<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
OGDEN CORPORATION
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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</TABLE>
<PAGE>
Ogden Corporation
Two Pennsylvania Plaza
New York, NY 10121
[LOGO]
May 15, 2000
TO OUR SHAREHOLDERS:
On behalf of the Board of Directors, it is my pleasure to invite you to
attend Ogden's 2000 Annual Meeting of Shareholders to be held at the Grand Hyatt
New York, Park Avenue at Grand Central, New York, New York at 10:00 A.M.
(Eastern Daylight Savings Time), on Wednesday, June 14, 2000.
The matters to be acted upon at the meeting are described in the attached
Notice of Annual Meeting and Proxy Statement which we urge you to read
carefully. Time will be set aside at the meeting for discussion of each item of
business described in the Proxy Statement as well as any other matters of
interest to you as a shareholder.
Shareholders who find it convenient are cordially invited to attend the
meeting in person. It is important that your shares be represented at the
meeting. Accordingly, whether or not you expect to attend, you are urged to
sign, date and return the enclosed proxy card in the enclosed postage paid
envelope to ensure that your shares will be represented at the annual meeting.
GEORGE L. FARR
CHAIRMAN OF THE BOARD
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF OGDEN CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders of Ogden
Corporation ("Ogden") will be held at the Grand Hyatt New York, Park Avenue at
Grand Central, New York, New York 10017 on Wednesday, June 14, 2000, at
10:00 A.M. (Eastern Daylight Savings Time), for the following purposes:
(1) To elect four directors to hold terms of office expiring at the Annual
Meeting of shareholders in 2003 and until their respective successors have
been elected and qualified;
(2) To consider and act upon a proposal to approve the adoption of an Executive
Performance Incentive Plan as more fully set forth in the attached Proxy
Statement, and in Schedule A thereto;
(3) To consider and act upon a proposal to amend the Ogden Corporation 1999
Stock Incentive Plan as more fully set forth in the attached Proxy Statement
and reflected in italics in Schedule B thereto;
(4) To consider and act upon a proposal submitted by a shareholder urging the
Board of Directors to arrange for the prompt sale of Ogden Corporation to
the highest bidder;
(5) To ratify the appointment of Deloitte & Touche LLP as auditors of Ogden and
its subsidiaries for the year ending December 31, 2000; and
(6) To consider and act upon such other business as may properly come before
this Annual Meeting.
The Board of Directors has fixed May 11, 2000, as the record date for this
Annual Meeting and all shareholders of record of Ogden at the close of business
on such date shall be entitled to notice of and to vote at this Annual Meeting.
By Order of the Board of Directors
JEFFREY R. HOROWITZ,
SECRETARY
Dated: New York, N.Y.
May 15, 2000
2
<PAGE>
IMPORTANT
PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED STAMPED, ADDRESSED ENVELOPE, SO THAT YOUR SHARES MAY
BE VOTED IF YOU ARE UNABLE TO ATTEND THIS ANNUAL MEETING.
3
<PAGE>
PROXY STATEMENT
The following statement is submitted to shareholders in connection with the
solicitation of proxies for the Annual Meeting of Shareholders of Ogden
Corporation to be held on Wednesday, June 14, 2000 at 10:00 a.m. (Eastern
Daylight Saving Time) at the Grand Hyatt New York, Park Avenue at Grand Central,
New York, New York 10017 (the "Annual Meeting"). A proxy card for this Annual
Meeting is enclosed. This Proxy Statement and the accompanying proxy card are
first being sent to shareholders on or about May 15, 2000.
The purposes of the Annual Meeting are:
(1) To elect four directors to hold terms of office expiring at the Annual
Meeting of Shareholders in 2003 and until their respective successors have
been elected and qualified;
(2) To consider and act upon a proposal to approve the adoption of an Executive
Performance Incentive Plan as more fully set forth in this Proxy Statement
and in Schedule A thereto;
(3) To consider and act upon a proposal to amend the Ogden Corporation 1999
Stock Incentive Plan as more fully set forth in the attached Proxy Statement
and reflected in italics in Schedule B thereto;
(4) To consider and act upon a proposal submitted by a shareholder urging the
Board of Directors to arrange for the prompt sale of Ogden Corporation to
the highest bidder;
(5) To ratify the appointment of Deloitte & Touche LLP as auditors of Ogden and
its subsidiaries for the year ending December 31, 2000; and
(6) To consider and act upon such other business as may properly come before
this Annual Meeting.
The solicitation of proxies to which this Proxy Statement relates is made by
and on behalf of the Board of Directors of Ogden. The costs of this solicitation
will be paid by Ogden. Such costs include preparation, printing, and mailing of
the Notice of Annual Meeting, proxy cards, and Proxy Statement. The solicitation
will be conducted principally by mail, although directors, officers, and
employees of Ogden and its subsidiaries (at no additional compensation) may
solicit proxies personally or by telephone and telegram. Arrangements will be
made with brokerage houses and other custodians, nominees, and fiduciaries for
proxy material to be sent to their principals, and Ogden will reimburse such
persons for their expenses in so doing. Ogden is also retaining D.F. King &
Co., Inc. to solicit proxies and will pay D.F. King & Co., Inc. a fee of $8,500
in connection therewith.
The shares represented by all valid proxies in the enclosed form will be
voted if received in time for this Annual Meeting in accordance with the
specifications, if any, made on the proxy card. If no specification is made, the
proxies will be voted FOR the nominees named in this Proxy Statement; and FOR
Proposals (2), (3) and (5) and AGAINST Proposal (4) as set forth above and
described in this Proxy Statement. Each proxy is revocable at any time prior to
being voted by delivering a subsequent
4
<PAGE>
proxy, by giving written notice to the Secretary of Ogden or by attending this
Annual Meeting and voting in person, provided that such action must be taken in
sufficient time to permit the necessary examination and tabulation of the
revocation or the subsequent proxy before the vote is taken.
VOTING SECURITIES
As of May 11, 2000, the record date for this Annual Meeting, Ogden had
outstanding 49,610,835 shares of common stock and 37,127 shares of $1.875
Cumulative Convertible Preferred Stock, Partially Participating, excluding
shares held in Ogden's corporate treasury. Each share of common stock is
entitled to one vote and each share of preferred stock is entitled to one-half
vote per share on all matters to come before this Annual Meeting, including the
election of directors.
Ogden has been advised by FMR Corp., Greenway Partners, L.P. and Fir Tree
Partners that they, along with certain members of their group or respective
investment managers, are each the beneficial owner of more than 5% of Ogden's
common stock, which were acquired for investment purposes for certain of their
advisory clients. The following table sets forth certain information concerning
the foregoing:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- -------------- ---------------------------------------- ----------------------- --------
<S> <C> <C> <C>
Common............... FMR Corp. 6,430,510 shares (1 ) 13.0
82 Devonshire Street
Boston, Massachusetts 02109
Common............... Greenway Partners, L.P. 4,820,500 shares (2 ) 9.8
277 Park Avenue, 27(th) Floor
New York, New York 10017
Common............... Fir Tree Partners 2,777,100 shares (3 ) 5.6
535 Fifth Avenue, 31(st) Floor
New York, New York 10017
</TABLE>
- ------------------------
(1) A Schedule 13G Report dated January 14, 2000 shows that 2,351,500 shares are
held with sole power to vote or to direct the vote and 5,112,600 shares are
held with sole power to dispose or direct the disposition thereof.
(2) A Schedule 13D Report dated October 15, 1999 shows that 4,820,500 shares are
held with sole voting power, 4,580,500 shares are held with shared voting
power, 4,820,500 shares are held with sole dispositive power and 4,580,500
shares are held with shared dispositive power.
(3) A Schedule 13D Report Filed on November 5, 1999 shows that 2,777,100 shares
are held with sole power to vote or to direct the vote and with sole power
to dispose or direct the disposition thereof.
5
<PAGE>
The proxy card provides space for a shareholder to withhold voting for any
or all nominees for the Board of Directors or to abstain from voting for any
proposal if the shareholder chooses to do so. Each nominee for election as a
director requires a plurality of the votes cast in order to be elected. Each of
Proposals (2), (3) and (4) requires the affirmative vote of a majority of the
votes cast at the Annual Meeting in person or by proxy and entitled to vote.
Proposal (5) requires the affirmative vote of the holders of a majority of the
votes represented by shares present at this Annual Meeting, in person or by
proxy and entitled to vote. With respect to the election of directors, only
shares that are voted in favor of a particular nominee will be counted towards
achievement of a plurality; where a shareholder properly withholds authority to
vote for a particular nominee such shares will not be counted towards such
nominee's or any other nominee's achievement of plurality. With respect to the
other proposals to be voted upon: (i) if a shareholder abstains from voting on a
proposal, such shares are considered present at the meeting for quorum purposes
but, since they are not affirmative votes for the proposal, they will have the
same effect as votes against the proposal (except for Proposals (2), (3) and
(4), in respect of which abstentions will not have the effect of either an
affirmative or negative vote) and (ii) under Delaware law shares registered in
the names of brokers or other "street name" nominees for which proxies are voted
on some but not all matters will be considered to be voted only as to those
matters actually voted, and will not have the effect of either an affirmative or
negative vote as to the matters with respect to which the broker does not have
authority to vote and a beneficial holder has not provided voting instructions
(commonly referred to as "broker non-votes").
ELECTION OF DIRECTORS--PROPOSAL NUMBER (1)
PROPOSED ACTION
The Ogden Board of Directors is proposing the election of four directors.
The directors will be elected for terms expiring at the Annual Meeting of
Shareholders in 2003 and until their respective successors have been elected and
qualified.
DESCRIPTION OF PROPOSAL
The Board of Directors has nominated the four persons named in the table
below for election as the Class II directors for terms of office expiring at the
2003 Annual Meeting of Shareholders and until their respective successors are
elected and qualified. Ogden has no reason to believe that any such nominee will
be unable to serve as a director if elected, but if any nominee should
subsequently become unavailable to serve as a director, the persons named as
proxies, or their respective substitutes, may, in their discretion, vote for a
substitute nominee designated by the Board of Directors or, alternatively, the
Board of Directors may reduce the number of directors to be elected at this
Annual Meeting. Messrs. Einspruch and Neal were elected directors at Ogden's
1997 Annual Meeting of Shareholders.
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<PAGE>
Mr. Einspruch has been a director since 1981 and Mr. Neal has been a director
since 1988. Messrs. Tato and Womack have been nominated to replace David Abshire
and Attallah Kappas who will be retiring from the Board following the 2000
Annual Meeting.
Mr. Tato received his B.A. degree from Columbia College in 1975, his M.A.
degree from Columbia University in 1976 and his J.D. degree from New York
University School of Law in 1979. Mr. Tato is a member of the law firm of
LeBoeuf, Lamb, Greene & MacRae, L.L.P. located in New York City. He has been a
member of the firm since 1988 and concentrates his practice in the area of
energy and project financing, representing independent power producers, equity
investors, other project sponsors and investment banking firms in the
development and financing of energy and other infrastructure projects. Mr. Tato
has significant experience in the planning, contracting and financing of energy,
water and wastewater, solid waste and telecommunications projects. He also
represented international consortia in connection with the privatization of
electrical generating facilities in Bolivia and Chile, the privatization of
water and wastewater facilities in Brazil, Colombia and the United States and
the development of energy projects in Indonesia.
Mr. Womack graduated from North Carolina State University with a degree in
Mechanical and Aeronautical Engineering in 1959 and received his M.S. degree in
Systems Engineering from the University of California at Los Angeles in 1969.
Mr. Womack is recently retired Chairman and CEO of USI Bath and Plumbing
Products, the second largest manufacturer of bath and plumbing products in the
United States. He also served as Chairman, CEO and a director of Zurn
Industries, a diverse mini-conglomerate with operations in plumbing products,
engineered power products, pollution control equipment and power plant
construction, which merged with USI in 1988. Mr. Womack was the lead executive
in the consolidation and integration of the two companies. Mr. Womack has served
in senior executive capacities with several publicly traded companies with
billion dollar plus sales since 1982. He possesses broad experience in
restructuring diverse business operations, consolidation and integration,
divestments and acquisitions, and with considerable experience in international
operations in Asia, Europe and Mexico.
7
<PAGE>
NOMINEES
The following table sets forth certain information concerning the nominees
for election as directors. Messrs. Einspruch and Neal are presently serving as
directors of Ogden.
<TABLE>
<CAPTION>
FIRST BECAME
NAME, AGE, AND OTHER INFORMATION PRINCIPAL OCCUPATION A DIRECTOR
- -------------------------------- -------------------------------------- ------------
<S> <C> <C>
Norman G. Einspruch: Age 67........... Professor and Senior Fellow, College 1981
Chairman of Ogden's Management of Engineering, University of Miami.
Committee; Member of Ogden's Audit,
Technology & Compensation Committees.
Homer A. Neal: Age 57................. Professor of Physics, Director of 1988
Chairman of Ogden's Governance Project Atlas, Interim President
Committee and Member of Ogden's Audit Emeritus, Vice President for Research
and Technology Committees; Director of Emeritus, University of Michigan.
Ford Motor Company.
Joseph A. Tato: Age 46................ Member of LeBoeuf, Lamb, Greene & --
MacRae, L.L.P., a law firm.
Robert R. Womack: Age 62.............. Retired Chairman and CEO of USI Bath --
Director of Commercial Metals Company and Plumbing Products.
and U.S. Industries, Inc.
</TABLE>
DIRECTORS WHOSE TERMS CONTINUE
The following table sets forth certain information concerning directors
whose terms are continuing.
<TABLE>
<CAPTION>
FIRST BECAME
NAME, AGE, AND OTHER INFORMATION TERM TO EXPIRE PRINCIPAL OCCUPATION A DIRECTOR
- -------------------------------- -------------- ------------------------------- ------------
<S> <C> <C> <C>
Scott G. Mackin: Age 43........ 2001 President and Chief Executive 1999(1)
Officer of Ogden and Ogden
Energy Group, Inc., an Ogden
subsidiary
</TABLE>
- ------------------------
(1) Mr. Mackin was appointed a director and President and Chief Executive
Officer of Ogden by the Board of Directors on September 16, 1999 to fill a
vacancy created by the resignation of a director whose term would have
expired in 2001.
8
<PAGE>
<TABLE>
<CAPTION>
FIRST BECAME
NAME, AGE, AND OTHER INFORMATION TERM TO EXPIRE PRINCIPAL OCCUPATION A DIRECTOR
- -------------------------------- -------------- ------------------------------- ------------
<S> <C> <C> <C>
Anthony J. Bolland: Age 46..... 2001 Managing Director, Boston 1998
Director of Globenet Ventures Management, Inc.
Communications Group Limited and
Northern Light Technology
Corporation.
Judith D. Moyers: Age 64....... 2001 President, Public Affairs 1978
Chairman of Ogden's Compensation Television, Inc.; Television
Committee and a member of Producer.
Ogden's Management and
Governance Committees.
Robert E. Smith: Age 64........ 2001 Counsel, Rosenman & Colin LLP, 1990
Member of Ogden's Audit, a law firm.
Governance and Management
Committees.
George L. Farr: Age 59......... 2002 Retired, former Vice Chairman 1999
Chairman of Ogden's Board of of American Express Company.
Directors and Member of Ogden's
Management Committee; Director
of Swiss Reinsurance Co.,
Zurich, Switzerland; and MISYS
PLC, London, England.
Jeffrey F. Friedman: Age 53.... 2002 Investment Manager, Dreyfus 1998
Chairman of Ogden's Audit Corporation.
Committee and Member of Ogden's
Compensation Committee.
Helmut Volcker: Age 65......... 2002 Professor of Energy Technology, 1994
Chairman of Ogden's Technology University of Essen, Germany;
Committee; Chairman, Technical retired member of the
Advisory Board, Alstom Energy Management Board of STEAG AG,
Systems GmbH, Stuttgart, Essen; and consultant for
Germany; Vice Chairman of the international energy projects
Board of Directors, Schmeink & and power plant industries.
Cofreth AG, Bocholt, Germany
</TABLE>
9
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
MANAGEMENT COMMITTEE. The Management Committee is composed of six
independent non-employee directors. The Management Committee's principal
functions are to review and evaluate Ogden's strategies, plans, policies and
management needed to meet long-range goals and objectives. The Committee's
functions also include evaluating and reviewing business transactions under
consideration by management, Ogden's financial status, current financial
arrangements, current and anticipated financial requirements and issuance and
sale of Ogden securities and advising and recommending to the Board of Directors
with respect thereto. There were six meetings of the Management Committee during
1999.
COMPENSATION COMMITTEE. The Compensation Committee is composed of three
"non-employee directors", within the meaning of Rule 16b-3 promulgated under
Section 16(b) of the Securities Exchange Act of 1934, as amended, and "outside
directors" within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended, who are not employees or members of management of Ogden or any
of its subsidiaries. The Compensation Committee is responsible for reviewing and
approving compensation and benefit plans for Ogden and providing independent
judgment as to the fairness of the compensation and benefit arrangements for
senior management of Ogden and its subsidiaries. The Compensation Committee
administers Ogden's Executive Performance Incentive Plans, Employees' Restricted
Stock Plan and Stock Option and Incentive Plans (except to the extent that the
plans state that the Board of Directors administer such plans with regard to
non-employee directors of Ogden), determines the Chief Executive Officer's
compensation and reviews and approves the annual salary, bonus and other
benefits, direct or indirect, of other designated members of senior management
of Ogden and its subsidiaries. There were ten meetings of the Compensation
Committee during 1999.
AUDIT COMMITTEE. The Audit Committee is composed of four independent
non-employee directors. The Audit Committee's principal functions are to
evaluate and review financial procedures, controls and reporting; compliance
with Ogden's Corporate Policy of Business Conduct; and both the audit scope and
audit fees. There were seven meetings of the Audit Committee during 1999.
GOVERNANCE COMMITTEE. The Governance Committee is composed of three
independent non-employee directors. The Governance Committee's principal
functions are to review and evaluate Ogden's Board practices. In particular, the
Committee will be responsible for monitoring and making recommendations on
issues such as Board size and composition, director compensation and stock
ownership, director retirement, and CEO performance. The Committee will review,
on an ongoing basis, the Board's performance as a whole as it relates to
recognized "best Board practices" in the area
10
<PAGE>
of corporate governance. The Committee will also make recommendations to the
Board of Directors with respect to nominees for new directors (including
nominations submitted in writing to the Secretary of Ogden by shareholders in
compliance with the requirements of Ogden's By-laws), and board committee
memberships with direct input from the Chairman of the Board of Directors and
Chief Executive Officer and from the other directors. There were two meetings of
the Governance Committee during 1999.
TECHNOLOGY COMMITTEE. The Technology Committee is composed of four
independent non-employee directors. The Technology Committee's principal
functions are to collect, review, study and evaluate various changes and
innovations in technology, materials and technical services that may be of
benefit to Ogden's operations. The Committee also reviews and takes into
consideration environmental standards and pollution-control requirements
connected with the operation by Ogden of various solid waste-to-energy and other
operating facilities across the United States and abroad. There were five
meetings of the Technology Committee during 1999.
During 1999 the Board of Directors held six regularly scheduled meetings and
two special meetings. Each incumbent director attended at least 75% of the
aggregate 1999 meetings of the Board of Directors and of the Committees on which
such director served.
DIRECTOR COMPENSATION
(a) Directors Fees
Each director who is not an employee of Ogden or an Ogden subsidiary
receives an annual director's retainer fee of $35,000 plus a meeting fee of
$1,500 for each Board of Directors meeting attended. Each non-employee director
will also receive a meeting fee of $1,500 for each committee meeting attended.
All directors are reimbursed for expenses incurred in attending Board of
Directors and committee meetings. Directors who are employees of Ogden or an
Ogden subsidiary receive no additional compensation for serving on the Board of
Directors or any committee.
(b) Stock Options
Each non-employee director of Ogden has been granted a Director's Stock
Option and limited stock appreciation rights under the Ogden 1990 Stock Option
Plan with respect to 25,000 shares of Ogden Common Stock at varying exercise
prices equal to the average of the high and low sales prices of Ogden Common
Stock on the date of grant (the "Fair Market Value"). Pursuant to the Ogden 1999
Stock Option Plan (the "1999 Plan"), approved by shareholders at the 1999 Annual
Shareholders Meeting the Board of Directors may award annual grants of Directors
Stock Options and limited stock appreciation rights with respect of up to 2,500
shares of Ogden common stock to each non-employee
11
<PAGE>
director, at an exercise price equal to the Fair Market Value on the date of
grant. (See Proposal Number (3) of this Proxy Statement for a description of a
proposed amendment to the 1999 Plan). On July 14, 1999, each non-employee
director was granted an option for 2,500 shares at an exercise price of $26.5938
per share, the Fair Market Value of a share of Ogden common stock on the date of
grant. Each option is a ten year option vesting at the rate of 33.3% each year
over a period of three years. On October 28, 1999 Mr. Farr was granted options
by the Board of Directors under the 1999 Plan aggregating 111,000 shares, 37,000
shares granted at $8.6563 per share (the Fair Market Value on the date of
grant), 37,000 shares granted at $10.8204 per share (125% above the Fair Market
Value on the date of grant), and 37,000 shares granted at $12.9845 (150% above
the Fair Market Value on the date of grant). Each option is a ten year option
vesting at the rate of 33.3% each year over a period of three years. These
options were granted to Mr. Farr in recognition of his performing certain
assignments given to him by the Board of Directors which required him, in his
capacity as Chairman of the Board, to perform services that are traditionally
and primarily performed by the executive officers of the Company.
