-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZG0r35LAwERStl3QhdFoydyg6J2pJws8CbQg0WqBY532NzKnbg7hCF08w2aD7OpO 1tu6lodR0cpKaHc04euH5g== 0000073902-94-000013.txt : 19940809 0000073902-94-000013.hdr.sgml : 19940809 ACCESSION NUMBER: 0000073902-94-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OGDEN CORP CENTRAL INDEX KEY: 0000073902 STANDARD INDUSTRIAL CLASSIFICATION: 8744 IRS NUMBER: 135549268 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03122 FILM NUMBER: 94542203 BUSINESS ADDRESS: STREET 1: TWO PENNSYLVANIA PLZ - 25TH FLR CITY: NEW YORK STATE: NY ZIP: 10121 BUSINESS PHONE: 2128686100 MAIL ADDRESS: STREET 1: TWO PENNSYLVANIA PLAZA CITY: NEW YORK STATE: NY ZIP: 10121 10-Q 1 OGDEN CORPORATION FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-3122 Ogden Corporation (Exact name of registrant as specified in its charter) Delaware 13-5549268 (State or other jurisdiction of I.R.S. Employer Identification incorporation or organization) Number) Two Pennsylvania Plaza, New York, New York 10121 (Address or principal executive office) (Zip Code) (212)-868-6100 (Registrant's telephone number including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares outstanding of each of the issuer's classes of common stock, as of June 30, 1994; 43,579,300 shares of Common Stock, $.50 par value per share. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME
FOR THE SIX MONTHS FOR THE THREE MONTHS ENDED JUNE 30, ENDED JUNE 30, 1994 1993 1994 1993 (In Thousands of Dollars, Except per Share Data) OPERATIONS OTHER THAN WASTE TO ENERGY: Net sales $209,602 $193,350 $113,872 $105,957 Service revenues 456,405 467,956 232,811 238,364 Total net sales and service revenues 666,007 661,306 346,683 344,321 Costs of goods sold 185,311 172,136 101,643 95,570 Operating expenses 396,133 409,413 201,832 209,111 Selling, administrative and general expenses 55,910 52,554 29,250 26,374 Total costs and expenses 637,354 634,103 332,725 331,055 Operating income 28,653 27,203 13,958 13,266 WASTE-TO-ENERGY OPERATIONS: Service revenues 228,853 212,958 119,794 109,455 Construction revenues 112,177 100,384 61,241 62,381 Total revenues 341,030 313,342 181,035 171,836 Operating costs 136,654 129,217 69,523 64,889 Construction costs 103,776 95,477 57,359 60,093 Selling, administrative and general expenses 10,109 8,088 5,717 3,934 Debt service charges 50,236 48,520 25,033 24,429 Other deductions (income)-net (369) (558) (166) (177) Total costs and expenses 300,406 280,744 157,466 153,168 Operating income 40,624 32,598 23,569 18,668 Consolidated operating income 69,277 59,801 37,527 31,934 Interest (expense)-net (6,043) (5,594) (3,523) (2,708) Other income (deductions)-net (71) 1,529 132 1,016 Income before income taxes and minority interest 63,163 55,736 34,136 30,242 Less: income taxes 25,897 22,851 13,996 12,398 minority interest 4,298 2,971 2,500 1,752 Income before cumulative effect of changes in accounting principles 32,968 29,914 17,640 16,092 Cumulative effect of changes in accounting principles (net of income taxes of $1,100 and $3,710 for 1994 and 1993, respectively) (1,520) (5,340) Net income $ 31,448 $ 24,574 $ 17,640 $ 16,092 EARNINGS (LOSS) PER COMMON SHARE: Income before cumulative effect of changes in accounting principles $ .75 $ .69 $ .40 $ .37 Cumulative effect of changes in accounting principles (.03) (.12) Total $ .72 $ .57 $ .40 $ .37 EARNINGS (LOSS) PER COMMON SHARE-ASSUMING FULL DILUTION: Income before cumulative effect of changes in accounting principles $ .74 $ .68 $ .40 $ .37 Cumulative effect of changes in accounting principles (.03) (.12) Total $ .71 $ .56 $ .40 $ .37
OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
JUNE 30, DECEMBER 31, 1994 1993 (In Thousands of Dollars) ASSETS OPERATIONS OTHER THAN WASTE TO ENERGY: Current Assets: Cash and cash equivalents $ 109,658 $ 105,539 Marketable securities 104,197 94,247 Receivables (less allowances: 1994, $20,593; 1993, $18,226) 378,902 375,532 Other 34,118 29,835 Total current assets 626,875 605,153 Property, plant and equipment-net 130,774 130,439 Other assets 300,629 281,255 Total 1,058,278 1,016,847 WASTE-TO-ENERGY OPERATIONS: Cash 4,208 3,558 Receivables (less allowances: 1994, $12,039 and 1993, $7,321) 249,103 224,561 Restricted funds held in trust 329,033 359,416 Property, plant and equipment-net 1,592,136 1,563,362 Other assets 138,854 144,766 Total 2,313,334 2,295,663 CONSOLIDATED ASSETS $ 3,371,612 $ 3,312,510 LIABILITIES AND SHAREHOLDERS' EQUITY OPERATIONS OTHER THAN WASTE TO ENERGY: Current Liabilities: Current portion of long-term debt $ 3,646 $ 3,070 Accounts payable 83,014 74,317 Accrued expenses, etc. 111,998 105,132 Total current liabilities 198,658 182,519 Long-term debt 247,419 247,640 Deferred income taxes 39,864 43,926 Other liabilities 109,863 95,963 Minority interest in subsidiaries 66,263 61,981 Convertible subordinated debentures 151,750 151,750 Total 813,817 783,779 WASTE-TO-ENERGY OPERATIONS: Accounts payable 11,820 24,647 Accrued expenses, etc. 149,028 151,874 Project Debt: Revenue bonds issued by and prime responsibility of municipalities 1,205,080 1,210,935 Revenue bonds issued by municipal agencies with sufficient service revenues guaranteed by third parties 338,231 340,431 Other borrowings 28,423 28,423 Deferred income taxes 175,792 155,130 Deferred income 52,788 52,028 Other liabilities 103,110 78,996 Total 2,064,272 2,042,464 CONSOLIDATED LIABILITIES 2,878,089 2,826,243 SHAREHOLDERS' EQUITY 493,523 486,267 CONSOLIDATED LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,371,612 $ 3,312,510
OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
JUNE 30, DECEMBER 31, 1994 1993 (In Thousands of Dollars) Serial Cumulative Convertible Preferred Stock, par value $1.00 per share; authorized, 4,000,000 shares: shares outstanding: 55,000 in 1994, 57,000 in 1993 $ 55 $ 57 Common Stock, par value $.50 per share; authorized, 80,000,000 shares: shares outstanding: 43,579,000 in 1994, 43,499,000 in 1993 21,790 21,750 Capital Surplus 101,255 100,223 Earned Surplus 374,362 370,231 Cumulative Translation Adjustment-Net (2,477) (4,639) Pension Liability Adjustment (928) (928) Net Unrealized Loss on Noncurrent Marketable Equity Securities (534) (427) CONSOLIDATED SHAREHOLDERS' EQUITY $ 493,523 $ 486,267
OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30 1994 1993 (In Thousands of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Cash generated from operations $103,960 $ 96,740 Management of Operating Assets and Liabilities: Decrease (Increase) in Assets: Receivables (26,697) (31,395) Other assets (24,180) (34,354) Increase (Decrease) in Liabilities: Accounts payable (3,606) 7,651 Accrued expenses 6,927 7,291 Other liabilities 30,749 33,881 Net cash provided by operating activities 87,153 79,814 CASH FLOWS FROM INVESTING ACTIVITIES: Entities purchased, net of cash acquired (4,768) (51,208) Decrease (increase) in marketable securities (9,950) 19,827 Proceeds from sale of business 12,516 Proceeds from sale of property, plant and equipment 957 7,066 Investments in waste-to-energy facilities (45,963) (34,344) Other capital expenditures (20,970) (21,625) Decrease (increase) in non-current receivables (9,780) 194 Other 163 1,805 Net cash used in investing activities (77,795) (78,285) CASH FLOWS FROM FINANCING ACTIVITIES: Other new debt 1,875 6,425 Decrease in funds held in trust for waste-to-energy facilities 30,383 19,065 Payment of debt (9,589) (19,042) Dividends paid (27,293) (27,096) Other 35 2,876 Net cash used by financing activities (4,589) (17,772) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,769 (16,243) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 109,097 116,457 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 113,866 $ 100,214
OGDEN CORPORATION AND SUBSIDIARIES JUNE 30, 1994 ITEM 1 - BASIS OF PRESENTATION: The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. However, in the opinion of the Management, all adjustments consisting of normal recurring accruals necessary for a fair presentation of the operating results have been included in the statements. The Corporation adopted SFAS 112, "Employers' Accounting for Postemployment Benefits," as of January 1, 1994. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" for a description of the plan and its effect on the accompanying financial statements. The accompanying financial statements for prior periods have been reclassified as to certain amounts to conform with the 1994 presentation. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: Operations:
Six Months Three Months Information Concerning Ended June 30, Ended June 30, Business Segments 1994 1993 1994 1993 (In Thousands of Dollars) Revenues: Operating Services $ 666,007 $661,306 $346,683 $344,321 Waste-to-Energy Operations 341,030 313,342 181,035 171,836 Total Revenues $1,007,037 $974,648 $527,718 $516,157 Income From Operations: Operating Services $ 33,680 $ 32,779 $ 16,537 $ 16,191 Waste-to-Energy Operations 40,624 32,598 23,569 18,668 Total Income from Operations 74,304 65,377 40,106 34,859 Corporate unallocated expenses-net (5,098) (4,047) (2,447) (1,909) Corporate interest-net (6,043) (5,594) (3,523) (2,708) Income Before Income Taxes and Minority Interest 63,163 55,736 34,136 30,242 Less: Income Taxes 25,897 22,851 13,996 12,398 Minority Interest 4,298 2,971 2,500 1,752 Income Before Cumulative Effect Of Changes In Accounting Principles 32,968 29,914 17,640 16,092 Cumulative Effect Of Changes In Accounting Principles (Net Of Income Taxes Of $1,100 and $3,710 for 1994 and 1993, respectively) (1,520) (5,340) Net Income $ 31,448 $ 24,574 $ 17,640 $ 16,092
Sales and service revenues for the first six months of 1994 were $32,400,000 higher than the comparable period of 1993. Operating Services revenues were $4,700,000 higher, primarily reflecting increased revenues of $13,200,000 in Entertainment Services due to several new contracts, including the start-up of the Arrowhead Pond of Anaheim, as well as increased customer activity; and $9,800,000 in Ogden Environmental and Energy Services primarily due to increased activity in the consulting and power generation groups; these increases were partially offset by lower sales of $10,800,000 in Facility Services (formerly Building Services and Industrial Services) primarily due to the sale of California Building Services contracts in the second quarter of 1993, and the loss of certain utility maintenance facility and building cleaning contracts, and $7,600,000 in Government Services due to the loss of several building maintenance contracts. Waste-to-Energy operations (Ogden Projects, Inc.) revenues increased $27,700,000. Service revenues were $15,900,000 higher due primarily to increased revenues from the Detroit, Michigan, Hartford, Connecticut, and Honolulu, Hawaii, facilities acquired in January 1993, revenues from the start up and full operation of the Union County, New Jersey, facility and the operation of the transfer station at Montgomery County, Maryland. Construction revenues increased $11,800,000 primarily due to construction activity at the Montgomery County, Maryland, facility which was partially offset by reduced activity at the Union County, New Jersey, facility which was completed in May 1994. Income from operations for the first six months of 1994 was $8,900,000 higher than the comparable period of 1993. Operating Services income increased $900,000, chiefly associated with increased earnings of $2,600,000 in Entertainment Services, primarily reflecting several new contracts including the start up of the Arrowhead Pond of Anaheim, as well as increased customer activity; and $2,200,000 in Facility Management primarily reflecting higher margins and increased activity at Atlantic Design. These increases were partially offset by a decrease of $2,600,000 in Government Services reflecting the loss of several contracts and lower customer activity, $700,000 in Asbestos Abatement primarily due to the settlement of a contract dispute and $900,000 in increased general administrative and marketing expenses. Waste-to-Energy income was $8,000,000 higher than the comparable period of 1993. Income from services (service revenues less operating costs and debt service charges) increased $6,800,000 primarily reflecting the start up of the Union County, New Jersey, facility and improved performance at certain facilities. Debt service charges for 1994 increased $1,700,000 primarily reflecting the conversion of one series of adjustable rate project debt to a fixed rate and higher interest expense on two interest rate swap agreements used to hedge adjustable rate project debt. The additional interest cost of these swaps was $1,000,000 and $300,000 for the six months of 1994 and 1993, respectively. Construction profit (construction revenues less construction costs) was $3,500,000 higher due to increased activity at the Montgomery County, facility. These increases were partially offset by additional general and administrative expenses of $2,000,000 due primarily to increased marketing efforts, including those related to opportunities in new industries. Corporate unallocated expenses - net for the six months of 1994 was $1,100,000 higher than the comparable period of 1993, primarily due to increased administrative costs. Corporate interest-net for the six months of 1994 was $450,000 higher than the comparable period of 1993. Interest expense increased by $600,000, from $12,100,000 