from our other Directors, will be focusing on candidates who have significant
business experience and who will provide Ogden with independent perspective and
counsel.
The matters to be acted upon at the meeting, including the election of
Directors, are described in the attached Notice of Annual Meeting and Proxy
Statement which we urge you to read carefully. Time will be set aside at the
meeting for discussion of each item of business described in the Proxy Statement
as well as any other matters of interest to you as a shareholder.
The Ogden Board of Directors and Management believe that our three global
businesses have exciting challenges ahead and that the reward for success will
be a greater return on our shareholders investment. The changes effected within
our Board to create a collective blend of talent will assist management in
achieving our long-term objectives.
Shareholders who find it convenient are cordially invited to attend the
meeting in person. It is important that your shares be represented at the
meeting. Accordingly, whether or not you expect to attend, you are urged to
sign, date and return the enclosed proxy card in the enclosed postage paid
envelope to ensure that your shares will be represented at the annual meeting.
R. RICHARD ABLON
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF OGDEN CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders of Ogden
Corporation ("Ogden") will be held at The Villas of Grand Cypress, One North
Jacaranda, Orlando, Florida, on Wednesday, May 20, 1998, at 9:00 A.M. (Eastern
Daylight Savings Time), for the following purposes:
(1) To elect four directors to hold office for terms of three years until the
Annual Meeting of Shareholders in 2001 and until their respective successors
have been elected and qualified;
(2) To ratify the appointment of Deloitte & Touche LLP as auditors of Ogden and
its subsidiaries for the year ending December 31, 1998;
(3) To consider and act upon a proposal submitted by a shareholder requesting
the Board of Directors take the steps necessary to provide that new
directors be elected annually and not by classes;
(4) To consider and act upon a proposal submitted by a shareholder requesting
the Board of Directors arrange for the prompt sale of Ogden Corporation to
the highest bidder;
(5) To consider and act upon a proposal submitted by a shareholder requesting
Ogden to endorse the Coalition for Environmentally Responsible Economics
Principles; and
(6) To consider and act upon such other business as may properly come before the
annual meeting.
The Board of Directors has fixed April 7, 1998, as the record date for the
annual meeting and all shareholders of record of Ogden at the close of business
on such date shall be entitled to notice of and to vote at the annual meeting.
By Order of the Board of Directors
KATHLEEN RITCH,
Vice President and Secretary
Dated: New York, N.Y.
April 10, 1998
IMPORTANT
PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED STAMPED, ADDRESSED ENVELOPE, SO THAT YOUR SHARES MAY
BE VOTED IF YOU ARE UNABLE TO ATTEND THE ANNUAL MEETING.
<PAGE>
PROXY STATEMENT
The following statement is submitted to shareholders in connection with the
solicitation of proxies for the Annual Meeting of Shareholders of Ogden
Corporation ("Ogden") to be held at 9 a.m. local time on Wednesday, May 20, 1998
(the "Annual Meeting") at The Villas of Grand Cypress, One North Jacaranda,
Orlando, Florida and at any adjournments or postonements thereof. A proxy card
for the Annual Meeting is enclosed. This Proxy Statement and the accompanying
proxy card are first being sent to shareholders on or about April 10, 1998.
The purposes of the Annual Meeting are (1) to elect four directors to hold
office for terms of three years until the Annual Meeting of Shareholders in 2001
and until their respective successors have been elected and qualified; (2) to
ratify the appointment of Deloitte & Touche LLP as auditors of Ogden and its
subsidiaries for the year ending December 31, 1998; (3) to consider and act upon
a proposal submitted by a shareholder requesting the Board of Directors take the
steps necessary to provide that new directors be elected annually and not by
classes; (4) to consider and act upon a proposal submitted by a shareholder
requesting the Board of Directors arrange for the prompt sale of Ogden
Corporation to the highest bidder; (5) to consider and act upon a proposal
submitted by a shareholder requesting Ogden to endorse the coalition for
Environmentally Responsible Economics Principles; and (6) to consider and act
upon such other business as may properly come before the Annual Meeting.
The solicitation of proxies to which this Proxy Statement relates is made by
and on behalf of the Board of Directors of Ogden. The costs of this solicitation
will be paid by Ogden. Such costs include preparation, printing, and mailing of
the Notice of Annual Meeting, proxy cards, and Proxy Statement. The solicitation
will be conducted principally by mail, although directors, officers, and
employees of Ogden and its subsidiaries (at no additional compensation) may
solicit proxies personally or by telephone and telegram. Arrangements will be
made with brokerage houses and other custodians, nominees, and fiduciaries for
proxy material to be sent to their principals, and Ogden will reimburse such
persons for their expenses in so doing. Ogden is also retaining D.F. King & Co.,
Inc. to solicit proxies and will pay D.F. King & Co., Inc. a fee of $8,500 in
connection therewith.
The shares represented by all valid proxies in the enclosed form will be
voted if received in time for the Annual Meeting in accordance with the
specifications, if any, made on the proxy card. If no specification is made, the
proxies will be voted FOR the nominees named in this Proxy Statement; FOR the
ratification of Deloitte & Touche LLP as auditors; and AGAINST the three
shareholder proposals. Each proxy is revocable at any time prior to being voted
by delivering a subsequent proxy, by giving written notice to the Secretary of
Ogden or by attending the Annual Meeting and voting in person, provided that
such action must be taken in sufficient time to permit the necessary examination
and tabulation of the revocation or the subsequent proxy before the vote is
taken.
1
<PAGE>
VOTING SECURITIES
As of April 7, 1998, the record date for the Annual Meeting, Ogden had
outstanding 50,361,207 shares of common stock ("Common Stock") and 73,386 shares
of $1.875 Cumulative Convertible Preferred Stock, Partially Participating
("Series A Preferred Stock"), excluding shares held in the corporate treasury.
Each share of Common Stock is entitled to one vote and each share of Series A
Preferred Stock is entitled to one-half vote per share on all matters to come
before the Annual Meeting, including the election of directors.
Ogden has been advised by FMR Corp. and Putnam Investments, Inc. that they,
along with certain of their investment managers are the beneficial owners of
more than 5% of Ogden's Common Stock, which were acquired for investment
purposes for certain of their advisory clients. The following table sets forth
certain information concerning the foregoing as of December 31, 1997:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------------------ ---------------------------------- -------------------------- -----------
<S> <C> <C> <C>
Common.............................. FMR Corp. 5,545,300 shares(1) 11.05
Devonshire Street
Boston, Massachusetts 02109
Common.............................. Putnam Investments, Inc. 4,064,100 shares(2) 8.00
One Post Office Square
Boston, Massachusetts 02109
</TABLE>
- ------------------------
(1) A Schedule 13G Report dated February 14, 1998 shows that 2,546,100 shares
are held with sole power to vote or to direct the vote and 5,545,300 shares
are held with sole power to dispose or direct the disposition thereof.
(2) A Schedule 13G Report dated January 16, 1998 shows that 6,400 shares are
held with shared voting power and 4,064,100 shares are held with shared
dispositive power.
The proxy card provides space for a shareholder to withhold voting for any
or all nominees for the Board of Directors or to abstain from voting for any
proposal if the shareholder chooses to do so. Each nominee for election as a
director requires a plurality of the votes cast in order to be elected. Each
other proposal submitted to the shareholders requires the affirmative vote of
the holders of a majority of the votes present at the Annual Meeting, in person
or by proxy, and entitled to vote. With respect to the election of directors,
only shares that are voted in favor of a particular nominee will be counted
towards achievement of a plurality; where a shareholder properly withholds
authority to vote for a particular
2
<PAGE>
nominee such shares will not be counted towards such nominee's or any other
nominee's achievement of plurality. With respect to the other proposals to be
voted upon: (i) if a shareholder abstains from voting on a proposal, such shares
are considered present at the meeting for such proposal but, since they are not
affirmative votes for the proposal, they will have the same effect as votes
against the proposal; and (ii) shares registered in the names of brokers or
other "street name" nominees for which proxies are voted on some but not all
matters will be considered to be voted only as to those matters actually voted,
and will not have the effect of either an affirmative or negative vote as to the
matters with respect to which the broker does not have authority to vote and a
beneficial holder has not provided voting instructions (commonly referred to as
"broker non-votes").