(c) Restricted Stock
On February 17, 2000 the Board of Directors adopted the Ogden Restricted
Stock Plan for Non-Employee Directors (the "Director's Restricted Stock Plan")
which is administered by the Board of Directors and provides that only
non-employee directors are eligible to receive awards. Each award of restricted
stock will vest upon the earliest of the third month following the date of
grant, the non-employee director's attainment of age 72, the non-employee
director's disability or the non-employee director's death. Shares are freely
transferable after they become vested subject to meeting certain SEC
requirements. All unvested shares of restricted stock are forfeited upon the
director's termination of directorship for any reason, other than death or
disability. Shares become fully vested upon a change-in-control of the Company.
Shares of common stock to be issued under the Director's Restricted Stock Plan
will be made from shares held in treasury, the maximum aggregate number of
shares authorized to be issued is 100,000 shares and the purchase price for each
share issued is zero.
Under the Director's Restricted Stock Plan each non-employee director will
automatically be paid in the form of restricted stock as follows: (i) 50% of the
director's annual retainer fees as of the first Board Meeting of each fiscal
year based on the closing price of a share of common stock on the date of such
meeting and (ii) 50% of the director's meeting fees as of the last day of each
calendar quarter in which such meeting occurs based on the average closing price
of a share of common stock for the calendar quarter. In the event of a
Change-in-Control of the Company, shares of restricted stock which
12
<PAGE>
would otherwise be made on the last day of the calendar quarter in which the
Change-in-Control occurs, will be made on the date of the Change-in-Control.
In September 1999 the Board of Directors waived their meeting fees for the
remainder of the year. On February 17, 2000 the Board authorized the payment of
50% of these fees in cash and granted awards of restricted stock in payment of
the other 50%. The Board also authorized a special award of 2,000 shares of
restricted stock to Messrs. Bolland, Einspruch, Farr and Friedman for serving on
a special committee appointed by the Board of Directors to oversee the sale of
the Company's Aviation and Entertainment businesses. The foregoing awards were
based on the average of the high and low sale prices of Ogden common stock on
December 22, 1999 ($11.781 per share).
In recognition of the special role that Mr. Farr is performing as Ogden's
Chairman of the Board, the Board of Directors has authorized a special
compensation package for Mr. Farr (in addition to the options granted to him on
October 28, 1999) that will apply only during the period of time in which he is
serving in his special role. The compensation package provides for a monthly
retainer of $35,000, payable 50% in cash and 50% in restricted stock at the end
of each quarter, commencing during the first quarter of 2000 and is subject to
review by the Compensation Committee on a quarterly basis. During this period of
time Mr. Farr will not be paid any director or committee retainer or meeting
fees.
SECURITY OWNERSHIP BY MANAGEMENT
Information about the common stock beneficially owned as of March 31, 2000
by each nominee, each director, each executive officer named in the summary
compensation table and all directors and executive officers of Ogden as a group
is set forth as follows:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1)(2)
- ------------------------ ---------------------------
<S> <C>
David Abshire............................................... 27,218(3)(7)
Anthony J. Bolland.......................................... 28,994(3)(7)
Lynde H. Coit............................................... 158,665(5)
Raymond E. Dombrowski, Jr................................... 22,500(5)
Norman G. Einspruch......................................... 40,880(3)(7)
George L. Farr.............................................. 14,000(3)(7)
Jeffrey F. Friedman......................................... 26,846(3)(7)
David L. Hahn............................................... 108,350(4)
Attallah Kappas............................................. 39,930(3)(7)
Scott G. Mackin............................................. 409,400(5)
Judith D. Moyers............................................ 33,967(3)(7)
Homer A. Neal............................................... 27,725(3)(7)
Robert E. Smith............................................. 28,121(3)(7)
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1)(2)
- ------------------------ ---------------------------
<S> <C>
Bruce W. Stone.............................................. 155,317(5)
Joseph A. Tato.............................................. 0
Helmut Volcker.............................................. 29,130(3)(7)
Robert R. Womack............................................ 5,000
All executive officers and directors as a group
(24 persons) including those named above.................. 1,156,043(6)
</TABLE>
- ------------------------------
(1) Except as otherwise noted each individual owns all shares directly and has
sole investment and voting power with respect to all shares. No officer or
director owns shares of Ogden Series A Preferred Stock.
(2) The beneficial ownership of each individual is less than 1.0% of the class.
(3) Includes, 20,000 shares for Dr. Volcker; 20,000 shares for Dr. Kappas 10,000
shares for Mr. Friedman; 5,000 shares for Mr. Farr; 5,000 shares for
Mr. Bolland and 25,000 shares for each of Messrs. Abshire, Einspruch, Neal,
Smith and Ms. Moyers subject to stock options which are exercisable within
60 days of March 31, 2000. Also includes: 2,735 shares held by
Dr. Einspruch in a Keogh Plan; 100 shares held by Dr. Neal jointly with his
wife over which Dr. Neal has shared voting and investment authority with his
wife; and 12,000 shares held by Mr. Friedman in an IRA.
(4) Includes 98,000 shares subject to stock options which are exercisable within
60 days of March 31, 2000. Does not include 700 shares held by his wife.
Mr. Hahn has neither investment nor voting power with respect to the shares
held by his wife and disclaims any beneficial interest of such shares.
(5) Includes 150,000 shares for Mr. Coit; 10,000 shares for Mr. Dombrowski;
363,000 shares for Mr. Mackin; and 125,000 shares for Mr. Stone subject to
stock options which are exercisable within 60 days of March 1, 2000.
(6) Includes 1,254,218 shares subject to stock options which are exercisable and
restricted stock which becomes vested within 60 days of March 31, 2000.
(7) Includes: 1,930 shares, 3,994 shares, 4,440 shares, 4,440 shares, 1,930
shares, 2,000 shares, 2,121 shares, 2,121 shares, 1,930 shares, and 2,312
shares of restricted stock awarded to Messrs. Abshire, Bolland, Einspruch,
Friedman, Kappas, Farr, Neal, Smith, Volcker and Ms. Moyers, respectively,
which become fully vested within 60 days of March 31, 2000.
VOTE REQUIRED
Election of directors is by a plurality vote. Accordingly, the four persons
nominated in accordance with Ogden's by laws who receive the greatest number of
affirmative votes will be elected.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF ALL FOUR NOMINEES NAMED ABOVE AS DIRECTORS--PROPOSAL NUMBER (1)
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APPROVAL OF THE EXECUTIVE PERFORMANCE INCENTIVE PLAN--
PROPOSAL NUMBER (2)
PROPOSED ACTION
The Ogden Board of Directors is proposing to establish and maintain the
Executive Performance Incentive Plan (the "Incentive Plan") which will provide
for annual incentive payments to Ogden's Chief Executive Officer ("CEO") and
certain key executives. The Incentive Plan will supersede the existing CEO
Formula Bonus Plan. The Incentive Plan is designed to provide for a direct
correspondence between performance and compensation for Ogden executives and to
qualify certain components of compensation paid to Ogden's key executives for
the tax deductibility exception under Section 162(m) of the Code while
maintaining a degree of flexibility in the amount of incentive compensation paid
to such individuals. The Ogden Board of Directors has adopted the Incentive
Plan, subject to stockholder approval.
Section 162(m) of the Code generally disallows a Federal income tax
deduction to any publicly held corporation for compensation paid in excess of
$1 million in any taxable year to the chief executive officer or any of the four
other most highly compensated executive officers. Ogden intends to structure
awards under the Incentive Plan so that compensation resulting therefrom would
be qualified "performance based compensation" eligible for continued
deductibility with stockholder approval. To allow Ogden to so qualify for such
compensation and to preserve the tax deductibility of such compensation, Ogden
is seeking approval of the Incentive Plan and the material terms of performance
goals applicable to the Incentive Plan. The complete text of the Incentive Plan
is attached hereto as Schedule A and reference is made to such Annex for a
complete statement of the provisions of the Incentive Plan.
No individual may receive for any fiscal year an amount under the Incentive
Plan which exceeds $4,000,000.
PLAN ADMINISTRATION
The Incentive Plan will be administered by the Compensation Committee which
is intended to consist entirely of non-employee directors who meet the criteria
of "outside director" under Section 162(m) of the Code. The Compensation
Committee will select the key executives who will receive awards, the target
pay-out level and the performance targets. The Compensation Committee will
certify the level of attainment of performance targets.
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DESCRIPTION OF PROPOSAL
Participants in the Incentive Plan will be eligible to receive an annual
cash performance award based on attainment by the Company and/or a subsidiary,
division or other operational unit of the Company of specified performance goals
to be established for each fiscal year by the Compensation Committee. The
performance award will be payable as soon as administratively feasible following
the end of the fiscal year with respect to which the payment relates, but only
after the Compensation Committee certifies that the performance goals have been
attained. Performance awards will generally be payable in cash, but may be
payable, in the sole discretion of the Compensation Committee, in restricted
stock under the terms of Ogden 1999 Stock Incentive Plan, amended and restated
as of January 1, 2000. A participant and Ogden may agree to defer all or a
portion of a performance award in a written agreement executed prior to the
beginning of the fiscal year to which the performance award relates in
accordance with any deferred compensation program in effect applicable to such
participant. Any deferred performance award will increase or decrease (between
the date on which it is credited to any deferred compensation program and the
payment date) based on an earnings factor elected by the participant from such
options offered by the deferred compensation program and set forth in writing
prior to the deferral which will be based either on a reasonable rate of
interest or on one more predetermined actual investments such that the amount
payable at the end of the deferral period shall be based on the actual rate of
return of a specific investment.
Code Section 162(m) requires that performance awards be based upon objective
performance measures. The performance goals will be based on one or more of the
following criteria: (i) profits, market share, revenues, income before income
taxes and extraordinary income, net income earnings before income tax, earnings
before interest, taxes, depreciation and amortization or a combination of any or
all of the foregoing; (ii) after-tax or pre-tax profits and/or after-tax or
pre-tax profits from continuing operations; (iii) operational cash flow or cash
generation targets; (iv) level of, reduction of, or other specified objectives
with regard to Ogden's bank debt or other long-term or short-term public or
private debt or other similar financial obligations; (v) earnings per share or
earnings per share from continuing operations; (vi) return on capital employed
or return on invested capital; (vii) after-tax or pre-tax return on
stockholders' equity or profitability targets as measured by return ratio and
stockholder returns; (viii) economic value added targets; (ix) fair market value
of the shares of Common Stock; and (x) the growth in the value of an investment
in the Common Stock assuming the reinvestment of dividends. In addition, such
performance goals may be based upon the attainment of specified levels of Ogden
(or subsidiary, division or other operational unit of Ogden) performance under
one or more of the measures described above relative to the performance of other
corporations. To the extent permitted under the Code, the Compensation Committee
may: (i) designate additional business criteria
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on which the performance goals may be based; or (ii) adjust, modify or amend the
aforementioned business criteria.
For the 2000 fiscal year, the Compensation Committee has established that
the payments under the Incentive Plan will be based on the achievement of
positive net Ogden Energy earnings before interest and taxes resulting from
continuing operations (excluding the results of Ogden Environmental and Energy
Services, corporate overhead and interest on corporate level debt) ("Energy
EBIT").
TERM AND AMENDMENT OF THE INCENTIVE PLAN
The Incentive Plan, if approved by stockholders, will be effective as of
January 1, 2000 for all fiscal years commencing on or after that date. The
Incentive Plan may be amended or discontinued by the Ogden Board of Directors at
any time. However, stockholder approval is required for an amendment that
increases the maximum payment which may be made to any individual for any fiscal
year above the award limits outlined above and specified in the Incentive Plan,
materially alters the business criteria on which performance goals are based,
increases the maximum annual measuring factor for deferred amounts, changes the
class of eligible employees or otherwise requires stockholder approval under
Code Section 162(m).
The Incentive Plan is not subject to any of the requirements of ERISA nor is
it intended to be qualified under Section 401(a) of the Code.
PLAN AWARDS
It is anticipated that only Ogden's CEO will be eligible to receive awards
under the Incentive Plan for the 2000 fiscal year. This award may range from 0%
to 200% of the CEO's annual salary rate for 2000 depending upon Ogden's
achievement of the performance goals established by the Compensation Committee.
For the 2000 fiscal year, the maximum award which can be paid from the Incentive
Plan shall be equal to 2% of Energy EBIT, subject to reduction at the
Compensation Committee's discretion.
VOTE REQUIRED
The affirmative vote of a majority of the votes cast at this Annual Meeting,
in person or by proxy, and entitled to vote will be required for the approval of
the Incentive Plan.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR PROPOSAL
NUMBER (2).
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APPROVAL OF AMENDED AND RESTATED OGDEN 1999 STOCK INCENTIVE PLAN--
PROPOSAL NUMBER (3)
PROPOSED ACTION
The Ogden Board of Directors maintains the Ogden Corporation 1999 Stock
Option Plan in order to provide a means by which employees and certain directors
responsible for significant contributions to Ogden's business may be given an
opportunity to purchase shares of Ogden common stock. The 1999 Stock Option Plan
has been amended and restated, effective as of January 1, 2000, to change the
name of the plan to the "1999 Stock Incentive Plan" and to authorize grants of
restricted stock to Ogden's employees (the "Restated Plan"). The Board of
Directors believes that the growth and success of Ogden, which is provided by
the awards permitted under the Restated Plan, provides such key individuals with
an incentive to continue to energetically apply their talents within Ogden and
further align the interests of such individuals with the interests of Ogden's
stockholders. Accordingly, on March 13, 2000, Ogden's Board of Directors and the
Compensation Committee of the Board of Directors adopted the Restated Plan,
subject to stockholder approval.
The Amendments made to the Restated Plan effective January 1, 2000, shall
not be effective in the event that the Amendments to the Restated Plan are not
approved by the stockholders at Ogden's 2000 Annual Meeting of Stockholders and
the Restated Plan in effect immediately prior to January 1, 2000 shall continue
in full force and effect.
DESCRIPTION OF PROPOSAL
The Board of Directors believes that the proposed Restated Plan satisfies
the objective of attracting, retaining, and motivating employees to give their
best efforts and ability to Ogden.
The key provisions of the Restated Plan are briefly summarized below, after
taking into account the amendments to the Plan which reflect the addition of
restricted stock awards. The complete text of the Restated Plan is attached
hereto as Schedule B and reference is made to such Annex for a complete
statement of the provisions of the Restated Plan.
(1) Type of awards: The Restated Plan would enable Ogden to grant "non-qualified
options," incentive stock options, limited stock appreciation rights
("LSARs"), performance-based cash awards and restricted stock (collectively,
the "Awards").
(2) Number of Shares: The aggregate maximum number of shares for which Awards
may be issued under the Restated Plan will be 4,000,000 shares of Ogden's
common stock, subject to antidilution adjustments in the event of any
changes in Ogden's capitalization, stock dividends, splits, spin-offs,
mergers, etc. Of this 4,000,000, no more than 1,000,000 shares of common
stock may be awarded in
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the form of restricted stock. Other than with regard to incentive stock
options, the number of shares that may be delivered under the Restated Plan
will be determined after giving effect to the use by a participant of the
right, if granted, to cause Ogden to withhold from the shares of common
stock otherwise deliverable to him or her upon the exercise of an Award or
shares of common stock in payment of all or a portion of his or her
withholding obligation arising from such exercise. If an LSAR is granted in
tandem with a stock option, such grant will only apply once against the
maximum number of shares of common stock which may be delivered to
participants or granted under the plan. If any shares of restricted stock
awarded under the Restated Plan are forfeited or repurchased by Ogden for
any reason, the number of forfeited or repurchased shares of restricted
stock will again be available for the purposes of Awards under the Restated
Plan.
(3) Administration: The Restated Plan is administered by a committee or
subcommittee of the Board of Directors (the "Committee") which consists of
two or more directors, each of whom is intended to be, to the extent
required by Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3"), a
"non-employee director" as defined in Rule 16b-3 and, to the extent required
by section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), an "outside director" as defined under section 162(m) of the Code.
Currently, the Compensation Committee appointed by the Ogden Board of
Directors serves as the Committee. With regard to grants of non-qualified
stock options to non-employee directors, the Board of Directors serves as
the Committee. The Committee has discretion to determine the types, terms
and conditions of all Awards, including exercise price or purchase price (if
any), performance goals and other earnout and/or vesting contingencies and
acceleration provisions, to adopt, alter or repeal administrative rules,
guidelines and practices (including special guidelines for non-U.S.
employees), to delegate administrative responsibilities as well as to
construe and interpret the terms of the Restated Plan and any agreements
evidencing Awards granted thereunder.
(4) Eligibility: Participants in the Restated Plan will be selected by the
Committee, in its sole discretion, from among the non-employee directors of
Ogden and employees of Ogden, its subsidiary corporations or parent
corporations, if any (as defined under Section 424 of the Code).
Participants will be selected on the basis of demonstrated ability to
contribute substantially to the success of Ogden. The Committee will
determine the identity and the number, of participants under the Restated
Plan. Awards may also be granted to employees of a corporation which has
been acquired by Ogden or a subsidiary, who hold options with respect to,
the stock of such acquired corporation, which options Ogden or a subsidiary
has agreed to assume.
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(5) Effective Date of the Restated Plan: The 1999 Stock Option Plan originally
became effective on May 20, 1999; the Restated Plan is effective as of
January 1, 2000, subject to the approval of Ogden's stockholders.
(6) Expiration, Amendment and Termination of the Restated Plan: The Restated
Plan may be amended, modified or terminated at any time by the Board of
Directors, except that no amendment or termination may, without the
participant's consent, adversely, affect any then outstanding Award under
the Restated Plan. Awards may not be granted pursuant to the Restated Plan
after May 19, 2009. The Board of Directors may not, without further approval
of Ogden's stockholders, in accordance with the laws of the State of
Delaware, solely to the extent required by the applicable provisions of
Rule 16b-3, section 162(m) or 422 of the Code, or the rules of any
applicable exchange: (i) increase the aggregate number of shares as to which
Awards may be granted under the plan (as adjusted); (ii) increase the
minimum individual participant share limitations; (iii) increase the maximum
cash payment; (iv) materially alter the performance criteria; (v) extend the
maximum option period; (vi) change the class of persons eligible to
participate in the plan; or (vii) change the manner of determining stock
option prices.
(7) Term of Option: All options will lapse on the expiration of the option terms
specified by the Committee in a certificate evidencing such option, but in
no event will non-qualified or incentive stock options be exercisable after
the expiration of 10 years from the date such option is granted (five years
for participants who own more than 10% of the total combined voting power of
all classes of the stock of Ogden, its subsidiary corporations or its parent
corporations).
(8) Option Price: The exercise price for each stock option issued under the
Restated Plan shall not be less than 100% of the fair market value (as
defined in the Restated Plan) of the common stock on the date the option is
granted. In the case of the grant of an incentive stock option to an
optionee who owns more than 10% of the total combined voting power of all
classes of stock of Ogden, its subsidiary corporations or its parent
corporations, the option price of such option shall be at least 110% of the
fair market value of the common stock on the date the option is granted.
(9) Maximum Grant: In any calendar year, the aggregate fair market value of the
shares (as determined at the time the option is granted) for which all
incentive stock options held by an optionee are exercisable for the first
time in such calendar year may not exceed $100,000. No participant other
than a nonemployee director shall be granted stock options and/or LSARs
during any calendar year to purchase more than an aggregate of 500,000
shares of common stock (subject to antidilution adjustments), and no
nonemployee director shall be granted stock options and/or LSARs during any
calendar year to purchase more than an aggregate of 2,500 shares of common
stock (subject to antidilution adjustments). No participant eligible to
receive restricted stock shall
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be awarded, during any calendar year, more than 500,000 shares of restricted
stock (subject to antidilution adjustments) for which the grant of such
Award or the lapse of the relevant restriction period is subject to the
attainment of performance goals. There are no annual individual share
limitations on restricted stock for which the grant of such Award or the
lapse of the relevant restriction period is not based on or conditioned upon
the attainment of performance goals. No nonemployee director shall be
awarded shares of restricted stock under the Restated Plan.