in 1993 to $12,700,000 in 1994, primarily reflecting increased costs on the Corporation's variable rate debt. Interest income for the six months of 1994 increased $100,000 from $6,500,000 in 1993 to $6,600,000 in 1994. This increase was due primarily to increased earnings on investments which were partially offset by reduced income on an interest rate swap agreement. Net interest income on interest rate swap agreements amounted to $1,000,000 and $1,600,000 for the six months ended June 30, 1994 and 1993, respectively. One interest rate swap agreement covering a notional amount of $100,000,000 expired on March 23, 1994. The effective income tax rate for the six months of 1994 and 1993 was 41% for both periods. Sales and service revenues for the second quarter of 1994 were $11,600,000 higher than the comparable period of 1993. Operating Services revenues were $2,400,000 higher, primarily reflecting increased revenues of $3,700,000 in Entertainment Services due to several new contracts, including Arrowhead Pond of Anaheim, as well as increased customer activity; and $8,000,000 at Ogden Environmental and Energy Services primarily in the consulting and engineering and power generation groups; these increases were partially offset by lower revenues of $4,500,000 in Facility Services primarily due to the loss of certain utility maintenance and building cleaning contracts as well as the sale of California Building Services contracts and $4,600,000 at Government Services reflecting the loss of several contracts. Waste-to- Energy operations revenues increased $9,200,000. Service revenues were $10,300,000 higher due primarily to the start up and commercial operations of the Union County facility and increased activity at the Hartford, facility and the Montgomery County transfer station. Construction revenues were $1,100,000 lower primarily due to reduced activity at the Union County facility which was completed in May 1994. This decrease was partially offset by activity at the Montgomery County facility. Income from operations for the second quarter of 1994 was $5,200,000 higher than the comparable period of 1993. Operating Services income increased $300,000 chiefly associated with increased earnings of $1,100,000 in Entertainment Services, primarily reflecting several new contracts and $1,300,000 in Facility Services chiefly associated with higher margins and increased activity at Atlantic Design; and $850,000 in Aviation Services reflecting increased customer activity. These increases were partially offset by lower earnings of $2,100,000 in Government Services chiefly associated with the loss of several contracts and reduced customer activity. Waste-to-Energy income was $4,900,000 higher than the comparable period of 1993. Income from services increased $5,100,000 primarily reflecting the start-up and commercial operations of the Union County facility and improved performance at the facilities acquired from Asea Brown Boveri, Inc. in 1993. Debt Service charges for the second quarter of 1994 increased $600,000. The additional interest costs of the two interest rate swap agreements used to hedge adjustable rate project debt was $400,000 and $300,000 for the second quarter of 1994 and 1993, respectively. Construction profit was $1,600,000 higher primarily due to increased construction activity at the Montgomery County facility. These increases were partially offset by increased general and administrative expenses of $1,800,000 due primarily to increased marketing efforts to develop new business. Corporate unallocated expenses - net for the second quarter of 1994 was $500,000 higher than the comparable period of 1993, primarily reflecting increased administrative costs. Corporate interest - net for the second quarter of 1994 was $800,000 higher than the comparable period of 1993. Interest expense increased $400,000 from $6,000,000 in 1993 to $6,400,000 in 1994, primarily reflecting increased costs on the Corporation's variable rate debt. Interest income for the second quarter of 1994 decreased $400,000 from $3,300,000 in 1993 to $2,900,000 in 1994. This decrease was primarily due to decreased income on an interest rate swap agreement partially offset by increased earnings on investments. Net interest income on interest rate swap agreements amounted to $100,000 and $800,000 for the second quarter of 1994 and 1993, respectively. The effective income tax rate for the second quarter of 1994 and 1993 was 41% for both periods. The Corporation adopted Statement of Financial Accounting No. 112 "Employers Accounting for Postemployment Benefits" (SFAS 112) as of January 1, 1994. This Statement establishes accounting standards for employers who provide benefits to former or inactive employees after employment but before retirement. These benefits include, but are not limited to, salary continuation, supplemental unemployment benefits, severance benefits, disability benefits, job training, health care benefits, and life insurance coverage. The effect of implementing SFAS 112 as of January 1, 1994 is shown in the accompanying financial statements as a cumulative effect of a change in accounting principle and is reflected as a charge to income of $1,520,000 or $.03 per share. Capital Investments, Commitments and Liquidity: During the first six months of 1994, capital investments amounted to $67,000,000 of which $46,000,000, inclusive of restricted funds transferred from funds held in trust, was for Waste-to-Energy Operations and $21,000,000 was for normal replacement and growth in Operating Services, Waste-to-Energy Operations and for corporate office equipment. At June 30, 1994, capital commitments amounted to $41,900,000 which includes commitments for equity investments (over and above restricted funds provided by revenue bonds issued by municipalities) of $7,900,000 for waste-to-energy facilities and $34,000,000 for normal replacement, modernization, and growth in Operating Services and Waste-to-Energy Operations. Ogden continues as a guarantor of surety bonds and letters of credit totaling approximately $19,200,000 on behalf of International Terminal Operating Co., Inc. (ITO). On June 1, 1994 Ogden was relieved of its contingent liability as guarantor with respect to certain Industrial Revenue Bonds of Avondale Industries, Inc., amounting approximately to $36,000,000. Ogden and Avondale have reached tentative agreement regarding the disposition of certain litigation, income tax and other matters which should preclude the need for Ogden to purchase Avondale Preferred Stock. With construction of waste-to-energy facilities financed to a large degree by revenue bonds issued by municipalities, potential repurchase of Ogden common shares, and capital commitments and payments, if any, required by guarantees, are expected to be satisfied from cash flow from operations; available funds, including short-term investments; and the Corporation's unused credit facilities to the extent needed. At June 30, 1994, the Corporation had $218,100,000 in cash, cash equivalents, and marketable securities and unused revolving credit lines of $170,200,000. PART II - OTHER INFORMATION Item 1. Legal Proceedings In the ordinary course of its business, Ogden's subsidiaries ("Ogden Subsidiaries") become involved in federal, state, and local proceedings relating to the laws regulating the discharge of materials into the environment and the protection of the environment. These include proceedings for the issuance, amendment, or renewal of the licenses and permits pursuant to which Ogden Subsidiaries operate. Such proceedings also include actions brought by individuals or local governmental authorities seeking to overrule governmental decisions on matters relating to Ogden Subsidiaries' operations in which Ogden Subsidiaries may be, but are not necessarily, a party. Most proceedings brought against Ogden Subsidiaries by governmental authorities under these laws relate to alleged technical violations of regulations, licenses, or permits pursuant to which Ogden Subsidiaries operate. At June 30, 1994, Ogden Subsidiaries were involved in such proceedings in which Ogden believes sanctions involved may exceed $100,000 in the aggregate. Ogden believes that such proceedings will not have a material adverse effect on its business. Item 4. Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of Shareholders of Ogden Corporation was held on May 26, 1994. (b) Not Required (c) Proposal 1: Election of five directors for a three year term:
Shares Shares Voted For Withheld David M. Abshire 38,355,818 427,593 Norman G. Einspruch 38,360,032 423,379 Attallah Kappas 38,350,112 433,299 Homer A. Neal 38,364,484 418,927 Stanford S. Penner 38,345,272 438,139
Proposal 2: Ratification of the selection of Deloitte & Touche as independent public accountants of the corporation and its subsidiaries for the year 1994:
Shares Shares Voted Voted Shares Broker For Against Abstained Non-Votes 38,409,457 242,656 131,298 -0-
Proposal 3: Proposal to approve the adoption by the Board of Directors of an amendment to the Ogden 1990 Stock Option Plan:
Shares Shares Voted Voted Shares Broker For Against Abstained Non-Votes 28,428,781 4,960,352 563,869 4,830,409
Proposal 4: Proposal to approve the adoption by the Board of Directors of a CEO Formula Bonus Plan:
Shares Shares Voted Voted Shares Broker For Against Abstained Non-Votes 35,664,361 2,509,394 606,656 3,000
Item 5. Other Information Ogden is the owner of 84.2% of the outstanding common stock of Ogden Projects, Inc. ("OPI"), a Delaware company whose common stock is traded on the New York Stock Exchange. On June 6, 1994 Ogden submitted an offer to the Board of Directors of OPI proposing to enter into an agreement of merger providing for the acquisition by Ogden of the remaining outstanding shares of OPI common stock that Ogden does not currently own for consideration consisting of 0.78 shares of Ogden common stock for each share of OPI common stock (the "Offer"). On June 6, 1994 the OPI Board of Directors appointed a special committee composed of independent directors to review and consider the Offer. The OPI special committee has retained financial and legal advisers. The Offer is subject to approval by the special committee and the execution of a definitive merger agreement. Since the Offer was made by Ogden there have been eight class action civil suits filed by OPI shareholders in the Court of Chancery of the State of Delaware in and for New Castle County against Ogden, OPI and the OPI Directors. The actions allege, among other things, that the consideration to be paid the OPI shareholders is grossly unfair, inadequate, and substantially below the fair value of the OPI shares. The actions seek injunctive relief against Ogden and OPI to enjoin them from consummating a transaction which would be unfair to the OPI shareholders as well as seeking the award of compensatory damages. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 2.0 Agreement and Plan of merger, dated as of October 31, 1989, among Ogden, ERCI Acquisition Corporation and ERC International Inc.* 4.0 (a) Ogden's Restated Certificate of Incorporation, as amended.* (b) Underwriting Agreement dated as of March 4, 1992 by and among Ogden Corporation, Goldman Sachs & Co., J. P. Morgan Securities, Inc. and Salomon Brothers Inc.* (c) Indenture dated as of March 1, 1992 between Ogden Corporation and The Bank of New York, Trustee, relating to Ogden's $100 million debt offering.* (d) Fiscal Agency Agreement and Offering Memorandum describing Ogden's $85 million 6% Convertible Subordinated Debentures, Due 2002 and $75 million 5.75% Convertible Subordinated Debentures, Due 2002.* (e) Credit Agreement by and among Ogden, The Bank of New York, as Agent, and National Westminster Bank PLC, Swiss Bank Corporation and Union Bank of Switzerland, dated as of January 31, 1990.* (f) Amendment No. 1, dated December 28, 1990, to the Credit Agreement, dated January 31, 1990, by and among Ogden, the signatory Banks thereto and The Bank of New York, as Agent.* 10.0 Material Contracts 10.1 Stock Purchase Agreement, dated May 31, 1988, between Ogden and Ogden Projects, Inc.* 10.2 Tax Sharing Agreement, dated January 1, 1989, between Ogden, Ogden Projects, Inc. and subsidiaries, Ogden Allied Services, Inc. and subsidiaries and Ogden Financial Services, Inc. and subsidiaries.* 10.3 Stock Purchase Option Agreement, dated June 14, 1989, between Ogden and Ogden Projects, Inc. as amended on November 16, 1989.* 10.4 Preferred Stock Purchase Agreement, dated July 7, 1989, between Ogden Financial Services, Inc. and Image Data Corporation.* (i) Preferred Stock Exchange Agreement between Image Data Corporation and Ogden Financial Services, Inc. dated as of January 1, 1991.* 10.5 Rights Agreement between Ogden Corporation and Manufacturers Hanover Trust Company, dated as of September 20, 1990.* 10.6 Executive Compensation Plans and Agreements (a) Ogden Corporation 1986 Stock Option Plan* (b) Ogden Corporation 1990 Stock Option Plan* (i) Ogden Corporation 1990 Stock Option Plan as Amended and Restated as of Janury 19, 1994. (c) Ogden Services Corporation Executive Pension Plan* (d) Ogden Services Corporation Select Savings Plan* (e) Ogden Services Corporation Select Savings Plan Trust* (f) Ogden Services Corporation Executive Pension Plan.* (g) Changes effected to the Ogden Profit Sharing Plan effective January 1, 1990.