DIRECTORS
BOARD RESTRUCTURING
Three major actions were recently taken by Ogden's Board of Directors with
respect to governance matters. First, a mandatory retirement program was adopted
which requires that any current director who is over age 72 will retire at the
Board meeting following the 1998 Annual Meeting, unless such director was under
age 72 at the time of election, in which case the director will serve the
remainder of their term. As part of that program, Ogden's By-Laws were amended
to require any person elected as a director to be less than 72 years old at the
time of election or appointment.
Second, interlocking relationships, such as consulting arrangements, between
Ogden and any of its directors will be prohibited and all such existing
arrangements are being terminated.
Third, a Governance Committee was established composed of three outside
independent directors. This Committee will monitor and make recommendations on
issues of corporate governance, such as board size, compensation, retirement
policies, nominees for new directorships and board performance.
Pursuant to the retirement program, at the Board meeting following the
Annual Meeting, Ralph Ablon, Frederick Seitz, and Stanford Penner will resign as
directors of Ogden. Abe Zaleznik, whose term expires at the 1998 Annual Meeting
will also retire and the Board has nominated Anthony J. Bolland to replace Mr.
Zaleznik on managements's slate of directors. Information concerning Mr. Bolland
is set forth below.
The Board believes that approximately 12 to 15 members is an appropriate
size for the Ogden Board and that the Board should be made up of a substantial
majority of independent, non-employee directors. The Governance Committee will
actively seek directors to replace the foregoing retiring directors. The
Committee will review the appropriate skills and characteristics required of the
Board in light of the current make-up of the Board, including issues of
diversity, age and expertise. With input
3
<PAGE>
from the Chairman of the Board and the other directors, the Committee will make
recommendations of additional directors to the Board, who has the authority to
fill the vacancies created. The Committee will seek to recommend individuals
with extensive business backgrounds either as a director or as a senior
executive of a public corporation.
ELECTION OF DIRECTORS--PROPOSAL NUMBER (1).
The Ogden Restated Certificate of Incorporation provides for a Board of
Directors that is divided into three classes of directors, which are designated
Class I, Class II, and Class III, respectively. The directors elected to each
class serve three-year terms. The expiration of the terms of the directors
elected in each Class is staggered so that the terms of directors elected to one
of the classes expires at each Annual Meeting of Shareholders. The terms of
office of directors elected to Class II will expire at the Annual Meeting, those
of the directors elected to Class I will expire at the Annual Meeting in 2000,
and those of the directors elected to Class III will expire at the Annual
Meeting in 1999.
The Board of Directors has nominated the four persons named in the table
below to serve as the Class II directors for terms of office commencing at the
Annual Meeting and continuing until the 2001 Annual Meeting of Shareholders and
until their respective successors are elected and qualified. Ogden has no reason
to believe that any such nominee will be unable to serve as a director if
elected. All nominees were elected a director at Ogden's 1995 Annual Meeting of
Shareholders except Anthony J. Bolland who has been nominated to replace Abraham
Zaleznik who will be leaving the Board after the 1998 Annual Meeting. Mr.
Bolland is Managing Director of Boston Ventures Management, Inc., a
Massachusetts corporation located in Boston, Massachusetts. Boston Ventures
Management, Inc. is a venture capitalist and the owner and manager of several
very large limited partnership investments. Mr. Bolland has been associated with
Boston Ventures Management, Inc. since August 1983. Prior thereto, he served as
Vice President of First Venture Capital Corporation. Mr. Bolland serves as a
member of the Board of Directors of America Media, Inc., Six Flags Entertainment
Corporation and Signet Communications. He received his L.L.B. degree from
Warwick University, England in 1975.
4
<PAGE>
NOMINEES FOR CLASS II DIRECTORS
The following table sets forth certain information concerning the nominees
for election as directors. Each of the nominees except Mr. Bolland is presently
serving as a director of Ogden. Except as set forth below, each person listed in
this table and the succeeding table has held the same principal employment or
occupation.
<TABLE>
<CAPTION>
TERM TO PRINCIPAL FIRST BECAME
NAME, AGE, AND OTHER INFORMATION EXPIRE OCCUPATION A DIRECTOR
- --------------------------------------------- ----------- --------------------------------------------- ---------------
<S> <C> <C> <C>
(1)R. Richard Ablon: Age 48.................. 1998 Chairman of the Board, President and Chief 1986
Member of Ogden's Executive Officer of Ogden.
Management Committee.
Judith D. Moyers: Age 62..................... 1998 President, Public Affairs Television, Inc., 1978
Chairman of Ogden's Compensation Home Economist and Education Specialist.
Committee; member of the Management
Committee,
and Governance Committee;
Director, PaineWebber Family of Mutual
Funds.
Robert E. Smith: Age 62...................... 1998 Counsel, Rosenman & Colin LLP, a law firm. 1990
Member of Ogden's Audit Committee,
Governance Committee and Management
Committee; Director, The Zweig Fund, Inc.
and The Zweig Total Return Fund, Inc.
Anthony J. Bolland: Age 45................... -- Managing Director, Boston Ventures 1998
Director of American Media, Inc., Six Flags Management, Inc.
Entertainment Corporation and Signet
Communications; prior Vice President of
First Venture Capital Corporation.
</TABLE>
- ------------------------
(1) Mr. Ablon is the son of Ralph E. Ablon, an Ogden director.
5
<PAGE>
DIRECTORS WHOSE TERMS CONTINUE
The following table sets forth certain information concerning directors
whose terms are continuing.
<TABLE>
<CAPTION>
TERM TO PRINCIPAL FIRST BECAME
NAME, AGE, AND OTHER INFORMATION EXPIRE OCCUPATION A DIRECTOR
- --------------------------------------------- ----------- --------------------------------------------- ---------------
<S> <C> <C> <C>
(2)Ralph E. Ablon: Age 81.................... 1999 Former Chairman of the Board-- Ogden. 1962
Terry Allen Kramer: Age 64................... 1999 Self employed, Financial Ventures and 1977
Director and Chairman of Theatrical Ventures.
the Board, American Diversified
Enterprises, Inc.; Director Gibraltar Bank
and President, Remark Theatrical
Productions, Inc.
(2)Frederick Seitz: Age 86................... 1999 President Emeritus, The Rockefeller 1977
Director of Profile Diagnostic University.
Sciences, Inc.
Helmut Volcker: Age 64....................... 1999 Professor of Energy Technology, University of 1994
Chairman of Ogden's Technology Essen.
Committee; Chairman, Technical
Advisory Board, GEC Alsthom
EVT Energie und Verfahrenstechnik GmbH,
Stuttgart; former member of the Management
Board, STEAG AG, Essen and Commerzbank AG,
Dusseldorf.
Jeffrey F. Friedman: Age 51.................. 1999 Investment Manager and Director 1998
Chairman of Ogden's Audit of Risk Management Activity
Committee and member of the and Corporate Hedging, Dreyfus
Compensation Committee Corporation.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
TERM TO PRINCIPAL FIRST BECAME
NAME, AGE, AND OTHER INFORMATION EXPIRE OCCUPATION A DIRECTOR
- --------------------------------------------- ----------- --------------------------------------------- ---------------
<S> <C> <C> <C>
David M. Abshire: Age 71..................... 2000 President, Center for Strategic and 1987
Member of Ogden's International Studies.
Management Committee; previously served on
the Board of Directors of Proctor and
Gamble Company and the Advisory Board of
British Petroleum.
Norman G. Einspruch: Age 65.................. 2000 Senior Fellow in Science and Technology and 1981
Chairman of Ogden's Management Professor and Chairman of Industrial
Committee; member of Ogden's Engineering, University of Miami.
Audit, Technology and Compensation
Committees; Director of Capital Factors
Holding, Inc.
Attallah Kappas: Age 71...................... 2000 Sherman Fairchild Professor; Physician- 1988
Member of Ogden's Management in-Chief Emeritus and past Vice President,
Committee and Technology The Rockefeller University.
Committee; Past Vice President, The
Rockefeller University.
Homer A. Neal: Age 55........................ 2000 Professor of Physics, Director of Project 1988
Chairman of Ogden's Atlas, Interim President Emeritus, University
Governance Committee; of Michigan.
member of Ogden's Audit
Committee and Technology
Committee; Director of Ford
Motor Company.
(2)Stanford S. Penner: Age 76................ 2000 Professor Emeritus, Former Vice Chancellor, 1985
Director Optodyne Department Chairman, and Institute Director,
Corp. University of California at San Diego;
Editor-in-Chief, Energy--The International
Journal.