(10) Payment: The issuance of shares of common stock to the participant upon
exercise of any option shall be contingent upon receipt by Ogden of a
personal, certified or bank check or the equivalent thereof acceptable to
Ogden in an amount equal to the full option price of the shares being
purchased and an amount sufficient to cover all amounts required to be
withheld by Ogden under applicable tax law. The Committee may authorize
Ogden to extend a loan to a participant to assist in funding the exercise
price with respect to any Award and/or the tax withholding amount or to
assist in the purchase of shares of Ogden's common stock on the open market.
Proceeds received by Ogden from optioned shares will be used by Ogden for
general corporate purposes.
(11) LSARs: The Committee may grant an LSAR, which is a right granted in tandem
with a related stock option, to receive a payment in cash equal to the
excess of the aggregate price (as described herein) at the time specified
below of a specified number of shares of common stock over the aggregate
exercise price of the related stock option being exercised. An LSAR may be
exercisable only upon the occurrence of a change in control (as defined in
the Restated Plan) and only in the alternative to exercise of its related
stock option. The exercise of an LSAR relating to a non-qualified stock
option with respect to any number of shares of common stock entitles the
participant to a cash payment, for each share, equal to the excess of
(i) the greatest of (A) the highest price per share of common stock paid in
the change in control in connection with which such LSAR became exercisable,
(B) the fair market value of a share of common stock on the date of such
change in control and (C) the fair market value of a share of common stock
on the effective date of such exercise over (ii) the exercise price of the
related stock option. The exercise of an LSAR relating to an incentive stock
option with respect to any number of shares of common stock entitles the
participant to a cash payment, for each such share, equal to the excess of
(i) the fair market value of a share of common stock on the effective date
of such exercise over (ii) the exercise price of the related stock option.
An LSAR will be exercisable only during the 90-day period following a change
in control, provided that the stock option to which it relates is
exercisable.
(12) Cash Awards:
(a) The Committee may grant a cash award, which is a right denominated in
cash or cash units to receive a cash payment, based upon the attainment
of pre-established performance goals and
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such other conditions, restrictions and contingencies as the Committee
determines. The Committee may specify a targeted performance awarded for
a participant. The individual target award may be expressed, at the
Committee's discretion, as a fixed dollar amount, a percentage of base
pay or total pay (excluding payments made under the plan), or an amount
determined pursuant to an objective formula or standard. At the time the
performance goals are established, the Committee will prescribe a formula
to determine the percentages of the individual target award which may be
payable based upon the degree of attainment of the performance goals
during the calendar year. The maximum cash award that may be granted to
any one individual in any calendar year shall be $3,000,000.
(b) Cash awards granted to "covered employees" under Section 162(m)(3) of
the Code (generally, the chief executive officer and the four other most
highly compensated executive officers) are intended to satisfy
Section 162(m) of the Code. This section generally disallows a federal
income tax deduction to any publicly held corporation for compensation
paid in excess of $1 million in any taxable year to a covered employee,
unless such compensation is performance-based and the material terms of
the performance goals are approved by stockholders. Section 162(m)
requires that the performance goals are based on objective criteria.
Under the Restated Plan, these performance goals will be based on one or
more of the following criteria with regard to Ogden (or any subsidiary
corporation, parent corporation, division, or other operational unit of
Ogden): (i) profits, market share, revenues, income before income taxes
and extraordinary items, net income, earnings before income tax, earnings
before interest, taxes, depreciation and amortization, funds from
operations or a combination of any or all of the foregoing;
(ii) after-tax or pre-tax profits, or a break-even; (iii) operational
cash flow or cash generation targets; (iv) level of, reduction of, or
other specified objectives with regard to limiting the level of increase
in, all or a portion of, Ogden's bank debt or other long-term or
short-term public or private debt or other similar financial obligations
of Ogden; (v) earnings per share or earnings per share from continuing
operations; (vi) return on capital employed or return on invested
capital; (vii) after-tax or pre-tax return on stockholders' equity or
profitability targets as measured by return ratio and stockholder
returns; (viii) economic value added targets; (ix) fair market value of
the shares of Ogden's common stock; and (x) the growth in the value of an
investment in Ogden's common stock assuming the reinvestment of
dividends. With respect to all participants but solely to the extent
permitted under the Code with respect to "covered employees," the
Committee may: (i) designate additional business criteria on which the
performance goals may be based or (ii) adjust, modify or amend the
aforementioned business criteria.
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(13) Restricted Stock:
(a) The Committee may grant restricted stock, which is an award of shares of
common stock that is subject to the attainment of pre-established
performance goals and such other conditions, restrictions and
contingencies as the Committee determines. Awards of restricted stock may
be granted solely to participants who are employees of Ogden, any
subsidiary or parent company (if any). Unless otherwise determined by the
Committee at grant or thereafter, upon a participant's termination of
employment for any reason during the relevant restriction period, all
restricted stock subject to restriction will be forfeited.
(b) Upon the award of restricted stock, the participant has all rights of a
stockholder with respect to the shares, including the right to receive
any dividends, the right to vote such shares, and, conditioned upon full
vesting of shares of restricted stock, the right to tender such shares,
subject to the conditions and restrictions generally applicable to
restricted stock or specifically set forth in the participant's
restricted stock agreement. The Committee may, in its sole discretion,
determine at the time of grant that the payment of dividends will be
deferred until, and conditioned upon, the expiration of the applicable
restriction period. The Committee may fix a purchase price (if any) of
restricted stock.
(c) Recipients of restricted stock are required to enter into a restricted
stock agreement which states the restrictions to which the shares are
subject and the criteria or date or dates on which such restrictions will
lapse. Within these limits, based on service, attainment of objective
performance goals, and such other factors as the Committee may determine
in its sole discretion, the Committee may provide for the lapse of such
restrictions or may accelerate or waive such restrictions at any time. A
participant who receives an Award of restricted stock shall not have any
rights with respect to such award of restricted stock, unless and until
such participant has delivered a fully executed copy of a restricted
stock award agreement and has otherwise complied with the applicable
terms and conditions of such Award.
(d) Awards of restricted stock are intended to satisfy section 162(m) of the
Code. Under the Restated Plan, an Award of restricted stock may be
conditioned upon or subject to the attainment of performance goals. These
performance goals will be based on one or more of the objective criteria
with regard to Ogden (or any subsidiary corporation, parent corporation,
division, or other operational unit of Ogden) as described above under
Section 12 with respect to cash awards.
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(14) General Provisions:
(a) The Restated Plan provides that the Committee may adjust the number of
shares of common stock available to be issued under the plan, the number
of shares subject to outstanding Awards and the exercise prices of
outstanding awards upon a change in the capitalization of Ogden, a stock
dividend or split, a merger, spin-off, or combination of shares and
certain other similar events. In the event of such adjustment or a change
in control, the Restated Plan also permits the Committee to determine
whether outstanding Awards and/or a portion of the plan should be assumed
and converted by a participant's new employer following such event,
provided that certain criteria are met.
(b) In the event of a change in control each outstanding Award of stock
options and LSARs shall become fully vested and exercisable. Except as
otherwise provided by the Committee in the agreement awarding restricted
stock, the restrictions to which any shares of restricted stock are
subject will lapse as if the applicable restriction period had ended upon
the change in control.
(15) Federal Income Tax Consequences of Stock Options:
The following discussion of the federal income tax consequences of the
granting and exercise of stock options under the Restated Plan, and the sale of
common stock acquired as a result thereof is based on an analysis of the Code,
existing laws, judicial decisions, and administrative rulings and regulations,
all of which are subject to change. In addition to being subject to the federal
income tax consequences described below, a participant may also be subject to
state, local, estate and gift tax consequences, none of which is described
below. This discussion is limited to the U.S. federal income tax consequences to
individuals, who are citizens or residents of the United States, other than
those individuals who are taxed on a residence basis in a foreign country.
NON-QUALIFIED STOCK OPTIONS:
No taxable income will be recognized by a participant at the time a
non-qualified stock option is granted to him or her.
Ordinary compensation income will be recognized by a participant at the time
a non-qualified stock option is exercised, and the amount of such income will be
equal to the excess of the fair market value on the exercise date of the shares
purchased by the optionee over the exercise price for such shares. Other than
with regard to non-employee directors, this ordinary compensation income will
also constitute wages subject to income tax withholding under the Code and Ogden
will require the participant to make suitable arrangements to ensure that the
participant remits to Ogden an amount sufficient to satisfy all tax withholding
requirements.
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Ogden will generally be entitled to a deduction for federal income tax
purposes at such time and in the same amount as the amount includable in the
participant's ordinary income in connection with his or her exercise of a
non-qualified stock option, subject to Section 162(m) described herein.
Upon a participant's subsequent sale or other disposition of shares
purchased on exercise of a non-qualified stock option, the participant will
recognize capital gain or loss (which may be short-term or long-term depending
upon the participant's holding period) on the difference between the amount
realized on such sale or other disposition and the participant's tax basis in
the shares sold. The tax basis of the shares acquired upon the exercise of the
option will be equal to the sum of the exercise price for such shares and the
amount includable in the participant's income with respect to such exercise and
acquisition of the shares.
INCENTIVE STOCK OPTIONS:
Neither the grant nor, provided the holding periods described below are
satisfied, the exercise of an incentive stock option will result in taxable
income, to a participant or a tax deduction for Ogden. However, for purposes of
the alternative minimum tax, the excess of the fair market value of the shares
acquired upon exercise of an incentive stock option (determined at the time the
option is exercised) and the exercise price for such shares will be considered
part of the participant's income.
If the applicable holding periods described below are satisfied, the sale of
shares of common stock purchased upon the exercise of an incentive stock option
will result in capital gain or loss to the participant and will not result in a
tax deduction to Ogden. To receive the foregoing incentive stock option tax
treatment as to the shares acquired upon exercise of an incentive stock option,
a participant must hold such shares for at least two years following the date
the incentive stock option is granted and for one year following the date of the
exercise of the incentive stock option. In addition, a participant generally
must be an employee of Ogden (or a subsidiary corporation or parent corporation
of Ogden) at all times between the date of grant and the date three months
before exercise of the option.
If the holding period rules are not satisfied, the portion of any gain
recognized on the disposition of the shares acquired upon the exercise of an
incentive stock option that is equal to the lesser of (a) the fair market value
of the shares on the date of exercise minus the exercise price or (b) the amount
realized on the disposition minus the exercise price, will be treated as
ordinary compensation income in the taxable year of the disposition of the
shares, with any remaining gain being treated as capital gain. If the holding
periods are not satisfied, Ogden will generally be entitled to a tax deduction
equal to the amount of such ordinary income included in the participant's
taxable income, subject to Section 162(m) described herein.
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STOCK OPTIONS GENERALLY:
The following considerations may also apply to grants of non-qualified stock
options and/or incentive stock options: (i) any officers and directors of Ogden
subject to Section 16(b) of the Exchange Act may be subject to special tax rules
regarding the income tax consequences concerning their stock options, (ii) any
entitlement to a tax deduction on the part of Ogden is subject to the applicable
tax rules (including, without limitation, Section 162(m) of the Code regarding a
$1,000,000 limitation on deductible compensation), and (iii) in the event that
the exercisability or vesting of any stock option is accelerated because of a
change in control, payments relating to the stock option (or a portion thereof),
either alone or together with certain other payments, may constitute parachute
payments under Section 280G of the Code, which excess amounts may be subject to
excise taxes.
In general, Section 162(m) of the Code denies a publicly held corporation a
deduction for federal income tax purposes for compensation in excess of
$1,000,000 per year per person to its chief executive officer and four other
officers whose compensation is disclosed in its proxy statement, subject to
certain exceptions. Stock options will generally qualify under one of these
exceptions if they are granted under a plan that states the maximum number of
shares with respect to which options may be granted to any participant during a
specified period and the plan under which the options are granted is approved by
shareholders and is administered by a compensation committee comprised of
outside directors. The Restated Plan is intended to satisfy these requirements
with respect to stock options.
During 1999 the Committee granted an aggregate of 1,931,400 option awards
under the Restated Plan to certain key employees and 161,000 option awards to
non-employee directors. The foregoing includes 622,000 option awards to current
executive officers and 490,000 option awards for Mr. Mackin and 55,000 option
awards for Mr. Stone. All option awards vest at the rate of 33.3% each year and
granted at an exercise price of not less than the average of the high and low
price of the Ogden common stock on the day of grant. No determination has been
made with respect to future recipients Awards under the Restated Plan, and,
because further Awards will likely be based upon prospective factors, it is not
currently possible to specify the names or positions of the individuals to whom
Awards may be granted, or the number of shares or other amounts, within the
limitations of the Restated Plan, to be covered by Awards to be granted in the
future. The closing price of Ogden's common stock on April 28, 2000 was $9 13/16
per share.
The Board of Directors believes that the proposed 1999 Stock Incentive Plan,
as amended and restated effective as of January 1, 2000, will satisfy the
objectives of attracting and retaining persons of ability as employees and
members of the Board of Directors and motivating them to exert their best
efforts on behalf of Ogden and its subsidiary corporations.
26
<PAGE>
VOTE REQUIRED
The affirmative vote of a majority of the votes cast at this Annual Meeting,
in person or by proxy, and entitled to vote will be required for the approval of
the Ogden Corporation 1999 Stock Incentive Plan, as amended and restated
effective as of January 1, 2000.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR PROPOSAL
NUMBER (3).
SHAREHOLDER PROPOSAL--PROPOSAL NUMBER (4)
Mr. William Steiner, 4 Radcliff Drive, Great Neck, New York 11024, an Ogden
shareholder who has been the beneficial owner of shares of Ogden Common Stock
with a market value of at least $2,000 and has held such shares continuously for
at least one year, and has advised he intends to maintain such ownership through
the date of the 2000 annual shareholders meeting, has submitted the following
resolution and supporting statement for inclusion in this Proxy Statement and
will cause the resolution to be introduced at the annual shareholders meeting:
MAXIMIZE VALUE RESOLUTION
RESOLVED: that the shareholders of Ogden Corporation urge the Ogden
Corporation Board of Directors to arrange for the prompt sale of Ogden
Corporation to the highest bidder.
SUPPORTING STATEMENT
The purpose of the Maximize Value Resolution is to give all Ogden
Corporation shareholders the opportunity to send a message to the Ogden
Corporation Board that they support the prompt sale of Ogden Corporation to the
highest bidder. A strong and or majority vote by the shareholders would indicate
to the Board the displeasure felt by the shareholders of the financial
performance of the company over many years and the drastic action that should be
taken. Even if it is approved by the majority of the Ogden Corporation shares
represented and entitled to vote at the annual meeting, the Maximize Value
Resolution will not be binding on the Ogden Corporation Board. The proponent
however believes that if this resolution receives substantial support from the
shareholders, the board may choose to carry out the request set forth in the
resolution:
The prompt auction of Ogden Corporation should be accomplished by any
appropriate process the board chooses to adopt including a sale to the highest
bidder whether in cash, stock, or a combination of both. It is expected that the
board will uphold its fiduciary duties to the utmost during the process.
27
<PAGE>
The proponent further believes that if the resolution is adopted, the
management and the board will interpret such adoption as a message from the
company's stockholders that it is no longer acceptable for the board to continue
with its current management plan and strategies.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION
BOARD OF DIRECTORS' REASONS FOR OPPOSING THE PROPOSAL
The Board of Directors recommends a vote against this proposal. The Board
believes that it is important that the Board retain the discretion granted it
under Delaware law to determine the businesses in which the Company engages, and
the time of any dispositions it believes are appropriate. By retaining this
discretion, the Board believes it is best able to maximize shareholder value.
In the past year, the Board has utilized its discretion to make changes to
Ogden's businesses that it views as appropriate to increase shareholder value.
On September 17, 1999, Ogden announced that following an evaluation of Ogden's
businesses and its previously announced intention to spin-off the Aviation and
Entertainment businesses, the Board had determined to restructure the business
of Ogden by focussing exclusively on the Energy business and disposing of other
businesses by sale. Goldman Sachs & Company was retained as Ogden's advisor in
connection with the sales of the Aviation and Entertainment businesses.
To date, Ogden has entered into definitive agreements for the sale of its
themed attractions and water park business and a substantial portion of its food
and beverage concession and venue management business. It is currently seeking
purchasers for its Aviation business and has received preliminary bids. In
addition, Ogden has entered into definitive agreements for the sale of certain
of its airport privatizations and other Aviation and Entertainment related
businesses. Ogden is also proceeding to close its New York offices and transfer
its headquarters to the Ogden Energy Group, Inc. offices in Fairfield, New
Jersey.
The Board believes that focusing on the Energy business will permit Ogden to
direct all of its efforts into a growth industry in which it has proven
capabilities. The Board also believes that this will benefit shareholders by
permitting Ogden to accelerate its future growth and attain more predictable
earnings. Accordingly, the Board believes that its strategy of disposing at sale
of Ogden's non-Energy businesses and focusing on the Energy business in the
future is in the best interests of shareholders.
28
<PAGE>
The Board is aware of its fiduciary duties and will evaluate any proposal it
receives in the context of its evaluation of the best interests of Ogden and its
shareholders. However, the Board believes that this proposal, if approved, would
change Ogden's strategy and restrict the Board's discretion to determine Ogden's
business in a manner which is inimical to the best interests of shareholders.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the votes cast at this
Annual Meeting, in person or by Proxy, and entitled to vote will be required for
approval of Proposal Number (4).
RECOMMENDATION
THE BOARD RECOMMENDS A VOTE AGAINST PROPOSAL NUMBER (4)
RATIFICATION OF AUDITORS--PROPOSAL NUMBER (5)
PROPOSED ACTION
Shareholders are requested to ratify the continued appointment of
Deloitte & Touche LLP as auditors of Ogden and its subsidiaries for the year
2000. A representative of Deloitte & Touche LLP is expected to be present at
this Annual Meeting with the opportunity to make a statement if he or she
desires to do so and to respond to appropriate questions.
DESCRIPTION OF PROPOSAL
Deloitte & Touche LLP has been Ogden's auditors since 1951. Audit and other
services rendered by Deloitte & Touche LLP for the fiscal year ended
December 31, 1999, in addition to the audit of the consolidated financial
statements, included: review of financial and related information that is to be
included in filings with the Securities and Exchange Commission; consultation
during the year on matters related to accounting and financial reporting; audits
of financial statements of certain subsidiary companies; audits of employee
benefit plans contained in filings required pursuant to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"); consulting services; and
meeting with Ogden's Audit Committee on matters related to the audit. Although
Ogden is not required to submit the selection of auditors to the shareholders
for ratification, it has elected to do so. In the event such selection is not
ratified, Ogden would consider the selection of other auditors for fiscal years
after 2000. However, it would not be possible to replace Deloitte & Touche LLP
as auditors for the 2000 fiscal year without significant disruption of Ogden's
business.
29
<PAGE>
VOTE REQUIRED
The affirmative vote of the holders of a majority of the votes present at
this Annual Meeting in person or by proxy, and entitled to vote will be required
to approve the continued appointment of Deloitte & Touche LLP as auditors of
Ogden and its subsidiaries for the year 2000.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR PROPOSAL NUMBER
(5)
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of Ogden's Compensation Committee are Judith D. Moyers,
Chairman; Norman G. Einspruch; and Jeffrey F. Friedman. All of the foregoing
members are "non-employee directors" (within the meaning of revised Rule 16b-3
promulgated under Section 16(b) of the Securities Exchange Act of 1934, as
amended) and "outside directors" (within the meaning of Section 162(m) of the
Code) of Ogden who are not employees or members of management of Ogden or any of
its subsidiaries.
The Compensation Committee Report on Executive Compensation and the graph
which follows shall not be deemed to be incorporated by reference into any
filing made by Ogden under the Securities Act of 1933 or the Securities Exchange
Act of 1934, notwithstanding any general statement contained in any such filing
incorporating this proxy statement by reference, except to the extent Ogden
incorporates such report and graph by specific reference.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
THE EXECUTIVE COMPENSATION PROGRAM
PHILOSOPHY
The Company's Compensation Committee (the "Committee") of the Board of
Directors is responsible for developing the Company's executive compensation
philosophy. In addition, the Committee administers the compensation program with
respect to the Company's Chief Executive Officer ("CEO") and other senior
executive officers.
The primary goal of the Company's compensation philosophy is to establish
incentives which encourage and reward the creation of shareholder value. This
"pay-for-performance" principle permeates all elements of the Company's
compensation program, which is designed to align executives'
30
<PAGE>
financial interests with those of our shareholders. The Company seeks to reward
exceptional performers--those individuals whose job performance clearly exceeds
expectations and is consistent with the Company's financial goals and corporate
values--with a total compensation package targeted at the 75(th) percentile of
total compensation offered by our competitors.
As part of our competitive review process and to facilitate the Committee's
effort to shift the Company's direct compensation mix towards greater emphasis
on long-term compensation, in 1999, the Committee retained the services of
outside compensation consultants. These consultants have reviewed our annual and
long-term programs and will assist the Committee in developing and implementing
an ongoing compensation program consistent with the needs of the Company and its
shareholders. The primary elements of the Company's current compensation
arrangements are discussed below.