* (h) Employment Letter Agreement between Ogden and an Executive Officer dated January 30, 1990.* (i) Employment Agreement between Ogden and R. Richard Ablon dated as of May 24, 1990.* (1) Letter Amendment Employment Agreement between Ogden and R. Richard Ablon dated as of October 11, 1990.* (j) Employment Agreement between Ogden and C.G. Caras dated as of July 2, 1990.* (i) Letter Amendment to Employment Agreement between Ogden Corporation and C.G. Caras, dated as of October 11, 1990.* (k) Employment Agreement between Ogden and Philip G. Husby as of July 2, 1990.* (l) Termination Letter Agreement between Maria P. Monet and Ogden dated as of October 22, 1990.* (m) Letter Agreement between Ogden and Ogden's Chairman of the Board dated January 16, 1992.* (n) Employment Agreement between Ogden and Ogden's Chief Accounting Officer dated as of December 18, 1991.* (o) Employment Agreement between Scott G. Mackin and Ogden Projects, Inc. dated as of June 1, 1990.* (p) Ogden Corporation Profit Sharing Plan.* (q) Ogden Corporation Core Executive Benefit Program.* (r) Ogden Projects Pension Plan.* (s) Ogden Projects Profit Sharing Plan.* (t) Ogden Projects Supplemental Pension and Profit Sharing Plan.* (u) Ogden Projects Employee's Stock Option Plan.* (v) Ogden Projects Core Executive Benefit Program.* (w) Ogden Corporation CEO Formula Bonus Plan. 10.7 Agreement and Plan of Merger among Ogden Corporation, ERC International, Inc., ERC Acquisition Corporation and ERC Environmental and Energy Services Co., Inc., dated as of January 17, 1991.* 10.8 First Amended and Restated Ogden Corporation Guaranty Agreement made as of January 30, 1992 by Ogden Corporation for the benefit of Mission Funding Zeta and Pitney Bowes Credit Corporation.* 10.9 Ogden Corporation Guaranty Agreement as of January 30, 1992 by Ogden Corporation for the benefit of Allstate Insurance Company and Ogden Martin Systems of Huntington Resource Recovery Nine Corporation.* 11.0 Detail of Computation of Earnings applicable to Common Stock. * Incorporated by reference as set forth in the Exhibit Index of this Form 10-Q (b) Reports on Form 8-K -- There were no reports on Form 8-K filed for the three months ended June 30, 1994. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized. OGDEN CORPORATION (Registrant) Date: August 8, 1994 By: /s/Philip G. Husby Philip G. Husby Senior Vice President and Chief Financial Officer Date: August 8, 1994 By: /s/Robert M. DiGia Robert M. DiGia Vice President, Controller and Chief Accounting Officer EX-10.6(B)(I) 2 AMENDED AND RESTATED STOCK OPTION PLAN EXHIBIT 10.6(b)(i) OGDEN CORPORATION 1990 STOCK OPTION PLAN AS ADOPTED OCTOBER 11, 1990 AMENDED AND RESTATED AS OF JANUARY 19, 1994 TABLE OF CONTENTS 1. Purpose of the Plan.......................................... 1 2. Definitions.................................................. 1 Board of Directors...................................... 1 Cause................................................... 1 Change in Control....................................... 1 Code.................................................... 2 Committee............................................... 2 Common Stock............................................ 2 Company................................................. 2 Director................................................ 2 Director's LSAR......................................... 2 Director's Option....................................... 2 Disability.............................................. 2 Exchange Act............................................ 2 Fair Market Value....................................... 2 Incentive Award......................................... 2 Incentive Stock Option.................................. 2 LSAR.................................................... 3 Non-Qualified Stock Option.............................. 3 Ogden................................................... 3 Option.................................................. 3 Participant............................................. 3 Person.................................................. 3 Plan.................................................... 3 Retirement.............................................. 3 Securities Act.......................................... 3 Stock Bonus............................................. 3 Subsidiary.............................................. 3 3. Stock Subject to the Plan and Certain Individual Limitations. 3 4. Administration of the Plan................................... 4 5. Eligibility.................................................. 5 6. Options...................................................... 5 Identification of Options............................... 5 Exercise Price.......................................... 5 Term and Exercise of Options............................ 5 Limitations on Grant of Incentive Stock Options......... 6 Effect of Termination of Employment..................... 7 Consequences Upon Change in Control..................... 7 Cash Bonuses and Loans.................................. 8 7. Limited Stock Appreciation Rights............................ 8 Benefit Upon Exercise................................... 8 Term and Exercise of LSARs.............................. 8 8. Director's Options and Director's LSARs...................... 9 Grant of Director's Options............................. 9 Identification of Director's Options.................... 10 Exercise Price.......................................... 10 Term and Exercise of Options............................ 10 Acceleration of Exercise Date Upon Change in Control.... 11 Effect of Termination of Director's Term................ 11 Director's LSARs........................................ 11 9. Stock Bonuses................................................ 12 10. Adjustment Upon Changes in Common Stock...................... 12 Shares Available for Grants............................. 12 Outstanding Options, LSARs, Director's Options and Director's LSARs -- Increase or Decrease in Issued Shares Without Consideration............................ 13 Outstanding Options, LSARs, Director's Options and Director's LSARs -- Certain Mergers..................... 13 Outstanding Options, LSARs, Director's Options and Director's LSARs -- Certain Other Transactions.......... 13 Outstanding Options, LSARs -- Other Changes............. 14 No Other Rights......................................... 14 11. Rights as a Stockholder...................................... 14 12. No Special Employment Rights; No Right to Incentive Award.... 14 13. Securities Matters........................................... 15 14. Withholding Taxes............................................ 15 Cash Remittance......................................... 15 Stock Remittance........................................ 15 Stock Withholding....................................... 16 Participants Subject to Section 16(b)................... 16 Timing and Method of Elections.......................... 16 15. Amendment of the Plan........................................ 17 16. No Obligation to Exercise.................................... 17 17. Transfers Upon Death......................................... 17 18. Expenses and Receipts........................................ 17 19. Failure to Comply............................................ 17 20. Effective Date and Term of Plan.............................. 17 1. PURPOSE OF THE PLAN This Ogden Corporation 1990 Stock Option Plan is intended to promote the interests of the Company by providing the employees of the Company and non-employee directors of Ogden Corporation, who are largely responsible for the management, growth and protection of the business of the Company, with incentives and rewards to encourage them to continue in the employ of the Company. 2. DEFINITIONS As used in the Plan, the following definitions apply to the terms indicated below: (a) "Board of Directors" shall mean the Board of Directors of Ogden. (b) "Cause," when used in connection with the termination of a Participant's employment with the Company, shall mean the termination of the Participant's employment by the Company on account of (i) the willful and continued failure by the Participant substantially to perform his duties and obligations (other than any such failure resulting from his incapacity due to physical or mental illness) or (ii) the willful engaging by the Participant in gross misconduct which could reasonably be expected to be materially and demonstrably injurious to the Company. For purposes of this Section 2(b), no act, or failure to act, on a Participant's part shall be considered "willful" unless done, or omitted to be done, by the Participant in bad faith and without reasonable belief that his action or omission was in the best interests of the Company. (c) "Change in Control" shall mean: (i) any Person (an "Acquiring Person") becomes the "beneficial owner" (as such term is defined in Rule 13d-3 promulgated under the Exchange Act, a "Beneficial Owner"), directly or indirectly, of securities of Ogden representing 20% or more of the combined voting power of the Ogden's then outstanding securities, other than beneficial ownership by a Participant, the Company, any employee benefit plan of the Company or any person or entity organized, appointed or established pursuant to the terms of any such benefit plan; (ii) Ogden's stockholders approve an agreement to merge or consolidate Ogden with another corporation, or an agreement providing for the sale of substantially all of the assets of Ogden 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, Ogden; or (iii) during any two-year period, individuals who at the date on which the period commences constitute a majority of the Board of Directors cease to constitute a majority 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 of Directors. The Committee may, in its absolute discretion, define the term Change in Control to mean, with respect to any Incentive Award (other than any Director's Option or Director's LSAR), the occurrence of any one or more of the events described in clauses (i) -- (iii) of this Section 2(c). (d) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. (e) "Committee" shall mean the Compensation Committee of the Board of Directors or such other committee as the Board of Directors shall appoint from time to time to administer the Plan. (f) "Common Stock" shall mean Ogden's common stock, $.50 par value per share. (g) "Company" shall mean Ogden and each of its Subsidiaries. (h) "Director" shall mean a member of the Board of Directors of Ogden who is not at the time of reference an employee of the Company and who is entitled to receive an Incentive Award pursuant to Section 8 hereof. (i) "Director's LSAR" shall mean a limited stock appreciation right which is granted pursuant to the provisions of Section 8 hereof and which relates to a Director's Option. Each Director's LSAR shall be exercisable only in the alternative to the exercise of its related Director's Option. (j) "Director's Option" shall mean an option to purchase shares of Common Stock of Ogden granted pursuant to Section 8 hereof. Each Director's Option shall be identified as a Non-Qualified Stock Option in the agreement by which it is evidenced. (k) "Disability" shall mean a condition entitling a Participant to benefits under the long-term disability policy maintained by the Company and applicable to him. (l) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (m) the "Fair Market Value" of a share of Common Stock with respect to any day 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 day as reported on the National Association of Securities Dealers Automated Quotation System 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. (n) "Incentive Award" shall mean an Option, LSAR, Stock Bonus, Director's Option or Director's LSAR granted pursuant to the terms of the Plan. (o) "Incentive Stock Option" shall mean an Option which is an "incentive stock option" within the meaning of Section 422A of the Code and which is identified as an Incentive Stock Option in the agreement by which it is evidenced. (p) "LSAR" shall mean a limited stock appreciation right which is granted pursuant to the provisions of Section 7 hereof and which relates to an Option. Each LSAR shall be exercisable only upon the occurrence of a Change in Control and only in the alternative to the exercise of its related Option. (q) "Non-Qualified Stock Option" shall mean (i) an Option which is not an Incentive Stock Option and which is identified as a Non-Qualified Stock Option in the agreement by which it is evidenced or (ii) a Director's Option. (r) "Ogden" shall mean Ogden Corporation, a Delaware corporation, and its successors. (s) "Option" shall mean an option to purchase shares of Common Stock of Ogden granted pursuant to Section 6 hereof. Each Option shall be identified as either an Incentive Stock Option or a Non-Qualified Stock Option in the agreement by which it is evidenced. (t) "Participant" shall mean an employee of the Company or a Director who is eligible to participate in the Plan and to whom an Incentive Award is granted pursuant to the Plan, and upon his death, his successors, heirs, executors and administrators, as the case may be. (u) "Person" shall mean a "person," as such term is used in Sections 13(d) and 14(d) of the Exchange Act. (v) "Plan" shall mean this Ogden Corporation 1990 Stock Option