</TABLE>
- ------------------------
(2) Pursuant to Ogden's retirement program Messrs. Ralph Ablon, Seitz and Penner
will resign as directors at the Board meeting following the 1998 Annual
Meeting.
7
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
MANAGEMENT COMMITTEE. The Management Committee is composed of five
independent outside Directors (including its Chairman) and one management
Director. The Management Committee's principal functions are to review and
evaluate Ogden's strategies, plans, policies and management needed to meet
long-range goals and objectives. The Committee's functions also include
evaluating and reviewing business transactions under consideration by
management, Ogden's financial status, current financial arrangements, current
and anticipated financial requirements and issuance and sale of Ogden securities
and advising and recommending to the Board of Directors with respect thereto.
There were six meetings of the Management Committee during 1997.
COMPENSATION COMMITTEE. The Compensation Committee is composed of three
"non-employee directors" (within the meaning of amended Rule 16b-3 of the
Securities Exchange Act) and "outside directors" (within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended) who are not employees
or members of management of Ogden or any of its subsidiaries. The Compensation
Committee is responsible for reviewing and approving compensation and benefit
plans for Ogden and providing independent judgment as to the fairness of the
compensation and benefit arrangements for senior management of Ogden and its
subsidiaries. The Compensation Committee administers Ogden's Stock Option Plans,
determines the Chief Executive Officer's compensation and reviews and approves
the annual salary, bonus and other benefits, direct or indirect, of other
designated members of senior management of Ogden and its subsidiaries. There
were three meetings of the Compensation Committee during 1997.
GOVERNANCE COMMITTEE. The newly established Governance Committee is
composed of three independent outside directors (including its Chairman). The
Governance Committee's principal functions are to review and evaluate Ogden's
Board practices. In particular, the Committee will be responsible for monitoring
and making recommendations on issues such as Board size and composition,
Director compensation and stock ownership, Director retirement, and CEO
performance. The Committee will review, on an ongoing basis, the Board's
performance as a whole as it relates to recognized "best Board practices" in the
area of corporate governance. The Committee will also make recommendations to
the Board of Directors with respect to nominees for new directors (including
nominees submitted by shareholders), and board committee memberships with direct
input from the Chairman of the Board and Chief Executive Officer and from the
other directors.
AUDIT COMMITTEE. The Audit Committee is composed of four independent
outside Directors (including its Chairman). The Audit Committee's principal
functions are to evaluate and review financial procedures, controls and
reporting; compliance with Ogden's Corporate Policy of Business
8
<PAGE>
Conduct; and both the audit scope and audit fees. There were five meetings of
the Audit Committee during 1997.
TECHNOLOGY COMMITTEE. The Technology Committee is composed of four
independent outside Directors (including its Chairman). The Technology
Committee's principal functions are to collect, review, study and evaluate
various changes and innovations in technology, materials and technical services
that may be of benefit to Ogden's operations. The Committee also reviews and
takes into consideration environmental standards and pollution-control
requirements connected with the operation by Ogden of various solid
waste-to-energy and other operating facilities across the United States. There
were six meetings of the Technology Committee during 1997.
DIRECTOR'S COMPENSATION
Each Ogden director who is not an employee of Ogden or an Ogden subsidiary
receives an annual director's fee of $9,000 plus $1,500 for each Board of
Directors meeting attended. Each such director also receives an annual fee of
$12,000 for each committee on which such director serves plus $1,500 for each
committee meeting attended. In addition, each such director receives $500 for
each day, or portion thereof, spent away from the director's city of residence
on special director activities. All directors are reimbursed for expenses
incurred in attending Board and committee meetings. Directors who are employees
of Ogden or an Ogden subsidiary receive no additional compensation for serving
on the Board or any committee.
Each nonemployee director of Ogden may be granted a Director's Stock Option
and LSAR with respect to a number of shares of Ogden Common Stock as determined
by the Compensation Committee not to exceed 25,000 shares at an exercise price
equal to the average of the high and low sales price of Ogden Common Stock on
the date of grant and which will vest at the rate of 20% per year over a 5 year
period. Ogden's independent outside directors are not provided a pension or
retirement plan.
Jesus Sainz, an Ogden Director since 1994, resigned as an Ogden director on
January 1, 1998. On January 15, 1998 he was elected Executive Vice President of
Ogden and entered into a three year employment agreement with Ogden for which he
was paid a bonus in the amount of $100,000. The employment agreement provides
for a minimum annual salary of $325,000, an incentive bonus as determined by the
Board of Directors of Ogden, a non-compete clause and a severance payment equal
to three times his salary and bonus if he is terminated under certain
conditions.
During 1997 the Board of Directors held six regularly scheduled meetings.
Each incumbent director attended at least 75% of the aggregate 1997 meetings of
the Board and of the Committees on which such director served except Terry Allen
Kramer.
9
<PAGE>
SECURITY OWNERSHIP BY MANAGEMENT
Information about the Common Stock beneficially owned as of March 31, 1998
by each nominee, each director, each executive officer named in the Summary
Compensation Table and all directors and executive officers of Ogden as a group
is set forth as follows:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF
OGDEN COMMON STOCK
----------------------
AMOUNT AND NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) CLASS(2)
- ------------------------------------------------------- ---------------------- -------------
<S> <C> <C>
R. Richard Ablon....................................... 1,252,855(3) 2.49
Ralph E. Ablon(9)...................................... 245,126 *
David M. Abshire....................................... 25,288(4) *
Anthony J. Bolland..................................... 0 *
Lynde H. Coit.......................................... 138,300(5) *
Norman G. Einspruch.................................... 36,440(4) *
Jeffrey F. Friedman.................................... 8,766 *
Philip G. Husby........................................ 147,460(6) *
Attallah Kappas........................................ 26,000(4) *
Terry Allen Kramer..................................... 301,658(4) *
Scott G. Mackin........................................ 340,400(7) *
Judith D. Moyers....................................... 31,655(4) *
Homer A. Neal.......................................... 25,604(4) *
Stanford S. Penner(9).................................. 30,221(4) *
Frederick Seitz(9)..................................... 36,442(4) *
Robert E. Smith........................................ 26,000(4) *
Bruce W. Stone......................................... 155,038(8) *
Helmut Volcker......................................... 18,200(4) *
Abraham Zaleznik(9).................................... 46,792(4) *
All executive officers and directors as a group
(28 persons) including those named above........... 3,614,324(10) 7.18
</TABLE>
- ------------------------
(1) Except as otherwise noted each individual owns all shares directly and has
sole investment and voting power with respect to all shares. No officer or
director owns shares of Ogden Series A Preferred Stock.
(2) Asterisks indicate beneficial ownership of less than 1.0% of the class.
10
<PAGE>
(3) Includes 30,655 shares held in trust for his minor children; and 960,000
shares subject to stock options which are exercisable within 60 days of
March 1, 1998. Does not include 804 shares held by his wife. Mr. Ablon has
neither investment nor voting power with respect to the shares held by his
wife, and disclaims any beneficial interest in such shares.
(4) Includes 20,000 shares for Dr. Kappas, 15,000 shares for Dr. Volcker and
25,000 shares for each of Messrs. Abshire, Einspruch, Neal, Penner, Seitz,
Smith, Zaleznik and Ms. Kramer and Moyers subject to stock options which are
exercisable within 60 days of March 1, 1998. Also includes: 2,735 shares
held by Dr. Einspruch in a Keogh Plan; 100 shares held by Dr. Neal jointly
with his wife over which Dr. Neal has shared voting and investment authority
with his wife; 1,000 shares held by Dr. Penner and his wife in a living
trust for their children over which Dr. Penner has shared voting and
investment authority with his wife; and 371 shares held by Dr. Seitz in
trust with his children over which he has shared voting and investment
authority with his children.
(5) Includes 136,300 shares subject to stock options which are exercisable
within 60 days of March 1, 1998.
(6) Includes 144,000 shares subject to stock options which are exercisable
within 60 days of March 1, 1998.
(7) Includes 324,400 shares subject to stock options which are exercisable
within 60 days of March 1, 1998.
(8) Includes 150,200 shares subject to stock options which are exercisable
within 60 days of March 1, 1998.