BASE SALARY
The Company targets base salary levels to attract, motivate and retain
talented executives who demonstrate the personal and professional qualities
required to succeed in the Company's entrepreneurial culture and who meet or
exceed our goals and standards for exceptional performance. As the Company
implements a shift in direct compensation mix towards greater utilization of
long-term compensation, it is expected that while base salary will remain
competitive, it will comprise a smaller proportion of the total compensation
received by executive officers.
ANNUAL INCENTIVE
The Company's annual incentive bonus payments are designed to be highly
variable based on the achievement of relevant quantitative and qualitative
criteria established by the Committee, which may vary from year to year.
Historically, annual incentive awards have been based upon any or all of the
following elements: earnings-per-share, business unit operating income and
attainment of team and individual goals. The Committee believes that annual
incentive bonuses reinforce the Company's pay-for- performance philosophy and it
intends to continue rewarding individuals whose performance contributes to
achieving the Company's strategic and financial objectives. Payment of annual
incentive awards attributable to1999 performance is payable 75% in cash and 25%
in restricted stock.
LONG-TERM INCENTIVES
The Committee believes that creation of shareholder value is best
facilitated through clear and uncomplicated long-term incentives. Accordingly,
the Company grants stock options to encourage equity ownership and to align
executives' and shareholders' interests. Historically, stock options have been
granted periodically to executives to reflect the Company's recognition of
expanded individual
31
<PAGE>
roles and job responsibilities or to readjust the total direct compensation mix
received by an executive. As part of its effort to better align executives' and
shareholders' incentives, the Company will grant options annually. These grants
will vest over a three-year period which is typical of the vesting schedule used
by our competitors. Option awards will be concentrated among those executives
who the Company believes have the greatest potential to substantially increase
shareholder value. Annual grant size will reflect a variety of factors,
including corporate performance during the most recent operating period, overall
compensation levels for comparable positions in the competitive market,
consideration of a given individual's importance in implementing our long-term
strategic plan, an evaluation of individual performance and previous option
grants.
With the assistance of its outside compensation consultants, the Company
regularly compares its executives' compensation levels with other
similarly-sized companies in the markets in which the Company operates. To
attract and retain high caliber executives, the Company targets its executives'
total compensation opportunity at approximately the 75th percentile of these
markets. Actual compensation levels may be lower than the 75(th) percentile
depending upon individual performance, achievement of business unit goals, the
Company's results of operations, and actual shareholder returns realized.
CHIEF EXECUTIVE OFFICER (CEO) COMPENSATION
In assessing competitors' compensation levels and practices, the Committee
reviews data covering each of the industries within which the Company competes
as well as general industry data. The Committee set Mr. Ablon's base salary for
1999 at $1,000,000, unchanged from 1998. For 1999, Mr. Ablon's target annual
incentive opportunity was 100% of his base salary. Mr. Ablon resigned from his
position as Chief Executive Officer on September 16, 1999. Accordingly,
Mr. Ablon received no annual incentive payment for the 1999 operating period.
However, in December 1999, the Company agreed to make certain payments to
Mr. Ablon in settlement of employment-related claims brought by Mr. Ablon
against the Company. (For a discussion of these payments to be made to
Mr. Ablon by the Company, see the "Legal Proceedings" section of this Proxy
Statement.)
On September 16, 1999, Mr. Mackin, previously an Executive Vice President of
the Company and President and Chief Operating Officer of Ogden Energy
Group, Inc., was named as the Company's President and Chief Executive Officer.
Consistent with the Company's pay-for-performance compensation philosophy and
the desire to align Mr. Mackin's incentives with those of the Company's
shareholders, Mr. Mackin's base salary was set at $600,000 per annum, his target
annual incentive bonus was set at 100% of his base salary and he was made a
front-loaded grant of 450,000 stock options with the following exercise prices:
150,000 equal to the fair market value of the Company's stock on the grant date
("FMV"), 150,000 at 125% of FMV, and 150,000 at 150% of FMV.
32
<PAGE>
CEO BONUS PLAN--1999 PERFORMANCE--The CEO Bonus Plan adopted by the Committee
and approved by shareholders in 1994 sets forth a Target Bonus which can be
earned by Mr. Ablon based upon the Pre-Tax Return on Equity (ROE) Performance
Level achieved for each calendar year. The bonus actually earned can vary based
upon the degree to which performance goals are achieved. For 1999, Mr. Ablon's
target bonus was $1,000,000. However, due to Mr. Ablon's resignation, no bonus
was due him pursuant to this plan. For 1999, Mr. Mackin received a bonus equal
to his target of $600,000, which was determined based upon the Committee's
review of the Company's performance as well as Mr. Mackin's performance both as
President and Chief Operating Officer of Ogden Energy Group, Inc. and as the
Company's Chief Executive Officer during the latter part of 1999.
POLICY REGARDING DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Company's policy regarding deductibility of executive pay in excess of
$1 million is to preserve the tax deductibility of such amounts by having annual
incentive bonuses for executives and stock options qualified as
performance-based compensation under the IRS rules. The 1994 Bonus Plan, as
amended, and the Company's 1999 Stock Option Plan, both of which were adopted by
the Committee and the Board, and approved by shareholders, constitute the
largest elements of the Company's senior executives' compensation packages. The
Committee acknowledges that there may be certain non-cash "imputed income" items
and certain non-incentive designed plans such as the Ogden Restricted Stock
Plan, which may cause pay to exceed $1 million in any year. This policy does not
contemplate restricting the Committee from using discretionary business judgment
as it determines appropriate.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Judith Davidson Moyers, Chairman
Norman G. Einspruch
Jeffrey F. Friedman
33
<PAGE>
The graph below compares the cumulative total shareholder return on Ogden's
common shares for the last five fiscal years with the cumulative total
shareholder return on the S&P 500 Index and the S&P Midcap 400 Index over the
same period, assuming the investment of $100 in Ogden common shares and the
reinvestment of all dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
OGDEN CORP., S&P 500 AND S&P MIDCAP 400
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
OGDEN CORP. S&P 500 S&P MIDCAP 400
<S> <C> <C> <C>
1994 100 100 100
1995 120.67 137.58 130.69
1996 114.32 169.17 155.6
1997 177.11 225.600 205.4
1998 165.33 290.08 244.23
1999 82.87 351.12 279.73
</TABLE>
- ------------------------
NOTES:
Assumes that the value of the investment in the company's Common stock, and
each index, was $100 on December 30, 1994, and that all dividends were
reinvested.
34
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the aggregate cash and
non-cash compensation for each of the last three fiscal years awarded to, earned
by or paid to each CEO of Ogden and each of Ogden's four other most highly
compensated executive officers whose salary and bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (1) LONG TERM COMPENSATION
---------------------------------------------------- --------------------------
AWARDS
SECURITIES
UNDERLYING
OTHER ANNUAL OPTIONS/ ALL OTHER
COMPENSATION LIMITED SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (5) (2) (3) (4)
- --------------------------- -------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Scott G. Mackin,................. 1999 $ 542,275 $ 600,000 $ 0 490,000 $ 0
President and Chief Executive 1998 517,275 575,000 0 0 97,019
Officer, Ogden, and President and 1997 495,000 450,000 0 50,000 88,156
Chief Executive Officer, Ogden
Energy Group, Inc., a 100% owned
subsidiary of Ogden.(6)
R. Richard Ablon,................ 1999 $ 730,769(6) $ 0 $159,776 0 $ 6,400(6)
former Chairman of the Board, 1998 1,000,000 1,500,000 147,854 0 200,609
President and Chief Executive 1997 800,000 1,000,000 131,639 0 160,840
Officer, Ogden.(6)
Raymond E. Dombrowski, Jr.,...... 1999 $ 300,000 $ 300,000 $ 0 0 $ 2,667
Senior Vice President and Chief 1998 132,869 110,000 0 50,000 0
Financial Officer, Ogden.(7)
Bruce W. Stone,.................. 1999 $ 291,059 $ 230,000 $ 0 55,000 $ 0
Executive Vice President and 1998 281,216 225,000 0 0 49,562
Managing Director, Ogden Energy 1997 270,400 209,280 129,095 0 45,988
Group, Inc., a 100% owned
subsidiary of Ogden.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (1) LONG TERM COMPENSATION
---------------------------------------------------- --------------------------
AWARDS
SECURITIES
UNDERLYING
OTHER ANNUAL OPTIONS/ ALL OTHER
COMPENSATION LIMITED SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (5) (2) (3) (4)
- --------------------------- -------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David L. Hahn,................... 1999 $ 310,500 $ 50,000 $ 37,900 0 $ 6,400
Senior Vice President, Ogden, and 1998 300,000 250,000 0 100,000 49,763
Executive Vice President and 1997 230,000 200,000 0 30,000 35,224
Chief Operating Officer of Ogden
Aviation Services, Inc., a 100%
owned subsidiary of Ogden.
Lynde H. Coit,................... 1999 $ 290,000 $ 250,000 $ 11,500 0 $ 6,400
Senior Vice President and General 1998 270,000 210,000 0 0 46,720
Counsel, Ogden. 1997 260,000 190,000 50,715 0 37,565
</TABLE>
- ------------------------------
(1) Includes annual compensation awarded to, earned by or paid to the individual
during the last three fiscal years, or any portion thereof, that the named
individual served as an executive officer of Ogden.
(2) Amounts in this column represent: (i) interest earned on funds distributed
to Messrs. Hahn and Coit which were held in the Ogden Select Savings Plan, a
deferred compensation plan, which was terminated during 1999; and (ii) cost
of life insurance, car allowance, medical reimbursement, personal use of
aircraft and other personal benefits which in the aggregate exceeded the
lesser of either $50,000 or 10% of the executive's combined salary and
bonus. The only personal benefits exceeding 25% of the total personal
benefits reported in 1999 for the listed executive officers was a charge of
$125,893 for personal use of the Ogden aircraft by Mr. Ablon.
(3) See "Stock Option Tables--Option/Limited Stock Appreciation Rights Granted
in Last Fiscal Year" of this Proxy Statement.
(4) Includes, for the fiscal year ending December 31, 1999, matching
contributions in the amount of $6,400 credited to the account balances of
each of Messrs. Ablon, Hahn and Coit and to Mr. Dombrowski in the amount of
$2,667 under the Ogden 401(k) Plan.
(5) The bonuses of Messrs. Mackin and Stone will be paid 75% in cash and 25% in
Ogden restricted stock which will vest at the rate of 50% each year over a
period of two years from the date of grant.
(6) Mr. Ablon resigned as Ogden's Chairman, President and Chief Executive
Officer on September 16, 1999 (See the "Legal Proceedings" section of this
Proxy Statement"). Mr. Mackin was appointed President and Chief Executive
Officer and a director on September 16, 1999.
(7) Mr. Dombrowski was appointed Senior Vice President and Chief Financial
Officer of Ogden in September 1998.
36
<PAGE>
STOCK OPTION TABLES
The following table sets forth information with respect to the named
executive officers of Ogden concerning the grant of Ogden stock options and
limited stock appreciation rights during the fiscal year 1999:
OPTION/LIMITED STOCK APPRECIATION RIGHTS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL OPTIONS/
NUMBER OF SECURITIES LIMITED STOCK
UNDERLYING OPTION/ APPRECIATION RIGHTS
LIMITED STOCK GRANTED TO GRANT DATE
APPRECIATION RIGHTS EMPLOYEES EXERCISE PRICE EXPIRATION PRESENT
NAME GRANTED (1) IN FISCAL YEAR (2) PER SHARE (3) DATE VALUE(4)
- ---- -------------------- ------------------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Scott G. Mackin...................... 40,000 $26.7813 1/21/2009 $462,758
150,000 10.375 9/29/2009 672,300
150,000 12.9688 9/29/2009 627,972
150,000 15.5625 9/29/2009 590,426
Bruce W. Stone....................... 27,500 11.7813 12/22/2009 139,962
27,500 14.7266 12/22/2009 130,695
</TABLE>
- ------------------------------
(1) All options vest at the rate of 33.33% per year over a three year period and
expire 10 years from date of grant except the 40,000 shares granted to
Mr. Mackin which vest at the rate of 20% per year over a five year period.
Each option is accompanied by a limited stock appreciation right which
provides that the option becomes immediately exercisable upon a change in
control of Ogden, as defined in the Ogden 1990 and 1999 Stock Option Plans.
(2) The 490,000 shares granted to Mr. Mackin and the 55,000 shares granted to
Mr. Stone, represented 25.4% and 2.8%, respectively of the total options
granted to key employees during 1999.
(3) Mr. Mackin's 40,000 share option was granted at $26.7813 per share, the
average of the high and low price of Ogden common stock on the date of grant
(the "Fair Market Value"), the 150,000 share option at $10.375 per share was
granted at Fair Market Value, the 150,000 share option at $12.9688 per share
was granted at 125% of Fair Market Value and the 150,000 share option at
$15.5625 per share was granted at 150% of Fair Market Value. The 27,500
share option of Mr. Stone at $11.7813 per share and the 27,500 share option
at $14.7266 per share were granted at Fair Market Value and 125% of Fair
Market Value, respectively.
(4) The estimated grant date present value was determined by using the
Black-Scholes model with the following assumptions: (i) an exercise price of
$26.7813, $10.375 and $11.7813 per share, equal to 100% of the Fair Market
Value of Ogden common stock on the date of grant, for the 40,000 shares and
150,000 shares granted to Mr. Mackin and the 27,500 shares granted to
Mr. Stone, respectively; an exercise price of $12.9688 and $14.7266 per
share, equal to 125% of the Fair Market Value of Ogden common stock on the
date of grant, for the 150,000 shares granted to Mr. Mackin the 27,500
shares granted to Mr. Stone, respectively; and, an exercise price of $15.562
per share, equal to 150% of the Fair Market Value of Ogden common stock on
the date of grant, for the 150,000 shares granted to Mr. Mackin; (ii) stock
price volatility of 0.5414;
37
<PAGE>
(iii) dividend yield of 4.0%; (iv) a 6.46% risk-free rate of return; and
(v) an option term of 10 years. No adjustments have been made for
forfeitures or nontransferability. The ultimate value of the options will
depend on the future market price of Ogden common stock, which cannot be
forecast with reasonable accuracy. The actual value, if any, an optionee
will realize upon exercise of an option will depend on the excess of the
market value of Ogden's common stock over the exercise price on the date the
option is exercised.
The following table sets forth information with respect to the named
executive officers of Ogden concerning the exercise of stock options and limited
stock appreciation rights during 1999 and the value of unexercised stock options
held as of December 31, 1999.
AGGREGATED OPTION/LIMITED STOCK APPRECIATION RIGHTS EXERCISED IN 1999 AND FISCAL
YEAR-END OPTION/ LIMITED STOCK APPRECIATION RIGHTS VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS/ THE-MONEY OPTIONS/LSAR
SHARES LSAR AT FY-END AT FY-END (1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Scott G. Mackin........................ 29,400 $ 285,424 345,000 520,000 $0 $196,875
R. Richard Ablon....................... 105,000 1,019,372 975,000 0 0 0
Raymond E. Dombrowski, Jr.............. 0 0 10,000 40,000 0 0
Bruce W. Stone......................... 25,200 244,649 125,000 55,000 0 0
David Hahn............................. 0 0 72,000 98,000 0 0
Lynde H. Coit.......................... 6,300 61,162 150,000 0 0 0
</TABLE>
- ------------------------------
(1) Computed based upon the difference between the exercise price of each option
grant and the average of the high and low sale prices of Ogden common stock
on the New York Stock Exchange Composite Tape on December 31, 1999 ($11.6875
per share).
OGDEN EXECUTIVE PENSION PLAN
The Ogden Executive Pension Plan is a non-tax qualified defined benefit plan
under which Ogden made annual contributions to the plans trust, as determined by
Ogden's actuary, which were deposited with the trustee pursuant to a grantor
trust agreement between Ogden and the trustee. Ogden did not have access to or
use of the trust assets; however, the assets were subject to the claims of
Ogden's general creditors in the event of its insolvency or bankruptcy.
All of the executive officers listed in the Summary Compensation Table
(except Messrs. Mackin and Stone), participated in the Ogden Executive Pension
Plan and are entitled to a retirement benefit,
38
<PAGE>
subject to certain offsets as described below, equal to 1.5% of the executive's
final average compensation for the five consecutive highest paid years out of
the executive's last ten years preceding retirement multiplied by the
executive's years of service.
The Ogden Executive Pension Plan was terminated in September 1999 and all
assets distributed, pursuant to which Messrs. Ablon, Dombrowski, Hahn and Coit
received $1,607,297, $13,549, $186,634 and $151,513, respectively.
OGDEN ENERGY GROUP PENSION PLAN
Scott G. Mackin and Bruce W. Stone participate in the Ogden Energy Group
Pension Plan, a tax-qualified defined benefit plan subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended. Under the
Energy Group Pension Plan each participant who meets the plan's vesting
requirements will be provided with an annual benefit at or after age 65 equal to
1.5% of the participant's average compensation during the five consecutive
calendar years of employment out of the ten consecutive calendar years
immediately preceding his retirement date or termination date during which such
average is the highest, multiplied by his total years of service. Compensation
includes salary and other compensation received during the year and deferred
income earned, but does not include imputed income, severance pay, special
discretionary cash payments or other non-cash compensation. The relationship of
the covered compensation to the annual compensation shown in the Summary
Compensation Table would be the Salary and Bonus columns and any car allowance.
A plan participant who is at least age 55 and who retires after completion of at
least five years of employment receives a benefit equal to the amount he would
have received if he had retired at age 65, reduced by an amount equal to 0.5% of
the benefit multiplied by the number of months between the date the participant
commences receiving benefits and the date he would have commenced to receive
benefits if he had not retired prior to age 65.
Messrs. Mackin and Stone also participate in the Ogden Energy Group
Supplemental Deferred Benefit Plan, a deferred compensation plan which is not
qualified for federal income tax purposes. The Energy Group Supplemental Benefit
Plan provides that, in the event that the annual retirement benefit of any
participant in the Energy Group Pension Plan, determined pursuant to such plan's
benefit formula, cannot be paid because of certain limits on annual benefits and
contributions imposed by the Code, the amount by which such benefit must be
reduced will be paid to the participant from the general assets of the company.
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The following table shows the estimated annual retirement benefits payable
in the form of a life annuity at age 65 under the Energy Group Pension Plan and
the Energy Group Supplemental Benefit Plan. Mr. Mackin has 13.5 years, and
Mr. Stone has 23.8 years of credited service under the Energy Group Pension Plan
as of December 31, 1999 and had annual average earnings for the last five years
of $924,636 and $470,039, respectively.
<TABLE>
<CAPTION>
AVERAGE ANNUAL
EARNINGS IN 5
CONSECUTIVE
HIGHEST PAID
YEARS OUT OF
LAST 10 YEARS ESTIMATED ANNUAL RETIREMENT BENEFITS BASED ON YEARS OF SERVICE
PRECEDING ---------------------------------------------------------------
RETIREMENT 5 10 15 20 25 30
- --------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$360,000 $27,000 $54,000 $81,000 $108,000 $135,000 $162,000
375,000 28,125 56,250 84,375 112,500 140,625 168,750
400,000 30,000 60,000 90,000 120,000 150,000 180,000
425,000 31,875 63,750 95,625 127,500 159,375 191,250
450,000 33,750 67,500 101,250 135,000 168,750 202,500
500,000 37,500 75,000 112,500 150,000 187,500 225,000
550,000 41,250 82,500 123,750 165,000 205,250 247,500
600,000 45,000 90,000 135,000 180,000 225,000 270,000
625,000 46,875 93,750 140,625 187,500 234,375 281,250
900,000 67,500 135,000 202,500 270,000 337,500 405,000
950,000 71,250 142,500 213,750 285,000 356,250 427,500
</TABLE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
EMPLOYMENT CONTRACTS
(A) Mr. Mackin is employed by Ogden as its Executive Vice President and
President and Chief Operating Officer of Ogden Energy Group, Inc., a
wholly-owned subsidiary of Ogden, pursuant to an employment agreement dated
as of October 1, 1998 for a five-year term commencing October 1, 1998 and
continuing through September 30, 2003 and year to year thereafter, subject
to the right of either party to terminate the agreement on any September 30
upon at least sixty (60) days prior written notice. The agreement provides
for a minimum annual salary in the amount of $517,275, and an annual
incentive bonus in such amount as may be determined by the Board of
Directors. The agreement also provides that if Mr. Mackin terminates his
employment for good reason, including a change-in-control (as defined in the
agreement), or if his employment is terminated by
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Ogden for any reason other than for cause (as defined in the agreement) then
he is entitled to a lump sum cash payment equal to the product of five times
his base salary at the highest annual rate in effect at any time prior to
the termination date, and the highest amount of annual bonus payable at any
time prior to the termination date and, if applicable, an additional payment
equal to the amount of any excise tax imposed on any payments under the
agreement (including the additional payment) under the excess parachute
payments of the Code.