Plan, as it may be amended from time to time. (w) "Retirement" shall mean the termination of the employment of a Participant with the Company on or after (i) the first date on which the Participant has both attained age 55 and completed 5 years of service with the Company or (ii) the date on which the Participant attains age 65. (x) "Securities Act" shall mean the Securities Act of 1933, as amended. (y) "Stock Bonus" shall mean a grant of a bonus payable in shares of Common Stock pursuant to Section 9 hereof. (z) "Subsidiary" shall mean any "subsidiary corporation" within the meaning of Section 425(f) of the Code. 3. STOCK SUBJECT TO THE PLAN AND CERTAIN INDIVIDUAL LIMITATIONS Under the Plan, the Committee may grant to Participants other than Directors (i) Options, (ii) LSARs and (iii) Stock Bonuses. In addition, Directors will be granted Director's Options and Director's LSARs pursuant to the provisions of Section 8 hereof. Subject to adjustment as provided in Section 10 hereof, the Committee may grant Options under the Plan to Participants under the Plan, and Director's Options shall be granted to Directors as provided in Section 8 hereof, with respect to a number of shares of Common Stock that in the aggregate does not exceed 6,200,000 shares. The grant of an LSAR or Director's LSAR shall not reduce the number of shares of Common Stock with respect to which Options or Director's Options may be granted pursuant to the Plan. Subject to adjustment as provided in Section 10 hereof, the maximum number of shares of Common Stock with respect to which Incentive Awards may be granted under this Plan to any one Participant shall not exceed 700,000 shares in the aggregate during any period of four consecutive calendar years commencing on or after January 1, 1994. Each share subject to an Option or Director's Option and to a related LSAR or Director's LSAR, respectively, shall only count as a single share for purposes of this limitation. In the event that any outstanding Option expires, terminates or is cancelled for any reason (other than pursuant to Paragraph 7(b)(2) hereof), the shares of Common Stock subject to the unexercised portion of such Option shall again be available for grants under the Plan. In the event that an outstanding Option is cancelled pursuant to Paragraph 7(b)(2) hereof by reason of the exercise of an LSAR, the shares of Common Stock subject to the cancelled portion of such Option shall not again be available for grants under the Plan. In the event that any outstanding Director's Option expires, terminates or is cancelled for any reason (other than pursuant to Paragraph 8(g)(ii)(B) hereof), the shares of Common Stock subject to the unexercised portion of such Director's Option shall again be available for grants under the Plan. In the event that an outstanding Director's Option is cancelled pursuant to Paragraph 8(g)(ii)(B) hereof by reason of the exercise of a Director's LSAR, the shares of Common Stock subject to the cancelled portion of such Director's Option shall not again be available for grants under the Plan. Shares of Common Stock issued under the Plan may be either newly issued shares or treasury shares, at the discretion of the Committee. 4. ADMINISTRATION OF THE PLAN The Plan shall be administered by a Committee of the Board of Directors consisting of three or more persons, each of whom shall be a "disinterested person" within the meaning of Rule 16b-3 promulgated under Section 16 of the Exchange Act and Section 162(m) of the Code. Subject to Section 3 hereof, the Committee shall from time to time designate the key employees of the Company who shall be granted Incentive Awards and the amount and type of such Incentive Awards, other than Director's Options and Director's LSARs, which shall be granted pursuant to Section 8 hereof. The Committee shall have full authority to administer the Plan, including authority to interpret and construe any provision of the Plan and the terms of any Incentive Award issued under it and to adopt such rules and regulations for administering the Plan as it may deem necessary. Decisions of the Committee shall be final and binding on all parties; provided, however, that the Committee shall have no authority or discretion with respect to Section 8 hereof to the extent such authority could cause the Participants granted Incentive Awards pursuant to such Section 8 to cease to be "disinterested persons" within the meaning of Rule 16b-3 promulgated under the Exchange Act or Section 162(m) of the Code. The Committee may, in its absolute discretion, determine the time or times at which each Option shall be exercisable, accelerate the date on which any Option granted under the Plan becomes exercisable or, subject to Section 6(c)(1) hereof, extend the term of any Option granted under the Plan. Whether an authorized leave of absence, or absence in military or government service, shall constitute termination of employment shall be determined by the Committee. No member of the Committee shall be liable for any action, omission, or determination relating to the Plan, and Ogden shall indemnify and hold harmless each member of the Committee and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Committee) arising out of any action, omission or determination relating to the Plan, unless, in either case, such action, omission or determination was taken or made by such member, director or employee in bad faith and without reasonable belief that it was in the best interests of the Company. 5. ELIGIBILITY The persons who shall be eligible to receive Incentive Awards pursuant to the Plan shall be such employees of the Company who are largely responsible for the management, growth and protection of the business of the Company (including officers of Ogden, whether or not they are directors of Ogden) as the Committee shall select from time to time and such Directors who are entitled to receive Incentive Awards pursuant to Section 8 hereof. 6. OPTIONS The Committee may grant Options pursuant to the Plan to Participants who are not Directors, which Options shall be evidenced by agreements in such form as the Committee shall from time to time approve. Options shall comply with and be subject to the following terms and conditions: (a) IDENTIFICATION OF OPTIONS All Options granted under the Plan shall be clearly identified in the agreement evidencing such Options as either Incentive Stock Options or as Non-Qualified Stock Options. (b) EXERCISE PRICE The exercise price of any Option granted under the Plan shall be not less than 100% of the Fair Market Value of a share of Common Stock on the date on which such Option is granted. (c) TERM AND EXERCISE OF OPTIONS (1) Subject to Section 3 hereof, each Option shall be exercisable on such date or dates, during such period and for such number of shares of Common Stock as shall be determined by the Committee on the day on which such Option is granted and set forth in the Option agreement with respect to such Option; provided, however, that no Option shall be exercisable after the expiration of ten years from the date such Option was granted; and, provided, further, that each Option shall be subject to earlier termination, expiration or cancellation as provided in the Plan or in the agreement evidencing such Option. (2) Each Option shall be exercisable in whole or in part; provided, that no partial exercise of an Option shall be for an aggregate exercise price of less than $1,000. The partial exercise of an Option shall not cause the expiration, termination or cancellation of the remaining portion thereof. (3) An Option shall be exercised by delivering notice to Ogden's principal office, to the attention of its Benefits Department, no less than three business days in advance of the effective date of the proposed exercise. Such notice shall specify the number of shares of Common Stock with respect to which the Option is being exercised and the effective date of the proposed exercise and shall be signed by the Participant. The Participant may withdraw such notice at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise. Payment for shares of Common Stock purchased upon the exercise of an Option shall be made on the effective date of such exercise either in cash or by personal check, certified check, bank cashier's check or wire transfer. (4) Any Option granted under the Plan may be exercised by a broker-dealer acting on behalf of a Participant if (i) the broker-dealer has received from the Participant or Ogden a fully-and duly-endorsed agreement evidencing such Option and instructions signed by the Participant requesting Ogden to deliver the shares of Common Stock subject to such Option to the broker-dealer on behalf of the Participant and specifying the account into which such shares should be deposited, (ii) adequate provision has been made with respect to the payment of any withholding taxes due upon such exercise or, in the case of an Incentive Stock Option, the disposition of such shares and (iii) the broker-dealer and the Participant have otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220. (5) Certificates for shares of Common Stock purchased upon the exercise of an Option shall be issued in the name of the Participant and delivered to the Participant as soon as practicable following the effective date on which the Option is exercised. (6) During the lifetime of a Participant, each Option granted to him shall be exercisable only by him. No Option shall be assignable or transferable otherwise than by will or by the laws of descent and distribution. (d) LIMITATIONS ON GRANT OF INCENTIVE STOCK OPTIONS (1) The aggregate Fair Market Value of shares of Common Stock with respect to which "incentive stock options" (within the meaning of Section 422A of the Code) granted after December 31, 1986, are exercisable for the first time by a Participant during any calendar year under the Plan and any other stock option plan of the Company (or any "subsidiary" of Ogden as such term is defined in Section 425 of the Code) shall not exceed $100,000. Such Fair Market Value shall be determined as of the date on which each such incentive stock option is granted. In the event that the aggregate Fair Market Value of shares of Common Stock with respect to such incentive stock options exceeds $100,000, then Incentive Stock Options granted hereunder to such Participant shall, to the extent and in the order required by regulations promulgated under the Code (or any other authority having the force of regulations), automatically be deemed to be Non-Qualified Stock Options, but all other terms and provisions of such Incentive Stock Options shall remain unchanged. In the absence of such Regulations (and authority), or in the event such Regulations (or authority) require or permit a designation of the options which shall cease to constitute incentive stock options, Incentive Stock Options shall, to the extent of such excess and in the order in which they were granted, automatically be deemed to be Non-Qualified Stock Options, but all other terms and provisions of such Incentive Stock Options shall remain unchanged. (2) No Incentive Stock Option may be granted to an individual if, at the time of the proposed grant, such individual owns stock possessing more than ten percent of the total combined voting power of all classes of stock of Ogden or any of its "subsidiaries" (within the meaning of Section 425 of the Code), unless (i) the exercise price of such Incentive Stock Option is at least one hundred and ten percent of the Fair Market Value of a share of Common Stock at the time such Incentive Stock Option is granted and (ii) such Incentive Stock Option is not exercisable after the expiration of five years from the date such Incentive Stock Option is granted. (e) EFFECT OF TERMINATION OF EMPLOYMENT (1) In the event that the employment of a Participant with the Company shall terminate for any reason other than Disability, Retirement, Cause or death (i) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the first anniversary of such termination, on which date they shall expire, and (ii) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination; provided, however, that no Option shall be exercisable after the expiration of its term. (2) In the event that the employment of a Participant with the Company shall terminate on account of the Disability or Retirement of the Participant, such Participant shall be entitled to exercise, at any time or from time to time after such termination, Options granted to him hereunder to the extent that such Options were exercisable at the time of such termination or would have become exercisable had his employment continued until the first anniversary of such termination; provided, however, no Option shall be exercisable after the first anniversary of the Participant's death; and provided, further, that no Option shall be exercisable after the expiration of its term. (3) In the event that the employment of a Participant with the Company shall terminate on account of the death of the Participant, such Participant shall be entitled to exercise, at any time or from time to time until the first anniversary of such termination, Options granted to him hereunder to the extent that such Options were exercisable at the time of such termination or would have become exercisable had his employment continued until the first anniversary of such termination; provided, however, that no Option shall be exercisable after the expiration of its term. (4) In the event of the termination of a Participant's employment for Cause, all outstanding Options granted to such Participant shall expire at the commencement of business on the date of such termination; provided, however, that no Participant shall be deemed to have been terminated for Cause during the one year period following any Change in Control. (5) For purposes of this Section 6(e), an Option shall be deemed to be exercisable on the date of the termination of the employment of a Participant with the Company to the extent, if any, it becomes exercisable by acceleration by the Committee or pursuant to a written agreement between the Company and the Participant, provided that such acceleration occurs prior to the first anniversary of such termination of employment. (f) CONSEQUENCES UPON CHANGE IN CONTROL Upon the occurrence of a Change in Control, each Option granted under the Plan and outstanding at such time shall become fully and immediately exercisable and shall remain exercisable until its expiration, termination or cancellation pursuant to the terms of the Plan. (g) CASH BONUSES AND LOANS (1) The Committee may, in its absolute discretion, grant to any Participant a cash bonus in an amount determined by the Committee to enable the Participant to pay any federal, state or local income taxes arising out of the exercise of an Option. (2) The Committee may, in its absolute discretion, 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 Option or (ii) the exercise price with respect to any Option. 