<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-3122
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Ogden Corporation
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(Exact name of registrant as specified in its charter)
Delaware 13-5549268
- ------------------------------- --------------------------------
(State or other jurisdiction of I.R.S. Employer Identification
incorporation or organization) Number)
Two Pennsylvania Plaza, New York, New York 10121
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(Address or principal executive office) (Zip Code)
(212)-868-6100
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(Registrant's telephone number including area code)
Not Applicable
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(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the issuer's classes of common
stock, as of September 30, 1998; 49,219,307 shares of Common Stock, $.50 par
value per share.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE NINE MONTHS FOR THE THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
----------- ----------- ----------- -----------
(In Thousands of Dollars, Except per Share Data)
<S> <C> <C> <C> <C>
Service revenues ............ $ 839,654 $ 860,507 $ 292,399 $ 286,213
Net sales ................... 402,604 454,069 142,884 169,309
Construction revenues ....... 10,963 5,830
Net gain on disposition of
businesses .................. 45,222 26,969 7,055
----------- ----------- ----------- -----------
Total revenues ........... 1,298,443 1,341,545 441,113 462,577
----------- ----------- ----------- -----------
Operating costs and expenses 647,032 644,315 217,440 203,369
Costs of goods sold ......... 363,760 432,123 120,177 164,052
Construction costs .......... 9,764 5,118
Selling, administrative and
general expenses ............ 84,293 83,708 24,844 26,072
Debt service charges ........ 77,390 75,762 26,949 25,219
----------- ----------- ----------- -----------
Total costs and expenses . 1,182,239 1,235,908 394,528 418,712
----------- ----------- ----------- -----------
Consolidated operating income 116,204 105,637 46,585 43,865
Equity in net income of
investees and joint ventures 8,183 1,791 4,136 834
Interest income ............. 12,316 16,852 5,270 6,218
Interest expense ............ (25,018) (26,936) (8,123) (9,410)
Other income (deductions)-net 127 (453) (45) (47)
----------- ----------- ----------- -----------
Income before income taxes
and minority interests ...... 111,812 96,891 47,823 41,460
Income taxes ................ (42,488) (40,210) (18,172) (16,375)
Minority interests .......... (2,409) (1,290) (1,496) (480)
----------- ----------- ----------- -----------
Net income .................. $ 66,915 $ 55,391 $ 28,155 $ 24,605
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
BASIC EARNINGS PER SHARE .... $ 1.33 $ 1.11 $ .57 $ .49
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
DILUTED EARNINGS PER SHARE .. $ 1.30 $ 1.09 $ .55 $ .48
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
----------- -----------
(In Thousands of Dollars,
Except Per Share Amounts)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ..................... $ 353,669 $ 185,671
Restricted funds held in trust ................ 118,673 103,882
Receivables (less allowances: 1998,
$33,893 and 1997, $20,207) .................... 380,302 393,185
Inventories ................................... 32,958 34,235
Deferred income taxes ......................... 56,491 56,690
Other ......................................... 55,816 58,408
----------- -----------
Total current assets ........................ 997,909 832,071
Property, plant and equipment-net ............. 1,979,565 1,947,547
Restricted funds held in trust ................ 222,712 206,013
Unbilled service and other receivables
(less allowances: 1997, $3,000) ............... 174,227 174,962
Unamortized contract acquisition costs ........ 138,174 136,462
Goodwill and other intangible assets .......... 113,355 79,889
Other assets .................................. 348,388 262,351
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Total Assets .................................. $ 3,974,330 $ 3,639,295
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Current Liabilities:
Notes payable ................................. $ 24,374
Current portion of long-term debt ............. 33,517 $ 19,696
Current portion of project debt ............... 61,368 68,052
Dividends payable ............................. 15,415 15,721
Accounts payable .............................. 103,005 109,719
Federal and foreign income taxes payable ...... 23,755 1,913
Accrued expenses, etc ......................... 311,118 267,874
Deferred income ............................... 48,229 42,962
----------- -----------
Total current liabilities ................... 620,781 525,937
Long-term debt ................................ 389,766 354,032
Project debt .................................. 1,407,192 1,424,648
Deferred income taxes ......................... 379,129 383,341
Deferred income ............................... 204,263 20,313
Other liabilities ............................. 249,263 187,866
Minority interests ............................ 25,406 28,417
Convertible subordinated debentures ........... 148,650 148,650
----------- -----------
Total Liabilities ........................... 3,424,450 3,073,204
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Shareholders' Equity:
Serial cumulative convertible preferred
stock, par value $1.00 per share;
authorized 4,000,000 shares; shares
outstanding: 42,684 in 1998 and 44,346 in 1997;
net of treasury shares of 29,820 in 1998 and
1997, respectively ............................ 43 45
Common stock, par value $.50 per share;
authorized, 80,000,000 shares; shares
outstanding: 49,219,307 in 1998 and
50,295,123 in 1997, net of treasury
shares of 4,232,543 and 3,135,123 in
1998 and 1997, respectively ................... 24,609 25,147
Capital surplus ............................... 178,039 212,383
Earned surplus ................................ 363,308 343,237
Cumulative translation adjustment-net ......... (15,154) (13,862)
Pension liability adjustment .................. (324) (324)
Net unrealized loss on securities
available for sale ............................ (641) (535)
----------- -----------
Total Shareholders' Equity .................... 549,880 566,091
----------- -----------
Total Liabilities and Shareholders' Equity .... $ 3,974,330 $ 3,639,295
----------- -----------
----------- -----------
</TABLE>
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 1998 December 31, 1997
Shares Amounts Shares Amounts
---------- ----------- ---------- ----------
(In Thousands of Dollars, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Serial Cumulative Convertible Preferred
Stock, Par Value $1.00 Per Share;
Authorized 4,000,000 Shares:
Balance at beginning of period ........ 74,166 $ 75 77,509 $ 78
Shares converted into common stock .... (1,662) (2) (3,343) (3)
---------- ----------- ---------- ----------
Total ................................. 72,504 73 74,166 75
Treasury shares ....................... (29,820) (30) (29,820) (30)
---------- ----------- ---------- ----------
Balance at end of period (aggregate
involuntary liquidation value - 1998
$863,000).............................. 42,684 43 44,346 45
---------- ----------- ---------- ----------
Common Stock, Par Value $.50 Per Share;
Authorized, 80,000,000 Shares:
Balance at beginning of period ........ 53,430,246 26,715 53,350,650 26,675
Exercise of stock options ............. 11,680 6 59,640 30
Conversion of preferred shares ........ 9,924 5 19,956 10
---------- ----------- ---------- ----------
Total ................................. 53,451,850 26,726 53,430,246 26,715
---------- ----------- ---------- ----------
Treasury shares at beginning of period 3,135,123 1,568 3,606,123 1,803
Purchase of treasury shares ........... 1,824,100 912
Exercise of stock options ............. (726,680) (363) (471,000) (235)
---------- ----------- ---------- ----------
Treasury shares at end of period ...... 4,232,543 2,117 3,135,123 1,568
---------- ----------- ---------- ----------
Balance at end of period .............. 49,219,307 24,609 50,295,123 25,147
---------- ----------- ---------- ----------
Capital Surplus:
Balance at beginning of period ........ 212,383 202,162
Exercise of stock options ............. 13,663 10,228
Purchase of treasury shares ........... (48,004)
Conversion of preferred shares ........ (3) (7)
----------- ----------
Balance at end of period .............. 178,039 212,383
----------- ----------
Earned Surplus:
Balance at beginning of period ........ 343,237 330,302
Net income ............................ 66,915 75,673
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Total ................................. 410,152 405,975
----------- ----------
Preferred dividends-per share 1998,
$2.5128, 1997, $3.35 .................. 109 152
Common dividends-per share 1998, $.9375
1997, $1.25 .......................... 46,735 62,586
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Total dividends ....................... 46,844 62,738
----------- ----------
Balance at end of period ............ 363,308 343,237
----------- ----------
Cumulative Translation Adjustment-Net . (15,154) (13,862)
----------- ----------
Pension Liability Adjustment .......... (324) (324)
----------- ----------
Net Unrealized Loss on Securities
Available For Sale ................... (641) (535)
----------- ----------
TOTAL SHAREHOLDERS' EQUITY ............ $ 549,880 $ 566,091
----------- ----------
</TABLE>
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30
---------------------------
1998 1997
--------- ---------
(In Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ..................................... $ 66,915 $ 55,391
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization .................. 84,533 79,825
Deferred income taxes .......................... 17,862 17,704
Other .......................................... (36,751) (18,776)
Management of Operating Assets and Liabilities:
Decrease (increase) in Assets:
Receivables .................................... 852 100,385
Inventories .................................... 238 9,923
Other assets ................................... (27,172) (1,733)
Increase (Decrease) in Liabilities:
Accounts payable ............................... (16,876) 14,862
Accrued expenses ............................... 265 (54,417)
Deferred income ................................ 196,272 (1,193)
Other liabilities .............................. 19,087 (14,425)
--------- ---------
Net cash provided by operating activities ...... 305,225 187,546
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Entities purchased, net of cash acquired ....... (20,516) (20,000)
Proceeds from sale of businesses ............... 79,857 57,680
Proceeds from sale of property, plant
and equipment ................................. 1,029 4,137
Investments in Energy facilities ............... (15,991) (21,550)
Other capital expenditures ..................... (81,527) (52,967)
Decrease (increase) in other receivables ....... 5,124 (99,815)
Distributions from investees and joint ventures 6,058 43,975
Increase in investment in investees and joint
ventures ...................................... (45,127) (39,522)
--------- ---------
Net cash used in investing activities .......... (71,093) (128,062)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings for Energy facilities ............... 267,303
Other new debt ................................. 62,789 140,564
Increase in funds held in trust ................ 5,397 (20,014)
Payment of debt ................................ (315,302) (77,528)
Dividends paid ................................. (47,150) (46,880)
Purchase of treasury shares .................... (48,916)
Proceeds from exercise of stock options ........ 14,032 7,869
Other .......................................... (4,287) (4,085)
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Net cash used in financing activities .......... (66,134) (74)
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS ...... 167,998 59,410
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 185,671 140,824
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..... $ 353,669 $ 200,234
--------- ---------
--------- ---------
</TABLE>
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
SEPTEMBER 30, 1998
ITEM 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles. However, in the opinion of management,
all adjustments consisting of normal recurring accruals necessary for a fair
presentation of the operating results have been included in the statements.
The accompanying financial statements for prior periods have been reclassified
as to certain amounts to conform with the 1998 presentation.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Revenues and income from operations (expressed in thousands of dollars) by
segment for the nine months and the three months ended September 30, 1998 and
1997 were as follows:
Operations:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30 September 30
------------------------------- -------------------------------
Information Concerning
Business Segments 1998 1997 1998 1997
----------- ----------- ----------- -----------
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
Revenues:
Entertainment ...................... $ 385,507 $ 329,775 $ 167,475 $ 144,801
Aviation ........................... 254,496 288,503 55,993 93,955
Energy ............................. 585,228 516,725 195,775 174,916
Other .............................. 73,212 206,542 21,870 48,905
----------- ----------- ----------- -----------
Total Revenues ..................... $ 1,298,443 $ 1,341,545 $ 441,113 $ 462,577
----------- ----------- ----------- -----------
Income (Loss) from Operations:
Entertainment ...................... $ 28,840 $ 24,592 $ 14,024 $ 14,106
Aviation ........................... 47,106 26,013 9,613 9,464
Energy ............................. 69,323 70,067 30,726 29,575
Other .............................. (1,820) 584 (1,114) (4,323)
----------- ----------- ----------- -----------
Total Income from Operations ....... 143,449 121,256 53,249 48,822
Equity in net income (loss) of
investees and joint ventures:
Entertainment ...................... (1,280) (1,285) 1,156 (390)
Aviation ........................... (1,015) 2,301 1,249
782
Energy ............................. 10,478 642 1,731 442
Other .............................. 133
----------- ----------- ----------- -----------
Total .............................. 151,632 123,047 57,385 49,656
Corporate unallocated expenses - net (27,118) (16,072) (6,709) (5,004)
Corporate interest - net ........... (12,702) (10,084) (2,853) (3,192)
----------- ----------- ----------- -----------
Income Before Income Taxes
and Minority Interest ............. $ 111,812 $ 96,891 $ 47,823 $ 41,460
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
<PAGE>
OPERATIONS:
Revenues for the first nine months of 1998 were $43,100,000 lower than the
comparable period of 1997. This was due primarily to a decline of $133,300,000
in the Other segment chiefly associated with the sales of Facility Services New
York Operations in July 1997 and certain operations of Atlantic Design Company
(ADC), a contract manufacturing business in late 1997 and early 1998. The
Entertainment segment's revenues were $55,700,000 higher primarily reflecting
increased activity at certain sports venues, South America operations, the
partial start-up of Entertainment sites in Arizona, Texas and Florida, and the
acquisition of the Enchanted Castle in late 1997. The Aviation segment's
revenues were $34,000,000 lower primarily reflecting the sale of the domestic
catering operations in the second quarter of 1998, the sale of the Spanish
inflight catering business and certain ground services operations in 1997, and a
contract change in a ground service operation. These decreases in aviation
segment's revenues were partially offset by the gain on the sale of a 5%
interest in the Hong Kong ground service company. The Energy segment's revenues
were $68,500,000 higher primarily due to an increase in Independent Power
operations including the results of the acquisition in late 1997 of both Pacific
Energy and a 60% interest in four cogeneration plants in China and increased
production at the Edison Bataan facility; the buy-out of a Waste-to-Energy power
purchase contract; an increase in Environmental consulting and engineering
activity and increased construction revenues associated with retrofit activity
at several facilities.
Consolidated operating income for the first nine months of 1998 was $10,600,000
higher than the comparable period of 1997. The Entertainment segment's income
from operations was $4,300,000 higher primarily reflecting increased activity at
the World Trade Center, South America operations and certain sports venues, the
partial start up of Entertainment sites in Arizona, Texas and Florida. These
increases in Entertainment's income from operations were partially offset by
start up expenses at the Tinseltown operations and lower results at our Florida
Theme Park due to a decline in tourism in 1998. The Aviation segment's income
from operations was $21,100,000 higher primarily reflecting the gain on the sale
of the domestic inflight catering operations in June 1998, and the sale of a 5%
interest in the Hong Kong ground services company. These increases in Aviation's
income from operations in 1998 were offset in part by reduced European
operations including a provision for restructuring operations and certain legal
claims in 1998, and in part by the sale in 1997 of the Miami and Spanish
inflight catering business and certain ground services operations.
The Energy segment's income from operations was $800,000 lower primarily
reflecting an increase in Waste-to-Energy operations chiefly associated with
income from a contract termination agreement, the gain on the buy-out of a power
purchase contract and increased activity at two facilities partially offset by
the amortization of the prepayment of a power purchase agreement, decreased
operating results at a facility due to a service agreement adjustment, increased
maintenance costs at several facilities and legal settlements; Independent Power
income from operations was higher primarily associated with the acquisitions in
late 1997 of a 60% interest in four cogeneration plants in China, and Pacific
Energy and increased activity at the Edison Bataan facility, partially offset by
increased development costs and costs related to
<PAGE>
geothermal operations. These increases were more than offset by a decrease in
construction income reflecting the settlement in 1997 of a contract dispute and
a decrease in the Environmental income from operations chiefly associated with
the write off of uncollectible notes receivable, the settlement of a contract.
The Other segment's loss from operations was $2,400,000 lower chiefly associated
with the sale of a business and an investment in Universal Ogden in 1997.
Corporate unallocted expenses - net for the nine months ended September 30, 1998
increased $11,000,000 over the comparable period of 1997. This increase was
primarily due to restructuring costs, settlement of certain litigations and
proxy related charges.
Equity in net income of investees and joint ventures for the nine months ended
September 30, 1998 was $6,400,000 higher than the comparable period of 1997
chiefly associated with the results of Pacific Energy joint ventures which
included the buy-out of an energy sales agreement with respect to a 50% joint
venture, acquired in September 1997, and increased activity at several
Entertainment and Aviation joint ventures. These increases were partially offset
by start-up costs of the Bogota, Colombia operations as well as low activity in
Entertainment's Spanish theme park joint venture.
The Energy segment had three interest rate swap agreements entered into as
hedges against interest rate exposure on three series of adjustable rate project
debt that resulted in additional debt service costs of $847,000 and $328,000 for
the first nine months of 1998 and 1997, respectively.
Interest income for the first nine months of 1998 was $4,500,000 lower than the
comparable period of 1997 primarily reflecting the repayment of debt by
customers. Interest expense was $1,900,000 lower chiefly associated with reduced
borrowings and payments on outstanding debt, partially offset by increased
interest on notes issued in connection with the acquisition of Pacific Energy in
September 1997. Ogden has two interest rate swap agreements covering notional
amounts of $100,000,000 and $3,900,000, respectively. The first swap agreement
expires on December 16, 1998 and was entered into in order to convert Ogden's
fixed rate $100,000,000 9.25% debentures into variable rate debt. The second
swap agreement expires on November 30, 2000 and was entered into in order to
convert Ogden's $3,900,000 variable rate debt to a fixed rate. These agreements
resulted in additional interest expense of $194,000 and $133,000 for the first
nine months of 1998 and 1997, respectively.
The effective income tax rate for the first nine months of 1998 was 38% compared
with 42% for the comparable period of 1997. This decrease of 4% was chiefly
associated with higher foreign earnings in countries with lower income tax
rates, and non-conventional fuel tax credits generated by Pacific Energy.
Revenues for the three months ended September 30, 1998 were $21,500,000 lower
than the comparable period of 1997. The Entertainment segment's revenues were
$22,700,000 higher reflecting increased customer activity at sport venues and
amphitheaters and an increase in South American operations. The Aviation
segment's revenues were $38,000,000 lower primarily reflecting the sale of the
domestic inflight catering operations in June 1998. The Other segment's revenues
decreased $27,000,000 chiefly associated with the previous sale of certain
operations of ADC and Facility Services New York operations. The Energy
segment's revenues increased
<PAGE>
$20,900,000 primarily due to Independent Power operations including the results
of the acquisitions in late 1997 of both Pacific Energy and a 60% interest in
four cogeneration plants in China and increased production of the Edison Bataan
facility and increased construction activity.
