<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-3122
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Ogden Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-5549268
- ------------------------------- ------------------------------
(State or other jurisdiction of I.R.S. Employer Identification
incorporation or organization) Number)
Two Pennsylvania Plaza, New York, New York 10121
--------------------------------------------------------
(Address or principal executive office) (Zip Code)
(212)-868-6100
-------------------------------------------------
(Registrant's telephone number including area code)
Not Applicable
------------------------------------------
(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ -------
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the issuer's classes of common
stock, as of June 30, 1998; 50,033,043 shares of Common Stock, $.50 par value
per share.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
------------------------- -----------------------
1998 1997 1998 1997
------------- ----------- ----------- -----------
(In Thousands of Dollars, Except per Share Data)
<S> <C> <C> <C> <C>
Service revenues $ 547,255 $ 574,294 $ 287,046 $ 293,750
Net sales 259,720 284,760 143,898 150,475
Construction revenues 5,133 1,801
Net gain on disposition of
businesses 45,222 19,914 39,710 7,689
-------- --------- -------- --------
Total revenues 857,330 878,968 472,455 451,914
-------- --------- -------- --------
Operating costs and
expenses 429,592 440,946 233,800 216,197
Costs of goods sold 243,583 268,071 134,844 144,166
Construction costs 4,646 1,713
Selling, administrative and
general expenses 59,449 57,636 30,428 27,868
Debt service charges 50,441 50,543 25,320 24,681
-------- --------- -------- --------
Total costs and expenses 787,711 817,196 426,105 412,912
-------- --------- -------- --------
Consolidated operating
income 69,619 61,772 46,350 39,002
Equity in net income of
investees and joint ventures 4,047 957 3,650 117
Interest income 7,046 10,634 3,506 6,375
Interest expense (16,895) (17,526) (8,299) (9,722)
Other income (deductions)-net 172 (406) (117) 77
------- --------- -------- --------
Income before income taxes
and minority interests 63,989 55,431 45,090 35,849
Income taxes (24,316) (23,835) (17,607) (15,415)
Minority interests (913) (810) (423) (425)
-------- ---------- --------- --------
Net income $ 38,760 $ 30,786 $ 27,060 $ 20,009
-------- --------- -------- --------
-------- --------- -------- --------
BASIC EARNINGS PER SHARE $ .77 $ .62 $ .54 $ .40
-------- --------- -------- --------
-------- --------- -------- --------
DILUTED EARNINGS PER SHARE $ .75 $ .60 $ .52 $ .39
-------- --------- -------- --------
-------- --------- -------- --------
</TABLE>
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
-------------- ---------------
(In Thousands of Dollars)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 228,912 $ 185,671
Restricted funds held in trust 309,300 103,882
Receivables (less allowances: 1998,
$29,177 and 1997, $20,207) 365,245 393,185
Inventories 35,968 34,235
Deferred income taxes 56,669 56,690
Other 56,720 58,408
----------- -----------
Total current assets 1,052,814 832,071
Property, plant and equipment-net 1,945,621 1,947,547
Restricted funds held in trust 228,360 206,013
Unbilled service and other receivables
(less allowances: 1998 and 1997, $3,000) 172,436 174,962
Unamortized contract acquisition costs 139,010 136,462
Goodwill and other intangible assets 78,499 79,889
Other assets 335,753 262,351
----------- -----------
Total Assets $ 3,952,493 $ 3,639,295
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Current Liabilities:
Current portion of long-term debt $ 43,143 $ 19,696
Current portion of project debt 70,909 68,052
Dividends payable 15,676 15,721
Accounts payable 98,660 109,719
Federal and foreign income taxes payable 9,400 1,913
Accrued expenses, etc. 279,072 267,874
Deferred income 68,651 42,962
----------- -----------
Total current liabilities 585,511 525,937
Long-term debt 395,350 354,032
Project debt 1,436,345 1,424,648
Deferred income taxes 381,806 383,341
Deferred income 198,410 20,313
Other liabilities 221,249 187,866
Minority interests 25,494 28,417
Convertible subordinated debentures 148,650 148,650
----------- -----------
Total Liabilities 3,392,815 3,073,204
----------- -----------
Shareholders' Equity:
Serial cumulative convertible preferred
stock, par value $1.00 per share;
authorized 4,000,000 shares; shares
outstanding: 42,812 in 1998 and
44,346 in 1997; net of treasury
shares of 29,820 in 1998 and 1997,respectively 43 45
Common stock, par value $.50 per share;
authorized, 80,000,000 shares; shares
outstanding: 50,033,043 in 1998 and
50,295,123 in 1997, net of treasury
shares of 3,418,043 and 3,135,123 in
1998 and 1997, respectively 25,017 25,147
Capital surplus 200,046 212,383
Earned surplus 350,565 343,237
Cumulative translation adjustment-net (15,237) (13,862)
Pension liability adjustment (324) (324)
Net unrealized loss on securities
available for sale (432) (535)
----------- -----------
Total Shareholders' Equity 559,678 566,091
----------- -----------
Total Liabilities and Shareholders' Equity $3,952,493 $ 3,639,295
----------- -----------
----------- -----------
</TABLE>
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1998 December 31, 1997
Shares Amounts Shares Amounts
----------------------------- ---------------------------
(In Thousands of Dollars, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Serial Cumulative Convertible Preferred
Stock, Par Value $1.00 Per Share;
Authorized 4,000,000 Shares:
Balance at beginning of period ........ 74,166 $ 75 77,509 $ 78
Shares converted into common stock .... (1,534) (2) (3,343) (3)
------------ --------------- ------------ --------------
Total ................................. 72,632 73 74,166 75
Treasury shares ....................... (29,820) (30) (29,820) (30)
------------ --------------- ------------ --------------
Balance at end of period (aggregate
involuntary liquidation value - 1998
$ 863,000) 42,812 43 44,346 45
------------ --------------- ------------ --------------
Common Stock, Par Value $.50 Per Share;
Authorized, 80,000,000 Shares:
Balance at beginning of period ........ 53,430,246 26,715 53,350,650 26,675
Exercise of stock options ............. 11,680 6 59,640 30
Conversion of preferred shares ........ 9,160 5 19,956 10
------------ --------------- ------------ --------------
Total ................................. 53,451,086 26,726 53,430,246 26,715
------------ --------------- ------------ --------------
Treasury shares at beginning of period 3,135,123 1,568 3,606,123 1,803
Purchase of treasury shares ........... 774,100 387
Exercise of stock options ............. (491,180) (246) (471,000) (235)
------------ --------------- ------------ --------------
Treasury shares at end of period ...... 3,418,043 1,709 3,135,123 1,568
------------ --------------- ------------ --------------
Balance at end of period .............. 50,033,043 25,017 50,295,123 25,147
------------ --------------- ------------ --------------
Capital Surplus:
Balance at beginning of period ........ 212,383 202,162
Exercise of stock options ............. 9,446 10,228
Purchase of treasury shares ........... (21,780)
Conversion of preferred shares ........ (3) (7)
--------------- ---------------
Balance at end of period .............. 200,046 212,383
--------------- ---------------
Earned Surplus:
Balance at beginning of period ........ 343,237 330,302
Net income ............................ 38,760 75,673
--------------- ---------------
Total ................................. 381,997 405,975
--------------- ---------------
Preferred dividends-per share 1998,
$1.6752, 1997, $3.35 .................. 73 152
Common dividends-per share 1998, $.625
1997, $1.25 .......................... 31,359 62,586
--------------- ---------------
Total dividends ....................... 31,432 62,738
--------------- ---------------
Balance at end of
period ................................ 350,565 343,237
--------------- ---------------
Cumulative Translation Adjustment-Net . (15,237) (13,862)
--------------- ---------------
Pension Liability Adjustment .......... (324) (324)
--------------- ---------------
Net Unrealized Loss on Securities
Available For Sale ................... (432) (535)
--------------- ---------------
TOTAL SHAREHOLDERS' EQUITY ............ $ 559,678 $ 566,091
--------------- ---------------
--------------- ---------------
</TABLE>
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30
1998 1997 (In
---------- ----------
(In Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 38,760 $ 30,786
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 54,609 51,970
Deferred income taxes 9,416 11,766
Other (44,694) (19,405)
Management of Operating Assets and Liabilities:
Decrease (Increase) in Assets:
Receivables 17,931 66,714
Inventories (2,879) (933)
Other assets (20,097) 7,693
Increase (Decrease) in Liabilities:
Accounts payable (10,359) 16,961
Accrued expenses (22,216) (59,834)
Deferred income 202,504 (1,079)
Other liabilities 9,667 (15,098)
-------- ---------
Net cash provided by operating activities 232,642 89,541
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of businesses 79,857 43,967
Proceeds from sale of property, plant and equipment 1,074 1,765
Investments in Energy facilities (12,095) (13,123)
Other capital expenditures (53,629) (32,877)
Decrease (increase) in other receivables 3,399 (95,891)
Distribution from investees and joint ventures 3,949
Increase in investment in and advances to
investees and joint ventures (38,438) (33,418)
--------- ---------
Net cash used in investing activities (15,883) (129,577)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings for Energy facilities 118,063
Other new debt 68,192 129,614
Increase in funds held in trust (205,769) (7,803)
Payment of debt (107,200) (27,485)
Dividends paid (31,477) (31,221)
Purchase of treasury shares (22,167)
Proceeds from exercise of stock options 9,698 4,126
Other (2,858) (2,723)
--------- ---------
Net cash (used in) provided by financing
activities (173,518) 64,508
-------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 43,241 24,472
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 185,671 140,824
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 228,912 $ 165,296
--------- ---------
--------- ---------
</TABLE>
<PAGE>
OGDEN CORPORATION AND SUBSIDIARIES
JUNE 30, 1998
ITEM 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles. However, in the opinion of management,
all adjustments consisting of normal recurring accruals necessary for a fair
presentation of the operating results have been included in the statements.
The accompanying financial statements for prior periods have been reclassified
as to certain amounts to conform with the 1998 presentation.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Revenues and income from operations (expressed in thousands of dollars) by
segment for the six months and the three months ended June 30, 1998 and 1997
were as follows:
Operations:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
--------------------------------------------
(In Thousands of Dollars)
Information Concerning
Business Segments 1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Entertainment $ 218,032 $ 184,974 $ 124,701 $ 105,143
Aviation 198,503 194,548 118,217 94,070
Energy 389,453 341,809 206,245 176,495
Other 51,342 157,637 23,292 76,206
--------- --------- --------- ---------
Total Revenues $ 857,330 $ 878,968 $ 472,455 $ 451,914
--------- --------- --------- ---------
--------- --------- --------- ---------
Income (Loss) from Operations:
Entertainment $ 14,816 $ 10,486 $ 9,145 $ 7,088
Aviation 37,493 16,549 29,883 10,478
Energy 38,597 40,492 23,020 28,607
Other (706) 4,907 (694) (2,146)
--------- --------- --------- ---------
Total Income from Operations 90,200 72,434 61,354 44,027
Equity in net income (loss) of investees and joint ventures:
Entertainment (2,436) (895) (1,348) (348)
Aviation (2,264) 1,519 (3,292) 501
Energy 8,747 200 8,290 (36)
Other 133
--------- --------- --------- ---------
Total 94,247 73,391 65,004 44,144
Corporate unallocated expenses - net (20,409) (11,068) (15,121) (4,948)
Corporate interest - net (9,849) (6,892) (4,793) (3,347)
--------- --------- --------- ---------
Income Before Income Taxes
and Minority Interest $ 63,989 $ 55,431 $ 45,090 $ 35,849
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
OPERATIONS:
Revenues for the first six months of 1998 were $21,600,000 lower than the
comparable period of 1997. This was primarily due to a decline of $106,300,000
in the Other segment chiefly associated with the sales of Facility Services New
York operations in July 1997 and certain operations of Atlantic Design Company
(ADC), a contract manufacturing business in late 1997 and in early 1998. The
Entertainment segment's revenues were $33,100,000 higher reflecting increased
activity at the World Trade Center and certain sports venues, the partial
start-up of
<PAGE>
Entertainment sites in Arizona, Texas and Florida, and the
acquisition of the Enchanted Castle in late 1997. The Aviation segment's
revenues were $4,000,000 higher primarily reflecting the gain on the sale of the
domestic catering operations and the gain on the sale of a 5% interest in the
Hong Kong ground services company. These increases in aviation revenues were
partially offset by the effect of the sale in 1997 of the Miami and Spanish
inflight catering business and certain ground services operations. The Energy
segment's revenues were $47,600,000 higher primarily due to Independent Power
operations including the results of the acquisition in late 1997 of both Pacific
Energy and a 60% interest in four cogeneration plants in China, and increased
production at the Edison Bataan facility; the buy-out of a Waste-to-Energy power
purchase contract; and increased construction revenues associated with retrofit
activity at several facilities.
