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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
...............................OGDEN CORPORATION ..............................
(Name of Registrant as Specified In Its Charter)
.............................PROVIDENCE CAPITAL, INC...........................
(Name of Person(s) Filing Proxy Statement)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which the
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previously. Identify the previous filing by registration statement number, or
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PROXY STATEMENT OF
PROVIDENCE CAPITAL, INC.
IN OPPOSITION TO THE BOARD OF DIRECTORS
OF OGDEN CORPORATION
------------------------------------------
OGDEN CORPORATION
Annual Meeting of Shareholders
scheduled for May 20, 1998
------------------------------------------
To our fellow shareholders of OGDEN CORPORATION:
This proxy statement is being furnished to holders ("shareholders")
of Common Stock, par value $.50 per share ("Common Stock") and $1.875
Cumulative Convertible Preferred Stock, Partially Participating ("Series A
Preferred Stock") of Ogden Corporation, a Delaware corporation ("Ogden" or the
"Company"), in connection with the solicitation of proxies by Providence
Capital, Inc. ("Providence") and certain of its affiliates and associates
(collectively, the "Soliciting Group") for use in connection with the
Company's 1998 annual meeting or at any adjournments or postponements thereof
(the "1998 Annual Meeting"). The Company's Board of Directors ("Board") has
announced that the 1998 Annual Meeting will be held on May 20, 1998 at the
Villas of Grand Cypress, One North Jacaranda, Orlando, Florida at 9:00 AM,
local time. The Soliciting Group is seeking your support to elect the three
candidates Providence intends to nominate (the "Nominees" or the "Slate") at
the 1998 Annual Meeting, namely Michael G. Conroy, Larry G. Schafran and
Robert J. Slater, to Ogden's Board of Directors.
Ogden's address is Ogden Corporation, Two Pennsylvania Plaza, New
York, NY 10121.
THIS SOLICITATION IS BEING MADE BY PROVIDENCE IN OPPOSITION TO THE
INCUMBENT BOARD AND MANAGEMENT OF THE COMPANY.
Providence's definitive Proxy Statement and accompanying Gold Proxy
Card are first being sent to shareholders on or about May 11, 1998.
Any questions regarding this proxy statement should be addressed to
Providence by mail at 730 Fifth Avenue, New York, NY 10019 or by telephone
(212) 888-3200 or to MacKenzie Partners Inc., 156 Fifth Avenue, New York, NY
10016, telephone number: (212) 929-5500 or toll free: (800) 322-2885.
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IF A GOLD PROXY CARD IS PROPERLY EXECUTED AND RETURNED, THE SHARES REPRESENTED
BY THE GOLD PROXY CARD WILL BE VOTED AS THE SHAREHOLDER SPECIFIES. IF NO
DIRECTIONS ARE GIVEN AND A SIGNED GOLD PROXY CARD IS RETURNED, THE PROXY
HOLDERS APPOINTED BY PROVIDENCE IN THE PROXY WILL VOTE THE SHARES OF COMPANY
STOCK REPRESENTED BY THAT PROXY CARD (I) "FOR" THE ELECTION OF PROVIDENCE'S
NOMINEES, AND "FOR" THE ELECTION OF THE COMPANY'S NOMINEE WHO IS NOT NAMED IN
1.B. OF THE GOLD PROXY CARD, (II) "FOR" THE RATIFICATION OF DELOITTE & TOUCHE
AS AUDITORS OF THE COMPANY, (III) "FOR" THE SHAREHOLDER PROPOSAL IN FAVOR OF
ELIMINATING THE CLASSIFIED BOARD STRUCTURE, (IV) "AGAINST" THE SHAREHOLDER
RESOLUTION CALLING FOR THE SALE OF THE COMPANY (V) "AGAINST" THE ADOPTION OF
THE CERES PRINCIPLES AND (VI) IN THE DISCRETION OF THE PROXY HOLDER WITH
RESPECT TO ANY OTHER MATTER THAT MAY PROPERLY BE BROUGHT BEFORE THE 1998
ANNUAL MEETING.
A shareholder may revoke a proxy at any time before it is exercised
by delivering a subsequent proxy, giving written notice of the revocation to
the Secretary of Ogden, or by voting in person at the 1998 Annual Meeting.
Management has stated in its proxy statement for the 1998 Annual Meeting that
"such action [e.g., delivery of subsequent proxy etc.] must be taken in
sufficient time to permit the necessary examination and tabulation of the
revocation or the subsequent proxy before the vote is taken."
Carefully review this Proxy Statement and the enclosed materials.
YOUR PROXY IS IMPORTANT. The Soliciting Group urges you to vote FOR
Providence's Nominees, FOR the ratification of Deloitte & Touche as auditors,
FOR the shareholder proposal in favor of eliminating the Classified Board,
AGAINST the shareholder proposal to sell the company and AGAINST the
shareholder proposal urging adoption of the CERES principles. You CANNOT use
the Company's Proxy Card to vote for Providence's Nominees.
IF YOU HAVE ALREADY MAILED THE PROXY CARD SUPPLIED TO YOU BY THE
COMPANY'S BOARD OF DIRECTORS, YOU HAVE THE RIGHT TO CHANGE YOUR VOTE BY
SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY CARD IN THE ENCLOSED
ENVELOPE. The latest dated proxy determines your vote at the 1998 Annual
Meeting.
If you own your shares in the name of a brokerage firm, bank nominee
or other institution, only they can vote your shares. Accordingly, you should
contact the person responsible for your account and give instructions with
respect to the granting of proxies. Your broker cannot vote your shares unless
he or she receives your specific instructions.
IF YOU HAVE ANY QUESTIONS OR HAVE ANY DIFFICULTY GRANTING PROXIES,
YOU ARE INVITED TO CONTACT MACKENZIE PARTNERS AT (212) 929-5500 OR CALL
TOLL-FREE: (800) 322-2885.
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REASONS FOR THE SOLICITATION
As noted, Providence, a registered broker-dealer and stockholder of
record of Ogden, intends to nominate three individuals for election to the
Board of Ogden at the 1998 Annual Meeting. Providence believes that during the
eight-year regime of the current Chief Executive Officer, R. Richard Ablon,
both the Board and senior management at Ogden have failed to implement a
consistent business strategy to deliver increased shareholder value over the
long-term. In fact, Providence believes that the policies of the present Board
and management have diminished shareholder value over the long-term,
considering the level of profitability, earnings growth, and the absence of
economic value added to the Company relative to the capital employed.
The chart below compares Ogden's share price performance relative to
the S&P 500 Index during the past eight years under R. Richard Ablon's
leadership as Chief Executive Officer. The 19.4% cumulative return to Ogden
stockholders equates to just 2.3% compounded annual growth for the past eight
years.
Ogden S&P 500 Index
- --------------------------------------------
May-90 0.00% 0.00%
Jun-90 5.83% -0.89%
Sep-90 -33.01% -15.28%
Dec-90 -27.18% -8.58%
Mar-91 -22.33% 3.87%
Jun-91 -26.70% 2.75%
Sep-91 -24.76% 7.37%
Dec-91 -21.36% 15.46%
Mar-92 -18.11% 11.75%
Jun-92 -23.79% 12.99%
Sep-92 -27.18% 15.66%
Dec-92 -11.65% 20.62%
Mar-93 -5.34% 25.04%
Jun-93 1.94% 24.72%
Sep-93 -2.43% 27.05%
Dec-93 -11.65% 29.13%
Mar-94 -13.59% 23.40%
Jun-94 -14.56% 22.99%
Sep-94 -18.45% 28.09%
Dec-94 -27.18% 27.14%
Mar-95 -21.84% 38.61%
Jun-95 -15.05% 50.80%
Sep-95 -8.74% 61.78%
Dec-95 -16.99% 70.51%
Mar-96 -24.27% 78.70%
Jun-96 -29.61% 85.65%
Sep-96 -21.84% 90.27%
Dec-96 -26.21% 105.06%
Mar-97 -17.96% 109.59%
Jun-97 -15.53% 145.04%
Sep-97 -8.25% 162.24%
Dec-97 9.47% 168.65%
Mar-98 11.65% 205.00%
Apr-98 19.42% 207.77%
Source: Bloomberg.
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Providence sees a direct correlation between the slow growth of Ogden's
share price and the minimal growth in Odgen's earnings. The chart below shows
Ogden's fully diluted earnings per share for the years 1990 through 1997, the
period of completed fiscal years that is coincident with R. Richard Ablon's
tenure as CEO.
Ogden 500 Index
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1990 $ 1.34 $21.34
1991 $ 1.32 $15.97
1992 $ 1.40 $19.09
1993 $ 1.41 $21.88
1994 $ 1.54 $30.60
1995 $ 0.15 $33.96
1996 $ 1.28 $38.73
1997 $ 1.49 $39.89
Source: Ogden Annual Reports.
The compound annual growth rate of Ogden's earnings per share was 1.6%
from 1990 to 1997 compared to 9.3% for the S&P 500 Index. In Providence's
view, Ogden's paltry level of growth is particularly troublesome considering
the Company's net cash used in investment activities amounted to $17.91 per
share during this period.
Even viewed on a cumulative total return basis (e.g. assuming
reinvestment of all dividends) the Company's performance lags behind relevant
market indicators. The following chart, reproduced from management's proxy
statement for the 1998 Annual Meeting shows cumulative total shareholder
return on Ogden's common shares trailing behind each of the S&P 500, S&P
Midcap 400 and S&P 500 Specialized Services Group Indexes by a significant
margin.
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Comparison of Five Year Cummulative Total Shareholder
Return Among Ogden, the S&P 500 Index, the
S&P Midcap 400 Index and the S&P
Specialized Services Group Index
[CHART]
Ogden Corp. S&P 500 S&P Midcap 400 S&P 500 Specialized Svs.