Consolidated operating income for the three months ended September 30, 1998 was
$2,700,000 higher than the comparable period of 1997. The Entertainment
segment's income from operations was comparable with the prior period primarily
reflecting increased activity at several sports venues and amphitheaters and in
South American operations. These increases were offset by increased development
and overhead expenses, reduced activity at a Florida Theme Park location and the
gain on the cancellation of a contract in 1997. The Aviation segment's income
from operations was comparable with the prior period primarily reflecting
decreases due to the sale of the domestic catering business in the second
quarter of 1998 and the settlement of an insurance claim in 1997. These
decreases were offset by management fees in 1998 relating to the sale of the
catering operations. The Energy segment's income from operations was $1,200,000
higher primarily due to an increase in Independent Power operations primarily
reflecting companies acquired in 1997. This increase was partially offset by
reduced income relating to the amortization of a power purchase agreement
prepayment and increased maintenance costs at several facilities partially
offset by a payment on a contract termination; and lower construction income.
The Other segment's loss from operations decreased $3,200,000 chiefly associated
with the previous sale of ADC businesses. Unallocated corporate expenses for the
three months ended September 30, 1998 were $1,700,000 higher than the comparable
period of 1997 primarily due to severance costs.
Equity in net income of investees and joint ventures for the three months ended
September 30, 1998 was $3,300,000 higher than the comparable period of 1997
primarily reflecting an increase in Entertainment's Metropolitan Entertainment
joint venture, Energy's Pacific Energy joint ventures, and increased activity in
several Aviation joint ventures.
At September 30, 1998, the Energy segment had three interest rate swap
agreements which resulted in additional debt service expense of $492,000 and
$101,000 for the three months ended September 30, 1998 and 1997, respectively.
Interest income for the three months ended September 30, 1998 was $900,000 lower
than the comparable period of 1997, chiefly associated with the repayment of
debt by customers partially offset by higher average cash and cash equivalents.
Interest expense was $1,300,000 lower chiefly associated with reduced
borrowings. Ogden has two interest rate swap agreements which resulted in
additional interest expense of $4,000 and $56,000 for the three months ended
September 30, 1998 and 1997, respectively.
The effective income tax rate for the three months ended September 30, 1998 was
38% compared with 40% for the comparable period of 1997. This decrease of 2%
primarily reflects higher foreign earnings in countries with lower tax rates and
non-conventional fuel tax credits.
Capital Investments and Commitments: During the first nine months of 1998,
capital investments amounted to $97,500,000, of which $16,000,000, inclusive of
restricted funds transferred from
<PAGE>
funds held in trust, was for Energy facilities and $81,500,000 was for normal
replacement and growth in Entertainment ($44,800,000), Aviation ($27,600,000),
Energy ($7,900,000) and Other ($1,200,000) operations.
At September 30, 1998, capital commitments amounted to $100,300,000 which
included $62,400,000 for normal replacement, modernization and growth in
Entertainment ($49,600,000), Aviation ($2,900,000) and Energy ($9,700,000) and
Corporate ($200,000) operations. Also included was $37,900,000 for Energy's
coal-fired power project in The Philippines reflecting $18,500,000 for the
remaining mandatory equity contribution, $5,700,000 for contingent equity
contributions, and $13,700,000 for a standby letter of credit in support of debt
service reserve requirements. Funding for the remaining mandatory equity
contribution is being provided through a bank credit facility, which must be
repaid in December 2001. The Corporation also has a $21,000,000 equity
commitment in an Aviation investment in Argentina and a $11,400,000 contingent
equity commitment in an entertainment joint venture. In addition, compliance
with standards and guidelines under the Clean Air Act Amendments of 1990 will
require further Energy capital expenditures estimated at $25,000,000 by December
2000 subject to the final time schedules determined by the individual states in
which the Company's waste-to-energy facilities are located.
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. In
connection with certain contractual arrangements, Ogden has agreed to provide a
vendor with specified amounts of business over a three year period. If these
amounts are not provided, the corporation may be liable for prorated damages of
up to approximately $3,000,000. 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 Ogden entered into a 30-year facility management
contract, pursuant to which it agreed to advance funds to a customer, and if
necessary, to assist the customers' refinancing of senior secured debt incurred
in connection with the construction of the facility. During 1997, Ogden
purchased the customer's senior secured debt in the amount of $95,000,000, using
borrowed funds, which senior secured debt was subsequently sold and the borrowed
funds repaid. Ogden is obligated to repurchase such senior secured debt in the
amount of $97,050,000 on December 30, 2002, if the debt is not refinanced prior
to that time. Ogden's repurchase obligation is collateralized by bank letters of
credit. Ogden is also required to repurchase the outstanding amount of certain
subordinated secured debt of such customer on December 30, 2002. At September
30, 1998, the amount outstanding was $51,625,000. In addition, the Corporation
has guaranteed indebtedness of $19,333,000 of an affiliate and principal tenant
of this customers, which indebtedness is due in November 1998 and is in the
process of being refinanced by the customer. Ogden also has guaranteed
borrowings of a customer amounting to approximately $12,990,000 as well as
$12,748,000 of borrowings of a joint venture in which
<PAGE>
Ogden has an equity interest. Management does not expect that these arrangements
will have a material adverse effect on Ogden's Consolidated Financial
Statements.
Liquidity/Cash Flow - Net cash provided from operating activities was
$117,700,000 higher than the comparable period of 1997 primarily reflecting
an increase of $197,500,000 chiefly associated with the prepayment of a power
purchase agreement for the Haverhill waste-to-energy plant partially offset
by the collection in 1997 of $41,700,000 relating to certain legal
settlements; as well as the collection of receivables relating to businesses
sold. Net cash used in investing activities decreased $57,000,000 primarily
reflecting a net decrease in loans to customers of $104,900,000, and
increased proceeds from the sale of businesses of $22,100,000. These
decreases in net cash used in investing activities were partially offset by
increased capital expenditures of $23,000,000 primarily in the Entertainment
and Aviation segments, and increased net investments in joint ventures of
$43,500,000. Net cash used in financing activities was $66,100,000 higher
chiefly associated with a net reduction of $48,200,000 of debt and
$48,900,000 for the purchase of treasury shares. These increases of net cash
used in financing activities were partially offset by an increase of
$25,400,000 of funds held in trust and $6,200,000 increase in proceeds from
the exercise of stock options.
At September 30, 1998, the Corporation has $353,700,000 in cash and cash
equivalents and unused revolving credit lines of $200,000,000.
In 1998, Ogden's Board of Directors increased the authorization to purchase
shares of the Corporation's common stock up to a total of $200,000,000. From
January 1 through November 5, 1998, 1,899,100 shares of common stock were
purchased for $50,900,000.
YEAR 2000 Issues:
Background - The term `Year 2000 issue' generally refers to the problems that
may occur from the improper processing of date sensitive calculations, date
comparisons, and leap year determination by computers and other machinery
containing computer chips (i.e., "embedded systems"). In an effort to save
expensive memory and processing time, historically most of the world's computer
hardware and software used only two digits to identify the year in a date. If
not corrected or replaced, many systems will fail to distinguish between the
years `2000' and `1900' and will incorrectly process related date information.
State of Readiness - The Company has established a Year 2000 Project that is
actively addressing its Year 2000 issues. The project is comprised of four
phases: awareness, assessment, action, and anticipation. The awareness phase
included the education of the Company's board of directors, management, and
staff regarding the Year 2000 issue and the Company's strategy to address the
problem. The awareness phase of the project is completed. The objective of the
project's assessment phase is to inventory and assess the Year 2000 compliance
of the Company's internal information technology and embedded systems, as well
as to ascertain the compliance of the products and services provided to the
Company by third parties. The Company's internal assessment is largely
completed. The assessment of third-parties that the Company relies on for key
services and products is in progress. The assessment phase is expected to be
completed by the end of the first quarter of 1999, which is slightly behind the
original schedule. The Company's action phase includes the prioritization,
remediation, and testing of Year 2000 solutions. The Company has begun the
remediation of all its mission critical systems, through a series of projects
with completion dates between January 1997 and October 1999. Additional
corrective efforts will be initiated as assessments are finalized and the
related issues prioritized. The fourth phase of the
<PAGE>
Company's Year 2000 Project, the anticipation phase, includes the development
and implementation of contingency plans for key business functions that are in
jeopardy of not being thoroughly tested or Year 2000 compliant on a timely
basis. The anticipation phase of the project is scheduled to commence in the
first quarter of 1999 and is expected to continue throughout 1999.
The Company has made considerable progress towards Year 2000 compliance, as a
result of the Company's initiative to improve access to business information
through the implementation of common, integrated computing systems across the
operations of the Company. This initiative commenced in 1996, with the
replacement of the Company's domestic administrative systems with PeopleSoft
systems and the upgrade of associated infrastructure. The implementations of
these Year 2000 compliant systems are 70% completed, with all expected to be
achieved by the first Quarter of 1999. Additionally, efforts are in progress to
replace or upgrade the international administrative systems and a variety of key
operating systems. The Company has not deferred any specific information
technology project as a result of the implementation of the Year 2000 Project.
Costs - The total cost associated with resolving the Company's Year 2000 issues
is not expected to be material to the Company's financial condition. Based on
the assessments completed to date, the estimated costs of the Company's Year
2000 Project are $10,000,000. The estimated cost will be refined upon completion
of the Company's remaining Year 2000 systems' assessments. The Company is
implementing or upgrading a number of systems (e.g., PeopleSoft), as part of its
initiative to improve the Company's access to key business information. The
costs of implementing those systems are not included in these estimates.
Risks - The Company believes that the diversity of its business and the
implementation of its Year 2000 project will significantly reduce the
possibility of interruptions of normal operations. The Company believes by the
end of the first quarter of 1999, it will be able to fully determine its most
reasonably likely worst case scenarios. Based on the assessment efforts to date,
the Company does not believe that the Year 2000 issue will have a material
adverse effect on its financial condition . However, failing to resolve Year
2000 issues on a timely basis could have a material adverse effect on the
Company's operations, although it is not possible at this time to quantify the
amount of business that may be lost or the costs that may be incurred.
Contingency Plans - The Company's Year 2000 project strategy includes the
development of contingency plans for any business functions determined to be at
risk of being unable to remediate or properly test Year 2000 issues on a timely
basis. While the Company is not presently aware of any significant exposure that
its systems will not be properly remediated on a timely basis, there can be no
assurances that all Year 2000 remediation processes will be completed and
properly tested before the Year 2000, or that contingency plans will
sufficiently mitigate the risk of a Year 2000 compliance problem. The Company
expects to develop and implement contingency plans starting in the first quarter
of 1999. The Company's contingency planning process is an ongoing one which will
continue through 1999 as the Company obtains relevant Year 2000 compliance
information resulting from its internal remediation and testing efforts, as well
as from third parties.
<PAGE>
Any statements in this communication, including but not limited to the "Year
2000 Issue" discussion, which may be considered to be "forward looking
statements", as that term is defined in the Private Securities Litigation Reform
Act of 1995, are subject to certain risk and uncertainties. The factors that
could cause actual results to differ materially from those suggested by any such
statements include, but are not limited to, those discussed or identified from
time to time in the Corporation's public filings with the Securities and
Exchange Commission and more generally, general economic conditions, including
changes in interest rates and the performance of the financial markets; changes
in domestic and foreign laws, regulations, and taxes; changes in competition and
pricing environments; and regional or general changes in asset valuations.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Ogden Corporation and its subsidiaries (the "Company") are
parties 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, other than ordinary routine
litigation incidental to its business, the outcome of which would have a
material adverse effect on the Company on a consolidated basis.
(a) Environmental Matters
The Company conducts regular inquiries of its subsidiaries
regarding litigation and environmental violations which include determining the
nature, amount and likelihood of liability for any such claims, potential claims
or threatened litigation.
In the ordinary course of its business, the Company 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 a Company 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 the Company by
governmental authorities or private parties under these laws relate to alleged
technical violations of regulations, licenses, or permits pursuant to which a
subsidiary operates. The Company believes that such proceedings will not have a
material adverse effect on the Company's consolidated financial statements.
The Company'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 the Company operations are occasionally subject to proceedings and
orders pertaining to emissions into the environment and other environmental
violations, the Company believes that it is in substantial compliance with
existing environmental laws and regulations.
In connection with certain previously divested operations, the
Company may be identified, along with other entities, as being among potentially
responsible parties responsible for contribution for costs associated with the
correction and remediation of environmental conditions at various hazardous
waste disposal sites subject to CERCLA. In certain instances the Company may be
exposed to joint and several liability for remedial action or damages. The
Company's ultimate liability in connection with such environmental claims will
depend on many factors, including its volumetric share of waste, the total cost
of remediation, the financial viability of other companies that also sent waste
to a given site and its contractual arrangement with the purchaser of such
operations.
II-1
<PAGE>
The potential costs related to such matters and the possible
impact on future operations are uncertain due in part to the complexity of
government laws and regulations and their interpretations, the varying costs and
effectiveness of cleanup technologies, the uncertain level of insurance or other
types of recovery, and the questionable level of the Company's responsibility.
Although the ultimate outcome and expense of environmental remediation is
uncertain, the Company believes that required remediation and continuing
compliance with environmental laws will not have a material adverse effect on
the Company's consolidated financial statements.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
2 Plan 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 Corporation
sub. and Ogden Projects, Inc., dated as of September
27, 1994.*
3 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 April 8, 1998.*
4 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
II-2
<PAGE>
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 Material Contracts
10.1 (a) U.S. $95 million Term Loan and Letter of Credit
and Reimbursement Agreement among Ogden, the Deutsche
Bank AG, New York Branch and the signatory Banks
thereto, dated March 26, 1997.*
(b) Ogden $200 million Credit Agreement by and
among Ogden, The Bank of New York, as Agent
and the signatory Lenders thereto dated as
of June 30, 1997.*
10.6 Rights Agreement between Ogden Corporation and
Manufacturers Hanover Trust Company, dated as of
September 20, 1990.*.
10.7 Executive Compensation Plans and Agreements.
(a) Ogden Corporation 1990 Stock Option Plan.*
i. Ogden Corporation 1990 Stock Option
Plan as Amended and Restated as of
January 19, 1994.*
ii. Amendment adopted and effective as
of September 18, 1997.*
(b) Ogden Services Corporation Executive Pension
Plan.*
(c) Ogden Services Corporation Select Savings
Plan.*
i. Ogden Services Corporation Select
Savings Plan Amendment and
Restatement as of January 1, 1995.*
ii. Amendment Number One to the Ogden
Services Corporation Select Savings
Plan as amended and restated
January 1, 1995, effective January
1, 1998.*
(d) Ogden Services Corporation Select Savings
Plan Trust.*
i. Ogden Services Corporation Select
Savings Plan Trust Amendment and
Restatement as of January 1, 1995.*
II-3
<PAGE>
(e) Ogden Services Corporation Executive Pension
Plan Trust.*
(f) Changes effected to the Ogden Profit Sharing
Plan effective January 1, 1990.*
(g) 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.*
(h) Ogden Corporation Core Executive Benefit
Program.*
(i) Ogden Projects Pension Plan.*
(j) Ogden Projects Profit Sharing Plan.*
(k) Ogden Projects Supplemental Pension and
Profit Sharing Plans.*
(l) Ogden Projects Core Executive Benefit
Program.*
(m) 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
Profit Sharing Plan effective as of
January 1, 1994.*
ii. Form of amended Ogden Projects
Pension Plan, effective as of
January 1, 1994.*
(n) Ogden Corporation CEO Formula Bonus Plan.*
(o) Ogden Key Management Incentive Plan.*
10.8 Employment Agreements
(a) Employment Letter Agreement between Ogden
Corporation and Lynde H. Coit, Senior Vice
President and General Counsel, dated January
30, 1990.*
II-4
<PAGE>
(b) Employment Agreement between R. Richard
Ablon, President, Chairman and C.E.O., and
Ogden dated as of January 1, 1998.*
(c) Separation Agreement between Ogden and
Philip G. Husby, Senior Vice President and
C.F.O., dated as of September 17, 1998.
(d) Employment Agreement between Ogden
Corporation and Ogden's Chief Accounting
Officer dated as of December 18, 1991.*
(e) Employment Agreement between Scott G.
Mackin, Executive Vice President and Ogden
Corporation dated as of October 1, 1998.
(f) Employment Agreement between Ogden
Corporation and David L. Hahn, Senior Vice
President - Aviation, dated December 1,
1995.*
i. Letter Amendment to Employment
Agreement between Ogden Corporation
and David L. Hahn, Senior Vice
President - Aviation effective as
of October 1, 1998.
(g) Employment Agreement between Ogden
Corporation and Rodrigo Arboleda, Senior
Vice President dated January 1, 1997.*
i. Letter Amendment to Employment
Agreement between Ogden Corporation
and Rodrigo Arboleda, Senior Vice
President, effective as of
October 1, 1998.
(h) Employment Agreement between Ogden Projects,
Inc. and Bruce W. Stone, dated June 1,
1990.*
(i) Employment Agreement between Ogden
Corporation and Quintin G. Marshall, Senior
Vice President - Corporate Development,
dated October 30, 1996.*
i. Letter Amendment to Employment
Agreement between Ogden Corporation
and Quintin G. Marshall, Senior
Vice President--Corporate
Development, effective as of
October 1, 1998.
II-5
<PAGE>
(j) Employment Agreements between Ogden and
Jesus Sainz, Executive Vice President,
effective as of January 1, 1998.*
i. Letter Amendment to Employment
Agreement between Ogden Corporation
and Jesus Sainz, Executive Vice
President, effective as of October
1, 1998.
(k) Employment Agreement between Alane
Baranello, Vice President - Human Resources,
and Ogden Services Corporation dated October
28, 1996.*
i. Letter Amendment to Employment
Agreement between Ogden Corporation
and Alane Baranello, Vice President
- Human Resources, dated as of
October 13, 1998.
(l) Employment Agreement between Peter Allen,
Senior Vice President, and Ogden Corporation
dated July 1, 1998.*
(m) Employment Agreement between Ogden
Corporation and Raymond E. Dombrowski, Jr.,
Senior Vice President and C.F.O., dated as
of September 21, 1998.