(9) Messrs. Ralph Ablon, Zaleznik, Penner and Seitz will be retiring from the
Board as set forth under Board Restructuring.
(10) Includes 2,188,400 shares subject to options which are exercisable within
60 days of March 1, 1998 and approximately 472,397 shares of Ogden Common
Stock which may be voted by Messrs. Coit, Husby, Stone and two other
individuals as members of the Investment Committee of Ogden's Group Trust
Fund for Profit Sharing Plans.
RATIFICATION OF AUDITORS--PROPOSAL NUMBER (2)
Shareholders are requested to ratify the continued appointment of Deloitte &
Touche LLP ("Deloitte") as auditors of Ogden and its subsidiaries for the year
1998. A representative of Deloitte is expected to be present at the Annual
Meeting with the opportunity to make a statement if he or she desires to do so
and to respond to appropriate questions. Deloitte has been Ogden's auditors
since 1951.
11
<PAGE>
Audit and other services rendered by Deloitte for the fiscal year ended December
31, 1997, in addition to the audit of the Consolidated Financial Statements,
included: review of financial and related information that is to be included in
filings with the Securities and Exchange Commission; consultation during the
year on matters related to accounting and financial reporting; audits of
financial statements of certain subsidiary companies; audits of employee benefit
plans contained in filings required pursuant to ERISA; consulting services; and
meeting with the Audit Committee on matters related to the audit. Although Ogden
is not required to submit the selection of auditors to the shareholders for
ratification, it has elected to do so. In the event such selection is not
ratified, Ogden would consider the selection of other auditors for fiscal years
after 1998. However, it would not be possible to replace Deloitte as auditors
for the 1998 fiscal year without significant disruption of Ogden's business.
THE BOARD RECOMMENDS A VOTE FOR PROPOSAL NUMBER (2)
SHAREHOLDER PROPOSAL--PROPOSAL NUMBER (3)
Mr. William Steiner, 4 Radcliff Drive, Great Neck, New York 11024, an Ogden
shareholder who has been the beneficial owner of shares of Ogden Common Stock
with a market value of at least $1,000 and has held such shares continuously for
at least one year, and has advised that he intends to maintain such ownership
through the date of the 1997 annual shareholders meeting, has submitted the
following resolution and supporting statement for inclusion in this Proxy
Statement and will cause the resolution to be introduced at the Annual Meeting.
ELIMINATE CLASSIFIED BOARD OF DIRECTORS RESOLUTION
"RESOLVED, that the stockholders of the Company request that the Board of
Directors take the necessary steps, in accordance with state laws, to declassify
the Board of Directors so that all director are elected annually, such
declassification to be effected in a manner that does not affect the unexpired
terms of directors previously elected."
12
<PAGE>
SUPPORTING STATEMENT
The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable for
its implementation of those policies. I believe that the classification of the
Board of Directors, which results in only a portion of the Board being elected
annually, is not in the best interest of the company and its stockholders.
I believe that the Company classified Board of Directors maintains the
incumbency of the current Board and therefore of current management, which in
turn limits management's accountability to stockholders.
The elimination of the Company's classified Board would require each new
director to stand for election annually and allow stockholders an opportunity to
register their views on the performance of the Board collectively and each
director individually. I believe this is one of the best methods available to
stockholders to insure that the Company will be managed in a manner that is in
the best interests of the stockholders.
I believe that concerns expressed by companies with classified boards that
the annual election of all directors could leave companies without experienced
directors in the event that all incumbents are voted out by stockholders are
unfounded. In my view, in the unlikely event that stockholders vote to replace
all directors, this decision would express stockholder dissatisfaction with the
incumbent directors and reflect the need for change.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION.
BOARD OF DIRECTORS' REASONS FOR OPPOSING THE PROPOSAL
The Board of Directors has evaluated the proposal submitted this year and
which was also submitted at last year's Annual Meeting and determined that a
classified Board is appropriate and prudent in protecting the interests of all
of Ogden's stockholders, and that the continuity and quality of leadership that
results from a classified Board provides the proper environment in which to
foster the creation of long-term value for our stockholders. In 1984 the
shareholders of the Corporation voted in favor of creating a classified Board of
Directors. Since that time proposals similar to the one presented this year and
last year were put before the stockholders several times and except for last
year, each time received less than a majority of the votes cast.
The Board of Directors believes that the success of the Corporation in
producing long-term shareholder value, as reflected in capital appreciation,
requires long-term and strategic planning, and
13
<PAGE>
careful and consistent application of the Corporation's financial and other
resources. The Board believes that an abrupt change of control could be
disruptive to the Corporation in achieving its long-term strategic goals and
might deprive shareholders of the opportunity to realize the full value of their
investment. The Board believes that a classified Board helps provide continuity
in management by ensuring that a majority of the Board at any given time would
have prior experience as directors of the Corporation.
The foregoing proposed resolution does not amend Ogden's Restated
Certificate of Incorporation. The amendment must first be approved by the Board
of Directors and then submitted to the shareholders for a vote. A vote in favor
of the proposal is only an advisory recommendation to the Board of Directors
that the Board recommend to the shareholders the amendment to the Certificate of
Incorporation. The Board of Directors, however, has not approved the requested
action and is opposed to such an amendment. In the opinion of the Board of
Directors, the above reasons continue to be valid and the classified board
remains in the best interest of the shareholders.
THE BOARD RECOMMENDS A VOTE AGAINST PROPOSAL NUMBER (3)
SHAREHOLDER PROPOSAL -- PROPOSAL NUMBER (4)
Mr. Charles Miller, 23 Park Circle, Great Neck, New York 11024, an Ogden
shareholder who has been the beneficial owner of shares of Ogden Common Stock
with a market value of at least $1,000 and has held such shares continuously for
at least one year, and has advised he intends to maintain such ownership through
the date of the 1998 annual shareholders meeting, has submitted the following
resolution and supporting statement for inclusion in this Proxy Statement and
will cause the resolution to be introduced at the annual shareholders meeting:
MAXIMIZE VALUE RESOLUTION
RESOLVED: that the shareholders of Ogden Corporation urge the Ogden
Corporation Board of Directors to arrange for the prompt sale of Ogden
Corporation to the highest bidder.
SUPPORTING STATEMENT
The purpose of the Maximize Value Resolution is to give all Ogden
Corporation shareholders the opportunity to send a message to the Ogden
Corporation Board that they support the prompt sale of Ogden Corporation to the
highest bidder. A strong and or majority vote by the shareholders would indicate
to the Board the displeasure felt by the shareholders of the financial
performance of the company over many years and the drastic action that should be
taken. Even if it is approved by the
14
<PAGE>
majority of the Ogden Corporation shares represented and entitled to vote at the
annual meeting, the Maximize Value Resolution will not be binding on the Ogden
Corporation Board. The proponent however believes that if this resolution
receives substantial support from the shareholders, the board may choose to
carry out the request set forth in the resolution:
The prompt auction of Ogden Corporation should be accomplished by any
appropriate process the board chooses to adopt including a sale to the highest
bidder whether in cash, stock, or a combination of both. It is expected that the
board will uphold its fiduciary duties to the utmost during the process.
The proponent further believes that if the resolution is adopted, the
management and the board will interpret such adoption as a message from the
company's stockholders that it is no longer acceptable for the board to continue
with its current management plan and strategies.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION
BOARD OF DIRECTORS' REASONS FOR OPPOSING THE PROPOSAL
The Board of Directors has a duty to act in the best interest of all
shareholders. Maximizing shareholder value is most certainly an important
component of that duty and the subject of shareholder value is considered often
by the Board of Directors and management.
The Board periodically reviews from a strategic perspective the long term
outlook for Ogden. The prospects for Ogden's current businesses are reviewed and
business plans developed. The Board continually evaluates acquisition prospects
as well as the benefits that may be derived from selling existing businesses and
reinvesting the after-tax proceeds thereof in new businesses.
The Board believes that the interest of shareholders is best served by
causing Ogden to continue to be operated effectively and efficiently to generate
increasing operating earnings. To that end, the Board continually develops,
plans and takes steps to achieve this goal. 1997 was a positive year for Ogden,
it was a year of accomplishment, we saw our stock price outperform all the major
equity market indices. Over the past two years Ogden has disposed of most of the
operations that did not meet our objectives for return on investment and
earnings growth and as a result Ogden now focuses on three business segments --
Entertainment, Aviation and Energy. The foundation for growth is now largely in
place. Therefore, the Board believes that adoption of this proposal would not
serve Ogden's best interest and could actually diminish shareholder value.