1992 100.0 100.0 100.0 100.0
1993 104.0 108.0 112.0 110.0
1994 90.0 110.0 109.0 109.5
1995 105.0 150.0 133.0 140.0
1996 104.0 185.0 174.0 163.0
1997 153.0 248.0 225.0 225.0
Source: Ogden 1998 Proxy Statement
The Company asserts in its proxy materials that on a total return basis
Ogden's common stock has outperformed the S&P 500 Index since January 1997. In
Providence's view such a short period of relative success versus the S&P 500
Index hardly excuses a long term legacy of failure measured against the same
index.
Providence believes that these results reflect poorly on the present
Board and management considering that growth has been a major theme of Ogden's
management since the appointment of R. Richard Ablon as CEO eight years ago.
Providence is not alone in its assessment of Ogden. The Company's results
and the apparent inability of Ogden's present Board to create value for
shareholders have not escaped the attention of the press. In a December 8,
1997 Business Week* feature story on the best and worst corporate boards among
U.S. public companies, Ogden's present Board was ranked among the ten worst
corporate boards in America. In compiling its rankings Business Week* relied
upon the opinions of 103 of the nation's largest pension funds, money managers
and leading governance experts who had been asked to name and rank
corporations with the most and least effective corporate boards and upon
objective criteria measuring the performance of a board against a set of "best
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practice" guidelines. Most recently, in a Fortune Magazine* article dated
March 30, 1998, Ogden was cited as one of six major U.S. companies who have
simply failed their shareholders.
Providence acknowledges that surveys or press articles concerning a
particular company generally reflect, to a greater or lesser degree, the
opinions or impressions of a particular author or persons the author surveys
at a particular time. However, Providence believes it is telling that twice
within the past six months Ogden's board has been the subject of unflattering
attention from two of America's leading business publications. Providence does
not believe it is a mere coincidence that it has been unable to find any
recent articles that place Ogden's present Board on a list of "best" corporate
boards.
Providence believes that Ogden's poor long-term stock price
performance and poor earnings performance demonstrate that the Company's
long-standing strategy of maintaining a disparate array of businesses
operating all over the globe has not worked. Furthermore, in Providence's
opinion, unless certain critical changes are made with respect to management,
corporate structure, and business focus, there is little reason to believe
that a sustainable level of earnings growth may be attained.
Providence believes that within Ogden's overly broad portfolio of
predominantly unrelated businesses, there exist certain core Aviation and
Entertainment assets which have significant value and growth potential, but
whose business values are presently not being fully realized as a result of
the following factors:
1. Unfocused Operations
Ogden operates a myriad of unrelated businesses ranging literally
from "A" to "Z", for example: artist management, baggage handling, betting
parlors, waste-to-energy management, and zoological parks. Providence believes
that the range of businesses in which Ogden operates results in a lack of
focus and is beyond the capacity of the Company to manage all at once.
While the company claims to operate in three business segments, a
closer inspection of Ogden reveals that the Entertainment division is involved
in eleven different lines of business in seven countries; the Aviation
division provides a wide variety of services and construction to airports and
has investments in four continents; and the Energy division operates four
different lines of business involving numerous types of power generation
plants on three continents.
Based on the Company's 1997 10-K report, the following is a list of
the businesses in which Ogden is currently involved:
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*J.A. Byrne, Business Week, "The Best and Worst Boards" December 8, 1997, and
Colvin, G. Fortune Magazine, "The 1998 Don't-Get-It-All-Stars", March 30,
1998. Providence has neither sought nor obtained the permission of either the
authors or the publishers of the above-cited articles with respect to their
use in this proxy statement.
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I. Entertainment
a) Facilities management and concession services to convention
centers, arenas, and public facilities in Alaska, mainland
U.S., U.K., Australia, Mexico, Canada, Germany.
b) Food & Beverage services to stadiums, arenas, zoos, and
amphitheaters in the U.S., Australia, New Zealand, and
Canada.
c) Casino operator of the Americana Beach Resort in Aruba,
Venezuela.
d) Operator of a thoroughbred racetrack and four OTB parlors in
Illinois.
e) Co-developer and operator of a 15-theater IMAX(TM) chain
(not yet developed).
f) Co-producer of large-format IMAX(TM) feature films with Sony
Corporation.
g) Recorded music and video development.
h) Concert promotion.
i) Broadway and television production.
j) Owner/operator of the Darien Lake Performing Arts Center.
k) Owner and/or Operator of the following theme attractions:
i) American Wilderness, Zoo and Aquarium(TM).
ii) Silver Springs and Wild Waters theme parks in
Orlando, Florida.
iii) Grizzly Park entertainment center in Yellowstone
National Park.
iv) 107th Floor Observation Deck at The World Trade
Center in New York City.
v) La Rural de Palermo fair and exhibition center in
Buenos Aires, Argentina.
vi) Parques Tecnocultiroles, S.A., a manager/operator
of Isla Magic, a theme park in Seville, Spain.
vii) Tinseltown Studios(TM): 700-seat audience
participation theater on part of the Anaheim
Stadium parking lot.
viii) Jazzland: a theme park to be located in New Orleans.
ix) Enchanted Castle Family Entertainment Center in
Chicago.
II. Aviation:
a) Airport services including ground handling, aircraft
cleaning and maintenance, ramp, passenger, cargo and
warehouse, fueling and in-flight catering services
(including operations in Chile, the United Kingdom, the
Netherlands, New Zealand, Peru, Brazil, Canada, Venezuela,
Mexico, St. Maarten, Laos (in process), Puerto Rico, Panama,
and the Dominican Republic).
b) Investments in airport privatization projects in Macau,
Colombia, Argentina, and the Czech Republic.
III. Energy:
a) Waste-to-Energy ("WTE"): Lessee/Operator/Part Owner/Owner
of 28 waste-to-energy projects in the U.S.
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b) Independent Power: Lessee/Operator/Part Owner/Owner of
various projects using a variety of energy sources including
geothermal, coal, hydro, diesel, natural gas, wood waste,
and landfill gas in China, the Philippines, and the U.S.
c) Water and Wastewater
i) Operates three small wastewater treatment
facilities in New York and one under development in
Alabama.
ii) Recent award of a 32-year concession in the City of
Muscat, Sultanate of Oman.
d) Environmental Consulting and Engineering (Ogden is seeking
to dispose of this business).
IV. Combat maneuver instrumentation systems: through Applied Data
Technology, Inc.
V. Contract manufacturing: through Atlantic Design Company, Inc.
2. Rapidly Changing Business Strategy
Providence also believes that the present Board and management is
constantly altering the business strategy of the Company in a manner that
hinders earnings growth. Since 1990, Ogden has exited business lines in the
fields of drug development and biomedical research, building maintenance,
asbestos abatement, telecommunications, defense and space technology,
hazardous waste, and others. Meanwhile, Ogden has entered other businesses
including independent power production, theme park management, airport
construction, wastewater treatment, air combat maneuvering instrumentation
systems, concerts, recorded music and video development, motion picture film
making, and others.
Ogden's operations now extend to such distant and diverse countries
as Laos, Romania, Bolivia, Poland, China, and the Sultanate of Oman.
During the late 1980's and early 1990's, the Company invested heavily
in its WTE operations, which the Company now agrees is a slow-growing
business. Although the Company appears to believe that its WTE operations
allow the Company to compete more effectively for independent power projects
and that there may be opportunities for expansion at existing facilities for
expansion, the Company has openly admitted in its latest Form 10-K that the
"domestic market for [its] waste-to-energy services has fully matured . . ."
and that outside of the United States demand for waste-to-energy projects is
expected to exist "only in unique circumstances". Currently, it appears that
Ogden is pursuing a growth strategy in two completely new lines of business:
Independent Power Construction in emerging markets, and Themed Entertainment.
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Providence doubts that investors can be comfortable with Ogden's
current business strategy given the company's willingness to exit and enter
different lines of business.
3. Confusing Conglomerate Structure
Providence believes that as long as Ogden maintains a conglomerate
structure of many different businesses with widely different growth profiles,
capital needs, and operating cycles, investors will have difficulty
ascertaining the true growth potential of the overall company due to confusion
in valuing multiple business segments.
4. Reliance on Waste-to-Energy Business: No-Growth, Leveraged, and the
Dominant Operating Business.
Over the past decade, Ogden has built a large energy business
(predominantly WTE) which accounts for a major portion of the company's
assets, debt, revenues, and income.
$'s millions % Change
12/97 12/96 1996 - 1997
----- ----- -----------
Revenues
Entertainment 425.9 391.9 8.7%
Aviation 363.3 426.7 -14.9%
- -------------------------------------------------------------------------
Energy 712.3 724.3 -1.4%
- -------------------------------------------------------------------------
Other 248.3 488.1 -49.1%
----- -----
Total 1,749.8 2,031.0 -13.8%
Income from Operations
Entertainment 30.5 20.3 50.2%
Aviation 34.0 14.9 128.2%
- -------------------------------------------------------------------------
Energy 94.4 90.5 4.3%
- -------------------------------------------------------------------------
Other 0.5 16.8 -97.0%
Corporate G&A (22.2) (22.9) -3.1%
------ ------
Total 137.2 119.6 14.7%
Source: Ogden 1997 Annual Report.
Providence believes that due to Ogden's relatively large financial
commitment to WTE, many investors focus primarily on this segment while
ignoring the growth prospects of Ogden's other businesses. Ogden's
consolidated income from operations grew 14.7% in 1997, although net of the
Energy segment, the percentage increase was 47.4%.
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Providence believes that given the large contribution of the Energy
segment to the Company's consolidated results (a segment that the Company
itself believes is growing slowly), it will be difficult for Ogden's overall
consolidated results to grow substantially.
In addition, the $1.5 billion of project debt associated with the WTE
business makes Ogden's balance sheet appear highly leveraged, even though a
majority of the project debt is non-recourse to the Company.
The WTE business, according to management, accounted for 94% of total
income from the Energy segment in 1997. As noted above, management anticipates
that WTE will only grow slowly in the near future due to a largely matured
domestic market and scarce opportunities for new projects. This is a
monumental shift in the Company's outlook, considering that in the 1993 Annual
Report, management defended its investment in WTE by citing EPA statistics
which predicted that by 1999, America would be combusting 21% of its waste in
WTE facilities. Providence believes that this EPA estimate will prove to be
incorrect.