10.9 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.*
10.10 Ogden Corporation Guaranty Agreement made as of
January 30, 1992 by Ogden Corporation for the benefit
of Allstate Insurance Company and Ogden Martin
Systems of Huntington Resource Recovery Nine Corp.*
11 Detail of Computation of Earnings applicable to
Common Stock.
27 Financial Data Schedule (EDGAR Filing Only).
* Incorporated by reference as set forth in the Exhibit Index of this
Form 10-Q.
(b) Reports on Form 8-K There were no Form 8-K Current Reports
filed during the Third Quarter of 1998.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized.
OGDEN CORPORATION
(Registrant)
Date: November 16, 1998 By /s/ Raymond E. Dombrowski, Jr.
-------------------------------
Raymond E. Dombrowski, Jr.
Senior Vice President
and Chief Financial
Officer
Date: November 16, 1998 By/s/ Robert M. DiGia
-------------------------------
Robert M. DiGia
Vice President,
Controller and Chief
Accounting Officer
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
- ------- ------------------------ --------------------
<S> <C> <C>
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 By-Laws as amended. Filed as Exhibit 3.2 to Ogden's Form
10-Q for the quarterly period ended
March 31, 1998 and incorporated
herein by reference.
4 Instruments Defining Rights of
Security Holders.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
- ------- ------------------------ --------------------
<S> <C> <C>
4.1 Fiscal Agency Agreement between Filed as Exhibits (C)(3) and
Ogden and Bankers Trust Company, (C)(4) to Ogden's Form 8-K
dated as of June 1, 1987 and filed with the Securities and
Offering Memorandum dated June Exchange Commission on July 7,
12, 1987, relating to U.S. 1987 and incorporated herein
$85 million Ogden 6% Convertible by reference.
Subordinated Debentures, Due 2002.
4.2 Fiscal Agency Agreement between Filed as Exhibit (4)to Ogden's
Ogden and Bankers Trust Company, Form S-3 Registration Statement
dated as of October 15, 1987, filed with the Securities and
and Offering Memorandum, dated Exchange Commission on December
October 15, 1987, relating to 4, 1987, Registration No.
U.S. $75 million Ogden 5-3/4% 33-18875, and incorporated
Convertible Subordinated herein by reference.
Debentures, Due 2002.
4.3 Indenture dated as of March 1, Filed as Exhibit (4)(C) to
1992 from Ogden Corporation to Ogden's Form 10-K for fiscal
The Bank of New York, Trustee, year ended December 31, 1991,
relating to Ogden's $100 million and incorporated herein by
debt offering. reference.
10 Material Contracts
10.1(a) U.S. $95 million Term Loan and Letter Filed as Exhibit 10.6 to Ogden's
of Credit and Reimbursement Agreement Form 10-Q for the quarterly period
among Ogden, the Deutsche Bank AG, ended March 31, 1997 and
New York Branch and the signatory incorporated herein by reference.
Banks thereto, dated March 26, 1997.
10.1(b) $200 million Credit Agreement among Filed as Exhibit 10.1(i) to Ogden's
Ogden, The Bank of New York as Agent Form 10-Q for the quarterly period
and the signatory Lenders thereto, dated ended June 30, 1997 and
as of June 30, 1997. incorporated herein by reference.
10.6 Rights Agreement between Ogden Filed as Exhibit (10)(h) to Ogden's
Corporation and Manufacturers Hanover Form 10-K for the fiscal year ended
Trust Company, dated as of September December 31, 1990 and incorporated
20, 1990 and amended August 15, 1995 herein by reference.
to provide The Bank of New York as
successor agent.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
10.7 Executive Compensation Plans.
(a) Ogden Corporation 1990 Stock Filed as Exhibit (10)(j) to Ogden Form
Option Plan. 10-K for the fiscal year ended December
31, 1990 and incorporated herein by
reference.
i. Ogden Corporation Filed as Exhibit 10.6(b)(i) to Ogden's
1990 Stock Form 10-Q for the quarterly period ended
Option Plan as September 30, 1994 and incorporated herein
Amended and by reference.
Restated as of
January 19, 1994.
ii. Amendment adopted Filed as Exhibit 10.7(a)(ii) to Ogden's
and effective as of Form 10-K for fiscal period ended December
September 18, 1997. 31, 1997 and incorporated herein by
reference.
(b) Ogden Services Corporation Filed as Exhibit (10)(k) to Ogden's Form
Executive Pension Plan. 10-K for the fiscal year ended December
31, 1990 and incorporated herein by
reference.
(c) Ogden Services Corporation Filed as Exhibit (10)(l) to Ogden Form
Select Savings Plan. 10-K for the fiscal year ended December
31, 1990 and incorporated herein by
reference.
(i) Ogden Services Filed as Exhibit 10.7(d)(I) to Ogden's
Corporation Form 10-K for the fiscal year ended
Select Savings December 31, 1994 and incorporated herein
Plan Amendment by reference.
and Restatement
as of January 1,
1995.
(ii) Amendment Number Filed as Exhibit 10.7(c)(ii) to Ogden's
One to the Ogden Form 10-K for the fiscal year ended
Services Corporation December 31, 1997 and incorporated herein
Select Savings by reference.
Plan as Amended
and Restated
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
January 1, 1995,
effective January 1,
1998.
(d) Ogden Services Corporation Filed as Exhibit (10)(m) to Ogden's Form
Select Savings Plan Trust. 10-K for the fiscal year ended December
31, 1990 and incorporated herein by reference.
i. Ogden Services Filed as Exhibit 10.7(e)(i) to Ogden's
Corporation Select Form 10-K for the fiscal year ended
Savings Plan Trust December 31, 1994 and incorporated herein
Amendment and by reference.
Restatement as of
January 1, 1995.
(e) Ogden Services Corporation Filed as Exhibit (10)(n) to Ogden's Form
Executive Pension Plan Trust. 10-K for the fiscal year ended December
31, 1990 and incorporated herein by
reference.
(f) Changes effected to the Ogden Filed as Exhibit (10)(o) to Ogden's Form
Profit Sharing Plan effective 10-K for the fiscal year ended December
January 1, 1990. 31, 1990 and incorporated herein by
reference.
(g) Ogden Corporation Profit Filed as Exhibit 10.8(p) to Ogden's Form
Sharing Plan. 10-K for fiscal year ended December 31,
1992 and incorporated herein by reference.
(i) Ogden Profit Sharing Filed as Exhibit 10.8(p)(i) to Ogden's
Plan as amended and Form 10-K for fiscal year ended December
restated January 1, 31, 1993 and incorporated herein by
1991 and as in reference.
effect through
January 1, 1993.
(ii) Ogden Profit Sharing Filed as Exhibit 10.7(p)(ii) to Ogden's
Plan as amended and Form 10-K for fiscal year ended December
restated effective as 31, 1994 and incorporated herein by
of January 1, 1995. reference.
(h) Ogden Corporation Core Filed as Exhibit 10.8(q) to Ogden's Form
Executive Benefit Program. 10-K for fiscal year ended December 31,
1992 and incorporated
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
herein by reference.
(i) 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.
(j) Ogden Projects Profit Sharing Filed as Exhibit 10.8(s) to Ogden's
Plan. Form 10-K for fiscal year ended
December 31, 1992 and incorporated
herein by reference.
(k) Ogden Projects Supplemental Filed as Exhibit 10.8(t) to Ogden's Form
Pension and Profit Sharing 10-K for fiscal year ended December 31,
Plans. 1992 and incorporated herein by reference.
(l) Ogden Projects Core Executive Filed as Exhibit 10.8(v) to Ogden's Form
Benefit Program. 10-K for fiscal year ended December 31,
1992 and incorporated herein by reference.
(m) Form of amendments to the Filed as Exhibit 10.8(w) to Ogden's Form
Ogden Projects, Inc. Pension 10-K for fiscal year ended December 31,
Plan and Profit Sharing Plans 1993 and incorporated herein by reference.
effective as of January 1, 1994.
(i) Form of amended Filed as Exhibit 10.7(w)(i) to Ogden's
Ogden Projects Form 10-K for fiscal year ended December
Profit Sharing Plan 31, 1994 and incorporated herein by
effective as of reference.
January 1, 1994.
(ii) Form of amended Filed as Exhibit 10.7(w)(ii) to Ogden's
Ogden Projects Form 10-K for fiscal year ended December
Pension Plan, 31, 1994 and incorporated herein by
effective as of reference.
January 1, 1994.
(n) Ogden Corporation CEO Formula Filed as Exhibit 10.6(w) to Ogden's Form
Bonus Plan. 10-Q for the quarterly period ended
September 30, 1994 and incorporated herein
by reference.
(o) Ogden Key Management Filed as Exhibit 10.7(p) to Ogden's Form
Incentive Plan. 10-K for the fiscal year ended December
31, 1997 and incorporated herein by
reference.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
10.8 Employment Agreements
(a) Employment Letter Agreement Filed as Exhibit (10)(p) to Ogden's Form
between Ogden Corporation 10-K for the fiscal year ended December
and Lynde H. Coit, Senior Vice 31, 1990 and incorporated herein by
President and General Counsel reference.
dated January 30, 1990.
(b) Employment Agreement between Filed as Exhibit 10.3(h) to Ogden's Form 10-Q
R. Richard Ablon and Ogden for the quarterly period ended June 30,
dated as of January 1, 1998. 1998 and incorporated herein by
reference.
(c) Separation Agreement between Transmitted herewith as Exhibit 10.8(c).
Ogden Corporation and Philip
G. Husby, Senior Vice
President and C.F.O., dated
as of September 17, 1998.
(d) Employment Agreement between Filed as Exhibit 10.2(q) to Ogden's Form 10-K
Ogden Corporation and Ogden's for fiscal year ended December 31,
Chief Accounting Officer 1991 and incorporated herein by reference.
dated as of December 18, 1991.
(e) Employment Agreement between Transmitted herewith as Exhibit 10.8(e).
Scott G. Mackin, Executive Vice
President, and Ogden Corporation
dated as of October 1, 1998.
(f) Employment Agreement Filed as Exhibit 10.8(i) to Ogden's Form
between Ogden Corporation 10-K for fiscal year ended December 31,
and David L. Hahn, Senior 1995 and incorporated herein by reference.
Vice President - Aviation,
dated December 1, 1995.
i. Letter Amendment to Transmitted herewith as Exhibit 10.8(f)(i).
Employment Agreement
between Ogden Corporation
and David L. Hahn,
effective as of October 1,
1998.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
(g) Employment Agreement between Filed as Exhibit 10.8(j) to Ogden's Form
Ogden Corporation and Rodrigo 10-K for fiscal year ended December 31,
Arboleda, Senior Vice 1996 and incorporated herein by reference.
President dated January 1, 1997.
i. Letter Amendment to Transmitted herewith as Exhibit 10.8(g)(i).
Employment Agreement
between Ogden Corporation
and Rodrigo Arboleda,
Senior Vice President,
effective as of October
1, 1998.
(h) Employment Agreement between Filed as Exhibit 10.8(k) to Ogden's Form 10-K
Ogden Projects, Inc. and for fiscal year ended December 31,
Bruce W. Stone, dated June 1, 1996 and incorporated herein by reference.
1990.
(i) Employment Agreement between Filed as Exhibit 10.8(l) to Ogden's Form
Ogden Corporation and Quintin 10-K for fiscal year ended December 31,
G. Marshall, Senior Vice 1996 and incorporated herein by reference.
President dated October 30,
1996.
i. Letter Amendment to Transmitted herewith as Exhibit 10.8(i)(i).
Employment Agreement
between Ogden Corporation
and Quintin G. Marshall,
Senior Vice President -
Corporate Development
effective as of October 1,
1998.
(j) Employment Agreements between Filed as Exhibit 10.8(m) to Ogden's Form
Ogden and Jesus Sainz, 10-K for the fiscal year ended December
Executive Vice President, 31, 1997 and incorporated herein by
effective as of January 1, reference.
1998.
i. Letter Amendment to Transmitted herewith as Exhibit 10.8(j)(i).
Employment Agreement
between Ogden Corporation
and Jesus Sainz, Executive
Vice President, effective
as of October 1, 1998.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
(k) Employment Agreement between Filed as Exhibit 10.3(m) to Ogden's Form
Alane Baranello, Vice 10-Q for the quarterly period ended June
President - Human Resources 30, 1998 and incorporated herein by
and Ogden Services reference.
Corporation dated October 28,
1996.
i. Letter Amendment to Transmitted herewith as Exhibit 10.8(k)(i).
Employment Agreement
between Ogden Corporation
and Alane Baranello, Vice
President - Human
Resources, dated as of
October 13, 1998.
(l) Employment Agreement between Filed herewith as Exhibit 10.3(M)(1) to
Peter Allen, Senior Vice Ogden's Form 10-Q for the quarterly ended
President, and Ogden June 30, 1998 incorporated herein by
Corporation dated July 1, reference.
1998.
(m) Employment Agreement Transmitted herewith as Exhibit 10.8(M).
between Ogden Corporation and
Raymond E. Dombrowski, Jr.,
Senior Vice President and
C.F.O., dated as of
September 21, 1998.
10.9 First Amended and Restated Ogden Filed as Exhibit 10.3(b)(i) to Ogden's
Corporation Guaranty Agreement made as Form 10-K for fiscal year ended December
of January 30, 1992 by Ogden 31, 1991 and incorporated herein by
Corporation for the benefit of Mission reference.
Funding Zeta and Pitney Bowes Credit.
10.10 Ogden Corporation Guaranty Agreement Filed as Exhibit 10.3(b)(iii) to Ogden's
made as of January 30,1992 by Ogden Form 10-K for fiscal year ended December
Corporation for the benefit of 31, 1991 and incorporated herein by
Allstate Insurance Company and Ogden reference.
Martin Systems of Huntington Resource
Recovery Nine Corp.
11 Ogden Corporation and Subsidiaries Transmitted herewith as Exhibit 11.
Detail of Computation of Earnings
Applicable to Common Stock.
27 Financial Data Schedule. Transmitted herewith as Exhibit 27.
</TABLE>
<PAGE>
Exhibit 10.8(c)
SEPARATION AGREEMENT
OGDEN CORPORATION (the "Company"), and PHILIP G. HUSBY (the "Executive") agree
to enter into this SEPARATION AGREEMENT dated as of the 17th day of September,
1998 as follows:
1. Resignation from Offices and Directorships.
Executive hereby tenders, and the Company accepts, his resignation from all his
positions as an officer of the Company and of any of the Company's direct or
indirect subsidiaries or affiliates, as a director of any of the Company's
direct or indirect subsidiaries or affiliates, and as member of any of the
Company's committees, effective as of September 17, 1998 (the "Resignation
Date"). Executive agrees that his employment with the Company and the Company's
direct or indirect subsidiaries or affiliates will terminate as of the
Resignation Date.
2. Cooperation.
During the period from the Resignation Date until December 31, 1998, Executive
agrees to make himself reasonably available to assist his successor and
cooperate with the Company in effecting a smooth transition of the management
with respect to the duties and responsibilities which Executive performed for
the Company and its direct and indirect subsidiaries and affiliates. Such
assistance is to be rendered at the mutual convenience of the parties.
Notwithstanding the foregoing, the Company expressly acknowledges and agrees
that nothing contained in this Agreement or any other agreement between the
parties shall restrict Executive from seeking, obtaining or commencing
employment with another company as of the Resignation Date.
3. Termination of Employment Agreement.
The parties agree that the Employment Agreement between Executive and the
Company dated July 2, 1990 (the "Employment Agreement") will terminate as of the
date of this Agreement, and shall be null and void and of no further force and
effect and neither party shall have any further obligation to the other pursuant
to the Employment Agreement, except as otherwise specifically provided in this
Separation Agreement. Executive relinquishes and forever waives any and all
rights in or claims that he now has or may have under the Employment Agreement.
Executive represents that with the termination of the Employment Agreement he
has no other present or future contract or agreement of employment with the
Company, whether written or oral, express or implied.
4. Separation Benefits.
In consideration for Executive's execution of this Separation Agreement and
compliance with the terms and conditions contained herein, the Company shall
provide Executive with the benefits described below:
<PAGE>
(a) Compensation and Benefits Through December 31,1998. During the period
beginning on the Resignation Date and ending on December 31, 1998, the
Company shall continue to provide Executive with compensation and
benefits at the same level as was in effect immediately prior to the
date of this Agreement, provided that (i) Executive will not be
entitled to receive any bonus payment for fiscal year 1998 and (ii)
Executive will not be eligible for any cash distributions under the
profit sharing plan. During such period, Executive also will continue
to be entitled to use Company-provided business equipment and devices,
including, but not limited to, e-mail, voicemail, computer equipment,
and facsimile machines. In addition, Executive will continue to be
entitled to use the company-provided telephone credit card until the
end of such period and VTS travel services, provided that costs, unless
for travel on behalf of the Company, will be paid by Executive.
(b) Salary Continuation. The Company shall pay Executive an amount equal to
his base salary at the rate of $312,000.00 per year which would have been
payable to him during the period beginning on January 1, 1999 and ending
on June 30, 2002. Payments will be made at the same time and in the same
manner as such base salary would have been paid if Executive had remained
employed until June 30, 2002, unless Executive elects to accelerate the
remaining payments in accordance with Section 4(k) below.
(c) Additional Payments. The Company shall pay Executive the gross amount of
$822,500.00, reduced by federal, state and local withholding taxes. The
amount payable under this Section 4(c) is calculated as 3.5 times
$235,000.00, which amount is equal to the annual incentive bonus paid in
1998 to Executive for fiscal year 1997. Such gross amount shall be payable
in four installments as follows unless Executive elects to accelerate the
remaining payments in accordance with Section 4(k) below: (i) $235,000.00
payable on January 15, 1999; (ii) $235,000.00 payable on January 15, 2000;
(iii) $235,000.00 payable on January 15, 2001; and (iv) $117,500.00
payable on January 15, 2002.
(d) Payment in lieu of 401(k) Plan Participation. The Company shall pay
Executive the gross amount of $19,200.00, reduced by applicable federal,
state and local withholding taxes. The amount payable under this Section
4(d) is equal to 4 times $4,800.00, the maximum amount of the company
matching contributions which can be allocated to his account under the
Ogden 401(k) Plan for the 1998 plan year. Such amount shall be paid in a
single lump sum cash payment on January 15, 1999.
