10-K 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For The Fiscal Year Ended December 31, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 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 incorporation or organization) Identification No.) Two Pennsylvania Plaza, New York, N.Y. 10121 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code - (212) 868-6100 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered Common Stock, par value New York Stock Exchange $.50 per share $1.875 Cumulative Convertible New York Stock Exchange Preferred Stock (Series A) Securities registered pursuant to Section 12(g) of the Act: None 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______ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. [X] The aggregate market value of registrant's voting stock, held by non- affiliates based on the New York Stock Exchange closing price as reported in the consolidated transaction reporting system as of the close of business on March 1, 1995 was as follows: Common Stock, par value $.50 per share $ 969,312,218 $1.875 Cumulative Convertible Preferred Stock (Series A) $ 5,970,668 The number of shares of the registrant's Common Stock outstanding as of March 1, 1995 was 48,792,109 shares. The following documents are hereby incorporated by reference into this Form 10-K: (1) Portions of the Registrant's Annual Report to Shareholders for the year ended December 31, 1994 (Parts II and IV). (2) Portions of the Registrant's 1995 Proxy Statement to be filed with the Securities and Exchange Commission (Part III). INDEX
PART I PAGE Business 1 - 35 Services 3 - 13 Projects 14 - 26 Other Information 27 - 35 Markets, Competition and General Business Conditions 27 - 28 Equal Employment Opportunity 29 Employee and Labor Relations 29 Environmental Regulatory Laws 29 - 31 Public Utility Regulatory Policies Act 32 - 33 Flow Control 33 - 34 Ash Residue and Other Matters 34 - 35 Properties 36 - 38 Legal Proceeding and Environmental Matters 39 - 40 Submission of Matters to a Vote of Security Holders 40 Executive Officers of Ogden 40 - 43 PART II Market For Ogden's Common Equity and Related Stockholder Matters 43 Selected Financial Data 43 Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Financial Statements and Supplementary Data 43 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 43 PART III Directors and Executive Officers of Ogden 44 Executive Compensation 44 Security Ownership of Certain Beneficial Owners and Management 44 Certain Relationships and Related Transactions 44 PART IV Exhibits, Financial Statement Schedules and Reports on Form 8-K 44 - 49
PART I Item 1. BUSINESS Ogden Corporation, a Delaware corporation (hereinafter together with its consolidated subsidiaries referred to as "Ogden" or the "Company"), has its executive offices located at Two Pennsylvania Plaza, New York, New York 10121, pursuant to a lease that expires on April 30, 2008 and which contains an option by Ogden to renew for an additional five years. Ogden is a diversified company primarily engaged in providing a wide range of services through the various operating groups within each of its two business segments. At December 31, 1993, Ogden owned approximately 84% of the issued and outstanding shares of common stock of Ogden Projects, Inc. ("OPI"). During 1994, pursuant to an offer made by Ogden to purchase OPI's remaining 16% of outstanding shares, Ogden and OPI entered into an Amended and Restated Agreement and Plan of Merger dated as of September 27, 1994 (the "Merger"). The Merger was approved by the OPI shareholders on December 29, 1994 at which time OPI became a wholly-owned subsidiary of Ogden. The merger provided that OPI shareholders of record on November 22, 1994 (except Ogden and shareholders exercising dissenter's rights) would be entitled to receive 0.84 of a share of Ogden common stock for each share of OPI common stock and cash for any fractional shares. The transaction required the issuance of 5,139,939 shares of Ogden common stock valued at $18.375 per share on December 29, 1994 for a total purchase price of $94,446,000. At December 31, 1994, in connection with Ogden's acquisition of the publicly traded shares of OPI, Ogden reclassified its business segments. Ogden now classifies its business segments as Services (formerly "Operating Services") and Projects, (formerly "Waste-to-Energy Operations"). Independent power activities, formerly part of Operating Services, are now part of Projects, reflecting consolidation of the overall management of these activities within OPI. Projects now includes the Waste-to-Energy, Independent Power, Water and Wastewater groups, and certain Construction Activities. Within the Services segment, certain business activities have been reclassified. The Environmental Services group no longer includes independent power; the Government Services group has been renamed Technology Services; and all facility management service contracts for government customers have been transferred to the Facility Management Services group. The following table and the discussions that follow reflect these reclassifications. Set forth in the following table is the amount of revenue attributable to each of the groups within Ogden's Services and Projects business segments for each of the last three fiscal years (In Thousands):
YEARS ENDED DECEMBER 31, 1992 1993 1994 SERVICES: AVIATION SERVICES $371,704 $389,201 $413,337 ENTERTAINMENT SERVICES 211,910 242,347 245,187 ENVIRONMENTAL SERVICES 119,128 122,262 140,745 TECHNOLOGY SERVICES 169,812 181,870 212,098 FACILITY MANAGEMENT SERVICES 397,600 382,056 357,272 OTHER SERVICES 8,561 12,368 10,811 TOTAL SERVICES $1,278,715 $1,330,104 $1,379,450 PROJECTS: WASTE-TO-ENERGY $ 371,669 $ 432,609 $ 459,478 INDEPENDENT POWER 24,063 28,173 32,006 WATER AND WASTEWATER 0 0 0 CONSTRUCTION ACTIVITIES 86,687 248,451 213,125 GAIN ON SALE OF LIMITED PARTNERSHIP INTERESTS 7,681 0 26,126 TOTAL PROJECTS $ 490,100 $ 709,233 $ 730,735 TOTAL SERVICES AND PROJECTS $1,768,815 $2,039,337 $2,110,185
The amounts of revenue, operating profit or loss and identifiable assets attributable to each of Ogden's two business segments for each of the last three fiscal years are set forth on page 44 of Ogden's 1994 Annual Report to Shareholders, certain specified portions of which are incorporated herein by reference. SERVICES The operations of Ogden's Services business segment are performed by Ogden Services Corporation and its subsidiaries ("Ogden Services") through its five major operating groups as follows: Aviation Services; Entertainment Services; Environmental Services; Technology Services; and Facility Management Services. Ogden Services, through joint ventures, partnerships and wholly-owned subsidiaries within each of the foregoing major operating groups, provides a wide range of services to private and public facilities throughout the United States and many foreign countries. Its principal customers include airlines, transportation terminals, sports arenas, stadiums, banks, owners and tenants of office buildings, state, local and Federal governments, universities and other institutions and large industrial organizations that are leaders in such fields as plastics, chemicals, drugs, tires, petroleum and electronics. Many customers are billed on cost-plus, fixed-price or time and materials basis. Where services are performed on a cost-plus basis, the customer reimburses the appropriate Ogden Services' group for all acceptable reimbursable expenditures made in connection with the job and also pays a fee, which may be a percentage of the reimbursable expenditures, a specific dollar amount, or a combination of the two. Fixed-price contracts, in most cases, contain escalation clauses increasing the fixed price in the event, and to the extent, that there are increases in payroll and related costs. Many of the contracts in the Aviation and Facility Management Services' groups are written on a month-to-month basis or provide for a longer or indefinite term but are terminable by either party on notice varying from 30 to 180 days. AVIATION SERVICES Aviation Services provides specialized support services to 185 airlines at 90 locations throughout the United States, Canada, Europe, Latin America and the Pacific Rim. The specialized support services provided by this group include comprehensive ground handling, ramp, passenger, cargo and warehouse, aviation fueling and in-flight catering services. These services are performed through contracts with individual airlines, through consolidated agreements with several airlines, and contracts with various airport authorities. During 1994 Aviation Services began to pursue opportunities associated with the privatization of airport operations and related airport projects. To capitalize on these opportunities, Ogden intends to combine its Aviation Services skills with the development, financing and construction management expertise of its Projects business segment. Ground Handling and Specialized Support Services Ground handling services include diversified ramp operations such as baggage unloading and loading, aircraft cleaning, aircraft maintenance, flight planning, de-icing, cargo handling, warehouse operations and passenger-related services such as ticketing, check-in, porter ("sky-cap") service, passenger lounge operations and other miscellaneous services. Global expansion by the Aviation group has resulted in providing comprehensive ground handling and related services at many international locations throughout Europe, Canada, South America and other countries. These locations include eight different airports throughout Germany; Heathrow Airport in England; Schiphol International Airport in the Netherlands; Auckland International Airport in New Zealand; the Czech Republic through a 50% interest in a Prague-based airport handling company; Pearson International Airport in Toronto and the Mirabel and Dorval Airports in Montreal; the Simon Bolivar International Airport in Caracas, Venezuela; VIP lounge operation and ground handling services at the Arturo Merino Benitez Airport in Santiago, Chile and the Mexico International Airport in Mexico City. Ogden Aviation continues to perform services at St. Maarten's and Air Aruba's aviation ground service operations at Reina Beatrix International Airport in Aruba through a corporation jointly owned by Ogden and Air Aruba. During 1994 Aviation Services: (i) began providing ground handling services at Jorge Chavez International Airport in Lima, Peru and airports located in Chicago, Los Angeles and Vancouver, British Columbia, (ii) added ramp handling services to its existing ground handling services operations at Guarulhos International Airport in Sao Paulo and Galeao International Airport in Rio de Janeiro, Brazil, (iii) sold its ground handling operations at Gatwick and four other United Kingdom regional airports and acquired an air cargo ground handling company which provides services at the London Heathrow Airport, (iv) formed joint ventures with the Kashmirwala Group in Pakistan to begin ground handling services at Karachi International Airport and with a Turkish company to provide aircraft cleaning, security and commissary supplies to carriers at Ataturk Airport in Istanbul and other locations in Turkey, and (v) expanded its cargo/warehouse services in North America through contract awards at four new airports. Fueling Services Aviation operates fueling facilities, including storage and hydrant fueling systems for the fueling of aircraft. This operation assists airlines in designing, arranging financing for, and installing underground fueling systems. These fueling operation services are principally performed in the North American market. However, Aviation has signed a 10-year contract to serve as sole fueling handling agent at Tocumen International Airport in Panama City, Panama and has been awarded a 5-year contract to fuel aircraft at the Luis Munoz International Airport in San Juan, Puerto Rico commencing in 1995. In-Flight Catering Aviation operates 18 in-flight kitchens for over 85 airline customers at a number of locations, including John F. Kennedy International and LaGuardia Airports in New York; Newark International Airport in New Jersey; Los Angeles and San Francisco International Airports in California; Miami International Airport in Florida; Washington Dulles International near Washington, D.C.; McCarren International in Las Vegas, Nevada; and Honolulu International in Hawaii. The Aviation in-flight kitchen at Honolulu International also provides catering services to two cruise ships owned by NAVATEK, a Hawaiian cruise line. During 1994, Aviation acquired inflight catering kitchens in the Canary Islands and Palma de Mallorca in Spain. Airport Privatization and Related Projects During 1994 Aviation Services and one of its partners,the Macau Services Corporation (a subsidiary of the Civil Aviation Authority of China) led a consortium which was awarded a 19-year contract, with a 16-year exclusivity arrangement, to provide ramp and cargo handling, passenger services, and aircraft line maintenance at the new Macau International Airport, expected to be operational in November 1995. The consortium, of which Aviation Services is the managing partner with a 29% participation, will provide all necessary passenger and ramp equipment and build cargo and engineering facilities, an aircraft hangar and a state-of-the-art training center at the airport. The consortium's investment in infrastructure improvements and equipment in the new Macau airport is expected to exceed $40 million. ENTERTAINMENT SERVICES The Entertainment Services group provides total facility management services; presentation of concerts and family shows; food, beverage and novelty concessions; and janitorial, security, parking, and other maintenance services. These services are provided to a wide variety of public and private facilities including more than 100 stadiums, convention and exposition centers, arenas, parks, amphitheaters, and fairgrounds located in the United States, Mexico, Canada, Brazil, Spain and the United Kingdom. Entertainment also operates a racetrack and five off-track betting parlors in Illinois. The facility management and concession arrangements under which this group operates are individually negotiated and vary widely as to terms and duration. Concession contracts and leases usually provide for payment by Entertainment of commissions or rentals based on a stipulated percentage of gross sales or net profits, sometimes with a minimum rental or payment. Most of the facility management contracts are on a cost-plus-a-fee basis but a number of such contracts provide for a sharing of profits and losses between Entertainment and the facility owner. Entertainment offers its customers a wide range of project-development options, including the operational design review, consultation during construction, and assistance with financing arrangements, as well as operations of facilities, usually in return for long-term services and concession contracts. In some cases Ogden Corporation guarantees Entertainment's performance of these contracts as well as the financing arrangements. Food, Beverage and Novelty Services at Stadiums and Arenas Food, beverage and novelty services are provided by Entertainment in the United States at a number of locations including the following: Rich Stadium (Buffalo, New York); the USAir Arena (Landover, Maryland); the Milwaukee Exposition and Convention Center (Milwaukee, Wisconsin); the Los Angeles Convention Center (Los Angeles, California); the Kingdome (Seattle, Washington); Veterans Stadium (Philadelphia, Pennsylvania); Market Square Arena (Indianapolis, Indiana); McNichols Arena (Denver, Colorado); Cobo Hall (Detroit, Michigan); Tempe Diablo Stadium (Tempe, Arizona); University of Oklahoma Stadium (Norman, Oklahoma); and the MGM Grand Gardens Arena (Las Vegas, Nevada). In 1994 Entertainment was awarded a 5-year contract to provide food and beverage and merchandise services for Wrigley Field in Chicago, Illinois and began providing food and beverage services at 110,000- seat Maracano Stadium, located in Rio de Janeiro, Brazil. In Canada, food, beverage and novelty concessions are provided at the Saint John Regional Exhibition Centre located in New Brunswick, Canada and at Lansdowne Park in Ottawa, Canada. During 1994, Entertainment was awarded a 20-year contract to provide food and beverage services at General Motors Place, a new sports and entertainment arena under construction in Vancouver, British Columbia which is scheduled to open in late 1995. This facility will be the home of the National Hockey League's Vancouver Canucks and the newly awarded National Basketball Association franchise, the Vancouver Grizzlies. Food, Beverage and Novelty Services at Amphitheaters Entertainment also provides food and beverage services at amphitheaters throughout the United States including the Starlake Amphitheater (near Pittsburgh, Pennsylvania); the Fiddler's Green Amphitheatre (Englewood, Colorado); and the Sandstone Amphitheatre (Kansas City, Missouri). During 1994 Entertainment was awarded several new amphitheater contracts, including the following: (i) a 10-year food and beverage contract at the Mega Star Amphitheater located in Eufaula, Oklahoma; (ii) a 15-year food and beverage contract at the all-seasons Connecticut Center for Performing Arts in Hartford, Connecticut, (iii) a 10-year exclusive food and beverage contract at the all-seasons Camden Amphitheater located in Camden, New Jersey which is expected to open in May 1995; (iv) a 20-year agreement pursuant to which Entertainment will provide food and beverage services and support for the long-term financing at the Polaris Amphitheater in Columbus, Ohio; and (v) a 20-year contract to provide food and beverage services, parking and support for the long-term financing at the Cellar Door Amphitheater located near Manassas, Virginia, expected to open during 1995. Facility Management and Concession Services Entertainment, through long-term management and concession agreements, provides management services, food, beverage and novelty concessions and maintenance services at various convention centers, arenas and public facilities including the Pensacola Civic Center in Pensacola, Florida; the Sullivan Arena and Egan Convention Center in Anchorage, Alaska; the Rosemont Horizon, near Chicago, Illinois; the Target Center in Minneapolis; The Great Western Forum in Los Angeles; and Anaheim Stadium, a 70,000 seat stadium located in Anaheim, California. During 1994 Entertainment provided design and consulting services at the 19,000 seat Victoria Station Arena in Manchester, England scheduled to open during 1995, which Entertainment will manage and operate, upon completion, pursuant to a 20-year lease. During early 1995, Entertainment secured a 20- year contract to provide total facility management services at the 10,000- seat Newcastle Arena, a new sports and entertainment arena located in Newcastle, England which will feature ice hockey, concerts and other events. Entertainment will provide consulting services during the design and development phase of the arena which is scheduled to open in November 1995. During 1994 this service group was also awarded a 20-year contract to provide complete facility management and concession services at the 12,000- seat Oberhausen Arena located in Oberhausen, Germany which is scheduled to open in 1996. The arena will feature ice hockey, handball, basketball and concerts. During August 1994 Entertainment began providing facility management services to the Northlands Coliseum in Edmonton, Alberta pursuant to a 5-year contract. The Coliseum is home to the Edmonton Oilers of the National Hockey League. During 1994 Entertainment arranged for the financing and assisted in the design and construction of the Ottawa Palladium, a 19,000-seat multipurpose indoor arena under construction in Ottawa, Canada, which is owned by a third party and which is scheduled to open in 1996. Entertainment has been awarded a 30-year contract to provide complete facility management and concession services at the arena which will be the home of the Ottawa Senators of the National Hockey League. Ogden has agreed that the Ottawa Palladium, under Entertainment's management, will generate a minimum amount of revenues computed in accordance with its 30-year contract. The owners of the Ottawa Palladium have entered into a 30-year license agreement with the owner of the Ottawa Senators, pursuant to which the Ottawa Senators are expected to play their home games at the arena commencing in 