In Providence's view, Ogden's Board has built a conglomerate
structure with its primary business segment consisting of a leveraged, slow
growth, cyclical operation which is potentially vulnerable to rapid industry
changes. From Providence's perspective, Ogden's earlier strategic plan to
become the largest operator of WTE facilities in the world has hurt
shareholder value because now, as Ogden's management itself admits, this
dominant division has a weak outlook.
5. Capital Misallocation
In Providence's view, Ogden's management has an abysmal track record
of allocating capital wisely. From 1990 to 1997, the Company spent a net
$901.9 million, or $17.91 per share, on investing activities. What does the
Company have to show for this investment? Earnings per share in 1997 were 10%
below 1989 which was the year immediately prior to R. Richard Ablon's
appointment as CEO; book value per common share has risen only 2.6% in the
last eight years; and Ogden's stock price declined 11.6% from December 31,
1989 to December 31, 1997! By these three measures, it appears to Providence
that no value has been added from the $17.91 per share of investments made by
the Board and management over the past eight years. Providence believes that
this track record is a signal that Ogden's capital allocation policies must
change.
In addition to investment activities, a major use of capital has been
the dividend. Ogden has expressed a firm commitment to the continuation of a
significant dividend pay-out. Over the past eight years, dividends to common
shareholders have totaled $10.00 per share, which exceeds the cumulative fully
diluted earnings of $9.29 per
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share over this period. In 1997, the pay-out ratio was equal to 84%.
Providence finds the dividend pay-out ratio unsustainable and fundamentally
inconsistent with Ogden's plans to produce significant year-on-year earnings
growth.
Recent changes in the U.S. tax code favoring long term capital gains
reinforce our view that dividends are a less effective way of returning value
to individual shareholders than allocating capital to share repurchases.
Ogden's average dividend yield over the past eight years has been a generous
5.7% compared to an average of 2.5% for the companies in the S&P 500.
Providence believes that Ogden's use of its own common stock to
finance acquisitions also deserves criticism. In December 1994 Ogden issued
5.1 million common shares at $18.375 per share to purchase a minority interest
in Ogden Projects, Inc. This acquisition for stock was made when Ogden's stock
was trading just 3.5% above its four-year low.
In contrast, the management has never implemented a significant share
repurchase program for the purpose of decreasing the number of outstanding
shares, even though the Board approved a two million share repurchase program
in 1990. In January 1998 the Company authorized a new $100 million share
repurchase plan. This repurchase plan, however, is primarily designed to
offset the effects of share issuances relating to the exercise of stock
options, not to reduce the number of outstanding shares. According to the
Company, only approximately $12 million worth of shares have been repurchased
by the Company to date under this latest repurchase plan.
Providence questions the Board's capital allocation decisions that
have included large dividend pay-outs (while also promising growth in
operations) and the use of the Company's stock, trading at historic lows, to
finance acquisitions. In the meantime, the Company has not implemented a share
repurchase program for the purpose of reducing the number of outstanding
shares.
6. Faltering Management
Mr. Ralph Ablon, father of Ogden's present CEO, was CEO from 1962 to
1990. Between the father and son, the two Ablons have run Ogden for the past 36
years.
During Mr. Ralph Ablon's 28-year term, Ogden shares appreciated
1,862% compared with 460% for the S&P 500 Index. In May 1990, R. Richard Ablon
replaced his father. Since R. Richard Ablon's appointment as CEO, Ogden's
shares have risen 19.4% compared to 207.8% for the S&P 500 Index. In
Providence's judgment, since taking over the CEO position, R. Richard Ablon
has not significantly improved Ogden's bottom line or share price.
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In Providence's opinion, the selection of R. Richard Ablon as CEO has
proven to be the wrong decision over the long term.
7. Management By Committee
In Providence's view, the Board of Ogden has created an excessively
complicated and expensive committee structure.
Consider that 6 out of the 14 present Directors serve on Ogden's
"Management Committee" of the Board. The Management Committee's principal
functions are to:
"review and evaluate Ogden's strategies, plans, policies and management
needed to meet long-range goals and objectives, . . . evaluating and
reviewing business transactions under consideration by management,
Ogden's financial status, current financial arrangements, current and
anticipated financial requirements and issuance and sale of Ogden
securities and advising and recommending to the Board of Directors with
respect thereto."
Providence asks: Isn't all of this what the Board is supposed to be doing?
In Providence's opinion this "Management Committee" unnecessarily
duplicates the whole Board, resulting in unnecessary additional Directors'
fees and expenses. The Board also has Compensation, Audit, Technology, and
Governance Committees on which there are collectively another 14 Director
seats. In sum, Ogden has 20 committee seats plus 14 board seats for a total of
34 Director/committee seats.
Each non-employee director of Ogden receives an annual fee of $9,000
for serving on the Board, and, another $12,000 annually for serving on each
committee, $1,500 for each of committee meeting attended, $1,500 for each
Board meeting attended, and $500 for each day spent away from the director's
city of residence on special director activities. Assuming the Company's new
Governance Committee meets three times in 1998 (the lowest number of meetings
for any Ogden committee in 1997) and the other committees and the Board meet
as many times as they did in 1997, Ogden's fees in 1998 to non-employee
directors (all but R. Richard Ablon) could total $561,000. This figure is an
average of $43,150 per non-employee director, not including travel expenses.
In Providence's view, Ogden has too many director seats and too many
committees that are costing the Company too much money, particularly in light
of
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what, in Providence's opinion, is an unsatisfactory performance over the past
eight years.
8. Directors' Lack of Public Company Management
Ogden's present Board members include six university professors, one
education specialist, one president of a policy think-tank and one lawyer.
The following chart shows the Ogden directors whose terms continue
after the 1998 Annual Meeting and the four nominees proposed for election by
management. Providence believes that a more successful Board would include a
larger number of directors who have held senior managerial leadership
positions, particularly at publicly-held companies. We believe that the
members of our slate -- Robert Slater (formerly President and Vice Chairman of
Crane Company); Larry G. Schafran (Chairman of the Board of Delta-Omega
Technologies and former Chairman of the Executive Committee of Dart Group);
and Michael G. Conroy (former President of the International Herald Tribune)
- -- would enhance the Board's ability to develop and implement strategies to
increase shareholder value.
OGDEN Director Age Professional Occupation
R. Richard Ablon 48 Chairman and CEO
David M. Abshire 71 President, Center for Strategic and Int'l Studies
Anthony J. Bolland 45 Venture Capitalist
Norman G. Einspruch 65 Professor, University of Miami
Jeffrey F. Friedman 51 Investment Manager
Attallah Kappas 71 Professor, Rockefeller University
Terry Allen Kramer 64 Venture Capitalist
Judith Moyers 62 Education Specialist
Homer A. Neal 55 Professor, University of Michigan
Robert E. Smith 62 Lawyer
Helmut Volcker 64 Professor, University of Essen
Source: Ogden 1998 Proxy Statement.
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9. Shareholder-Hostile Corporate Governance
Providence also believes that certain elements of the Company's
governance structure that have been adopted by the Board are contrary to the
best interests of shareholders.
For example, Ogden's Board is classified. This prevents shareholders
from electing all directors annually. Dr. Charles Miller, an Ogden
shareholder, proposed at Ogden's 1997 Annual Meeting that the Board take the
necessary steps to declassify its structure so that all directors would be
elected annually. Providence agrees with Dr. Miller's assertion that "the
election of directors is the primary avenue for stockholders to influence
corporate governance policies and to hold management accountable for its
implementation of those policies." Ogden shareholders agreed with Dr. Miller
by passing this resolution with 22.8 million shares "For" and only 14.4
million shares "Against". Despite this 61.3% plurality, Ogden's Board rejected
the shareholder resolution. This year, another Ogden shareholder, Mr. William
Steiner, has proposed that the classified Board be eliminated. Providence
supports this proposal and, unless otherwise instructed to the contrary, will
vote all proxies it receives in favor of Mr. Steiner's proposal.
Management of Ogden continues to publicly oppose Mr. Steiner's
resolution to eliminate the classified Board, in spite of the support of the
declassification proposal received last year. Ogden has recently announced,
however, that a recommendation would be made to the Ogden Board to put forth a
binding proposal to eliminate the classified structure if Mr. Steiner's
proposal receives a level of support at the 1998 Annual Meeting equivalent to
the support received by the 1997 proposal.
In addition to the classified Board, Ogden has also put in place
other measures which may serve to entrench management. These include a
Shareholder Rights Plan, established in September 1990, which provides that
"rights" are exercisable after a party acquires, or makes a tender offer to
acquire, 15% or more of the Corporation's common stock.
Under a stock option plan adopted in 1990, Ogden began granting
limited stock appreciation rights ("LSARs") to management and the Board. These
rights are exercisable only in the event of the acquisition of 20% of the
stock by any person, or the approval of shareholders to sell or merge the
Company, or certain changes in the membership of the Board. As of December
1997, there were 4,549,500 LSARs outstanding, representing 9.0% of the current
common shares outstanding.
In Providence's view, each of these measures, the classified board,
the Shareholder Rights Plan, and the LSARs, have the effect of making an
acquisition of Ogden more difficult and more expensive and, as a result, have
a tendency to shield the current management and Board. The shareholders of
Ogden would be better served, in Providence's opinion, by the elimination of
these devices. In Providence's view, the
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only "defense" that should be available to Ogden's Board and management team
is excellent performance in managing and operating the Company.
Lastly, Providence also believes that the way in which executive
compensation decisions are made, particularly with regard to the Company's
chief executive officer, has not been "shareholder-friendly". According to the
Company's proxy statements, R. Richard Ablon's bonus is determined strictly on
the basis of "Pre-tax Return on Equity" - earnings growth and shareholder
returns are not considered. Consequently, under this bonus formula, if Ogden's
1998 pre-tax income is unchanged from 1997, R. Richard Ablon would still
receive a bonus equal to 125% of his base salary. Moreover, he will still
receive a bonus of 75% of his base salary even if pre-tax income declines by
as much as 44%.