(e) Medical and Dental Benefits. The Company will continue for Executive, his
spouse, and his eligible dependent children (as defined as dependents
under the relevant plans, programs or arrangements), all medical, dental,
and prescription drug, plans, programs or arrangements, whether group or
individual, in which Executive was participating immediately prior to the
Resignation Date, as follows:
(i) The Company will provide such continued medical, dental, and
prescription drug coverage until the earliest of (A) June 30,
2002, (B) Executive's death (provided that benefits payable to
his spouse and dependents shall not terminate upon his death),
or (C) with respect to any particular benefit coverage, the
date Executive first becomes eligible for such particular
coverage offered by a subsequent employer. Executive's
<PAGE>
cost for such coverage will be the same as the cost charged
to senior executives of the Company who are provided with
similar coverages.
(ii) Upon Executive's death, his surviving spouse, and any eligible
dependent children shall have the right to continue the
medical, dental, and prescription drug coverages in effect on
the date of his death until the earlier of June 30, 2002 or
the date his surviving spouse becomes eligible for other
employer-provided group health coverage. The cost for such
continued coverage will be the same as the cost charged to
senior executives of the Company who are provided with similar
coverages for spouses and dependent children.
(iii) The Company reserves the right to change, modify, or
discontinue medical, dental, and prescription drug, plans,
programs or arrangements on a consistent and
non-discriminatory basis applicable to all senior executives.
In such case, Executive shall have the right to participate in
any successor plan, program or arrangement. In the event that
Executive's participation in any such plan, program, or
arrangement of the Company is prohibited, the Company will
arrange to provide Executive with benefits substantially
similar to those provided under such plan, program, or
arrangement. The cost for such continued coverage will be the
same as the cost charged to senior executives of the Company
who are provided with similar coverages.
(iv) At the end of the continued coverage period, Executive, his
spouse, and dependents, if then eligible, may elect to
continue such coverages at Executive's expense in accordance
with the group health continuation requirements of COBRA.
(f) Life Insurance. Subject to Executive's provision of satisfactory
evidence of insurability for Executive and his spouse pursuant to the
same standard of insurability applicable to senior executives eligible
for such coverage, the Company completely at its expense will continue
for Executive, his spouse, and his dependents, all life insurance
plans, programs or arrangements, whether group or individual, in which
Executive was participating immediately prior to the Resignation Date.
Such coverage shall remain in effect until the earliest of (A) June 30,
2002, (B) Executive's death, or (C) the date Executive first becomes
eligible for life insurance coverage offered by a subsequent employer.
The Company reserves the right to change, modify, or discontinue such
plans, programs or arrangements on a consistent and non-discriminatory
basis applicable to all senior executives. In the event that
Executive's participation in any such plan, program, or arrangement of
the Company is prohibited, the Company will arrange to provide
Executive with benefits substantially similar to those provided under
such plan, program, or arrangement. The cost for such continued
coverage will be the same as the cost charged to senior executives of
the Company who are provided with similar coverages.
(g) Ogden Executive Pension Plan. Executive may elect to have payment of
his pension benefit under the Ogden Executive Pension Plan as of any of
the following dates (1) January 15, 1999; (2) the date on which
accelerated payment of Executive's salary continuation is made pursuant
to Executive's acceleration election under Section 4(k) in connection
with Executive's commencement of new employment or a change in control;
or (3) June 30, 2002.
<PAGE>
Executive's pension benefit shall be determined as follows:
(i) In the event that Executive elects to have payment made on
January 15, 1999, the amount of pension benefit shall be
determined in accordance with the terms of the Executive
Pension Plan as in effect on the Resignation Date as if he had
continued in active employment until December 31, 1998 and had
continued to accrue credited service until December 31, 1998.
(ii) If Executive elects to receive accelerated payment of his
salary continuation pursuant to Section 4(k), then Executive's
accrual of credited service will be determined as follows:
(A) if Executive's acceleration election is made in
connection with new employment, the accrual of
credited service will end as of the date on which
accelerated payment of Executive's salary
continuation is made regardless of whether Executive
elects to defer payment of the pension benefit; and
(B) if Executive's acceleration election is made in
connection with a Change in Control (as defined in
Appendix A attached hereto), the accrual of credited
service will continue until June 30, 2002 regardless
of when Executive elects to receive payment of the
pension benefit.
(ii) If Executive does not elect accelerated payment of his salary
continuation, Executive will accrue credited service until
June 30, 2002.
(iii) The pension benefit shall be computed by including the payment
made pursuant to Section 4(b) and (c) above.
(v) The calculation of the amount of pension benefits payable
under this Section 4(g) will be made by the Hewitt Associates,
the actuaries for the Company's tax-qualified defined benefit
retirement plan.
(h) Ogden Select Plan. For purposes of the Ogden Select Plan, Executive
will be considered to have terminated employment on the date on which
the Company makes the final salary continuation payment under Section
4(b) above.
(i) Stock Options. Stock options granted to Executive under the Ogden
Corporation Stock Option Plan shall be treated as follows:
(i) Such options shall continue to vest during the period from the
Resignation Date until the date on which the Company makes the
final salary continuation payment under Section 4(b) above;
and
(ii) Each such option shall continue to be exercisable by Executive
until the earlier of (A) the last day of the one-year period
beginning on the date on which the Company makes
<PAGE>
the final salary continuation payment under Section 4(b) above
or (B) the date any such option expires by its terms.
(j) Outplacement Services. The Company at its expense will provide
Executive with executive-level outplacement services during the
18-month period beginning on the date of this Separation Agreement at
an agency selected by the Company and accepted by Executive.
(k) Acceleration of Payment. In the event that (i) Executive commences
employment with a new employer or becomes self-employed on a bona fide
basis as part of either a corporate entity or partnership or (ii) a
"Change in Control" of the Company (as defined in Appendix A of this
Separation Agreement) occurs, then the Executive may elect to have the
remaining balance of any amounts payable to Executive under Section
4(b) and 4(c) and his pension benefit under 4(g) above shall be paid to
Executive in a single lump sum within 15 business days after Executive
notifies the Company that he has commenced new employment or becomes
self-employed or the date of such Change in Control, as applicable.
5. Expenses.
The Company shall promptly reimburse Executive for all outstanding but
unpaid business expenses incurred by Executive prior to the Resignation
Date.
6. Death or Total Disability.
In the event of Executive's death or total disability (within the meaning of the
Company's long-term disability benefits plan), at any time, Executive (or
Executive's estate, designated beneficiary, or legal representative) will
continue to be entitled to the compensation and benefits described in Section 4
of this Separation Agreement.
7. General Release of Claims Against the Company and Other Released Parties.
Executive knowingly and voluntarily releases and forever discharges the Company
and any and all of the Company's partners, affiliates, owners, agents, officers,
directors, employees, successors and assigns, and all related persons,
individually and in their official capacities (hereinafter collectively referred
to as the "Released Parties"), of and from any and all claims, known and
unknown, that Executive, his heirs, executors, administrators, successors, and
assigns, have or may have as of the date of execution of this Separation
Agreement, including, but not limited to, any alleged violation of:
X The National Labor Relations Act;
X Title VII of the Civil Rights Act of 1964;
X Sections 1981 through 1988 of Title 42 of the United States
Code;
X The Employee Retirement Income Security Act of 1974;
X The Age Discrimination in Employment Act of 1967;
X The Immigration Reform and Control Act;
X The Americans with Disabilities Act of 1990;
X The Fair Labor Standards Act;
X The Occupational Safety and Health Act;
X The Family and Medical Leave Act of 1993;
<PAGE>
X The New York Human Rights Law;
X The New York Labor Law;
X The New York Equal Rights Law Section 40-c et seq.;
X The New York Minimum Wage Law;
X The New York Equal Pay Law;
X The New York City Administrative Code, Title 8;
X any other federal, state or local civil or human rights law
or any other local, state or federal law, regulation or
ordinance;
X any public policy, contract, tort, or common law; or
X any allegation for costs, fees, or other expenses including
attorneys' fees incurred in these matters.
8. Release of Claims Against Executive.
The Company, and its direct or indirect subsidiaries and affiliates (the "Ogden
Group"), voluntarily releases and forever discharges Executive of and from any
and all actions or causes of action, suits, claims, debts, charges, complaints,
contracts (whether oral or written, express or implied from any source) and
promises whatsoever, in law or equity, that the Ogden Group, has or may have,
upon or by reason of any matter, cause or thing whatsoever, and any statutory,
tort and/or contract claim as of the date of this Separation Agreement based
upon any act or event occurring before the effective date of this Separation
Agreement including, without limitation, any claim arising out of Executive's
employment by the Ogden Group and his ownership of the shares in CODAD;
provided, however, that if any member of the Ogden Group did not have knowledge
prior to the effective date of this Separation Agreement of any action or event,
the release and discharge set forth in this section shall not apply with respect
to such action or event to the extent that Executive's actions are found to
constitute fraud, willful misconduct or violation of law.
9. Indemnification of Executive.
Executive will continue to be indemnified with respect to any actions taken or
omissions occurring while he was an employee of the Ogden Group (a) by any
indemnity provisions contained in the Company's Restated Certificate of
Incorporation and By-Laws or any applicable resolutions of the Company's Board
of Directors immediately prior to the Resignation Date and (b) by any directors
and officers insurance maintained by the Company or any other applicable
agreement in effect as of the Resignation Date.
10. CODAD Stock.
(a) Executive agrees to execute a Power of Attorney in the form attached as
Exhibit A hereto and any other documentation provided to Executive by
the Company necessary to transfer title in all shares of CODAD held in
his name to the Company or such other entity as may be designated by
the Company. Executive agrees that no consideration is payable for such
transfer.
(b) The Company will indemnify and hold harmless Executive against any and
all actions or causes of action, or suits brought against Executive
based upon or arising out of his ownership of the CODAD Stock.
<PAGE>
11. Survival of Restrictive Covenants Under Employment Agreement.
Notwithstanding anything in this Separation Agreement to the contrary, Executive
and the Company agree that (a) the restrictive covenant with respect to trade
secrets set forth in Section 12 of the Employment Agreement shall remain in full
force and effect, (b) the restrictive covenant with respect to the Company's
customer list set forth in Section 13 of the Employment Agreement shall remain
in full force and effect until December 31, 2003 at which time such covenant
shall terminate, and (c) the enforcement provisions set forth in Section 15 of
the Employment Agreement shall remain in full force and effect. The parties
agree that the limited covenant not to compete set forth in Section 14 of the
Employment Agreement shall not be applicable to Executive on or after the
Resignation Date.
12. Breach of Agreement.
By signing this Separation Agreement, Executive is providing a complete waiver
of all claims that may have arisen, whether known or unknown, up until the time
that this Separation Agreement is executed. If Executive breaches this
Separation Agreement by filing a claim against the Released Parties arising out
of any claim arising as of the Resignation Date other than a claim to enforce
the provisions of this Separation Agreement, Executive agrees to pay all legal
fees and costs incurred by the Released Parties in the event that such action is
dismissed as a matter of law. Notwithstanding the foregoing, nothing herein
shall preclude Executive from commencing an action against any of the Released
Parties for acts committed following the Resignation Date.
13. Withholding of Taxes.
The Company may withhold from any compensation and benefits payable under this
Separation Agreement all applicable federal, state, local, or other withholding
taxes.
14. Non-Disclosure.
Executive agrees that he will not disclose the existence or terms of this
Separation Agreement to any third party other than his immediate family,
attorney, accountants, or other consultants or advisors, except as may be
required by law. The Company agrees that it will not disclose the existence or
terms of this Separation Agreement to any third party other than its attorneys,
accountants, or other consultants or advisors and such of directors and/or
officers of any of the Released Parties as the Company reasonably determines
necessary, except as may be required by law.
15. Nonadmission of Wrongdoing.
The parties understand and agree that neither the making of this Separation
Agreement nor anything contained herein shall in any way be construed or
considered as an admission on the part of any of the parties regarding any
liability, wrongdoing, or unlawful conduct of any kind. The parties further
understand and agree that Executive's resignation from his offices,
directorships and memberships, and termination of employment, in accordance with
the terms of this Separation Agreement has occurred for reasons other than
cause.
<PAGE>
16. Successors and Assignment.
(a) Company Successor. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company, by
agreement in form and substance satisfactory to Executive, expressly to
assume and agree to perform this Separation Agreement in the same
manner and to the same extent as the Company would be required to
perform it if no such succession had taken place. As used in this
Agreement, the term "the Company" shall mean the Company as defined in
the first sentence of this Agreement and any successor to all or
substantially all its business or assets or which otherwise becomes
bound by all the terms and provisions of this Separation Agreement,
whether by the terms hereof, by operation of law or otherwise.
(b) Executive's Successor. This Separation Agreement shall inure to the
benefit of and be enforceable by Executive and his personal or legal
representatives and successors in interest under this Separation
Agreement.
(c) Assignment by Executive. The rights and benefits of Executive under
this Separation Agreement are personal to him and no such right or
benefit shall be subject to voluntary or involuntary alienation,
assignment or transfer; provided, however, that nothing in this Section
16 shall preclude Executive from designating a beneficiary or
beneficiaries to receive any benefit payable on his death.
17. Governing Law.
This Separation Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in that State, without regard to its conflict of laws provisions. The
parties consent to the exclusive jurisdiction of the state and Federal courts
within New York County, New York in connection with any controversy or claim
arising out of Executive's employment or arising under this Separation
Agreement.
18. Separability.
If any provision of the Separation Agreement is deemed legally or factually
invalid or unenforceable to any extent or in any application, then the remainder
of the provision and the Separation Agreement, except to such extent or in such
application, shall not be affected, and each and every provision of the
Separation Agreement shall be valid and enforceable to the fullest extent and in
the broadest application permitted by law.
19. Miscellaneous.
(a) Entire Agreement; Amendment. This Separation Agreement shall supersede
the Employment Agreement and any and all existing oral or written
agreements, representations, or warranties between Executive and the
Company or any of the Released Parties. It may not be amended except by
a written agreement signed by both parties and shall be binding on the
parties and their legal representatives, heirs, successors and assigns.
<PAGE>
(b) Waiver. The failure of a party to insist upon strict adherence to any
term of this Separation Agreement on any occasion shall not be
considered a waiver thereof or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other
term of this Separation Agreement.
(c) Headings. Section headings are used herein for convenience of reference
only and shall not affect the meaning of any provision of this
Separation Agreement.
(d) Counterparts. This Separation Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an
original, and such counterparts will together constitute but one
Agreement.
Since Executive's execution of this Separation Agreement releases the Company
and the other Released Parties from all claims Executive may have, Executive
should review this carefully before signing it. Executive acknowledges that he
has had at least twenty-one (21) days to consider its meaning and effect and to
determine whether he wishes to enter into it. During that time, Executive is
advised to consult with anyone of his choosing, including an attorney, prior to
executing this Separation Agreement.
Once Executive has signed this Separation Agreement, he may choose to revoke his
execution within seven (7) days. Any revocation of this Separation Agreement
must be in writing and personally delivered to Alane Baranello at Ogden
Corporation, Two Pennsylvania Plaza, New York, New York 10121, or if mailed,
postmarked within seven (7) days of the date upon which it was signed by him.
The Company will not make any payments pursuant to this Separation Agreement
until after the seven (7) day period expires.
IN WITNESS WHEREOF, the parties hereto have duly executed this Separation
Agreement as of the day and year first above written.
OGDEN CORPORATION
By: /s/ Alane Baranello
--------------------
Name: Alane Baranello
Title: V.P. Human Resources
EXECUTIVE
/s/ Philip G. Husby
-------------------
Philip G. Husby
<PAGE>
APPENDIX A
DEFINITION OF CHANGE IN CONTROL
The following definition of "Change in Control" shall apply for purposes of
Section 4(k) of the Separation Agreement:
Change in Control. A "Change in Control" of the Company shall be deemed to have
occurred as of the first day any one or more of the following conditions shall
have been satisfied:
(a) Any person, or more than one person acting as a group (within the
meaning of the Securities Exchange Act of 1934), other than a trustee
or other fiduciary holding securities under an employee benefit plan
sponsored by the Company, becomes the beneficial owner, directly or
indirectly, of securities of the Company, representing more than
twenty-five percent (25%) of the combined voting power of the Company's
then outstanding securities;
(b) Individuals who, as of May 20, 1998, constitute the Board of Directors
of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to May 20, 1998, whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(c) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all the Company's assets; or (iii)
a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least seventy-five percent (75%)
of the combined voting power of the voting securities of the Company
(or such surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.
<PAGE>
Exhibit 10.8(e)
CONFIDENTIAL AND
LEGALLY PRIVILEGED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of October ,
1998, by and between OGDEN CORPORATION, a Delaware corporation maintaining its
principal office at Two Pennsylvania Plaza, New York, New York (the "Company")
and Scott G. Mackin, now residing at 1 Robin Court, Morristownship, New Jersey
07960 (the "Employee").
WITNESSETH:
WHEREAS, the Employee is currently serving as President and Chief
Operating Office of Ogden Energy Group, Inc., a wholly owned subsidiary of the
Company ("Ogden Energy"); and
WHEREAS, the Employee is currently employed under an employment
agreement with Ogden Energy dated January 1, 1994 and which was amended on
December 20, 1996 (the "Old Agreement"); and
WHEREAS, Ogden Energy, Company and Employee desire to terminate the Old
Agreement and enter into a new employment agreement with the Company on such
terms and conditions as set forth herein; and
WHEREAS, the Company desires to ensure that the Employee will continue
to be available to provide services in the capacity of President and Chief
Operating Officer of Ogden Energy in the future, which services are significant
to the Company's long-range prospects;
WHEREAS, to induce the Employee to continue to provide such services,
the Company is offering to provide the Employee with the compensation, benefits
and security provided for in this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment/Capacity/Term.