1996. Pursuant to a management agreement between the City of Anaheim, California and a wholly owned subsidiary of Ogden, Entertainment manages and operates the Arrowhead Pond, a facility owned by and located within the City of Anaheim. The Arrowhead Pond is a multi-purpose facility capable of accommodating professional basketball and hockey, concerts and other attractions, and has a maximum seating capacity of approximately 19,400. Ogden has agreed that the Arrowhead Pond, under Entertainment's management, will generate a minimum amount of revenues computed in accordance with the 30-year management agreement with the City. Entertainment also has a 30-year lease agreement with The Walt Disney Company at the Arrowhead Pond where the Anaheim Mighty Ducks, a National Hockey League team owned by The Walt Disney Company, plays its home games. In Mexico, Entertainment owns a 27% equity interest in a Mexican company which manages the Sports Palace, a 22,000 seat arena, and the Autodrome, a 45,000 seat open air facility, located in Mexico City, as well as the new Autodrome Fundidora Amphitheater in Monterey, Mexico that is able to accommodate 18,000 people. Entertainment also owns 51% of a company that provides food and beverage concessions at the Sports Palace and the new Autodrome amphitheater referred to above. Other Activities During 1994 Entertainment acquired an equity interest in Parques Tecnocultiroles, S.A. ("Partecsa"), a Spanish Corporation based in Seville, Spain. Partecsa has been awarded a 30-year contract with an 8-year renewal option to convert, remodel, manage and operate Cartuja, a multi-attraction theme park located on a 200 acre site in Seville, Spain where the 1992 Exposition Fair was held. Partecsa has requested Entertainment to perform advisory services relating to the conversion and future operation of Cartuja. Upon completion of its conversion Partecsa has agreed to award Entertainment, subject to the execution of a definitive agreement, the exclusive rights to provide the food and beverage concessions at Cartuja for a four (4) year period. Entertainment also leases and operates a thoroughbred and harness racetrack and six off-track betting parlors in Illinois where it telecasts races from Fairmount Park and other racing facilities. Restaurants and other food and beverage services are provided by Entertainment at these facilities. A large portion of the track's revenue is derived from its share of the pari-mutuel handle, which can be adjusted by state legislation. Other income is derived from admission charges, parking, programs and concessions. Entertainment also provides concessions at zoos located in Seattle, Washington and Cleveland, Ohio. ENVIRONMENTAL SERVICES The Environmental Services group provides a comprehensive range of environmental, infrastructure and energy consulting, engineering and design services to industrial and commercial companies, electric utilities and governmental agencies. The Environmental group's services include analysis and characterization, remedial investigations, analytical testing, engineering and design, data management, project management, and regulatory assistance. These services are provided to detect, evaluate, solve and monitor environmental problems and health and safety risks, environmental, civil, geotechnical, transportation and sanitary engineering, urban and regional planning and storm water management, as well as regulatory assistance, nuclear safety and engineering, and consulting services relating to nuclear waste management, security engineering and design services. Environmental provides services to a variety of clients in the public and private sectors in the United States and abroad. Principal clients include major Federal agencies, particularly the Department of Defense and the Department of Energy, as well as major corporations in the chemical, petroleum, transportation, public utility and health care industries and Federal and state regulatory authorities. Approximately 33% of Environmental's revenues are derived from contracts or subcontracts with departments or agencies of the United States Government. United States Government contracts may be terminated, in whole or in part, at the convenience of the government or for cause. In the event of a convenience termination, the government is obligated to pay the costs incurred by Environmental under the contract plus a fee based upon work completed. As of December 31, 1994, Environmental's backlog of orders amounted to approximately $143 million, of which approximately $40 million represented government orders that were not yet funded; as of December 31, 1993, the comparable amounts were $120 million and $37 million, respectively. The Environmental group continues to provide professional environmental engineering services, including program management, environmental analysis, testing and restoration to the United States Navy CLEAN Program (Comprehensive Long Term Environmental Action Navy) pursuant to a 10-year contract awarded during 1991. Thus far the Environmental group has provided these services at Navy bases in Hawaii, Guam, Japan, Hong Kong, the Philippines, Australia and Korea. Pursuant to its three year contract with the U.S. Air Force Center for Environmental Excellence, the Environmental group continues to oversee the removal of storage tanks and contaminated soil from Air Force bases across the United States and in U.S. territories. The Environmental group also remains as one of four contractors selected by the U.S. Air Force to competitively bid for work over a five year period to identify, investigate and remediate environmental contamination problems at Kelly Air Force Base, Texas. Environmental also performs remediation services and environmental studies for the U.S. Army Corps. of Engineers in Alaska and Texas, and environmental compliance and training services pursuant to a 5-year contract with the National Guard Bureau and the Air National Guard Readiness Center. The Environmental group continues to develop its mixed waste analytical business through its analytical laboratory in Fort Collins, Colorado which opened during 1993 and analyzes mixtures of nuclear and non-nuclear hazardous waste. This mixed waste laboratory provides testing services for the Department of Energy and other Federal government agencies involved in the cleanup of government facilities. Environmental is continuing to pursue international markets through its wholly-owned environmental, and geotechnical consulting firm in Spain; its environmental services contract with the U.S. Army Corps of Engineers, European District,to provide environmental site assessments in Germany; its contract to work with the Chevron Overseas Petroleum, Inc.'s Tengizchevroil Joint Venture Project; its discussions with the Republic of Kazakhstan to develop an environmental protection public health and safety plan; and its IEAJ affiliate in Japan, a leading consultant to the nuclear industry. TECHNOLOGY SERVICES The Technology Group provides services through its five technology-based operating units: Atlantic Design Company, Inc. (Atlantic Design); Applied Data Technology, Inc. (ADTI), acquired in 1995; W.J. Schafer Associates, Inc. (WJSA); Systems Engineering, Applied Engineering; and Biomedical. These operating units produce a broad range of technology and scientific solutions for public and private industry, including the development and manufacture of commercial technology products, the development of new applications for advanced technologies, and analysis, integration, testing and implementation services. Principal business areas are: computer hardware/software systems and technologies, telecommunications systems, advanced communications and sensor systems and technologies, management and logistics services, biomedical research and repository services, air combat maneuvering instrumentation systems, and after-action reporting and display systems. Atlantic Design This unit, with principal offices located in Charlotte, North Carolina and engineering facilities located in Fairfield, New Jersey and locations within New York state, provides engineering design, drafting and technical services, as well as turn-key, integrated services in electronics contract manufacturing and assembly and, through its Lenzar operation in Florida, develops and markets medical products and custom image capturing products. Atlantic Design provides services to customers primarily in the computer, medical and electronic industries, including IBM, General Electric, Seiko, Compaq, Martin Marietta, AT&T, EMC2 Corporation, Netrix Corporation and Pratt and Whitney. Atlantic Design's services also include the design of mechanical, electro- mechanical and electronic equipment; technical writing; engineering analysis; building, testing and repairing electronic assemblies and equipment; and the development of prototype equipment for a variety of industries. ADTI During January 1995, Technology Services strengthened its group through the acquisition of ADTI located in San Diego, California. ADTI is a leading supplier of air combat maneuvering instrumentation systems and after-action reporting and display systems. ADTI's range systems are installed at Navy and Air Force aircraft training ranges to facilitate air-to-air combat exercises and monitor, record and graphically display the exact maneuvers of the aircraft on the ranges and simulate the various weapons systems aboard the aircraft. These range automated systems are used by the U.S. Navy and Air Force to train pilots for combat conditions and by the Department of Defense in training pilots to avoid "friendly fire" incidents. ADTI's systems are currently installed at four of the 14 domestic ranges, including the range at the Top Gun school at Miramar, California. The range systems business includes new ranges, expansion and upgrade of existing ranges, product support and related programs. ADTI also developed a proprietary flight line test set designed to test and trouble-shoot the Auxiliary Power Unit ("APU") on-board a Boeing air-to-air refueling aircraft. The APU tester was developed to fill the military's demand for a practical low cost flightline support unit that will isolate faults within the APU on-board the Boeing aircraft. WJSA This unit provides technology and engineering services and consultation in space-based and free electron laser technology and high energy systems research to the Ballistic Missile Defense Organization as well as technical research to the other agencies within the Department of Defense and the U.S. Government. This unit is also currently working under contract with the Defense Nuclear Agency to define and analyze sensor architectures that assess bomb damage to underground targets. WJSA is also involved in a program with the Department of Energy to develop an advanced technique for producing large-scale electric power. WJSA continues its efforts under contract with the Coleman Research Corporation to provide system engineering and technical assistance support for the Theater High Altitude Area Defense Project. Systems Engineering, Applied Engineering This units provides systems and software engineering and computer/telephone-related products and services to Government agencies and private industry. Some of their largest clients are the U.S. General Services Administration (GSA), the Department of Defense, and the Office of Personnel Management. During 1994, these units were awarded several large contracts ranging from one to five years in duration. This included two information technology (IT) contracts with GSA; one to provide IT requirements studies for automated business systems to agencies located in and around Washington, D.C. and another to analyze, design and develop business, scientific and mathematical systems for agencies located throughout the Western United States; another contract was awarded with the U.S. Navy to provide engineering and technical services for advanced strategic and tactical communications systems and systems integration programs on major Navy combat vessels. Biomedical This unit provides biomedical research, support and biological repository services for such customers as the National Institute of Health, the Walter Reed Army Institute of Research, the U.S. Food and Drug Administration, the Center for Disease Control and Prevention, the National Cancer Institute and other health agencies, commercial firms and not-for-profit organizations sponsoring research, primarily in the area of new drug development and testing. FACILITY MANAGEMENT SERVICES The Facility Management Services group provides a comprehensive range of facility management, maintenance and manufacturing support services to industrial, commercial, electric utilities, and education and institutional customers throughout the United States and Canada. Beginning in 1995 the facility management services operations of the Technology Services group were transferred to Facility Management Services. The range of services provided include total facility management; facility operations and maintenance; operations, maintenance and repair of production equipment; security and protection; housekeeping; landscaping and grounds care; energy management; warehousing and distribution; project and construction management; and skilled craft support services. This service group's commercial and office building customers include the World Trade Center and the American Express Tower in New York, Phillips Petroleum Headquarters in Bartlesville, Oklahoma, various governmental agencies and AT&T at several sites in New Jersey. Facility's industrial and manufacturing customers include IBM, Chrysler, Colgate Palmolive, Goodyear, BF Goodrich, US West, Exxon, Dow Chemical, American Cyanamid, MITRE Corporation and Martin Marietta. The group continues its support to the institutional and educational marketplace whose customers include the University of Miami; New York University; Clark Atlanta University in Georgia; and Concordia University in Montreal, Canada. Facility Management Services, in conjunction with Projects, also provides services to the waste-to-energy plants in operation, or being built, by Ogden Martin Systems, Inc. on a cost-plus basis as negotiated between Ogden Martin and Ogden Facility Services. OTHER SERVICES Ogden Services also provides services relating to the removal and encapsulation of asbestos-containing materials from office buildings and other facilities and arranges for the transport of such material to approved disposal sites. Asbestos-remediation jobs are being performed principally in the greater Manhattan-New York metropolitan area. The market for asbestos removal and encapsulation services by office buildings and large residential complexes, industrial plants, airports and other public facilities has been greatly reduced over the past several years and Ogden Services' continued involvement in this industry is reviewed on an annual basis. Through Universal Ogden Services, a joint venture based in Seattle, Washington, services are provided to a wide range of facilities where people live for extended periods of time, such as remote job sites and oil rigs. Food and housekeeping services are currently provided to offshore oil production platforms and drilling rigs in the Gulf of Mexico, the North Sea, the West Coast of Africa and South America, for oil production and drilling companies. Logistical support services, including catering, housing, security, operations, and maintenance are provided to remote industrial campsites located in the United States and abroad. PROJECTS The operations of Ogden's Projects business segment are conducted by Ogden's wholly owned subsidiary Ogden Projects, Inc. and its subsidiaries ("OPI") whose principal business is conducted through it's four major operating groups: Waste-to-Energy; Independent Power; Water and Wastewater; and Construction Activities. WASTE-TO-ENERGY The Waste-to-Energy group operates facilities which combust municipal solid waste to make saleable energy in the form of electricity or steam. This group completed construction of its first waste-to-energy facility in 1986 and currently operates 27 waste-to-energy facilities at 26 locations. Waste-to- Energy has one facility under construction, is the owner or lessee of 17 of its facilities, has been awarded three additional facilities that are not yet under construction, and has taken steps toward expanding its waste-to-energy business internationally. In most cases, the Waste-to-Energy group, through wholly-owned subsidiaries ("Operating Subsidiaries"), provides waste-to-energy services pursuant to long-term service contracts ("Service Agreements") with local governmental units sponsoring the waste-to-energy project ("Client Communities"). The group has projects currently under development for which there is no sponsoring Client Community and may in the future undertake other such projects. (a) Terms and Conditions of Service Agreements. Projects generally have been awarded by Client Communities pursuant to competitive procurement. However, Waste-to-Energy has also built and is operating projects that were not competitively bid. Following execution of a Service Agreement between the Operating Subsidiary and the Client Community, several conditions must be met before construction commences. These usually include, among other things, financing the facility, executing an agreement providing for the sale of the energy produced by the facility, purchasing or leasing the facility site, and obtaining of required regulatory approvals, including the issuance of environmental and other permits required for construction. In many respects, satisfaction of these conditions is not wholly within this group's control and, accordingly, implementation of an awarded project is not assured, or may occur only after substantial delays. Waste-to-Energy incurs substantial costs in preparing bids and, if it is the successful bidder, implementing the project so it meets all conditions precedent to the commencement of construction. In some instances Waste-to-Energy has made contractual arrangements with communities that provide partial recovery of development costs if the project fails to go into construction for reasons beyond its control. Each Service Agreement is different in order to reflect the specific needs and concerns of the Client Community, applicable regulatory requirements, and other factors. The following description sets forth terms that are generally common to these agreements: (i) the Operating Subsidiary designs the facility, generally applies for the principal permits required for its construction and operation, and helps to arrange for financing, and then constructs and equips the facility on a fixed price and schedule basis. The actual construction and installation of equipment is performed by contractors under the supervision of the Operating Subsidiary. The Operating Subsidiary bears the risk of costs exceeding the fixed price of the facility and may be charged liquidated damages for construction delays, unless caused by the Client Community or by unforeseen circumstances beyond its control, such as changes of law ("Unforeseen Circumstances"). After the facility successfully completes acceptance testing, the Operating Subsidiary operates and maintains the facility for an extended term, generally 20 years or more; (ii) the Operating Subsidiary generally guarantees that the facility will meet minimum processing capacity and efficiency standards, energy production levels, and environmental standards. The Operating Subsidiary's failure to meet these guarantees or to otherwise observe the material terms of the Service Agreement (unless caused by the Client Community or by Unforeseen Circumstances) may result in liquidated damages to the Operating Subsidiary or, if the breach is substantial, continuing, and unremedied, the termination of the Service Agreement. In the case of such Service Agreement termination, the Operating Subsidiary may be obligated to discharge project indebtedness; (iii) the Client Community is generally required to deliver minimum quantities of municipal solid waste ("MSW") to the facility and, regardless of whether that quantity of waste is delivered to the facility, to pay a service fee. Generally, the Client Community also provides or arranges for debt financing. Additionally, the Client Community bears the costs of disposing ash residue from the facility and, in many cases, of transporting the residue to the disposal site. Generally, expenses resulting from the delivery of unacceptable and hazardous waste to the