Consolidated operating income for the first six months of 1998 was $7,800,000
higher than the comparable period of 1997. The Entertainment segment's income
from operations was $4,300,000 higher primarily reflecting increased activity at
the World Trade Center and certain sports venues, the partial start-up of
Entertainment sites in Arizona, Texas and Florida and other credits. These
increases in Entertainment's income from operations were partially offset by
start-up expenses at the Tinseltown operation. The Aviation segment's income
from operations was $20,900,000 higher primarily reflecting the gain on the sale
of the domestic inflight catering business in June 1998, and the gain on the
sale of a 5% interest in the Hong Kong ground services company. These increases
in Aviation's income from operations in 1998 were offset in part by reduced
European operations, provision for restructuring European operations, certain
legal claims and other charges in 1998, and in part by the gain on the sale in
1997 of the Miami and Spanish inflight catering business and certain ground
services operations. The Energy segment's income from operations was $1,900,000
lower primarily reflecting an increase of $800,000 in Waste-to-Energy operations
chiefly associated with increased operating results at four facilities,
partially offset by increased maintenance costs and decreased operating results
at a facility due to a service agreement adjustment. In addition, construction
income increased $400,000 due to the commencement of retrofit activity at
several facilities. These increases were more than offset by the Independent
Power group's income from operations decreasing $500,000 primarily due to
provisions established for several geothermal operations and increased
development costs, partially offset by the results of Pacific Energy and the
groups 60% interest in four cogeneration plants in China, both acquired in 1997;
increased production at the Edison Bataan facility and the Environmental group's
income from operations decreasing $2,500,000 primarily reflecting the write-off
of uncollectible notes receivable. The Other segment's income from operations
was $5,600,000 lower chiefly associated with the sale of an investment in
Universal Ogden in the first quarter of 1997.
Corporate unallocated expenses - net for the six months ended June 30, 1998
increased $9,300,000 over the comparable period of 1997. This increase was
primarily due to restructuring costs, certain litigation and proxy related
charges.
Equity in net income of investees and joint ventures for the six months ended
June 30, 1998 was $3,100,000 higher than the comparable period of 1997 chiefly
associated with the buy-out of an energy sales agreement with respect to a 50%
joint venture, the results of Pacific Energy joint ventures acquired in
September 1997 and increased activity in several aviation joint ventures.
<PAGE>
These increases were partially offset by start-up costs of the Bogota, Colombia
and Argentina 2000 airport operations as well as low activity in Entertainment's
Spanish theme park joint venture.
The Energy segment has three interest rate swap agreements entered into as
hedges against interest rate exposure on three series of adjustable rate
project debt that resulted in additional debt service costs of $360,000 and
$200,000 for the first six months of 1998 and 1997.
Interest income for the first six months of 1998 was $3,600,000 lower than the
comparable period of 1997 primarily reflecting the repayment of debt by a
customer and lower average cash and cash equivalents. Interest expense was
$600,000 lower chiefly associated with reduced borrowings and payments on
outstanding debt, partially offset by increased interest on notes issued in
connection with the acquisition of Pacific Energy in September 1997. Ogden has
two interest rate swap agreements covering notional amounts of $100,000,000 and
$4,300,000, respectively. The first swap agreement expires on December 16, 1998
and was entered into in order to convert Ogden's fixed rate $100,000,000 9.25%
debentures into variable rate debt. The second swap agreement expires on
November 30, 2000 and was entered into in order to convert Ogden's $4,300,000
variable rate debt to a fixed rate. These agreements resulted in additional
interest expense of $190,000 and $80,000 for the first six months of 1998 and
1997, respectively.
The effective income tax rate for the first six months of 1998 was 38% compared
with 43% for the comparable period of 1997. This decrease of 5% was chiefly
associated with higher foreign earnings in countries with lower income tax
rates, and non-conventional fuel tax credits generated by Pacific Energy.
Revenues for the three months ended June 30, 1998 were $20,500,000 higher than
the comparable period of 1997. The Entertainment segment's revenues were
$19,600,000 higher reflecting increased customer activity in food and beverage
operations at sports venues and the World Trade Center, the partial start-up of
Entertainment sites in Arizona, Texas and Florida and the acquisition of
Enchanted Castle in late 1997. The Aviation segment's revenue was $24,100,000
higher primarily reflecting the gain on the sale of the domestic inflight
catering operations in June 1998. This increase was partially offset by the gain
on the sale in 1997 of the Spanish inflight catering operations and certain
ground services operations. The Energy segment's revenues were $29,800,000
higher primarily due to Independent Power operations, including the results of
the acquisition in 1997 of both Pacific Energy and a 60% interest in four
cogeneration plants in China, and increased production on the Edison Bataan
facility; the buyout of a Waste-to-Energy power purchase agreement; and an
increase in the consulting and engineering business of Ogden Environmental.
These increases in revenues were partially offset by a decrease of $52,900,000
in the Other segment's revenues primarily due to the previous sale of certain
operations of ADC and Facility Services New York operations.
Consolidated operating income for the three months ended June 30, 1998 was
$7,300,000 higher than the comparable period of 1997. The Entertainment
segment's income from operations was $2,100,000 higher primarily due to
increased activity at several sports venues and the World Trade Center, the
acquisition of Enchanted Castle, the partial start-up of an entertainment site
in Florida and other credits. These increases were partially offset by start up
costs at the
<PAGE>
Tinseltown operation. The Aviation segment's income from operations
was $19,400,000 higher primarily reflecting the gain on the sale of the domestic
inflight catering operations in June 1998. This increase was offset in part by
reduced European operations, provisions for restructuring European operations,
certain legal claims and other charges in 1998 and in part by the gain on the
sale of the Spanish inflight kitchen and certain ground services operations. The
Energy segment's income from operations was $5,600,000 lower primarily due to a
reduction of $4,500,000 in Independent Power reflecting provisions established
for several geothermal operations and increased development costs. These
decreases were partially offset by the results of Pacific Energy and the group's
60% interest in four cogeneration plants in China acquired in 1997; the
Environmental group's income from operations decreased $2,000,000 reflecting the
write-off of uncollectible notes receivables. Waste-to-Energy operations
increased $800,000. The Other segment's income from operations increased
$1,500,000 chiefly associated with the previous sale of certain ADC operations.
Unallocated corporate expenses - net for the three months ended June 30, 1998
were $10,200,000 higher than the comparable period of 1997 chiefly associated
with restructuring costs, certain litigation and proxy related charges.
Equity in net income of investees and joint ventures for the three months ended
June 30, 1998 was $3,500,000 higher than the comparable period of 1997 primarily
reflecting the buyout of an energy sales agreement with respect to a 50% owned
joint venture, the results of Pacific Energy joint ventures acquired in 1997 and
increased activity at several aviation joint ventures. These increases were
partially offset by start-up costs of the Bogota, Colombia and Argentina 2000
airport operations as well as low activity in Entertainment's Spanish theme park
joint venture.
At June 30, 1998, the Energy segment had three interest rate swap agreements
which resulted in additional debt service expense of $108,000 and lower debt
service expense of $9,000 during the three months ended June 30, 1998 and 1997,
respectively.
Interest income for the three months ended June 30, 1998 was $2,900,000 lower
than the comparable period of 1997 chiefly associated with the repayment of debt
by customers and lower average cash and cash equivalents. Interest expense was
$1,400,000 lower chiefly associated with reduced short term borrowings and
payments on outstanding debt, partially offset by interest on notes issued in
connection with the acquisition of Pacific Energy. Ogden has two interest rate
swap agreements which resulted in additional interest expense of $41,000 and
$46,000 for the three months ended June 30, 1998 and 1997, respectively.
The effective income tax rate for the three months ended June 30, 1998 was 39%
compared with 43% for the comparable period of 1997. This decrease of 4%
primarily reflects higher foreign earnings in countries with lower tax rates and
non-conventional fuel tax credits.
Capital Investments and Commitments: During the first six months of 1998,
capital investments amounted to $65,700,000, of which $12,100,000, inclusive of
restricted funds transferred from funds held in trust, was for Energy facilities
and $53,600,000 was for normal replacement and growth in Entertainment
($29,200,000), Aviation ($20,900,000), Energy ($2,900,000) operations and Other
($600,000).
<PAGE>
At June 30, 1998, capital commitments amounted to $139,000,000 which included
$68,500,000 for normal replacement, modernization, and growth in Entertainment
($52,400,000), Aviation ($4,100,000), and Energy ($12,000,000) operations. Also
included was $38,100,000 for Energy's coal-fired power project in The
Philippines reflecting $18,700,000 for the remaining mandatory equity
contribution, $5,700,000 for contingent equity contributions, and $13,700,000
for a standby letter of credit in support of debt service reserve requirements.
Funding for the remaining mandatory equity contribution is being provided
through a bank credit facility, which must be repaid in December 2001. The
Corporation also has a $21,000,000 equity commitment in an Aviation joint
venture in Argentina and a $11,400,000 contingent equity commitment in an
entertainment venture. In addition, compliance with standards and guidelines
under the Clean Air Act Amendments of 1990 will require further Energy capital
expenditures currently estimated at $25,000,000 by December 2000 subject to the
final time schedules determined by the individual states in which the Company's
waste-to-energy facilities are located.
Ogden and certain of its subsidiaries have issued or are party to performance
bonds and guarantees and related contractual obligations undertaken mainly
pursuant to agreements to construct and operate certain waste-to-energy,
entertainment, and other facilities. In the normal course of business, they are
involved in legal proceedings in which damages and other remedies are sought. In
connection with certain contractual arrangements, Ogden has agreed to provide
two vendors with specified amounts of business over a three year period. If
these amounts are not provided, the corporation may be liable for prorated
damages of up to approximately $5,000,000. Management does not expect that these
contractual obligations, legal proceedings, or any other contingent obligations
incurred in the normal course of business will have a material adverse effect on
Ogden's Consolidated Financial Statements.
During 1994, a subsidiary of Ogden entered into a 30-year facility management
contract, pursuant to which it agreed to advance funds to a customer and, if
necessary, to assist the customers' refinancing of senior secured debt incurred
in connection with the construction of the facility. During 1997, Ogden
purchased the customer's senior secured debt in the amount of $95,000,000, using
borrowed funds, which senior secured debt was subsequently sold and the borrowed
funds repaid. Ogden is obligated to repurchase such senior secured debt in the
amount of $97,050,000 on December 30, 2002 if the debt is not refinanced prior
to that time. Ogden's repurchase obligation is collateralized by bank letters of
credit. Ogden is also required to repurchase the outstanding amount of certain
subordinated secured debt of such customer on December 30, 2002. At June 30,
1998, the amount outstanding was $51,625,000. In addition, the Corporation has
guaranteed indebtedness of $20,683,000 of an affiliate and principal tenant of
this customer, which indebtedness is due in September 1998. Ogden also has
guaranteed borrowing's of a customer amounting to approximately $13,200,000 as
well as $13,800,000 of borrowings of joint ventures in which Ogden has an equity
interest. Management does not expect that these arrangements will have a
material adverse effect on Ogden's Consolidated Financial Statements.
Liquidity/Cash Flow - Net cash provided from operating activities was
$143,100,000 higher than the comparable period of 1997 primarily reflecting an
increase in deferred income of $204,000,000 chiefly associated with the
prepayment of a power purchase agreement for the Haverhill waste-to-energy
plant, partially offset by the collection in 1997 of $41,700,000 relating to
<PAGE>
certain legal settlements. Net cash used in investing activities decreased
$113,700,000 primarily reflecting a net decrease in loans to customers of
$99,300,000, and increased proceeds of $35,900,000 from the sale of businesses.