The Company agrees to and does hereby continue to employ the
Employee, and the Employee agrees to and does hereby continue in the employ of
the Company upon the terms and conditions set forth in this Agreement. Such
employment shall be in an executive capacity as Executive Vice President of the
Company and as President and Chief Operating Officer of Ogden Energy. This
Agreement shall commence on October 1, 1998 and shall continue through September
30, 2003, and from year to year thereafter subject to the right of the Employee
or the Company to terminate the Agreement as of September 30, 1999, or any
subsequent September
<PAGE>
30, by written notice given to the other party at least sixty (60) days prior to
such termination date stating an intention to so terminate. Termination by the
Company, in accordance with the provisions of the preceding sentence, shall
obligate the Company to make a severance payment as provided in Paragraph 9.
hereof. Termination by either party, in accordance with the provisions of the
above referenced sentence, shall not require a statement of the reason or cause
for such termination and shall not be deemed a breach or violation of this
Agreement by the party giving such notice so long as, in the case of the
Company, termination is effected with said severance payment. As used in this
Agreement, the phrase "term of this Agreement" shall be deemed to include the
period subsequent to the date hereof and prior to termination of this Agreement;
however, such phrase shall not be construed as limiting the enforceability by
either party of any rights which survive termination of this Agreement.
2. Time and Effort/Absences.
During the "term of this Agreement", the Employee shall devote
his entire time and attention during normal business hours to the business of
the Company and Ogden Energy and its subsidiaries (the "Ogden Energy Group"),
subject to the supervision of the Board of Directors of the Company, and he
shall not engage in any other business activity whether or not such business
activity is pursued for gain, profit, or other pecuniary advantage, but this
restriction shall not be construed to restrict the Employee (i) from performing
services as a member of the Board of Directors, Board of Trustee or the like of
any not-for-profit entity for which the Employee receives no compensation or as
a member of the Board of a for-profit corporation with the prior written
approval of the Chairman of the Board of the Company, provided that, in each
case such services do not unreasonably interfere with the ability of the
Employee to perform the services and discharge the responsibilities required of
him under this Agreement, and (ii) from investing his assets in such form or
manner as will not require any services on the part of the Employee in the
operation of the business of the entity in which such investments are made. The
Employee shall be excused from rendering his services during reasonable vacation
periods and during other reasonable temporary absences as authorized from time
to time by the Chairman of the Board of Directors of the Company. At the date
hereof, the principal office of the Company is located in the metropolitan New
York area and the principal office of Ogden Energy is located in Fairfield, New
Jersey, considered to be a New York suburb and part of the metropolitan New York
area. It is understood that the Employee will not be required to relocate from
the metropolitan New York area to discharge his responsibilities under this
Agreement.
3. Corporate Offices.
If elected, the Employee will serve, without additional
compensation, as an officer and director (or in either capacity) of the Company,
Ogden Energy and the Ogden Energy Group.
4. Salary/Bonus/Other Benefits.
In consideration of the services and duties to be rendered and
performed by the Employee during the term of this Agreement, the Company agrees
to pay and provide for the Employee the compensation and benefits described
below:
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(a) Consistent with the Company's policy concerning its
executives, the Employee's annual salary shall be reviewed
by the Board of Directors or an appropriate committee of
the Board of Directors of the Company on a calendar year
basis, with any increases therein being within the sole
discretion of the Board of Directors or an appropriate
committee of the Board of Directors and shall become
effective on March 1st of the following year. The minimum
annual salary payable to the Employee under this Agreement
shall be in the amount of Five Hundred Seventeen Thousand
Two Hundred Seventy Five and 00/100 Dollars ($517,275),
payable in equal monthly or bi-weekly installments.
(b) An annual incentive bonus in such amount as may from time
to time be fixed by the Board of Directors or an
appropriate committee of the Board of Directors of the
Company, provided that in determining the annual incentive
bonus the Board of Directors or appropriate Committee
shall utilize standards which are reasonably applied to
the Employee and other executives of the Company on a
non-discriminatory basis.
(c) Other Benefits. It is intended that the Company and Ogden
Energy shall continue to provide the Employee with
benefits at least as favorable as benefits provided on
behalf of other executives of the Company and the Ogden
Energy Group who furnish services of comparable
significance, as they may exist from time to time. Such
benefits presently include Group Life Insurance, Group
Health Insurance, Automobile Allowance, and Pension,
Profit Sharing and 401(k) Plans. Except as otherwise
provided herein, any such participation shall be in
accordance with the provisions of such plans and nothing
contained in this Agreement is intended to or shall be
deemed to affect adversely any of the Employee's rights as
a participant under any such plan. Nothing herein shall
prevent the Company from modifying or discontinuing any
benefit plan on a consistent and non-discriminatory basis
applicable to all such executives.
5. Expense.
The Employee shall be reimbursed for out-of-pocket expenses
incurred from time to time on behalf of the Company and the Ogden Energy Group
or in the performance of his duties under this Agreement, upon the presentation
of such supporting documents and forms as the Company shall reasonably request.
6. Medical Leave, Reasonable Accommodation, Termination for
Medical Incapacity and Disability Benefits.
The Company agrees to provide the Employee with a leave of
absence not to exceed six (6) months in duration in any twelve (12) month period
if the Employee has a medical condition that precludes the Employee from being
fully functional in his or her position.
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The term "fully functional" means able to travel to and from work, be at work,
perform satisfactorily all essential functions of the position and the
conditions of employment without significant risk of substantial harm to self or
others. Any leave entitlement granted by Federal, state or local law shall run
concurrently with the commencement of his or her six month period of leave,
whether such leave is taken all at once, intermittently or on a reduced time
basis. Nothing herein is intended to diminish any entitlement granted by law. If
appropriate, the Company will support the Employee's application for disability
benefits.
If the Employee is not able to return to the position in a
fully functional capacity at the conclusion of six months of medical leave in a
twelve month period, this Agreement may be terminated by the Board of Directors
of the Company at its sole discretion, without prior notice.
Unless otherwise prohibited by law, the Employee agrees that
the Employee will furnish for review by a medical professional designated by the
Company, copies of the Employee's medical records pertaining to any medical
condition for which the Employee requests a medical leave of more than twelve
(12) weeks in duration, return to work from any such leave, work restrictions,
modification or accommodation; or the Employee or the Company believes that the
Employee has a medical condition that may be causing or contributing to
performance or conduct deficiencies. The Employee also agrees to authorize any
health care professional from who the Employee is receiving diagnostic
evaluation, treatment or other medical care to discuss the Employee's medical
condition with the medical professional designated by the Company to receive and
review the Employee's medical records. The Employee further agrees that he or
she will undergo, at the sole expense of the Company, any medical specialty
evaluation if requested to do so by the Company.
The Company agrees to provide the Employee, if he or she is
otherwise qualified for the position, with medically necessary accommodation if
it likely will enable the employee to be fully functional in the position and is
reasonable, feasible and will not impose undue hardship on Company operations.
The term "medically necessary" means that the accommodation has risk-avoiding or
therapeutic value in accordance with scientifically valid medical principles and
practice and that the Employee requires similar accommodation when performing
comparable non-work functions.
The inability of the Employee to be fully functional in his or
her position for medical reasons shall not constitute a breach of this Agreement
by the Employee. If this Agreement is terminated by the Company because the
Employee is not fully functional in his or her position for medical reasons, as
provided for in this paragraph, the Company shall be obligated to continue the
salary of the Employee as provided in Paragraph 4. (a) for a period equal to the
greater of (a) twelve (12) months, or (b) such longer period as may be
determined by the Board of Directors of the Company, in each case, reduced by
any disability insurance benefits provided for the benefit of the Employee at
the expense of the Company.
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7. Death/Death Benefit.
In the event of the death of the Employee during the term of
this Agreement, this Agreement shall terminate and the Employee's salary shall
continue to be paid to his designated beneficiary, or if none, to his personal
representative, through the last day of the month in which such death occurs. In
addition, the Employee, his personal representative(s) and/or his beneficiaries
will be entitled to such death benefits as are provided to Employee under
Paragraph 4 hereof.
8. Company Stock Option Plan.
The Board of Directors of the Company has awarded and may from
time to time in the future award to the Employee non-qualified stock options to
purchase shares of the Company's Common Stock. If the employment of the Employee
terminates under circumstances entitling him to a Severance Payment (as defined
in Paragraph 9.), he shall thereupon be entitled to exercise any and all options
granted to him, to the extent permitted pursuant to the terms and conditions of
the Company's Stock Option Plan.
9. Severance Payment.
(A) If the Company gives notice to terminate in accordance with
Paragraph 1. of this Agreement or if the employment of the
Employee is terminated at any time (i) by the Employee for
Good Reason (as defined in Paragraph 10.), or (ii) by the
Company for any reason other than for Cause (as hereinafter
defined), the Company will be obligated to pay the following
amounts to the Employee (the "Severance Payment") within 30
days following Employee's date of termination:
(i) Earned But Unpaid Compensation. The Company shall pay
Employee any accrued but unpaid base salary for
services rendered to Employee's termination date, any
accrued but unpaid expenses required to be reimbursed
under this Agreement and any vacation accrued to
Employee's termination date.
(ii) Lump Sum Payment. The Company shall pay Employee an
amount equal to the product of five times the sum of
(a) and (b) below:
(a) Employee's annualized base salary at the
highest annual rate in effect at any time
prior to the Employee's termination date;
and
(b) The highest amount of annual bonus payable
to Employee at any time prior to the
Employee's termination date.
(iii) Gross-Up Payment. In the event that any portion of
the benefits payable under this Section 9.(A) and any
other payments and benefits under any other agreement
with or plan of the Company or Ogden Energy (in the
aggregate, "Total Payments") are deemed to constitute
an "excess parachute payment" within the meaning of
Section 280G of the Internal
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Revenue Code (the "Code"), then the Company shall pay
Employee as promptly as practicable following such
determination an additional amount (the "Gross-Up
Payment") calculated as described below to reimburse
Employee on an after tax basis for any excise tax
imposed on such payments under Section 4999 of the
Code. The Gross-up Payment shall equal the amount, if
any, needed to ensure that the net parachute payments
(including the Gross-up Payment) actually received by
Employee after the imposition of federal and state
income and excise taxes (including any interest or
penalties imposed by the Internal Revenue Service),
is equal to the amount that Employee would have
netted after the imposition of federal and state
income taxes had the Total Payments not been subject
to the taxes imposed by Section 4999. For purposes of
this calculation, it shall be assumed that Employee's
tax rate will be the maximum marginal federal and
state income tax rate on earned income, with such
maximum federal rate to be computed with regard to
Section 1(a) of the Code. In the event that Employee
and the Company are unable to agree as to the amount
of the Gross-up Payment, if any, Employee shall
select a law firm or accounting firm among those
regularly consulted (during the 12-month period
immediately prior to the Employee's termination date)
by the Company regarding federal income tax matters
and such law firm or accounting firm shall determine
the amount of Gross-up Payment and such determination
shall be final and binding upon Employee and the
Company.
(iv) Other Benefits. Any benefits to which Employee may be
entitled pursuant to the plans, policies and
arrangements referred to in Section 4(c) hereof shall
be determined and paid in accordance with the terms
of such plans, policies and arrangements.
(v) No Mitigation Required. Employee shall not be
required to mitigate the amount of any compensation
provided for under this Section 9.(A) by seeking
other employment or otherwise, nor shall the amount
of any payment provided for under this Agreement be
reduced by any compensation earned by the Employee as
the result of employment with another employer after
the Employee's termination date or by any other
compensation.
(vi) Non-Competition Covenant Does Not Apply. The
restrictive covenant prohibiting competitive activity
set forth in Section 14. hereof shall not be
applicable to Employee and shall be null and void.
(vii) No Other Benefits or Compensation. Except as may be
provided under this Agreement, under the terms of any
incentive compensation, employee benefit, or fringe
benefit plan, applicable to Employee at the time of
Employee's termination or resignation of employment,
Employee shall have no right to receive any other
compensation, or to participate in any
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other plan, arrangement or benefit, with respect to
future periods after such termination or
resignation".
(B) Termination of the Employee's employment on account of his
disability, death or retirement (as defined in this Agreement) will not
be considered a termination of the Employee's employment by the company
and will not require the Company to pay and provide any Severance
Payment. No Severance Payment will be required if the employment of the
Employee is terminated by the Company for Cause (as hereinafter
defined) or by the Employee (other than for Good Reason as defined in
Paragraph 10) or if the Employee gives notice to terminate in
accordance with Paragraph 1. hereof. The Severance Payment provided
herein in is provided in order to reinforce and encourage the continued
loyalty, attention, and dedication of the Employee to the Company's
business and affairs without the concerns which normally arise from the
possibility of a loss of employment security. As used herein, the terms
"Retirement" and "Cause" shall have the following meanings,
respectively:
(a) Retirement. Termination of the Employee's employment
on account of "Retirement" shall mean termination on
or after the Employee's normal retirement date in
accordance with the terms of the Ogden Energy pension
plan (or any successor or substitute plan or plans of
Ogden Energy Group under which the Employee may be a
participant); and
(b) Cause. Termination by the Company of the Employee's
employment for "Cause" shall mean termination as a
result of (i) the willful and continued failure by
the Employee to devote the time, attention and effort
necessary to perform substantially the services
contemplated by this Agreement in a manner consistent
with the Employee's past performance (other than any
such failure resulting from the Employees incapacity
due to physical or mental illness) after a written
demand for substantial performance is delivered to
the Employee by a member or representative of the
Board of Directors of the Company which specifically
identifies the manner in which it is alleged that the
Employee has not devoted such time, attention and
effort necessary to substantially perform such
services, or (ii) the willful engaging by the
Employee in gross misconduct which is materially and
demonstrably injurious to the Company; provided that,
no act, or failure to act, on the Employee's part
shall be considered "willful" unless done, or
omitted to be done, in bad faith and without
reasonable belief that such action or omission was
in, or not opposed to, the best interests of the
Company. It is also expressly understood that the
Employee's attention to or engagement in matters not
directly related to the business of the Company shall
not provide a basis for termination for Cause if such
attention or engagement is authorized by the terms of
this Agreement or has otherwise been approved by the
Board of Directors of the Company. Anything in this
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Agreement to the contrary notwithstanding, the
Employee's employment may not be terminated for Cause
unless and until there shall have been delivered to
the Employee a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters
of the entire membership of the Board (after
reasonable notice to the Employee and an opportunity
for the Employee, together with his counsel, to be
heard before the Board), finding that in the good
faith opinion of the Board the Employee was guilty of
the conduct set forth in clause (i) or (ii) of this
subparagraph (b) and specifying the particulars
thereof in detail. Except as otherwise provided in
Paragraph 1 and Paragraph 6, no purported termination
by the Company of the Employee's employment which is
not justified as a termination of the Employee's
employment for Cause shall be effective.
10. Termination by the Employee for Good Reason.
The termination by the Employee of this Agreement and his
employment for "Good Reason" shall be deemed a justifiable termination of his
employment and shall excuse the Employee from the obligation to render services
as provided in Paragraph 2 hereof. Upon such termination, the Employee shall be
entitled to the Severance Payment in accordance with the provisions of Paragraph
9. (A) hereof. As used herein, the phrase "Good Reason" shall mean:
(a) a change in the Employee's status, title or
position(s) in an executive capacity as set forth in
Paragraph 1 hereof, which in his reasonable judgment,
does not represent a promotion from or enhancement of
his status, title and position, or the assignment by
the Board of Directors of the Company to the Employee
of any duties or responsibilities which, in his
reasonable judgment, are inconsistent with such
status, title or position, or any removal of the
Employee from or any failure to reappoint or reelect
him to such positions, except in connection with a
justifiable termination by ------ the Company of the
Employee's employment for Cause or on account of
disability, the Retirement or death of the Employee
or the termination by the employee of his employment
other than for Good Reason; or
(b) a reduction in the Employee's annual salary or a
failure by the Company to pay to the Employee any
installment of the annual salary required by
Paragraph 4 hereof, which failure continues for a
period of twenty (20) days after written notice
thereof is given by the Employee to the Company; or
(c) the Company's requiring the Employee to be based
anywhere other than the metropolitan New York area,
except for required travel on the business of the
Company or the Ogden Energy Group to an extent
substantially consistent with the business travel
obligations which the Employee has previously
undertaken on behalf of the Company or the Ogden
Energy Group; or
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(d) the failure by the Company to obtain the assumption
of this Agreement in form and substance to the
reasonable satisfaction of the Employee by any
permitted successor (other than by permitted merger
or consolidation for which no separate assumption is
necessary) as referred to in Paragraph 17; or
(e) any refusal by the Company to allow the Employee to
attend to matters or engage in activities not
directly related to the business of the Company which
is permitted by this Agreement or which, prior
thereto, was permitted by the Board of Directors of
the Company; or
(f) any "Change in Control" of the Company as defined in
Appendix A to this Agreement.
11. Notice of Termination.
Any purported notice of termination of this Agreement and the
Employee's employment shall be communicated in writing and delivered to the
other party as provided in Paragraph 18 (hereinafter a "Notice of Termination").
For purposes of this Agreement a "Notice of Termination" shall mean a notice
complying with the terms of this Agreement and which specifics the termination
provision relied upon by the party giving such notice and shall set forth in
detail such facts and circumstances claimed by said party to provide a justified
basis for termination of the Employee's employment under the provision(s) so
indicated.
12. Trade Secrets, Etc.
The Employee acknowledges that prior to his initial employment
by the Company and Ogden Energy he had no knowledge of the formulae, processes
or methods of manufacture or other trade secrets of the Company and Ogden
Energy. Upon the termination of his employment, the Employee agrees forthwith to
deliver up to the Company notebooks and other data relating to research or
experiments as conducted by him or relating to the products, formulae, processes
or methods of manufacture of the Company and Ogden Energy.
13. Customer List.
The Employee recognizes and acknowledges that the written list
of the customers of the Company, its subsidiaries, the Ogden Energy Group, and
affiliates, as they may exist from time to time, is a valuable, special and
unique asset. The Employee agrees that he will not during the term of his
employment or within five (5) years thereafter, use for his own personal benefit
or disclose the written list of the customers of the Company, its subsidiaries,
the Ogden Energy Group and affiliates or any part thereof, to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever.