facility, and from the presence of hazardous materials on the site, are also borne by the Client Community. In addition, the Client Community is also generally responsible to pay increased expenses and capital costs resulting from Unforeseen Circumstances, subject to limits which may be specified in the Service Agreement; (iv) Ogden typically guarantees each Operating Subsidiary's performance under its respective Service Agreement. After construction is completed and the facility is accepted, the Client Community pays the Operating Subsidiary a fixed operating fee which escalates in accordance with specified indices, reimburses the Operating Subsidiary for certain costs specified in the Service Agreement including taxes, governmental impositions (other than income taxes), ash disposal and utility expenses, and shares with the Operating Subsidiary a portion of the energy revenues (generally 10%) generated by the facility. If the facility is owned by the Operating Subsidiary, the Client Community also pays as part of the Service Fee an amount equal to the debt service due to be paid on the bonds issued to finance the facility. At most facilities, Waste-to-Energy may earn additional fees from accepting waste from the Client Community or others utilizing the capacity of the facility which exceeds the amount of waste committed by the Client Community. Waste-to-Energy operates transfer stations in connection with some of its waste-to-energy facilities and, in connection with the Montgomery County, Maryland, project, OPI will use a railway system to transport MSW and ash residue to and from the facility. Waste-to-Energy leases and operates a landfill located at its Haverhill, Massachusetts, facility, and leases, but does not operate, a landfill in connection with its Bristol, Connecticut, facility. (b) Other Arrangements for Providing Waste-to-Energy Services. Waste- to-Energy owns two facilities that are not operated pursuant to Service Agreements with Client Communities, and is currently developing, and may undertake in the future, additional such projects. In such projects, OPI must obtain sufficient waste under contracts with haulers or communities to ensure sufficient project revenues. In these cases, Waste-to-Energy is subject to risks usually assumed by the Client Community, such as those associated with Unforeseen Circumstances and the supply and price of municipal waste to the extent not contractually assumed by other parties. This group's current contracts with waste suppliers for these two facilities provide that the fee charged for waste disposal service is subject to limited increases in the event that costs of operation increase as a result of Unforeseen Circumstances. On the other hand, in these cases, Waste-to-Energy generally retains all of the energy revenues from sales of power to utilities or industrial power users and disposal fees for waste accepted at these facilities. Accordingly, OPI believes that such projects carry both greater risks and greater potential rewards than projects in which there is a Client Community. For the projects that are not operated pursuant to a Service Agreement, tipping fees, which are generally subject to escalation in accordance with specified indices, and energy revenues are paid to the Waste-to-Energy group. Electricity generated by these projects is sold to public utilities and in one instance, steam and a portion of the electricity generated is sold to industrial users. Under certain of the contracts under which waste is provided to these facilities, Waste-to-Energy may be entitled to fee adjustments to reflect certain Unforeseen Circumstances. (c) Project Financing. Financing for projects is generally accomplished through the issuance of a combination of tax-exempt and taxable revenue bonds issued by a public authority. If the facility is owned by the Operating Subsidiary, the authority lends the bond proceeds to the Operating Subsidiary and the Operating Subsidiary contributes additional equity to pay the total cost of the project. For such facilities, project-related debt is included as a liability in Ogden's consolidated financial statements. Generally, such debt is secured by the revenues pledged under the respective indenture and is collateralized by the assets of the Operating Subsidiary and otherwise provides no recourse to Ogden, subject to construction and operating performance guarantees and commitments. (d) Waste-to-Energy Projects. Certain information with respect to projects as of February 28, 1995 is summarized in the following table: WASTE-TO-ENERGY PROJECTS
Tons Boiler Commencement In Operation Per Day Units of Operations Tulsa,OK(I)............ 750 2 1986 Haverhill/Lawrence, MA-RDF................ 950 1 1984 Marion County, OR.......... 550 2 1987 Hillsborough County, FL 1,200 3 1987 Tulsa, OK(II)...... 375 1 1987 Bristol, CT................ 650 2 1988 Alexandria/Arlington, VA... 975 3 1988 Indianapolis, IN........... 2,362 3 1988 Hennepin County, MN 1,000 2 1990 Stanislaus County, CA...... 800 2 1989 Babylon, NY................ 750 2 1989 Haverhill, MA-Mass Burn.... 1,650 2 1989 Warren County, NJ ..... 400 2 1990 Kent County, MI........ 625 2 1990 Wallingford, CT........ 420 3 1990 Fairfax County, VA......... 3,000 4 1990 Huntsville, AL......... 690 2 1990 Lake County, FL............ 528 2 1990 Lancaster County, PA... 1,200 3 1991 Pasco County, FL....... 1,050 3 1991 Huntington, NY ........ 750 3 1991 Hartford, CT .. 2,000 3 1989 Detroit, MI ... 3,300 3 1989 Honolulu, HI ...... 2,160 2 1990 Union County, NJ....... 1,440 3 1994 Lee County, FL ........ 1,200 3 1994 Onondaga, NY...... 990 3 1995 Total................ 31,765 Unrecognized Construction Revenues as of 12/31/94 Scehduled (In Tons Boiler Commencement thousands Under Construction Per Day Units of Operations of dollars) Montgomery County, MD 1,800 3(2) 1995 $ 44,764 Estimated Construction Revenues Expected (In Awarded - Not Yet Tons Boiler Commencement thousands Under Construction Per Day Units of Construction of dollars) Mercer County, NJ ..... 1,450 2 1995 $185,120 Halifax, Nova Scotia 550 2 $ 99,620* Clark County, OH 1,750 2 $ N/A Total................. 3,750 *Expressed in Canadian Dollars NOTES: Facility is owned by an owner/trustee pursuant to a sale/leaseback arrangement. Facility has been designed (or, with respect to awarded facilities and facilities under construction, will be designed) to allow for the addition of another unit. Facility is owned (or, with respect to facilities not under construction, is to be owned) by the Client Community. Phase II of the Tulsa facility, which was financed as a separate project, expanded the capacity of the facility from two to three units. Operating Subsidiaries were purchased after completion, and use a mass- burn technology that is not the Martin Technology. Owned by a limited partnership in which the limited partners are not affiliated with OPI. Under contracts with the Connecticut Resource Recovery Authority and Northeast Utilities, OPI operates only the boiler and turbine for this facility. Operating contracts were acquired after completion. Facility uses a refuse-derived fuel technology and does not employ the Martin Technology. In addition, Waste-to-Energy is presently constructing environmental improvements to the Detroit Facility. The total price for this project is approximately $117,800,000 (subject to escalation), and Waste-to- Energy expects construction to be completed in 1995. This facility is substantially complete and is processing waste. During 1994, the Minister of the Environment for the Province of Nova Scotia disapproved the project for economic, not environmental, reasons, and the Metropolitan Authority purported to terminate its contract with OPI on that basis. OPI has challenged the minister's decision as being beyond his authority. If OPI is successful in its challenge, the Metropolitan Authority may still terminate development of the project, subject to certain obligations to reimburse OPI for certain of its costs. In 1993, OPI negotiated major project agreements with Clark County, Ohio, for the disposal of MSW and with Ohio Edison Company pursuant to which Ohio Edison leases a site to OPI and purchases steam generated at the proposed waste-to-energy facility. This project is conditional upon obtaining commitments of additional MSW from other sources and satisfactory resolution of litigation described below. Contracts related to the project are the subject of litigation brought by a local landfill in which an intermediate appellate court recently enjoined performance by the County. The Ohio Supreme Court has agreed to hear OPI's appeal of this decision, probably in the Spring of 1995. When this litigation is resolved, OPI will evaluate whether to attempt to procure additional waste contracts for this facility.
(e) Technology. The principal feature of the Martin Technology is the reverse-reciprocating stoker grate upon which the waste is burned. The patent for the basic stoker grate technology used in the Martin Technology expired in 1989. OPI has no information that would cause it to believe that any other company uses the basic stoker grate technology that was protected by the expired patent. Moreover, OPI believes that unexpired patents on other portions of the Martin Technology would limit the ability of other companies to effectively use the basic stoker grate technology in competition with OPI. There are several unexpired patents related to the Martin Technology including: (i) Grate Bar for Grate Linings, Especially in Incinerators - expires 2/9/99; (ii) Method and Arrangement for Reducing NOx Emissions from Furnaces - expires 7/19/00; (iii) Method and Apparatus for Regulating the Furnace Output of Incineration Plants - expires 9/4/07; (iv) Method for Regulating the Furnace Output in Incineration Plants - expires 1/1/08; and (v) Feed Device with Filling Hopper and Adjoining Feed Chute for Feeding Waste to Incineration Plants - expires 4/23/08. More importantly, OPI believes that it is Martin's know-how in manufacturing grate components and in designing and operating mass-burn facilities, Martin's worldwide reputation in the waste-to-energy field, and OPI's know-how in designing, constructing and operating waste-to-energy facilities, rather than the use of patented technology, that is important to OPI's competitive position in the waste-to-energy industry in the United States. OPI does not believe that the expiration of the patent covering the basic stoker grate technology or patents on other portions of the Martin Technology will have a material adverse effect on OPI's financial condition or competitive position. (f) The Cooperation Agreement. Under an agreement between Martin GmbH fur Umuelt-und Energietechnik of Germany ("Martin") and OPI (the "Cooperation Agreement"), OPI has the exclusive rights to market the proprietary technology (the "Martin Technology") of Martin in the United States, Canada, Mexico, Bermuda, certain Caribbean countries, most of Central and South America, and Israel. In addition, in Germany, Turkey, Saudi Arabia, Kuwait, the Netherlands, Denmark, Norway, Sweden, Finland, Poland, and Italy OPI has exclusive rights to use the Martin Technology, but only on a full service design, construct, and operate basis. The Cooperation Agreement provides that OPI may acquire, own, commission, and/or operate facilities that use technology other than the Martin Technology that have been constructed by entities other than OPI or its affiliates. Martin is obligated to assist OPI in installing, operating, and maintaining facilities incorporating the Martin Technology. The fifteen year term of the Cooperation Agreement renews automatically each year unless notice of termination is given, in which case the Cooperation Agreement would terminate 15 years after such notice. Additionally, the Cooperation Agreement may be terminated by either party if the other fails to remedy its material default within 90 days of notice. The Cooperation Agreement is also terminable by Martin if there is a change of control (as defined in the Cooperation Agreement) of Ogden Martin Systems, Inc. ("OMS"), a wholly-owned subsidiary of OPI or any direct or indirect parent of OMS not approved by its respective board of directors. Although termination would not affect the rights of OPI to design, construct, operate, maintain, or repair waste-to-energy facilities for which contracts have been entered into or proposals made prior to the date of termination, the loss of OPI's right to use the Martin Technology could have a material adverse effect on OPI's future business and prospects. (g) International Business Development. In 1994, Waste-to-Energy continued the development of its waste-to-energy business in selected international markets. An office in Munich, Germany, was opened in 1993 and, as indicated above, extended its right to use the Martin Technology to develop full service projects in much of Europe. In Europe, waste-to-energy facilities have been built as turn-key construction projects and then operated by local governmental units or by utilities under cost-plus contracts. Waste-to-Energy emphasizes developing projects which it will build and then operate for a fixed fee. Some European countries are seeking to substantially reduce their dependency on landfilling. For example, Germany has enacted legislation which would prevent the landfilling of untreated raw municipal waste by the end of the decade. The trend toward privatization of municipal services in Latin America continues to remain strong. The market for waste-to-energy is in a formative stage and, with few exceptions, continues to lag behind other infrastructure project development in most Latin American countries. Waste-to-energy services in Latin America will be offered through strategic alliances with Latin American firms and by coordinating marketing efforts with other business development efforts of Ogden's Services segment. Ogden plans to open an office in Hong Kong in 1995. OPI has entered into an agreement with CTCI Corporation in Taiwan to jointly pursue waste-to- energy operation and maintenance contracts in that country. Certain other Asia Pacific countries are seeking alternatives to landfilling and are also moving toward privatization of municipal services. The development of this market by OPI will be managed through the Hong Kong office, with emphasis on establishing teaming agreements with local firms to pursue select project opportunities. (h) Backlog. Waste-to-Energy's backlog as of December 31, 1994, is set forth under (d) above. As of the same date of the prior year, the estimated unrecognized construction revenues for projects under construction was $224,257,000, and the estimated construction revenues for projects awarded but not yet under construction was $254,486,000 (including U.S. dollar equivalent of $99,620,000 expressed in Canadian Dollars). The change in the amount for projects under construction reflects construction progress on two projects. Generally, the construction period for a waste-to-energy facility is approximately 28 to 34 months. INDEPENDENT POWER The Independent Power group, through wholly-owned subsidiaries, develops, operates and, in some cases, owns power projects ("alternative energy projects") which cogenerate electricity and steam or generate electricity alone for sale to utilities both in the United States and abroad. In 1994, the independent power business of Projects and of Services' Environmental Services group were combined under Projects' Independent Power group. The Independent Power group intends to develop additional projects which use, among other fuels, wood, tires, other wastes, coal, oil, natural gas, or water. Independent Power is currently pursuing further opportunities to own and/or operate independent power projects domestically and abroad. Independent Power will seek to participate in the operation of the independent power project facilities pursuant to long-term operations and maintenance contracts from which it will seek operating profits. In many cases, capital may be invested in the ownership of the project (usually through acquiring an interest in a corporate or partnership entity that owns the power production facilities and the contracts for the supply of fuel and the purchase of power from these facilities), to derive investment earnings and possibly tax benefits. In some cases, if Independent Power has expended funds in and dedicated resources to development of the project, it will seek a developers fee at the time the construction financing of the project is completed. Many alternate energy projects are awarded to private power producers on the basis of open, competitive bidding, in which pricing of capacity and electric energy is the dominant selection criterion. Because these awards are often vigorously contested by a number of independent power producers, the returns on such projects are often driven to very low levels. The Independent Power group therefore seeks opportunities in which power purchase contract terms can be set by negotiations and in which the group is able to stress its abilities to operate facilities in a highly reliable manner and to provide operational guarantees of performance that may be attractive to the power purchaser. The Independent Power group, through Catalyst New Martinsville Hydroelectric Corporation, manages and operates a hydroelectric power generating facility under a long-term lease with the City of New Martinsville, West Virginia. The plant has been in operation since 1988 and rated at approximately 40 megawatts of power. The plant's electrical output is sold to the Monongahela Power Company under a long-term power sales agreement. The Independent Power group, as a 50/50 partner in the Heber Geothermal Company ("HGC") (a partnership with Centennial Geothermal, Inc.), leases and operates a 47-megawatt (net) power plant in Heber, California. The power is sold to Southern California Edison. The working interest in the geothermal field, which is adjacent to and supplies fluid to the power plant, is owned by a partnership composed of an Independent Power group subsidiary and Centennial Field, Inc., an unaffiliated company. The Independent Power group also has the contracts to operate and maintain both the geothermal field, which currently produces approximately eight million pounds per hour of fluid, and the power plant. During December 1994 the acquisition of the Second Imperial Geothermal Company (SIGC) and its principal asset, a leasehold interest in a 48 megawatt geothermal power plant located in Heber, California, was completed. SIGC is a party to a 30-year power purchase contract with Southern California Edison. Prior to the acquisition, the Independent Power group (through the Environmental group) was the operations and maintenance contractor at SIGC. This acquisition will compliment the geothermal field operated by the Independent Power group in Heber, California. During 1994 the Independent Power group's operations were expanded into the Latin American market through the acquisition of an equity interest in Energia Global, Inc. (EGI) which resulted in a long term contract to operate two hydroelectric plants owned by EGI's Costa Rica subsidiary and which are under construction in Costa Rica. During the design and construction phase of these two plants, the Independent Power group will serve as a consultant. WATER AND WASTEWATER The Water and Wastewater group, through Ogden Water Systems, Inc., intends to develop, operate and, in some cases, own projects that purify water, treat wastewater, and treat and manage biosolids and compost organic wastes. As with the waste-to-energy business, water and wastewater projects involve various contractual arrangements with a variety of private and public entities including municipalities, lenders, joint venture partners (which provide financing or technical support), and contractors and subcontractors which build the facilities. In 1994, Ogden Water Systems, Inc. formed a joint venture, the Ogden Yorkshire Water Company, with a wholly-owned subsidiary of Yorkshire Water, plc, a major British water and wastewater utility. The purpose of the joint venture is to develop, design, construct, maintain, operate, and in some cases own, water and wastewater treatment facilities in the United States, Canada, and Latin America. The joint venture is actively bidding on public procurements for such services and seeking acquisition opportunities. Ogden Water Systems, Inc., is also pursuing opportunities in water and wastewater treatment facilities in countries outside