These decreases in net cash used in investing activities were partially offset
by increased capital expenditures of $20,800,000 primarily in the Entertainment
and Aviation segments and increased investments and advances to investees and
joint ventures of $5,100,000. Net cash used in financing activities was
$238,000,000 higher chiefly associated with an increase of funds held in trust
of $198,000,000 relating to the prepayment of a power purchase agreement,
$22,200,000 for the purchase of treasury shares and a net reduction of
$23,100,000 of debt.
At June 30, 1998, the Corporation had $228,900,000 in cash and cash equivalents
and unused revolving credit lines of $184,600,000.
In January 1998, Ogden's Board of Directors reauthorized the purchase of shares
of the Corporation's common stock in an amount up to $100,000,000. From January
1 through August 10, 1998, 1,165,700 shares of common stock were purchased for
$32,418,000.
Any statements in this communication, which may be considered to be "forward
looking statements" as that term is defined in the Private Securities Litigation
Reform Act of 1995, are subject to certain risks and uncertainties. The factors
that could cause actual results to differ materially from those suggested by any
such statements include, but are not limited to, those discussed or identified
from time to time in the Corporation's public filings with the Securities and
Exchange Commission and more generally, general economic conditions, including
changes in interest rates and the performance of the financial markets; changes
in domestic and foreign laws, regulations, and taxes; changes in competition and
pricing environments; and regional or general changes in asset valuations.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Ogden Corporation and its subsidiaries (the "Company") are parties to
various legal proceedings involving matters arising in the ordinary course of
business. The Company does not believe that there are any pending legal
proceedings for damages against the Company, other than ordinary routine
litigation incidental to its business, the outcome of which would have a
material adverse effect on the Company on a consolidated basis.
(a) Environmental Matters
The Company conducts regular inquiries of its subsidiaries regarding
litigation and environmental violations which include determining the nature,
amount and likelihood of liability for any such claims, potential claims or
threatened litigation.
In the ordinary course of its business, the Company may become
involved in Federal, state, and local proceedings relating to the laws
regulating the discharge of materials into the environment and the protection of
the environment. These include proceedings for the issuance, amendment, or
renewal of the licenses and permits pursuant to which a Company subsidiary
operates. Such proceedings also include actions brought by individuals or local
governmental authorities seeking to overrule governmental decisions on matters
relating to the subsidiaries' operations in which the subsidiary may be, but is
not necessarily, a party. Most proceedings brought against the Company by
governmental authorities or private parties under these laws relate to alleged
technical violations of regulations, licenses, or permits pursuant to which a
subsidiary operates. The Company believes that such proceedings will not have a
material adverse effect on the Company's consolidated financial statements.
The Company's operations are subject to various Federal, state and
local environmental laws and regulations, including the Clean Air Act, the Clean
Water Act, the Comprehensive Environmental Response Compensation and Liability
Act (CERCLA) and Resource Conservation and Recovery Act (RCRA). Although the
Company operations are occasionally subject to proceedings and orders pertaining
to emissions into the environment and other environmental violations, the
Company believes that it is in substantial compliance with existing
environmental laws and regulations.
In connection with certain previously divested operations, the Company
may be identified, along with other entities, as being among potentially
responsible parties responsible for contribution for costs associated with the
correction and remediation of environmental conditions at various hazardous
waste disposal sites subject to CERCLA. In certain instances the Company may be
exposed to joint and several liability for remedial action or damages. The
Company's ultimate liability in connection with such environmental claims will
depend on many factors, including its volumetric share of waste, the total cost
of remediation, the financial viability of other companies that also sent waste
to a given site and its contractual arrangement with the purchaser of such
operations.
II-1
<PAGE>
The potential costs related to such matters and the possible impact on
future operations are uncertain due in part to the complexity of government laws
and regulations and their interpretations, the varying costs and effectiveness
of cleanup technologies, the uncertain level of insurance or other types of
recovery, and the questionable level of the Company's responsibility. Although
the ultimate outcome and expense of environmental remediation is uncertain, the
Company believes that required remediation and continuing compliance with
environmental laws will not have a material adverse effect on the Company's
consolidated financial statements.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of Ogden Corporation was
held on May 20, 1998.
<TABLE>
<CAPTION>
(b) Name of Each Director Elected Name of Each other Director
-----------------------------
whose Term of Office Continued
------------------------------
<S> <C> <C>
R. Richard Ablon Terry Allen Kramer (1999)
Judith D. Moyers Helmut Volcker (1999)
Robert E. Smith Jeffrey F. Friedman (1999)
Anthony J. Bolland David M. Abshire (1999)
Norman G. Einspruch (2000)
Attallah Kappas (2000)
Homer A. Neal (2000)
</TABLE>
(c) (i) Proposal 1: Election of four directors for a three year term.
<TABLE>
<CAPTION>
--------------------- ---------------------- -------------------
Name Votes For Votes Withheld
--------------------- ---------------------- -------------------
<S> <C> <C>
--------------------- ---------------------- -------------------
R. Richard Ablon 37,450,211 1,798,315
--------------------- ---------------------- -------------------
Judith D. Moyers 37,458,876 1,789,650
--------------------- ---------------------- -------------------
Robert E. Smith 37,458,122 1,790,404
--------------------- ---------------------- -------------------
Anthony J. Bolland 41,189,235 1,793,645
--------------------- ---------------------- -------------------
Michael G. Conroy 3,734,354 578,300
--------------------- ---------------------- -------------------
Larry G. Schafran 3,734,354 578,300
--------------------- ---------------------- -------------------
Robert J. Slater 3,734,354 578,300
--------------------- ---------------------- -------------------
</TABLE>
(ii) Proposal 2: Ratification of the selection of Deloitte
& Touch LLP as independent public accountants of the
corporation and its subsidiaries for the year 1998:
<TABLE>
<CAPTION>
-------------- ----------------- ------------- --------------------
For Against Abstain Broker Non-Vote
-------------- ----------------- ------------- --------------------
<S> <C> <C> <C>
-------------- ----------------- ------------- --------------------
43,267,100 13,152,379 568,138 - 0 -
-------------- ----------------- ------------- --------------------
</TABLE>
II-2
<PAGE>
(iii) Proposal 3: Stockholder proposal requesting the Board
of Directors take the steps necessary to provide that
new Directors be elected annually and not by classes:
<TABLE>
<CAPTION>
-------------- ----------------- ------------- --------------------
For Against Abstain Broker Non-Vote
-------------- ----------------- ------------- --------------------
<S> <C> <C> <C>
-------------- ----------------- ------------- --------------------
24,707,914 13,152,379 568,138 5,132,749
-------------- ----------------- ------------- --------------------
</TABLE>
(iv) Proposal 4: Stockholder proposal requested the prompt
sale of the Company to the highest bidder:
<TABLE>
<CAPTION>
-------------- ----------------- ------------- --------------------
For Against Abstain Broker Non-Vote
-------------- ----------------- ------------- --------------------
<S> <C> <C> <C>
-------------- ----------------- ------------- --------------------
3,311,801 34,409,812 706,818 5,132,749
-------------- ----------------- ------------- --------------------
</TABLE>
(v) Stockholder proposal requesting the endorsement of
the Coalition for Environmentally Responsible
Economics Principles:
<TABLE>
<CAPTION>
-------------- ----------------- ------------- --------------------
For Against Abstain Broker Non-Vote
-------------- ----------------- ------------- --------------------
<S> <C> <C> <C>
-------------- ----------------- ------------- --------------------
3,024,000 33,067,720 2,339,711 5,132,749
-------------- ----------------- ------------- --------------------
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
2 Plan of Acquisition, Reorganization Arrangement,
Liquidation or Succession.
2.1 Agreement and Plan of Merger, dated as of October
31, 1989, among Ogden, ERCI Acquisition
Corporation and ERC International, Inc.*
2.2 Agreement and Plan of Merger among Ogden
Corporation, ERC International Inc., ERC
Acquisition Corporation and ERC Environmental and
Energy Services Co., Inc. dated as of January 17,
1991.*
2.3 Amended and Restated Agreement and Plan of Merger
among Ogden Corporation, OPI Acquisition
Corporation sub. and Ogden Projects, Inc., dated
as of September 27, 1994.*
3 Articles of Incorporation and By-Laws.
II-3
<PAGE>
3.1 Ogden's Restated Certificate of Incorporation as
amended.*
3.2 Ogden's By-Laws, as amended through April 8,
1998.*
4 Instruments Defining Rights of Security Holders.
4.1 Fiscal Agency Agreement between Ogden and Bankers
Trust Company, dated as of June 1, 1987 and
Offering Memorandum dated June 12, 1987, relating
to U.S. $85 million Ogden 6% Convertible
Subordinated Debentures, Due 2002.*
4.2 Fiscal Agency Agreement between Ogden and Bankers
Trust Company, dated as of October 15, 1987, and
Offering Memorandum, dated October 15, 1987,
relating to U.S. $75 million Ogden 5-3/4%
Convertible Subordinated Debentures, Due 2002.*
4.3 Indenture dated as of March 1, 1992 from Ogden
Corporation to The Bank of New York, Trustee,
relating to Ogden's $100 million debt offering.*
10 Material Contracts
10.1 (i) Ogden $200 million Credit Agreement by and
among Ogden, The Bank of New York, as Agent and
the signatory Lenders thereto dated as of June 30,
1997.*
10.2 Rights Agreement between Ogden Corporation and
Manufacturers Hanover Trust Company, dated as of
September 20, 1990.*.
10.3 Executive Compensation Plans and Agreements.
(a) Ogden Corporation 1990 Stock Option
Plan.*
i. Ogden Corporation 1990 Stock
Option Plan as Amended and
Restated as of January 19,
1994.*
ii. Amendment adopted and
effective as of September 18,
1997.*
(b) Ogden Services Corporation Executive
Pension Plan.*
(c) Ogden Services Corporation Select
Savings Plan.*
i. Ogden Services Corporation
Select Savings Plan Amendment
and Restatement as of January
1, 1995.* ii. Amendment Number
One to the Ogden Services
Corporation Select Savings
Plan as amended and restated
January 1, 1995, effective
January 1, 1998.*
II-4
<PAGE>
(d) Ogden Services Corporation Select
Savings Plan Trust.*
i. Ogden Services Corporation
Select Savings Plan Trust
Amendment and Restatement as
of January 1, 1995.*
(e) Ogden Services Corporation Executive
Pension Plan Trust.*
(f) Changes effected to the Ogden Profit
Sharing Plan effective January 1, 1990.*
(g) Employment Letter Agreement between
Ogden and an executive officer dated
January 30, 1990.*
(h) Employment Agreement between R. Richard
Ablon and Ogden dated as of January 1,
1990.
(i) Employment Agreement between Ogden and
Philip G. Husby, dated as of July 2,
1990.*
(j) Letter Agreement between Ogden
Corporation and Ogden's Chairman of the
Board, dated as of January 16, 1992.*
(k) Employment Agreement between Ogden
Corporation and Ogden's Chief Accounting
Officer dated as of December 18, 1991.*
(l) Employment Agreement between Scott G.
Mackin and Ogden Projects, Inc. dated as
of January 1, 1994.*
(m) Employment Agreement between Alane
Baranello and Ogden Services
Corporation, dated October 28, 1996.
(m)(1) Employment Agreement between Peter Allen
and Ogden Corporation dated July 1,
1998.
(n) Ogden Corporation Profit Sharing Plan.*
(i) Ogden Profit Sharing Plan as
amended and restated January
1, 1991 and as in effect
through January 1, 1993.*
II-5
<PAGE>
(ii) Ogden Profit Sharing Plan as
amended and restated effective
as of January 1, 1995.*
(o) Ogden Corporation Core Executive Benefit
Program.*
(p) Ogden Projects Pension Plan.*
(q) Ogden Projects Profit Sharing Plan.*
(r) Ogden Projects Supplemental Pension and
Profit Sharing Plans.*
(s) Ogden Projects Core Executive Benefit
Program.*
(t) Ogden Corporation CEO Formula Bonus
Plan.*
(u) Form of amendments to the Ogden
Projects, Inc. Pension Plan and Profit
Sharing Plans effective as of January 1,
1994.
i. Form of amended Ogden Projects
Profit Sharing Plan effective
as of January 1, 1994.*
ii. Form of amended Ogden Projects
Pension Plan, effective as of
January 1, 1994.*
10.4 First Amended and Restated Ogden Corporation
Guaranty Agreement made as of January 30, 1992 by
Ogden Corporation for the benefit of Mission
Funding Zeta and Pitney Bowes Credit Corporation.*
10.5 Ogden Corporation Guaranty Agreement made as of
January 30, 1992 by Ogden Corporation for the
benefit of Allstate Insurance Company and Ogden
Martin Systems of Huntington Resource Recovery
Nine Corp.*
10.6 $95 million Term Loan and Letter of Credit and
Reimbursement Agreement, dated March 26, 1997
among Ogden as Borrower, the lender banks named
therein and the Deutsche Bank A.G., New York
Branch as Agent and lender.*
11 Detail of Computation of Earnings applicable to
Common Stock.