14. Limited Covenant Not to Compete.
If the employment of the Employee hereof is terminated (i) by
the Employee pursuant to Paragraph 1 hereof or (ii) by the Company for Cause (as
defined in Paragraph 9.(B)(b) above), then in either case (y) the Employee will
not, for a period of five (5) years from
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such termination of employment, within the territorial confines of the United
States of America, directly or indirectly, own, manage, operate, control, be
employed by, participate in, or be connected in any manner with the ownership,
management, operation or control of any business in competition with the
business conducted by the Company and the Ogden Energy Group at the time of such
termination, and (z) the Employee will, for a period of five (5) years from such
termination refrain from carrying on a business similar to that presently
carried on by the Company and the Ogden Energy Group within the states in which
the business of the Company and the Ogden Energy Group has been carried on, so
long as the Company and the Ogden Energy Group carries on like business therein.
15. Injunctive Relief.
In the event of a breach by the Employee of the provisions of
Paragraph 12, 13 or 14 during or after the "term of this Agreement", the Company
shall be entitled to an injunction restraining the Employee from violation of
such paragraph. Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedy it may have in the event of breach of this
Agreement by the Employee.
16. Certain Proprietary Rights.
Employee agrees to and hereby does assign to the Company all
his right, title and interest in and to all inventions, whether or not
patentable, which are made or conceived solely or jointly by him:
(a) At any time during the term of his employment by the
Company in an executive, managerial, planning,
technical research or engineering capacity (including
development, manufacturing, systems, applied science
and sales), or
(b) During the course of or in connection with his duties
during the "term of this Agreement", or
(c) With the use of time or materials of the Company.
The Employee agrees to communicate to the Company or
its representatives all facts known to him concerning
such inventions, to sign all rightful papers, make a
rightful oaths and generally to do every thing
possible to aid the Company in obtaining and
enforcing proper patent protection for all such
inventions in all countries and in vesting title to
such inventions and patents in the Company. For the
purpose of this Agreement, the subject matter of any
application for patent naming Employee as a sole or
joint inventor filed during the course of employment
or within one year subsequent to the termination
thereof shall be deemed to be an invention made or
conceived by him during the course of his employment
by the Company and assignable to the Company
hereunder, unless the Employee establishes by a
preponderance of the evidence that such invention was
made or conceived by him subsequent to termination of
his employment hereunder. At the Company's request
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(during or after the "term of this Agreement") and
expense, the Employee will promptly execute a
specific assignment of title to the Company, and
perform any other acts reasonably necessary to
implement the foregoing assignment.
17. Binding Effect.
This Agreement shall be binding upon and inure to the benefit
of:
(a) The Company and any successors or assigns of the
Company, whether by way of a merger or consolidation,
or liquidation of the Company, or by way of the
Company selling all or substantially all of the
assets of the Company, or a division thereof, to a
successor entity; however, in the event of the
assignment by the Company of this Agreement, the
Company shall nevertheless remain liable and
obligated to the Employee in accordance with the
terms hereof; and
(b) The Employee, his estate, his executors,
administrators, heirs and beneficiaries.
18. Notice.
Any notice or other communication required under this
Agreement shall be in writing, shall be deemed to have been given and received
when delivered in person, or, if mailed, shall be deemed to have been given when
deposited in the United States mail, first class, registered or certified,
return receipt requested, with proper postage prepaid, and shall be deemed to
have been received on the third business day thereafter, and shall be addressed
as follows:
If to the Company, addressed to:
Ogden Corporation
Two Pennsylvania Plaza, 25th Floor
New York, New York 10121
Attention: Chairman of the Board, President and Chief Executive Officer
With a copy to:
Senior Vice President and General Counsel
If to the Employee, addressed to:
Scott G. Mackin
1 Robin Court
Morris Township, New Jersey 07960
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or such address as to which any party hereto may have notified the other
in writing.
19. Governing Law.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York.
20. Entire Agreement.
This Agreement contains or refers to the entire arrangement or
understanding between the Employee and the Company relating to the employment of
the Employee by the Company. No provision of the Agreement may be modified or
amended except by an instrument in writing by or for both parties hereto.
21. Waiver.
Failure of either party hereto to insist upon strict
compliance by the other party with any term, covenant or condition hereof shall
not be deemed a waiver of such term, covenant or condition, nor shall any waiver
or relinquishment or failure to insist upon strict compliance or any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
22. Prior Employment Agreement.
This Employment Agreement supercedes and replaces the Old
Agreement between the Employee and Ogden Energy dated as of January 1, 1994 as
amended December 20, 1996 which shall become null and void as of the date
hereof.
23. Assignment by Employee.
The rights and benefits of the Employee under this Agreement
are personal to him and no such right or benefit shall be subject to voluntary
or involuntary alienation, assignment or transfer; provided, however, that
nothing in this Paragraph 23 shall preclude the Employee from designating a
beneficiary or beneficiaries to receive any benefit payable on his death.
OGDEN CORPORATION
By: /s/ R. Richard Ablon
-----------------------------------
Chairman of the Board, President
and Chief Executive Officer
/s/ Scott G. Mackin
- -------------------
Scott G. Mackin
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APPENDIX A
DEFINITION OF CHANGE IN CONTROL
The following definition of Change in Control shall apply for purposes of
Paragraph 10.(e) of the Employment Agreement:
Change in Control. Change in Control of the Company shall be deemed to have
occurred as of the first day any one or more of the following conditions shall
have been satisfied:
(a) Any person, or more than one person acting as a group (within the
meaning of the Securities Exchange Act of 1934), other than a trustee
or other fiduciary holding securities under an employee benefit plan
sponsored by the Company, becomes the beneficial owner, directly or
indirectly, of securities of the Company, representing more than
twenty-five percent (25%) of the combined voting power of the Company's
then outstanding securities;
(b) Individuals who, as of May 20, 1998, constitute the Board of Directors
of the Company (the Incumbent Board) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to May 20, 1998, whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(c) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all of the Company's assets; or
(iii) a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least seventy-five percent (75%)
of the combined voting power of the voting securities of the Company
(or such surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.
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Exhibit 10.8(f)(i)
September __, 1998
Mr. David L. Hahn
19 Jones Lane
Lloyd Harbor, New York 11743
Dear Mr. Hahn:
This letter will confirm the agreement between you and Ogden
Corporation (the "Company") that, effective as of October 1, 1998, the
Employment Agreement between you and the Company, dated as of December 1, 1995
(the "Employment Agreement") is hereby amended as follows, all other terms and
conditions of the Employment Agreement remain unchanged and in full force and
effect:
I. The first sentence only of Paragraph 1. (b)
Employment/Capacity/Term. of the Employment Agreement is
hereby amended to read as follows, all other terms of
Paragraph 1. remain unchanged and in full force and effect:
"(b) Such employment shall commence on October 1, 1998 and
shall continue through September 30, 1999 and from year to
year thereafter subject to the right of the Employee or the
Company to terminate such employment as of October 1, 1999, or
any subsequent October 1, by written notice given to the other
party at least sixty (60) days prior to such termination date
stating an intention to so terminate such employment".
II. Paragraph 4. (a) Salary/Bonus/Other Benefits of the Employment
Agreement is hereby amended to read as follows, all other
terms of Paragraph 4. remain unchanged and in full force and
effect:
"(a) an annual salary payable in equal monthly or bi-weekly
installments, in the amount of Three Hundred Thousand Dollars
($300,000) or in such greater amount as may from time to time
be fixed by the Board of Directors of the Company".
III. Paragraph 8. Severance Pay. of the Employment Agreement is
hereby amended in its entirety to read as follows:
<PAGE>
"8. Severance Pay.
(A) If the Company gives notice to terminate in
accordance with Paragraph 1. (b) of this Agreement or
if the employment of the Employee is terminated at
any time (i) by the Employee for Good Reason (as
defined in Paragraph 9.), or (ii) by the Company for
any reason other than for Cause (as hereinafter
defined), the Company will be obligated to pay the
following amounts to the Employee (the "Severance
Pay"):
(i) Earned But Unpaid Compensation. The Company
shall pay Employee any accrued but unpaid
base salary for services rendered to
Employee's termination date, any accrued but
unpaid expenses required to be reimbursed
under this Agreement and any vacation
accrued to Employee's termination date.
(ii) Lump Sum Payment. The Company shall pay
Employee an amount equal to the product of
five times the sum of (a) and (b) below:
(a) Employee's annualized base salary at
the highest annual rate in effect at
any time prior to the Employee's
termination date; and
(b) The highest amount of annual bonus
payable to Employee at any time
prior to the Employee's termination
date.
(c) The foregoing amount will be paid to
Executive (less required withholding
taxes) in a single lump sum payment
within 30 business days after the
Termination Date or, at the election
of the Employee such amount shall be
paid in sixty (60) equal monthly
payments, with the first payment
commencing on the Termination Date.
(iii) Other Benefits. Any benefits to which
Employee may be entitled pursuant to the
plans, policies and arrangements referred to
in Section 4(c) hereof shall be determined
and paid in accordance with the terms of
such plans, policies and arrangements.
(iv) No Mitigation Required. Except as otherwise
provided herein, Employee shall not be
required to mitigate the amount of any
compensation provided for under this Section
8. by seeking other employment or otherwise,
nor shall the amount of any payment provided
for under this Agreement be reduced by any
compensation earned by the Employee as the
result of employment with another employer
after the Employee's termination date or by
any other compensation.
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<PAGE>
(v) Non-Competition Covenant Does Not Apply. The
restrictive covenant prohibiting competitive
activity set forth in Section 13. below
shall not be applicable to Employee and
shall be null and void.
(vi) No Other Benefits or Compensation. Except as
may be provided under this Agreement, under
the terms of any incentive compensation,
employee benefit, or fringe benefit plan,
applicable to Employee at the time of
Employee's termination or resignation of
employment, Employee shall have no right to
receive any other compensation, or to
participate in any other plan, arrangement
or benefit, with respect to future period
after such termination or resignation.
(B) No Severance Pay will be required if the employment of the
Employee is terminated by the Company for Cause (as
hereinafter defined) or by the Employee (other than for Good
Reason as defined in Paragraph 9) or if the Employee gives
notice to terminate in accordance with Paragraph 1. The
Severance Pay provided herein is provided in order to
reinforce and encourage the continued loyalty, attention, and
dedication of the Employee to the Company's business and
affairs without the concerns which normally arise from the
possibility of a loss of employment security. As used herein,
the terms "Retirement" and "Cause" shall have the following
meanings, respectively:
(a) Retirement.
Termination of the Employee's employment on
account of "Retirement" shall mean
termination on or after the Employee's
normal retirement date in accordance with
the terms of the Ogden 401(k) Plan; and
(b) Cause.
Termination by the Company of the Employee's
employment for "Cause" shall mean
termination as a result of (i) the willful
and continued failure by the Employee to
perform substantially the services
contemplated by this Agreement (other than
any such failure resulting from the
Employee's incapacity due to physical or
mental illness) after a written demand for
substantial performance is delivered to the
Employee by a member or representative of
the Board of Directors of the Company which
specifically identifies the manner in which
it is alleged that the Employee has not
substantially performed such services, or
(ii) the willful engaging by the Employee in
gross misconduct which is materially and
demonstrably injurious to the Company;
provided that, no act, or failure to act, on
the Employee's part shall be considered
"willful" unless done, or omitted to be
done, in bad faith and without
3
<PAGE>
reasonable belief that such action or
omission was in, or not opposed to, the best
interests of the Company."
(IV) Paragraph 9. Termination by the Employee for Good Reason of
the Employment Agreement is amended by adding the following
Subparagraph (e) thereto, all other terms of Paragraph 9.
remain unchanged and in full force and effect:
"(e) any "Change in Control" of the Company as
defined in Appendix A to this Agreement".
AGREED AND ACCEPTED Very truly yours,
Ogden Corporation
Date: September __, 1998 By
/s/ David L. Hahn /s/ R. Richard Ablon
- -------------------- -----------------------
David L. Hahn Chairman of the
Board, President and
Chief Executive
Officer
4
<PAGE>
APPENDIX A
DEFINITION OF CHANGE IN CONTROL
The following definition of Change in Control shall apply for purposes of
Paragraph 9.(e) of the Employment Agreement:
Change in Control. Change in Control of the Company shall be deemed to have
occurred as of the first day any one or more of the following conditions shall
have been satisfied:
(a) Any person, or more than one person acting as a group (within the
meaning of the Securities Exchange Act of 1934), other than a trustee
or other fiduciary holding securities under an employee benefit plan
sponsored by the Company, becomes the beneficial owner, directly or
indirectly, of securities of the Company, representing more than
twenty-five percent (25%) of the combined voting power of the Company's
then outstanding securities;
(b) Individuals who, as of May 20, 1998, constitute the Board of Directors
of the Company (the Incumbent Board) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to May 20, 1998, whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(c) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all of the Company's assets; or
(iii) a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least seventy-five percent (75%)
of the combined voting power of the voting securities of the Company
(or such surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.
<PAGE>
Exhibit 10.8(g)(i)
September __, 1998
Mr. Rodrigo Arboleda
611 North Mashta Drive
Key Biscayne, Florida 33149
Dear Mr. Arboleda:
This letter will confirm the agreement between you and Ogden
Corporation (the "Company") that, effective as of October 1, 1998, Paragraph 9.
Termination by the Employee for Good Reason of the Employment Agreement between
you and the Company, dated as of January 1, 1997 (the "Employment Agreement") is
hereby amended by adding the following Subparagraph (e) thereto: "(e) any
"Change in Control" of the Company as defined in Appendix A to this Employment
Agreement." All other terms and conditions of the Employment Agreement remain
unchanged and in full force and effect.
AGREED AND ACCEPTED Very truly yours,
Ogden Corporation
/s/ Rodrigo Arboleder
- --------------------- Date: September __, 1998 By /s/ R. Richard Ablon
Rodrigo Arboleda ----------------------------
Chairman of the
Board, President and
Chief Executive
Officer
<PAGE>
APPENDIX A
DEFINITION OF CHANGE IN CONTROL
The following definition of Change in Control shall apply for purposes of
Paragraph 9.(e) of the Employment Agreement:
Change in Control. Change in Control of the Company shall be deemed to have
occurred as of the first day any one or more of the following conditions shall
have been satisfied:
(a) Any person, or more than one person acting as a group (within the
meaning of the Securities Exchange Act of 1934), other than a trustee
or other fiduciary holding securities under an employee benefit plan
sponsored by the Company, becomes the beneficial owner, directly or
indirectly, of securities of the Company, representing more than
twenty-five percent (25%) of the combined voting power of the Company's
then outstanding securities;
(b) Individuals who, as of May 20, 1998, constitute the Board of Directors
of the Company (the Incumbent Board) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to May 20, 1998, whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(c) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all of the Company's assets; or
(iii) a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least seventy-five percent (75%)
of the combined voting power of the voting securities of the Company
(or such surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.
2
<PAGE>
Exhibit 10.8(i)(i)
September __, 1998
Mr. Quintin G. Marshall
69 Indian Head Road
Riverside, Connecticut 06878
Dear Mr. Marshall:
This letter will confirm the agreement between you and Ogden
Corporation (the "Company") that, effective as of October 1, 1998, the
Employment Agreement between you and the Company, dated as of October 30, 1996
(the "Employment Agreement") is hereby amended as follows, all other terms and
conditions of the Employment Agreement remain unchanged and in full force and
effect:
I. Paragraph 1.(a) and the first sentence only of Paragraph
1.(b) Employment/Capacity/Term. of the Employment Agreement
are hereby amended to read as follows, all other terms of
Paragraph 1. remain unchanged and in full force and effect:
"(a) The Company agrees to and does hereby employ the
Employee, and the Employee agrees to and hereby does enter
into the employ of the Company upon the terms and conditions
set forth in this Agreement. Such employment shall be in an
executive capacity as Senior Vice President, Corporate
Development of the Company."
"(b) This Agreement and such employment shall commence on
October 1, 1998 and shall continue through September 30, 1999
(the "Initial Term") and from year to year thereafter (the
"Extended Term") subject to the right of the Employee or the
Company to terminate this Agreement and such employment as of
October 1, 1999 or any subsequent October 1, by written notice
stating an intention to terminate such employment at least
thirty (30) days prior to such termination date stating an
intention to terminate such employment (the "Termination
Date").
II. Paragraph 4. (a) Salary/Bonus/Other Benefits of the Employment
Agreement is hereby amended to read as follows, all other
terms of Paragraph 4. remain unchanged and in full force and
effect:
<PAGE>
"(a) an annual salary payable in equal monthly or bi-weekly
installments, in the amount of Two Hundred Fifty Thousand
Dollars ($250,000) or in such greater amount as may from time
to time be fixed by the Board of Directors of the Company".
III. Paragraph 8. Severance Pay. of the Employment Agreement is
hereby amended in its entirety to read as follows:
"8. Severance Pay.
(A) If the Company gives notice to terminate in
accordance with Paragraph 1. (b) of this Agreement or
if the employment of the Employee is terminated at
any time (i) by the Employee for Good Reason (as
defined in Paragraph 9.), or (ii) by the Company for
any reason other than for Cause (as hereinafter
defined), the Company will be obligated to pay the
following amounts to the Employee (the "Severance
Pay"):
(i) Earned But Unpaid Compensation. The Company
shall pay Employee any accrued but unpaid
base salary for services rendered to
Employee's Termination Date, any accrued but
unpaid expenses required to be reimbursed
under this Agreement and any vacation
accrued to Employee's Termination Date.
(ii) Lump Sum Payment. The Company shall pay
Employee an amount equal to the product of
five times the sum of (a) and (b) below:
(a) Employee's annualized base salary at
the highest annual rate in effect at
any time prior to the Employee's
termination date; and
(b) The highest amount of annual bonus
payable to Employee at any time
prior to the Employee's termination
date.
(c) The foregoing amount will be paid to
Executive (less required withholding
taxes) in a single lump sum within
30 business days after the
Termination Date.
(iii) Other Benefits. Any benefits to which
Employee may be entitled pursuant to the
plans, policies and arrangements referred to
in Section 4(c) hereof shall be determined
and paid in accordance with the terms of
such plans, policies and arrangements.
(iv) No Mitigation Required. Except as otherwise
provided herein, Employee shall not be
required to mitigate the amount of any
compensation provided for under this Section
8. by seeking other employment or otherwise,
nor shall the amount of any payment provided
for under this Agreement be reduced by any
2
<PAGE>
compensation earned by the Employee as the
result of employment with another employer
after the Employee's termination date or by
any other compensation.