of the territory of the joint venture. CONSTRUCTION ACTIVITIES The construction of each of Projects' waste-to-energy facilities is the responsibility of its Construction Activities group. Construction of Independent Power, Water and Wastewater projects and any other construction activities undertaken in connection with Ogden's Services business are expected to be the responsibility of this group. A general contractor is usually responsible for the procurement of bulk commodities used in the construction of the facility, such as steel and concrete. These commodities are generally readily available from many suppliers. The Construction Activities group generally directs the procurement of all major equipment utilized in a project, which equipment is also generally readily available from many suppliers. The stoker grates utilized Waste-to- Energy in facilities constructed by the group are required to be obtained from Martin pursuant to the Cooperation Agreement. During the construction period for waste-to-energy facilities owned by Client Communities, construction income is recognized on the percentage-of- completion method based on the percentage of costs incurred to total estimated costs. PROJECTS' FOREIGN BUSINESS DEVELOPMENT Projects' Waste-to-Energy, Independent Power, Water and Wastewater and Construction groups are involved in the development of projects in foreign countries where opportunities for the services provided by these groups are highly dependent upon the elimination of historic legal and political barriers to the participation of foreign capital and foreign companies in the financing, construction, ownership and operation of waste-to-energy, power production and water and wastewater facilities. For example, in many countries, the production, distribution and delivery of electricity has traditionally been provided by governmental or quasi-governmental agencies. Although a number of these countries have recently liberalized their laws and policies with regard to the participation of private interests and foreign capital in their electric sectors, not all have done so, and not all that have done so may afford acceptable opportunities for Projects. The development, construction, ownership and operation of waste-to-energy, independent power production, and water and wastewater facilities in foreign countries also exposes Projects to several potential risks that typically are not involved in such activities in the United States. Many of the countries in which Projects is or intends to be active in developing its waste-to-energy, independent power, water and wastewater and construction projects are lesser developed countries or developing countries. The financial condition and creditworthiness of the potential purchasers of power and services provided by Projects--which may be a governmental or private utility or industrial consumer--or of the suppliers of fuel for alternate energy projects or of waste for waste-to-energy projects in these countries may not be as strong as those of similar entities in the developed countries. The obligations of the purchaser under the power purchase agreement, the services recipient under the related service agreement and the supplier under the fuel supply agreement may not be guaranteed by any host country governmental or other creditworthy agency. Waste-to-Energy and Independent Power projects in particular, are keenly dependent on the reliable and predictable delivery of fuel, municipal solid waste in the case of waste-to-energy, meeting the quantity and quality requirements of the project facilities. Projects will in all cases seek to negotiate long-term contracts for the supply of fuel with creditworthy and reliable suppliers under terms that will permit it to project the future cost of fuel through the life of the contract. However, the reliability of fuel deliveries may be compromised by one or more of several factors that may be more acute or may occur more frequently in developing countries than in developed countries, including a lack of sufficient infrastructure to support deliveries under all circumstances, bureaucratic delays in the import, transportation and storage of fuel in the host country, customs and tariff disputes and local or regional unrest or political instability . Payment for electricity to project companies in which Projects may invest, and for related operating services that it may provide, will often be made in whole or part in the domestic currencies of the host countries. Conversion of such currencies into U.S. dollars may not be assured by a governmental or other creditworthy host country agency, and may be subject to limitations in the currency markets, as well as restrictions of the host country. In addition, fluctuations in value of such currencies against the value of the U.S. dollar may cause the group's participation in such projects to yield less return than expected. Transfer of earnings and profits in any form beyond the borders of the host country may be subject to special taxes or limitations imposed by host country laws. In addition, Projects will generally participate in projects, the facilities for which will be fixed and practically immovable. The provision of electric power, waste disposal and water and wastewater services are treated as a matter of national or key economic importance by the laws and politics of many host countries. There is therefore some risk that the assets constituting the facilities of the projects in which it participates could be temporarily or permanently expropriated or nationalized by a host country, or made subject to martial or exigent law or control. Projects will seek to manage and mitigate these risks through all available means that it deems appropriate. They will include: careful political and financial analysis of the host countries and the key participants in each project; guarantees of relevant agreements with creditworthy entities; political risk and other forms of insurance; participation by international finance institutions, such as affiliates of the World Bank, in financing of projects in which it participates; and joint ventures with other companies to pursue the development, financing and construction of these projects. GAIN ON SALE OF LIMITED PARTNERSHIP INTERESTS In 1991, limited partnership interests in, and the related tax benefits of, the partnership that owns the Huntington, New York, facility were sold by Waste-to-Energy to third-party investors. In 1992 Waste-to-Energy sold the subsidiary that held the remaining limited partnership interests in, and certain related tax benefits of, that partnership. During 1994, an Operating Subsidiary of the Waste-to-Energy group that is the owner of the Onondaga County, New York, facility sold limited partnership interests and tax benefits to third party investors. Under both the Huntington and Onondaga limited partnership agreements, Operating Subsidiaries are general partners and retain responsibility for the operation and maintenance of the facilities. OTHER ACTIVITIES Projects also intends to develop, operate and, in some cases, own projects that process recyclable paper products into containerboard for reuse in the commercial sector. As with it's Waste-to-Energy group, such projects involve various contractual arrangements with a variety of private and public entities, including municipalities, lenders, joint venture partners (which may provide some of the financing or technical support), purchasers of the plant output, and contractors and subcontractors which build the facilities. In addition, such projects require significant amounts of energy in the form of steam, which may be provided by present or future waste-to-energy projects operated by the Waste-to-Energy group. In 1993, Projects discontinued the fixed-site hazardous waste business conducted through American Envirotech, Inc., an indirect subsidiary. In light of substantial and adverse changes in the market for hazardous waste incineration services and regulatory uncertainty stemming from EPA pronouncements, Projects ceased all development activities. Although Projects continues to hold permits and certain related assets pending resolution of certain litigation, any other related assets have been disposed of or otherwise abandoned. (See "Item 3. Legal Proceedings and Environmental Matters" of this Form 10-K.) OTHER INFORMATION MARKETS, COMPETITION AND GENERAL BUSINESS CONDITIONS Ogden's Services and Projects business segments can be adversely affected by general economic conditions, war, inflation, adverse competitive conditions, governmental restrictions and controls, natural disasters, energy shortages, weather, the adverse financial condition of customers and suppliers, various technological changes and other factors over which Ogden has no control. The economic climate can also adversely affect several of Ogden's Services' operations, including, but not limited to, fewer airline flights, reduced inflight meals and flight cancellations in Services' Aviation group; cost cutting and budget reductions in Services' Technology group and Facility group; and, reduced event attendance in Services' Entertainment group. In addition, disputes between owners of professional sports organizations and the professional players of such organizations have affected and may continue to affect the operations of the Entertainment group. Ogden's Projects business segment, through its Waste-to-Energy group, markets its services principally to governmental entities, including city, county, and state governments as well as public authorities or special purpose districts established by one or more local government units for the purpose of managing the collection and/or disposal of municipal solid waste ("MSW"). Since 1989 there has been a decline in the number of communities requesting proposals for waste-to-energy facilities. Ogden believes that this decline has resulted from a number of factors that adversely affected communities' willingness to make long-term capital commitments to waste disposal projects, including: declining prices at which energy can be sold; declining alternative disposal costs; uncertainties about the impact of recycling on the waste stream; and continuing concerns arising from the Clean Air Act Amendments of 1990 and the regulatory actions currently being proposed pursuant to its terms. Ogden believes that waste-to-energy facilities and recycling are complimentary methods of managing a community's waste disposal needs. The fact that many of Ogden's Client Communities have recycling rates in excess of national averages demonstrates that a properly sized waste-to-energy facility does not hinder achievement of aggressive recycling goals. Ogden does not believe there will be a near term return to frequent public procurement for waste-to-energy facilities. MSW is typically supplied to Ogden's waste-to-energy facilities pursuant to long-term contracts. In most of the markets that Projects' Waste-to- Energy group currently serve, the cost of waste-to-energy services to its current Client Communities is competitive with the cost of other disposal alternatives, mainly landfilling. Compliance with regulations promulgated by the United States Environmental Protection Agency (the "EPA") in 1991 will to some extent increase the cost of landfilling, although landfills may be less expensive in some cases, in the short term, than waste-to-energy facilities. Landfills generally do not commit their capacity for extended periods. Much of the landfilling done in the United States is done on a spot market or through short term contracts (less than 5 years). Accordingly, landfill pricing tends to be more volatile as a result of periodic changes in waste generation and available capacity than Ogden's pricing, which is based on long-term contracts. Ogden believes that landfills have not been required to comply with permitting requirements relating to the emission of air pollutants and that this provides landfills with a competitive advantage. Another factor affecting the competitiveness of waste-to-energy fees are the additional charges imposed by Client Communities and included in such fees to support recycling programs, household hazardous waste collections, citizen education, and similar initiatives. The cost competitiveness of waste-to-energy facilities also depends on the prices at which the facility can sell the energy it generates. Another factor affecting the demand for new waste-to-energy projects was a 1994 United States Supreme Court decision invalidating state and local laws and regulations mandating that waste generated within a given jurisdiction be taken to a designated facility. Waste-to-energy facilities also compete with other disposal technologies such as mixed solid-waste composting. Mixed waste composting is not a proven technology, and Ogden believes that it has not been applied successfully to date in a large scale facility. Mass-burn waste-to-energy systems compete with various refuse-derived fuel ("RDF") systems in which MSW is preprocessed to remove various non- combustibles and is shredded for sizing prior to burning. Ogden believes that the large-scale facilities being contracted for today are primarily mass-burn systems. Although OPI operates four RDF projects, these were all acquired after construction. Other technologies utilized in mass-burn type facilities in the United States include those of Von Roll, W+E, Takuma, Volund, Steinmueller, Deutsche Babcock, O'Connor, and Detroit Stoker. There is substantial competition within the waste-to-energy field. Ogden competes with a number of firms, some of which have greater financial resources than Ogden. Some competitors have licenses or similar contractual arrangements for competing technologies in the waste-to-energy field, and a limited number of competitors have their own proprietary technology. Competition for projects is intense in all markets in which Projects does business or intends to do business. There are numerous companies in the United States and in several foreign countries that pursue these projects. Many of these companies have more experience, capital and other resources than does Ogden. EQUAL EMPLOYMENT OPPORTUNITY In recent years, governmental agencies (including the Equal Employment Opportunity Commission) and representatives of minority groups and women have asserted claims against many companies, including some Ogden subsidiaries, alleging that certain persons have been discriminated against in employment, promotions, training, or other matters. Frequently, private actions are brought as class actions, thereby increasing the practical exposure. In some instances, these actions are brought by many plaintiffs against groups of defendants in the same industry, thereby increasing the risk that any defendant may incur liability as a result of activities which are the primary responsibility of other defendants. Although Ogden and its subsidiaries have attempted to provide equal opportunity for all of its employees, the combination of the foregoing factors and others increases the risk of financial exposure. EMPLOYEE AND LABOR RELATIONS As of January 31, 1995, Ogden and its subsidiaries employed approximately 45,000 people. Certain employees of Ogden are employed pursuant to collective bargaining agreements with various unions. During 1994 Ogden successfully renegotiated collective bargaining agreements in certain of its business sectors with no strike-related loss of service. Ogden considers relations with its employees to be good and does not anticipate any significant labor disputes in 1995. ENVIRONMENTAL REGULATORY LAWS Ogden's business activities are pervasively regulated pursuant to federal, state, and local environmental laws. Federal laws, such as the Clean Air Act and Clean Water Act, and their state counterparts, govern discharges of pollutants to air and water. Other federal, state, and local laws, such as RCRA, comprehensively govern the generation, transportation, storage, treatment, and disposal of solid waste, including hazardous waste (such laws and the regulations thereunder, "Environmental Regulatory Laws"). The Environmental Regulatory Laws and other federal, state, and local laws, such as the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA") (collectively, "Environmental Remediation Laws"), make Ogden potentially liable on a joint and several basis for any environmental contamination which may be associated with its activities at sites, including landfills, which OPI has owned, operated, or leased or at which there has been disposal of residue or other waste handled or processed by OPI. OPI leases and operates a landfill in Haverhill, Massachusetts, and leases a landfill in Bristol, Connecticut, in connection with its projects at those locations. Some state and local laws also impose liabilities for injury to persons or property caused by site contamination. Some Service Agreements provide for indemnification of the Operating Subsidiaries from some such liabilities. The Environmental Regulatory Laws require that many permits be obtained before the commencement of construction and operation of any waste-to-energy facility, including: air quality permits, stormwater discharge permits, solid waste facility permits in most cases, and,in many cases, wastewater discharge permits. There can be no assurance that all required permits will be issued, and the process of obtaining such permits can often cause lengthy delays, including delays caused by third party appeals challenging permit issuance. Failure to meet conditions of these permits or of the Environmental Regulatory Laws and the corresponding regulations can subject an Operating Subsidiary to regulatory enforcement actions by the appropriate governmental unit, which could include monetary penalties, and orders requiring certain remedial actions or limiting or prohibiting operation. To date, OPI has not incurred material penalties, been required to incur material capital costs or additional expenses, nor been subjected to material restrictions on its operations as a result of violations of environmental laws, regulations, or permits. Certain of the Environmental Regulatory Laws also authorize suits by private parties for damages and injunctive relief. Repeated unexcused failure to comply with environmental standards may also constitute a default by the Operating Subsidiary under its Service Agreement. The Environmental Regulatory Laws and federal and state governmental regulations and policies governing their enforcement are subject to revision. New technology may be required or stricter standards may be established for the control of discharges of air or water pollutants or for solid waste or ash handling and disposal. Thus, as new technology is developed and proven, it may be required to be incorporated into new facilities or major modifications to existing facilities. This new technology may often be more expensive than that used previously. The Clean Air Act Amendments of 1990 required EPA to promulgate New Source Performance Standards ("NSPS") and Emission Guidelines ("EG") applicable to new and existing municipal waste combustion units for particulate matter (total and fine), opacity (as appropriate), sulfur dioxide, hydrogen chloride, oxides of nitrogen, carbon monoxide, dioxins and dibenzofurans. The EPA proposed NSPS and EG regulations on September 20, 1994, incorporating all the requirements mandated by the 1990 Amendments. OPI, as well as other individual members of the industry, the industry trade association, affected client communities and their organizations and environmental groups have all submitted extensive comments to EPA on these proposed regulations. EPA is developing the regulations under a court order which requires that they be in their final form by September 1, 1995. Due to the extensive nature of the comments submitted, as well as developments in the Congress which could suspend new regulations, it is not clear at what time nor in what form the final regulations will indeed be published. The form of the proposed rules would require that most of Ogden's existing facilities be retrofitted for control equipment to achieve some or all of the mercury, nitrogen oxide, organics and acid gases emissions limits. The NSPS and EG, which OPI believes will be issued in final form in 1995, will require capital improvements or operating changes to most of the facilities operated by Ogden. The exact timing and cost of such modifications cannot be stated definitively because State regulations embodying these have generally not been finally adopted. The