In 1996, R. Richard Ablon's compensation was in the 75th percentile
of total direct compensation for companies with revenues under $3.0 billion,
the same year in which Ogden's stock price fell by 11.1%. Although the
performance of the Company's stock price was significantly better in 1997, in
Providence's view Ogden's overall financial performance (including its stock
price) has not been strong enough over the past eight years to justify annual
compensation to Mr. Ablon (and the four other most highly compensated officers
of Ogden) that is presently in the 75th percentile of total direct
compensation by companies with comparable revenues.
10. Expenses/General Administration
Ogden's corporate general and administrative expenses which totaled
$12.6 million (net of charges) in 1990 ballooned to $22.2 million in 1997, an
increase of 76.2%. Over the same period, however, the Company's revenues only
increased 12.4%. Why there should be such a disparity between the percentage
increase in revenue and the percentage increase in corporate general and
administrative expenses is not immediately clear. Providence suggests that an
audit of Ogden's corporate general and administrative expenses as well as the
general and administrative expenses of each business unit is in order to
determine, for example, whether (and to what extent) overhead costs have been
duplicated as a result of the Company's conglomerate structure and multiple
lines of business.
* * * * *
In the weeks immediately prior to the filing of its initial
preliminary proxy statement, representatives of Providence were in contact
with the Board and management of the Company, including R. Richard Ablon,
about Providence's concerns. At the Company's request and for the purpose of
reaching an understanding with the Company on how Providence's issues could be
addressed without a contested election, Providence submitted several proposals
regarding (i) corporate structure, (ii) business strategies, (iii) capital
allocation policies, (iv) corporate governance issues, (v) the composition of
the Board and Board committees, (vi) payment of Providence's
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expenses for its preparations to engage in a contested election and (vii)
Providence's role as an advisor to Ogden (with respect to which Providence
proposed a fee of $50,000 a month to provide advisory services to Ogden). In
response to Providence's final proposal (which did not contain any suggestion
of advisory fees for Providence), the Company would only commit to (i)
reimbursing Providence for Providence's legal and other expenses incurred in
connection with its efforts with respect to Ogden, and (ii) issuing a press
release stating Ogden's intention to intensify its efforts to grow the
Company's earnings. In Providence's view, Ogden's offer was unresponsive and
failed to address the critical issues contained in Providence's proposal.
Providence's Suggestions for Accelerating Earnings Growth
Providence's three director Nominees have had substantial business
and public board experience. If elected, our Nominees will seek to foster
changes to improve Ogden's growth and business values. More specifically,
Providence's director Nominees will ask that the Board seek to:
1. Focus Ogden's Business Operations
Our Nominees will suggest that the management of Ogden analyze each line
of business and rank it according to potential for profitability and
earnings growth. Once this analysis is complete, our Nominees may
recommend that the operations which represent the least opportunity for
profit and growth should be sold. Providence believes that this process
may succeed in allowing Ogden's management to focus its attention on the
growth businesses at the Company and avoid the potential distractions
caused by having to manage a wide assortment of assets. The sale of
businesses that the Board determines are underperforming may also raise
capital which in turn could be put to a variety of uses including, but
not limited to, repurchasing stock, reducing long-term debt, funding
acquisitions, or making further capital investments in Ogden's growth
businesses.
In connection with analyzing and ranking each of the Company's
businesses, the Nominees may recommend that the Company seek the
assistance of outside financial advisors. The Nominees do not have any
agreements, arrangements or understandings with any party (including
Providence) regarding possible future financial advisory or other
assignments or recommendations to the Board for any assignment with
respect to Ogden, its securities or any of its businesses. In light of
its role in this contested solicitation, Providence has determined that
it will not make itself available to act as a financial advisor or
consultant to the Company if any of its three Nominees are elected to the
Board at the 1998 Annual Meeting.
2. Simplify Ogden's Corporate Structure
Our Nominees will suggest that the Company explore ways to simplify its
corporate structure, including exploring the sale or spin-off of one or
more of its three main
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business segments. Providence believes that each of the three segments
has sufficient revenues and profits to operate as an independently traded
company.
In particular, Providence believes that the Company ought to consider a
sale, spin-off or other disposition of the WTE business. In Providence's
view the sale or spin-off of the WTE business would dramatically change
the profile of the Company. A majority of the $1.5 billion of project
debt carried on Ogden's balance sheet is associated with the WTE
business. In Providence's opinion, investors view Ogden as a leveraged
Company due to this project debt associated with WTE. In Providence's
view, it is possible that the sale or spin-off of WTE could positively
impact Ogden's risk profile with investors.
Providence further believes that the sale or spin-off of the WTE business
might also be perceived favorably by investors because it would allow
shareholders to participate in a company more focused on its growing
Entertainment and Aviation units. Ogden would then no longer be viewed as
a company dominated by a slowly growing, leveraged, waste-to-energy
business. Ogden's Entertainment and Aviation segments collectively
produced revenues of $789 million in 1997 and the combined operating
earnings of these two segments increased by 83.2% (to $64.5 million)
between 1996 and 1997.
Although Providence believes that there are some obvious logical reasons
for Ogden to divest its WTE business (i.e., focus the Company on its
faster growing businesses), Providence acknowledges that any such
divestiture would require the Board and management of the Company to
conduct a detailed review and analysis of the effects of such a
transaction on the Company before it could be approved.
Providence is not proposing that Ogden undertake any specific
transactions. Providence is, however, suggesting that Ogden needs to
carefully analyze its operations and consider whether it should be in all
of the businesses it presently operates, particularly businesses that the
Company itself notes are slow-growing, such as the WTE business.
Providence believes that such a review might result in Board
recommendations that certain businesses be sold, discontinued, or
spun-off.
Providence acknowledges that the sale, spin-off or other disposition of
any of Ogden's assets entails certain material risks and uncertainties.
Risk factors and uncertainties include, but may not be limited to:
Ogden's ability to find suitable buyers for businesses at acceptable
prices; potential adverse tax consequences of any disposition; the
transaction costs (e.g., fees and expenses) of any disposition; possible
loss of management personnel as a result of dispositions of businesses;
the time and effort that would be required of management and the Board to
structure and complete any disposition transaction; and the financial
impact to Ogden's ongoing earnings, cash flow, liquidity, and borrowing
capabilities of any such transaction.
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Providence has not performed an in-depth analysis or retained any
financial or other advisor to perform an analysis of the specific risks
or of the effect on the financial position or on the value of any of
Ogden's assets (or on the Company as a whole) that could be involved in
any particular sale, spin-off or other disposition transaction. In
addition, Providence has not analyzed the time periods or transactions
costs that might be associated with any particular disposition
transaction. Providence has not had access to Ogden's internal accounting
statements and such other business records and materials that would be
material to determining the appropriateness of any particular sale,
spin-off or other disposition transaction. However, based upon publicly
available financial statements of the Company, Providence believes that
the sale, spin-off or other disposition of Ogden's WTE business would
materially reduce the Company's revenues, operating earnings, net income,
cash flow from operations, book value, borrowing capability and ability
to pay dividends at the current rate.
3. Improve Capital Allocation
In Providence's view the Company needs to rethink its dividend pay-out
policy and consider reducing or eliminating the dividend in favor of a
significant share repurchase program. Providence believes that Ogden
might be able to finance the repurchase of a significant number of
shares. Providence notes that Ogden: (i) plans to pay dividends of $63
million in 1998, (ii) had $186 million in cash on its balance sheet at
December 31, 1997, and (iii) had $200 million available under its credit
agreement at December 31, 1997. While Providence is not suggesting that
Ogden utilize all of its present financial resources for share
repurchases, it appears that Ogden could initiate a share buy-back
program beyond the $100 million plan put in place by the Company in
January 1998.
Providence acknowledges that there are certain risks and uncertainties
associated with a significant share repurchase. For example, a reduction
in the dividend payout to help finance a larger share repurchase program
may result in a number of Ogden shareholders deciding to sell their
stock. This in turn, may have a negative impact on Ogden's share price,
that may or may not be offset by Company share repurchases. In addition,
the use of existing cash and bank borrowings to finance a share
repurchase may have a negative impact on the Company's net earnings,
liquidity, leverage profile, and cash flow needed to finance
acquisitions, debt repayments, and capital expenditures. Moreover, the
Company may be subject to contractual restrictions that might limit the
size of any share buy-back program.
In Providence's opinion, Ogden's Board should assess the Company's
financial resources with a view to initiating a share buy-back program
that significantly reduces the number of outstanding shares, but that is
consistent with the Company's needs for capital in its growing
businesses. Providence believes that share buy-backs are, on the whole, a
better, more flexible method for returning value to shareholders than
dividend payments.
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4. Recruit New Chairman and Chief Executive Officer
Providence believes that Ogden needs a new Chairman and Chief Executive
Officer. In Providence's opinion, the current Chief Executive Officer has
had eight years without achieving satisfactory results. Providence's
Nominees, if elected, will seek to convince the Board that a new CEO is
necessary. Providence and its Nominees are aware of issues that will or
may arise out of any replacement of Mr. Ablon, who has been Ogden's CEO
over a long period. For example, Mr. Ablon's removal would result in the
Company having to make a significant termination payment to Mr. Ablon
(See "Change of Control and Termination of Employment Arrangements below
for further information on this point). It should also be noted that
neither Providence nor any of the Nominees have attempted, to date, to
identify suitable candidates to replace Mr. Ablon.
In spite of these issues and acknowledging the fact that there can be no
assurance that replacing Mr. Ablon will result in stronger earnings
growth or better returns to shareholders, Providence and the Nominees
believe that Ogden would be better served by seeking a qualified, new CEO
rather than continuing with Mr. Ablon who, in Providence's view, has
failed to demonstrate the leadership the Company needs and its
shareholders deserve during his eight year tenure.