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. 7. LIMITED STOCK APPRECIATION RIGHTS The Committee may grant in connection with any 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 Option. An LSAR may be granted at the same time as, or subsequent to the time that, its related Option is granted. Each LSAR shall be evidenced by an agreement in such form as the Committee shall from time to time approve. Each LSAR granted hereunder shall be subject to the following terms and conditions: (a) BENEFIT UPON EXERCISE (1) 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 such 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 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. (2) 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 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. (b) TERM AND EXERCISE OF LSARS (1) 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 the preceding sentence of this Section 7(b), in the event that an LSAR held by any Participant who is or may be subject to the provisions of Section 16(b) of the Exchange Act becomes exercisable prior to the expiration of six months following the date on which it is granted, then the LSAR shall also be exercisable during the period commencing on the first day immediately following the expiration of such six month period and terminating on the expiration of ninety days following 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 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 Option to which it relates is exercisable. (2) The exercise of an LSAR with respect to a number of shares of Common Stock shall cause the immediate and automatic cancellation of the Option to which it relates with respect to an equal number of shares. The exercise of an Option, or the cancellation, termination or expiration of an Option (other than pursuant to this Paragraph (2)), 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. (3) 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. (4) During the lifetime of a Participant, each LSAR granted to him shall be exercisable only by him. No LSAR shall be assignable or transferable otherwise than by will or by the laws of descent and distribution and otherwise than together with its related Option. (5) An LSAR shall be exercised, subject to the requirements of Paragraph 7(b) above, by delivering notice to Ogden's principal office, to the attention of its Benefits Department, no less than three business days in advance of the effective date of the proposed exercise. Such notice shall specify the number of shares of Common Stock with respect to which the LSAR is being exercised and the effective date of the proposed exercise and shall be signed by the Participant. The Participant may withdraw such notice at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise. 8. DIRECTOR'S OPTIONS AND DIRECTOR'S LSARS Director's Options and Director's LSARs shall be granted pursuant to this Section 8, in the amounts and subject to the terms and conditions hereinafter set forth. Each Director's Option and Director's LSAR shall be evidenced by an agreement in the form set forth as Exhibit A hereto. (a) GRANT OF DIRECTOR'S OPTIONS (1) Each individual who on November 14, 1990, is a Director shall be granted on such date a Director's Option with respect to 25,000 shares of Common Stock. (2) Each individual who becomes a Director after November 14, 1990, may be granted a Director's Option with respect to a number of shares of Common Stock determined by the Committee not to exceed 25,000 shares. Such determination shall be made (i) in the case of an individual who becomes a Director by election by the shareholders of Ogden, prior to such election and (ii) in the case of any other individual, prior to such person's appointment or selection to the Board of Directors. Such Director's Option shall be granted on the date on which such individual's term as a Director commences. (b) IDENTIFICATION OF DIRECTOR'S OPTIONS All Director's Options granted under the Plan shall be clearly identified in the agreement evidencing such Director's Options as Non-Qualified Stock Options. (c) EXERCISE PRICE The per share exercise price of each Director's Option shall be equal to the Fair Market Value of a share of Common Stock on the date on which the Director's Option is granted. (d) TERM AND EXERCISE OF OPTIONS (1) Director's Options shall become exercisable with respect to 20% of the number of shares of Common Stock subject to each such Director's Option upon the first anniversary of the date on which such Director's Option is granted and with respect to an additional 20% of the number of shares of Common Stock subject thereto on each subsequent anniversary of such date. Each Director's Option shall be exercisable until the expiration of ten years after the date on which it is granted; provided, that each Director's Option shall be subject to earlier termination, expiration or cancellation as provided herein. (2) Each Director's Option shall be exercisable in whole or in part; provided, that no partial exercise of a Director's Option shall be for an aggregate exercise price of less than $1,000. The partial exercise of a Director's Option shall not cause the expiration, termination or cancellation of the remaining portion thereof. (3) A Director's Option shall be exercised by delivering notice to Ogden's principal office, to the attention of its Benefits Department, no less than three business days in advance of the effective date of the proposed exercise. Such notice shall specify the number of shares of Common Stock with respect to which the Director's Option is being exercised and the effective date of the proposed exercise and shall be signed by the Participant. The Participant may withdraw such notice at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise. Payment for shares of Common Stock purchased upon the exercise of a Director's Option shall be made on the effective date of such exercise either in cash or by personal check, certified check, bank cashier's check or wire transfer. (4) Any Director's Option granted under the Plan may be exercised by a broker-dealer acting on behalf of a Participant if (i) the broker-dealer has received from the Participant or the Company a fully-and duly-endorsed agreement evidencing such Director's Option and instructions signed by the Participant requesting Ogden to deliver the shares of Common Stock subject to such Director's Option to the broker-dealer on behalf of the Participant and specifying the account into which such shares should be deposited and (ii) the broker-dealer and the Participant have otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220. (5) Certificates for shares of Common Stock purchased upon the exercise of a Director's Option shall be issued in the name of the Participant and delivered to the Participant as soon as practicable following the effective date on which the Director's Option is exercised. (6) During the lifetime of a Participant, each Director's Option granted to him shall be exercisable only by him. No Director's Option shall be assignable or transferable otherwise than by will or by the laws of descent and distribution. (e) ACCELERATION OF EXERCISE DATE UPON CHANGE IN CONTROL Upon the occurrence of a Change in Control, any Director's Option granted under the Plan and outstanding at such time shall become fully and immediately exercisable and shall remain exercisable until its expiration, termination or cancellation pursuant to the terms of the Plan. (f) EFFECT OF TERMINATION OF DIRECTOR'S TERM In the event that the term of a Participant's membership on the Board of Directors terminates for any reason, then (x) Director's Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the expiration of one year after the termination of such Participant's term, at which time such Director's Options shall expire and (y) Director's Options granted to such Participant, to the extent that they were not exercisable at the time of such termination and would have become exercisable during the one-year period following such termination had such termination not occurred, shall become exercisable upon such termination and shall remain exercisable until the expiration of such one-year period, at which time such Director's Options shall expire; provided, however, that no Director's Option shall be exercisable after the expiration of its term. (g) DIRECTOR'S LSARS Each Director's Option shall include a Director's LSAR with respect to a number of shares of Common Stock equal to the number of shares of Common Stock subject to such Director's Option, which Director's LSAR shall be evidenced by the agreement evidencing such Director's Option. Each Director's LSAR granted hereunder shall be subject to the following terms and conditions: (i) BENEFIT UPON EXERCISE The exercise of a Director's LSAR 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 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 Director's 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. (ii) TERM AND EXERCISE OF LSARS (A) Each Director's 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 the preceding sentence of this Section 8(g)(ii)(A), in the event that a Director's LSAR becomes exercisable prior to the expiration of six months following the date on which it is granted, then the Director's LSAR shall also be exercisable during the period commencing on the first day immediately following the expiration of such six month period and terminating on the expiration of ninety days following such date. Notwithstanding anything else herein, a Director's LSAR may be exercised only if and to the extent that the Director's Option to which it relates is exercisable. (B) The exercise of a Director's LSAR with respect to a number of shares of Common Stock shall cause the immediate and automatic cancellation of the Director's Option to which it relates with respect to an equal number of shares. The exercise of a Director's Option, or the cancellation, termination or expiration of a Director's Option (other than pursuant to this Paragraph (B)), with respect to a number of shares of Common Stock, shall cause the cancellation of the Director's LSAR related to it with respect to an equal number of shares. (C) Each Director's LSAR shall be exercisable in whole or in part; provided, that no partial exercise of a Director's LSAR shall be for an aggregate exercise price of less than $1,000. The partial exercise of a Director's LSAR shall not cause the expiration, termination or cancellation of the remaining portion thereof. Upon the partial exercise of a Director's LSAR, the agreement evidencing the Director's LSAR and the related Director's Option shall be returned to the Participant exercising such Director's LSAR together with the payment described in Paragraph 8(g)(i) hereof. (D) During the lifetime of a Participant, each Director's LSAR granted to him shall be exercisable only by him. No Director's LSAR shall be assignable or transferable otherwise than by will or by the laws of descent and distribution and otherwise than together with its related Director's Option. (E) A Director's LSAR, subject to the requirements of Paragraph 8(g)(ii) above, shall be exercised by delivering notice to Ogden's principal office, to the attention of its Benefits Department, no less than three business days in advance of the effective date of the proposed exercise. Such notice shall specify the number of shares of Common Stock with respect to which the Director's LSAR is being exercised and the effective date of the proposed exercise and shall be signed by the Participant. The Participant may withdraw such notice at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise. 9. STOCK BONUSES Subject to Section 3 hereof, the Committee may grant Stock Bonuses in such amounts