27 Financial Data Schedule (EDGAR Filing Only).
II-6
<PAGE>
*Incorporated by reference as set forth in the Exhibit Index of this Form 10-Q.
(b) Reports on Form 8-K
There were no Form 8-K Current Reports
filed during the Second Quarter of 1998.
II-7
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized.
OGDEN CORPORATION
(Registrant)
Date: August 13, 1998 By/s/ Philip G. Husby
---------------------------------
Philip G. Husby
Senior Vice President
and Chief Financial
Officer
Date: August 13, 1998 By:/s/ Robert M. DiGia
-------------------------------
Robert M. DiGia
Vice President,
Controller and Chief
Accounting Officer
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
- ------- ------------------------------ ---------------------------------
<S> <C> <C>
2 Plan of Acquisition,
Reorganization Arrangement,
Liquidation or Succession.
2.1 Agreement and Plan of Merger, Filed as Exhibit 2 to Ogden's
dated as of October 31, 1989, Form S-4 Registration Statement
among Ogden, ERCI Acquisition File No. 33-32155, and
Corporation and ERC International incorporated herein by
Inc. reference.
2.2 Agreement and Plan of Merger Filed as Exhibit (10)(x) to
among Ogden Corporation, ERC Ogden's Form 10-K for the
International Inc., ERC fiscal year ended December 31,
Acquisition Corporation and 1990 and incorporated herein
ERC Environmental and Energy by reference.
Services Co., Inc. dated as of
January 17, 1991.
2.3 Amended and Restated Agreement Filed as Exhibit 2 to Ogden's
and Plan of Merger among Ogden Form S-4 Registration Statement
Corporation, OPI Acquisition File No. 33-56181 and
Corporation sub. and Ogden incorporated herein by
Projects, Inc. dated as of reference.
September 27, 1994.
3 Articles of Incorporation and
By-Laws.
3.1 Ogden's Restated Certificate Filed as Exhibit (3)(a)
of Incorporation as amended. to Ogden's Form 10-K for the
fiscal year ended December 31,
1988 and incorporated herein
by reference.
3.2 Ogden By-Laws as amended. Filed as Exhibit 3.2 to Ogden's
Form 10-Q for the quarterly
period ended March 31, 1998 and
incorporated herein by reference.
4 Instruments Defining Rights of
Security Holders.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT FILING INFORMATION
- ------- -------------------------------- ---------------------------
<S> <C> <C>
4.1 Fiscal Agency Agreement between Filed as Exhibits (C)(3) and
Ogden and Bankers Trust Company, (C)(4) to Ogden's Form 8-K
dated as of June 1, 1987 and filed with the Securities and
Offering Memorandum dated June Exchange Commission on July 7,
12, 1987, relating to U.S. 1987 and incorporated herein
$85 million Ogden 6% Convertible by reference.
Subordinated Debentures, Due 2002.
4.2 Fiscal Agency Agreement between Filed as Exhibit (4)to Ogden's
Ogden and Bankers Trust Company, Form S-3 Registration Statement
dated as of October 15, 1987, filed with the Securities and
and Offering Memorandum, dated Exchange Commission on December
October 15, 1987, relating to 4, 1987, Registration No.
U.S. $75 million Ogden 5-3/4% 33-18875, and incorporated
Convertible Subordinated herein by reference.
Debentures, Due 2002.
4.3 Indenture dated as of March 1, Filed as Exhibit (4)(C) to
1992 from Ogden Corporation to Ogden's Form 10-K for fiscal
The Bank of New York, Trustee, year ended December 31, 1991,
relating to Ogden's $100 million and incorporated herein by
debt offering. reference.
10 Material Contracts
10.1 Credit Agreement by and among Filed as Exhibit No. 10.2 to Ogden's
Ogden, The Bank of New York, as Form 10-K for fiscal year ended
Agent and the signatory Lenders thereto December 31,1993, and
dated as of September 20, 1993. incorporated herein by reference.
(i) Amendment to Credit Filed as Exhibit 10.1(i) to Ogden's
Agreement, dated as of Form 10-K for fiscal year ended
November 16, 1995. December 31, 1995, and
incorporated herein by reference.
10.1(a) U.S. $95 million Term Loan and Letter Filed as Exhibit 10.6 to Ogden's
of Credit and Reimbursement Form 10-Q for the quarterly period
Agreement among Ogden, the Deutsche ended March 31, 1997 and
Bank AG, New York Branch and the incorporated herein by reference.
signatory Banks thereto, dated March
26, 1997.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
10.1(b) $200 million Credit Agreement among Filed as Exhibit 10.1(i) to Ogden's
Ogden, The Bank of New York as Agent Form 10-Q for the quarterly period
and the signatory Lenders thereto, ended June 30, 1997 and incorporated
dated as of June 30, 1997. herein by reference.
10.2 Stock Purchase Agreement dated May Filed as Exhibit (10)(d) to Ogden's
31, 1988, between Ogden and Ogden Form 10-K for the fiscal year ended
Projects, Inc. December 31, 1989 and incorporated
herein by reference.
10.3 Tax Sharing Agreement, dated January Filed as Exhibit (10)(e) to Ogden's
1, 1989 between Ogden, Ogden Form 10-K for the fiscal year ended
Projects, Inc. and subsidiaries, December 31, 1989 and incorporated
Ogden Allied Services, Inc. and herein by reference.
subsidiaries and Ogden Financial
Services, Inc. and subsidiaries.
10.4 Stock Purchase Option Agreement, Filed as Exhibit (10)(f) to Ogden's
dated June 14, 1989, between Ogden Form 10-K for the fiscal year ended
and Ogden Projects, Inc. as amended December 31, 1989 and incorporated
on November 16, 1989. herein by reference.
10.5 Preferred Stock Purchase Agreement, Filed as Exhibit (10)(g) to Ogden's
dated July 7, 1989, between Ogden Form 10-K for the fiscal year ended
Financial Services, Inc. and Image December 31, 1989 and incorporated
Data Corporation. herein by reference
10.6 Rights Agreement between Ogden Filed as Exhibit (10)(h) to Ogden's
Corporation and Manufacturers Hanover Form 10-K for the fiscal year ended
Trust Company, dated as of September December 31, 1990 and incorporated
20, 1990 and amended August 15, 1995 herein by reference.
to provide The Bank of New York as
successor agent.
10.7 Executive Compensation Plans.
(a) Ogden Corporation 1990 Filed as Exhibit (10)(j) to Ogden
Stock Option Plan. Form 10-K for the fiscal year ended
December 31, 1990 and incorporated
herein by reference.
i. Ogden Corporation 1990 Filed as Exhibit 10.6(b)(i) to
Stock Option Plan Ogden's Form 10-Q for the quarterly
as Amended and period ended September 30, 1994 and
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Restated as of January incorporated herein by reference.
19, 1994
ii. Amendment adopted and Filed as Exhibit 10.7(a)(ii) to
effective as of September Ogden's Form 10-K for fiscal period
18, 1997. ended December 31, 1997 and
incorporated herein by reference.
(b) Ogden Services Corporation Filed as Exhibit (10)(k) to Ogden's
Executive Pension Plan. Form 10-K for the fiscal year ended
December 31, 1990 and incorporated
herein by reference.
(c) Ogden Services Corporation Select Filed as Exhibit (10)(l) to Ogden
Savings Plan. Form 10-K for the fiscal year ended
December 31, 1990 and incorporated
herein by reference.
(i) Ogden Services Corporation Filed as Exhibit 10.7(d)(I) to
Select Savings Plan Ogden's Form 10-K for the fiscal year
Amendment and ended December 31, 1994 and
Restatement as of incorporated herein by reference.
January 1, 1995.
(ii) Amendment Number One to the Filed as Exhibit 10.7(c)(ii) to
Ogden Services Ogden's Form 10-K for the fiscal year
Corporation Select ended December 31, 1997 and
Savings Plan as incorporated herein by reference.
Amended and Restated
January 1, 1995,
effective January 1,
1998.
(d) Ogden Services Corporation Select Filed as Exhibit (10)(m) to Ogden's
Savings Plan Trust. Form 10-K for the fiscal year ended
December 31, 1990 and incorporated
herein by reference.
i. Ogden Services Filed as Exhibit 10.7(e)(i) to Ogden's
Corporation Select Form 10-K for the fiscal year ended
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Savings Plan Trust December 31, 1994 and incorporated
Amendment and Restatement herein by reference.
as of January 1, 1995.
(e) Ogden Services Corporation Filed as Exhibit (10)(n) to Ogden's
Executive Pension Plan Trust. Form 10-K for the fiscal year ended
December 31, 1990 and incorporated
herein by reference.
(f) Changes effected to the Ogden Filed as Exhibit (10)(o) to Ogden's
Profit Sharing Plan effective Form 10-K for the fiscal year ended
January 1, 1990. December 31, 1990 and incorporated
herein by reference.
(g) Ogden Corporation Profit Filed as Exhibit 10.8(p) to Ogden's
Sharing Plan. Form 10-K for fiscal year ended
December 31, 1992 and incorporated
herein by reference.
(i) Ogden Profit Sharing Plan as Filed as Exhibit 10.8(p)(i) to
amended and restated January Ogden's Form 10-K for fiscal year
1, 1991 and as in effect ended December 31, 1993 and
through January 1, 1993. incorporated herein by reference.
(ii) Ogden Profit Sharing Plan as Filed as Exhibit 10.7(p)(ii) to
amended and restated Ogden's Form 10-K for fiscal year
effective as of January 1, ended December 31, 1994 and
1995. incorporated herein by reference.
(h) Ogden Corporation Core Executive Filed as Exhibit 10.8(q) to Ogden's
Benefit Program. Form 10-K for fiscal year ended
December 31, 1992 and incorporated
herein by reference.
(i) Ogden Projects Pension Plan. Filed as Exhibit 10.8(r) to Ogden's
Form 10-K for fiscal year ended
December 31, 1992 and incorporated
herein by reference.
(j) Ogden Projects Profit Sharing Filed as Exhibit 10.8(s) to Ogden's
Plan. Form 10-K for fiscal year ended
December 31, 1992 and incorporated
herein by reference.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(k) Ogden Projects Supplemental Pension Filed as Exhibit 10.8(t) to Ogden's Form
and Profit Sharing Plans. 10-K for fiscal year ended December 31, 1992
and incorporated herein by reference.
(l) Ogden Projects Employees' Stock Option Filed as Exhibit 10.8(u) to Ogden's Form
Plan. 10-K for fiscal year ended December 31, 1992
and incorporated herein by reference.
(i) Amendment dated as of Filed as Exhibit 10.7(u)(i) to Ogden's Form
December 29, 1994, to the 10-K for fiscal year ended December 31, 1994
Ogden Projects Employees' and incorporated herein by reference.
Stock Option Plan.
(m) Ogden Projects Core Executive Benefit Filed as Exhibit 10.8(v) to Ogden's Form
Program. 10-K for fiscal year ended December 31, 1992
and incorporated herein by reference.
(n) Form of amendments to the Ogden Filed as Exhibit 10.8(w) to Ogden's Form
Projects, Inc. Pension Plan and Profit 10-K for fiscal year ended December 31, 1993
Sharing Plans effective as of January and incorporated herein by reference.
1, 1994.
(i) Form of amended Ogden Filed as Exhibit 10.7(w)(i) to Ogden's Form
Projects Profit Sharing Plan 10-K for fiscal year ended December 31, 1994
effective as of January 1, and incorporated herein by reference.
1994.
(ii) Form of amended Ogden Filed as Exhibit 10.7(w)(ii) to Ogden's Form
Projects Pension Plan, 10-K for fiscal year ended December 31, 1994
effective as of January 1, and incorporated herein by reference.