costs to meet new rules for existing facilities owned by Client Communities will be borne by the Client Communities. For projects owned or leased by Ogden and operated under a Service Agreement, the Client Community has the obligation to fund such capital improvements, to which Ogden must make an equity contribution, generally 20%. Such equity contributions are likely to range, in total for all such facilities, from $9 million to $15 million. With respect to a project owned by Ogden and not operated pursuant to a Service Agreement, such capital improvements may cost between $8 million and $15 million. Ogden believes that most costs incurred to meet EG and operating permit requirements at facilities it operates may be recovered from Client Communities and other users of its facilities through increased tipping fees permitted under applicable contracts. The Clean Air Act also requires each state to implement a state implementation plan that outlines how areas out of compliance with federally- established national ambient air quality standards will be returned to compliance. The state plans must include an operating permit program. Most states are now in the process of implementing these requirements. The state implementation plans and the operating permits to be issued under them may place new requirements on waste-to-energy facilities. Under federal law, the new operating permits may have a term of up to 12 years after issuance or renewal, subject to review every 5 years. The Environmental Remediation Laws prohibit disposal of hazardous waste other than in small, household-generated quantities at Ogden's municipal solid waste facilities. The Service Agreements recognize the potential for improper deliveries of hazardous wastes and specify procedures for dealing with hazardous waste that is delivered to a facility. Although certain Service Agreements require the Operating Subsidiary to be responsible for some costs related to hazardous waste deliveries, to date, no Operating Subsidiary has incurred material hazardous waste disposal costs. PUBLIC UTILITY REGULATORY POLICIES ACT Ogden's business is subject to the provisions of the federal Public Utility Regulatory Policies Act ("PURPA"). Pursuant to PURPA, the Federal Energy Regulatory Commission ("FERC") has promulgated regulations that exempt qualifying facilities (facilities meeting certain size, fuel and ownership requirements) from compliance with certain provisions of the Federal Power Act, the Public Utility Holding Company Act of 1935, and, except under certain limited circumstances, state laws regulating the rates charged by, or the financial and organizational activities of, electric utilities. PURPA was promulgated in 1978 to encourage the development of cogeneration facilities and small facilities making use of non-fossil fuel power sources, including waste-to-energy facilities. The exemptions afforded by PURPA to qualifying facilities from the Federal Power Act and the Public Utility Holding Company Act of 1935 and most aspects of state electric utility regulation are of great importance to OPI and its competitors in the waste- to-energy industry. State public utility commissions must approve the rates, and in some instances other contract terms, by which public utilities purchase electric power from Ogden's projects. PURPA requires that electric utilities purchase electric energy produced by qualifying facilities at negotiated rates or at a price equal to the incremental or "avoided" cost that would have been incurred by the utility if it were to generate the power itself or purchase it from another source. While public utilities are not required by PURPA to enter into long-term contracts, PURPA creates a regulatory environment in which such contracts can typically be negotiated. In January and February, 1995, the FERC issued two orders in which it modified its previous interpretation of PURPA and held that state laws and regulatory orders directing utilities to purchase electricity from qualifying facilities at rates in excess of the utility's projected avoided costs were preempted by PURPA and that contracts providing for such above-avoided cost rates were void. Such laws and regulations have been used in the past by states to encourage the development of environmentally beneficial facilities such as waste-to-energy facilities. The FERC stated in both orders that it intends to apply its reinterpretation of PURPA only on a prospective basis and that it will not entertain requests by utilities to invalidate power sales agreements entered into pursuant to such state laws and regulatory orders unless the purchasing utility raised the issue of the legality of the rate at the time of contract execution. Ogden does not believe any of the power sales agreements related to its waste-to-energy facilities is subject to challenge based on the prospective nature of the orders. However, numerous petitions have been filed with the FERC seeking rehearing of its January, 1995 order, including by electric utilities challenging the prospective nature of the relief granted by the FERC. Ogden cannot predict the ultimate outcome of these proceedings or whether any of the agreements for the sale of electricity from its facilities will be affected thereby. FLOW CONTROL Many states have mandated local and regional solid waste planning, and require that new solid waste facilities may be constructed only in conformity with these plans. State laws may authorize the planning agency to require that waste generated within its jurisdiction be brought to a designated facility, which may help that facility become economically viable but preclude the development of other facilities in that jurisdiction. Such ordinances are sometimes referred to as legal flow control. In 1994, the United States Supreme Court ruled that the flow control ordinance of Clarkstown, New York was unconstitutional as a local regulation of interstate commerce that is unauthorized by Congress and therefore violative of the United States Constitution. The Court's decision has been applied by other courts to invalidate or question other similar laws and ordinances. Ogden does not believe this decision would materially impact Ogden's existing facilities or its ability to develop new ones. This view is based on a number of considerations. Most of the contracts pursuant to which Ogden provides disposal services require the Client Community to deliver stated minimum quantities of waste on a put-or-pay basis. Furthermore, only a few of the Client Communities served by Ogden relied solely on legal flow control to provide waste to Ogden's facilities, a factor influenced in part by past difficulties in enforcing legal flow control ordinances. Although some municipalities may experience temporary difficulties in meeting delivery commitments as they address required changes in their waste disposal plans, such difficulties should not be long-lived as indicated by the experience of municipalities served by OPI which adopted alternative measures. Ogden believes that there are other methods for providing incentives to use integrated waste systems incorporating waste to energy that do not entail legal flow control, which incentives should not be affected by the Court's decision. These include mandating that charges for utilization of the system be maintained at competitive levels and that revenue shortfalls be funded from tax revenues or special assessments on residents. This type of incentive will be utilized at the facility being constructed and which will be operated by Ogden in Montgomery County, Maryland. Congressional action authorizing flow control was brought at the end of the 1994 Congressional session, but passage was defeated on the last day of the session by a single vote. Legislation is again pending in the current session of Congress. Furthermore, in most of the municipalities where OPI provides services, information available to Ogden indicates that the cost to the Client Community of waste to energy is competitive with alternative disposal facilities, and therefore Ogden's facilities should be able to compete for waste economically. As indicated, however, certain additional waste disposal services are financed by the Client Community's increasing the cost for disposal at waste-to-energy facilities, and these services may have to be paid for by other mechanisms. In addition, state laws have been enacted in some jurisdictions that may also restrict the intrastate and interstate movement of solid waste. Restrictions on importation of waste from other states have generally been voided by Federal courts as invalid restrictions on interstate commerce. Bills proposed in past sessions of Congress would authorize such designations and restrictions. Bills of this nature have been introduced in the current session of Congress. ASH RESIDUE In 1994, the United States Supreme Court held that municipal solid waste ash residue having hazardous characteristics is subject to RCRA's provisions for management as a hazardous waste relating to transportation, disposal and treatment downstream of the point of generation. No ash residue from a fully operational facility operated by Ogden has been characterized as hazardous under the present or past EPA prescribed test procedures and such ash residue is currently disposed of in permitted landfills as non-hazardous waste. In certain states, ash residue from certain waste-to-energy facilities of other vendors or communities has, on occasion, been found to have hazardous characteristics under these test procedures. The Supreme Court's ruling has not had a significant impact on Ogden's business. Following that decision and related EPA actions made adjustments to its operations and, as required by EPA guidance, did tests that show that the ash residue leaving its facilities is not hazardous. The trade association of which Ogden is a member, Ogden and other industry members have filed an action against the EPA in federal court challenging certain actions taken by EPA since the Court's ruling which could require some waste-to-energy facilities to obtain permits under RCRA in connection with the conditioning of ash. Ogden believes that pending EPA rulings will resolve this issue so that such permitting is not required at its facilities. However, a conclusion must await final agency action. OTHER MATTERS In October, 1992, Congress enacted, and the President signed into law, comprehensive energy legislation, several provisions of which are intended to foster the development of competitive, efficient bulk power generation markets throughout the country. Although the impact of the legislation cannot be fully known because Federal and State regulatory agencies are still engaged in the process of developing policies and promulgating implementing regulations, OPI believes that, over the long term, the legislation will create business opportunities both in the waste-to-energy field as well as in other power generation fields. Item 2. PROPERTIES (a) Services The principal physical properties of Services are the fueling installations at various airports in the United States and Canada and the corporate premises located at Two Pennsylvania Plaza, New York, New York 10121 under lease, which expires on April 30, 2008 and which contains an option by Ogden to renew for an additional five years. Atlantic Design Company's corporate offices are located in Charlotte, North Carolina. Atlantic Design owns a 51,000 square foot operating facility on 3.5 acres of land in Vestal, New York. Atlantic Design also leases operating facilities at various locations in Florida, New Jersey and New York. The leases range from a term of one year to as long as ten years. Ogden Services Corporation, through wholly-owned subsidiaries, owns and leases buildings in various areas in the United States and several foreign countries which house office, laboratory and warehousing operations. The leases range from a month-to-month term to as long as five years. The Aviation in-flight food service operation facilities, aggregating approximately 600,000 square feet, are leased, except at Newark, New Jersey; Miami, Florida; and Las Vegas, Nevada, which are owned. Entertainment owns and operates Fairmount Park racetrack, which conducts thoroughbred and harness racing on a 150-acre site with a long-term lease expiring in 2017 located in Collinsville, Illinois, eight miles from downtown St. Louis. Entertainment also owns a 148-acre site located at East St. Louis, Illinois. Ogden Abatement and Decontamination Services owns a 12,000 square-foot warehouse and office facility located in Long Island City, New York. Technology leases most of its facilities, consisting almost entirely of office space. This includes an 11-year lease which began in 1986 for its headquarters facility in Fairfax, Virginia, for approximately 119,000 square feet as well as office space in other locations throughout the United States under lease terms of five years or less. Environmental's headquarters is located in Fairfax, Virginia, where Environmental currently occupies approximately 27,000 square feet of space in the headquarters building of ERC International, Inc. ("ERCI"), a wholly-owned subsidiary of Ogden. Environmental's lease payments include the cost of certain services and allocations which are shared with ERCI. Environmental has agreed to continue to occupy and sublease from ERCI not less than 24,000 square feet of space in the building for the remainder of the lease term expiring in 1997. Environmental also leases an aggregate of approximately 347,000 square feet of office and laboratory space in 40 separate locations in 17 states in the United States. These leases are generally short term in nature, with terms which range from five to ten years or less and include (i) the headquarters office described above, (ii) office and laboratory space in Nashville and Oak Ridge, Tennessee; San Diego, California; Pensacola, Florida; and Phoenix, Arizona, and (iii) laboratory office space owned in Fort Collins, Colorado. In addition to its Fairfax, Virginia headquarters, Environmental maintains regional headquarters in San Diego, California and Nashville, Tennessee. Many of the other Services segment facilities operate from leased premises located principally within the United States. (b) Projects OPI's principal executive offices are located in Fairfield, New Jersey, in an office building located on a 5.4-acre site owned by OPI. The following table summarizes certain information relating to the locations of the properties owned or leased by OPI or its subsidiaries as of January 31, 1995.
Approx. Site Size Location in Acres Site Use Nature of Interest Fairfield, New Jersey 5.4 Office space Own Marion County, Oregon 15.2 Waste-to-energy Own Alexandria/Arlington, facility Virginia 3.3 Waste-to-energy Acquiring the Alexandria factility Authority's and the Arlington Authority's interest under Site lease (expires Oct. 1, 2025) pursuant to Conditional Sale Agreement Bristol, Connecticut 18.2 Waste-to-energy Own facility Bristol, Connecticut 35.0 Landfill Site lease(expires Jul. 1, 2014) Indianapolis, Indiana 23.5 Waste-to-energy Site lease (expires Dec., facility 2008 subject to four 5- year renewal options) Stanislaus County, 16.5 Waste-to-energy Site lease (expires Aug. California facility 20, 2021 subject to 15- year renewal option) Babylon, New York 9.5 Waste-to-energy Site lease (expires Dec. facility 19, 2010, with renewal options) Haverhill, Massachusetts 12.7 Waste-to-energy Site lease (expires Mar. facility 16, 1997, subject to sixteen 5-year renewal options) Haverhill, Massachusetts 16.8 RDF processing Site lease (expires Mar. facility 16, 1997, subject to sixteen 5-year renewal options) Haverhill, Massachusetts 20.2 Landfill Site lease (expires Mar. 16, 1997, subject to sixteen 5-year renewal options) Lawrence, Massachusetts 11.8 RDF power plant Own Lake County, Florida 15.0 Waste-to-energy Own facility Wallingford, Connecticut 10.3 Waste-to-energy Site lease (expires Dec. facility 1, 2026) Fairfax County, Virginia 22.9 Waste-to-energy Acquiring Fairfax facility Authority's interest under Site Lease (expires Mar. 10, 2016) pursuant to Conditional Sale Agreement Imperial County, 83.0 Undeveloped Own California land Montgomery County 35.0 Waste-to-energy Site lease (expires Nov. facility 16, 2030) Huntington, New York 13.0 Waste-to-energy Site lease (expires Oct. facility 28, 2012, subject to successive renewal terms through Jan. 28, 2029) Warren County, 19.8 Waste-to-energy Site lease (expires Nov. New Jersey facility 16, 2005 subject to two ten-year renewals) Hennepin County, 14.6 Waste-to-energy Leases of site and Minnesota facility facility (expires Oct. 1, 2017 subject to renewal options to December 20, 2024) Stockton, California 4.5 Contaminated Site lease (expired soil remediation remediation February 1, facility 1994) (discontinued) Tulsa, Oklahoma 22.0 Waste-to-energy Leases of site and facility facility (expires April 30, 2012 subject to renewal options to August 2, 2026) Harris County, Texas 14.0 Undeveloped Own land Onondaga, New York 12.0 Facility site Site lease expires contemporaneously with service agreement, subject to renewal options to May 9, 2020 NOTES: Two Facilities not listed in the table were initially owned by political subdivisions and were sold to a leveraged lessor. The leverage lessor entered into lease agreements with the respective Operating subsidiaries as accommodation leases. All of the lease obligations, including the obligation to pay rent, are passed through to the client communities. The Operating Subsidiary's ownership or leasehold interest is subject to material liens in connection with the financing of the related project. Sublease of site expires contemporaneously with facility lease.
Item 3. LEGAL PROCEEDINGS AND ENVIRONMENTAL MATTERS (a) Legal Proceedings The Company is a party to various legal proceedings involving matters arising in the ordinary course of business. The Company does not believe that there are any pending legal proceedings for damages against the Company, including the legal proceeding described below, the outcome of which would have a material adverse effect on the Company on a consolidated basis. In December 1993 and January 1994, individuals who had been shareholders of American Envirotech, Inc. ("AEI"), a company which in 1992 had been acquired in a merger by a subsidiary of the Company, sued the Company and several of its subsidiaries in state courts in Fort Worth and Houston, Texas. The plaintiffs claim that AEI's termination of its project development in 1993 breached the merger agreement, and that in connection with the termination the Company and its subsidiaries breached fiduciary duties and committed fraud. The Fort Worth plaintiffs seek damages in an unspecified amount. The Houston plaintiffs seek $37 million in actual damages as well as significant punitive damages. Both cases are in pre-trial proceedings. On March 2, 1995, the Fort Worth court indicated that it would grant plaintiffs' summary judgement motion, and find that the defendants breached the contract. The Company believes that AEI properly terminated its contract in accordance with its terms, that it acted at all times fairly and in compliance with its obligations; and, based on the advice of counsel, that it has meritorious defenses. The Company also believes, based on the advice of counsel, that questions of fact exist and therefore, the Fort Worth court erred in granting summary judgment. The Company intends to take whatever actions are necessary, at the appropriate time, to overcome the impact of the summary judgment ruling, and if it is successful all issues will be tried by a jury. Otherwise the case will be tried as to non-contractual claims and damages only. The Company believes that plaintiffs have not been damaged because the project could not have been completed on a successful basis, and under the merger agreement payments to the plaintiffs were contingent upon successful financing and profitable operations. The Company will vigorously defend these lawsuits and pursue all appropriate appeal rights, if necessary. No assurances can be given as to the ultimate outcome of either case. (b) Environmental Matters Ogden conducts regular inquiries of its subsidiaries regarding litigation and environmental violations which include determining the nature, amount and likelihood of liability for any such claims, potential claims or threatened litigation. In the ordinary course of its business, subsidiaries of Ogden may become involved in Federal, state, and local proceedings relating to the laws regulating the discharge of materials into the environment and the protection of the environment. These include proceedings for the issuance, amendment, or renewal of the licenses and permits pursuant to which the subsidiary operates. Such proceedings also include actions brought by individuals or local governmental authorities seeking to overrule governmental decisions on matters relating to the subsidiaries' operations in which the subsidiary may be, but is not necessarily, a party. Most proceedings brought against an Ogden subsidiary by governmental authorities or private parties under these laws relate to alleged technical violations of regulations, licenses, or permits pursuant to which the subsidiary operates. Ogden believes that such proceedings will not have a material adverse effect on Ogden and its subsidiaries on a consolidated basis. Ogden's operations are subject to various Federal, state and local environmental laws and regulations, including the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and Resource Conservation and Recovery Act (RCRA). Although Ogden's operations are occasionally subject to proceedings and orders pertaining to emissions into the environment and other environmental violations, Ogden believes that it is in substantial compliance with existing environmental laws and regulations and to the best of its knowledge neither Ogden nor any of its operations have been named as a potential responsible party at any site. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of the security holders of Ogden during the fourth quarter of 1994. EXECUTIVE OFFICERS OF OGDEN Set forth below are the names, ages, position and office, and year appointed, of all "executive officers" (as defined by Rule 3b-7 of the Securities Exchange Act of 1934) of Ogden as of March 31, 1995:
CONTINUALLY AN OGDEN POSITIONS & AGE AS OF OFFICER NAME OFFICE HELD 3/31/95 SINCE =========================================================================== Ralph E. Ablon Chairman of 78 1962 the Board R. Richard Ablon President & 45 1987 Chief Executive Officer
CONTINUALLY AN OGDEN POSITIONS & AGE AS OF OFFICER NAME OFFICE HELD 3/31/95 SINCE =========================================================================== Constantine G.Caras Executive Vice 56 1991 President & Chief Administrative Officer Scott G. Mackin President & Chief 38 1992 Operating Officer, Ogden Projects, Inc., a wholly-owned subsidiary of Ogden Philip G. Husby Senior Vice 48 1991 President, Treasurer & Chief Financial Officer Lynde H. Coit Senior Vice 40 1991 President & General Counsel David L. Hahn Senior Vice President 43 1995 Rodrigo Arboleda Senior Vice President 54 1995 Robert M. DiGia Vice President, 70 1965 Controller & Chief Accounting Officer Nancy R. Christal Vice President- 36 1992 Investor Relations Kathleen Ritch Vice President & 52 1981 Secretary
There is no family relationship by blood, marriage or adoption (not more remote than first cousins) between any of the above individuals and any Ogden director, except that R. Richard Ablon, an Ogden director and President and Chief Executive Officer, is the son of Ralph E. Ablon, an Ogden director and Chairman of the Board. The term of office of all officers shall be until the next election of directors and until their respective successors are chosen and qualified. There are no arrangements or understandings between any of the above officers and any other person pursuant to which any of the above was selected as an officer. Except as set forth below, the foregoing table lists the principal occupation and employment of the named individual and the position or similar position that he/she has held since January 1, 1990: Ralph E. Ablon has been Chairman of the Board of Ogden since 1962 and served as its Chief Executive Officer prior to May 1990. R. Richard Ablon has been President and Chief Executive Officer of Ogden since May 1990. From January, 1987 to May 1990, he was President and Chief Operating Officer, Operating Services, Ogden. Mr. Ablon has served as Chairman of the Board and Chief Executive Officer of Ogden Projects, Inc., since November 1990. Constantine G. Caras has been Executive Vice President and Chief Administrative Officer since July 1990. Since September 1986 he has served as Executive Vice President of Ogden Services Corporation. Scott G. Mackin has been considered an Executive Officer of Ogden since 1992. He has been President and Chief Operating Officer of Ogden Projects, Inc. since January 1991. From November 1990 to January 1991, he was Co- President, Co-Chief Operating Officer, General Counsel and Secretary at Ogden Projects, Inc. Between 1987 and 1990 Mr. Mackin served in various executive capacities of Ogden Projects, Inc. Philip G. Husby has been Senior Vice President and Chief Financial Officer of Ogden since January 1, 1991. From April 1987 to December 31, 1990, he served as Senior Vice President and Chief Administrative Officer of Ogden Financial Services, Inc., an Ogden subsidiary. Lynde H. Coit has been a Senior Vice President and General Counsel of Ogden since January 17, 1991. From April 1989 to January 1991, he was Senior Vice President and General Counsel of Ogden Financial Services, Inc., an Ogden subsidiary. From January 1988 to March 1989, he was a partner of the law firm of Nixon, Hargrave, Devans & Doyle and prior thereto he was employed by that firm. David L. Hahn was elected Senior Vice President of Ogden in January 1995. He has served as Vice President-Marketing of Ogden Services Corporation for more than the past five years. Rodrigo Arboleda was elected Senior Vice President of Ogden in January 1995. Since 1992, he has served as Senior Vice President-Business Development for Latin America of Ogden Services Corporation. From 1989 to 1992 he owned and served as the President and Chief Executive Officer of Interamerican Consulting Group, Inc., a consulting firm located in Miami, Florida specializing in management, financing, and restructuring of troubled companies. Nancy R. Christal has been Vice President - Investor Relations of Ogden since February 1992 and served as Ogden's Director, Investor Relations from January 1991 to February 1992. From April 1990 to January 1991, she was Director, Investor Relations at Ogden Projects, Inc. From 1985 to March 1990 she served first as Manager and then as Assistant Vice President, Investor Relations at Chemical Bank. Part II Item 5. MARKET FOR OGDEN'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Pursuant to General Instruction G (2), the information called for by this item is hereby incorporated by reference from Page 49 of Ogden's 1994 Annual Report to Shareholders. As of March 1, 1995, the approximate number of Ogden common stock Shareholders was 12,700. Item 6. SELECTED FINANCIAL DATA Pursuant to General Instruction G (2), the information called for by this item is hereby incorporated by reference from Page 26 of Ogden's 1994 Annual Report to Shareholders. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Pursuant to General Instruction G (2), the information called for by this item is hereby incorporated by reference from Pages 24 and 25 of Ogden's 1994 Annual Report to Shareholders. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Pursuant to General Instruction G (2), the information called for by this item is hereby incorporated by reference from Pages 26 through 46 and Page 49 of Ogden's 1994 Annual Report to Shareholders. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Applicable. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF OGDEN Pursuant to General Instruction G (3), the information regarding directors called for by this item is hereby incorporated by reference from Ogden's 1995 Proxy Statement to be filed with the Securities and Exchange Commission. Item 11. EXECUTIVE COMPENSATION Pursuant to General Instruction G (3), the information called for by this item is hereby incorporated by reference from Ogden's 1995 Proxy Statement to be filed with the Securities and Exchange Commission. The information regarding officers called for by this item is included at the end of Part I of this document under the heading "Executive Officers of Ogden." Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Pursuant to General Instruction G (3), the information called for by this item is hereby incorporated by reference from Ogden's 1995 Proxy Statement to be filed with the Securities and Exchange Commission. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Pursuant to General Instruction G (3), the information called for by this item is hereby incorporated by reference from Ogden's 1995 Proxy statement to be filed with the Securities and Exchange Commission. Part IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Listed below are the documents filed as a part of this report: 1). All financial statements contained on pages 27 through 46 and the Independent Auditors' Report on page 47 of Ogden's 1994 Annual Report to Shareholders are incorporated herein by reference. 2). Financial statement schedules as follows: (i) Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 1994, 1993 and 1992. 3). Those exhibits required to be filed by Item 601 of Regulation S-K: EXHIBITS 2.0 Plans of Acquisition, Reorganization, Arrangement, Liquidation or Succession. 2.1 Agreement and Plan of Merger, dated as of October 31, 1989, among Ogden, ERCI Acquisition Corporation and ERC International, Inc.* 2.2 Agreement and Plan of Merger among Ogden Corporation, ERC International, Inc., ERC Acquisition Corporation and ERC Environmental and Energy Services Co., Inc., dated as of January 17, 1991.* 2.3 Amended and Restated Agreement and Plan of Merger among Ogden Corporation, OPI Acquisition Corp. and Ogden Projects, Inc., dated as of September 27, 1994.* 3.0 Articles of Incorporation and By-laws. 3.1 Ogden's Restated Certificate of Incorporation as amended.* 3.2 Ogden's By-Laws, as amended through March 17, 1994.* 4.0 Instruments Defining Rights of Security Holders. 4.1 Fiscal Agency Agreement between Ogden and Bankers Trust Company, dated as of June 1, 1987, and Offering Memorandum dated June 12, 1987, relating to U.S. $85 million Ogden 6% Convertible Subordinated Debentures, Due 2002.* 4.2 Fiscal Agency Agreement between Ogden and Bankers Trust Company, dated as of October 15, 1987, and Offering Memorandum, dated October 15, 1987, relating to U.S. $75 million Ogden 5-3/4% Convertible Subordinated Debentures, Due 2002.* 4.3 Indenture dated as of March 1, 1992 from Ogden Corporation to The Bank of New York, Trustee, relating to Ogden's $100 million debt offering.* 10.0 Material Contracts 10.1 Credit Agreement by and among Ogden, The Bank of New York, as Agent and the signatory bank Lenders thereto dated as of September 20, 1993.* 10.2 Stock Purchase Agreement, dated May 31, 1988, between Ogden and Ogden Projects, Inc.* 10.3 Tax Sharing Agreement, dated January 1, 1989, between Ogden, Ogden Projects, Inc. and subsidiaries, Ogden Allied Services, Inc. an subsidiaries, and Ogden Financial Services, Inc. and subsidiaries.* 10.4 Stock Purchase Option Agreement, dated June 14, 1989, between Ogden and Ogden Projects, Inc. as amended on November 16, 1989.* 10.5 Preferred Stock Purchase Agreement, dated July 7, 1989, between Ogden Financial Services, Inc. and Image Data Corporation.* 10.6 Rights Agreement between Ogden Corporation and Manufacturers Hanover Trust Company, dated as of September 20, 1990.* 10.7 Executive Compensation Plans and Arrangements (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 January 19, 1994.* (c) Ogden Services Corporation Executive Pension Plan.* (d) Ogden Services Corporation Select Savings Plan.* (i) Ogden Services Corporation Select Savings Plan Amendment and Restatement as of January 1, 1995. Transmitted herewith as Exhibit 10.7 (d)(i). (e) Ogden Services Corporation Select Savings Plan Trust.* (i) Ogden Services Corporation Select Savings Plan Trust Amendment and Restatement dated as of January 1, 1995. Transmitted herewith as Exhibit 10.7 (e)(i). (f) Ogden Services Corporation Executive Pension Plan Trust.* (g) Changes effected to the Ogden Profit Sharing Plan effective January 1, 1990.* (h) Employment Letter Agreement between Ogden and Lynde H. Coit dated January 30, 1990.* (i) Employment Agreement between Ogden and R. Richard Ablon dated as of May 24, 1990.* (i) 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 Corporation and Ogden's Chairman of the Board, dated as of 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 January 1, 1994.* (p) Ogden Corporation Profit Sharing Plan.* (i) Ogden Profit Sharing Plan as amended and restated January 1, 1991 and as in effect through January 1, 1993.* (ii) Ogden Profit Sharing Plan as amended and restated effective as of January 1, 1995. Transmitted herewith as Exhibit 10.7 (p)(ii). (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 Plans.* (u) Ogden Projects Employee's Stock Option Plan.* (i) Amendment, dated as of December 29, 1994 to the Ogden Projects Employees' Stock Option Plan. Transmitted herewith as Exhibit 10.7 (u)(i). (v) Ogden Projects Core Executive Benefit Program.* (w) Form of amendments to the Ogden Projects, Inc. Pension Plan and Profit Sharing Plans effective as of January 1, 1994.* (i) Form of Amended Ogden Projects, Inc. Profit Sharing Plan, effective as of January 1, 1994. Transmitted herewith as Exhibit 10.7 (w)(i). (ii) Form of Amended Ogden Projects, Inc. Pension Plan, effective as of January 1, 1994. Transmitted herewith as Exhibit 10.7 (w)(ii). 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 Ogden Corporation and Subsidiaries Detail of Computation of Earnings Applicable to Common Stock for the years ended December 31, 1994, 1993 and 1992. Transmitted herewith as Exhibit 11. 13 Those portions of the Annual Report to Stockholders for the year ended December 31, 1994, which are incorporated herein by reference. Transmitted herewith as Exhibit 13. 21 Subsidiaries of Ogden. Transmitted herewith as Exhibit 21. 23 Consent of Deloitte & Touche LLP. Transmitted herewith as Exhibit 23. 27 Financial Data Schedule (EDGAR Filing Only). Transmitted herewith as Exhibit 27. * Incorporated by reference as set forth in the Exhibit Index of this Annual Report on Form 10-K. (b) No Reports on Form 8-K were filed by Ogden during the fourth quarter of 1994. However, on January 3, 1995 Ogden filed a Form 8-K Current Report pursuant to the merger transaction resulting in Ogden Projects, Inc. becoming a wholly-owned subsidiary of Ogden effective December 29, 1994. SIGNATURES Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. OGDEN CORPORATION Date: March 16, 1995 By /S/ R. Richard Ablon R. Richard Ablon President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated. SIGNATURE TITLE /S/ Ralph E. Ablon Chairman of the Board & Director RALPH E. ABLON /S/ R. Richard Ablon President & Chief Executive Officer R. RICHARD ABLON and Director /S/ Philip G. Husby Senior Vice President, Treasurer and PHILIP G. HUSBY Chief Financial Officer /S/ Robert M. DiGia Vice President, Controller and Chief ROBERT M. DIGIA Accounting Officer /S/ David M. Abshire Director DAVID M. ABSHIRE /S/ Norman G. Einspruch Director NORMAN G. EINSPRUCH /S/ Constantine G. Caras Director CONSTANTINE G. CARAS /S/ Attallah Kappas Director ATTALLAH KAPPAS (i) /S/ Terry Allen Kramer Director TERRY ALLEN KRAMER /S/ Maria P. Monet Director MARIA P. MONET /S/ Judith D. Moyers Director JUDITH D. MOYERS /S/ Homer A. Neal Director HOMER A. NEAL /S/ Stanford S. Penner Director STANFORD S. PENNER /S/ Jesus Sainz Director JESUS SAINZ /S/ Frederick Seitz Director FREDERICK SEITZ /S/ Robert E. Smith Director ROBERT E. SMITH /S/ Helmut F. O. Volcker Director HELMUT F.O. VOLCKER /S/ Abraham Zaleznik Director ABRAHAM ZALEZNIK (ii) INDEPENDENT AUDITORS' REPORT Ogden Corporation: We have audited the consolidated financial statements of Ogden Corporation and subsidiaries as of December 31, 1994 and 1993 and for each of the three years in the period ended December 31, 1994, and have issued our report thereon dated February 3, 1995, which report includes an explanatory paragraph relating to the adoption of Statements of Financial Accounting Standards No. 106, 109, 112, and 115; such consolidated financial statements and report are included in your 1994 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedules of Ogden Corporation and subsidiaries, listed in Item 14. These consolidated financial statement schedules are the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. /s/Deloitte & Touche LLP New York, New York February 3, 1995 SCHEDULE II OGDEN CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1994 COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E ADDITIONS BALANCE AT CHARGED TO BALANCE AT BEGINNING COSTS AND CHARGED TO END OF DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD Allowances deducted in the balance sheet from the assets to which they apply: Doubtful receivables - current $25,547,000 $ 5,869,000 $10,241,000 $ 9,047,000 $32,783,000 31,000 142,000 Deferred charges on projects 750,000 5,650,000 1,350,000 750,000 7,000,000 TOTAL $26,297,000 $11,519,000 $11,764,000 $ 9,797,000 $39,783,000 Allowances not deducted: Provision for consolidation of facilities $ 4,720,000 $ 1,320,000 $ 3,400,000 Estimated cost of disposal of discontinued operations 1,008,000 $ 1,485,000 1,548,000 945,000 Reserves relating to tax indemnification and other contingencies in connection with the sale of limited partnership interests in and related tax benefits of a waste-to-energy facilty $ 6,000,000 6,000,000 Other 1,477,000 3,500,000 (1,350,000) 23,000 3,604,000 TOTAL $ 7,205,000 $ 9,500,000 $ 135,000 $ 2,891,000 $13,949,000 Notes: Reserve for contract billing adjustments. Transfer from other accounts. Recoveries of amounts previously written off. Write-offs of receivables considered uncollectible. Write-offs of unsuccessful development costs. Net proceeds from operations and sale of assets relating to discontinued operations. Payments charged to allowances. Gain from on-site remediation business utilizing mobile technology.
SCHEDULE II OGDEN CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1993 COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E ADDITIONS BALANCE AT CHARGED TO BALANCE AT BEGINNING COSTS AND CHARGED TO END OF DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD Allowances deducted in the balance sheet from the assets to which they apply: Doubtful receivables - current $19,730,000 $7,682,000 $4,073,000 $ 6,034,000 $25,547,000 119,000 94,000 71,000 Deferred charges on projects 750,000 750,000 TOTAL $20,480,000 $7,682,000 $4,263,000 $ 6,128,000 $26,297,000 Allowances not deducted: Provision for consolidation of facilities $ 6,040,000 $ 1,320,000 $ 4,720,000 Estimated cost of disposal of discontinued operations 7,620,000 $1,706,000 $4,061,000 12,379,000 1,008,000 Other 285,000 1,350,000 158,000 1,477,000 TOTAL $13,945,000 $3,056,000 $4,061,000 $13,857,000 $ 7,205,000 Notes: Reserve for contract billing adjustments. Transfer from other accounts. Recoveries of amounts previously written off. Write-offs of receivables considered uncollectible. Transfer to other accounts. Net proceeds from on-site remediation utilizing mobile technology $3,853,000 and reclassification of liabilities pertaining to fixed-site hazardous waste business $208,000. Payments charged to allowances. Gain from on-site remediation business utilizing mobile technology.
SCHEDULE II OGDEN CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1992 COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E ADDITIONS BALANCE AT CHARGED TO BALANCE AT BEGINNING COSTS AND CHARGED TO END OF DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD Allowances deducted in the balance sheet from the assets to which they apply: Doubtful receivables - current $15,498,000 $3,279,000 $4,121,000 $ 5,027,000 $19,730,000 1,841,000 18,000 Deferred charges on projects 6,500,000 5,750,000 750,000 TOTAL $21,998,000 $3,279,000 $5,980,000 $10,777,000 $20,480,000 Allowances not deducted: Provision for consolidation of facilities $ 7,360,000 $ 1,320,000 $ 6,040,000 Estimated cost of disposal of discontinued operations 7,090,000 $ 530,000 7,620,000 Other 1,225,000 940,000 285,000 TOTAL $15,675,000 $ 530,000 $ 2,260,000 $13,945,000 Notes: Reserve for contract billing adjustment. Transfer from other accounts. Recoveries of amounts previously written off. Write-offs of receivables considered uncollectible. Write-offs of unsuccessful development efforts. Net proceeds from discontinued operations. Payments charged to allowances.