as it shall determine from time to time. A Stock Bonus shall be paid at such time and subject to such conditions as the Committee shall determine at the time of the grant of such Stock Bonus. Certificates for shares of Common Stock granted as a Stock Bonus shall be issued in the name of the Participant to whom such grant was made and delivered to such Participant as soon as practicable after the date on which such Stock Bonus is required to be paid. 10. ADJUSTMENT UPON CHANGES IN COMMON STOCK (a) SHARES AVAILABLE FOR GRANTS In the event of any change in the number of shares of Common Stock outstanding by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or similar corporate change, the maximum aggregate number of shares of Common Stock with respect to which the Committee may grant Options, Director's Options and Stock Bonuses shall be appropriately adjusted by the Committee. In the event of any change in the number of shares of Common Stock outstanding by reason of any other event or transaction, the Committee may, but need not, make such adjustments in the number and class of shares of Common Stock with respect to which Options and Stock Bonuses may be granted as the Committee may deem appropriate. (b) OUTSTANDING OPTIONS, LSARS, DIRECTOR'S OPTIONS AND DIRECTOR'S LSARS - -- INCREASE OR DECREASE IN ISSUED SHARES WITHOUT CONSIDERATION Subject to any required action by the shareholders of Ogden, in the event of any increase or decrease in the number of issued shares of Common Stock resulting from a subdivision or consolidation of shares of Common Stock or the payment of a stock dividend (but only on the shares of Common Stock), or any other increase or decrease in the number of such shares effected without receipt or payment of consideration by Ogden, the Committee shall proportionally adjust the number of shares of Common Stock subject to each outstanding Option, LSAR, Director's Option and Director's LSAR and the exercise price per share of Common Stock of each such Option, LSAR, Director's Option and Director's LSAR. (c) OUTSTANDING OPTIONS, LSARS, DIRECTOR'S OPTIONS AND DIRECTOR'S LSARS -- CERTAIN MERGERS Subject to any required action by the shareholders of Ogden, in the event that Ogden shall be the surviving corporation in any merger or consolidation (except a merger or consolidation as a result of which the holders of shares of Common Stock receive securities of another corporation), each Option, LSAR, Director's Option and Director's LSAR outstanding on the date of such merger or consolidation shall pertain to and apply to the securities which a holder of the number of shares of Common Stock subject to such Option, LSAR, Director's Option or Director's LSAR would have received in such merger or consolidation. (d) OUTSTANDING OPTIONS, LSARS, DIRECTOR'S OPTIONS AND DIRECTOR'S LSARS -- CERTAIN OTHER TRANSACTIONS In the event of (i) a dissolution or liquidation of Ogden, (ii) a sale of all or substantially all of Ogden's assets, (iii) a merger or consolidation involving Ogden in which Ogden is not the surviving corporation or (iv) a merger or consolidation involving Ogden in which Ogden is the surviving corporation but the holders of shares of Common Stock receive securities of another corporation and/or other property, including cash, the Committee shall, in its absolute discretion, have the power to: (i) cancel, effective immediately prior to the occurrence of such event, each Option (including each LSAR related thereto) outstanding immediately prior to such event (whether or not then exercisable), and, in full consideration of such cancellation, pay to the Participant to whom such Option was granted an amount in cash, for each share of Common Stock subject to such Option, equal to the excess of (A) the value, as determined by the Committee in its absolute discretion, of the property (including cash) received by the holder of a share of Common Stock as a result of such event over (B) the exercise price of such Option; or (ii) provide for the exchange of each Option (including any related LSAR) outstanding immediately prior to such event (whether or not then exercisable) for an option with respect to, as appropriate, some or all of the property for which such Option is exchanged and, incident thereto, make an equitable adjustment as determined by the Committee in its absolute discretion in the exercise price of the Option or the number of shares or amount of property subject to the Option or, if appropriate, provide for a cash payment to the Participant to whom such Option was granted in partial consideration for the exchange of the Option. Upon the occurrence of any event described in this Paragraph 10(d), the Committee shall, with respect to each Director's Option and Director's LSAR outstanding immediately prior to such event (whether or not then exercisable), take the action described in clause (i) above, except that the value of the property received in exchange for a share of Common Stock pursuant to such event shall be the fair market value of such property. (e) OUTSTANDING OPTIONS, LSARS -- OTHER CHANGES In the event of any change in the capitalization of Ogden or corporate change other than those specifically referred to in Sections 10(b), (c) or (d) hereof, the Committee may, in its absolute discretion, make such adjustments in the number and class of shares subject to Options and LSARs outstanding on the date on which such change occurs and in the per share exercise price of each such Option and LSAR, as the Committee may consider appropriate to prevent dilution or enlargement of rights. (f) NO OTHER RIGHTS Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of Ogden or any other corporation. Except as expressly provided in the Plan, no issuance by Ogden of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Common Stock subject to an Incentive Award or the exercise price of any Option, LSAR, Director's Option or Director's LSAR. 11. RIGHTS AS A STOCKHOLDER No person shall have any rights as a stockholder with respect to any shares of Common Stock covered by or relating to any Incentive Award granted pursuant to this Plan until the date of the issuance of a stock certificate with respect to such shares. Except as otherwise expressly provided in Section 10 hereof, no adjustment to any Incentive Award shall be made for dividends or other rights for which the record date occurs prior to the date such stock certificate is issued. 12. NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO INCENTIVE AWARD Nothing contained in the Plan or any Incentive Award shall confer upon any Participant any right with respect to the continuation of his employment by the Company or interfere in any way with the right of the Company, subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Incentive Award. No person shall have any claim or right to receive an Incentive Award hereunder. The Committee's granting of an Incentive Award to a Participant at any time shall neither require the Committee to grant an Incentive Award to such Participant or any other Participant or other person at any time nor preclude the Committee from making subsequent grants to such Participant or any other Participant or other person. 13. SECURITIES MATTERS (a) Ogden shall be under no obligation to effect the registration pursuant to the Securities Act of any shares of Common Stock to be issued hereunder or to effect similar compliance under any state laws. Notwithstanding anything herein to the contrary, Ogden shall not be obligated to cause to be issued or delivered any certificates evidencing shares of Common Stock pursuant to the Plan unless and until Ogden is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded. The Committee may require, as a condition of the issuance and delivery of certificates evidencing shares of Common Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that such certificates bear such legends, as the Committee, in its sole discretion, deems necessary or desirable. (b) The exercise of any Option granted hereunder shall only be effective at such time as counsel to Ogden shall have determined that the issuance and delivery of shares of Common Stock pursuant to such exercise is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded. Ogden may, in its sole discretion, defer the effectiveness of any exercise of an Option granted hereunder in order to allow the issuance of shares of Common Stock pursuant thereto to be made pursuant to registration or an exemption from registration or other methods for compliance available under federal or state securities laws. Ogden shall inform the Participant in writing of its decision to defer the effectiveness of the exercise of an Option granted hereunder. During the period that the effectiveness of the exercise of an Option has been deferred, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto. 14. WITHHOLDING TAXES (a) CASH REMITTANCE Subject to Paragraph 14(d) whenever shares of Common Stock are to be issued upon the exercise of an Option or a Director's Option or in connection with the grant of a Stock Bonus, Ogden shall have the right to require the Participant to remit to Ogden in cash an amount sufficient to satisfy federal, state and local withholding tax requirements, if any, attributable to such exercise or grant prior to the delivery of any certificate or certificates for such shares. In addition, upon the exercise of an LSAR Ogden shall have the right to withhold from any cash payment required to be made pursuant thereto an amount sufficient to satisfy the federal, state and local withholding tax requirements, if any, attributable to such exercise. (b) STOCK REMITTANCE At the election of the Participant, subject to the approval of the Committee, when shares of Common Stock are to be issued upon the exercise of an Option or a Director's Option or the grant of a Stock Bonus, the Participant may tender to Ogden a number of shares of Common Stock determined by such Participant, the Fair Market Value of which at the tender date the Committee determines to be sufficient to satisfy the federal, state and local withholding tax requirements, if any, attributable to such exercise or grant and not greater than the Participant's estimated total federal, state and local tax obligations associated with such exercise or grant. Such election shall satisfy the Participant's obligations under Paragraph 14(a) hereof, if any. (c) STOCK WITHHOLDING At the election of the Participant, subject to the approval of the Committee, when shares of Common Stock are to be issued upon the exercise of an Option or a Director's Option or the grant of a Stock Bonus, Ogden shall withhold a number of such shares determined by such Participant, the Fair Market Value of which at the exercise date the Committee determines to be sufficient to satisfy the federal, state and local withholding tax requirements, if any, attributable to such exercise or grant and is not greater than the Participant's estimated total federal, state and local tax obligations associated with such exercise or grant. Such election shall satisfy the Participant's obligations under Paragraph 14(a) hereof, if any. (d) PARTICIPANTS SUBJECT TO SECTION 16(B) Notwithstanding the last sentence of Section 9 hereof, the Company shall hold as custodian for any Participant who is subject to the provisions of Section 16(b) of the Exchange Act and who has not made an election pursuant to Section 83(b) of the Code stock certificates evidencing the total number of shares of Common Stock required to be issued pursuant to the grant of a Stock Bonus until the expiration of six months following the date of such grant. Upon the expiration of such six-month period, the Participant shall remit to the Company in cash an amount sufficient to satisfy federal, state and local withholding tax requirements, if any, attributable to such grant prior to the delivery of any certificate or certificates for such shares, unless the Participant has made an election pursuant to Paragraph 14(b) or (c) hereof, in which case the Participant shall tender a number of shares prior to such delivery, or the Company shall withhold a number of shares, respectively, determined pursuant to such Paragraph. Paragraph 14(a) hereof, and not this Paragraph 14(d), shall apply if the date on which income is required to be recognized for federal income tax purposes with respect to such grant is more than six months after such grant. (e) TIMING AND METHOD OF ELECTIONS (1) Notwithstanding any other provisions of the Plan, in order to be effective, an election under Paragraph 14(c) relating to a Stock Bonus made by a Participant who is subject to Section 16(b) of the Exchange Act must (i) be irrevocable and be made not less than six months in advance of the date on which income is required to be recognized with respect to the grant or (ii) take effect during a window period described in Rule 16b-3(e)(3) of the Exchange Act. (2) Notwithstanding any other provisions of the Plan, in order to be effective, an election under Paragraph 14 (c) relation to an Option or Director's Option made by a Participant who is subject to Section 16(b) of the Exchange Act must (i) take effect during a window period described in Rule 16b- 3(e)(3) under the Exchange Act and exercise of the Option or Director's Option must occur at least six months after the grant date or (ii) be irrevocable and be made not less than six months in advance of the date of exercise. (3) Such elections shall be made by the delivery to Ogden's principal office, to the attention of its Benefits Department, of a written notice signed by the Participant. A Participant can change an irrevocable election made in accordance with clause 14(e)(1)(i) or clause 14(e)(2)(ii) through another irrevocable election that takes effect at least six months thereafter. 