1994.
(o) Ogden Corporation CEO Formula Bonus Filed as Exhibit 10.6(w) to Ogden's Form
Plan. 10-Q for the quarterly period ended
September 30, 1994 and incorporated herein
by reference.
(p) Ogden Key Management Incentive Plan. Filed as Exhibit 10.7(p) to Ogden's Form
10-K for the fiscal year ended December 31,
1997 and incorporated
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
herein by reference.
10.8 Employment Agreements
(a) Employment Letter Agreement between Filed as Exhibit (10)(p) to Ogden's Form
Ogden and an executive officer dated 10-K for the fiscal year ended December 31,
January 30, 1990. 1990 and incorporated herein by reference.
(b) Employment Agreement between R. Filed as Exhibit (10)(r) to Ogden's Form
Richard Ablon and Ogden dated as of 10-K for the fiscal year ended December 31,
May 24, 1990. 1990 and incorporated herein by reference.
i. Letter Amendment to Employment Filed as Exhibit (10)(r)(i) to Ogden's Form
Agreement between Ogden 10-K for the fiscal year ended December 31,
Corporation ad R. Richard 1990 and incorporated herein by reference.
Ablon, dated as of October 11,
1991.
ii. Employment Agreement between Transmitted herewith as Exhibit 10.3(h).
R. Richard Ablon and Ogden
dated as of January 1, 1998.
(c) Employment Agreement between Ogden and Filed as Exhibit (10)(s) to Ogden's Form
C.G. Caras dated as of July 2, 1990. 10-K for the fiscal year ended December 31,
1990 and incorporated herein by reference.
(i) Letter Amendment to Filed as Exhibit (10)(s)(i) to Ogden's Form
Employment Agreement between 10-K for the fiscal year ended December 31,
Ogden Corporation and C.G. 1990 and incorporated herein by reference.
Caras, dated as of October
11, 1990.
(ii) Termination Letter Agreement Filed as Exhibit 10.8(c)(ii) to Ogden's Form
between C.G. Caras and Ogden 10-K for the fiscal year ended December 31,
Corporation dated April 30, 1996 and incorporated herein by reference.
1996.
(d) Employment Agreement Filed as Exhibit (10)(t) to Ogden's
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
between Ogden and Philip G. Form 10-K for the fiscal year ended December 31,
Husby, dated as of July 2, 1990 and incorporated herein by reference.
1990.
(e) Termination Letter Agreement between Filed as Exhibit (10)(v) to Ogden's Form
Maria P. Monet and Ogden dated as of 10-K for the fiscal year ended December 31,
October 22, 1990. 1990 and incorporated herein by reference.
(f) Letter Agreement between Ogden Filed as Exhibit 10.2(p) to Ogden's Form
Corporation and Ogden's Chairman of 10-K for fiscal year ended December 31, 1991
the Board, dated as of January 16, and incorporated herein by reference.
1992.
(g) Employment Agreement between Ogden Filed as Exhibit 10.2(q) to Ogden's Form
Corporation and Ogden's Chief 10-K for fiscal year ended December 31, 1991
Accounting Officer dated as of and incorporated herein by reference.
December 18, 1991.
(h) Employment Agreement between Scott G. Filed as Exhibit 10.8(o) to Ogden's Form
Mackin and Ogden Projects, Inc. dated 10-K for fiscal year ended December 31, 1993
as of January 1, 1994. and incorporated herein by reference.
(i) Letter Amendment to Filed as Exhibit 10.8(h)(i) to Ogden's Form
Employment Agreement between 10-K for fiscal year ended December 31, 1996
Ogden Projects, Inc. and and incorporated herein by reference.
Scott G. Mackin, dated
December 20, 1996.
(i) Employment Agreement between Ogden Filed as Exhibit 10.8(i) to Ogden's Form
Corporation and David L. Hahn, dated 10-K for fiscal year ended December 31, 1995
December 1, 1995. and incorporated herein by reference.
(j) Employment Agreement between Ogden Filed as Exhibit 10.8(j) to Ogden's Form
Corporation and Rodrigo Arboleda, 10-K for fiscal year ended December 31, 1996
dated January 1, 1997. and incorporated herein by reference.
(k) Employment Agreement between Ogden Filed as Exhibit 10.8(k) to Ogden's Form
Projects, Inc. 10-K for fiscal year ended
8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
and Bruce W. Stone, dated June December 31, 1996 and incorporated herein
1, 1990. by reference.
(l) Employment Agreement between Ogden Filed as Exhibit 10.8(l) to Ogden's Form
Corporation and Quintin G. Marshall, 10-K for fiscal year ended December 31, 1996
dated October 30, 1996. and incorporated herein by reference.
(m) Employment Agreements between Ogden Filed as Exhibit 10.8(m) to Ogden's Form
and Jesus Sainz, effective as of 10-K for the fiscal year ended December 31,
January 1, 1998. 1997 and incorporated herein by reference.
(n) Employment Agreement between Alane Transmitted herewith as Exhibit 10.3(m).
Baranello and Ogden Services
Corporation dated October 28, 1996.
(o) Employment Agreement between Peter Transmitted herewith as Exhibit 10.3(m)(1).
Allen and Ogden Corporation dated July
1, 1998.
10.9 First Amended and Restated Ogden Corporation Filed as Exhibit 10.3(b)(i) to Ogden's Form
Guaranty Agreement made as of January 30, 1992 10-K for fiscal year ended December 31, 1991
by Ogden Corporation for the benefit of Mission and incorporated herein by reference.
Funding Zeta and Pitney Bowes Credit.
10.10 Ogden Corporation Guaranty Agreement made as of Filed as Exhibit 10.3(b)(iii) to Ogden's
January 30,1992 by Ogden Corporation for the Form 10-K for fiscal year ended December 31,
benefit of Allstate Insurance Company and Ogden 1991 and incorporated herein by reference.
Martin Systems of Huntington Resource Recovery
Nine Corp.
11 Ogden Corporation and Subsidiaries Detail of Transmitted herewith as Exhibit 11.
Computation of Earnings Applicable to Common
Stock.
27 Financial Data Schedule. Transmitted herewith as Exhibit 27.
</TABLE>
<PAGE>
EXHIBIT 10.3(m)
CONFIDENTIAL AND
LEGALLY PRIVILEGED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 28th day of October
1996, by and between OGDEN SERVICES CORPORATION, a Delaware corporation
maintaining its principal office at Two Pennsylvania Plaza, New York, New York
(the "Company") and Alane G. Baranello, an individual now residing at 18 Downing
Street, East Williston, New York 11596 (the "Employee").
WITNESSETH THAT:
WHEREAS, the Employee is currently serving in an executive capacity as
a Vice President of the Company and the Company desires to ensure that the
Employee will continue to be available to provide human resource services for
the company; and
WHEREAS, to induce the Employee to provide such services, the Company
is offering to provide the Employee with the compensation, benefits and security
provided for in this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment/Capacity/Term.
(a) The Company agrees to and does hereby employ the Employee,
and the Employee agrees to and hereby does enter into the employ of the Company
upon the terms and conditions set forth in this Agreement. Such employment shall
be in an executive capacity as Vice President, Human Resources of the Company.
(b) This Agreement and such employment shall commence on
November 1, 1996 and shall continue through October 31, 1999 ("the Initial
Term"), and from year to year thereafter (the "Extended Term"), subject to the
right of the Employee or the Company to terminate this Agreement and such
employment by written notice stating an intention to terminate such employment
at least thirty (30) days prior to such termination date, stating and intention
to terminate such employment (the "Termination Date"). Termination by either
party, in accordance with the provisions of the preceding sentence shall not
require a statement of the reason or cause for such termination and shall not be
deemed a breach or violation of this Agreement by the party giving such notice.
As used in this Agreement, the phrase "term of this Agreement" shall be deemed
to include the period subsequent to the date hereof and prior to termination of
this Agreement.
<PAGE>
2. Time and Effort/Absences.
During the "term of this Agreement", the Employee shall devote his
entire time and attention during normal business hours to the business of the
Company subject to the supervision of the Board of Directors of the Company and
the President and Chief Executive Officer of the Company, and he or she shall
not engage in any other business activity whether or not such business activity
is pursued for gain, profit, or other pecuniary advantage, but this restriction
shall not be construed to restrict the Employee (i) from performing services as
a member of the Board of Directors, Board of Trustees or the like of any
non-profit entity for which the Employee receives no compensation, provided
that, such services do not unreasonably interfere with the ability of the
Employee to perform the services and discharge the responsibilities required of
him under this Agreement, and (ii) from investing his assets in such form or
manner as will not require any services on the part of the Employee in the
operation of the business of the entity in which such investments are made. The
Employee shall be excused from rendering his services during reasonable vacation
periods and during other reasonable temporary absences as authorized from time
to time by the Board of Directors or the President and Chief Executive Officer
of the Company.
3. Corporate Offices.
If elected, the Employee will serve, without additional
compensation, as an officer and director (or in either capacity) of the Company.
4. Salary/Bonus/Other Benefits.
In consideration of the services and duties to be rendered and
performed by the Employee during the term of this Agreement, the Company agrees
to pay and provide for the Employee the compensation and benefits described
below:
(a) An annual salary, payable in equal monthly or bi-weekly
installments, in the amount of One Hundred Ten Thousand Dollars ($110,000) or in
such greater amount as may from time to time be fixed by the Board of Directors
of the Company.
(b) An annual incentive bonus in such amount as may from time
to time be fixed by the Board of Directors of the Company.
(c) Other Benefits. It is intended that the Company shall
continue to provide the Employee with benefits at least as favorable as benefits
provided on behalf of other executives of the Company who furnish services of
comparable significance, as they may exist from time to time. Such benefits
presently include (i) Group Life Insurance, Supplemental Executive Group Life
Insurance, Medical and Health Insurance, Ogden Stock Option Plan, Executive
Pension Plan, Ogden Select Plan and Ogden 401(k) Plan and (ii) an automobile
allowance in the amount of $700 per month. Provided, however, any such
participation shall be in accordance with the provisions of such plans and
nothing
2
<PAGE>
contained in this Agreement in intended to or shall be deemed to affect
adversely any of the Employee's rights as a participant under any such plans.
Nothing herein shall prevent the Company from modifying or discontinuing any
benefit plan on a consistent and non-discriminatory basis applicable to all such
executives.
5. Expenses.
The Employee shall be reimbursed for out-of-pocket expenses
incurred from time to time on behalf of the Company or in the performance of his
or her duties under this Agreement, upon the presentation of such supporting
documents and forms as the Company shall reasonably request.
6. Medical Leave, Reasonable Accommodation, Termination for
Medical Incapacity and Disability Benefits.
The Company agrees to provide the Employee with a medical
leave of absence not to exceed six (6) months in duration in any twelve (12)
month period if the Employee has a medical condition that precludes the Employee
from being fully functional in his or her position. The term "fully functional"
means able to travel to and from work, be at work, perform satisfactorily all
essential functions of the position as identified herein and otherwise meet the
demands of the position and the conditions of employment without significant
risk of substantial harm to self or others. Any leave entitlement granted by
Federal, state or local law shall run concurrently with the commencement of his
or her six month period of leave, whether such leave is taken all at once,
intermittently or on a reduced time basis. Nothing herein is intended to
diminish any entitlement granted by law. If appropriate, the Company will
support the Employee's application for disability benefits.
If the Employee is not able to return to the position in a
fully functional capacity at the conclusion of six months of medical leave in a
twelve month period, this Agreement may be terminated by the Board of Directors
of the Company at its sole discretion, without prior notice.
Unless otherwise prohibited by law, the Employee agrees that
the Employee will furnish for review for review by a medical professional
designated by the Company, copies of the Employee's medical records pertaining
to any medical condition for which the Employee requests a medical leave of more
than twelve (12) weeks in duration, return to work from any such leave, work
restrictions, modification or accommodation; or the Employee or the Company
believes that the Employee has a medical condition that may be causing or
contributing to performance or conduct deficiencies. The Employee also agrees to
authorize any health care professional from whom the Employee is receiving
diagnostic evaluation, treatment or other medical care to discuss the Employee's
medical condition with the medical professional designated by the Company to
receive and review the Employee's medical records. The Employee further agrees
that he or she will undergo, at the sole expense of the Company, any medical
specialty evaluation if requested to do so by the Company.