15
<PAGE>
THE BOARD RECOMMENDS A VOTE AGAINST PROPOSAL NUMBER (4)
SHAREHOLDER PROPOSAL -- PROPOSAL NUMBER (5)
The custodian and a trustee of the New York City Employees' Retirement
System ("NYCERS"), 1 Centre Street, New York, New York 10007-2341, an Ogden
shareholder who has been beneficial owner of shares of Ogden common stock with a
market value of at least $1,000 and has held such shares continuously for at
least one year, and has advised that they intend to maintain such ownership
through the date of the 1998 annual shareholders meeting, has submitted the
following resolution and supporting statement for inclusion in this Proxy
Statement and will cause the resolution to be introduced at the annual
shareholders meeting.
WHEREAS WE BELIEVE: Responsible implementation of a sound, credible
environmental policy contributes to long-term shareholder value by increasing
efficiency, decreasing environmental liabilities and associated litigation, and
enhancing public image and product attractiveness;
Adherence to public standards for environmental performance gives a company
greater public credibility than standards created by industry alone. For maximum
credibility and usefulness, such standards should address the concerns of
investors and other stakeholders;
Increasingly, investors expect companies to provide regularly, meaningful,
comprehensive, impartial environmental reports. Standardized environmental
reports enable investors to compare performance over time. They also attract
investors seeking companies that are environmentally responsible.
WHEREAS: The Coalition for Environmentally Responsible Economics (CERES),
which includes some of this Company's shareholders, public interest
representatives, and environmental experts, consulted with corporations to
produce the CERES Principles -- a set of comprehensive public standards for
environmental performance and standardizing reporting. A number of companies,
including Bank America, Baxter International, Bethlehem Steel, General Motors,
H.B. Fuller, ITT Industries, Pennsylvania Power and Light, Polaroid, and Sun
Company, have endorsed the CERES Principles to demonstrate their commitment to
public environmental accountability and standardizing reporting. Some
Fortune-500 endorsers assert that the benefits of working with CERES are
credibility and "value-added" through the company's environmental initiatives;
By endorsing the CERES Principles, a company commits to work toward:
(1) Protection of the biosphere; (2) Sustainable use of natural resources;
(3) Waste reduction and disposal; (4) Energy conservation; (5) Risk reduction;
(6) Safe products/services; (7) Environmental restoration; (8) Informing the
public; (9) Management commitment; and (10) Audits and reports. (Full
16
<PAGE>
text of the CERES Principles and accompanying CERES Report Form are obtainable
from CERES, 711 Atlantic Avenue, Boston, MA 02110. Telephone: (617)451-0927).
CERES is distinguished from other initiatives for corporate environmental
responsibility by being a successful model of shareholder relations; a leader in
public accountability through standardized environmental reporting; and a
catalyst for significant and measurable environmental improvement within norms.
RESOLVED: Shareholders request that the Company endorse the CERES Principles
as a part of its commitment to be publicly accountable for its environmental
impact.
SUPPORTING STATEMENT
We believe, and recent reports have stated, that environmental initiatives
can provide a competitive advantage to any company, and that such initiatives
can enhance financial performance. In addition, the quality of a company's
environmental management provides the outside world with a good indicator of the
overall quality of the company's business management. We believe that
endorsement of the CERES Principles would help to reduce environmental
liabilities and increase efficiency and opportunities for costs saving.
Your vote FOR this resolution would serve the best interests of our Company
and its shareholders.
BOARD OF DIRECTORS' REASONS FOR OPPOSING THE PROPOSAL
The Board of Directors believes that adoption of the principles advocated by
the Coalition for Environmentally Responsible Economies (CERES) would impose
costly, additional reporting requirements on Ogden which are not imposed by law
but by an organization which is largely self-appointed. The Board of Directors
believes that environmental compliance is an integral part of sound management
and responsible corporate citizenship, and that it does not need to endorse
CERES Principles to either of these goals. Accordingly, the Board of Directors
believes that the interest of Ogden's stockholders is best served by focusing
Ogden's efforts on achieving and maintaining environmental compliance with those
laws and regulations promulgated by government entities, as well as continuing
the Corporation's current programs which are designed to require full compliance
by all of Ogden's employees and operations with applicable environmental laws
and regulations governing any of Ogden's businesses.
The Board believes that through the effective implementation of its existing
programs and corporate compliance with industry codes and governmental
regulations, it has met almost all of the
17
<PAGE>
goals of the CERES Principles without accepting those portions of such
Principles which might cause Ogden to incur additional costs and obligations.
Ogden's management, monitored by the Board of Directors and the Audit
Committee of the Board, will continue to be responsive to the need to inform the
stockholders and other interested parties, including the affected communities,
of its environmental activities and to demonstrate its commitment to
environmental accountability. The Board believes that this can and will be
accomplished without subscribing to the CERES Principles.
THE BOARD RECOMMENDS A VOTE AGAINST PROPOSAL NO. (5)
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of Ogden's Compensation Committee are "non-employee directors"
(within the meaning of revised Rule 16b-3 of the Securities Exchange Act) and
"outside directors" (within the meaning of Section 162(m) of the Internal
Revenue Code of 1986, as amended) of Ogden who are not employees or members of
management of Ogden or any of its subsidiaries.
The Compensation Committee Report on Executive Compensation and the Graph
which follows shall not be deemed to be incorporated by reference into any
filing made by Ogden under the Securities Act of 1933 or the Securities Exchange
Act of 1934, notwithstanding any general statement contained in any such filing
incorporating this proxy statement by reference, except to the extent Ogden
incorporates such report and graph by specific reference.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
THE EXECUTIVE COMPENSATION PROGRAM
Ogden has designed its executive compensation program to attract, motivate
and retain talented executives. Toward this end, the executive compensation
program provides:
- A base salary program to attract and retain talented executives who
demonstrate the qualities required in the Ogden entrepreneurial culture
and who meet the corporation's rigorous goals and standards.
- Annual incentive bonus payments that are highly variable based on the
achievement of Ogden's earnings-per-share target and pre-established
individual goals. These incentive bonuses reward
18
<PAGE>
individuals whose performance contributes to achieving strategic and
financial corporate objectives, which increased shareholder value.
Additionally, the CEO Formula Bonus Plan sets annual incentive bonus
targets for the CEO based on a pre-tax return on equity formula.
- Clear and uncomplicated long-term incentives, in the form of stock
options, to encourage equity ownership and to align executive's interests
with shareholders. Stock options are granted periodically to reflect
expanded roles and responsibilities or to readjust the total direct
compensation mix. Grants typically vest over a five-year period and expire
ten years from grant date.
CHIEF EXECUTIVE OFFICER (CEO) COMPENSATION
The Committee set Mr. Ablon's base salary for 1998 at $1,000,000,
representing an annual increase of $200,000 (25%). Mr. Ablon's last salary
increase occurred in 1994. He was also awarded a 1997 bonus of $1,000,000 which
was payable under the CEO Formula Bonus Plan for 1997 performance; and granted
no new stock options. The factors utilized by the Committee in reaching its
decisions are summarized below:
COMPETITIVE PRACTICE IN CEO COMPENSATION -- Ogden operates diverse lines of
business. Its success depends on the marketing and financial acumen as well as
the creativity of its executives. As such, it competes for executive talent with
any number of major Fortune 500 companies across many industries. Therefore, the
Committee reviews summaries of prevailing CEO compensation practices of major
companies in many industries rather than just companies within the specific
service industry category. The Committee uses this information to evaluate
competitive factors affecting the CEO compensation. The Committee reviewed the
competitive practices in CEO compensation based on The Wall Street
Journal/William M. Mercer (WSJ/Mercer) survey of 1997 Proxy Statements
(comparing 1996 compensation from 350 major service and industrial companies).
The Committee evaluated Mr. Ablon's 1997 total cash compensation against
1996 competitive pay at 80 of the 350 companies with revenues under $3.0 billion
(1996 was the most recent year for which information was available). Using these
measures, Mr. Ablon's total compensation, including base salary, bonus and
long-term incentive payments, approximates the 75th percentile of total direct
compensation.