15. AMENDMENT OF THE PLAN The Board of Directors may at any time suspend or discontinue the Plan or revise or amend it in any respect whatsoever; provided, however, that without approval of the shareholders no revision or amendment shall (i) except as provided in Section 10 hereof, increase the number of shares of Common Stock that may be issued under the Plan, (ii) materially increase the benefits accruing to individuals holding Incentive Awards granted pursuant to the Plan, (iii) materially modify the requirements as to eligibility for participation in the Plan or (iv) modify or amend the provisions of Section 8 hereof or any terms and conditions of the Plan with respect to Director's Options or Director's LSARs. 16. NO OBLIGATION TO EXERCISE The grant to a Participant of an Option, LSAR, Director's Option or Director's LSAR shall impose no obligation upon such Participant to exercise such Option, LSAR, Director's Option or Director's LSAR. 17. TRANSFERS UPON DEATH Upon the death of a Participant, outstanding Incentive Awards granted to such Participant may be exercised only by the executors or administrators of the Participant's estate or by any person or persons who shall have acquired such right to exercise by will or by the laws of descent and distribution. No transfer by will or the laws of descent and distribution of any Incentive Award, or the right to exercise any Incentive Award, shall be effective to bind Ogden unless the Committee shall have been furnished with (a) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the transfer and (b) an agreement by the transferee to comply with all the terms and conditions of the Incentive Award that are or would have been applicable to the Participant and to be bound by the acknowledgements made by the Participant in connection with the grant of the Incentive Award. 18. EXPENSES AND RECEIPTS The expenses of the Plan shall be paid by Ogden. Any proceeds received by Ogden in connection with any Incentive Award will be used for general corporate purposes. 19. FAILURE TO COMPLY In addition to the remedies of Ogden elsewhere provided for herein, failure by a Participant to comply with any of the terms and conditions of the Plan or the agreement executed by such Participant evidencing an Incentive Award, unless such failure is remedied by such Participant within ten days after having been notified of such failure by the Committee, shall be grounds for the cancellation and forfeiture of such Incentive Award, in whole or in part, as the Committee, in its absolute discretion, may determine. 20. EFFECTIVE DATE AND TERM OF PLAN The Plan was adopted by the Board of Directors on October 11, 1990. No grants may be made under the Plan after October 11, 2000. The grant of each Option, LSAR, Director's Option and Director's LSAR to any Participant who is subject to Section 16(b) of the Exchange Act is subject to the approval of the Plan by the shareholders of Ogden in accordance with the requirements of Rule 16b-3 promulgated under such Section, and no Option, LSAR, Director's Option or Director's LSAR granted to any such Participant shall be exercisable prior to the receipt of such approval, unless, in either case, such Participants are entitled to rely on the exemption provided by such Rule 16b-3, or any successor thereto, in connection with such grants notwithstanding the absence of such shareholder approval. EX-10.6(W) 3 CEO FORMULA BONUS PLAN EXHIBIT 10.6(w) CEO FORMULA BONUS PLAN 1. PURPOSE: The purpose of the CEO Formula Bonus Plan (the"Plan") is to provide the CEO with an additional incentive to enhance and improve the performance of the Company as well as to meet the requirements of qualified performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and preserve the deduction for compensation in excess of $1.0 million paid to the CEO. 2. DEFINITIONS: (a) "Bonus" shall be the amount approved by the Committee and payable to the CEO in accordance with the Plan for each Measurement Year. (b) "CEO" means the Chief Executive Officer of Ogden Corporation ("Ogden"). (c) "Committee" means the Compensation Committee of the Ogden Board of Directors comprised of "outside directors" within the meaning of Section 162(m) of the Code. (d) "Company" means Ogden and its subsidiaries. (e) "Designated Beneficiary" means the Participant's spouse who shall receive any payments due to the Participant under the Plan upon the Participant's death. If the spouse is not living, the Designated Beneficiary shall be the Participant's estate. (f) "Disability" is defined as a condition entitling the Participant to benefits under the Company's long-term disability plan or policy applicable to the CEO. (g) "Effective Date" shall be January 1, 1994. (h) "Measurement Year" means each calendar year period over which the Company's ROE Performance is measured. (i) "Participant" means the CEO who is eligible to receive a Bonus under the Plan. (j) "Pre-Tax Income" for any Measurement Year is the amount of consolidated income from continuing operations before income taxes and minority interest as of the December 31 occurring in such Measurement Year as reported in the Company's Statements of Consolidated Income. (k) "Pre-Tax ROE Performance Level" for any Measurement Year means the Company's Pre-tax Income achieved in any such Measurement Year divided by the Company's Shareholders' Equity for such Measurement Year. (l) "Shareholders' Equity" for any Measurement Year is equal to the total shareholders equity as of the December 31 occurring in the immediately preceding calendar year, as reported in the Company's Statements of Shareholders' Equity. (m) "Target Bonus" for any Measurement Year shall be equal to the Participant's base salary as determined by the Committee prior to the Measurement Year and which becomes effective as of March 1 of the Measurement Year. 3. ELIGIBILITY: Participation in the Plan will be limited to the CEO. 4. BONUS FORMULA: The Participant will be eligible for an annual cash Bonus with respect to each Measurement Year based upon the Company's Pre-Tax ROE Performance Level attained in such Measurement Year. The amount of each Bonus shall be equal to a portion of the Target Bonus. The maximum Bonus payable under the Plan is 150% of Target Bonus. For each Pre-Tax ROE Performance Level, the amount of any Bonus payable is designated in the following table:
PRE-TAX ROE % OF TARGET PERFORMANCE LEVEL BONUS <15% 0 15% to under 20% 75% 20% to under 25% 100% 25% to under 30% 125% 30% or greater 150%
5. AWARD DETERMINATION: The annual Bonus amount to be awarded under the Plan will be determined by the Committee based on the actual Pre-Tax ROE Performance Level in the Measurement Year. Following December 31 of each Measurement Year, the Committee will certify in writing to the Pre-Tax ROE Performance Level achieved after the completion and audit of the Company's annual financial statements. Such certification shall be included in the minutes of the Committee. 6. MODIFICATION OF AWARDS BASED ON INDIVIDUAL PERFORMANCE: The Participant's Bonus award as determined by the Pre-Tax ROE Performance Level may be reduced based on the Committee's evaluation of other factors related to the Participant's and Company's overall performance. 7. TIMING AND PAYMENT OF AWARDS: Payment of any Bonus under the Plan will be made after completion of each Measurement Year as soon as practical following Certification by the Committee of the Company's Pre-Tax ROE Performance Level and final approval of the Bonus by the Committee. 8. DISABILITY OR DEATH: In the event of the Participant's Disability or Death during a Measurement Year, the full Bonus earned for the Measurement Year and approved by the Committee will be paid to the Participant or Designated Beneficiary, as the case may be, as if the Participant had remained active throughout the Measurement Year. In the event of the Participant's death after the end of a Measurement Year but prior to the payment of any Bonus earned for such Measurement Year such Bonus shall be paid to the Participant's Designated Beneficiary. Page 2 9. TERMINATION OF EMPLOYMENT: In the event the Participant's employment is terminated by Ogden during a Measurement Year for any reason other than for cause, as determined by the Committee or if the Participant has an employment agreement with Ogden, as set forth in such employment agreement, the full Bonus earned for the Measurement Year and approved by the Committee will be paid as if the Participant had remained employed throughout the Measurement Year. 10. ADMINISTRATION: The Plan will be administered by the Committee. The Committee retains the discretion to change the Pre- Tax ROE Performance Levels under the Bonus Formula, as set forth in the table in Paragraph 4. above, prior to the start of any Measurement Year and while the outcome is still uncertain. The Committee may reduce the Bonus payable under the Plan in any Measurement Year. The Committee reserves the right to terminate the Plan at any time or to amend the Plan in any respect; provided that no amendment shall be made which would cause payments pursuant to this Plan to fail to qualify for the exemption from the limitations of Section 162(m) of the Code provided by Section 162(m)(4)(C) of the Code. No Plan amendment or termination will alter the Participant's right to a Bonus for a Measurement Year already in progress with the exception of the 1994 Measurement Year. The Plan shall terminate and become null and void if it is not approved by the Ogden shareholders at the 1994 Annual Meeting in accordance with the requirements of Section 162(m)(4)(C)(ii) of the Code. 11. MISCELLANEOUS: (a) The right of the Participant to any payment hereunder shall not be assigned, transferred, pledged or encumbered. (b) This Plan and all rights hereunder shall be subject to any and all governmental laws, regulations and approvals that may exist from time to time and shall be interpreted in accordance with the laws of the State of New York. (c) All payments required to be paid hereunder shall be subject to any required Federal, state, local and other applicable withholdings or deductions. (d) Nothing contained in the Plan shall confer upon the Participant any right with respect to the continuation of the Participant's employment by the Company or interfere in any way with the right of the Company at any time to terminate such employment or to increase or decrease the base salary of the Participant from the rate in effect at the commencement of a Measurement Year. Page 3 EX-11 4 COMPUTATION OF EARNINGS APPLICABLE TO COMMON STOCK EXHIBIT 11 OGDEN CORPORATION AND SUBSIDIARIES DETAIL OF COMPUTATION OF EARNINGS APPLICABLE TO COMMON STOCK
FOR THE SIX MONTHS FOR THE THREE MONTHS ENDED JUNE 30, ENDED JUNE 30, 1994 1993 1994 1993 (In Thousands) NUMBER OF SHARES USED FOR COMPUTATION OF EARNINGS PER SHARE: Average number of common shares 43,551 43,284 43,574 43,341 NUMBER OF SHARES USED FOR COMPUTATION OF EARNINGS PER SHARE ASSUMING FULL DILUTION: Average number of common shares 43,551 43,284 43,574 43,341 Shares issuable for conversion of preferred stock 334 365 332 362 Shares issuable for conversion of debentures 84 61 Number of shares used for computation 43,885 43,733 43,906 43,764 COMPUTATION OF EARNINGS APPLICABLE TO COMMON SHARES: Income before cumulative effect of changes in accounting principles $32,968 $29,914 $17,640 $16,092 Add (less): adjustments arising from minority interests in consolidated subsidiaries 2 13 2 12 dividends on Ogden preferred stock (94) (102) (47) (51) Consolidated income applicable to Ogden common stock $32,876 $29,825 $17,595 $16,053 Cumulative effect of changes in accounting principles $(1,520) $(5,340) $ 0 $ 0 COMPUTATION OF EARNINGS APPLICABLE TO COMMON SHARES- ASSUMING FULL DILUTION: Income before cumulative effect of changes in accounting principles $32,968 $29,914 $17,640 $16,092 Add: adjustments arising from minority interests in consolidated subsidiaries 2 13 2 12 debenture interest-net of applicable income taxes 17 5 Consolidated income applicable to Ogden common stock $32,970 $29,944 $17,642 $16,109 Cumulative effect of changes in accounting principles $(1,520) $(5,340) $ 0 $ 0 Note: Earnings per common share was computed by dividing net income, increased (decreased) for adjustments arising from minority interest in consolidated subsidiaries, reduced by preferred stock dividend requirements, by the weighted average of the number of shares of common stock and common stock equivalents, where dilutive, outstanding during each period. Earnings per common share, assuming full dilution, were computed on the assumption that all convertible debentures, convertible preferred stock, and stock options converted or exercised during each period, or outstanding at the end of each period were converted at the beginning of each period or at the date of issuance or grant, if dilutive. This computation provides for the elimination of related convertible debenture interest and preferred dividends.