(v) Non-Competition Covenant Does Not Apply. The
restrictive covenant prohibiting competitive
activity set forth in Section 11. below
shall not be applicable to Employee and
shall be null and void.
(vi) No Other Benefits or Compensation. Except as
may be provided under this Agreement, under
the terms of any incentive compensation,
employee benefit, or fringe benefit plan,
applicable to Employee at the time of
Employee's termination or resignation of
employment, Employee shall have no right to
receive any other compensation, or to
participate in any other plan, arrangement
or benefit, with respect to future period
after such termination or resignation.
(B) No Severance Pay will be required if the employment of the
Employee is terminated by the Company for Cause (as
hereinafter defined) or by the Employee (other than for Good
Reason as defined in Paragraph 9) or if the Employee gives
notice to terminate in accordance with Paragraph 1. The
Severance Pay provided herein is provided in order to
reinforce and encourage the continued loyalty, attention, and
dedication of the Employee to the Company's business and
affairs without the concerns which normally arise from the
possibility of a loss of employment security. As used herein,
the terms "Retirement" and "Cause" shall have the following
meanings, respectively:
(a) Retirement.
Termination of the Employee's employment on
account of "Retirement" shall mean
termination on or after the Employee's
normal retirement date in accordance with
the terms of the Ogden 401(k) Plan; and
(b) Cause.
Termination by the Company of the Employee's
employment for "Cause" shall mean
termination as a result of (i) the willful
and continued failure by the Employee to
perform substantially the services
contemplated by this Agreement (other than
any such failure resulting from the
Employee's incapacity due to physical or
mental illness) after a written demand for
substantial performance is delivered to the
Employee by a member or representative of
the Board of Directors of the Company which
specifically identifies the manner in which
it is alleged that the Employee has not
substantially performed such services, or
(ii) the willful engaging
3
<PAGE>
by the Employee in gross misconduct which is
materially and demonstrably injurious to the
Company; provided that, no act, or failure
to act, on the Employee's part shall be
considered "willful" unless done, or omitted
to be done, in bad faith and without
reasonable belief that such action or
omission was in, or not opposed to, the best
interests of the Company."
(IV) Paragraph 9. Termination by the Employee for Good Reason of
the Employment Agreement is amended by adding the following
Subparagraph (e) thereto, all other terms of Paragraph 9.
remain unchanged and in full force and effect:
"(e) any "Change in Control" of the Company as
defined in Appendix A to this Agreement".
AGREED AND ACCEPTED Very truly yours,
Ogden Corporation
/s/ Quintin G. Marshall
- ----------------------- Date: September __, 1998 By /s/ R. Richard Ablon
Quintin G. Marshall --------------------------
Chairman of the
Board, President and
Chief Executive
Officer
4
<PAGE>
APPENDIX A
DEFINITION OF CHANGE IN CONTROL
The following definition of Change in Control shall apply for purposes of
Paragraph 9.(e) of the Employment Agreement:
Change in Control. Change in Control of the Company shall be deemed to have
occurred as of the first day any one or more of the following conditions shall
have been satisfied:
(a) Any person, or more than one person acting as a group (within the
meaning of the Securities Exchange Act of 1934), other than a trustee
or other fiduciary holding securities under an employee benefit plan
sponsored by the Company, becomes the beneficial owner, directly or
indirectly, of securities of the Company, representing more than
twenty-five percent (25%) of the combined voting power of the Company's
then outstanding securities;
(b) Individuals who, as of May 20, 1998, constitute the Board of Directors
of the Company (the Incumbent Board) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to May 20, 1998, whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(c) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all of the Company's assets; or
(iii) a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least seventy-five percent (75%)
of the combined voting power of the voting securities of the Company
(or such surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.
5
<PAGE>
Exhibit 10.8(j)(i)
October 13, 1998
Mr. Jesus Sainz
Paseo Conde de los Gaitanes, 34
La Moraleja 28109
Madrid, Spain
Dear Mr. Sainz:
This letter will confirm the agreement between you and Ogden
Corporation (the "Company") that, effective as of October 1, 1998, Paragraph 9.
Termination by the Employee for Good Reason of the Employment Agreement between
you and the Company, dated as of January 15, 1997 (the "Employment Agreement")
is hereby amended by adding the following Subparagraph (e) thereto: "(e) any
"Change in Control" of the Company as defined in Appendix A to this Employment
Agreement". All other terms and conditions of the Employment Agreement remain
unchanged and in full force and effect.
AGREED AND ACCEPTED Very truly yours,
Ogden Corporation
/s/ Jesus Sainz Date: October __, 1998 By /s/ R. Richard Ablon
- --------------- ---------------------------
Jesus Sainz Chairman of the
Board, President and
Chief Executive
Officer
<PAGE>
APPENDIX A
DEFINITION OF CHANGE IN CONTROL
The following definition of Change in Control shall apply for purposes of
Paragraph 9.(e) of the Employment Agreement:
Change in Control. Change in Control of the Company shall be deemed to have
occurred as of the first day any one or more of the following conditions shall
have been satisfied:
(a) Any person, or more than one person acting as a group (within the
meaning of the Securities Exchange Act of 1934), other than a trustee
or other fiduciary holding securities under an employee benefit plan
sponsored by the Company, becomes the beneficial owner, directly or
indirectly, of securities of the Company, representing more than
twenty-five percent (25%) of the combined voting power of the Company's
then outstanding securities;
(b) Individuals who, as of May 20, 1998, constitute the Board of Directors
of the Company (the Incumbent Board) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to May 20, 1998, whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(c) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all of the Company's assets; or
(iii) a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least seventy-five percent (75%)
of the combined voting power of the voting securities of the Company
(or such surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.
2
<PAGE>
Exhibit 10.8(k)(i)
Octoer 3, 1998
Mrs. Alane Baranello
54 Castle Ridge Road
Manhasset, New York 11030
Dear Mrs. Baranello:
This letter will confirm that the Employment Agreement between you and
Ogden Services Corporation dated as of October 28, 1996 (the "Employment
Agreement") is hereby amended effective as of October 1, 1998 as follows: (i)
Ogden Corporation is hereby substituted for Ogden Services Corporation as the
Employer and Company under the Employment Agreement, and (ii), Paragraph 9.
Termination by the Employee for Good Reason of the Employment Agreement is
hereby amended by adding the following Subparagraph (e) thereto: "(e) any
"Change in Control" of the Company as defined in Appendix A to this Employment
Agreement." All other terms and conditions of the Employment Agreement remain
unchanged and in full force and effect.
AGREED AND ACCEPTED Very truly yours,
Ogden Corporation
/s/ Alane G. Baranello Date: October 3, 1998 By /s/ R. Richard Ablon
- ---------------------- --------------------------
Alane G. Baranello Chairman of the
Board, President and
Chief Executive
Officer
<PAGE>
APPENDIX A
DEFINITION OF CHANGE IN CONTROL
The following definition of Change in Control shall apply for purposes of
Paragraph 9.(e) of the Employment Agreement:
Change in Control. Change in Control of the Company shall be deemed to have
occurred as of the first day any one or more of the following conditions shall
have been satisfied:
(a) Any person, or more than one person acting as a group (within the
meaning of the Securities Exchange Act of 1934), other than a trustee
or other fiduciary holding securities under an employee benefit plan
sponsored by the Company, becomes the beneficial owner, directly or
indirectly, of securities of the Company, representing more than
twenty-five percent (25%) of the combined voting power of the Company's
then outstanding securities;
(b) Individuals who, as of May 20, 1998, constitute the Board of Directors
of the Company (the Incumbent Board) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to May 20, 1998, whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(c) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all of the Company's assets; or
(iii) a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least seventy-five percent (75%)
of the combined voting power of the voting securities of the Company
(or such surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.
2
<PAGE>
Exhibit 10.8(m)
EMPLOYMENT AGREEMENT
OGDEN CORPORATION (the "Company") and RAY DOMBROWSKI ("Executive") agree to
enter into this EMPLOYMENT AGREEMENT dated as of September 21, 1998, as follows:
1. Employment.
The Company hereby agrees to employ Executive, and Executive hereby agrees to be
employed by the Company, upon the terms and subject to the conditions set forth
in this Agreement.
2. Employment Term.
The period of Executive's employment under this Agreement shall begin as of
September 21, 1998 (the "Effective Date") and shall continue until terminated in
accordance with Section 5 below (the "Employment Term").
3. Duties and Responsibilities.
(a) The Company will employ Executive as its Chief Financial Officer. In
such capacity, Executive shall perform the customary duties and have
the customary responsibilities of such position and such other duties
as may be assigned to Executive from time to time by the Company's
Chief Executive Officer or by the Company's Board of Directors (the
"Board").
(b) Executive agrees to faithfully serve the Company, devote his full
working time, attention and energies to the business of the Company its
subsidiaries and affiliated entities, and perform the duties under this
Agreement to the best of his abilities. Executive may perform services
without direct compensation therefor in connection with the management
of personal investments or in connection with charitable or civic
organizations.
(c) Executive agrees (i) to comply with all applicable laws, rules and
regulations, and all requirements of all applicable regulatory,
self-regulatory, and administrative bodies; (ii) to comply with the
Company's Policy of Business Conduct; and (iii) not to engage in any
other business or employment without the written consent of the Company
except as otherwise specifically provided herein.
4. Compensation and Benefits.
(a) Signing Bonus. The Company shall pay the Executive a signing bonus
("Signing Bonus") in the amount of $50,000 as soon as practicable
following the execution of this Agreement, but in no event sooner than
seven (7) days thereafter. In the event that the Executive's employment
with the Company is either terminated by the Company for Cause pursuant
to Section 5(c) or by the Executive pursuant to Section 5(e) for other
than Good Reason prior to September 21, 1999, the Signing Bonus shall
be repaid by the Executive to the Company.
<PAGE>
(b) Base Salary. During the Employment Term, the Company shall pay
Executive a base salary at the annual rate of $300,000 per year or such
higher rate as may be determined from time to time by the Board ("Base
Salary"). Such Base Salary shall be paid in accordance with the
Company's standard payroll practice for senior executives.
(c) Annual Incentive Bonus. During the Employment Term, the Company will be
eligible for an annual incentive bonus in such amount as may be
determined by the Board, provided that Executive's target incentive
bonus for 1998 will be $220,000 and the minimum bonus payable to
Executive for 1998 will be at least $110,000. The actual amount of the
bonus will be calculated based on the Company's financial performance
and Executive's achievement of pre-determined goals.
(d) Initial Stock Option Grant. Executive will be granted options to
purchase 50,000 shares of Ogden common stock pursuant to the Ogden
Stock Option Plan. During the Employment Term, Executive also will be
considered for the grant of additional stock options from year-to-year
as determined by the Board.
(e) Expense Reimbursement. The Company shall promptly reimburse Executive
for the ordinary and necessary business expenses incurred by Executive
in the performance of the duties under this Agreement in accordance
with the Company's customary practices applicable to senior executives,
provided that such expenses are incurred and accounted for in
accordance with the Company's policy.
(f) Other Benefit Plans, Fringe Benefits and Vacations. Executive shall be
eligible to participate in or receive benefits under any pension plan,
profit sharing plan, 401(k) plan, non-qualified deferred compensation
plan, supplemental executive retirement plan, medical and dental
benefits plan, life insurance plan, short-term and long-term disability
plans, incentive compensation plans, vacations, or any other fringe
benefit plan, generally made available by the Company to senior
executives. Except as otherwise provided in this Agreement, any such
participation shall be in accordance with the provisions of such plans
and nothing contained in this Agreement is intended to, or shall be
deemed to, affect adversely any of Executive's rights as a participant
under any such plans. Nothing herein shall prevent the Board from (i)
paying a bonus to Executive under any incentive plan which it adopts
and in which the other executives participate or (ii) modifying or
discontinuing any benefit plan on a consistent and non-discriminatory
basis applicable to all such executives.
(g) New York City Apartment. The Company will provide Executive with an
apartment located near the Company's principal place of business in New
York City selected by mutual agreement of the parties for the
Executive's sole use during the Employment Term.
5. Termination of Employment.
Executive's employment under this Agreement may be terminated under the
following circumstances:
(a) Death. Executive's employment shall terminate upon Executive's death.
(b) Total Disability. The Company may terminate Executive's upon his
becoming "Totally Disabled". For purposes of this Agreement, Executive
shall be "Totally Disabled" if he is physically or mentally
incapacitated so as to render him incapable of performing his usual and
<PAGE>
customary duties under this Agreement. Executive's receipt of
disability benefits under the Company's long-term disability plan or
receipt of Social Security disability benefits shall be deemed
conclusive evidence of Total Disability for purpose of this Agreement;
provided, however, that in the absence of Executive's receipt of such
long-term disability benefits or Social Security benefits, the
Board may, in its reasonable discretion (but based upon appropriate
medical evidence), determine that Executive is Totally Disabled. (c)
Termination by the Company for Cause. The Company may terminate
Executive's employment for "Cause". Such termination shall be effective
as of the date specified in the written Notice of Termination provided
to Executive.
(i) Termination of employment by the Company for Cause shall
be deemed to have occurred only if such termination directly
results from: (A) an act or acts of dishonesty on Executive's
part constituting a felony; (B) Executive's willful and
continued failure to devote the time, attention, and effort
necessary to substantially perform his duties as an executive
officer of the Company in a manner consistent with Executive's
past performance (other than any such failure resulting from
Executive's incapacity due to physical or mental illness),
after a demand for substantial performance is delivered to
Executive by the Board which specifically identifies the
manner in which the Board believes that Executive has not
substantially performed his duties and Executive is given a
reasonable time after such demand substantially to perform his
duties; (C) gross misconduct or gross negligence in connection
with the business of the Company or an affiliate which has
substantial effect on the Company or the affiliate; or (D) a
material breach of any of the covenants set forth in Section 7
hereof.
(ii) Executive's employment shall in no event be considered to
have been terminated by the Company for Cause if the act or
failure to act upon which such termination is based: (A) was
done or omitted to be done as a result of bad judgment or
negligence on Executive's part, or without intent of gaining
therefrom directly or indirectly a profit to which Executive
was not legally entitled, or as a result of Executive's good
faith belief that such act or failure to act, was, and is,
not opposed to the interests of the Company; or (B) is an act
or failure to act in respect of which Executive meets the
applicable standard of conduct prescribed for indemnification
or reimbursement or payment of expenses under the By-laws of
the Company or the laws of the state of its incorporation or
the liability insurance covering directors and officers of
the Company, in each case as in effect at the time of such
act or failure to act.
(iii) Any determination of Cause under this Agreement shall be made
by resolution duly adopted by the affirmative vote of not
less than two-thirds of the entire membership of the Board at
a meeting of the Board called and held for the purpose (after
reasonable notice to Executive and an opportunity for
Executive, together with Executive's counsel, to be heard
before the Board), finding that in the good faith opinion of
the Board that Executive was guilty of conduct set forth
above in clause (i) of this Section 5(c) and specifying the
particulars thereof in detail.
(d) Termination by the Company without Cause. The Company may terminate
Executive's employment under this Agreement without Cause at any time
after providing Notice of Termination to Executive.
<PAGE>
(e) Termination by Executive. Executive may terminate his employment under
this Agreement at any time after providing Notice of Termination to the
Company. Such Notice shall state whether the Executive's termination is
for "Good Reason". Termination of employment by Executive for Good
Reason shall be deemed to have occurred, if Executive provides the
Notice of Termination within 60 days after the occurrence of any of the
following:
(i) A change in Executive's responsibilities, status, title, or
position, which, in Executive's reasonable judgment,
represents a diminution of Executive's responsibilities,
status, title, or position offices, or any removal of
Executive from, or any failure to re-elect Executive to, any
of such titles, offices, or positions, provided that this
clause shall not apply if -------- Executive's employment is
terminated as a result of: (A) Executive's death, (B)
Executive's Total Disability in accordance with Section 5(c),
(C) Cause in accordance with Section 5(d), or (D) Executive's
voluntary termination in accordance with this Section 5(e)
other than for Good Reason.
(ii) A reduction by the Company in Executive's Base Salary.
(iii) The failure of the Company substantially to maintain and to
continue Executive's participation in the Company's benefit
plans (other than those plans or improvements that have
expired thereafter in accordance with their original terms),
or the taking of any action which would materially reduce
Executive's benefits under any of such plans or deprive
Executive of any material fringe benefit enjoyed by him.
(iv) The failure by the Company to pay any material amount of
current compensation owing to Executive, or any material
amount of compensation deferred under any plan, agreement or
arrangement of or with the Company owing to Executive, within
20 days after the Executive makes written demand for such
amount.
(v) The failure by the Company to obtain an assumption of the
obligations of the Company under this Agreement by any
successor to the Company.
(vi) Any purported termination of Executive's employment which
is not effected pursuant to a Notice of Termination, and for
purposes of this Agreement, no such purported termination
shall be effective.
(vii) Any "Change in Control" of the Company as defined in
Appendix A to this Agreement.
(f) Notice of Termination. Any termination of Executive's employment by the
Company or by Executive (other by reason of Executive's death) shall be
communicated by written Notice of Termination to the other party in
accordance with Section 16 below. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice in writing which shall
indicate the specific termination provision in this Agreement relied
upon to terminate Executive's employment and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated.
(g) Termination Date. Termination Date means (i) if Executive's employment
is terminated because of his death, the date of death, or (ii) if
employment is terminated for any other reason, the date specified in
the Notice of Termination.
<PAGE>
6. Compensation Following Termination of Employment.
(a) Termination by Reason of Death. In the event that Executive's
employment is terminated by reason of Executive's death, the Company
shall pay the following amounts to Executive's beneficiary or estate:
(i) Earned But Unpaid Compensation. Any accrued but unpaid
Base Salary for services rendered to the date of death, any
accrued but unpaid expenses required to be reimbursed under
this Agreement, and any vacation accrued to the date of death.
(ii) Lump Sum Payment. An amount equal to the Base Salary (at
the rate in effect as of the date of Executive's death) which
would have been payable to Executive if Executive had
continued in employment until the last day of the month in
which Executive's death occurs. Such amount shall be paid in a
single lump sum cash payment within 30 days after Executive's
death.