CEO FORMULA BONUS PLAN -- 1997 PERFORMANCE -- The CEO Formula Bonus Plan
(the Plan), adopted by the Committee and approved by shareholders in 1994, sets
forth a Target Bonus which can be earned based upon the Pre-Tax Return on Equity
(ROE) Performance Level achieved for each calendar year. Under the terms of the
Plan, Ogden's 1997 Pre-Tax Income of $130,778,000 was divided
19
<PAGE>
by opening Shareholders' Equity of $550,925,000 equaling 23.7%. This Performance
Level earns Mr. Ablon 125% of the Target Bonus. The 1997 Target Bonus, which
equals base pay, was $800,000.
CEO Formula Bonus Plan -- 1998 Targets -- Under the terms of the Plan, the
Committee must pre-establish the Performance Levels for each calendar year. The
Target Bonus for 1998 is $1,000,000, 100% of base salary. The bonus that may be
awarded under the Plan may vary based upon Ogden's Pre-Tax Return On Equity
Performance Level. The Committee established the following Performance Levels
for 1998 (unchanged from 1997):
<TABLE>
<CAPTION>
PRE-TAX ROE PERFORMANCE LEVEL % OF TARGET BONUS
- ------------------------------------------------------------------------ -------------------
<S> <C>
less than 13%........................................................... 0
13% to under 17%........................................................ 75%
17% to under 21%........................................................ 100%
21% to under 25%........................................................ 125%
25% or greater.......................................................... 150%
</TABLE>
FINANCIAL PERFORMANCE -- Ogden's overall financial performance for 1997
reflected the progress of the Company's refocusing efforts. For the 1997 year,
Ogden's stock price returned 48.4%, well ahead of the respective indices.
Ogden's total shareholder return (assumes reinvestment of dividends) of 56.6%
significantly outperformed the Dow Jones Industrial Average at 24.9%, the S&P
500 at 33.4% and the S&P Mid Cap 400 at 32.2%.
OTHER EXECUTIVE COMPENSATION
The Committee decided on 1998 base salaries for Messrs. Mackin, Husby, Stone
and Coit, in the amounts of $517,275, $312,000, $281,216, $270,400 respectively,
(representing increases of 4.5%, 4.0%, 4.0% and 4.0%, respectively) and annual
bonus amounts reflected in the Summary Compensation table, for 1997 performance.
In arriving at these decisions, the Committee considered individual
contributions during 1997. The Committee also considered summaries of executive
compensation surveys published by leading compensation consulting firms.
In reviewing competitive pay levels, the base salary and bonus awards of
Messrs. Mackin, Husby, Stone and Coit ranged near the 75th percentile of
comparable positions in other Fortune 500 companies within the $1 billion to $3
billion revenue range.
20
<PAGE>
POLICY REGARDING DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Ogden's policy regarding deductibility of executive pay in excess of $1
million is to preserve the tax deductibility of the CEO's annual incentive bonus
and stock options by having these two components of compensation qualified as
performance-based under the IRS rules. The CEO Formula Bonus Plan and the 1990
Ogden Stock Option Plan, as amended, both of which were adopted by the Committee
and the Board, and approved by shareholders, constitute the largest elements of
the CEO's compensation package. The Committee acknowledges that there may be
certain non-cash "imputed income" items, which may cause pay to exceed $1
million in any year. This policy does not contemplate restricting the Committee
from using discretionary business judgment as it determines appropriate.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS (1)
Abraham Zaleznik, Chairman
Norman G. Einspruch
Judith Davidson Moyers
Frederick Seitz
- ------------------------
(1) Since Messrs. Zaleznik and Seitz will be retiring, the Board has
subsequently appointed Judith Moyers as Chairman and Norman Einspruch and
Jeffrey Friedman as members of the Committee.
21
<PAGE>
Ogden is no longer listed in the S&P Specialized Services Group Index,
however, since the index did appear in Ogden's 1997 Proxy Statement it is
required to be reflected again this year. Solely for the foregoing reason it is
reflected, along with the S&P Index and S&P Midcap 400 Index, in the following
graph which compares the cumulative total shareholder return on Ogden's common
shares for the last five fiscal years with the cumulative total shareholder
return on each of the foregoing indices assuming the investment of $100 in Ogden
common shares and the reinvestment of all dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER
RETURN AMONG OGDEN, THE S&P 500 INDEX, THE
S&P MIDCAP 400 INDEX AND THE S&P
SPECIALIZED SERVICES GROUP INDEX
22
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the aggregate cash and
noncash compensation for each of the last three fiscal years awarded to, earned
by or paid to the Chief Executive Officer of Ogden and each of Ogden's four
other most highly compensated executive officers whose salary and bonus exceeded
$100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (1)
----------------------------------------------------------------------------------
LONG TERM
COMPENSATION
AWARDS
---------------
NUMBER
OPTIONS/ ALL OTHER
OTHER ANNUAL LIMITED COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) SARS(3) (4)
- ------------------------------- --------- --------- --------- ----------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
R. Richard Ablon,.............. 1997 $ 800,000 1,000,000(5) $ 131,639 $ 160,840
Chairman of the Board, 1996 800,000 800,000 148,188 0
President and Chief Executive 1995 800,000 400,000 142,890 0
Officer, Ogden and Chairman
and Chief Executive Officer,
Ogden Energy Group, Inc., a
100% owned subsidiary of
Ogden.
Scott G. Mackin,............... 1997 495,000 450,000 0 50,000 88,156
Executive Vice President, 1996 475,000 375,000 0 85,530
Ogden and President and Chief 1995 450,000 375,000 0 79,986
Operating Officer, Ogden
Energy Group, Inc., a 100%
owned subsidiary of Ogden.
Philip G. Husby,............... 1997 300,000 235,000 0 42,339
Senior Vice President and 1996 300,000 115,000 0 4,500
Chief Financial Officer, 1995 260,000 115,000 39,952 4,500
Ogden.
Bruce W. Stone,................ 1997 270,400 209,280 129,095 45,988
Executive Vice President and 1996 260,000 180,000 0 44,761
Managing Director, Ogden 1995 250,000 180,000 0 42,670
Energy Group Inc., a 100%
owned subsidiary of Ogden.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (1)
----------------------------------------------------------------------------------
LONG TERM
COMPENSATION
AWARDS
---------------
NUMBER
OPTIONS/ ALL OTHER
OTHER ANNUAL LIMITED COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) SARS(3) (4)
- ------------------------------- --------- --------- --------- ----------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lynde H. Coit,................. 1997 260,000 190,000 50,715 37,565
Senior Vice President and 1996 260,000 107,250 50,482 4,500
General Counsel, Ogden. 1995 235,000 105,000 36,000 4,500
</TABLE>
- ------------------------
(1) Includes annual compensation awarded to, earned by or paid to the individual
during the last three fiscal years, or any portion thereof, that he served
as an executive officer of Ogden.
(2) Amounts in this column represent cost of life insurance, car allowance,
medical reimbursement, personal use of aircraft and other personal benefits
which in the aggregate exceeded the lesser of either $50,000 or 10% of the
executives combined salary and bonus. The only personal benefits exceeding
25% of the total personal benefits reported in 1997 for the listed executive
officers was a charge of $89,473 for use of the Ogden aircraft by Mr. Ablon
and a reimbursement for medical expenses in the amount of $107,846 and
$37,879 for Messrs. Stone and Coit, respectively.
(3) See "Stock Option Table (I) -- Option/LSAR Grants in Last Fiscal Year" of
this Proxy Statement.
(4) Includes, for the fiscal year ending December 31, 1997: (i) 401(K) matching
contributions credited to the account balances of Messrs. Ablon, Husby and
Coit in the amount of $0, $4,800, and $4,800, respectively, under the Ogden
401(k) Plan; (ii) an annual contribution in the amount of $16,150 to each of
the account balances of Messrs. Mackin and Stone under the Ogden Energy
Group Profit Sharing Plan; and (iii) a special discretionary cash payment
made to Messrs. Ablon, Mackin, Husby, Coit and Stone in the amount of
$160,840, $72,006, $37,539, $32,765 and $29,838, respectively, as a result
of contribution limitations imposed by the Internal Revenue Code relating to
the Ogden Energy and Ogden Profit Sharing Plans.
(5) Mr. Ablon's bonus was determined in accordance with the CEO Formula Bonus
Plan (see "Compensation Committee Report on Executive Compensation--Chief
Executive Officer (CEO) Compensation" of this Proxy Statement).