EX-99 2 EXHIBIT INDEX EXHIBIT INDEX EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION 2 Plan of Acquisition, Reorganization Arrangement, Liquidation or Succession. 2.1 Agreement and Plan of Merger, Filed as Exhibit 2 to Ogden's dated as of October 31, 1989, Form S-4 Registration Statement among Ogden, ERCI Acquisition File No. 33-32155, and Corporation and ERC International incorporated herein by Inc. reference. 2.2 Agreement and Plan of Merger Filed as Exhibit (10)(x) to among Ogden Corporation, ERC Ogden's Form 10-K for the International Inc., ERC fiscal year ended December 31, Acquisition Corporation and 1990 and incorporated herein ERC Environmental and Energy by reference. Services Co., Inc. dated as of January 17, 1991. 2.3 Amended and Restated Agreement Filed as Exhibit 2 to Ogden's and Plan of Merger among Ogden Form S-4 Registration Statement Corporation, OPI Acquisition File No. 33-56181 and Corporation sub. and Ogden incorporated herein by Projects, Inc. dated as of reference. September 27, 1994. 3 Articles of Incorporation and By-Laws. 3.1 Ogden's Restated Certificate Filed as Exhibit (3)(a) of Incorporation as amended. to Ogden's Form 10-K for the fiscal year ended December 31, 1988 and incorporated herein by reference. 3.2 Ogden's By-Laws, as amended Filed as Exhibit No. 3.2 to through March 17, 1994. Ogden's Form 10-K for the fiscal year ended December 31, 1993 and incorporated herein by reference. 4 Instruments Defining Rights of Security Holders. 4.1 Fiscal Agency Agreement between Filed as Exhibits (C)(3) and Ogden and Bankers Trust Company, (C)(4) to Ogden's Form 8-K dated as of June 1, 1987 and filed with the Securities and Offering Memorandum dated June Exchange Commission on July 7, 12, 1987, relating to U.S. 1987 and incorporated herein $85 million Ogden 6% Convertible by reference. Subordinated Debentures, Due 2002. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION 4.2 Fiscal Agency Agreement between Filed as Exhibit (4) to Ogden's Ogden and Bankers Trust Company, Form S-3 Registration Statement dated as of October 15, 1987, filed with the Securities and and Offering Memorandum, dated Exchange Commission on December October 15, 1987, relating to 4, 1987, Registration No. U.S. $75 million Ogden 5-3/4% 33-18875, and incorporated Convertible Subordinated herein by reference. Debentures, Due 2002. 4.3 Indenture dated as of March 1, Filed as Exhibit (4)(C) to 1992 from Ogden Corporation to Ogden's Form 10-K for fiscal The Bank of New York, Trustee, year ended December 31, 1991, relating to Ogden's $100 million and incorporated herein by debt offering. reference. 10 Material Contracts 10.1 Credit Agreement by and among Filed as Exhibit No. 10.2 to Ogden, The Bank of New York, as Ogden's Form 10-K for fiscal Agent and the signatory Lenders year ended December 31, 1993, thereto dated as of September 20, and incorporated herein by 1993. reference. 10.2 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. 10.3 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. 10.4 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. 10.5 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. 10.6 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. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION 10.7 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. (i) Ogden Corporation 1990 Filed as Exhibit 10.6(b)(i) to Stock Option Plan as Ogden's Form 10-Q for the Amended and Restated as of quarterly period ended January 19, 1994. September 30, 1994 and incorporated herein by reference. (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. (i) Ogden Services Corporation Transmitted herewith as Select Savings Plan Exhibit 10.7(d)(i). Amendment and Restatement as of January 1, 1995. (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. (i) Ogden Services Corporation Transmitted herewith as Select Savings Plan Trust Exhibit 10.7(e)(i). Amendment and Restatement as of January 1, 1995. (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. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION (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, 1991. by reference. (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. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION (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, 1993 January 1, 1994. 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. (i) Ogden Profit Sharing Plan Filed as Exhibit 10.8(p)(i) to as amended and restated Ogden's Form 10-K for fiscal January 1, 1991 and as in year ended December 31, 1993 effect through January 1, and incorporated herein by 1993. reference. (ii) Ogden Profit Sharing Plan Transmitted herewith as as amended and restated Exhibit 10.7(p)(ii). effective as of January 1, 1995. (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. (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. EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION (u) Ogden Projects Employees' 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. (i) Amendment dated as of Transmitted herewith as December 29, 1994, to the Exhibit 10.7(u)(i). Ogden Projects Employees' Stock Option Plan. (v) Ogden Projects Core Executive Filed as Exhibit 10.8(v) to Benefit Program. Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (w) Form of amendments to the Ogden Filed as Exhibit 10.8(w) to Projects, Inc. Pension Plan and Ogden's Form 10-K for fiscal Profit Sharing Plans effective as year ended December 31, 1993 of January 1, 1994. and incorporated herein by reference. (i) Form of amended Ogden Transmitted herewith as Projects Profit Sharing Exhibit 10.7(w)(i). Plan effective as of January 1, 1994 and incorporated herein by reference. (ii) Form of amended Ogden Transmitted herewith as Projects Pension Plan, Exhibit 10.7(w)(ii). effective as of January 1, 1994 and incorporated herein by reference. 10.8 First Amended and Restated 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 as 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 for the years ended December 31, 1994, 1993 and 1992. 13 Those portions of the Annual Transmitted herewith as Report to Stockholders for the Exhibit 13. year ended December 31, 1994, which are incorporated herein by reference. 21 Subsidiaries of Ogden. Transmitted herewith as Exhibit 21. 23 Consent of Deloitte & Touche. Transmitted herewith as Exhibit 23. 27 Financial Data Schedule. Transmitted herewith as Exhibit 27. EX-10 3 EXHIBIT 10.7(D)(I) EXHIBIT 10.7(d)(i) OGDEN SELECT SAVINGS PLAN ARTICLE I PURPOSE 1.1 PURPOSE. The purpose of the Ogden Select Savings Plan is to enable eligible employees of the Company to enhance their retirement security by permitting them to elect to defer receipt of a portion of their compensation to a later date or event. The Ogden Select Savings Plan was originally effective as of October 1, 1990, the amendment and restatement of the Ogden Select Savings Plan shall be January 1, 1995. ARTICLE II DEFINITIONS When used herein the following terms shall have the following meanings: 2.1 "Board" shall mean the Board of Directors of the Company. 2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. 2.3 "Committee" shall mean the Administrative Committee of the Ogden Profit Sharing Plan as appointed by the Board to administer the Plan. 2.4 "Company" shall mean Ogden Services Corporation along with certain of its designated subsidiaries and affiliates. 2.5 "Compensation" shall mean a Participant's annual salary including any bonuses, any car allowance or other current cash compensation paid by the Company but excluding Discretionary Profit Sharing Cash Payments, any Select Awards, imputed income, salary gross-ups, non-cash compensation and severance pay. 2.6 "Compensation Committee" shall mean the Compensation Committee of the Ogden Corporation Board of Directors. 2.7 "Deferral Year" shall mean each Plan Year as to which an election is made to defer Compensation in accordance with the provisions of Section 3.3 of the Plan. 2.8 "Disability" shall mean the inability of a Participant to perform the duties of his position with the Company due to a physical or mental ailment, as determined by the Committee in its sole discretion, such physical or mental ailment to result in the Executive's termination of employment or retirement. 2.9 "Discretionary Profit Sharing Cash Payment" shall mean the cash payment awarded to a Participant out of Company profits by the Compensation Committee in its sole discretion. Any Discretionary Profit Sharing Cash Payment awarded shall be paid from the profits of the Company and not be Compensation. 2.10 "Distribution Date" shall mean, as determined by a Participant, either (i) the last business day of the calendar quarter immediately following such Participant's Termination of Service; or (ii) the December 31 immediately following such Participant's Termination of Service. 2.11 "Effective Date" shall mean January 1, 1995. 2.12 "Executive" shall mean any officer or other member of the management group of the Company whose Compensation is within the top 4% of all employees of the Company. 2.13 "Investment Committee" shall mean the Investment Committee of the Ogden Profit Sharing Plan as appointed by the Board to manage and direct the investment of the assets of the Plan. 2.14 "Participant" shall mean any Executive who becomes a Participant in the Plan as provided in Section 3.2 of the Plan. 2.15 "Payment Event" shall mean Termination of Service, death, or Disabality, in accordance with Section 5.2 of the Plan. 2.16 "Plan" shall mean this Ogden Select Savings Plan, as amended and restated herein, and as amended from time to time. 2.17 "Plan Year" shall mean calendar year. 2.18 "Select Award" shall mean an amount determined by the Compensation Committee in its sole discretion and contributed by the Company to the deferral account of a Participant in accordance with Section 3.4 of the Plan. 2.19 "Trust" shall mean the trust established under the Trust Agreement. 2.20 "Trust Agreement" shall mean as of the Effective Date the agreement between the Company and The Bank of New York dated as of October 1, 1990, and as in effect through December 31, 1994 and the agreement with American Express Trust dated as of January 1, 1995, as amended from time to time or an agreement between the Company and such other trustee as may be appointed by the Board from time to time. 2.21 "Termination of Service" shall mean termination of employment with the Company and all of its affiliates including any form of retirement other than by reason of Disability or death. 2.22 "Valuation Date" shall mean each business day of the Plan Year that the New York Stock Exchange is open for business and shall be the date upon which the Participant's account balances are determined in accordance with Section 4.1(c). ARTICLE III ELIGIBILITY AND PARTICIPATION 3.1 ELIGIBILITY. Participation in the Plan shall be limited to those Executives who (i) are eligible to participate in the Ogden Profit Sharing Plan, or any other defined contribution plan sponsored by any affiliate or subsidiary of the Company, and (ii) have received written notification from either (1) the Company or (2) from a person designated by the Company, that they are eligible to participate in the Plan. 3.2 PARTICIPATION. (a) An Executive eligible to participate in the Plan under Section 3.1 may become a Participant for any Plan Year by executing an irrevocable deferral election (on a form prescribed by the Committee) with respect to his Compensation, his Discretionary Profit Sharing Cash Payment, or both, for such Plan Year. Except as provided in Section 3.2(b), such election must be executed and delivered to the Committee on or before the last day of December of the preceding Plan Year. (b) With respect to an Executive who first becomes eligible to participate in the Plan under Section 3.1 after the beginning of a Plan Year, such Executive may participate in the Plan for the remainder of such Plan Year by executing an irrevocable deferral election (on a form prescribed by the Committee) with respect to such Executive's Compensation, Discretionary Profit Sharing Cash Payment, or both, earned on or after the date the deferral election is made, within 30 days of the date such Executive receives notice from the Committee that the Executive is eligible to participate. (c) An Executive eligible to participate in the Plan under Section 3.1 will become a Participant for any Plan Year in which the Compensation Committee grants a Select Award on behalf of such Participant. 3.3 DEFERRAL ELECTION. (a) As a condition of participation under Sections 3.2 (a) and (b) of the Plan, an Executive must agree to defer from 1% to 10% of Compensation, or 1% to 100% of his Discretionary Profit Sharing Cash Payment, or both, for each Plan Year as to which such Executive elects to defer Compensation or Discretionary Profit Sharing Cash Payment. The amount so deferred must be in increments of 1%. The Executive may make separate elections with respect to base salary, bonus payments, or both. The Committee may from time to time provide another manner of specifying the amount of Compensation or Discretionary Profit Sharing Cash Payment to be deferred, including, but not limited to, a specific dollar amount. (b) An election made under the Plan shall relate only to Compensation, a Discretionary Profit Sharing Cash Payment, or both for the Plan Year, or to Compensation, Discretionary Profit Sharing Cash Payment, or both for the remainder of a Plan Year if Section 3.2(b) applies. A separate election must be made in order to defer Compensation or a Discretionary Profit Sharing Cash Payment for each subsequent Plan Year. In the event of a failure to make a timely deferral election for any Plan Year, no portion of the Participant's Compensation or Discretionary Profit Sharing Cash Payment for such Plan Year may be deferred under the Plan. (c) Each deferral election under Sections 3.2 and 3.3 shall (in accordance with Section 5.2) also designate: (1) the Distribution Date the payment shall commence; and (2) the method of payment. The Participant may choose between a lump sum distribution and annual installments to a maximum of five years; (3) the investment fund or funds the deferral is to be initially invested under; and (4) the beneficiary to receive any payments if the Participant dies before receiving all amounts to which the Participant is entitled under the Plan. 3.4 SELECT AWARD. The Compensation Committee may contribute directly to the Plan on behalf of any Executive or group of Executives a discretionary amount in a given Plan Year. Each Select Award shall be a bookkeeping entry on the Company's records. The Participant shall be a general unsecured creditor of the Company with respect to the amount of any Select Award credited to his account. The Compensation Committee may establish a vesting schedule for any Select Award. The vesting schedule will be determined at the time the Select Award is determined. ARTICLE IV PARTICIPANT'S ACCOUNT 4.1 ACCOUNTS. (a) The Company shall establish written bookkeeping accounts to record the deferrals of Compensation, Discretionary Profit Sharing Cash Payments and any Select Award and earnings, increases and decreases thereon under the Plan. (b) During the Deferral Year, the Company shall credit each Participant's account for that Deferral Year with the amount deferred under Sections 3.2 3.3 and 3.4 by each Participant Any deferral of Compensation, Discretionary Profit Sharing Cash Payments or Select Awards will be credited to such Participant's account as soon as it is received by the Trustee. Generally, this will be in the month immediately following the month in which the deferral, or Select Award is payable. (c) The amounts determined in accordance with Section 4.1(b) shall be deemed to be invested by the Investment Committee in accordance with the Participant's election. The Committee shall maintain written records of such investments. If a Participant does not make a written election, he shall be deemed to have directed the investment of his funds into the investment fund with the highest price stability and the least volatile total return potential. Income, gains and losses on such investments shall be credited to or charged against each Participant's account as of the Valuation Date. (d) A Participant's account shall be reduced by any payments made to the Participant, or his beneficiary, estate or representative. The Company's obligation to make payments pursuant to the Plan to any Participant, his beneficiary, estate or representative shall be limited to the amount credited to such Participant's account as of the date of such payment. Neither the Plan nor any action taken pursuant thereto guarantees any fixed dollar amount of payments to the Participant, his beneficiary, estate or representative. The amount of payment under the Plan shall vary in accordance with the performance of the investment of amounts deferred under the Plan in the investment fund or funds selected by the Participant. The Company, the Committee, the Investment Committee, the Compensation Committee, and the Board shall not be responsible for any decrease in value of any Participant's account due to such investment. (e) With respect to the employee benefit or welfare plans sponsored by the Company under which the amount of any benefit is based on the rate of salary paid to an employee, a Participant's rate of salary for the purposes of such employee benefit or welfare plan shall include any amount of Compensation deferred under the Plan, unless otherwise specifically provided in such plan. 4.2 FUNDING PROHIBITIONS. All entries in a Participant's account shall be bookkeeping entries only and shall not represent a special reserve or otherwise constitute a funding of the Company's unsecured promise to pay any amounts hereunder. All payments to be made under the Plan shall be paid from the general funds of the Company. All such assets shall be the property solely of the Company and shall be subject to the claims of the Company's unsecured general creditors. To the extent a Participant or any other person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company and such person shall have only the unsecured promise of the Company that such payments shall be made. In its sole discretion, the Company may authorize the creation of an irrevocable grantor trust or other arrangement to meet the obligations created under the Plan. The existence of such trust or other arrangement shall be consistent with the "unfunded" status of the Plan. ARTICLE V PAYMENT 5.1 PAYMENT OF ACCOUNT. Payment of amounts credited to a Participant's account shall be made in the manner and at the time or times specified herein. All payments shall be made by Company check or by other arrangements. 5.2 COMMENCEMENT OF PAYMENT. Notwithstanding any provisions of the Plan to the contrary, upon the occurrence of a Payment Event, the balance in the Participant's account shall be valued on the last Valuation Date of the calendar quarter or of the Plan Year as elected in accordance with Section 3.3 and paid to the Participant (or, in the case of death, to the Participant's beneficiary) on or before the first day of the month following 90 days from the Valuation Date in accordance with Section 5.3. 5.3 METHOD OF PAYMENT. (a) For all Payment Events, the method of payment selected by the Participant will be irrevocable. Selection of method of payment shall be made at the time the Participant first elects to participate in the Plan. Any Participant who was a Participant prior to January 1, 1995 may elect a method of payment before January 1, 1995 other than a lump sum for those amounts deferred (and earnings thereof) on or after January 1, 1995. The method of payments shall be: (i) lump sum; or (ii) substantially equal annual installments not to exceed five years. Earnings or losses credited to a Participant's account as of the Valuation Date preceding the date of the next distribution shall be added to the Participant's account and distributed as a part of the next installment. Distribution shall be made or commence as specified in Section 5.2 of the Plan. Subsequent installments will be made each year in the month of the first installment. Each such installment shall include earnings or losses credited to the balance of the Participant's accounts. The final installment will be the balance of the Participant's deferred compensation account and earnings or losses credited to the account. (b) Notwithstanding any other provision of the Plan to the contrary, a Participant may withdraw an amount from his account only in the event of "financial hardship". To be a financial hardship, the hardship must be unforeseeable and beyond the control of the Participant. The Committee shall have the right to require such Participant to submit such documentation as it deems appropriate for the purpose of determining that the Participant has incurred a financial hardship. The amount withdrawn shall not exceed the amount reasonably needed to satisfy such financial hardship. ARTICLE VI ADMINISTRATION 6.1 ADMINISTRATION. The Plan shall be administered by the Committee. The Committee shall have all powers necessary to carry out the provisions of the Plan, including, without limitation, the power to delegate administrative matters to other persons, to interpret the Plan and to adopt guidelines for its administration. 6.2 INVESTMENT. The investment of funds within the Trust shall be the responsibility of the Investment Committee. ARTICLE VII MISCELLANEOUS 7.1 TERMINATION OF PLAN. The Company may at any time by action of the Board terminate the Plan. Upon termination of the Plan, no further deferrals will be permitted, and the Participant's Compensation and Discretionary Profit Sharing Cash Payment will be restored on a nondeferred basis. 7.2 AMENDMENT. The Company may at any time amend the Plan in any respect, (i) in the case of amendments which have a material effect on the cost to the Company of maintaining the Plan, by action of the Compensation Committee of the Board or, (ii) with respect to any other amendments, by action of the Committee; provided, however, that no such amendment shall adversely affect the rights of Participants or their beneficiaries to any amounts credited or to be credited to the Participants' accounts with respect to any Deferral Year which has commenced prior to the adoption of any such amendment or any funds held in the Trust at the time of such amendment. 