(B) Mr. Dombrowski is employed by Ogden as its Senior Vice President and Chief
Financial Officer pursuant to an employment agreement dated as of
September 21, 1998 which continues in effect until terminated by
Mr. Dombrowski, by Ogden or by Mr. Dombrowski's death or total disability.
His annual salary under the agreement is fixed at a minimum of $300,000 with
an annual incentive bonus in such amount as determined by the Board of
Directors. Ogden also provides Mr. Dombrowski with access to a
company-provided apartment located near Ogden's offices in New York City.
The agreement also provides that if Mr. Dombrowski's employment is
terminated by Ogden for any reason other than for Cause (as defined in the
agreement) or if Mr. Dombrowski terminates employment for good reason,
including a change-in-control (as defined in the agreement), then
Mr. Dombrowski is entitled to a lump sum cash payment equal to the product
of five times his base salary at the highest annual rate in effect at any
time prior to the termination date and the highest amount of annual bonus
payable at any time prior to the termination date, and if applicable, an
additional payment equal to the amount of any excise tax imposed on any
payments under the agreement (including the additional payment) under the
excess parachute payments of the Code.
(C) Mr. Stone is employed by Ogden Energy Group, Inc., an Ogden subsidiary as
Executive Vice President for Waste-to-Energy operations and Managing
Director pursuant to an employment agreement which became effective as of
May 1, 1999 and continues through May 1, 2004, and from year to year
thereafter. The annual salary under the agreement is fixed at a minimum of
$291,059 with an annual incentive bonus in such amount as determined by the
Board of Directors. The agreement also provides that if Mr. Stone's
employment is terminated by Ogden Energy for any reason other than for cause
(as defined in the agreement) or if Mr. Stone terminates employment for good
reason, including a change-in-control (as defined in the agreement), then
Mr. Stone is entitled to a lump sum cash payment equal to the product of
five time his annualized based salary at the highest annual rate in effect
at any time prior to the termination date and the highest amount of annual
bonus payable at any time prior to the termination date.
(D) Mr. Hahn is employed by Ogden as its Senior Vice President, Aviation and as
Executive Vice President and Chief Operating Officer of Ogden Aviation
Services, Inc., a wholly-owned subsidiary
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of Ogden, pursuant to an amended employment agreement which became effective
as of October 1, 1998 and continues through September 30, 1999, and from
year to year thereafter, subject to the right of either party to terminate
such employment on September 30, 1999 or any subsequent September 30, upon
at least sixty days prior written notice. The annual salary under the
agreement is fixed at a minimum of $300,000 with an annual incentive bonus
in such amount as determined by the Board of Directors. The agreement also
provides that if Mr. Hahn's employment is terminated by Ogden for any reason
other than for cause (as defined in the agreement) or if Mr. Hahn terminates
employment for good reason, including a change-in-control (as defined in the
agreement), then Mr. Hahn is entitled to a lump sum cash payment equal to
the product of five times his base salary at the highest annual rate in
effect at any time prior to the termination date and the highest amount of
annual bonus payable at any time prior to the termination date. At
Mr. Hahn's option the foregoing amount may be paid to him over a period of
five years.
(E) Mr. Coit is employed by Ogden as its Senior Vice President and General
Counsel pursuant to an employment agreement dated as of March 1, 1999 which
continues in effect until terminated by Mr. Coit, by Ogden or by Mr. Coit's
death or total disability. The annual salary under the agreement is fixed at
a minimum of $290,000 with an annual incentive bonus in such amount as
determined by the Board of Directors. The agreement also provides that if
Mr. Coit's employment is terminated by Ogden for any reason other than for
cause (as defined in the agreement) or if Mr. Coit terminates employment for
good reason, including a change-in-control (as defined in the Agreement),
then Mr. Coit is entitled to a lump-sum cash payment equal to the product of
five times his base salary at the highest annual rate in effect at any time
prior to the termination date and the highest amount of annual bonus payable
at any time prior to the termination date.
(F) See "Legal Proceedings" of this Proxy Statement for a description of the
suit brought by Mr. Ablon against Ogden alleging that Ogden had breached his
Employment Agreement and a description of the terms and conditions of the
settlement of the suit between Ogden and Mr. Ablon.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A loan was made by Ogden in 1989 to Lynde H. Coit, Senior Vice President and
General Counsel of Ogden, to assist Mr. Coit in the purchase of a home in
connection with his relocation. The loan is evidenced by a demand note, bearing
interest at the rate of 8% per annum and is secured by a second mortgage on the
premises. The maximum amount outstanding under the loan during 1999 was
$145,000. As of December 31, 1999, there was an outstanding balance of $145,000.
A loan was made by Ogden on December 16, 1998 to David L. Hahn, Senior Vice
President, Aviation to assist Mr. Hahn in making improvements and additions to
his existing home. The loan is
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evidenced by a promissory note bearing interest at the rate of 7% per annum. The
maximum amount outstanding during 1999 under the promissory note was $300,000.
As of March 1, 2000, there was an outstanding balance of $300,000, plus accrued
interest, under the promissory note.
The maximum amount outstanding during 1999 pursuant to a loan made by Ogden
Energy in 1990 to Bruce W. Stone, an Executive Officer of Ogden, for the purpose
of assisting him in the purchase of his home was $96,058. The loan is evidenced
by a demand note bearing interest at the rate 8% per annum. As of February 1,
2000, there was an outstanding balance of $76,207.
On August 6, 1999 Ogden made loans to Messrs. Mackin, Stone and Coit for the
purpose of paying the exercise price and withholding taxes in connection with
their exercise of Ogden stock options which were expiring on August 9, 1999. All
loans are evidenced by demand notes with interest accruing thereon at the
short-term applicable federal rate compounded annually. As of March 1, 2000 the
outstanding balances for Messrs. Mackin, Stone and Coit was $505,838.04,
$436,021.94 and $106,864.80, respectively.
Robert E. Smith, an Ogden director, is counsel to the law firm of
Rosenman & Colin LLP which during 1999 rendered legal services to Ogden
principally in the area of litigation management.
Mr. Tato, a nominee for director, is a member of the New York law firm of
LeBoeuf, Lamb, Greene & MacRae, L.L.P. which rendered services during 1999 to
Ogden Energy Group, Inc., an Ogden subsidiary.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Ogden's
directors, officers and persons who beneficially own more than 10% of any class
of Ogden's equity securities to file certain reports concerning their beneficial
ownership and changes in their beneficial ownership of Ogden's equity
securities. Ogden believes that during fiscal 1999 all persons who are required
to file reports concerning their beneficial ownership as described above
complied with their Section 16(a) filing requirements except the following
officers who were late in filing their Form 5 reports concerning the grant of
stock options on December 22, 1999: B. Kent Burton, Vice President, William J.
Metzger, Vice President and Chief Accounting Officer, Gary D. Perusse, Vice
President and Bruce W. Stone, Executive Vice President, Ogden Energy
Group, Inc.
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LEGAL PROCEEDINGS
(a) Shareholder Litigation
On September 22, October 1, and October 12, 1999 complaints (the
"Complaints") denominated as class actions (the "Actions") were filed in the
United States District Court for the Southern District of New York against the
Company, the Company's former Chairman and Chief Executive, R. Richard Ablon,
and Robert M. DiGia (incorrectly identified in the Complaints as the Chief
Financial Officer and Senior Vice President of the Company). The Complaints,
which are largely identical to one another, are brought by alleged shareholders
of the Company and purport to assert claims under the federal securities laws.
In general, the Complaints allege that the Company and the individual defendants
disseminated false and misleading information during the period of March 11,
1999 through September 17, 1999 (the "Class Period") with respect to the
Company's intended reorganization plans and its financial condition. The
Complaints seek the certification of a class of all purchasers of Ogden
Corporation common stock during the Class Period. By order dated December 22,
1999, the Actions have been consolidated for all purposes and lead plaintiffs
and lead counsel have been appointed. On February 28, 2000 plaintiffs filed a
consolidated amended complaint (the "Amended Complaint"). The Amended Complaint
repeats the allegations made in the original complaints and adds new allegations
with respect to the timing of the reporting of certain losses experienced by
Ogden. In the Amended Complaint Plaintiffs have added Raymond E. Dombrowski,
Jr., Ogden's Senior Vice President and Chief Financial Officer as a defendant.
There has been no discovery in the Actions. While the Actions are at a very
early stage, the Company believes it has meritorious defenses to the allegations
made in the Complaints and intends to defend the Actions vigorously. On
April 28, 2000, all defendants filed motion to dismiss the Actions, with
prejudice.
(b) Other Litigation
On November 5, 1999, the Company received a summons and complaint filed in
the Supreme Court of the State of New York, brought by R. Richard Ablon, the
Company's former Chairman, President and Chief Executive Officer. In general,
this complaint alleges that the Company has breached the employment agreement
between the Company and Mr. Ablon (the terms of which are described under the
Employment Contracts section of this Proxy Statement), and seeks damages in the
amount of $12.5 million, plus continuation of pension and certain other benefits
valued in such complaint at approximately $10 million.
In December 1999 a settlement was reached between Ogden and Mr. Ablon
whereby Ogden agreed (i) to pay Mr. Ablon an aggregate of $15.0 million between
January 3, 2000 and July 3, 2000; (ii) not to assert any offsets to the
foregoing payments; (iii) to pay a portion of Mr. Ablon's legal fees in
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the amount of $50,000; (iv) that the Demand Notes of Mr. Ablon in the amount of
$1,816,757 would be forgiven and no interest would be charged or forgiven;
(v) to maintain Mr. Ablon's medical insurance program as currently provided
until December 31, 2004 at which time his participation would continue at
Mr. Ablon's own cost; (vi) to provide him with $2.0 million of term life
insurance until he reaches age 65; and (vii) that Mr. Ablon's obligations under
his Employment Agreement would be deemed fulfilled. Mr. Ablon agreed to
immediately withdraw his lawsuit by stipulation and without prejudice pending
the payment of the $15.0 million on or before July 3, 2000, whereupon the
withdrawal will automatically become a withdrawal with prejudice.
OTHER MATTERS
Ogden has no knowledge of any matters to be presented to the meeting other
than those set forth above. The persons named in the accompanying form of proxy
will use their own discretion in voting with respect to any such matters.
Any proposals of shareholders to be presented at Ogden's Annual Meeting of
Shareholders in 2001 must be received at Ogden's principal executive offices,
Two Pennsylvania Plaza, New York, New York 10121, Attn: Secretary, not later
than January 16, 2001.
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SCHEDULE A
OGDEN CORPORATION
EXECUTIVE PERFORMANCE INCENTIVE PLAN
1. PURPOSE
The purpose of this Plan is to attract, retain and motivate key employees by
providing cash performance awards to designated key employees of the Company,
its Parent and its Subsidiaries. This Plan is effective for the fiscal year of
the Company commencing on January 1, 2000 and for fiscal years thereafter,
subject to approval by the stockholders of the Company in accordance with the
laws of the State of Delaware.
2. DEFINITIONS
Unless the context otherwise requires, the words which follow shall have the
following meaning:
(a) "Award"--shall mean the total annual Performance Award as determined
under the Plan.
(b) "Board"--shall mean the Board of Directors of the Company.
(c) "Change in Control of the Company"--shall have the meaning set forth
in the Exhibit A hereto.
(d) "Code"--shall mean the Internal Revenue Code of 1986, as amended and
any successor thereto.
(e) "Code Section 162(m)"--shall mean the exception for performance-based
compensation under Section 162(m) of the Code or any successor
section and the Treasury regulations promulgated thereunder.
(f) "Company"--shall mean Ogden Corporation and any successor by merger,
consolidation or otherwise.
(g) "Committee"--shall mean the Compensation Committee of the Board or
such other Committee of the Board that is appointed by the Board all
of whose members shall satisfy the requirements to be "outside
directors," as defined under Code Section 162(m).
(h) "Individual Target Award"--shall mean the targeted performance award
for a Plan Year specified by the Committee as provided in Section 5
hereof.
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(i) "Parent"--shall mean, other than the Company, (i) any corporation in
an unbroken chain of corporations ending with the Company which owns
stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain or (ii) any corporation or trade or
business (including, without limitation, a partnership or limited
liability company) which controls fifty percent (50%) or more
(whether by ownership of stock, assets or an equivalent ownership
interest) of the Company.
(j) "Participant"--shall mean an employee of the Company, the Parent or a
Subsidiary selected, in accordance with Section 4 hereof, to be
eligible to receive an Award in accordance with this Plan.
(k) "Performance Award"--shall mean the amount paid or payable under
Section 6 hereof.
(l) "Plan"--shall mean this Ogden Corporation Executive Performance
Incentive Plan.
(m) "Plan Year"--shall mean the fiscal year of the Company, or if
applicable and determined by the Committee, in its sole discretion,
the fiscal year of the applicable subsidiary.
(n) "Subsidiary"--shall mean, other than the Company, (i) any corporation
in an unbroken chain of corporations beginning with the Company
which owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain; (ii) any corporation or trade or
business (including, without limitation, a partnership or limited
liability company) which is controlled fifty percent (50%) or more
(whether by ownership of stock, assets or an equivalent ownership
interest or voting interest) by the Company or one of its
Subsidiaries; or (iii) any other entity in which the Company or any
of its Subsidiaries has a material equity interest and which is
designated as a "Subsidiary" by resolution of the Committee.
3. ADMINISTRATION AND INTERPRETATION OF THE PLAN
The Plan shall be administered by the Committee. The Committee shall have
the exclusive authority and responsibility to: (i) interpret the Plan;
(ii) approve the designation of eligible Participants; (iii) set the performance
criteria for Awards within the Plan guidelines; (iv) certify attainment of
performance goals and other material terms; (v) reduce Awards as provided
herein; (vi) authorize the payment of all benefits and expenses of the Plan as
they become payable under the Plan; (vii) adopt, amend and rescind rules and
regulations relating to the Plan; and (viii) make all other determinations and
take all other actions necessary or desirable for the Plan's administration
including, without limitation, correcting any defect, supplying any omission or
reconciling any inconsistency in this Plan in
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the manner and to the extent it shall deem necessary to carry this Plan into
effect, but only to the extent any such action would be permitted under Code
Section 162(m).
Decisions of the Committee shall be made by a majority of its members. All
decisions of the Committee on any question concerning the selection of
Participants and the interpretation and administration of the Plan shall be
final, conclusive and binding upon all parties. The Committee may rely on
information, and consider recommendations, provided by the Board or the
executive officers of the Company. The Plan is intended to comply with Code
Section 162(m), and all provisions contained herein shall be limited, construed
and interpreted in a manner to so comply.
4. ELIGIBILITY AND PARTICIPATION
(a) For each Plan Year, the Committee shall select the employees of the
Company, its Parent and Subsidiaries who are to participate in the Plan
from among the executive key employees of the Company, its Parent and
Subsidiaries.
(b) No person shall be entitled to any Award under this Plan for any Plan
Year unless he or she is so designated as a Participant for that Plan
Year. The Committee may add to or delete individuals from the list of
designated Participants at any time and from time to time, in its sole
discretion, subject to any limitations required to comply with Code
Section 162(m).
5. INDIVIDUAL TARGET AWARD
For each Participant for each Plan Year, the Committee may specify a
targeted performance award. The Individual Target Award may be expressed, at the
Committee's discretion, as a fixed dollar amount, a percentage of base pay or
total pay (excluding payments made under this Plan), or an amount determined
pursuant to an objective formula or standard. Establishment of an Individual
Target Award for an employee for a Plan Year shall not imply or require that the
same level Individual Target Award (if any such award is established by the
Committee for the relevant employee) be set for any subsequent Plan Year. At the
time the Performance Goals are established (as provided in subsection 6.2
below), the Committee shall prescribe a formula to determine the percentages
(which may be greater than one-hundred percent (100%)) of the Individual Target
Award which may be payable based upon the degree of attainment of the
Performance Goals during the Plan Year. Notwithstanding anything else herein,
the Committee may, in its sole discretion, elect to pay a Participant an amount
that is less than the Participant's Individual Target Award (or attained
percentage thereof) regardless of the degree of attainment of the Performance
Goals; provided that no such discretion to reduce an Award earned based on
achievement of the applicable Performance Goals shall be permitted for the Plan
Year in which a Change in Control of the Company occurs, or during such Plan
Year with regard to the prior Plan Year if the Awards for the prior Plan Year
have not been made by the time of the Change in
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Control of the Company, with regard to individuals who were Participants at the
time of the Change in Control of the Company.
6. PERFORMANCE AWARD PROGRAM
6.1 PERFORMANCE AWARDS. Subject to Section 7 herein, each Participant is
eligible to receive up to the achieved percentage of their Individual Target
Award for such Plan Year (or, subject to the last sentence of Section 5, such
lesser amount as determined by the Committee in its sole discretion) based upon
the attainment of the objective Performance Goals established pursuant to
subsection 6.2 and the formula established pursuant to Section 5. Except as
specifically provided in Section 7, no Performance Award shall be made to a
Participant for a Plan Year unless the minimum Performance Goals for such Plan
Year are attained.
6.2 OBJECTIVE PERFORMANCE GOALS, FORMULAE OR STANDARDS (THE "PERFORMANCE
GOALS"). The Committee shall establish the objective performance goals, formulae
or standards and the Individual Target Award (if any) applicable to each
Participant or class of Participants for a Plan Year in writing prior to the
beginning of such Plan Year or at such later date as permitted under Code
Section 162(m) and while the outcome of the Performance Goals are substantially
uncertain. Such Performance Goals may incorporate, if and only to the extent
permitted under Code Section 162(m), provisions for disregarding (or adjusting
for) changes in accounting methods, corporate transactions (including, without
limitation, dispositions and acquisitions) and other similar type events or
circumstances. To the extent any such provision would create impermissible
discretion under Code Section 162(m) or otherwise violate Code Section 162(m),
such provision shall be of no force or effect. These Performance Goals shall be
based on one or more of the following criteria with regard to the Company (or a
subsidiary, division, or other operational unit of the Company): (i) the
attainment of certain target levels of, (including, without limitation, a
break-even) or a specified percentage increase in, profits, market share,
revenues, income before income taxes and extraordinary items, net income,
earnings before income tax, earnings before interest, taxes, depreciation and
amortization or a combination of any or all of the foregoing; (ii) the
attainment of certain target levels of, or a percentage increase in, after-tax
or pre-tax profits including, without limitation, that are attributable to
continuing and/or other operations; (iii) the attainment of certain target
levels of, or a specified increase in, operational cash flow or cash generation
targets; (iv) the achievement of a certain level of, reduction of, or other
specified objectives with regard to limiting the level of increase in, all or a
portion of, the Company's bank debt or other long-term or short-term public or
private debt or other similar financial obligations of the Company, which may be
calculated net of such cash balances and/or other offsets and adjustments as may
be established by the Committee; (v) the attainment of a specified percentage
increase in earnings per share or earnings per share from continuing operations;
(vi) the attainment of certain target levels of, or a specified increase
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in return on capital employed or return on invested capital; (vii) the
attainment of certain target levels of, or a percentage increase in, after-tax
or pre-tax return on stockholders' equity or profitability targets as measured
by return ratio and shareholder return; (viii) the attainment of certain target
levels of, or a specified increase in, economic value added targets based on a
cash flow return on investment formula; (ix) the attainment of certain target
levels in the fair market value of the shares of the Company's common stock; and
(x) the growth in the value of an investment in the Company's common stock
assuming the reinvestment of dividends. For purposes of item (i) above,
"extraordinary items" shall mean all items of gain, loss or expense for the Plan
Year determined to be extraordinary or unusual in nature or infrequent in
occurrence or related to a corporate transaction (including, without limitation,
a disposition or acquisition) or related to a change in accounting principle,
all as determined in accordance with standards established by opinion No. 30 of
the Accounting Principles Board.
In addition, such Performance Goals may be based upon the attainment of
specified levels of Company (or subsidiary, division or other operational unit
of the Company) performance under one or more of the measures described above
relative to the performance of other corporations. To the extent permitted under
Code Section 162(m), but only to the extent permitted under Code Section 162(m)
(including, without limitation, compliance with any requirements for stockholder
approval), the Committee may: (i) designate additional business criteria on
which the Performance Goals may be based or (ii) adjust, modify or amend the
aforementioned business criteria.
6.3 MAXIMUM NONDISCRETIONARY AWARD. The maximum Performance Award payable to
a Participant for any Plan Year is $4,000,000.