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<PAGE>
STOCK OPTION TABLES
(I) The following table sets forth information with respect to the named
executive officers of Ogden concerning the grant of Ogden stock options and the
limited stock appreciation rights ("LSARS") during the fiscal year 1997:
OPTION/LSAR GRANT IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/LSARS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTION/LSARS EMPLOYEES IN PRICE PER EXPIRATION PRESENT
NAME GRANTED (1) FISCAL YEAR SHARE DATE VALUE(2)
- ---------------------------------------- --------------- ----------------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
R. Richard Ablon........................ 0 0 $ 0 N/A $ N/A
Scott G. Mackin......................... 50,000(1) 8.77 20.1875 1/15/2007 188,612
Philip G. Husby......................... 0 0 0 N/A N/A
Bruce W. Stone.......................... 0 0 0 N/A N/A
Lynde H. Coit........................... 0 0 0 N/A N/A
</TABLE>
- ------------------------
(1) Options were granted at the fair market value of the Ogden Common Stock on
the date of grant, vest at the rate of 20% per year over a five year period,
and expire 10 years from date of grant. Each option is accompanied by a
limited stock appreciation right which provides that the option becomes
immediately exercisable upon a Change in Control of Ogden, as defined in the
Ogden 1990 Stock Option Plan as Amended and Restated. See the "Limited Stock
Appreciation Rights" section of this Proxy Statement.
(2) The estimated grant date present value was determined by using the
Black-Scholes model with the following assumptions: an exercise price of
$20.1875 per share, equal to 100% of the fair market value of Ogden Common
Stock on the date of grant; stock price volatility of .2592; dividend yield
of 6.014%; a 6.58% risk-free rate of return; and an option term of 10 years.
No adjustments have been made for forfeitures or nontransferability. The
ultimate value of the options will depend on the future market price of
Ogden Common Stock, which cannot be forecast with reasonable accuracy. The
actual value, if any, an optionee will realize upon exercise of an option
will depend on the excess of the market value of Ogden's Common Stock over
the exercise price on the date the option is exercised.
25
<PAGE>
(II) The following table sets forth information with respect to the named
executive officers of Ogden concerning the exercise of stock options and LSARS
during 1997 and the value of unexercised stock options held as of the end of
1997.
AGGREGATED OPTION/LSAR EXERCISES IN 1997 AND FISCAL YEAR-END
OPTION/LSAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/LSAR AT FY-END (1)
SHARES OPTIONS/LSAR AT FY-END
ACQUIRED ON VALUE -------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------- ----------------- ------------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
R. Richard Ablon....................... 0 $ 0 840,000 240,000 $ 7,307,072 $ 1,387,512
Scott G. Mackin........................ 0 0 284,400 130,000 2,375,187 867,194
Philip G. Husby........................ 0 0 128,000 32,000 1,559,832 185,002
Bruce W. Stone......................... 0 0 150,200 0 1,603,100 0
Lynde H. Coit.......................... 0 0 116,300 40,000 934,240 231,252
</TABLE>
- ------------------------
(1) Computed based upon the difference between the exercise price and the
average of the high and low sale prices of Ogden Common Stock on the New
York Stock Exchange Composite Tape on December 31, 1997.
OGDEN EXECUTIVE PENSION PLAN
The Executive Pension Plan is a non-tax-qualified defined benefit plan that
is generally not subject to the provisions of the Employee Retirement Income
Security Act of 1974. Ogden makes annual contributions to the Executive Pension
Plan trust, as determined by Ogden's actuary, which are deposited with The Bank
of New York pursuant to a grantor trust agreement between Ogden and The Bank of
New York. Ogden does not have access to or use of the trust assets; however, the
assets may be subject to the claims of Ogden's general creditors in the event of
its insolvency or bankruptcy. Amounts payable under the Executive Pension Plan
are generally included in the recipient's income only when actually paid.
All executive officers of Ogden, including those listed in the Summary
Compensation Table (except Messrs. Mackin and Stone), are eligible to
participate in the Executive Pension Plan and are entitled to
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<PAGE>
a retirement benefit, subject to certain offsets as described below, equal to
1.5% of the executive's final average compensation for the five consecutive
highest paid years out of the executive's last ten years preceding retirement
multiplied by the executive's years of service.
Compensation includes salary, bonus and other compensation received during
the year and deferred income earned, but does not include imputed income,
severance pay, special discretionary cash payments or other noncash
compensation. An eligible executive becomes fully vested and entitled to a
benefit under the Executive Pension Plan trust upon the completion of five years
of service, unless the executive was a participant in Ogden's prior pension plan
on December 31, 1988, in which event the executive is automatically fully
vested. The relationship of the covered compensation to the annual compensation
shown in the Summary Compensation Table would be the Salary and Bonus columns
and any car allowance.
Pursuant to the provisions of the Executive Pension Plan, a lump-sum
equivalent of the monthly benefit to be distributed to the executive upon
retirement, termination or death, is subject to offset by any amounts previously
distributed to such executive as a result of the prior termination of Ogden's
pension and supplemental pension plans and subject to an early retirement
reduction of 6% per year prior to age 65. The amount distributed will be taxable
to the executive as ordinary income at the time of distribution. As of December
31, 1997, R. Richard Ablon, Philip G. Husby and Lynde H. Coit have accrued 27,
11, and 9 years of service, respectively, under the plan and a monthly benefit
accrual in the amount of $26,588, $3,950, and $3,893, respectively. Scott G.
Mackin and Bruce W. Stone are not eligible for benefits under the Ogden
Executive Pension Plan but do participate in the Ogden Energy Group Pension Plan
as described below.
OGDEN ENERGY GROUP PENSION PLAN
Scott G. Mackin and Bruce W. Stone participate in the Ogden Energy Group
Pension Plan (the "Pension Plan"), a tax-qualified defined benefit plan subject
to the provisions of the Employee Retirement Income Security Act of 1974. Under
the Pension Plan each participant who meets the plan's vesting requirements will
be provided with an annual benefit at or after age 65 equal to 1.5% of the
participant's average compensation during the five consecutive calendar years of
employment out of the ten consecutive calendar years immediately preceding his
retirement date or termination date during which such average is highest,
multiplied by his total years of service. Compensation includes salary and other
compensation received during the year and deferred income earned, but does not
include imputed income, severance pay, special discretionary cash payments or
other noncash compensation. The relationship of the covered compensation to the
annual compensation shown in the Summary Compensation Table would be the Salary
and Bonus columns and any car allowance. A plan participant who is at
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<PAGE>
least age 55 and who retires after completion of at least five years of
employment receives a benefit equal to the amount he would have received if he
had retired at age 65, reduced by an amount equal to 0.5% of the benefit
multiplied by the number of months between the date the participant commenced
receiving benefits and the date he would have received benefits if he had not
retired prior to age 65.
Messr. Mackin and Stone also participate in the Ogden Energy Group
Supplemental Deferred Benefit Plan (the "Supplemental Plan"), a deferred
compensation plan which is not qualified for federal income tax purposes. The
Supplemental Plan provides that, in the event that the annual retirement benefit
of any participant in the Pension Plan, determined pursuant to such plan's
benefit formula, cannot be paid because of certain limits on annual benefits and
contributions imposed by the Internal Revenue Code (the "Code"), the amount by
which such benefit must be reduced will be paid to the participant from the
general assets of the company.
The following table shows the estimated annual retirement benefits payable
in the form of a life annuity at age 65 under the Pension Plan and the
Supplemental Plan. These benefits are subject to any deduction for Social
Security benefits. Mr. Mackin has 11.5 years and Mr. Stone has 21.8 years of
credited service under the Pension Plan as of December 31, 1997 and had annual
average earnings for the last five years of $723,508 and $394,865, respectively.