5. Reconstitute the Board
In Providence's opinion, the Board needs vigorous directors with
substantial business and public board experience. Providence is confident
that its Nominees have these attributes.
Ogden has, belatedly in Providence's view, begun to make changes to its
board by announcing in April (i) a retirement age for its Board, (ii) a
new policy eliminating interlocking relationships between the directors
and the Company, and (iii) a new governance committee. Providence
believes, however, that these changes are insufficient.
Among the four management nominees for election at the 1998 Annual
Meeting and the seven directors whose terms will continue after the
meeting are six individuals whose primary occupations are in the
academic, educational or public policy fields. The remainder, aside from
Mr. Ablon, include a lawyer and three individuals whose primary
occupations are in the venture capital or investment management fields.
As noted above, Providence believes that the addition of its Nominees to
the Board, each of whom has had experience as a senior executive of a
substantial enterprise, would benefit the Company. While the election of
all of Providence's Nominees would mean that three directors with long
service with the Company would be removed from the board, Providence
believes that any disadvantages that might result from this (for
instance, possible loss of continuity and an adjustment period for both
new and old Board members) would be more than offset by the advantages
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of introducing three individuals who could bring a fresh perspective to
the Board's consideration of Ogden's businesses.
Providence's Nominees will seek to persuade the Board to fill existing
and future Board vacancies and to nominate persons for election to the
Board who have had experience as a senior executive of a substantial
public or private, for-profit business organization.
6. Corporate Governance
Providence's Nominees will propose that the Ogden Board be declassified
and that the Shareholder Rights Plan be eliminated. As noted in the
discussion above concerning the Company's present corporate governance
policies, Providence believes that neither the present classified board
structure nor the Shareholder Rights Plan serves the Company's
shareholders well. Although there are certain protections which a
classified board structure and a Shareholder Rights Plan provide to
shareholders, Providence believes that the potential benefits to
shareholders in eliminating these defensive measures outweigh the value
of these protections. A classified board structure and a Shareholder
Rights Plan offer the added protection of stability and continuity in the
management of the Company. In addition, it may strengthen the ability of
the Board to negotiate with hostile bidders to ensure that the highest
premium available be paid to shareholders. Thus, in the event that
Ogden's classified board structure or its Shareholder Rights Plan were to
be eliminated, Providence believes that the Company would be more
susceptible to a successful unsolicited offer.
However, Providence believes that eliminating the classified board
structure and the Shareholder Rights Plan would provide the Company's
shareholders a greater opportunity to maximize their return without
sacrificing their ability to protect themselves from undesirable offers.
As noted above, if the classified board were eliminated, the shareholders
of Ogden would have the ability to hold all of the directors accountable
on an annual basis rather than over a three year period. In the same
manner, the elimination of the Shareholder Rights Plan would give Ogden
shareholders an improved ability to determine for themselves how to
respond to any offer, solicited or unsolicited, that might be made. While
the Shareholder Rights Plan may discourage coercive offers or may enable
the Board to seek an alternative offer for shareholders, Providence
believes that it is equally true that such a plan could be used to block
an offer which shareholders would find attractive or that it might be
used for an undesirable purpose, such as the entrenchment of the Board or
management of the Company. It is Providence's opinion that the disclosure
and substantive requirements of the Williams Act (e.g., Sections 13(d),
14(d) and 14(e) of the Securities and Exchange Act of 1934) and
Delaware's anti-takeover law (Section 203 of the Delaware General
Corporation Law, Delaware's Business Combination Statute) provide the
shareholders of Ogden more than adequate protection against unfair or
coercive offers.
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7. Expenses
Providence's Nominees will, if elected, propose that the Audit Committee
of the Board immediately review the corporate general and administrative
expenses of the Company as a whole and each of its business units in
order to report to the whole Board as to why the growth in these
expenditures has far outstripped the growth in revenues and to recommend
tangible measures to address this growth in expense. Providence believes
that there is little risk to the Company in the Board's Audit Committee
exploring the disproportionate growth (measured against growth in
revenue) of the Company's corporate general and administrative expenses.
Tangible benefits to the Company could result if the Audit Committee
determines, for example, that there are expenses the Company could
eliminate or expense reporting or tracking procedures that could be
improved.
Corporate Approval Issues
Most of Providence's suggestions for accelerating earnings growth could
be initiated by the Board without the vote or consent of shareholders,
including (i) the review of Ogden's business operations, (ii) review of the
dividend pay-out ratio, (iii) recruitment of a new Chairman and Chief
Executive Officer, (iv) Audit Committee review of corporate general and
administrative expenses, and (v) elimination of the Shareholder Rights Plan.
Neither Providence nor any of the Nominees has any present plan or intention
to request that Ogden conduct a shareholder vote on any of the foregoing
issues.
The elimination of the classified Board requires an amendment to the
Company's certificate of incorporation, necessitating both the approval of the
amendment by the Board and the subsequent approval of holders of shares of
Ogden stock representing not less than 80% of votes which would be entitled to
be cast generally in an election of directors. As noted, the present Chairman
of Ogden, R. Richard Ablon has stated that if the precatory proposal
requesting the elimination of the classified Board garners as much support
this year as it did last, that he will seek Board approval for an amendment to
the certificate of incorporation eliminating the classified Board that would
be voted upon by the shareholders at the 1999 Annual Meeting. Providence's
Nominees are committed to seeking the elimination of the classified Board and
would seek Board approval for the requisite amendment and then shareholder
approval no later than the 1999 Annual Meeting, regardless of the outcome of
the vote on the precatory proposal under consideration at this year's Annual
Meeting.
Whether a shareholder vote would be required for any sales or spin-offs
of businesses of the Company that the Board might recommend would depend upon
the form any such transactions or series of transactions might take and the
magnitude of any such sales or dispositions. Generally, however, neither (i)
"spin-off" transactions (i.e., transactions where stock of a subsidiary
company is distributed to shareholders) nor (ii) sales of assets or operations
that constitute less than all or substantially all of the business of a
Delaware company, such as Ogden, require a vote of the company's shareholders.
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Providence has suggested that its Nominees, if elected, would seek to
investigate ways of simplifying Ogden's corporate structure, including the
feasibility and desirability of selling or spinning off businesses Ogden owns.
If elected and if the Board of Ogden were to determine that the sale or
spin-off of one or more businesses by Ogden was desirable, Providence's
Nominees would seek to have any such sale or spin-off approved by the
shareholders of Ogden only if (i) such approval was required by applicable
law, by the requirements of a national securities exchange on which the
securities of the Company were listed or by the terms of any contract to which
the Company was bound or (ii) the Nominees then believed, in the exercise of
their fiduciary duties as directors of Ogden, that it was otherwise desirable
or in the best interests of the Company to obtain shareholder approval of any
such transaction.
* * * * *
There can be no assurance that Providence's suggestions for accelerating
earnings growth at Ogden would, in fact, result in any positive change in
earnings growth. As noted above, there are material risks and uncertainties
associated with pursuing many of the strategies Providence suggests Ogden
should consider (e.g., sales or spin-off of businesses; share repurchases). It
might be the case, in fact, that after due consideration of these suggestions,
Ogden's Board properly concludes that one or more them should not be pursued.
Further, it should also be noted that earnings growth and improvements on
shareholder returns at Ogden are, in part, dependent upon national and
international economic, fiscal and political trends and policies that are
largely beyond Ogden's control.
Notwithstanding these uncertainties, Providence firmly believes that
Ogden, at the very least, needs to seriously consider these suggestions to
determine whether they present a way for Ogden to improve upon the poor growth
in earnings per share it has demonstrated during R. Richard Ablon's tenure as
CEO.
Providence is asking you to elect its three Nominees:
Michael G. Conroy, age 59, was formerly President of The International Herald
Tribune, U.S., a large international newspaper publishing organization. Mr.
Conroy has 26 years of business experience in sales, marketing, manufacturing,
and distribution and has worked extensively in Europe, the Middle East, and
Africa. He is a director of Great Bear Paper Company, L.L.C.
Larry G. Schafran, age 59, is a managing general partner of a real estate
investment and development firm. He is Chairman of the Board of Delta-Omega
Technologies, Inc., a specialty chemicals and industrial cleaners and
degreasers company. He is the former Chairman of the Executive Committee of
Dart Group Corporation, a company with interests in various retail and
distribution businesses.
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Robert J. Slater, age 60, is a management consultant and was formerly
President and Vice Chairman of Crane Company, a $1.5 billion multinational
manufacturing and distribution company. Mr. Slater was also CEO of Medusa
Cement Company. Mr. Slater has been a director of seven public companies and
currently serves on the boards of Southdown, Inc. (NYSE: SDW), a domestic
cement manufacturer and First Industrial Realty Trust (NYSE: FR), a real
estate investment trust with 226 properties.
* * * * *
If elected, Providence's Nominees would be a minority on Ogden's
Board, and there is no assurance that the continuing Board members would
support all or any portion of Providence's suggestions for stimulating
earnings growth. Providence believes, however, that its Nominees would be able
to effectively articulate the need for change to the other members of the
Board. Providence also believes that in the event its Nominees are elected,
the continuing members of the Board may perceive the election of the Nominees
as indicative of shareholder support for Providence's views and may then
favorably consider pursuing Providence's suggestions.
Summary
In our judgment, Ogden's current leadership has not provided
shareholders with adequate returns over the past eight years. The share price
has grown at a compound annual rate of 2.3% from the point at which R. Richard
Ablon was appointed Chief Executive Officer. The Company continues to maintain
a conglomerate structure with ever-changing business strategies which
Providence believes confuses shareholders and prevents the values of its
stronger growth businesses from being realized in the stock market. Over the
past decade, the Company, under R. Richard Ablon's direction, created a WTE
business the Company now admits is a "slow growth" business and that may be at
risk in a deregulated domestic utility industry.
In our opinion, Ogden has had a Board that has been well-compensated
for unsatisfactory results - a Board that refused to act in accordance with
the wishes of its shareholders when, by an overwhelming margin, the
shareholders requested the directors to eliminate the classified Board
structure and reinstate the annual election of directors.