The Company agrees to provide the Employee, if he or she is
otherwise qualified for
3
<PAGE>
the position, with medically necessary accommodations if it likely will enable
the employee to be fully functional in the position and is reasonable, feasible
and will not impose undue hardship on Company operations. The term "medically
necessary" means that the accommodation has risk-avoiding or therapeutic value
in accordance with scientifically valid medical principles and practice and that
the Employee requires similar accommodation when performing comparable non-work
functions.
The inability of the Employee to be fully functional in his or
her position for medical reasons shall not constitute a breach of this Agreement
by the Employee. If this Agreement is terminated by the Company because the
Employee is not fully functional in his or her position for medical reasons, as
provided for in this paragraph, the Company shall be obligated to continue the
salary of the Employee as provided in Paragraph 4. (a) for a period equal to the
greater of (a) twelve months, or (b) such longer period as may be determined by
the Board of Directors of the Company, in each case, reduced by any disability
insurance benefits provided for the benefit of the Employee at the expense of
the Company.
7. Death/Death Benefit.
In the event of the death of the Employee during the term of
this Agreement, this Agreement shall terminate and the Employee's salary shall
continue to be paid to his or her designated beneficiary or, if none, to his or
her personal representative, through the last day of the month in which such
death occurs.
8. Severance Pay.
If the Company gives notice to terminate in accordance with
Paragraph 1 or if the employment of the Employee is terminated at any time (i)
by the Employee for Good Reason (as defined in Paragraph 9)., or (ii) by the
Company for any reason other than for Cause (as hereinafter defined), the
Company will be obligated to pay to the Employee a cash payment in an amount
equal to the product of (i) and (ii); where (i) shall equal the sum of (A) the
Employee's annual salary and (B) the Employee's annual incentive bonus during
the twelve (12) month period ending with the close of the month in which such
termination of employment occurs (the "Date of Termination"), but not less than
$50,000, which represents the 1996 target incentive, divided by twelve (12); and
where (ii) shall be the lesser of, (x) thirty-six (36), or (y) the number of
months until the Employee's normal retirement date (the "Severance Pay").
Termination of the Employee's employment on account of his or her disability,
death or retirement (as hereinafter defined) will not be considered a
termination of the Employee's employment by the Company and will not require the
Company to pay and provide any Severance Pay. No Severance Pay will be required
if the employment of the Employee is terminated by the Company for Cause (as
hereinafter defined) or by the Employee (other than for Good Reason as defined
in Paragraph 9.) or if the Employee gives notice to terminate in accordance with
Paragraph 1. The Severance Pay provided herein is provided in order to reinforce
and encourage the continued loyalty, attention, and dedication of the Employee
to the Company's business and affairs without the concerns which normally arise
from the possibility of a loss of employment security. As used herein, the terms
4
<PAGE>
"Retirement" and "Cause" shall have the following meanings, respectively:
(a) Retirement.
Termination of the Employee's employment on account of "Retirement"
shall mean termination on or after the Employee's normal retirement date in
accordance with the terms of the Ogden 401(k); and
(b) Cause.
Termination by the Company of the Employee's employment for "Cause"
shall mean termination as a result of (i) the willful and continued failure by
the Employee to perform substantially the services contemplated by this
Agreement (other than any such failure resulting from the Employee's incapacity
due to physical or mental illness) after a written demand for substantial
performance is delivered to the Employee by a member or representative of the
Board of Directors of the Company or the President and Chief Executive Officer
of the Company which specifically identifies the manner in which it is alleged
that the Employee has not substantially performed such services, or (ii) the
willful engaging by the Employee in gross misconduct which is materially and
demonstrably injurious to the Company; provided that, no act, or failure to act,
on the Employee's part shall be considered "willful" unless done, or omitted to
be done, in bad faith and without reasonable belief that such action or omission
was in, or not opposed to, the best interests of the Company. It is also
expressly understood that the Employee's attention to or engagement in matters
not directly related to the business of the Company shall not provide a basis
for termination for Cause if such attention or engagement is authorized by the
terms of this Agreement or has otherwise been approved by the Board of Directors
of the Company. Anything in this Agreement to the contrary notwithstanding, the
Employee's employment may bot be terminated for Cause unless and until there
shall have been delivered to the Employee a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the entire membership of
the Board at a meeting of the Board called and held for that purpose(after
reasonable notice to the Employee and an opportunity for the Employee, together
with his counsel, to be heard before the Board), finding that in the good faith
opinion of the Board the Employee was guilty of the conduct set forth in clause
(i) or (ii) of this subparagraph (b) and specifying the particulars thereof in
detail. Except as otherwise provided in Paragraphs 1 and 6, not purported
termination by the Company of the Employee's employment which is not justified
as a termination of the Employee's employment for Cause shall be effective .
9. Termination by the Employee for Good Reason.
The termination by the Employee of this Agreement and his
employment for "Good Reason" shall be deemed a justifiable termination of his
employment and shall excuse the Employee from the obligation to render services
as provided in Paragraph 2. hereof. Upon such termination, the Employee shall be
entitled to Severance Pay in accordance with the provisions of Paragraph 8.
hereof. As used herein, the phrase "Good Reason" shall mean:
5
<PAGE>
(a) a change in the Employee's status, title or position as an officer
of the Company or the Ogden Group in the executive capacity set forth in this
Agreement which, in his or her reasonable judgment, does not represent a
promotion from or enhancement of his status, title and position, or, the
assignment by the Board of Directors of the Company to the Employee of any
duties or responsibilities which in his or her reasonable judgment, are
inconsistent with such status, title or position, or any removal of the Employee
from or failure to reappoint or reelect him or her to such position, except in
connection with a justifiable termination by the Company of the Employee's
employment for Cause or on account of disability, the retirement or death of the
Employee or the termination by the Employee of his employment other than for
Good Reason;
(b) a reduction in the Employee's annual salary or a failure
by the Company to pay to the Employee any installment of the annual salary
required by Paragraph 4. which failure continues for a period of twenty (20)
days after written notice thereof is given by the Employee to the Company;
(c) the failure by the Company within ten (10) days of notice
from the Employee to obtain the assumption of this Agreement in form and
substance to the reasonable satisfaction of the Employee by any successor (other
than by merger of consolidation for which no separate assumption is necessary)
as referred to in Paragraph 12; or
(d) any refusal by the Company to allow the Employee to attend
to matters or engage in activities not directly related to the business of the
Company which is permitted by this Agreement or which, prior thereto, was
permitted by the Board of Directors of the Company.
10. Notice of Termination.
Any purported notice of termination of the Employee's
employment (other than a Notice given by either party pursuant to Paragraph 1.
hereof) shall be communicated in writing and delivered to the other party as
provided in Paragraph 12., below (hereinafter a "Notice of Termination").
11. Confidentiality and Limited Covenant Not to Compete.
In connection with the performance of the Employee's job
duties in a position of trust and confidence, he or she will develop or receive
confidential, restricted or unpublished information involving trade secrets,
customer-related information, vendor-related information, copyrights, lists,
data and other information, strategic planning or operating data, computer
programs, financial, pricing, operating or training data or other confidential
business techniques, processes, methods or information which is not generally
known to the public (collectively referred to as "proprietary information").
Employee will receive or have access to "proprietary information" which was
obtained and developed through the investment of substantial amounts of money,
time and effort by the Company. Employee acknowledges and agrees that disclosure
of such "proprietary information" or its use for the benefit of any other person
or entity would be
6
<PAGE>
injurious to the Company. Employee also acknowledges and agrees that unless
Employee agrees to maintain the confidentiality of such "proprietary
information" and to limit its use solely to the Company, Employee would not have
been granted employment and if already employed, Employee's employment would
cease immediately. Regardless of the cessation of Employees employment for any
reason, the Employee's obligation to continue to maintain the confidentiality of
the "propriety information" shall continue.
The Employee agrees to deliver to the Company, at its request,
or in any event, upon cessation of Employee's employment with the Company (for
whatever reason and at whatever time) (a) all memoranda, notes, records, files
or other documentation, whether made or compiled by the Employee alone or in
conjunction with others (regardless of whether such persons are employed by the
Company); (b) all proprietary and other information of the Company which is in
Employee's control or possession; and (c) copies of such information, as well as
other corporate property. Regardless of cessation of Employee's employment by
the Company, and without any fee, the Employee will assist the Company in
protecting all rights the Company may have to such proprietary information.
The Employee recognizes that, as a direct consequence of the
materials, information and training provided to him or her by the Company, the
access he or she is granted to proprietary information and the opportunities
that he or she will have while employed by the Company to cultivate the loyalty
and goodwill of the Company's customers, suppliers, vendors and other persons,
it is important that the Employee refrain from engaging in activities which
could result in damage to the Company's business.
The Employee further recognizes that the Company has invested
considerable time and money to train its employees, in the services provided by
the Company and to develop the special skills required to perform such services.
Therefore, he or she will not, during the term of his or her employment with the
Company and for a period of one (1) year immediately thereafter, solicit,
entice, hire or otherwise seek to persuade, either directly or through any other
entity, any officer, employee, consultant or agent of the Company to discontinue
such relationship for any reason. During such period, the Employee will not
solicit business with any customers of the Company, nor will he or she seek to
entice or persuade any sources of referral, vendors or other entities, who are
then doing business with the Company to reduce, discontinue or curtail any
services provided to the Company in any respect.
To avoid the use of "proprietary information", the Employee
agrees to refrain from engaging in competing employment either directly or
indirectly on his or her own behalf or as an agent, consultant or employee of
any partnership, corporation or other entity, in any state where the Company
conducts business for a period of six (6) months after his or her employment
ceases (regardless of the reason for cessation of such employment).
The Employee recognizes and agrees that ascertaining damages
in the event of his
7
<PAGE>
or her breach or violation of any covenant or undertaking contained in this
Agreement would be difficult, if not impossible, and further recognizes that the
various rights and duties created in this Agreement are essential for the
operation of the Company's business operations. Consequently, irreparable injury
would result from any violation of this Agreement by him or her. Since it would
be difficult, if not impossible, to compensate fully the Company by monetary
damages in the event of the Employee's breach (although the Company retains the
right to commence a civil action seeking monetary damages), the Employee agrees
that the Company, in addition to and without limiting any other remedy or right
it may have, shall have the immediate right to obtain a preliminary, and
subsequently, a final injunction against the Employee, to be issued by a court
of competent jurisdiction, enjoining the Employee from engaging in any breach or
violation of this Agreement. An injunction shall be issued without posting a
bond that otherwise might be required. If an injunction is issued or if monetary
damages are awarded against the Employee, he or she will reimburse the Company
for the legal fees and court costs incurred in obtaining such relief (including
all appeals and other proceedings).
12. Binding Effect.
This Agreement shall be binding upon and inure to the benefit
of:
(a) Any successors or assigns of the Company, whether by way
of a merger or consolidation, or liquidation of the Company, or by way of the
Company selling all or substantially all of the assets of the Company to a
successor entity; however, in the event of the assignment by the Company of this
Agreement, the Company shall nevertheless remain liable and obligated to the
Employee in accordance with the terms hereof; and
(b) The Employee's estate, his executors, administrators,
heirs and beneficiaries.
13. Notices.
Any notice or other communication required under this
Agreement shall be in writing, shall be deemed to have been given and received
when delivered in person, or, if mailed, shall be deemed to have been given when
deposited in the United States mail, first class, registered or certified,
return receipt requested, with proper postage prepaid, and shall be deemed to
have been received on the third business day thereafter, and shall be addressed
as follows:
If to the Company, addressed to:
Ogden Services Corporation
Two Pennsylvania Plaza
New York, New York 10121
Attention: President and Chief Executive
Officer
8
<PAGE>
With a copy to its: General Counsel
If to the Employee, addressed to:
Alane G. Baranello
18 Downing Street
East Williston, New York 11596
or such other address as to which any party hereto may have notified the other
in writing.
14. Governing Law.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York, without regard to its
conflict or choice of law provisions to preserve the parties' intent, and the
enforceability of this Agreement.
15. Entire Agreement.
This Agreement contains the entire arrangement or
understanding between the Employee and the Company relating to the employment of
the Employee by the Company. No provision of the Agreement may be modified or
amended except by any instrument in writing by or for both parties hereto. All
references to paragraphs refer to paragraphs of this Agreement.