(iii) Other Benefits. Any benefits to which Executive may be
entitled pursuant to the plans, policies and arrangements
referred to in Section 4(e) hereof as determined and paid in
accordance with the terms of such plans, policies and
arrangements.
(b) Termination by Reason of Total Disability. In the event that
Executive's employment is terminated by reason of Executive's Total
Disability prior to the last day of the Employment Term as determined
in accordance with Section 5(b), the Company shall pay the following
amounts to Executive:
(i) Earned But Unpaid Compensation. Any accrued but unpaid
Base Salary for services rendered to Executive's Termination
Date, any accrued but unpaid expenses required to be
reimbursed under this Agreement, any vacation accrued to the
Termination Date.
(ii) Continuation of Base Salary. An amount equal to (A) the
Base Salary (at the rate in effect as of the date of
Executive's Total Disability) which would have been payable to
Executive if Executive had continued in active employment
until the end of the 12-month period following Executive's
Termination Date, or such longer period as may be determined
by the Board, (B) reduced by amount of disability insurance
benefits payable to Executive during such period under any
employer-paid disability insurance plan. Payment shall be made
at the same time and in the same manner as such compensation
would have been paid if Executive had remained in active
employment until the end of such period.
(iii) Other Benefits. Any benefits to which Executive may be
entitled pursuant to the plans, policies and arrangements
referred to in Section 4(e) hereof shall be determined and
paid in accordance with the terms of such plans, policies and
arrangements.
(c) Termination for Cause or Termination By Executive for Other Than Good
Reason. In the event that Executive's employment is terminated by the
Company for Cause pursuant to Section
<PAGE>
5(c), or by Executive pursuant to Section 5(e) for other than Good
Reason, the Company shall pay the following amounts to Executive:
(i) Earned But Unpaid Compensation. Any accrued but unpaid
Base Salary for services rendered to Executive's Termination
Date, any accrued but unpaid expenses required to be
reimbursed under this Agreement, any vacation accrued to
Executive's Termination Date.
(ii) Other Benefits. Any benefits to which Executive may be
entitled pursuant to the plans, policies and arrangements
referred to in Section 4(e) hereof shall be determined and
paid in accordance with the terms of such plans, policies and
arrangements.
(d) Termination By the Company Without Cause or Termination by Executive
for Good Reason. Executive shall be entitled to the benefits described
in this Section 6(d) in the event that Executive's employment is
terminated (i) by the Company pursuant to Section 5(d) for reasons
other than death, Total Disability, or Cause, or (ii) by Executive for
Good Reason pursuant to Section 5(e).
(i) Earned But Unpaid Compensation. The Company shall pay
Executive any accrued but unpaid Base Salary for services
rendered to Executive's Termination Date, any accrued but
unpaid expenses required to be reimbursed under this
Agreement, any vacation accrued to Executive's Termination
Date.
(ii) Lump Sum Payment. The Company shall pay Executive an
amount equal to the product of five times the sum of (A) and
(B) below:
(A) Executive's annualized Base Salary at
the highest annual rate in effect at any time prior
to the Termination Date; and
(B) the amount of annual bonus payable to
Executive for the calendar year ending immediately
prior to the calendar year in which the Termination
Date occurs.
This amount will be paid to Executive in a single
lump sum within 30 business days after the Termination Date.
(iii) Gross-Up Payment. In the event that any portion of the
benefits payable under this Section 6(d) and any other
payments and benefits under any other agreement with or plan
of the Company (in the aggregate, "Total Payments") constitute
an "excess parachute payment" within the meaning of Section
280G of the Internal Revenue Code (the "Code"), then the
Company shall pay Executive as promptly as practicable
following such determination an additional amount (the
"Gross-up Payment") calculated as described below to reimburse
Executive on an after tax basis for any excise tax imposed on
such payments under Section 4999 of the Code. The Gross-up
Payment shall equal the amount, if any, needed to ensure that
the net parachute payments (including the Gross-up Payment)
actually received by Executive after the imposition of federal
and state income and excise taxes (including any interest or
penalties imposed by the Internal Revenue Service), is equal
to the amount that
<PAGE>
Executive would have netted after the imposition of federal
and state income taxes had the Total Payments not been
subject to the taxes imposed by Section 4999. For purposes of
this calculation, it shall be assumed that Executive's tax
rate will be the maximum marginal federal and state income
tax rate on earned income, with such maximum federal rate to
be computed with regard to Section 1(a) of the Code.
In the event that Executive and the Company are
unable to agree as to the amount of the Gross-up Payment, if
any, Executive shall select a law firm or accounting firm from
among those regularly consulted (during the 12-month period
immediately prior to the Termination Date) by the Company
regarding federal income tax matters and such law firm or
accounting firm shall determine the amount of Gross-up Payment
and such determination shall be final and binding upon
Executive and the Company.
(iv) Other Benefits. Any benefits to which Executive may be
entitled pursuant to the plans, policies and arrangements
referred to in Section 4(e) hereof shall be determined and
paid in accordance with the terms of such plans, policies and
arrangements.
(v) No Mitigation Required. Executive shall not be required to
mitigate the amount of any compensation provided for under
this Section 6(d) by seeking other employment or otherwise,
nor shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by the
Employee as the result of employment with another employer
after the Termination Date or by any other compensation.
(vi) Non-Competition Covenant Does Not Apply. The restrictive
covenant prohibiting competitive activity set forth in Section
7(b) below shall not be applicable to Executive and shall be
null and void.
(e) No Other Benefits or Compensation. Except as may be provided under this
Agreement, under the terms of any incentive compensation, employee
benefit, or fringe benefit plan, applicable to Executive at the time of
Executive's termination or resignation of employment, Executive shall
have no right to receive any other compensation, or to participate in
any other plan, arrangement or benefit, with respect to future periods
after such termination or resignation.
<PAGE>
7. Restrictive Covenants.
(a) Protected Information. Executive recognizes and acknowledges that he
will have access to various confidential or proprietary information
concerning the Company and entities affiliated with the Company of a
special and unique value which may include, without limitation, (i)
books and records relating to operations, finance, accounting, sales,
personnel and management, (ii) policies and matters relating
particularly to operations such as customer service requirements, costs
of providing service and equipment, operating costs and pricing
matters, and (iii) various trade or business secrets, including
business opportunities, marketing or business diversification plans,
business development and bidding techniques, methods and processes,
financial data and the like (collectively, the "Protected
Information"). Executive therefore covenants and agrees that he will
not at any time, either while employed by the Company or afterwards,
knowingly make any independent use of, or knowingly disclose to any
other person or organization (except as authorized by the Company) any
of the Protected Information.
(b) Competitive Activity. Executive covenants and agrees that at all times
during his period of employment with the Company, and for a period of
two (2) years after the date of termination of his employment by reason
of (i) termination by the Company for Cause in accordance with Section
5(c) above, or (ii) termination by the Executive in accordance with
Section 5(e) above for other than Good Reason, he will not, directly or
indirectly, engage in, assist, or have any active interest or
involvement whether as an employee, agent, consultant, creditor,
advisor, officer, director, stockholder (excluding holding of less than
1% of the stock of a public company), partner, proprietor or any type
of principal whatsoever, in any person, firm, or business entity which,
directly or indirectly, is engaged in the same business as that
conducted and carried on by the Company, without the Company's specific
written consent to do so.
(c) Return of Documents and Other Materials. Executive shall promptly
deliver to the Company, upon termination of his employment, or at any
other time as the Company may so request, all customer lists, leads and
refunds, data processing programs and documentation, employee
information, memoranda, notes, records, reports, tapes, manuals,
drawings, blueprints, programs, and any other documents and other
materials (and all copies thereof) relating to the Company's business
or that of its customers, and all property associated therewith, which
Executive may then possess or have under his control.
8. Enforcement of Covenants.
(a) Right to Injunction. Executive acknowledges that a breach of the
covenants set forth in Section 7 hereof will cause irreparable damage
to the Company with respect to which the Company's remedy at law for
damages will be inadequate. Therefore, in the event of breach or
anticipatory breach of the covenants set forth in this section by
Executive, Executive and the Company agree that the Company shall be
entitled to the following particular forms of relief, in addition to
remedies otherwise available to it at law or equity, injunctions, both
preliminary and permanent, enjoining or retraining such breach or
anticipatory breach and Executive hereby consents to the issuance
thereof forthwith and without bond by any court of competent
jurisdiction.
(b) Separability of Covenants. The covenants contained in Section 7 hereof
constitute a series of separate covenants, one for each applicable
State in the United States and the District of
<PAGE>
Columbia, and one for each applicable foreign country. If in any
judicial proceeding, a court shall hold that any of the covenants set
forth in Section 7 exceed the time, geographic, or occupational
limitations permitted by applicable laws, Executive and the Company
agree that such provisions shall and are hereby reformed to the maximum
time, geographic, or occupational limitations permitted by such laws.
Further, in the event a court shall hold unenforceable any of the
separate covenants deemed included herein, then such unenforceable
covenant or covenants shall be deemed eliminated from the provisions of
this Agreement for the purpose of such proceeding to the extent
necessary to permit the remaining separate covenants to be enforced in
such proceeding. Executive and the Company further agree that the
covenants in Section 7 shall each be construed as a separate agreement
independent of any other provisions of this Agreement, and the
existence of any claim or cause of action by Executive against the
Company whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of any of the
covenants of Section 7.
9. Certain Proprietary Rights.
Executive agrees to and hereby does assign to the Company all his right, title
and interest in and to all inventions, whether or not patentable, which are made
or conceived solely or jointly by him:
(a) at any time during the term of his employment by the Company in an
executive, managerial, or planning capacity (including development and
sales); or
(b) during the course of or in connection with his duties during the
Employment Term; or
(c) with the use of time or materials of the Company.
Executive agrees to communicate to the Company or its representatives all facts
known to him concerning such inventions, to sign all rightful papers, make all
rightful oaths and generally to do everything possible to aid the Company in
obtaining and enforcing proper patent protection for all such inventions in all
countries and in vesting title to such inventions in all countries and in
vesting title to such inventions and patents in the Company. For the purpose of
this Agreement, the subject matter of any application for patent naming Employee
as a sole or joint inventor filed during the course of employment or within one
year subsequent to the termination thereof shall be deemed to be an invention
made or conceived by him during the course of his employment by the Company and
assignable to the Company hereunder, unless Executive establishes by a
preponderance of the evidence that such invention was made or conceived by him
subsequent to termination of his employment hereunder. At the Company's request
(during or after the term of this Agreement) and expense, Executive will
promptly execute a specific assignment of title to the Company, and perform any
other acts reasonably necessary to implement the foregoing assignment.
10. Withholding of Taxes.
The Company shall withhold from any compensation and benefits payable under this
Agreement all applicable federal, state, local, or other taxes.
11. Source of Payments.
All payments provided under this Agreement, other than payments made pursuant to
a plan which provides otherwise, shall be paid from the general funds of the
Company, and no special or separate
<PAGE>
fund shall be established, and no other segregation of assets made, to assure
payment. Executive shall have no right, title or interest whatever in or to any
investments which the Company may make to aid the Company in meeting its
obligations under this Agreement. To the extent that any person acquires a right
to receive payments from the Company under this Agreement, such right shall be
no greater than the right of an unsecured creditor of the Company and its
affiliates.
12. Successor and Binding Agreement.
(a) Company Successor. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company, by
agreement in form and substance satisfactory to Executive, expressly to
assume and agree to perform this Agreement in the same manner and to
the same extent as the Company would be required to perform it if no
such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle Executive to compensation
from the Company in the same amount and on the same terms as Executive
would be entitled to under this Agreement if Executive had given Notice
of Termination for Good Reason as of the day immediately before such
succession became effective and had specified that day in the notice of
termination. As used in this Agreement, "Company" shall mean the
Company as defined in the first sentence of this Agreement and any
successor to all or substantially all its business or assets or which
otherwise becomes bound by all the terms and provisions of this
Agreement, whether by the terms hereof, by operation of law or
otherwise.
(b) Executive's Successor. This Agreement shall inure to the benefit of and
be enforceable by Executive and his personal or legal representatives
and successors in interest under this Agreement.
(c) Facility of Payment. In the event of Executive's legal incapacity, the
Company may make any payments due under this Agreement to his legal
representative. In the event of Executive's death, the Company may make
any payment due under this Agreement to his surviving spouse or, if
none, to Executive's estate. Any payment made in accordance with this
provision fully discharges the obligation of the Company therefor.
13. Assignment by Executive.
The rights and benefits of Executive under this Agreement are personal to him
and no such right or benefit shall be subject to voluntary or involuntary
alienation, assignment or transfer; provided, however, that nothing in this
Section 13 shall preclude Executive from designating a beneficiary or
beneficiaries to receive any benefit payable on his death.
14. Entire Agreement; Amendment.
This Agreement shall supersede any and all existing oral or written agreements,
representations, or warranties between Executive and the Company or any of its
subsidiaries or affiliated entities relating to the terms of Executive's
employment during the Employment Term. It may not be amended except by a written
agreement signed by both parties.
<PAGE>
15. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed in that
State, without regard to its conflict of laws provisions.
16. Notices.
Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by registered or certified mail, return receipt
requested, or by facsimile or by hand delivery, to those listed below at their
following respective addresses or at such other address as each may specify by
notice to the others:
To the Company:
Ogden Corporation
Two Pennsylvania Plaza
New York, New York 10121
Attention: General Counsel
To Executive:
Ray Dombrowski
120 Glenwood Road
Haddonfield, New Jersey 08033
17. Miscellaneous.
(a) Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
(b) Separability. If any term or provision of this Agreement is declared
illegal or unenforceable by any court of competent jurisdiction and
cannot be modified to be enforceable, such term or provision shall
immediately become null and void, leaving the remainder of this
Agreement in full force and effect.
(c) Headings. Section headings are used herein for convenience of reference
only and shall not affect the meaning of any provision of this
Agreement.
(d) Rules of Construction. Whenever the context so requires, the use of the
singular shall be deemed to include the plural and vice versa.
(e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts will together constitute but one
Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year set forth below.
OGDEN CORPORATION EXECUTIVE
By:/s/ R. Richard Ablon
-----------------------------
R. Richard Ablon Ray Dombrowski
President and Chief Executive
Officer
Date: /s/ Ray Dombrowski
----------------------------
Date:
----------------------------
<PAGE>
APPENDIX A
DEFINITION OF CHANGE IN CONTROL
The following definition of "Change in Control" shall apply for purposes of
Paragraph 5(e)(vii) of the Employment Agreement:
Change in Control. A "Change in Control" of the Company shall be deemed to have
occurred as of the first day any one or more of the following conditions shall
have been satisfied:
(a) Any person (other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or a corporation owned
directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), becomes the beneficial owner, directly or indirectly, of
securities of the Company, representing more than twenty-five percent
(25%) of the combined voting power of the Company's then outstanding
securities;
(b) Individuals who, as of May 20, 1998, constitute the Board of Directors
of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to May 20, 1998, whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(c) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all the Company's assets; or (iii)
a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least seventy-five percent (75%)
of the combined voting power of the voting securities of the Company
(or such surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.
<PAGE>
EXHIBIT 11
OGDEN CORPORATION AND SUBSIDIARIES
DETAILS OF COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------------------------------
1998 1997
---------------------------------------- ---------------------------------------
INCOME SHARES PER-SHARE INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) (AMOUNT) (NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- --------- ----------- ------------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net income ................... $66,915 $55,391
Less: preferred stock dividend 109 115
------- -------
Basic Earnings Per Share ..... 66,806 50,071 $ 1.33 55,276 49,951 $ 1.11
------- --------
Effect of Dilutive Securities:
Stock Options ................ 887 374
Convertible preferred stock .. 109 258 115 278
6% convertible debentures .... 1,582 1,450 1,540 1,450
5 3/4% Convertible debentures 1,155 1,016 1,105 1,016
------- ------- ------- -------
Diluted Earnings Per Share ... $69,652 53,682 $ 1.30 $58,036 53,069 $ 1.09
------- ------- ------- ------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------------------------------
1998 1997
---------------------------------------- ---------------------------------------
INCOME SHARES PER-SHARE INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) (AMOUNT) (NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- --------- ----------- ------------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net income ................... $28,155 $24,605
Less: preferred stock dividend 36 38
------- -------
Basic Earnings Per Share ..... 28,119 49,653 $ 0.57 24,567 50,048 $ 0.49
------- --------
Effect of Dilutive Securities:
Stock Options ................ 575 555
Convertible preferred stock .. 36 255 38 272
6% convertible debentures .... 807 2,175 793 2,175
5 3/4% Convertible debentures 589 1,524 574 1,524
------- ------- ------- -------
Diluted Earnings Per Share ... $29,551 54,182 $ 0.55 $25,972 54,574 $ 0.48
------- ------- ------- ------- ------- --------
</TABLE>
Note:
Basic earnings per common share was computed by dividing net income, reduced by
preferred stock dividend requirements, by the weighted average of the number of
shares of common stock outstanding during each period.
Diluted earnings per common share was computed on the assumption that all
convertible debentures, convertible preferred stock, and stock options converted
or exercised during each period, or outstanding at the end of each period were
converted at the beginning of each period or the date of issuance or grant, if
dilutive. This computation provides for the elimination of related convertible
debenture interest and preferred dividends.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 353,669
<SECURITIES> 0
<RECEIVABLES> 414,195
<ALLOWANCES> 33,893
<INVENTORY> 32,958
<CURRENT-ASSETS> 997,909
<PP&E> 2,608,034
<DEPRECIATION> 628,469
<TOTAL-ASSETS> 3,974,330
<CURRENT-LIABILITIES> 620,781
<BONDS> 1,945,608
0
43
<COMMON> 24,609
<OTHER-SE> 525,228
<TOTAL-LIABILITY-AND-EQUITY> 3,974,330
<SALES> 402,604
<TOTAL-REVENUES> 1,298,443
<CGS> 363,760
<TOTAL-COSTS> 732,068
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,118
<INTEREST-EXPENSE> 25,018
<INCOME-PRETAX> 111,812
<INCOME-TAX> 42,488
<INCOME-CONTINUING> 66,915
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 66,915
<EPS-PRIMARY> 1.33
<EPS-DILUTED> 1.30
</TABLE>