6.4 PAYMENT DATE; COMMITTEE CERTIFICATION. The Performance Awards will be
paid as soon as administratively feasible after the Plan Year in which they are
earned, but not before the Committee certifies in writing that the Performance
Goals specified (except to the extent permitted under Code Section 162(m) and
provided in Section 7 with regard to death, disability or Change in Control of
the Company or certain other termination situations) pursuant to subsection 6.2
were, in fact, satisfied, except as may otherwise be agreed by a Participant and
the Company in a written agreement executed prior to the beginning of the Plan
Year to which the Performance Award relates in accordance with any deferred
compensation program in effect applicable to such Participant. The Committee
shall use its best efforts to make a determination with regard to satisfaction
of the Performance Goals within two and one-half (2 1/2) months after the end of
each Plan Year. Any Performance Award deferred by a Participant shall not
increase (between the date on which the Performance Award is credited to any
deferred compensation program applicable to such Participant and the payment
date) based on an earnings factor determined by the Committee and set forth in
writing prior to such deferral which shall be based either on a reasonable rate
of interest or one or more predetermined actual investments such
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that the amount payable at the end of the deferral period shall be based on the
actual rate of return of a specific investment, and, in no case, shall such
increase be based on a measuring factor for each Plan Year greater than the
annual increase for such Plan Year in the S&P 500 Index. The Participant shall
have no right to receive payment of any deferred amount until he or she has a
right to receive such amount under the terms of the applicable deferred
compensation program.
7. EMPLOYMENT AT YEAR END GENERALLY REQUIRED FOR AWARD
No Award shall be made to any Participant who is not an active employee of
the Company, its Parent or one of its Subsidiaries or affiliates at the end of
the Plan Year; PROVIDED, HOWEVER, that the Committee, in its sole and absolute
discretion, may make Awards to Participants for a Plan Year in circumstances
that the Committee deems appropriate including, but not limited to, a
Participant's death, disability, retirement or other termination of employment
during such Plan Year and the Committee shall be required to make at least a
pro-rata Award through the date of a Change in Control of the Company to each
Participant who is a Participant at the time of such Change in Control of the
Company. All such Awards shall be based on achievement of the Performance Goals
for the Plan Year, except that, to the extent permitted under Code
Section 162(m), in the case of death, disability or Change in Control of the
Company during the Plan Year (or such other termination situations as permitted
under Code Section 162(m)) an amount equal to or less than the Individual Target
Awards may be made by the Committee either during or after the Plan Year without
regard to actual achievement of the Performance Goals. Furthermore, upon a
Change in Control of the Company the Committee may, in its sole discretion but
only to the extent permitted under Code Section 162(m), make an award (payable
immediately) equal to a pro-rata portion (through the date of the Change in
Control of the Company) of the Individual Target Award payable upon achieving,
but not surpassing, the Performance Goals for the relevant Plan Year. Any such
immediate pro-rata payment shall reduce any other Award made for such Plan Year
under this Plan by the amount of the pro-rata payment.
8. NON-ASSIGNABILITY
No Award under this Plan nor any right or benefit under this Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance,
garnishment, execution or levy of any kind or charge, and any attempt to
anticipate, alienate, sell, assign, pledge, encumber and to the extent permitted
by applicable law, charge, garnish, execute upon or levy upon the same shall be
void and shall not be recognized or given effect by the Company.
9. NO RIGHT TO EMPLOYMENT
Nothing in the Plan or in any notice of award pursuant to the Plan shall
confer upon any person the right to continue in the employment of the Company,
its Parent, or one of its Subsidiaries or affiliates
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nor affect the right of the Company, its Parent or any of its Subsidiaries or
affiliates to terminate the employment of any Participant.
10. AMENDMENT OR TERMINATION
The Board (or a duly authorized committee thereof) may, in its sole and
absolute discretion, amend, suspend or terminate the Plan or to adopt a new plan
in place of this Plan at any time; provided, that no such amendment shall,
without the prior approval of the stockholders of the Company in accordance with
the laws of the State of Delaware to the extent required under Code
Section 162(m): (i) materially alter the Performance Goals as set forth in
subsection 6.2; (ii) increase the maximum amount set forth in subsection 6.3 and
the interest factor under subsection 6.4, except to the extent permitted under
Code Section 162(m) to substitute an approximately equivalent rate in the event
that the S&P 500 Index ceases to exist; (iii) change the class of eligible
employees set forth in Section 4(a); or (iv) implement any change to a provision
of the Plan requiring stockholder approval in order for the Plan to continue to
comply with the requirements of Code Section 162(m). Furthermore, no amendment,
suspension or termination shall, without the consent of the Participant, alter
or impair a Participant's right to receive payment of an Award for a Plan Year
otherwise payable hereunder.
11. SEVERABILITY
In the event that any one or more of the provisions contained in the Plan
shall, for any reason, be held to be invalid, illegal or unenforceable, in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of the Plan and the Plan shall be construed as if such invalid,
illegal or unenforceable provisions had never been contained therein.
12. WITHHOLDING
The Company shall have the right to make such provisions as it deems
necessary or appropriate to satisfy any obligations it may have to withhold
federal, state or local income or other taxes incurred by reason of payments
pursuant to the Plan.
13. GOVERNING LAW
This Plan and any amendments thereto shall be construed, administered, and
governed in all respects in accordance with the laws of the State of Delaware
(regardless of the law that might otherwise govern under applicable principles
of conflict of laws).
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EXHIBIT A
A "Change in Control of the Company" shall be deemed to have occurred upon:
(a) the acquisition by any person or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of twenty-five percent (25%) or more of either (i) the
then outstanding shares of common stock of the Company or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors, provided that the following
acquisitions shall not constitute a Change in Control of the Company: (i) any
acquisition directly from the Company (excluding any acquisition by virtue of
the exercise of a conversion privilege), (ii) any acquisition by the Company;
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company, or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a reorganization, merger or
consolidation, if following such reorganization, merger or consolidation the
conditions described in clause (iii) of paragraph (c) below are met.
(b) individuals who, as of the effective date of the Plan, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the effective date of the Plan, whose election, or
nomination for election by the Company stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the
Board; or
(c) the stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or disposition of
all or substantially all the Company's assets; or (iii) a merger, consolidation,
or reorganization of the Company with or involving any other corporation,
limited liability entity or similar person, other than a merger, consolidation,
or reorganization that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least seventy-five percent (75%) of the combined voting
power of the voting securities of the Company (or such surviving entity)
outstanding immediately after such merger, consolidation, or reorganization.
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SCHEDULE B
[AMENDED LANGUAGE IS REFLECTED IN ITALICS]
OGDEN CORPORATION
1999 STOCK INCENTIVE PLAN
AMENDED AND RESTATED AS OF JANUARY 1, 2000
1. PURPOSE.
The purposes of this Ogden Corporation 1999 Stock Incentive Plan, AMENDED
AND RESTATED AS OF JANUARY 1, 2000 (the "Plan") are to induce certain
individuals to remain in the employ of, or to continue to serve as directors of,
Ogden Corporation (the "Company"), its present and future subsidiary
corporations (each a "Subsidiary"), as defined in section 424(f) of the Internal
Revenue Code of 1986, as amended (the "Code") and its future parent
corporations, if any (each, a "Parent"), as defined in section 424(e) of the
Code, to attract new individuals to enter into such employment and service and
to encourage such individuals to secure or increase on reasonable terms their
stock ownership in the Company. THE PLAN HAS BEEN AMENDED AND RESTATED,
EFFECTIVE AS OF JANUARY 1, 2000, TO AUTHORIZE GRANTS OF RESTRICTED STOCK TO
EMPLOYEES OF THE COMPANY, A SUBSIDIARY OR PARENT (IF ANY). The Board of
Directors of the Company (the "Board") believes that the granting of stock
options, RESTRICTED STOCK and other awards (the "Awards") under the Plan will
promote continuity of management and increased incentive and personal interest
in the welfare of the Company and aid in securing its continued growth and
financial success.
2. SHARES SUBJECT TO PLAN.
The maximum number of shares of the common stock, par value $.50 per share
(the "Common Stock"), of the Company with respect to which Awards may be granted
under the Plan or that may be delivered to participants ("Participants") and
their beneficiaries under the Plan shall be 4,000,000 (subject to adjustment as
provided in Section 10 of the Plan). For purposes of this Section 2 other than
with regard to incentive stock options described in Section 4(A) of the Plan,
the number of shares that may be delivered under the Plan shall be determined
after giving effect to the use by a Participant of the right, if granted, to
cause the Company to withhold from the shares of Common Stock otherwise
deliverable to him or her upon the exercise of an Award, shares of Common Stock
in payment of all or a portion of his or her withholding obligation arising from
such exercise (i.e., only the number of shares
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issued net of the shares tendered shall be deemed delivered for purposes of
determining the maximum number of shares available for delivery under the Plan).
If any Awards expire or terminate for any reason without having been exercised
in full, new Awards may thereafter be granted with respect to the unpurchased
shares subject to such expired or terminated Awards. If a limited stock
appreciation right ("LSAR") is granted in tandem with a stock option, such grant
shall only apply once against the maximum number of shares of Common Stock which
may be delivered to Participants or granted under the Plan. IF ANY SHARES OF
RESTRICTED STOCK AWARDED UNDER THIS PLAN ARE FORFEITED OR REPURCHASED BY THE
COMPANY FOR ANY REASON, THE NUMBER OF FORFEITED OR REPURCHASED SHARES OF
RESTRICTED STOCK SHALL AGAIN BE AVAILABLE FOR THE PURPOSES OF AWARDS UNDER THIS
PLAN. The shares of Common Stock available under the Plan may be either
authorized and unissued shares of Common Stock or shares of Common Stock held in
or acquired for the treasury of the Company.
3. ADMINISTRATION.
(A) The Plan shall be administered by a committee or subcommittee of the
Board (the "Committee") which shall consist of two or more members of the Board,
each of whom is intended to be, to the extent required by Rule 16b-3 promulgated
under section 16(b) of the Securities Exchange Act of 1934, as amended
("Rule 16b-3"), a "non-employee director" as defined in Rule 16b-3 and, to the
extent required by section 162(m) of the Code, an "outside director" as defined
under section 162(m) of the Code; provided, however, that with respect to the
application of the Plan to non-employee directors, the Board shall be deemed the
Committee. If for any reason the Committee does not meet the requirements of
Rule 16b-3 or section 162(m) of the Code, such non-compliance with the
requirements of Rule 16b-3 or section 162(m) of the Code shall not affect the
validity of Awards, interpretations or other actions of the Committee. The
Committee shall be appointed annually by the Board, which may at any time and
from time to time remove any members of the Committee, with or without cause,
appoint additional members to the Committee and fill vacancies, however caused,
in the Committee. In the event that no Committee shall have been appointed, the
Plan shall be administered by the Board. A majority of the members of the
Committee shall constitute a quorum. All determinations of the Committee shall
be made by a majority of its members present at a meeting duly called and held
except that the Committee may delegate to any one of its members the authority
of the Committee with respect to the grant of Awards to an employee who: (i) is
not an officer and/or director of the Company; (ii) is not, and may not
reasonably be expected to become, a "covered employee" within the meaning of
section 162(m) (3) of the Code; and (iii) who is not subject to the reporting
requirements under section 16(a) of the Securities Exchange Act of 1934, as
amended. Any decision or determination of the Committee reduced to writing and
signed by all of the members of the Committee (or by a member of
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the Committee to whom authority has been delegated) shall be fully as effective
as if it had been made at a meeting duly called and held.
(B) The Committee's powers and authority shall include, but not be limited
to (i) selecting individuals for participation who are employees of the Company,
any Subsidiary or any Parent and who are members of the Board; (ii) determining
the types and terms and conditions of all Awards granted, including EXERCISE
PRICE OR PURCHASE PRICE (IF ANY), performance GOALS and other earnout and/or
vesting contingencies AND ACCELERATION PROVISIONS; (iii) permitting
transferability of Awards to third parties; (iv) interpreting the Plan's
provisions; and (v) administering the Plan in a manner that is consistent with
its purpose. The Committee's determination on the matters referred to in this
Section 3(B) shall be conclusive. Any dispute or disagreement which may arise
under or as a result of or with respect to any Award shall be determined by the
Committee, in its sole discretion, and any interpretations by the Committee of
the terms of any Award shall be final, binding and conclusive.
(C) Subject to Section 13 of the Plan, the Committee shall have the
authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan and perform all acts, including the delegation of
its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of the Plan and
any Award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or in
any agreement relating thereto in the manner and to the extent it shall deem
necessary to effectuate the purpose and intent of the Plan. The Committee may
adopt special guidelines and provisions for persons who are residing in, or
subject to, the taxes of, non-U.S. jurisdictions to comply with applicable tax,
securities and other laws and may impose any limitations and restrictions that
it deems necessary to comply with the applicable tax, securities and other laws
of such non-U.S. jurisdictions. To the extent applicable, the Plan is intended
to comply with section 162(m) of the Code (with regard to "covered employees" as
defined in section 162(m) of the Code) and the applicable requirements of
Rule 16b-3 and shall be limited, construed and interpreted in a manner so as to
comply therewith.
4. TYPES OF AWARDS.
An Award may be granted singularly, in combination with another Award(s) or
in tandem whereby exercise or vesting of one Award held by a Participant cancels
another award held by the Participant. Subject to Section 6 hereof, an Award may
be granted as an alternative to or replacement of an existing Award under the
Plan or under any other compensation plans or arrangements of the Company,
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including the plan of any entity acquired by the Company. The types of Awards
that may be granted under the Plan include:
(A) A stock option, which represents a right to purchase a specified number
of shares of Common Stock during a specified period at a price per share which
is no less than that required by Section 6 hereof. Options will be either
(a) "incentive stock options" (which term, when used herein, shall have the
meaning ascribed thereto by the provisions of section 422 (b) of the Code, or
(b) options which are not incentive stock options ("non-qualified stock
options"), as determined at the time of the grant thereof by the Committee.
(B) An LSAR, which is a right granted in tandem with a related stock option,
to receive a payment in cash equal to the excess of the aggregate price (as
described herein) at the time specified below of a specified number of shares of
Common Stock over the aggregate exercise price of the related stock option being
exercised; provided, however, that such right shall be exercisable only upon the
occurrence of a Change in Control and only in the alternative to exercise of its
related stock option. The Committee may grant in connection with any stock
option granted hereunder one or more LSARs relating to a number of shares of
Common Stock less than or equal to the number of shares of Common Stock subject
to the related stock option. An LSAR may be granted at the same time as, or
subsequent to the time that, its related stock option is granted.
The exercise of an LSAR relating to a non-qualified stock option with
respect to any number of shares of Common Stock shall entitle the Participant to
a cash payment, for each share, equal to the excess of (i) the greatest of
(A) the highest price per share of Common Stock paid in the Change in Control in
connection with which such LSAR became exercisable, (B) the fair market value of
a share of Common Stock on the date of such Change of Control and (C) the fair
market value of a share of Common Stock on the effective date of such exercise
over (iii) the exercise price of the related stock option. Such payment shall be
paid as soon as practical, but in no event later than the expiration of five
business days; after the effective date of such exercise. The exercise of an
LSAR relating to an incentive stock option with respect to any number of shares
of Common Stock shall entitle the Participant to a cash payment, for each such
share, equal to the excess of (i) the fair market value of a share of Common
Stock on the effective date of such exercise over (ii) the exercise price of the
related stock option. Such payment shall be paid as soon as practical, but in no
event later than the expiration of five business days, after the effective date
of such exercise.
An LSAR shall be exercisable only during the period commencing on the first
day following the occurrence of a Change in Control and terminating on the
expiration of ninety days after such date. Notwithstanding anything else herein,
an LSAR relating to an incentive stock option may be exercised with respect to a
share of Common Stock only if the fair market value of such share on the
effective date
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of such exercise exceeds the exercise price relating to such share.
Notwithstanding anything else herein, an LSAR may be exercised only if and to
the extent that the stock option to which it relates is exercisable. The
exercise of an LSAR with respect to a number of shares of Common Stock shall
cause the immediate and automatic cancellation of the stock option to which it
relates with respect to an equal number of shares. The exercise of a related
stock option, or the cancellation, termination or expiration of a related stock
option (other than pursuant to this paragraph), with respect to a number of
shares of Common Stock, shall cause the cancellation of the LSAR related to it
with respect to an equal number of shares. Each LSAR shall be exercisable in
whole or in part; provided, that no partial exercise of an LSAR shall be for an
aggregate exercise price of less than $1,000. The partial exercise of an LSAR
shall not cause the expiration, termination or cancellation of the remaining
portion thereof.
(C) A cash award, which is a right denominated in cash or cash units to
receive a cash payment, based on the attainment of pre-established performance
goals and such other conditions, restrictions and contingencies as the Committee
shall determine; provided, however, that if the cash award is made to a "covered
employee," under section 162(m)(3) of the Code, the Award is intended to satisfy
section 162(m) of the Code.
For each Participant for each calendar year, the Committee may specify a
targeted performance award. The individual target award may be expressed, at the
Committee's discretion, as a fixed dollar amount, a percentage of base pay or
total pay (excluding payments made under the Plan), or an amount determined
pursuant to an objective formula or standard. Establishment of an individual
target award for an employee for a calendar year shall not imply or require that
the same level individual target award (if any such award is established by the
Committee for the relevant employee) be set for any subsequent calendar year. At
the time the performance goals are established, the Committee shall prescribe a
formula to determine the percentages (which may be greater than one-hundred
percent (100%)) of the individual target award which may be payable based upon
the degree of attainment of the performance goals during the calendar year.
Notwithstanding anything else herein, the Committee may, in its sole discretion,
elect to pay a Participant an amount that is less than the Participant's
individual target award (or attained percentage thereof) regardless of the
degree of attainment of the performance goals; provided that no such discretion
to reduce an Award earned based on achievement of the applicable performance
goals shall be permitted for the calendar year in which a Change in Control of
the Company occurs, or during such calendar year with regard to the prior
calendar year if the Awards for the prior calendar year have not been made by
the time of the Change in Control of the Company, with regard to individuals who
were Participants at the time of the Change in Control of the Company.
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For "covered employees" under section 162(m) of the Code, the Committee
shall establish the objective performance goals, formulae or standards and the
individual target award (if any) applicable to each Participant or class of
Participants for a calendar year in writing prior to the beginning of such
calendar year or at such later date as permitted under section 162(m) of the
Code and while the outcome of the performance goals are substantially uncertain.
Such performance goals may incorporate, if and only to the extent permitted
under section 162(m) of the Code, provisions for disregarding (or adjusting for)
changes in accounting methods, corporate transactions (including, without
limitation, dispositions and acquisitions) and other similar type events or
circumstances. The performance goals that may be used by the Committee for such
Awards shall be based on ONE OR MORE OF THE PERFORMANCE CRITERIA described in
Exhibit A, attached hereto. The Committee may designate a single goal criterion
or multiple goal criteria for performance measure purposes with the measurement
based on absolute Company, Subsidiaries, Parent, division or business unit
performance and/or on performance as compared with that of other publicly traded
companies. With respect to "covered employees" under section 162(m) of the Code,
the Committee shall satisfy the certification requirements in the manner set
forth under section 162(m) of the Code.
(D) RESTRICTED STOCK, WHICH IS AN AWARD OF SHARES OF COMMON STOCK UNDER THE
PLAN THAT IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS AS PROVIDED UNDER
SECTION 8 HEREOF. A PARTICIPANT WHO RECEIVES AN AWARD OF RESTRICTED STOCK SHALL
NOT HAVE ANY RIGHTS WITH RESPECT TO SUCH AWARD OF RESTRICTED STOCK, UNLESS AND
UNTIL SUCH PARTICIPANT HAS DELIVERED A FULLY EXECUTED COPY OF A RESTRICTED STOCK
AWARD AGREEMENT AND HAS OTHERWISE COMPLIED WITH THE APPLICABLE TERMS AND
CONDITIONS OF SUCH AWARD. AN AWARD OF RESTRICTED STOCK MAY BE CONDITIONED ON THE
ATTAINMENT OF PRE-ESTABLISHED PERFORMANCE GOALS AND SUCH OTHER CONDITIONS,
RESTRICTIONS AND CONTINGENCIES AS THE COMMITTEE SHALL DETERMINE; PROVIDED,
HOWEVER, THAT IF AN AWARD OF RESTRICTED STOCK IS MADE TO A "COVERED EMPLOYEE,"
UNDER SECTION 162(M)(3) OF THE CODE, THE AWARD IS INTENDED TO SATISFY
SECTION 162(M) OF THE CODE. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY,
AWARDS OF RESTRICTED STOCK MAY BE GRANTED SOLELY TO PARTICIPANTS WHO ARE
EMPLOYEES OF THE COMPANY, A SUBSIDIARY OR PARENT (IF ANY).
(E) The Committee may provide a loan to any Participant in an amount
determined by the Committee to enable the Participant to pay (i) any federal,
state or local income taxes arising out of the exercise of an Award or (ii) the
exercise price with respect to any Award or (iii) to purchase shares of Common
Stock on the open market. Any such loan (i) shall be for such term and at such
rate of interest as the Committee may determine, (ii) shall be evidenced by a
promissory note in a form determined by the Committee and executed by the
Participant and (iii) shall be subject to such other terms and conditions as the
Committee may determine.