16. Waiver.
Failure of either party hereto to insist upon strict
compliance by the other party with any term, covenant or condition hereof shall
not be deemed a waiver of such term, covenant or condition, nor shall any waiver
or relinquishment or failure to insist upon strict compliance of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
17. Assignment by Employee.
The rights and benefits of the Employee under this Agreement
are personal to him or her and no such right or benefit shall be subject to
voluntary or involuntary alienation, assignment or transfer; provided, however,
that nothing in this Paragraph 1 shall preclude the Employee from designating a
beneficiary or beneficiaries to receive any benefit payable on his death.
18. Severability.
If for any reason any provision of this Agreement shall be
held invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid, and all other provisions shall
9
<PAGE>
to the full extent consistent with law continue in full force and effect. If any
such provision shall be held invalid in part, such invalidity shall in no way
affect the remaining portion of such provision not held so invalid, and the
remaining portion of such provision, together with all other provisions of this
Agreement, shall to the full extent consistent with law continue in full force
and effect.
19. Headings.
The headings of paragraphs are included solely for convenience
of reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.
OGDEN SERVICES CORPORATION
Dated: By /s/ R. Richard Ablon
---------------------------- ------------------------------
President and Chief Executive
Officer
Dated: 10/28/96 By /s/ Alane G. Baranello
---------------------------- ------------------------------
Alane G. Baranello, Employee
10
<PAGE>
EXHIBIT 10.3 (m)(1)
CONFIDENTAL AND
LEGALLY PRIVILEGED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of July 1998,
by and between OGDEN CORPORATION, a Delaware corporation maintaining its
principal office at Two Pennsylvania Plaza, New York, New York (the "Company")
and Peter Allen, an individual now residing at 60 Maple Drive, Great Neck, New
York 11021 (the "Employee").
WITNESSETH THAT:
WHEREAS, the Employee is currently serving in an executive capacity as
a Senior Vice President of the Company in its Legal Department and the Company
desires to ensure that the Employee will continue to be available to provide
legal services for the Company and its subsidiaries;
WHEREAS, to induce the Employee to provide such services, the Company
is offering to provide the Employee with the compensation, benefits and security
provided for in this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment/Capacity/Term.
(a) The Company agrees to and does hereby employ the Employee,
and the Employee agrees to and hereby does enter into the
employ of the Company upon the terms and conditions set
forth in this Agreement. Such employment shall be in an
executive capacity as Senior Vice President of the Company.
(b) This Agreement and such employment shall commence on July 1,
1998 and shall continue through June 30, 2001 (the "Initial
Term"), and from year to year thereafter (the "Extended
Term"), subject to the right of the Employee or the Company
to terminate this Agreement and such employment by written
notice stating an intention to terminate such employment at
least thirty (30) days prior to such termination date (the
"Termination Date"). As used in this Agreement, the phrase
"term of this Agreement" shall be deemed to include the
period subsequent to the date hereof and prior to the
Termination Date.
<PAGE>
2. Time and Effort/Absences.
During the "term of this Agreement", the Employee shall devote
his or her entire time and attention during normal business hours
to the business of the Company subject to the supervision of the
Board of Directors of the Company and the President and Chief
Executive Officer of the Company. Employee shall not engage in
any other business activity whether or not such business activity
is pursued for gain, profit, or other pecuniary advantage, but
this restriction shall not be construed to restrict the Employee
(i) from performing services as a member of the Board of
Directors, Board of Trustees or the like of any non-profit entity
for which the Employee receives no compensation, provided that,
such services do not unreasonably interfere with the ability of
the Employee to perform the services and discharge the
responsibilities required of Employee under this Agreement, and
(ii) from investing his or her assets in such form or manner as
will not require any services on the part of the Employee in the
operation of the business of the entity in which such investments
are made. The Employee shall be excused from rendering his or her
services during reasonable vacation periods and during other
reasonable temporary absences as authorized from time to time by
the Board of Directors or the President and Chief Executive
Officer of the Company.
3. Corporate Offices.
If elected, the Employee will serve, without additional
compensation, as an officer and director (or in either capacity)
of the Company and its subsidiaries.
4. Salary/Bonus/Other Benefits.
In consideration of the services and duties to be rendered and
performed by the Employee during the term of this Agreement, the
Company agrees to pay and provide for the Employee the
compensation and benefits described below:
(a) An annual salary, payable in equal monthly or biweekly
installments, in the amount of Two Hundred Three Thousand Dollars
($203,000.00) or in such greater amount as may from time to time
be fixed by the Board of Directors of the Company.
(b) An annual incentive bonus in such amount as may from time to
time be fixed by the Board of Directors of the Company.
(c) Other Benefits. The Company shall continue to provide the
Employee with benefits at least as favorable as benefits
currently provided to Employee and provided on behalf of other
executives of the Company who furnish services of comparable
significance, as they may exist from time to time. Such benefits
presently include (i) grandfathered participation in the Ogden
Core Medical Program, Group Life Insurance, Supplemental
Executive Group Life Insurance,
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<PAGE>
Medical and Dental Insurance, Ogden Stock Option Plan, Executive
Pension Plan, Ogden Select Plan, Ogden Profit Sharing Plan and
Ogden 401(k) Plan and (ii) an automobile allowance in the amount
of $700.00 per month. Provided, however, any such participation
shall be in accordance with the provisions of such plans and
nothing contained in this Agreement is intended to or shall be
deemed to affect adversely any of the Employee's rights as a
participant under any such plans. Nothing herein shall prevent
the Company from modifying or discontinuing any benefit plan on a
consistent and non-discriminatory basis applicable to all such
executives.
5. Expenses.
The Employee shall be reimbursed for out-of-pocket expenses
incurred from time to time on behalf of the Company or in the
performance of his or her duties under this Agreement, upon the
presentation of such supporting documents and forms as the
Company shall reasonably request.
6. Medical Leave, Reasonable Accommodation, Termination for
Medical Incapacity and Disability Benefits.
The Company agrees to provide the Employee with a medical leave of
absence not to exceed six (6) months in duration in any twelve
(12) month period if the Employee has a medical condition that
precludes the Employee from being fully functional in his or her
position. The term "fully functional" means able to travel to and
from work, be at work, perform satisfactorily all essential
functions of the position as identified herein, and otherwise
meet the demands of the position and the conditions of employment
without significant risk of substantial harm to self or others.
Any leave entitlement granted by Federal, state or local law
shall run concurrently with the commencement of Employees six
month period of leave, whether such leave is taken all at once,
intermittently or on a reduced time basis. Nothing herein is
intended to diminish any entitlement granted by law. If
appropriate, the Company will support the Employee's application
for disability benefits.
If the Employee is not able to return to the position in a fully
functional capacity at the conclusion of six months of medical
leave in a twelve month period, this Agreement may be terminated
by the Board of Directors of the Company at its sole discretion,
without prior notice.
Unless otherwise prohibited by law, the Employee agrees that the
Employee will furnish for review by a medical professional
designated by the Company, copies of the Employee's medical
records pertaining to any medical condition for which the
Employee requests a medical leave of more than twelve (12) weeks
in duration, return to work from any such leave, work
restrictions, modification or accommodation; or the Employee or
the company believes that the Employee has a medical condition
that may be causing or contributing to performance or
3
<PAGE>
conduct deficiencies. The Employee also agrees to authorize any
health care professional from whom the Employee is receiving
diagnostic evaluation, treatment or other medical care to discuss
the Employee's medical condition with the medical professional
designated by the Company to receive and review the Employee's
medical records. The Employee further agrees that he or she will
undergo, at the sole expense of the Company, any medical
specialty evaluation if requested to do so by the Company.
The Company agrees to provide the Employee, if Employee is
otherwise qualified for the position, with medically necessary
accommodation if it likely will enable the employee to be fully
functional in the position and is reasonable, feasible and will
not impose undue hardship on Company operations. The term
"medically necessary" means that the accommodation has
risk-avoiding or therapeutic value in accordance with
scientifically valid medical principles and practice and that the
Employee requires similar accommodation when performing
comparable non-work functions.
The inability of the Employee to be fully functional in his or
her position for medical reasons shall not constitute a breach of
this Agreement by the Employee. If this Agreement is terminated
by the Company because the Employee is not fully functional in
his or her position for medical reasons, as provided for in this
paragraph, the Company shall be obligated to continue the salary
of the Employee as provided in Paragraph 4. (a) for a period
equal to the greater of (i) twelve (12) months, or (ii) such
longer period as may be determined by the Board of Directors of
the Company, in each case, reduced by any disability insurance
benefits provided for the benefit of the Employee at the expense
of the Company.
7. Death/Death Benefit.
In the event of the death of the Employee during the term of this
Agreement, this Agreement shall terminate and the Employee's
salary shall continue to be paid to his or her designated
beneficiary or, if none, to his or her personal representative,
through the last day of the month in which such death occurs.
8. Severance Pay.
If the Company gives notice to terminate in accordance with
Paragraph 1.(b) or if the employment of the Employee is
terminated at any time (i) by the Employee for Good Reason (as
defined in Paragraph 9), or (ii) by the Company for any reason
other than for Cause (as hereinafter defined), the Company will
be obligated to pay to the Employee a lump-sum cash payment in an
amount equal to the product of (i) and (ii); where (i) shall
equal the sum of (A) the Employee's annual salary in effect on
the date of termination and (B) the Employee's annual incentive
bonus for the twelve (12) month period ending on December 31
immediately preceding the date such termination of employment
occurs (the "Date of Termination"), but not less than $125,000,
which represents the 1998
4
<PAGE>
target incentive, divided by twelve (12); and where (ii) shall
be thirty-six (36), (the "Severance Pay"). Termination of the
Employee's employment on account of his disability, death or
voluntary retirement after age 65 will not be considered a
termination of the Employee's employment by the Company and
will not require the Company to pay and provide any Severance
Pay. No Severance Pay will be required if the employment of
the Employee is terminated by the Company for Cause (as
hereinafter defined) or by the Employee (other than for Good
Reason as defined in Paragraph 9) or if the Employee gives
notice to terminate in accordance with Paragraph 1(b). The
Severance Pay provided herein is provided in order to
reinforce and encourage the continued loyalty, attention, and
dedication of the Employee to the Company's business and
affairs without the concerns which normally arise from the
possibility of a loss of employment security. As used herein,
the term "Cause" shall have the following meaning:
Cause. Termination by the Company of the Employee's employment
for "Cause" shall mean termination as a result of (i) the
willful and continued failure by the Employee to perform
substantially the services contemplated by this Agreement
(other than any such failure resulting from the Employee's
incapacity due to physical or mental illness) after a written
demand for substantial performance is delivered to the
Employee by a member or representative of the Board of
Directors of the Company which specifically identifies the
manner in which it is alleged that the Employee has not
substantially performed such services, or (ii) the willful
engaging by the Employee in gross misconduct which is
materially and demonstrably injurious to the Company; provided
that, no act, or failure to act, on the Employee's part shall
be considered "willful" unless done, or omitted to be done, in
bad faith and without reasonable belief that such action or
omission was in, or not opposed to, the best interest of the
Company. It is also expressly understood that the Employee's
attention to or engagement in matters not directly related to
the business of the Company shall not provide a basis for
termination for Cause if such attention or engagement is
authorized by the terms of this Agreement or has otherwise
been approved by the Board of Directors of the Company.
Anything in this Agreement to the contrary notwithstanding,
the Employee's employment may not be terminated for Cause
unless and until there shall have been delivered to the
Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and
held for that purpose (after reasonable notice to the Employee
and an opportunity for the Employee, together with his
counsel, to be heard before the Board), finding that in the
good faith opinion of the Board the Employee was guilty of the
conduct set forth in clause (i) or (ii) of this subparagraph
(b) and specifying the particulars thereof in detail Except as
otherwise provided in Paragraphs 1 and 6, no purported
termination by the Company of the Employee's employment which
is not justified as a termination of the Employee's employment
for Cause shall be effective.
5
<PAGE>
9. Termination by the Employee for Good Reason.
The Termination by the Employee of his employment for "Good
Reason" shall be deemed a justifiable termination of his
employment and shall excuse the Employee from the obligation
to render services as provided in Paragraph 2 hereof. Upon
such termination, the Employee shall be entitled to Severance
Pay in accordance with the provisions of Paragraph 8 hereof.