In deciding how to vote, Providence asks the shareholders of Ogden to
consider whether the present Board of the Company has worked hard enough for
them and whether the present Board has been responsive to its shareholders.
The three independent nominees which Providence has submitted for
election to the Board are committed to taking responsible actions that would
allow Ogden to accomplish its mission of increasing long term shareholder
value. For this reason, Providence respectfully requests the support of Ogden
shareholders in electing Robert J. Slater, Lawrence G. Schafran and Michael G.
Conroy to the Board of Ogden.
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BACKGROUND OF PROVIDENCE'S NOMINEES
The Soliciting Group is soliciting proxies in favor of the
election of the three nominees listed below to Ogden's Board of Directors.
Each of the Soliciting Group's Nominees has consented to serve as director of
the Company if elected, and each intends to discharge his duties as a director
of Ogden in compliance with all applicable legal requirements, including the
general fiduciary obligations imposed upon directors of a Delaware
corporation. There are no arrangements or understandings between any Nominee
and any other person pursuant to which he was selected to serve as a Nominee.
Additional information regarding each Nominee is provided in Appendix A.
Present Principal Occupation
Name and Address Age Employment History; Directorships
Michael G. Conroy 59 Retired executive (1997 - present),
400 East 56th Street former President, International
New York, NY 10022 Herald Tribune, U.S., Inc., a
newspaper publishing company
(1985- 1997).
Directorships:
Bear Island Paper Company, L.L.C.
Larry G. Schafran 59 Managing General Partner, LG Schafran
54 Riverside Drive & Associates, a real estate
LG Schafran & Associates investment and development firm.
Apt. 14B (1984 - Present). Chairman of the
New York, NY 10024 Executive Committee, Dart Group
Corporation, a company with interests
in the discount automotive parts and
accessories business, discount
bookstores and supermarket and wine
and beer businesses (1994-1997).
Directorships:
COMSAT Corporation
Delta-Omega Technologies, Inc. (Chairman)
Discovery Zone, Inc.
Kasper A.S.L., Ltd. (Compensation
Committee and Audit Committee member),
National Income Realty Trust (trustee)
Publicker Industries, Inc. (Compensation
Committee and Audit Committee Chairman
member).
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Robert J. Slater 60 President, Jackson Consulting, a private
Jackson Consulting consulting company specializing in
27 Wahackme Rd. advising basic industries (1988-present);
New Canaan, CT 06840 formerly President and Vice Chairman of
Crane Company.
Directorships:
Southdown, Inc. (Member of the
Compensation, Audit, and Finance
Committees).
First Industrial Realty Trust, Inc.
QUORUM REQUIREMENTS AND VOTING RIGHTS
According to management's proxy statement, shareholders of record of
the Company's Common Stock and Series A Preferred Stock at the close of
business on April 7, 1998, the record date established by the Company for its
1998 Annual Meeting are entitled to vote at the 1998 Annual Meeting in person
or by proxy. Each share of Common Stock is entitled to one vote and each share
of Series A Preferred Stock is entitled to one-half vote on matters to come
before the 1998 Annual Meeting, including the election of directors. The
presence in person or by proxy of the holders of a majority of the stock
having voting power constitutes a quorum for the 1998 Annual Meeting.
In order to be elected as a director, a nominee for election to
Ogden's Board must receive a plurality of the votes cast. With respect to the
election of directors, only shares that are voted in favor of a particular
nominee will be counted towards the necessary plurality; where a shareholder
properly withholds authority to vote for a particular nominee such shares will
not be counted towards such nominee's (or any other nominee's) vote total.
With the four nominees of the Company and the three Providence
Nominees, there will be seven nominees for four seats on the Company's Board,
and the four nominees who receive the greatest number of votes will be
elected. Shareholders who use the Gold Proxy Card furnished by Providence will
be able to vote for the three Providence Nominees and one of the Company's
nominees. The three Company nominees for whom Providence is not seeking
authority to vote are R. Richard Ablon, Judith D. Moyers, and Robert E. Smith.
Shareholders cannot vote for any of Providence's Nominees and also vote for
one or more of the Company's nominees using the Company's proxy card. Any
shareholder who wishes to vote for one or more of Providence's nominees and
for any or all of R. Richard Ablon, Judith D. Moyers, and Robert E. Smith will
be required to vote by ballot at the 1998 Annual Meeting. Shareholders should
refer to the Company's proxy statement for information concerning the
Company's nominees. There is no assurance that any of the Company's nominees
will serve as directors if any of Providence's nominees are elected to the
Company's Board.
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Each other proposal submitted to the shareholders requires the
affirmative vote of the holders of a majority of the votes present at the 1998
Annual Meeting, in person or by proxy, and entitled to vote. With respect to
these other proposals: (i) if a shareholder abstains from voting on a
proposal, such shares are considered present at the meeting for such proposal
but, since they are not affirmative votes for the proposal, they will have the
same effect as votes cast against the proposal; and (ii) shares registered in
the names of brokers or other "street name" nominees for which proxies are
voted on some but not all matters will be considered to be voted only as to
those matters actually voted and will not have the effect of either an
affirmative or negative vote on matters as to which the broker does not have
authority to vote and a beneficial holder has not provided voting instructions
(i.e., "broker non-votes").
As noted above, shares represented by signed Gold Proxy Cards will be
voted for Providence's three named Nominees unless the proxy is otherwise
marked. If any of these Nominees becomes unavailable for election, which is
not currently anticipated, shares represented by the Gold Proxy Cards in the
form to be distributed with the Soliciting Group's definitive Proxy Statement
will be voted at the discretion of the proxy holders.
CHANGE OF CONTROL AND TERMINATION
OF EMPLOYMENT ARRANGEMENTS
According to management's proxy statement for the 1998 Annual Meeting
the Company's Stock Option Plans, as amended, permit the grant of limited
stock appreciation rights ("LSARs") in tandem with the grant of stock option
awards. The LSARs granted under the Company's plans are only exercisable
during a 90 day period following the occurrence of a "Change of Control" (as
defined in each stock option agreement). Providence does not believe, based
upon its review of the Company's 1990 Stock Option Plan, that the election of
its three Nominees to the Board would constitute a change of control that
would result in the LSARs becoming exercisable.
R. Richard Ablon has an employment agreement with Ogden pursuant to
which he is employed by Ogden as its President and Chief Executive Officer. If
Mr. Ablon's employment is terminated by Ogden or if Mr. Ablon terminates his
employment for good reason (as described in his agreement), then Mr. Ablon
would be entitled to a cash payment equal to five times the average of his
salary and bonus paid during the term of this agreement. Providence estimates,
based upon compensation figures available for Mr. Ablon in Ogden proxy
statements that, if he were terminated on or about June 30, 1998, Mr. Ablon
would be entitled to a lump sum payment from the Company of approximately
$7.45 million. Under the employment agreement, any change in Mr. Ablon's
status, title or position as an officer of the Company that, in the reasonable
judgment of Mr. Ablon, represents a diminution of his status, title or
position would constitute good reason for which he may terminate his
employment and collect this cash payment from the Company.
Providence's Nominees have committed, if elected, to seek a new chief
executive officer for Ogden in place of Mr. Ablon. As noted, if elected,
Providence's Nominees will constitute a
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<PAGE>
minority of the members of the Board and would not, without the concurrence of
other Board members, be able to remove Mr. Ablon.
Reference is made to Management's proxy statement for the 1998 Annual
Meeting for further information concerning the LSARs and Mr. Ablon's
employment arrangements.
OTHER MATTERS
In addition to the proposal for the election of directors, four other
proposals have been submitted for the consideration of shareholders at the
1998 Annual Meeting, according to management's proxy statement. The Soliciting
Group recommends that the shareholders of the Company vote in the following
manner with respect to each of these additional proposals:
Proposal 2 - Ratification of Auditors
Providence has no objection to the appointment of Deloitte & Touche
LLP ("Deloitte") as auditors of the Company and its subsidiaries for the
Fiscal Year 1998. Therefore, the Soliciting Group suggests that you vote FOR
Proposal 2 and the ratification of Deloitte as the Company's auditors.
Proposal 3 - Elimination of Classified Board Structure
Last year the shareholders of Ogden overwhelmingly cast their votes
in favor of a shareholder resolution urging the elimination of the classified
structure of the Company's Board. Because the Company has failed to act in
accordance with the wishes of its shareholders, the issue has been re-proposed
for consideration at the 1998 Annual Meeting. Providence favors the annual
election of all directors so that shareholders may, each year, express their
full satisfaction with or disapproval of each of the members of the Board.
As noted above, Providence's Nominees have committed to ask the Board
to abolish the classified board structure.
The Soliciting Group strongly urges you to vote FOR Proposal 3 to
recommend declassifying the Board.
Proposal 4 - Sale of Ogden
Providence believes that this shareholder-proposed resolution to urge
the Board to sell the Company promptly to the highest bidder reflects
shareholder frustration with the Company's performance. Providence sympathizes
with these frustrations but disagrees with the specific proposal. As discussed
above, Providence is of the view that more focus is needed on the Company's
Aviation and Entertainment businesses and that it would be sensible to explore
the sale or spin off of its Waste to Energy business. The Soliciting Group
recommends that you vote AGAINST Proposal 4.
-27-
<PAGE>
Proposal 5 - Adoption of CERES Principles Resolution
Because Providence has not independently examined the costs
associated with the adoption of the CERES Principles, we are assuming
management's judgement (as expressed in its proxy statement) that adoption
would result in "costly, additional reporting requirements on Ogden which are
not imposed by law" is correct and that, therefore, the adoption of the CERES
Principles would not be in the best interests of shareholders.
The Soliciting Group recommends that you vote AGAINST Proposal 5.