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5. ELIGIBILITY.
An Award may be granted only to (i) employees of the Company, a Subsidiary
or a Parent, (ii) directors of the Company who are not employees of the Company,
a Subsidiary or a Parent and (iii) employees of a corporation which has been
acquired by the Company, a Subsidiary or a Parent, whether by way of exchange or
purchase of stock, purchase of assets, merger or reverse merger, or otherwise,
who hold options with respect to the stock of such corporation which the Company
has agreed to assume. Eligibility for the grant of an Award and actual
participation in the Plan shall be determined by the Committee in its sole
direction.
6. STOCK OPTION PRICES AND FAIR MARKET VALUE.
(A) Except as otherwise provided in Section 14 hereof, the initial per share
option price of any stock option shall not be less than the fair market value of
a share of Common Stock on the date of grant; provided, however, that, in the
case of a Participant who owns (within the meaning of section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company, each Subsidiary and Parent at the time a stock option which is
an incentive stock option is granted to him or her, the initial per share option
price shall not be less than 110% of the fair market value of a share of Common
Stock on the date of grant.
(B) For all purposes of this Plan, the fair market value of a share of
Common Stock on any date shall be (i) the average of the high and low sales
prices on such day of a share of Common Stock as reported on the principal
securities exchange on which shares of Common Stock are then listed or admitted
to trading or (ii) if not so reported, the average of the closing bid and ask
prices on such date as reported on the Nasdaq Stock Market, Inc. or (iii) if not
so reported, as furnished by any member of the National Association of
Securities Dealers, Inc. selected by the Committee. In the event that the price
of a share of Common Stock shall not be so reported, the Fair Market Value of a
share of Common Stock shall be determined by a qualified appraiser selected by
the Committee. Notwithstanding anything herein to the contrary, the fair market
value of a share of Common Stock on any date means the price for Common Stock
set by the Committee in good faith based on reasonable methods set forth under
section 422 of the Code and the regulations thereunder including, without
limitation, a method utilizing the average of prices of the Common Stock
reported on the principal national securities exchange on which it is then
traded on the Nasdaq Stock Market, Inc. during a reasonable period designated by
the Committee.
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7. OPTION TERM.
Options shall be granted for such term as the Committee shall determine, not
in excess of ten years from the date of the granting thereof; provided, however,
that, except as otherwise provided in Section 14 hereof, in the case of a
Participant who owns (within the meaning of section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company, each Subsidiary and Parent that the time an option which is an
incentive stock option is granted to him or her, the term with respect to such
option shall not be in excess of five years from the date of the granting
thereof.
8. RESTRICTED STOCK AWARDS.
AWARDS OF RESTRICTED STOCK SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS AND
RESTRICTIONS:
(A) THE PURCHASE PRICE (IF ANY) OF RESTRICTED STOCK SHALL BE FIXED BY THE
COMMITTEE. THE PURCHASE PRICE FOR SHARES OF RESTRICTED STOCK MAY BE ZERO TO THE
EXTENT PERMITTED BY APPLICABLE LAW, AND, TO THE EXTENT NOT SO PERMITTED, SUCH
PURCHASE PRICE MAY NOT BE LESS THAN PAR VALUE.
(B) AWARDS OF RESTRICTED STOCK SHALL BE EVIDENCED BY AN AGREEMENT ENTERED
INTO BETWEEN THE COMPANY AND THE PARTICIPANT. IN THE EVENT THAT THE PARTICIPANT
IS REQUIRED TO PAY THE PURCHASE PRICE FOR RESTRICTED STOCK, SUCH AGREEMENT MUST
BE ACCEPTED WITHIN A PERIOD OF 60 DAYS (OR SUCH SHORTER PERIOD AS THE COMMITTEE
MAY SPECIFY AT GRANT) AFTER THE AWARD DATE BY EXECUTING A RESTRICTED STOCK AWARD
AGREEMENT AND BY PAYING THE PURCHASE PRICE, IF ANY.
(C) EACH PARTICIPANT RECEIVING AN AWARD OF RESTRICTED STOCK SHALL BE ISSUED
A STOCK CERTIFICATE IN RESPECT OF SUCH SHARES OF RESTRICTED STOCK, UNLESS THE
COMMITTEE ELECTS TO USE ANOTHER SYSTEM, SUCH AS BOOK ENTRIES BY THE TRANSFER
AGENT, AS EVIDENCING OWNERSHIP OF AN AWARD OF RESTRICTED STOCK. SUCH CERTIFICATE
SHALL BE REGISTERED IN THE NAME OF SUCH PARTICIPANT, AND SHALL BEAR AN
APPROPRIATE LEGEND REFERRING TO THE TERMS, CONDITIONS, AND RESTRICTIONS
APPLICABLE TO SUCH AWARD OF RESTRICTED STOCK, SUBSTANTIALLY IN THE FOLLOWING
FORM:
"THE ANTICIPATION, ALIENATION, ATTACHMENT, SALE, TRANSFER,
ASSIGNMENT, PLEDGE, ENCUMBRANCE OR CHARGE OF THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS
(INCLUDING FORFEITURE) OF THE OGDEN CORPORATION (THE "COMPANY") 1999
STOCK OPTION PLAN, AMENDED AND RESTATED AS OF JANUARY 1, 2000, AND
AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE
COMPANY DATED . COPIES OF SUCH PLAN AND AGREEMENT ARE ON
FILE AT THE PRINCIPAL OFFICE OF THE COMPANY."
(D) IF STOCK CERTIFICATES ARE ISSUED IN RESPECT OF SHARES OF RESTRICTED
STOCK, THE COMMITTEE SHALL REQUIRE THAT ANY STOCK CERTIFICATES EVIDENCING SUCH
SHARES BE HELD IN CUSTODY BY THE COMPANY UNTIL THE RESTRICTIONS THEREON SHALL
HAVE LAPSED, AND THAT, AS A CONDITION OF ANY AWARD OF RESTRICTED STOCK, THE
PARTICIPANT SHALL HAVE
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DELIVERED A DULY SIGNED STOCK POWER, ENDORSED IN BLANK, RELATING TO THE COMMON
STOCK COVERED BY SUCH AWARD OF RESTRICTED STOCK.
(E) THE PARTICIPANT SHALL NOT BE PERMITTED TO TRANSFER SHARES OF RESTRICTED
STOCK AWARDED UNDER THIS PLAN DURING THE PERIOD OR PERIODS SET BY THE COMMITTEE
(THE "RESTRICTION PERIOD") COMMENCING ON THE DATE OF SUCH AWARD OF RESTRICTED
STOCK, AS SET FORTH IN THE RESTRICTED STOCK AWARD AGREEMENT AND SUCH AGREEMENT
SHALL SET FORTH A VESTING SCHEDULE AND ANY EVENTS WHICH WOULD ACCELERATE VESTING
OF THE SHARES OF RESTRICTED STOCK. WITHIN THESE LIMITS, BASED ON SERVICE,
ATTAINMENT OF PERFORMANCE GOALS (AS DESCRIBED IN SECTION 8(F) BELOW) AND/OR SUCH
OTHER FACTORS OR CRITERIA AS THE COMMITTEE MAY DETERMINE IN ITS SOLE DISCRETION,
THE COMMITTEE MAY PROVIDE FOR THE LAPSE OF SUCH RESTRICTIONS IN INSTALLMENTS IN
WHOLE OR IN PART, OR MAY ACCELERATE THE VESTING OF ALL OR ANY PART OF ANY AWARD
OF RESTRICTED STOCK AND/OR WAIVE THE DEFERRAL LIMITATIONS FOR ALL OR ANY PART OF
ANY SUCH AWARD.
(F) IF THE GRANT OF SHARES OF RESTRICTED STOCK OR THE LAPSE OF RESTRICTIONS
IS BASED ON OR CONDITIONED UPON THE ATTAINMENT OF PERFORMANCE GOALS, THE
COMMITTEE SHALL ESTABLISH THE PERFORMANCE GOALS AND THE APPLICABLE VESTING
PERCENTAGE OF THE AWARD OF RESTRICTED STOCK APPLICABLE TO EACH PARTICIPANT OR
CLASS OF PARTICIPANTS IN WRITING PRIOR TO THE BEGINNING OF THE APPLICABLE FISCAL
YEAR OR AT SUCH LATER DATE AS OTHERWISE DETERMINED BY THE COMMITTEE AND WHILE
THE OUTCOME OF THE PERFORMANCE GOALS ARE SUBSTANTIALLY UNCERTAIN. SUCH
PERFORMANCE GOALS MAY INCORPORATE PROVISIONS FOR DISREGARDING (OR ADJUSTING FOR)
CHANGES IN ACCOUNTING METHODS, CORPORATE TRANSACTIONS (INCLUDING, WITHOUT
LIMITATION, DISPOSITIONS AND ACQUISITIONS) AND OTHER SIMILAR EVENTS OR
CIRCUMSTANCES. WITH REGARD TO AN AWARD OF RESTRICTED STOCK THAT IS INTENDED TO
COMPLY WITH SECTION 162(M) OF THE CODE, TO THE EXTENT ANY SUCH PROVISION WOULD
CREATE IMPERMISSIBLE DISCRETION UNDER SECTION 162(M) OF THE CODE OR OTHERWISE
VIOLATE SECTION 162(M) OF THE CODE, SUCH PROVISION SHALL BE OF NO FORCE OR
EFFECT. THE PERFORMANCE GOALS THAT MAY BE USED BY THE COMMITTEE FOR SUCH AWARDS
SHALL BE BASED ON ONE OR MORE OF THE PERFORMANCE CRITERIA DESCRIBED IN
EXHIBIT A, ATTACHED HERETO. THE COMMITTEE MAY DESIGNATE A SINGLE GOAL CRITERION
OR MULTIPLE GOAL CRITERIA FOR PERFORMANCE MEASURE PURPOSES WITH THE MEASUREMENT
BASED ON ABSOLUTE COMPANY, SUBSIDIARIES, PARENT, DIVISION OR BUSINESS UNIT
PERFORMANCE AND/OR ON PERFORMANCE AS COMPARED WITH THAT OF OTHER PUBLICLY TRADED
COMPANIES. WITH RESPECT TO "COVERED EMPLOYEES" UNDER SECTION 162(M) OF THE CODE,
THE COMMITTEE SHALL SATISFY THE CERTIFICATION REQUIREMENTS IN THE MANNER SET
FORTH UNDER SECTION 162(M) OF THE CODE.
(G) EXCEPT AS PROVIDED HEREIN AND AS OTHERWISE DETERMINED BY THE COMMITTEE,
THE PARTICIPANT SHALL HAVE, WITH RESPECT TO THE SHARES OF RESTRICTED STOCK, ALL
OF THE RIGHTS OF A HOLDER OF SHARES OF COMMON STOCK INCLUDING, WITHOUT
LIMITATION, THE RIGHT TO RECEIVE ANY DIVIDENDS, THE RIGHT TO VOTE SUCH SHARES
AND, SUBJECT TO AND CONDITIONED UPON THE VESTING OF SHARES OF RESTRICTED STOCK,
THE RIGHT TO TENDER SUCH SHARES. THE COMMITTEE MAY, IN ITS SOLE DISCRETION,
DETERMINE AT THE TIME OF GRANT THAT THE PAYMENT OF DIVIDENDS SHALL BE DEFERRED
UNTIL, AND CONDITIONED UPON, THE EXPIRATION OF THE APPLICABLE RESTRICTION
PERIOD.
B-9
<PAGE>
(H) IF AND WHEN THE RESTRICTION PERIOD EXPIRES WITHOUT A PRIOR FORFEITURE OF
THE RESTRICTED STOCK SUBJECT TO SUCH RESTRICTION PERIOD, THE CERTIFICATES FOR
SUCH SHARES SHALL BE DELIVERED TO THE PARTICIPANT. ALL LEGENDS SHALL BE REMOVED
FROM SAID CERTIFICATES AT THE TIME OF DELIVERY TO THE PARTICIPANT, EXCEPT AS
OTHERWISE REQUIRED BY APPLICABLE LAW.
(I) UNLESS OTHERWISE DETERMINED BY THE COMMITTEE AT GRANT OR THEREAFTER,
UPON A PARTICIPANT'S TERMINATION OF EMPLOYMENT FOR ANY REASON DURING THE
RELEVANT RESTRICTION PERIOD, ALL RESTRICTED STOCK SUBJECT TO RESTRICTION SHALL
BE FORFEITED.
9. LIMITATION ON AMOUNT OF AWARDS GRANTED.
(A) Except as otherwise provided in Section 15 hereof, the aggregate fair
market value of the shares of Common Stock for which any Participant may be
granted incentive stock options which are exercisable for the first time in any
calendar year (whether under the terms of the Plan or any other stock option
plan of the Company) shall not exceed $100,000.
(B) No Participant (OTHER THAN A NONEMPLOYEE DIRECTOR) shall be granted
stock options and/or LSARs during any calendar year to purchase more than an
aggregate of 500,000 shares of Common Stock (subject to adjustment as provided
in Section 10 OF THE PLAN) AND NO NONEMPLOYEE DIRECTOR SHALL BE GRANTED STOCK
OPTIONS AND/OR LSARS DURING ANY CALENDAR YEAR TO PURCHASE MORE THAN AN AGGREGATE
OF 2,500 SHARES OF COMMON STOCK (SUBJECT TO ADJUSTMENT AS PROVIDED IN
SECTION 10 of the Plan). LSARs granted in tandem with a stock option shall only
apply once against a Participant's maximum individual number of shares of Common
Stock subject to an award of options and/or LSARs hereunder. NO PARTICIPANT
ELIGIBLE TO RECEIVE RESTRICTED STOCK SHALL BE AWARDED, DURING ANY CALENDAR YEAR,
MORE THAN 500,000 SHARES OF RESTRICTED STOCK (SUBJECT TO ADJUSTMENT AS PROVIDED
IN SECTION 10 OF THE PLAN) FOR WHICH THE GRANT OF SUCH AWARD OR THE LAPSE OF THE
RELEVANT RESTRICTION PERIOD IS SUBJECT TO THE ATTAINMENT OF PERFORMANCE GOALS AS
PROVIDED UNDER SECTION 8(F) HEREOF. NO NONEMPLOYEE DIRECTOR SHALL BE AWARDED
SHARES OF RESTRICTED STOCK HEREUNDER.
(C) THERE ARE NO ANNUAL INDIVIDUAL SHARE LIMITATIONS ON RESTRICTED STOCK FOR
WHICH THE GRANT OF SUCH AWARD OR THE LAPSE OF THE RELEVANT RESTRICTION PERIOD IS
NOT BASED ON OR CONDITIONED UPON THE ATTAINMENT OF PERFORMANCE GOALS IN
ACCORDANCE WITH SECTION 8(F) HEREOF.
(D) Subject to Section 9(E), the following additional maximums are imposed
under the Plan. The maximum number of shares of Common Stock that may be covered
by stock options intended to be incentive stock options shall be 4,000,000
(subject to adjustment as provided in Section 10 of the Plan). THE MAXIMUM
NUMBER OF SHARES OF COMMON STOCK THAT IS AVAILABLE FOR AWARDS OF RESTRICTED
STOCK SHALL BE 1,000,000 (SUBJECT TO ADJUSTMENT AS PROVIDED IN SECTION 10 OF THE
PLAN). The maximum payment that may be made for Awards granted to any one
individual pursuant to Section 4(C) hereof shall be $3,000,000
B-10
<PAGE>
for any single or combined performance goals established for a specified
performance period. A specified performance period for purposes of this
performance goal payment limit shall not exceed a sixty (60) consecutive month
period.
(E) Subject to the overall limitation on the number of shares of Common
Stock that may be delivered under the Plan, the Committee may use available
shares of Common Stock as the form of payment for compensation, grants or rights
earned or due under any other compensation plans or arrangements of the Company,
including the plan of any entity acquired by the Company.
10. ADJUSTMENT OF NUMBER OF SHARES.
(A) In the event that a dividend shall be declared upon the Common Stock
payable in shares of Common Stock, the number of shares of Common Stock then
subject to any Award and the number of shares of Common Stock available for
purchase or delivery under the Plan but not yet covered by an Award shall be
adjusted by adding to each share the number of shares which would be
distributable thereon if such shares had been outstanding on the date fixed for
determining the stockholders entitled to receive such stock dividend. In the
event that the outstanding shares of Common Stock are exchanged for a different
number or kind of shares of stock or other securities of the Company or of
another corporation, whether through reorganization, recapitalization, stock
split-up, reverse stock split, reclassification, combination of shares, sale of
assets or merger or consolidation in which the Company is the surviving
corporation, then, if the Committee shall determine, in its sole discretion, to
be appropriate, there shall be substituted for each share of Common Stock then
subject to any outstanding Award and for each share of Common Stock which may be
issued under the Plan but not yet covered by an outstanding Award, the number
and kind of shares of stock or other securities for which each outstanding share
of Common Stock shall be so exchanged and, if determined by the Committee in its
sole discretion to be appropriate, the exercise or option price applicable under
any then outstanding Award shall be adjusted proportionately to reflect such
corporate transaction.
(B) In the event that there shall be any change in the capitalization of the
Company or other corporate change affecting the outstanding Common Stock,
including by way of an extraordinary or stock dividend, spin-off or other
corporate change, other than any change specified in Section 10(A)hereof, then,
if the Committee shall, in its sole discretion, determine it to be appropriate,
the number or kind of shares then subject to any outstanding Award, the number
or kind of shares then available for issuance in accordance with the provisions
of the Plan but not yet covered by an outstanding Award, and/or the exercise or
option price applicable under any then outstanding Award shall be adjusted
proportionately to reflect such corporate event and, if and to the extent the
Committee shall, in its sole discretion, determine it to be appropriate, all or
any portion of the Plan may be assumed
B-11
<PAGE>
by any corporate successor to all or a portion of the Company's business and
shares of such corporate successor (or the Parent or a Subsidiary thereof) shall
be substituted for the shares of Common Stock covered by the portion of the Plan
so assumed.
(C) Notwithstanding the foregoing provisions of this Section 10, in the case
of any then outstanding incentive stock options, the Committee shall make
commercially reasonable efforts to effect any substitution or adjustment
authorized by the Committee pursuant to this Section 10in a manner consistent
with the applicable requirements of Treasury Regulation section 1.425-1.
(D) Any substitution or adjustment determined under this Section 10 by the
Committee in good faith shall be final, binding and conclusive on the Company
and all Participants, directors and employees and their respective heirs,
executors, administrators, successors and assigns.
(E) No adjustment or substitution provided for in this Section 10 shall
require the Company to issue a fractional share under any Award or to sell a
fractional share under any stock option. Fractional shares of Common Stock
resulting from any adjustment in Awards pursuant to this Section 10 shall be
aggregated until, and eliminated at, the time of exercise by rounding-down for
fractions less than one-half and rounding-up for fractions equal to or greater
than one-half. No cash settlements shall be made with respect to fractional
shares eliminated by rounding.
(F)(i) Notwithstanding the foregoing provisions of this Section 10, in the
event of a Change in Control, each Award OF STOCK OPTIONS AND LSARS shall become
fully vested and exercisable. EXCEPT AS OTHERWISE PROVIDED BY THE COMMITTEE IN
THE AWARD AGREEMENT UPON THE AWARD OF RESTRICTED STOCK, THE RESTRICTIONS TO
WHICH ANY SHARES OF RESTRICTED STOCK ARE SUBJECT SHALL LAPSE AS IF THE
APPLICABLE RESTRICTION PERIOD HAD ENDED UPON A CHANGE IN CONTROL.
(ii) As used herein, "Change in Control" shall mean:
(I) any Person (as such term is defined in sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company representing
20% or more of the combined voting power of the Company's then outstanding
securities, other than beneficial ownership by a Participant, the Company, any
subsidiary of the Company, any employee benefit plan of the Company or a
subsidiary thereof or any person or entity organized, appointed or established,
pursuant to the terms of any such benefit plan;
(II) the Company's stockholders approve an agreement to merge or consolidate
the Company with another corporation, or an agreement providing for the sale of
substantially all of the assets of the
B-12
<PAGE>
Company to one or more corporations, in any case other than with or to a
corporation 50% or more of which is controlled by, or is under common control
with, the Company; or
(III) during any two-year period, individuals who at the date on which the
period commences constitute a majority of the Board cease to constitute a
majority of thereof for any reason; provided, however, that a director who was
not a director at the beginning of such period shall be deemed to have satisfied
the two-year requirement if such director was elected by, or on the
recommendation of, at least two-thirds of the directors who were directors at
the beginning of such period (either actually or by prior operation of this
provision), other than any director who is so approved in connection with any
actual or threatened contest for election to positions on the Board.