As used herein, the phrase "Good Reason" shall mean:
(a) a change in the Employee's status, title or
position(s) as an officer of the Company in the
executive capacity set forth in this Agreement
which, in his or her reasonable judgment, does not
represent a promotion from or enhancement of his
status, title and position, or the assignment by
the Board of Directors of the Company to the
Employee of any duties or responsibilities with
such status, title or position, or any removal of
the Employee from or any failure to reappoint or
reelect him or her to such position, except in
connection with a justifiable termination by the
Company of the Employee's employment for Cause or
on account of disability, voluntary retirement
after age 65, death of the Employee or the
termination by the Employee of his employment
other than for Good Reason;
(b) a reduction in the Employee's annual salary or a
failure by the Company to pay to the Employee any
installment of the annual salary required by
Paragraph 4, which failure continues for a period of
twenty (20) days after written notice thereof is
given by the Employee to the Company;
(c) the failure by the Company within ten (10) days of
notice from the Employee to obtain the assumption of
this Agreement in form and substance to the
reasonable satisfaction of the Employee by any
successor as referred to in Paragraph 12; or
(d) any refusal by the Company to allow the Employee to
attend to matters or engage in activities not
directly related to the business of the Company which
is permitted by this Agreement or which, prior
thereto, was permitted by the Board of Directors of
the Company.
(e) the change of employee's principal place of
employment to a location more than 50 miles from
Employee's current principal place of employment,
except for required travel on the Company's business
to an extent substantially consistent with Employee's
business travel obligations.
6
<PAGE>
10. Notice of Termination.
Any purported notice of termination of the Employee's
employment shall be communicated in writing and delivered to
the other party as provided in Paragraph 12, below
(hereinafter a "Notice of Termination").
11. Confidentiality and Limited Covenant Not to Compete.
In connection with the performance of the Employee's job
duties in a position of trust and confidence, he or she will
develop or receive confidential, restricted or unpublished
information involving trade secrets, customer-related
information, vendor-related information, copyrights, lists,
data and other information, strategic planning or operating
data, computer programs, financial, pricing, operating or
training data or other confidential business techniques,
processes, methods or information which is not generally known
to the public (collectively referred to as "proprietary
information"). Employee will receive or have access to
"proprietary information" which was obtained and developed
through the investment of substantial amounts of money, time
and effort by the Company. Employee acknowledges and agrees
that disclosure of such "proprietary information" or its use
for the benefit of any other person or entity would be
injurious to the Company. Employee also acknowledges and
agrees that unless Employee agrees to maintain the
confidentiality of such "proprietary information" and to limit
its use solely to the Company, Employee would not have been
granted employment and if already employed, Employee's
employment would cease immediately. Regardless of the
cessation of Employees employment for any reason, the
Employee's obligation to continue to maintain the
confidentiality of the "propriety information" shall continue.
The Employee agrees to deliver to the Company, at its request,
or in any event, upon cessation of Employee's employment with
the Company (for whatever reason and at whatever time) (a) all
memoranda, notes, records, files or other documentation,
whether made or compiled by the Employee alone or in
conjunction with others (regardless of whether such persons
are employed by the Company); (b) all proprietary and other
information of the Company which is in Employee's control or
possession; and (c) copies of such information, as well as
other corporate property. Regardless of cessation of
Employee's employment by the Company, and without any fee, the
Employee will assist the Company in protecting all rights the
Company may have to such proprietary information.
The Employee recognizes that, as a direct consequence of the
materials, information and training provided to him or her by
the Company, the access he or she is granted to proprietary
information and the opportunities that he or she will have
while employed by the Company to cultivate the loyalty and
goodwill of the Company's customers, suppliers, vendors and
other persons, it is important that the Employee refrain from
engaging in activities which could result in damage to the
Company's business.
7
<PAGE>
The Employee further recognizes that the Company has invested
considerable time and money to train its employees, in the
services provided by the Company and to develop the special
skills required to perform such services. Therefore, he or she
will not, during the term of his or her employment with the
Company and for a period of one (1) year immediately
thereafter, solicit, entice, hire or otherwise seek to
persuade, either directly or through any other entity, any
officer, employee, consultant or agent of the Company to
discontinue such relationship for any reason. During such
period, the Employee will not solicit business with any
customers of the Company, nor will he or she seek to entice or
persuade any sources of referral, vendors or other entities,
who are then doing business with the Company to reduce,
discontinue or curtail any services provided to the Company in
any respect.
To avoid the use of "proprietary information", the Employee
agrees to refrain from engaging in competing employment either
directly or indirectly on his or her own behalf or as an
agent, consultant or employee of any partnership, corporation
or other entity, in any state where the Company conducts
business for a period of six (6) months after his or her
employment ceases (regardless of the reason for cessation of
such employment).
The Employee recognizes and agrees that ascertaining damages
in the event of his or her breach or violation of any covenant
or undertaking contained in this Agreement would be difficult,
if not impossible, and further recognizes that the various
rights and duties created in this Agreement are essential for
the operation of the Company's business operations.
Consequently, irreparable injury would result from any
violation of this Agreement by him or her. Since it would be
difficult, if not impossible, to compensate fully the Company
by monetary damages in the event of the Employee's breach
(although the Company retains the right to commence a civil
action seeking monetary damages), the Employee agrees that the
Company, in addition to and without limiting any other remedy
or right it may have, shall have the immediate right to obtain
a preliminary, and subsequently, a final injunction against
the Employee, to be issued by a court of competent
jurisdiction, enjoining the Employee from engaging in any
breach or violation of this Agreement. An injunction shall be
issued without posting a bond that otherwise might be
required. If an injunction is issued or if monetary damages
are awarded against the Employee, he or she will reimburse the
Company for the legal fees and court costs incurred in
obtaining such relief (including all appeals and other
proceedings).
12. Binding Effect.
This Agreement shall be binding upon and inure to the benefit
of:
(a) Any successors or assigns of the Company, whether by
way of a merger or consolidation, or liquidation of
the Company, or by way of the Company
8
<PAGE>
selling all or substantially all of the assets of the
Company to a successor entity; and
(b) The Employee's estate, his or her executors,
administrators, heirs and beneficiaries.
13. Notices.
Any notice or other communication required under this
Agreement shall be in writing, shall be deemed to have been
given and received when delivered in person, or, if mailed,
shall be deemed to have been given when deposited in the
United States mail, first class, registered or certified,
return receipt requested, with proper postage prepaid, and
shall be deemed to have been received on the third business
day thereafter, and shall be addressed as followed:
If to the Company, addressed to:
Ogden Corporation
Two Pennsylvania Plaza
New York, New York 10121
Attention: Chairman of the Board, President
and Chief Executive Officer
With a copy to its: General Counsel
If to the Employee, addressed to:
Peter Allen
60 Maple Drive
Great Neck, New York 11021
or such other address as to which any party hereto may have
notified the other in writing.
14. Governing Law.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York, without
regard to its conflict or choice of laws provisions to
preserve the parties intent, and the enforceability of this
Agreement.
15. Entire Agreement.
This Agreement contains the entire arrangement or
understanding between the Employee and the Company relating to
the employment of the Employee of the Company and, except as
otherwise set forth in this Agreement, shall supercede any and
all existing oral or written agreements, representations or
warranties
9
<PAGE>
between the Employee and the Company relating to the
Employee's employment by the Company. No provision of the
Agreement may be modified or amended except by any instrument
in writing by or for both parties hereto. All references to
paragraphs refer to paragraphs of this Agreement.
16. Waiver.
Failure of either party hereto to insist upon strict
compliance by the other party with any term, covenant or
condition hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver of such term,
covenant or condition, nor shall any waiver or relinquishment
or failure to insist upon strict compliance of any right or
power hereunder at any one or more time be deemed a waiver or
relinquishment of such right or power at any other time or
times.
17. Assignment by Employee.
The rights and benefits of the Employee under this Agreement
are personal to him or her and no such right or benefit shall
be subject to voluntary or involuntary alienation, assignment
or transfer; provided, however, that nothing in this Paragraph
shall preclude the Employee from designating a beneficiary or
beneficiaries to receive any benefit payable on his or her
death.
18. Severability.
If for any reason any provision of this Agreement shall be
held invalid, such invalidity shall not affect any other
provision of this Agreement not held so invalid, and all other
provisions shall to the full extent consistent with law
continue in full force and effect. If any such provision shall
be held invalid in part, such invalidity shall in no way
affect the remaining portion of such provision not held so
invalid, and the remaining portion of such provision, together
with all other provisions of this Agreement, shall to the full
extent consistent with law continue in full force and effect.
19. Headings.
The headings of paragraphs are included solely for convenience
of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
OGDEN CORPORATION
Dated:June 24, 1998 By: /s/ R. Richard Ablon
------------- ---------------------------------
Chairman of the Board,
President and Chief
Executive Officer
Dated:June 24, 1998 By: /s/ Peter Allen
------------- ---------------------------------
Peter Allen - Employee
<PAGE>
EXHIBIT 11
OGDEN CORPORATION AND SUBSIDIARIES
DETAIL OF COMPUTATION OF EARNINGS APPLICABLE TO COMMON STOCK
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30
--------------------------------------------------------------------------
1998 1997
--------------------------------------------------------------------------
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- ---------
(In Thousands, Except for Share Amounts)
<S> <C> <C> <C> <C> <C> <C>
Net income ................... $ 38,760 $ 30,786
Less: preferred stock dividend 73 77
---------- ----------
Basic Earnings Per Share ..... 38,687 50,283 $ 0.77 30,709 49,901 $ 0.62
-------- ---------
Effect of Dilutive Securities:
Stock options ................ 1,042 283
Convertible preferred stock .. 73 260 77 280
6% convertible debentures .... 775 1,088 747 1,088
5 3/4% convertible debentures 566 762 531 762
---------- ------ ---------- ------
Diluted Earnings per Share ... $ 40,101 53,435 $ 0.75 $ 32,064 52,314 $ 0.60
---------- ------ -------- ---------- ------- ---------
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30
----------------------------------------------------------------------------
1998 1997
----------------------------------------------------------------------------
Income Shares Per-Share Income Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- --------- ----------- ------------- ---------
(In Thousands, Except per Share Amounts)
<S> <C> <C> <C> <C> <C> <C>
Net income ................... $27,060 $20,009
Less: preferred stock ........ 36 38
------- -------
Basic Earnings Per Share ..... 27,024 50,206 $ 0.54 19,971 49,984 $ 0.40
------- --------
Effect of Dilutive Securities:
Stock options ................ 863 264
Convertible preferred stock .. 36 258 38 277
6% convertible debentures .... 775 2,175 747 2,175
5 3/4% convertible debentures 566 1,524 531 1,524
------- ------ ------ --------
Diluted Earnings per Share ... $28,401 55,026 $ 0.52 $21,287 54,224 $ 0.39
------- ------ ------- ------- ------ --------
</TABLE>
Note:
Earnings per common share was computed by dividing net income,
reduced by preferred stock dividend requirements, by the weighted
average of the number of shares of common stock outstanding during
each period.
Diluted earnings per common share was computed on the assumption
that all convertible debentures, convertible preferred stock, and
stock options converted or exercised during each period, or
outstanding at the end of each period were converted at the
beginning of each period or the date of issuance or grant, if
dilutive. This computation provides for the elimination of related
convertible debenture interest and preferred dividends.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 228,912
<SECURITIES> 0
<RECEIVABLES> 394,422
<ALLOWANCES> 29,177
<INVENTORY> 35,968
<CURRENT-ASSETS> 860,509
<PP&E> 2,541,591
<DEPRECIATION> 595,970
<TOTAL-ASSETS> 3,952,493
<CURRENT-LIABILITIES> 585,511
<BONDS> 1,980,345
0
43
<COMMON> 25,017
<OTHER-SE> 534,618
<TOTAL-LIABILITY-AND-EQUITY> 3,952,493
<SALES> 259,720
<TOTAL-REVENUES> 857,330
<CGS> 243,583
<TOTAL-COSTS> 483,400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,279
<INTEREST-EXPENSE> 16,895
<INCOME-PRETAX> 63,989
<INCOME-TAX> 24,316
<INCOME-CONTINUING> 38,760
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,760
<EPS-PRIMARY> $0.77
<EPS-DILUTED> $0.75
</TABLE>