CERTAIN INFORMATION CONCERNING PROVIDENCE AND
OTHER PARTICIPANTS IN THE SOLICITATION; EXPENSES OF SOLICITATION
Providence is a New York City based registered broker-dealer with
special expertise in corporate governance and shareholder matters. Providence
was founded in 1990 by Herbert A. Denton, its President, Chief Executive
Officer and sole director. Two other employees of Providence, William Tapert
and Adam Weiss, are participants in this solicitation.
Gregory M. Morey a managing member of Providence Investors, LLC
("Providence Investors"), a private investment fund of which Mr. Denton is
also a managing member, will also participate in the solicitation.
Pacific Equity Limited ("Pacific Equity"), a Hong Kong company of
which Mr. Denton is the sole managing director has orally agreed to contribute
to payment of the expenses of the solicitation.
Additional information with respect to Providence, Pacific Equity and
Messrs. Denton, Tapert, Weiss and Morey is provided in Appendix A.
Executed proxies will be solicited by mail, telephone,
facsimile/telecopier and in person. Solicitations will be made by Mr. Denton,
Mr. Tapert, Mr. Weiss and Mr. Morey. None of the foregoing individuals will
receive additional compensation for making solicitations. Proxies will be
solicited from individuals, brokers, banks, bank nominees and other
institutional holders. The Soliciting Group has requested banks, brokerage
houses and other custodians, nominees and fiduciaries to forward all
solicitation materials to the beneficial owners of the shares they hold of
record. Providence will reimburse these record holders for their reasonable
out-of-pocket expenses.
The Soliciting Group has also retained Mackenzie Partners as
information agent and to solicit proxies in connection with the 1998 Annual
Meeting, for which services MacKenzie Partners will be paid a fee to be agreed
upon, in an amount not to exceed $50,000, and will be reimbursed for its
reasonable expenses. MacKenzie Partners will employ approximately 15 people in
its efforts on behalf of the Soliciting Group. The costs of this solicitation
include printing, postage, legal and related expenses are expected to be
approximately $300,000. The total costs incurred to date in connection with
this solicitation are not in excess of approximately $120,000. Providence and
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<PAGE>
Pacific Equity will bear the costs of the solicitation. Providence intends to
ask the Board to have the Company reimburse Providence and Pacific Equity for
the costs and expenses incurred in connection with this solicitation.
Providence does not intend to request that its reimbursement request be
submitted to a vote of shareholders.
Reference is made to management's proxy statement for the 1998 Annual
Meeting, for information concerning the following: (i) the Company's Common
Stock and Series A Preferred Stock, (ii) beneficial ownership of Common Stock
and Series A Preferred Stock by management and holders of more than 5% of a
class of voting equity securities, (iii) the Company's management, present
directors and board-endorsed nominees, (iv) Board committees, (v) independent
public accountants, (vi) the number of shares of voting securities of the
Company presently outstanding, and (vii) procedures for submitting proposals
for consideration at the Company's 1999 Annual Meeting.
-29-
<PAGE>
APPENDIX A
ADDITIONAL INFORMATION REGARDING THE NOMINEES
Current ownership interests in securities of the Company of the Nominees and
their Associates
Below are the shareholdings and purchases and sales of shares in Ogden during
the past two years of each of the Nominees (unless otherwise indicated, each
Nominee has sole voting and investment power in respect of the indicated
shares):
Purchases and Sales
Name of Nominee Number and Class of Shares Owned in the past two years
- --------------- -------------------------------- ---------------------
Michael G. Conroy None N/A
Larry G. Schafran None N/A
Robert J. Slater 1,000 shares of Common Stock 3/19/98 Purchase 1,000
shares
None of the associates of any of the Nominees owns any securities of the
Company, other than Lynn Hecht Schafran, the wife of Larry G. Schafran, who
owns 1,000 shares of Ogden Common Stock directly and who holds an indirect
interest in the 30,000 shares of Common Stock of the Company owned directly by
Providence Investors. Ms. Schafran, whose address is 54 Riverside Drive, New
York, N.Y. 10024, has a less than 2% interest in Providence Investors. Mr.
Schafran disclaims beneficial ownership of the shares owned directly or
indirectly by his wife.
Nominee ownership of securities of parents or subsidiaries of the Company
None.
Securities of the Company owned by Nominees of record, but not beneficially
None.
Other Information
None of the Nominees has been involved in any legal proceeding of the
type required to be disclosed in response to instruction 4 to Item 103 of
Regulation S-K, Item 401(f) of Regulation S-K or Item 5(b)(iii) of Schedule
14A. None of the Nominees or any of their associates have been engaged in any
transactions or similar series of transactions that would be required to be
disclosed in response to Item 404(a) of Regulation S-K. None of the Nominees
has or has had any business relationships that would be required to be
disclosed in response to Item 404(b) of Regulation S-K. None of the Nominees
(or any related party of a Nominee of the type specified in clauses (3), (4)
or (5) of Item 404(c) of Regulation S-K) has any indebtedness that would be
required to be disclosed in response to Item 404(c) of Regulation S-K. Item
405 of Regulation S-K is not applicable to any of the Nominees.
<PAGE>
There are no arrangements or understandings between any participant
or any other person and any of the Nominees pursuant to which the nominations
are being made.
None of the Nominees and none of the associates of any Nominee, has
any arrangement or understanding with any person with respect to any future
employment by the Company or its affiliates or with respect to any future
transactions to which Ogden or any of its affiliates will or may be a party.
None of the Nominees or any of their associates presently has any
direct or indirect economic interests in Ogden which differ in any way from
all other shareholders of the Company. If any of the Nominees are elected as
directors of the Company, however, he would receive compensation for his
services as a director, a benefit not extended to all shareholders of the
Company.
None of the Nominees is, or was during the past year, a party to any
contract, arrangement or understanding with any person with respect to any
securities of the Company. None of the Nominees or any of their associates
presently has agreements, arrangements, or understandings with any other
persons or entities with respect to the Company or its subsidiaries, including
but not limited to sales of any of the Company's businesses.
Each of the Nominees is a citizen of the United States.
ADDITIONAL INFORMATION REGARDING OTHER PARTICIPANTS**
Name, principal occupation or business, business address
Providence Capital, Inc.
Broker-Dealer Firm
730 Fifth Avenue, Suite 2102
New York, NY 10019
Herbert A. Denton
President, Chief Executive Officer
Providence Capital, Inc.
730 Fifth Avenue, Suite 2102
New York, NY 10019
- --------
** The information under the heading "Additional Information Regarding
Other Participants" in this Appendix A relates only to participants
in this solicitation other than the Nominees.
-ii-
<PAGE>
William Tapert
Managing Director
Providence Capital Inc.
730 Fifth Avenue, Suite 2102
New York, NY 10019
Adam Weiss
Vice President
Providence Capital Inc.
730 Fifth Avenue, Suite 2102
New York, NY 10019
Gregory Morey
Managing Member
Providence Investors, LLC
730 Fifth Avenue, Suite 2102
New York, NY 10019
Pacific Equity Limited
Investments in securities
12th Floor
Dina House
Duddell Street
Hong Kong
Current ownership interests in securities of the Company of the participants
and their associates
Below are the shareholdings and purchases and sales of shares in Ogden during
the past two years of each of the participants (unless otherwise indicated,
each participant has sole voting and investment power in respect of the
indicated shares):
<TABLE>
<CAPTION>
Purchases and Sales
Name of Participant Number and Class of Shares Owned in the past two years
- -------------------- -------------------------------- ---------------------
<S> <C> <C>
Providence Capital, Inc. 10,000 shares of Common Stock 3/23/98 Purchase 2,000
shares
3/27/98 Purchase 3,000
shares
4/8/98 Purchase 2,000
shares
4/13/98 Purchase 1,000
shares
4/22/98 Purchase 2,000
shares
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C> <C>
Herbert A. Denton 40,000 shares of Common Stock Transactions by
(10,000 shares through Providence, Providence: (See above)
as to which Mr. Denton has sole
voting and investment power and Transactions by
30,000 shares through Providence Providence Investors:
Investors as to which Mr. Denton 3/9/98 Purchase 5,000
shares voting and investment power shares
with Mr. Morey as a managing 3/16/98 Purchase 8,000
member of Providence Investors) shares
3/18/98 Purchase 7,000
shares
4/3/98 Purchase 10,000
shares
Gregory M. Morey 30,000 shares of Common Stock Transactions by
(through Providence Investors as to Providence Investors:
which Mr. Morey shares voting and (See above)
investment power with Mr. Denton
as a managing member of
Providence Investors)
</TABLE>
Set forth below with respect to each associate of a participant who owns any
securities of the Company are such associate's name, address and the form of
ownership and number and class of shares of the Company owned (directly or
indirectly) by such associate.
Form of Ownership; Number
Name, Relationship and Address and Class of Shares Owned
Providence Investors, LLC Direct; 30,000 shares of Common Stock
Private investment fund
of which Messrs. Denton and
Morey are the sole managing
members)
730 Fifth Avenue
New York, N.Y. 10019
Participant ownership of securities of parents or subsidiaries of the Company
None.
Securities of the Company owned by participants of record, but not beneficially
None.
-iv-
<PAGE>
Other Information
None of the participants has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the past ten
years.
None of the participants or any of their associates presently has any
direct or indirect economic interests in Ogden which differ in any way from
all other shareholders of the Company. Providence may, in the future, after
the conclusion of the solicitation to which this proxy statement relates, seek
and accept assignments from Ogden or third parties as a financial advisor or
consultant with respect to Ogden or its assets. Providence does not presently
have and during the pendency of its solicitation with respect to the 1998
Annual Meeting Providence will not seek or accept any engagement from any
person to act as a financial advisor or consultant or any similar role with
respect to Ogden. If Providence were to be retained as a financial advisor or
consultant by Ogden or by a third party with respect to Ogden or its assets,
it would receive payments that would benefit only Providence. No such payment
would inure to any other shareholder of Ogden.
None of the participants is, or was within the past year, a party to
any contract, arrangements or understanding with any person with respect to
any securities of the registrant. None of the participants or any of their
associates presently has any agreements, arrangements, or understandings with
any other persons or entities with respect to the Company or its subsidiaries,
including but not limited to sales of any of the Company's businesses.