(G) In the event of the occurrence of any corporate transaction or event
described in Section 10(A) or 10(B) hereof or the occurrence of a Change in
Control, the Committee may reasonably determine in good faith that all or a
portion of the Awards hereunder shall be honored, assumed or converted or new
rights substituted therefor (each such honored, assumed, converted or
substituted Award shall hereinafter be called an "Alternative Award") by a
Participant's employer (or the parent or a subsidiary of such employer)
immediately following such corporate transaction or event or Change in Control,
provided that any such Alternative Award must meet the following criteria:
(i) the Alternative Award must be based on stock which is traded on an
established securities market, or which will be so traded within 30 days of the
transaction, event or Change in Control;
(ii) the Alternative Award must provide such Participant with rights and
entitlements substantially equivalent to the rights and entitlements applicable
under such Award immediately prior to such transaction, event or Change in
Control, including, but not limited to, an identical or better exercise
schedule; and
(iii) the Alternative Award must have economic value substantially
equivalent to the value of such Award (as determined by the Committee at the
time of the transaction, event or Change in Control).
For purposes of incentive stock options, any assumed or substituted stock
option shall comply with the requirements of Treasury Regulation
Section 1.425-1 (and any amendments thereto). The Committee may, in its sole
discretion, apply the same methodology to non-qualified stock options.
11. PURCHASE FOR INVESTMENT, WAIVERS AND WITHHOLDING.
(A) Unless the delivery of shares under any Award shall be registered under
the Securities Act of 1933, such Participant shall, as a condition of the
Company's obligation to deliver such shares, be required to represent to the
Company in writing that he or she is acquiring such shares for his or her
B-13
<PAGE>
own account as an investment and not with a view to, or for sale in connection
with, the distribution of any thereof. All certificates for shares of Common
Stock delivered under the Plan shall be subject to such stock transfer orders
and other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is then listed or any national
securities association system upon whose system the Common Stock is then quoted,
any applicable federal or state securities law, and any applicable corporate
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(B) In the event of the death of a Participant, an additional condition of
exercising any Award shall be the delivery to the Company of such tax waivers
and other documents as the Committee shall determine.
(C) An additional condition of exercising any non-qualified stock option,
LSAR, OR AWARD OF RESTRICTED STOCK, shall be the entry by the Participant into
arrangements with the Company with respect to withholding as the Committee shall
determine. The Company shall have the right to deduct from any payment to be
made to a Participant, or to otherwise require, prior to the issuance or
delivery of any shares of Common Stock or the payment of any cash hereunder,
payment by the Participant of, any federal, state or local taxes required by law
to be withheld. UPON THE VESTING OF RESTRICTED STOCK, OR UPON MAKING AN ELECTION
UNDER SECTION 83(B) OF THE CODE, A PARTICIPANT SHALL PAY ALL REQUIRED
WITHHOLDING TO THE COMPANY. Any such withholding obligation with regard to any
Participant may be satisfied, subject to the consent of the Committee, by
reducing the number of shares of Common Stock otherwise deliverable. Any
fraction of a share of Common Stock required to satisfy such tax obligations
shall be disregarded and the amount due shall be paid instead in cash by the
Participant.
12. NO STOCKHOLDER STATUS; NO RESTRICTIONS ON CORPORATE ACTS;
NO EMPLOYMENT RIGHT.
(A) Neither any Participant nor his or her legal representatives, legatees
or distributees shall be or be deemed to be the holder of any share of Common
Stock covered by an Award unless and until a certificate for such share has been
issued. Upon payment of the purchase price therefor, a share issued PURSUANT TO
THE exercise of A STOCK OPTION shall be fully paid and non-assessable.
(B) Neither the existence of the Plan nor any Award shall in any way affect
the right or power of the Company or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock
B-14
<PAGE>
ahead of or affecting the Common Stock or the rights thereof, or dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding whether of a
similar character or otherwise.
(C) Neither the existence of the Plan nor the grant of any Award shall
require the Company, any Subsidiary or Parent to continue any Participant in the
employ or service of the Company, such Subsidiary or such Parent.
13. TERMINATION AND AMENDMENT OF THE PLAN.
The Board may at any time terminate the Plan or make such modifications of
the Plan as it shall deem advisable; provided, however, that the Board may not,
without further approval of the holders of the shares of Common Stock in
accordance with the laws of the State of Delaware, solely to the extent required
by the applicable provisions of Rule 16b-3, section 162(m) or 422 of the Code or
the rules of any applicable exchange: (i) increase the aggregate number of
shares of Common Stock as to which Awards may be granted under the Plan (as
adjusted in accordance with the provisions of Section 10 hereof); (ii) increase
the minimum individual Participant share limitations under Section 9(B) of the
Plan; (iii) increase the maximum payment under Section 9(D) of the Plan;
(iv) materially alter the performance criteria described in SECTIONS 4(C), 4(D)
AND 8(F), and Exhibit A of the Plan; (v) extend the maximum option period under
Section 7 of the Plan; (vi) change the class of persons eligible to participate
in the Plan; or (vii) change the manner of determining stock option prices under
Section 6 of the Plan. Except as otherwise provided in Section 15 hereof, no
termination or amendment of the Plan may, without the consent of the Participant
to whom any Award shall theretofore have been granted, adversely affect the
rights of such Participant under such Award.
14. EXPIRATION AND TERMINATION OF THE PLAN.
The Plan shall terminate on May 19, 2009 or at such earlier time as the
Board may determine. THE AMENDMENTS MADE TO the Plan EFFECTIVE JANUARY 1, 2000,
SHALL NOT BE effective in the event that THE AMENDMENTS TO THE PLAN ARE NOT
approved by the stockholders of the Company at its 2000 Annual Meeting of
Stockholders AND THE PLAN AS IN EFFECT IMMEDIATELY PRIOR TO JANUARY 1, 2000
SHALL CONTINUE IN FULL FORCE AND EFFECT. Awards may be granted under the Plan at
any time and from time to time prior to its termination. Any Award outstanding
under the Plan at the time of the termination of the Plan shall remain in effect
until such Award shall have been exercised or shall have expired in accordance
with its terms.
B-15
<PAGE>
15. STOCK OPTIONS GRANTED IN CONNECTION WITH ACQUISITIONS.
In the event that the Committee determines that, in connection with the
acquisition by the Company or a Subsidiary of another corporation which will
become a Subsidiary or division of the Company (such corporation being hereafter
referred to as an "Acquired Subsidiary"), stock options may be granted hereunder
to employees and other personnel of an Acquired Subsidiary in exchange for then
outstanding stock options to purchase securities of the Acquired Subsidiary.
Such stock options may be granted at such option prices, may be exercisable
immediately or at any time or times either in whole or in part, and may contain
such other provisions not inconsistent with the Plan, or the requirements set
forth in Section 13 hereof that certain amendments to the Plan be approved by
the stockholders of the Company, as the Committee, in its discretion, shall deem
appropriate at the time of the granting of such stock options.
B-16
<PAGE>
EXHIBIT A
PERFORMANCE GOALS
These performance goals shall be based on one or more of the following
criteria with regard to the Company (or a Subsidiary, Parent, division, or other
operational unit of the Company): (i) the attainment of certain target levels
of, or a specified percentage increase in, profits, market share, revenues,
income before income taxes and extraordinary items, net income, earnings before
income tax, earnings before interest, taxes, depreciation and amortization,
funds from operations or a combination of any or all of the foregoing; (ii) the
attainment of certain target levels of (INCLUDING, WITHOUT LIMITATION, A
BREAK-EVEN), or a percentage increase in, after-tax or pre-tax profits
including, without limitation, that attributable to continuing and/or other
operations; (iii) the attainment of certain target levels of, or a specified
increase in, operational cash flow or cash generation targets; (iv) the
achievement of a certain level of, reduction of, or other specified objectives
with regard to limiting the level of increase in, all or a portion of, the
Company's bank debt or other long-term or short-term public or private debt or
other similar financial obligations of the Company, which may be calculated net
of such cash balances and/or other offsets and adjustments as may be established
by the Committee; (v) the attainment of a specified percentage increase in
earnings per share or earnings per share from continuing operations; (vi) the
attainment of certain target levels of, or a specified increase in return on
capital employed or return on invested capital; (vii) the attainment of certain
target levels of, or a percentage increase in, after-tax or pre-tax return on
stockholders' equity or profitability targets as measured by return ratio and
stockholder returns; (viii) the attainment of certain target levels of, or a
specified increase in, economic value added targets based on a cash flow return
on investment formula; (ix) the attainment of certain target levels in the fair
market value of the shares of the Company's common stock; and (x) the growth in
the value of an investment in the Company's common stock assuming the
reinvestment of dividends. For purposes of item (i) above, "extraordinary items"
shall mean all items of gain, loss or expense for the calendar year determined
to be extraordinary or unusual in nature or infrequent in occurrence or related
to a corporate transaction (including, without limitation, a disposition or
acquisition) or related to a change in accounting principle, all as determined
in accordance with standards established by opinion No. 30 of the Accounting
Principles Board.
To the extent permitted under section 162 (m) of the Code, but only to the
extent permitted under section 162(m) of the Code with respect to "covered
employees" under section 162(m) of the Code (including, without limitation,
compliance with any requirements for stockholder approval), the Committee may:
(i) designate additional business criteria on which the performance goals may be
based or (ii) adjust, modify or amend the aforementioned business criteria.
B-17
<PAGE>
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[OGDEN]
1999
NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
. . . . . . . . . . . . . . . . . . . . . . . . . .
THE ANNUAL MEETING OF
SHAREHOLDERS WILL BE HELD
AT THE
GRAND HYATT NEW YORK,
PARK AVENUE AT GRAND
CENTRAL,
NEW YORK, NEW YORK AT
10:00 A.M. (EASTERN
DAYLIGHT
SAVINGS TIME)
ON WEDNESDAY, JUNE 14,
2000.
<PAGE>
TELEPHONE INTERNET MAIL
800-481-9814 http://proxy.shareholder.
com/og
Use any touch-tone Use the Internet to vote Mark, sign and date your
telephone to vote your your proxy. Have your proxy card and return it
proxy. Have your proxy proxy card in hand when in the postage-paid
card in hand when you you access the envelope we have
call. You will be prompted website. You will be provided.
to enter your control prompted to enter your
number, located in the box control number, located in
below, and then follow the the box below, to create
simple directions. an electronic ballot.
Your telephone or Internet vote authorizes If you have submitted your proxy by
the named proxies to vote your shares in telephone or the Internet there is
the same manner as if you marked,signed no need for you to mail back your
and returned the proxy card. proxy.
<TABLE>
<S> <C>
CALL TOLL-FREE TO VOTE - IT'S FAST AND CONVENIENT CONTROL NUMBER FOR
800-481-9814 TELEPHONE OR INTERNET VOTING
DETACH PROXY CARD HERE IF YOU ARE NOT
VOTING BY TELEPHONE OR INTERNET
- ------------------------------------------------------------------------------------------------------------------------------------
The proposals are fully explained in the enclosed Notice of Annual Meeting of
Shareholders and Proxy Statement. To vote your proxy please mark by placing an
"X" in the appropriate box, sign and date the Proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE FOUR
DIRECTORS, "FOR" PROPOSALS 2, 3 AND 5 AND "AGAINST" PROPOSAL 4.
Proposal 1. Election of the following four FOR election of all WITHHOLD AUTHORITY to vote *EXCEPTIONS
nominee directors for a three year term. nominees listed below. for all nominees listed below.
Nominees: 01 - Norman G. Einspruch, 02 - Homer A. Neal, 03 - Joseph A. Tato, 04 - Robert R. Womack
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions: _____________________________________________________________________________________________________ PLEASE
DETACH
Proposal 2. Adoption of Executive Performance Incentive Proposal 3. Amendment to the Ogden 1999 Stock Incentive HERE
Plan. Plan.
You must
FOR / / AGAINST / / ABSTAIN / / FOR / / AGAINST / / ABSTAIN / / detach this
portion of
Proposal 4. Shareholder proposal urging the board Proposal 5. Ratification of appointment of Deloitte & the proxy
to arrange for the prompt sale of Ogden Touche LLP as auditors of Ogden for the card before
to the highest bidder. year 2000. returning
it in the
FOR / / AGAINST / / ABSTAIN / / FOR / / AGAINST / / ABSTAIN / / enclosed
envelope
Please sign exactly as your name(s) appear
hereon. When signing as attorney, executor,
administrator, trustee or guardian, please
sign your full title as such. If signer is a
corporation, please sign in full corporate
name by authorized officer. If signer is a
partnership, please sign in partnership name
by authorized person. Each joint owner
should sign.
Dated ________________________________, 2000
____________________________________________
Signature
____________________________________________
Signature, if held jointly
SIGN, DATE AND RETURN THE PROXY CARD If you plan to attend the VOTES MUST BE INDICATED
PROMPTLY USING THE ENCLOSED ENVELOPE. meeting please check here. / / (x) IN BLACK OR BLUE INK. X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
COMMON
OGDEN CORPORATION--BOARD OF DIRECTORS PROXY
KNOW ALL MEN BY THESE PRESENT that the undersigned shareholder of OGDEN
CORPORATION (the "Corporation") does hereby constitute and appoint Scott G.
Mackin and Jeffrey R. Horowitz, and each of them attorneys and proxies for the
undersigned with full power of substitution to each, for and in the name of the
undersigned and with all the powers the undersigned would possess if personally
present, to appear and vote all the shares of Common Stock of the undersigned in
the Corporation at the Annual Meeting of Shareholders of the Corporation, to be
held at the Grand Hyatt New York, Park Avenue at Grand Central, New York, New
York on Wednesday, June 14, 2000, at 10:00 A.M. (Eastern Daylight Savings Time)
and at any and all adjournments or postponements thereof, as set forth in the
Notice of Annual Meeting of Shareholders, dated May 15, 2000 and in their
discretion to act upon any other matters as may properly come before the
meeting.
A majority of such attorneys as shall be present and shall act at said
meeting, or any of them (or if only one of such attorneys shall be present and
acts, then that one) shall have and may exercise all the powers of said
attorneys hereunder.
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES TO WHICH IT
RELATES WILL BE VOTED AS SPECIFIED, BUT IF NO SPECIFICATION IS MADE, THE SHARES
TO WHICH IT RELATES WILL BE VOTED FOR THE ELECTION OF THE FOUR NOMINEE DIRECTORS
LISTED ON THE REVERSE SIDE; FOR ADOPTION OF THE EXECUTIVE PERFORMANCE INCENTIVE
PLAN; FOR ADOPTION OF THE AMENDMENT TO THE OGDEN 1999 STOCK INCENTIVE PLAN;
AGAINST SHAREHOLDER PROPOSAL NUMBER 4; AND FOR THE RATIFICATION OF DELOITTE &
TOUCHE LLP AS AUDITORS. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE ELECTION OF THE FOUR DIRECTORS; FOR ADOPTION OF THE EXECUTIVE
PERFORMANCE INCENTIVE PLAN; FOR THE AMENDMENT TO THE OGDEN 1999 INCENTIVE PLAN;
FOR RATIFICATION OF DELOITTE & TOUCHE LLP AS AUDITORS; AND AGAINST SHAREHOLDER
PROPOSAL NUMBER 4.
(Continued and to be dated and signed on the OGDEN CORPORATION
reverse side) P.O. BOX 11173
NEW YORK, N.Y. 10203-0173
<PAGE>
TELEPHONE INTERNET MAIL
800-481-9814 http://proxy.shareholder.
com/og
Use any touch-tone Use the Internet to vote Mark, sign and date your
telephone to vote your your proxy. Have your proxy card and return it
proxy. Have your proxy proxy card in hand when in the postage-paid
card in hand when you you access the envelope we have
call. You will be prompted website. You will be provided.
to enter your control prompted to enter your
number, located in the box control number, located in
below, and then follow the the box below, to create
simple directions. an electronic ballot.
Your telephone or Internet vote authorizes If you have submitted your proxy by
the named proxies to vote your shares in telephone or the Internet there is
the same manner as if you marked,signed no need for you to mail back your
and returned the proxy card. proxy.
<TABLE>
<S> <C>
CALL TOLL-FREE TO VOTE - IT'S FAST AND CONVENIENT CONTROL NUMBER FOR
800-481-9814 TELEPHONE OR INTERNET VOTING
DETACH PROXY CARD HERE IF YOU ARE NOT
VOTING BY TELEPHONE OR INTERNET
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The proposals are fully explained in the enclosed Notice of Annual Meeting of
Shareholders and Proxy Statement. To vote your proxy please mark by placing an
"X" in the appropriate box, sign and date the Proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE FOUR
DIRECTORS, "FOR" PROPOSALS 2, 3 AND 5 AND "AGAINST" PROPOSAL 4.
Proposal 1. Election of the following four FOR election of all WITHHOLD AUTHORITY to vote *EXCEPTIONS
nominee directors for a three year term. nominees listed below. for all nominees listed below.
Nominees: 01 - Norman G. Einspruch, 02 - Homer A. Neal, 03 - Joseph A. Tato, 04 - Robert R. Womack
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions: _____________________________________________________________________________________________________ PLEASE
DETACH
Proposal 2. Adoption of Executive Performance Incentive Proposal 3. Amendment to the Ogden 1999 Stock Incentive HERE
Plan. Plan.
You must
FOR / / AGAINST / / ABSTAIN / / FOR / / AGAINST / / ABSTAIN / / detach this
portion of
Proposal 4. Shareholder proposal urging the board Proposal 5. Ratification of appointment of Deloitte & the proxy
to arrange for the prompt sale of Ogden Touche LLP as auditors of Ogden for the card before
to the highest bidder. year 2000. returning
it in the
FOR / / AGAINST / / ABSTAIN / / FOR / / AGAINST / / ABSTAIN / / enclosed
envelope
Please sign exactly as your name(s) appear
hereon. When signing as attorney, executor,
administrator, trustee or guardian, please
sign your full title as such. If signer is a
corporation, please sign in full corporate
name by authorized officer. If signer is a
partnership, please sign in partnership name
by authorized person. Each joint owner
should sign.
Dated ________________________________, 2000
____________________________________________
Signature
____________________________________________
Signature, if held jointly
SIGN, DATE AND RETURN THE PROXY CARD If you plan to attend the VOTES MUST BE INDICATED
PROMPTLY USING THE ENCLOSED ENVELOPE. meeting please check here. / / (x) IN BLACK OR BLUE INK. X
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PREFERRED
OGDEN CORPORATION--BOARD OF DIRECTORS PROXY
KNOW ALL MEN BY THESE PRESENT that the undersigned shareholder of OGDEN
CORPORATION (the "Corporation") does hereby constitute and appoint Scott G.
Mackin and Jeffrey R. Horowitz, and each of them attorneys and proxies for the
undersigned with full power of substitution to each, for and in the name of the
undersigned and with all the powers the undersigned would possess if personally
present, to appear and vote all the shares of Preferred Stock of the undersigned
in the Corporation at the Annual Meeting of Shareholders of the Corporation, to
be held at the Grand Hyatt New York, Park Avenue at Grand Central, New York, New
York on Wednesday, June 14, 2000, at 10:00 A.M. (Eastern Daylight Savings Time)
and at any and all adjournments or postponements thereof, as set forth in the
Notice of Annual Meeting of Shareholders, dated May 15, 2000 and in their
discretion to act upon any other matters as may properly come before the
meeting.
A majority of such attorneys as shall be present and shall act at said
meeting, or any of them (or if only one of such attorneys shall be present and
acts, then that one) shall have and may exercise all the powers of said
attorneys hereunder.
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES TO WHICH IT
RELATES WILL BE VOTED AS SPECIFIED, BUT IF NO SPECIFICATION IS MADE, THE SHARES
TO WHICH IT RELATES WILL BE VOTED FOR THE ELECTION OF THE FOUR NOMINEE DIRECTORS
LISTED ON THE REVERSE SIDE; FOR ADOPTION OF THE EXECUTIVE PERFORMANCE INCENTIVE
PLAN; FOR ADOPTION OF THE AMENDMENT TO THE OGDEN 1999 STOCK INCENTIVE PLAN;
AGAINST SHAREHOLDER PROPOSAL NUMBER 4; AND FOR THE RATIFICATION OF DELOITTE &
TOUCHE LLP AS AUDITORS. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE ELECTION OF THE FOUR DIRECTORS; FOR ADOPTION OF THE EXECUTIVE
PERFORMANCE INCENTIVE PLAN; FOR THE AMENDMENT TO THE OGDEN 1999 INCENTIVE PLAN;
FOR RATIFICATION OF DELOITTE & TOUCHE LLP AS AUDITORS; AND AGAINST SHAREHOLDER
PROPOSAL NUMBER 4.
(Continued and to be dated and signed on the OGDEN CORPORATION
reverse side) P.O. BOX 11173
NEW YORK, N.Y. 10203-0173