<TABLE>
<CAPTION>
AVERAGE ANNUAL
EARNINGS IN 5
CONSECUTIVE
HIGHEST PAID
YEARS OUT OF
LAST 10 YEARS ESTIMATED ANNUAL RETIREMENT BENEFITS BASED ON YEARS OF SERVICE
PRECEDING ---------------------------------------------------------------------------------
RETIREMENT 5 10 15 20 25 30 35
- -------------- --------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 375,000 $ 28,125 $ 56,250 $ 84,375 $ 112,500 $ 140,625 $ 168,750 $ 196,875
400,000 30,000 60,000 90,000 120,000 150,000 180,000 210,000
425,000 31,875 63,750 95,625 127,500 159,375 191,250 223,125
525,000 39,375 78,750 118,125 157,500 196,875 236,250 275,625
625,000 46,875 93,750 140,625 187,500 234,375 281,250 328,125
675,000 50,625 101,250 151,875 202,500 253,125 303,750 354,375
750,000 56,250 112,500 168,750 225,000 281,250 337,500 393,750
</TABLE>
28
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
EMPLOYMENT CONTRACTS
(A) R. Richard Ablon is employed by Ogden as its President and Chief
Executive Officer pursuant to an employment agreement which is for a five-year
term commencing January 1, 1991 and which provides that commencing December 31,
1991 and each December 31 thereafter, the term of the agreement is automatically
extended an additional one-year period until Mr. Ablon reaches his normal
retirement date and year to year thereafter. Either party may elect not to
extend the term for an additional one-year period by written notice given to the
other at least sixty days' prior to December 31, 1998 or any subsequent December
31, in which event the agreement would continue in effect until the expiration
of its then existing term, at which time Mr. Ablon's employment would terminate.
The annual salary under the agreement is fixed at a minimum of $500,000 with an
annual incentive bonus in such amount as determined by the Board of Directors.
If Mr. Ablon's employment is terminated by Ogden or if Mr. Ablon terminates
employment for good reason (as described in the agreement) then Mr. Ablon would
be entitled to a cash payment equal to five times the average of his salary and
bonus paid during the term of the agreement.
(B) Mr. Mackin is employed pursuant to an employment agreement which is for
a five-year term commencing January 1, 1997 and continuing through December 31,
2001 and year to year thereafter, subject to the right of either party to
terminate the agreement on any December 31 upon at least sixty (60) days prior
written notice. The agreement provides for a minimum annual salary in the amount
of $400,000, an annual incentive bonus in such amount as may be determined by
the Board of Directors of Ogden Projects, Inc. ("OPI"), a wholly owned
subsidiary of Ogden Energy Group, Inc., and a five-year covenant not to compete.
The agreement also provides that if Mr. Mackin terminates his employment for
good reason (as defined in the agreement) or if his employment is terminated for
any reason other than for cause (as defined in the agreement) then he is
entitled to a severance payment equal to five times his annual salary and bonus
at the time of such termination.
(C) Mr. Stone is employed by OPI pursuant to an employment agreement which
became effective as of June 1, 1990 and continued through December 31, 1993, and
from year to year thereafter, subject to the right of either party to terminate
such employment on any December 31, upon at least sixty days prior written
notice. The annual salary under the agreement is fixed at a minimum of $144,200
with an annual incentive bonus in such amount as determined by the Board of
Directors. The agreement also provides that if Mr. Stone's employment is
terminated for any reason other than for cause (as defined in the agreement) or
if Mr. Stone terminates employment for good reason (as defined in the
agreement), then Mr. Stone is entitled to a cash payment equal to three times
his annual salary and bonus at the time of such termination.
29
<PAGE>
(D) Mr. Husby is employed by Ogden as its Senior Vice President and Chief
Financial Officer pursuant to an employment agreement which became effective as
of July 2, 1990 and continued through December 31, 1995 and year to year
thereafter subject to the right of either party to terminate such employment as
of December 31, 1998, or any subsequent December 31 upon sixty days prior
written notice. The annual salary under the agreement is set at a minimum of
$185,000 with an annual incentive bonus in such amount as determined by the
Board of Directors. The agreement also provides that if Ogden terminates the
employment of Mr. Husby for any reason other than for cause (as defined in the
agreement) or if Mr. Husby terminates employment for good reason (as defined in
the agreement), then Mr. Husby is entitled to a cash payment equal to three
times his annual salary and bonus at the time of such termination.
(E) Mr. Coit is employed by Ogden as its Senior Vice President and General
Counsel pursuant to an employment agreement which became effective as of January
30, 1990 and continued through April 1, 1994, provided, however, commencing on
April 1, 1991 and each April 1 thereafter, the term thereof is automatically
extended an additional one year period unless terminated by Ogden upon ninety
days' prior written notice. Mr. Coit's annual salary under the agreement will be
no less than his base salary in 1989 plus an incentive bonus in such amount as
determined by the Board of Directors. The agreement provides that if Mr. Coit is
terminated by Ogden without cause or resigns for good reason(as defined in the
agreement), Ogden will (a) pay Mr. Coit an amount equal to his current monthly
salary plus one-twelfth his incentive bonus for the 12-month period ending on
the December 31 immediately preceding his date of termination or resignation,
times the lesser of (i) 12 plus 2 for each twelve months of service, or (ii) 36;
(b) purchase Mr. Coit's home for its original purchase price; and (c) continue
his benefits for a number of months equal to the number of months of pay which
Mr. Coit would be entitled during the period of time set forth under (a) above.
LIMITED STOCK APPRECIATION RIGHTS
Ogden's Stock Option Plans, as amended, (the "Plans") permit, in connection
with the grant of an option award, the grant of tandem limited stock
appreciation rights ("LSARs"). In general, the exercise of an LSAR by an
optionee entitles the optionee to an amount in cash, with respect to each share
subject thereto, equal to the excess of the value of a share of Ogden Common
Stock (determined in accordance with the Plans) on the exercise date over the
exercise price of the related option award. An LSAR is exercisable only during
the period commencing the first day following the occurrence of a Change in
Control (as defined in each Stock Option Agreement) and terminating on the
expiration of ninety days after such date. In general, the term "Change in
Control" means the acquisition by any person of 20% or more of the voting power
of Ogden's outstanding securities, the approval by Ogden's
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<PAGE>
shareholders of an agreement to merge Ogden or to sell substantially all of its
assets or the occurrence of certain changes in the membership of the Ogden Board
of Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A loan was made by Ogden in 1989 to Lynde H. Coit, Senior Vice President and
General Counsel of Ogden, to assist Mr. Coit in the purchase of a home in
connection with his relocation. The loan is evidenced by a demand note, bearing
interest at the rate of 8% per annum and is secured by a second mortgage on the
premises. The maximum amount outstanding under the loan during 1997 was
$145,000. As of December 31, 1997, there was an outstanding balance of $145,000.
The maximum amount outstanding during 1997 pursuant to a loan made by OPI in
1990 to Bruce W. Stone, an Executive Officer of Ogden and Executive Vice
President and Managing Director of Ogden Energy, for the purposes of assisting
Mr. Stone in the purchase of his home was $91,260. The loan is evidenced by a
demand note bearing interest at the rate of 8% per annum. As of December 31,
1997 there was an outstanding balance of $88,483.
Robert E. Smith, an Ogden director, is counsel to the law firm of Rosenman &
Colin which was paid less than $120,000 for legal services rendered during 1997.
Consistent with the Board's policy concerning the termination of interlocking
relationships, Rosenman & Colin no longer provides services to Ogden and its
subsidiaries, except for the completion of any projects already in progress.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Ogden's
directors, executive officers and persons who beneficially own more than 10% of
any class of Ogden's equity securities ("Reporting Persons") to file certain
reports concerning their beneficial ownership and changes in their beneficial
ownership of Ogden's equity securities. Ogden believes that during fiscal 1997
all Reporting Persons complied with their Section 16(a) filing requirements,
except that one report covering a small purchase transaction was filed ten (10)
days late by Helmut Volcker, an Ogden Director.
OTHER MATTERS
Ogden has no knowledge of any matters to be presented to the meeting other
than those set forth above. The persons named in the accompanying form of proxy
will use their own discretion in voting with respect to any such matters.
Any proposals of shareholders to be presented at Ogden's Annual Meeting in
1999 must be received at Ogden's principal executive offices, Two Pennsylvania
Plaza, New York, New York 10121, Attn: Vice President and Secretary, not later
than December 16, 1998.
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[LOGO]
1998
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
. . . . . . . . . . . . .
. . . . . . . . . . . . .
THE ANNUAL MEETING OF
SHAREHOLDERS WILL BE HELD
AT
VILLAS OF GRAND CYPRESS,
ONE NORTH JACARANDA,
ORLANDO, FLORIDA
ON WEDNESDAY, MAY 20,
1998,
AT 9:00 A.M. (EASTERN
DAYLIGHT
SAVINGS TIME)