None of the participants or any of their associates has been engaged
in any transactions or similar series of transactions that would be required
to be disclosed in response to Item 404(a) of Regulation S-K.
None of the participants and none of the associates of any
participant, has any arrangement or understanding with respect to any future
employment by the Company or its affiliates or with respect to any future
transactions to which Ogden or any of its affiliates will or may be a party.
As of May 7, 1998 Providence had margin indebtedness of $179,254
attributable, in part, to the 10,000 shares of Common Stock of the Company
owned by Providence.
-v-
<PAGE>
COMMON
THIS PROXY IS SOLICITED IN OPPOSITION
TO THE INCUMBENT BOARD OF DIRECTORS
AND MANAGEMENT OF THE COMPANY IN CONNECTION WITH
THE 1998 ANNUAL MEETING OF STOCKHOLDERS OF:
OGDEN CORPORATION
The undersigned shareholder of OGDEN CORPORATION (the "Company")
hereby appoints each of Herbert A. Denton and William Tapert as lawful
attorney and proxy, each with full power of substitution, for and in the name
of the undersigned to represent and vote, as designated below, all shares of
the common stock, par value $.50 per share, of the Company which the
undersigned is entitled to vote at the 1998 annual meeting of shareholders of
the Company, to be held on May 20, 1998 at the Villas of Grand Cypress, One
North Jacaranda, Orlando, Florida commencing at 9:00 a.m., or at any
adjournment, postponement or rescheduling thereof (collectively, the "Annual
Meeting"). The undersigned hereby revokes any and all previous proxies with
respect to the matters covered by this proxy and the voting of such shares at
the Annual Meeting.
1. ELECTION OF DIRECTORS ("Proposal 1"):
A. Nominees of Providence Capital, Inc. ("Providence").
MICHAEL G. CONROY, LARRY G. SCHAFRAN and ROBERT J. SLATER.
[ ] FOR the nominees listed above.
[ ] WITHHOLD AUTHORITY for the nominees listed above.
INSTRUCTION: To withhold authority for any individual nominee(s) check
the "FOR" box above and write that nominee(s) name on the space below provided:
B. Providence intends to use this proxy to vote for one of the four
individuals nominated by the Company to serve as a director. You may withhold
authority to vote for this additional Company nominee. Please refer to
management's Proxy Statement for the 1998 Annual Meeting for the names,
backgrounds, qualifications and other information concerning the Company's
nominees. There is no assurance that any of the Company's nominees will serve
as directors if any of Providence's nominees are elected to the Board.
The Company's nominees with respect to whom Providence is NOT seeking
authority to vote for and WILL NOT exercise any such authority are:
R. RICHARD ABLON, JUDITH D. MOYERS, and ROBERT E. SMITH
INSTRUCTION: To withhold authority to vote for the election of the
Company nominee whose name is not listed above, write such Company nominee's
name on the line provided below.
(Continued and to be signed on the reverse side)
<PAGE>
[REVERSE]
2. RATIFICATION OF AUDITORS ("Proposal 2"): Ratification of Deloitte &
Touche LLP as auditors of the Company for the year 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO DECLASSIFY BOARD ("Proposal 3"): Shareholder proposal
requesting the Board to take steps necessary to provide that new
directors be elected annually and not by classes.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. PROPOSAL TO SELL OGDEN ("Proposal 4"): Shareholder proposal requesting
the Board of Directors arrange for the prompt sale of the Company to
the highest bidder.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. PROPOSAL TO ENDORSE CERES PRINCIPLES ("Proposal 5"): Shareholder
proposal requesting the Company to endorse the Coalition for
Environmental Responsible Economic Principles.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. DISCRETIONARY AUTHORITY: In his discretion, the proxy is authorized
to vote upon such other business as may
properly come before the Annual Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
This Proxy Card, when properly executed, will be voted as directed herein. IF
NO INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF THE THREE NOMINEES LISTED IN 1.A. ABOVE AND "FOR" THE
ELECTION OF THE COMPANY NOMINEE WHOSE NAME IS NOT LISTED IN ITEM 1.B. ABOVE,
"FOR" THE RATIFICATION OF DELOITTE & TOUCHE LLP AS AUDITORS, "FOR" SHAREHOLDER
PROPOSAL 3, AND "AGAINST" SHAREHOLDER PROPOSALS 4 AND 5, "FOR" ANY ADJOURNMENT
OR POSTPONEMENT SUPPORTED BY THE SOLICITING SHAREHOLDER, AND IN THE DISCRETION
OF THE PROXY AS TO ALL OTHER MATTERS. PROVIDENCE RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE ELECTION OF ITS FOUR NOMINEES, FOR THE RATIFICATION OF DELOITTE &
TOUCHE LLP AS AUDITORS, FOR SHAREHOLDER PROPOSAL 3 AND AGAINST SHAREHOLDER
PROPOSALS 4 AND 5.
PLEASE DATE AND SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS HEREON.
Dated:___________________________
Signature:_______________________
Signature:_______________________
Title:___________________________
<PAGE>
If stock is jointly held, each joint owner should sign. When signing as
attorney in fact, executor, administrator, trustee, guardian, corporate
officer or partner, please give full title.
PLEASE SIGN, DATE AND RETURN THIS PROXY
<PAGE>
PREFERRED
THIS PROXY IS SOLICITED IN OPPOSITION
TO THE INCUMBENT BOARD OF DIRECTORS
AND MANAGEMENT OF THE COMPANY IN CONNECTION WITH
THE 1998 ANNUAL MEETING OF STOCKHOLDERS OF:
OGDEN CORPORATION
The undersigned shareholder of OGDEN CORPORATION (the "Company")
hereby appoints each of Herbert A. Denton and William Tapert as lawful
attorney and proxy, each with full power of substitution, for and in the name
of the undersigned to represent and vote, as designated below, all shares of
the $1.875 Cumulative Convertible Preferred Stock, Partially Participating, of
the Company which the undersigned is entitled to vote at the 1998 annual
meeting of shareholders of the Company, to be held on May 20, 1998 at the
Villas of Grand Cypress, One North Jacaranda, Orlando, Florida commencing at
9:00 a.m., or at any adjournment, postponement or rescheduling thereof
(collectively, the "Annual Meeting"). The undersigned hereby revokes any and
all previous proxies with respect to the matters covered by this proxy and the
voting of such shares at the Annual Meeting.
1. ELECTION OF DIRECTORS ("Proposal 1"):
A. Nominees of Providence Capital, Inc. ("Providence").
MICHAEL G. CONROY, LARRY G. SCHAFRAN and ROBERT J. SLATER.
[ ] FOR the nominees listed above.
[ ] WITHHOLD AUTHORITY for the nominees listed above.
INSTRUCTION: To withhold authority for any individual nominee(s)
check the "FOR" box above and write that nominee(s) name on the space below
provided:
B. Providence intends to use this proxy to vote for one of the four
individuals nominated by the Company to serve as a director. You may withhold
authority to vote for this additional Company nominee. Please refer to
management's Proxy Statement for the 1998 Annual Meeting for the names,
backgrounds, qualifications and other information concerning the Company's
nominees. There is no assurance that any of the Company's nominees will serve
as directors if any of Providence's nominees are elected to the Board.
The Company's nominees with respect to whom Providence is NOT seeking
authority to vote for and WILL NOT exercise any such authority are:
R. RICHARD ABLON, JUDITH D. MOYERS, and ROBERT E. SMITH
INSTRUCTION: To withhold authority to vote for the election of the
Company nominee whose name is not listed above, write such Company nominee's
name on the line provided below.
(Continued and to be signed on the reverse side)
<PAGE>
[REVERSE]
2. RATIFICATION OF AUDITORS ("Proposal 2"): Ratification of Deloitte &
Touche LLP as auditors of the Company for the year 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO DECLASSIFY BOARD ("Proposal 3"): Shareholder proposal
requesting the Board to take steps necessary to provide that new
directors be elected annually and not by classes.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. PROPOSAL TO SELL OGDEN ("Proposal 4"): Shareholder proposal
requesting the Board of Directors arrange for the prompt sale of the
Company to the highest bidder.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. PROPOSAL TO ENDORSE CERES PRINCIPLES ("Proposal 5"): Shareholder
proposal requesting the Company to endorse the Coalition for
Environmental Responsible Economic Principles.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. DISCRETIONARY AUTHORITY: In his discretion, the proxy is authorized
to vote upon such other business as may
properly come before the Annual Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
This Proxy Card, when properly executed, will be voted as directed herein. IF
NO INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF THE THREE NOMINEES LISTED IN 1.A. ABOVE AND "FOR" THE
ELECTION OF THE COMPANY NOMINEE WHOSE NAME IS NOT LISTED IN ITEM 1.B. ABOVE,
"FOR" THE RATIFICATION OF DELOITTE & TOUCHE LLP AS AUDITORS, "FOR" SHAREHOLDER
PROPOSAL 3, AND "AGAINST" SHAREHOLDER PROPOSALS 4 AND 5, "FOR" ANY ADJOURNMENT
OR POSTPONEMENT SUPPORTED BY THE SOLICITING SHAREHOLDER, AND IN THE DISCRETION
OF THE PROXY AS TO ALL OTHER MATTERS. PROVIDENCE RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE ELECTION OF ITS FOUR NOMINEES, FOR THE RATIFICATION OF DELOITTE &
TOUCHE LLP AS AUDITORS, FOR SHAREHOLDER PROPOSAL 3 AND AGAINST SHAREHOLDER
PROPOSALS 4 AND 5.
PLEASE DATE AND SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS HEREON.
Dated:__________________________
Signature:______________________
Signature:______________________
Title:__________________________
<PAGE>
If stock is jointly held, each joint owner should sign. When signing as
attorney in fact, executor, administrator, trustee, guardian, corporate
officer or partner, please give full title.
PLEASE SIGN, DATE AND RETURN THIS PROXY