EX-99 5 EXHIBIT INDEX EXHIBIT INDEX EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION 2 Agreement and Plan of Merger, Incorporated herein by dated as of October 31, 1989, reference to Exhibit 2 to among Ogden, ERCI Acquisition Ogden's Form S-4 Registration Corporation and ERC International Statement File No. 33-32155. Inc. 4 (a) Ogden's Restated Certificate Filed as Exhibit (4)(a) of Incorporation as amended. to Ogden's Form 10-Q for the quarter ended September 30, 1990 and incorporated herein by reference. (b) Underwriting Agreement, dated Filed as Exhibit 1(b) to as of March 4, 1992 by and among Ogden's Form 10-K for the Ogden Corporation, Goldman Sachs fiscal year ended December 31, & Co., J.P. Morgan Securities, 1991 and incorporated herein Inc. and Salomon Brothers Inc. by reference. (c) Indenture dated as of March 1, Filed as Exhibit (4)(c) to 1992 between Ogden Corporation Ogden's Form 10-K for fiscal and The Bank of New York, year ended December 31, 1991, Trustee, relating to Ogden's and incorporated herein by $100 million debt offering. reference. (d) Fiscal Agency Agreement and Filed as Exhibits (4)(a) and Offering Memorandum describing (b) to Ogden's Form 10-K for Ogden's $85 million 6% the fiscal year ended Convertible Subordinated December 31, 1989 and Debentures, Due 2002 and incorporated herein by $75 million 5.75% Convertible reference. Subordinated Debentures, Due 2002. (e) Credit Agreement by and among Filed as Exhibit (10)(b) to Ogden, The Bank of New York, as Ogden's Form 10-K for the Agent and National Westminster fiscal year ended December 31, Bank PLC, Swiss Bank Corporation 1989 and incorporated herein and Union Bank of Switzerland by reference. dated as of January 31, 1990. (f) Amendment No. 1, dated December Filed as Exhibit (10)(i) to 28, 1990 to the Credit Agreement, Ogden's Form 10-K for the dated January 31, 1990, by and fiscal year ended December 31, among Ogden, the signatory Banks 1990 and incorporated herein thereto and The Bank of New York, by reference. as Agent. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION 10 Material Contracts 10.1 Stock Purchase Agreement dated Filed as Exhibit (10)(d) to May 31, 1988, between Ogden and Ogden's Form 10-K for the Ogden Projects, Inc. fiscal year ended December 31, 1989 and incorporated herein by reference. 10.2 Tax Sharing Agreement, dated Filed as Exhibit (10)(e) to January 1, 1989 between Ogden, Ogden's Form 10-K for the Ogden Projects, Inc. and fiscal year ended December 31, subsidiaries, Ogden Allied 1989 and incorporated herein Services, Inc. and subsidiaries by reference. and Ogden Financial Services, Inc. and subsidiaries. 10.3 Stock Purchase Option Agreement, Filed as Exhibit (10)(f) to dated June 14, 1989, between Ogden's Form 10-K for the Ogden and Ogden Projects, Inc. fiscal year ended December 31, as amended on November 16, 1989. 1989 and incorporated herein by reference. 10.4 Preferred Stock Purchase Filed as Exhibit (10)(g) to Agreement, dated July 7, 1989, Ogden's Form 10-K for the between Ogden Financial Services, fiscal year ended December 31, Inc. and Image Data Corporation. 1989 and incorporated herein by reference. (i) Preferred Stock Exchange Filed as Exhibit (10)(f)(i) to Agreement between Image Ogden's Form 10-K for the Data Corporation and Ogden fiscal year ended December 31, Financial Services, Inc., 1990 and incorporated herein dated as of January 1, 1991. by reference. 10.5 Rights Agreement between Ogden Filed as Exhibit (10)(h) to Corporation and Manufacturers Ogden's Form 10-K for the Hanover Trust Company, dated as fiscal year ended December 31, of September 20, 1990. 1990 and incorporated herein by reference. 10.6 Executive Compensation Plans and Agreements. (a) Ogden Corporation 1986 Filed as Exhibit (10)(k) to Stock Option Plan. Ogden's Form 10-K for the fiscal year ended December 31, 1985 and incorporated herein by reference. (b) Ogden Corporation 1990 Filed as Exhibit (10)(j) to Stock Option Plan. Ogden's Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION (i) Ogden Corporation 1990 Transmitted herewith as Stock Option Plan as Exhibit 10.6(b)(i). Amended and Restated on January 19, 1994. (c) Ogden Services Corporation Filed as Exhibit (10)(k) to Executive Pension Plan. Ogden's Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. (d) Ogden Services Corporation Filed as Exhibit (10)(l) to Select Savings Plan. Ogden's Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. (e) Ogden Services Corporation Filed as Exhibit (10)(m) to Select Savings Plan Trust. Ogden's Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. (f) Ogden Services Corporation Filed as Exhibit (10)(n) to Executive Pension Plan Trust. Ogden's Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. (g) Changes effected to the Ogden Filed as Exhibit (10)(o) to Profit Sharing Plan effective Ogden's Form 10-K for the January 1, 1990. fiscal year ended December 31, 1990 and incorporated herein by reference. (h) Employment Letter Agreement Filed as Exhibit (10)(p) to between Ogden and an executive Ogden's Form 10-K for the officer dated January 30, 1990. fiscal year ended December 31, 1990 and incorporated herein by reference. (i) Employment Agreement between Filed as Exhibit (10)(r) to R. Richard Ablon and Ogden Ogden's Form 10-K for the dated as of May 24, 1990. fiscal year ended December 31, 1990 and incorporated herein by reference. (i) Letter Amendment to Filed as Exhibit (10)(r)(i) Employment Agreement to Ogden's Form 10-K for the between Ogden Corporation fiscal year ended December 31, and R. Richard Ablon, dated 1990 and incorporated herein as of October 11, 1990. by reference. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION (j) Employment Agreement between Filed as Exhibit (10)(s) to Ogden and C. G. Caras dated Ogden's Form 10-K for the as of July 2, 1990. fiscal year ended December 31, 1990 and incorporated herein by reference. (i) Letter Amendment to Filed as Exhibit (10)(s)(i) Employment Agreement to Ogden's Form 10-K for the between Ogden Corporation fiscal year ended December 31, and C. G. Caras, dated as 1990 and incorporated herein of October 11, 1990. by reference. (k) Employment Agreement between Filed as Exhibit (10)(t) to Ogden and Philip G. Husby, Ogden's Form 10-K for the dated as of July 2, 1990. fiscal year ended December 31, 1990 and incorporated herein by reference. (l) Termination Letter Agreement Filed as Exhibit (10)(v) to between Maria P. Monet and Ogden Ogden's Form 10-K for the dated as of October 22, 1990. fiscal year ended December 31, 1990 and incorporated herein by reference. (m) Letter Agreement between Ogden Filed as Exhibit 10.2 (p) to Corporation and Ogden's Chairman Ogden's Form 10-K for fiscal of the Board, dated as of year ended December 31, 1991 January 16, 1992. and incorporated herein by reference. (n) Employment Agreement between Filed as Exhibit 10.2 (q) to Ogden Corporation and Ogden's Ogden's Form 10-K for fiscal Chief Accounting Officer dated year ended December 31, 1991 as of December 18, 1991. and incorporated herein by reference. (o) Employment Agreement between Filed as Exhibit 10.8(o) to Scott G. Mackin and Ogden Ogden's Form 10-K for fiscal Projects, Inc. dated as of year ended December 31, 1992 June 1, 1990. and incorporated herein by reference. (p) Ogden Corporation Profit Sharing Filed as Exhibit 10.8(p) to Plan. Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (q) Ogden Corporation Core Executive Filed as Exhibit 10.8(q) to Benefit Program. Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION (r) Ogden Projects Pension Plan. Filed as Exhibit 10.8(r) to Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (s) Ogden Projects Profit Sharing Filed as Exhibit 10.8(s) to Plan. Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (t) Ogden Projects Supplemental Filed as Exhibit 10.8(t) to Pension and Profit Sharing Plans. Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (u) Ogden Projects Employee's Stock Filed as Exhibit 10.8(u) to Option Plan. Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (v) Ogden Projects Core Executive Filed as Exhibit 10.8(u) to Benefit Program. Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (w) Ogden Corporation CEO Formula Transmitted herewith as Bonus Plan. Exhibit 10.6(w). 10.7 Agreement and Plan of Merger Filed as Exhibit (10)(x) to among Ogden Corporation, ERC Ogden's Form 10-K for the International Inc., ERC fiscal year ended December 31, Acquisition Corporation and 1990 and incorporated herein ERC Environmental and Energy by reference. Services Co., Inc. dated as of January 17, 1991. 10.8 First Amended and Re-stated Filed as Exhibit 10.3 (b) (i) Ogden Corporation Guaranty to Ogden's Form 10-K for Agreement made as of January 30, fiscal year ended December 31, 1992 by Ogden Corporation for 1991 and incorporated herein the benefit of Mission Funding by reference. Zeta and Pitney Bowes Credit Corporation. 10.9 Ogden Corporation Guaranty Filed Exhibit 10.3 (b) (iii) Agreement made as of January to Ogden's Form 10-K for 30, 1992 by Ogden Corporation fiscal year ended December 31, for the benefit of Allstate 1991 and incorporated herein Insurance Company and Ogden by reference. Martin Systems of Huntington Resource Recovery Nine Corp. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION 11 Ogden Corporation and Transmitted herewith as Subsidiaries Detail of Exhibit 11. Computation of Earnings Applicable to Common Stock. -----END PRIVACY-ENHANCED MESSAGE-----