7.3 PAYMENTS TO PERSONS OTHER THAN PARTICIPANTS. If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for such person's affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or such person's estate (unless a prior claim therefore has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to such person's spouse, child, a relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Company, the Committee, the Investment Committee and the Board. 7.4 BENEFICIARY. Each Participant shall designate a beneficiary to whom any balance in each account under the Plan shall be payable on his death. A Participant may also designate an alternate beneficiary to receive such payment in the event that the designated beneficiary cannot receive payment for any reason. In the event no designated or alternate beneficiary can receive such payment for any reason, payment will be made to the Participant's estate. Each Participant may at any time change any beneficiary designation. A change of beneficiary designation must be made in writing and delivered to the Committee or its delegate for such purposes. The interest of any beneficiary who dies before the Participant will terminate unless otherwise specified by the Participant. 7.5 NO LIABILITY OF MEMBERS. No member of the Committee, the Investment Committee, Compensation Committee of the Board, nor any employee of the Company shall be personally liable by reason of any contract or other instrument executed by such member or employee or on such member's or employee's behalf in his capacity as a member of the Committee, the Investment Committee, the Compensation Committee of the Board or as an employee, or for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each employee, officer or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan or investment of the funds may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan unless arising out of such person's own fraud or bad faith. 7.6 SUCCESSOR CORPORATION. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company. The Company agrees that it will make appropriate provisions for the preservation of Participants' rights under the Plan in any agreement or plan which it may enter into or adopt to effect any such merger, consolidation, reorganization or transfer of assets. 7.7 NO ALIENATION OF BENEFITS. To the extent permitted by law, Participants and beneficiaries shall not have the right to alienate, anticipate, commute, sell, assign, transfer, pledge, encumber or otherwise convey the right to receive any payments under the Plan, and any payments under the Plan or rights thereto shall not be subject to the debts, liabilities, contracts, engagements or torts of Participants or beneficiaries nor to attachment, garnishment or execution, nor shall they be transferable by operation of law in the event of bankruptcy or insolvency. Any attempt, whether voluntary or involuntary, to effect any such action shall be null, void and of no effect. 7.8 NO RIGHTS TO CONTINUED EMPLOYMENT. Nothing contained herein shall be construed as conferring upon an Executive the right to continue in the employ of the Company as an Executive or in any other capacity. 7.9 HEADINGS. The headings are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of the Plan. 7.10 APPLICABLE LAW. The Plan shall be construed and administered in accordance with the laws of the State of New York, without reference to the principles of conflicts of law thereof. EX-10 4 EXHIBIT 10.7(E)(I) EXHIBIT 10.7(e)(i) THE OGDEN SELECT SAVINGS PLAN TRUST AGREEMENT THIS TRUST AGREEMENT made and entered into as of the 1st day of January, 1995, by and between Ogden Services Corporation, a State of Delaware Corporation ("Company") and certain of the Company's designated subsidiaries and affiliates (individually known as a "Participating Company" and collectively "Employer") and American Express Trust Company, a Minnesota trust company (Trustee); (a) WHEREAS, the Company has adopted the nonqualified deferred compensation plan known as the Ogden Select Savings Plan ("Plan") for the benefit of a select group of management or highly compensated employees; b) WHEREAS, the Employer has incurred and expects to continue to incur liability under the terms of such Plan with respect to the individuals participating in such Plan; (c) WHEREAS, the Company has established a trust (Trust) with The Bank of New York, a New York banking corporation ("BONY"), such Trust being established pursuant to a trust agreement effective October 1, 1990 and as amended and restated effective as of November 1, 1991 ("BONY Trust Agreement") and contributed to the Trust assets that have been held therein, subject to the claims of the Employer's creditors in the event of the Company's or a Participating Company's insolvency, as herein defined, until paid to Plan participants and their beneficiaries in such manner and at such times as specified in the Plan; (d) WHEREAS, pursuant to Sections 5.8 and 5.9 of the BONY Trust Agreement, the Company has appointed the Trustee as a successor trustee to BONY; (e) WHEREAS, it is the intention of the parties that the Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan(s) as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purpose of Title I of the Employee Retirement Income Security Act of 1974 ("ERISA"); (f) WHEREAS, it is the intention of the Company to direct BONY to deliver the trust fund, established under the BONY Trust Agreement, to the Trustee and the Trustee acknowledges receipt of such trust fund, and to continue to make contributions to the Trust to provide itself with a source of funds to assist in the meeting of its liabilities under the Plans; NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised held and disposed of as follows: SECTION 1. ESTABLISHMENT OF TRUST (a) The Company hereby deposits, in addition to the trust fund delivered by BONY, with Trustee in trust $100, together which shall become the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement. (b) The Trust hereby established is irrevocable by the Company. (c) The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. (d) The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes of Plan participants and general creditors as herein set forth. Plan participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan participants and their beneficiaries against the Company. Any assets held by the Trust will be subject to the claims of the Employer's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein. (e) The Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor any Plan participant or beneficiary shall have any right to compel such additional deposits. (f) The Company represents that it shall restrict participation in the nonqualified plan(s) relating to or supported by the Trust to a "select group of management or highly compensated employees", as that phrase is used in and defined under Sections 201, 301, and 401 of ERISA. The Company represents to the Trustee that the Trust is exempt from Parts 2, 3, and 4 of Title 1 of ERISA. The Company agrees to indemnify against and hold harmless from any and all claims, judgements, settlements and related costs or damages incurred by the Trustee resulting from Trustee's reliance on these representations. SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES. (a) The Company shall deliver to Trustee a schedule ("Payment Schedule") that indicates the amounts payable in respect of each Plan participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plans), and the time of commencement for payment of such amounts. Except as otherwise provided herein, Trustee shall make payments to the Plan participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Company. (b) The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan shall be determined by the Company or such party as it shall designate under the Plan(s), and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan. (c) The Company may make payment of benefits directly to Plan participants or their beneficiaries as they become due under the terms of the Plan. The Company shall notify the Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan, the Company shall make the balance of each such payment as it falls due. The Trustee shall notify the Company where principal and earnings are not sufficient. SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT. (a) Trustee shall cease payment of benefits to Plan participants and their beneficiaries if the Company is Insolvent. The Company shall be considered "Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to pay its debts as they become generally due, or (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) At times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below: (1) The Chief Executive Officer ("CEO") of the Company shall have the duty to inform the Trustee in writing of the Company's Insolvency. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payment of benefits to Plan participants or their beneficiaries. (2) Unless Trustee has actual knowledge of the Company's Insolvency, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. The Trustee may in all events rely on such evidence concerning the Company's solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning the Company's solvency. (3) If at any time the Trustee has determined that the Company is Insolvent, the Trustee shall discontinue payments to Plan participants or their beneficiaries and shall hold the assets of the Trust for the benefit of the Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any right of Plan participants or their beneficiaries to pursue their rights as general creditors of the Company with respect to benefits due under the Plan or otherwise. (4) The Trustee shall resume the payment of benefits to Plan participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent (or is no longer Insolvent). (c) Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan participants or their beneficiaries under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants or their beneficiaries by the Company in lieu of the payment provided for hereunder during any such period of discontinuance, plus earnings if any, thereon. SECTION 4. PAYMENTS TO COMPANY. Except as provided in Section 3 hereof, the Company shall have no right or power to direct Trustee to return to the Company or to divert to others any of the Trust assets before all payment of benefits have been made to Plan participants and their beneficiaries pursuant to the terms of the Plan. SECTION 5. INVESTMENT AUTHORITY. (a) The Trustee shall have the authority, as directed by the Company, to provide the following authorized investment vehicles: government securities, common stocks, preferred stocks, bonds, notes, commercial paper, fixed time deposits, money market instruments, mutual funds including any investment offered by the Trustee or its affiliates. The Company can delegate to each participant the right to direct the Trustee as to the appropriate allocation within the authorized investments selected by the Company. The Trustee nevertheless retains the authority to override a Participant's direction. (b) In no event may the Trustee invest in securities (including stock or right to acquire stock) or obligations issued by the Company, other than a de minimis amount held in common investment vehicles in which the Trustee invests. All rights associated with assets of the Trust shall be exercised by Trustee or the person designated by the Trustee, and shall in no event be exercisable by or rest with Plan participants, except that voting rights with respect to Trust assets will be exercised by the Company. SECTION 6. DISPOSITION OF INCOME. During the term of the Trust, all income received by the Trust, net of expenses and taxes, if any, shall be accumulated and reinvested. SECTION 7. ACCOUNTING BY TRUSTEE. The Trustee shall keep accurate and detailed records of all investments, receipts , disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and the Trustee. Within 60 days following the close of each calendar year and within 60 days after the removal or resignation of Trustee, the Trustee shall deliver to the Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and other investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. SECTION 8. RESPONSIBILITY OF TRUSTEE. (a) The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such material would use in the conduct of an enterprise of alike character and with like aims, provided, however, that the Trustee shall incur no liability to any person for any action taken pursuant to a written direction, request or approval given by the Company which is contemplated by, and in reasonable conformity with, the terms of the Plan or this Trust Agreement and this given in writing by Company. In the event of a dispute between Company and a party, Trustee may apply to a court of competent jurisdiction to resolve the dispute. (b) If the Trustee, after discussion with the Company, undertakes or defends any litigation arising in connection with this Trust Agreement, the Company agrees to indemnify the Trustee against the Trustee's costs, expenses and liabilities (including, without limitation, reasonable attorneys' fees and expenses) relating thereto and to be primarily liable for such payments. If the Company does not pay such cost, expenses and liabilities in a reasonably timely manner, Trustee may, upon written notice to the Company, obtain payment from the Trust. (c) The Trustee may consult with legal counsel (who may also be counsel for the Company or the Trustee generally) with respect to any of its duties or obligations hereunder. (d) The Trustee may, hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder. (e) The Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein, provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor trustee, or to loan to any person the proceeds of any borrowing against such policy. (f) Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or to applicable law, the Trustee shall not have any power that could give this Trust Agreement the objective of carrying on a business and dividing the gains from, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. (g) The Trustee shall on a timely basis deliver or cause to be executed and delivered, to the Employer, all notices, prospectuses, finance statements proxies and proxy soliciting materials relating to investments held hereunder. The Trustee shall not vote any proxy or tender offer election, participate in any voting trust, exercise any options or subscription right or join in, dissent from or oppose any merger, reorganization, consolidation, liquidation or sale with respect to any asset held hereunder except in accordance with the timely written instructions of the Company. If no such written instructions are timely received such proxies, elections and voting trust shall not be voted; such option or subscription rights shall not be exercises; and such mergers, reorganization, consolidation, acquisitions or sales hall not be joined, dissented from or opposed. (h) The Trustee may, in the exercise of its discretion, invest and reinvest the assets of any trust created under this Trust Agreement in assets issued or distributed by American Express Finanacial Advisors or any of its successors, subsidiaries or affiliates, even though American Express Financial Advisors and its successors, subsidiaries or affiliates are affiliated with the Trustee. Assets that the Trustee may acquire pursuant to the authority granted by this paragraph includes, but are not limited to load and no-load mutual funds. SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE. The Company shall pay all administrative and the Trustee's fees and expenses. If not so paid within a reasonable time and after written notice, the Trustee shall deduct the fees and expenses directly from the Trust. SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE. (a) The Trustee may resign at any time by written notice to the Company, which shall be effective 60 days after receipt of such notice unless the Company and the Trustee agree otherwise. (b) The Trustee may be removed by the Company on 60 days notice or upon shorter notice accepted by the Trustee. (c) Upon resignation or removal of the Trustee and appointment of a successor trustee, subject to Trustee's rights to deduct fees and expenses pursuant to Section 9, all assets shall subsequently be transferred to the successor trustee. The transfer shall be completed within 60 days after receipt of notice of resignation, removal or transfer, unless the Company extends the time limit. In the event of such resignation or removal, the Trustee and its successors or assigns shall file with the Company a final accounting pursuant to provisions of Section 7. (d) If Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 11 thereof, by the effective date of resignation or removal under paragraph (a) or (b) of this section. If no such appointment has been made, Trustee may apply to a court of competent jurisdiction for appointment or a successor or for instructions. All expenses of the Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust. SECTION 11. APPOINTMENT OF SUCCESSOR. (a) If Trustee resigns or is removed in accordance with Sections 10(a) or (b) hereof, the Company may appoint any third party, such as a bank trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace the Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all of the rights and powers of the Trustee, including ownership rights in the Trust assets. The Trustee shall execute any instrument necessary or reasonable requested by the Company or the successor trustee to evidence the transfer. (b) The successor trustee need not examine the records and acts of any prior trustee and may retain or dispose of existing Trust assets, subject to Sections 7 and 8 hereof. The successor trustee shall not be responsible for and Company shall indemnify and defend the successor trustee from any claim or liability resulting from any action or inaction of any prior trustee or from any other past event, or any condition existing at the time it becomes successor trustee. SECTION 12. AMENDMENT OR TERMINATION. (a) This Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or shall make the Trust revocable. (b) The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan, unless sooner revoked in accordance with Section 1(b) hereof. Upon termination of the Trust any assets remaining in the Trust shall be returned to the Company. (c) Upon written approval of participants or beneficiaries entitled to payment of benefits pursuant to the terms of Plan, the Company may terminate this Trust Agreement prior to the time all benefit payments under the Plan have been made. All assets in the Trust at termination shall be returned to the Company. SECTION 13. MISCELLANEOUS. (a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Benefits payable to Plan participants and their beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. (c) This Trust Agreement shall be governed by and construed in accordance with the laws of Minnesota. SECTION 14. EFFECTIVE DATE. The effective date of this Trust Agreement shall be of January 1, 1995. IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be effective as of the day and year first above written. OGDEN SERVICES CORPORATION By: Title: Vice President Date: AMERICAN EXPRESS TRUST COMPANY By: Title: Date: EX-10 5 EXHIBIT 10.7(P)(II) EXHIBIT 10.7(p)(i) OGDEN PROFIT SHARING PLAN OGDEN PROFIT SHARING PLAN TABLE OF CONTENTS Section Page 1. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 2.1. "Account" . . . . . . . . . . . . . . . . . . . . . . . . . . .2 2.2. "Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 2.3. "Actual Contribution Percentage". . . . . . . . . . . . . . . .2 2.4. "Actual Contribution Ratio" . . . . . . . . . . . . . . . . . 2 2.5. "Actual Deferral Percentage". . . . . . . . . . . . . . . . . .2 2.6. "Actual Deferral Ratio" . . . . . . . . . . . . . . . . . . . .2 2.7. "Administrative Committee". . . . . . . . . . . . . . . . . . .2 2.8. "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . .2 2.9. "Base Compensation" . . . . . . . . . . . . . . . . . . . . . .3 2.10. "Base Contribution Percentage". . . . . . . . . . . . . . . . .3 2.11. "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . . . .3 2.12. "Board of Directors". . . . . . . . . . . . . . . . . . . . . .3 2.13. "Break in Service" . . . . . . . . . . . . . . . . . . . . . .3 2.14. "Code". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 2.15. "Committee" . . . . . . . . . . . . . . . . . . . . . . . . . .3 2.16. "Company" . . . . . . . . . . . . . . . . . . . . . . . . . . .3 2.17. "Company Contribution Account". . . . . . . . . . . . . . . . .3 2.18. "Company Discretionary Contributions" . . . . . . . . . . . . .3 2.19. "Company Matched Contributions" and "Company Matched Contribution Account". . . . . . . . . . . . .4 2.20. "Compensation". . . . . . . . . . . . . . . . . . . . . . . . .4 2.21. "Contributions" . . . . . . . . . . . . . . . . . . . . . . . .4 2.22. "Direct Rollover" . . . . . . . . . . . . . . . . . . . . . . .4 2.23. "Disability". . . . . . . . . . . . . . . . . . . . . . . . . .5 2.24. "Distributee" . . . . . . . . . . . . . . . . . . . . . . . . .5 2.25. "Early Retirement Age". . . . . . . . . . . . . . . . . . . . .5 2.26. "Early Retirement Date" . . . . . . . . . . . . . . . . . . . .5 2.27. "Effective Date". . . . . . . . . . . . . . . . . . . . . . . .5 2.28. "Eligible Employee" . . . . . . . . . . . . . . . . . . . . . .5 2.29. "Eligible Retirement Plan". . . . . . . . . . . . . . . . . . .5 2.30. "Eligible Rollover Distribution". . . . . . . . . . . . . . . .5 2.31. "Employee". . . . . . . . . . . . . . . . . . . . . . . . . . .6 2.32. "Employer". . . . . . . . . . . . . . . . . . . . . . . . . . .6 2.33. "Excess Compensation" . . . . . . . . . . . . . . . . . . . . .6 2.34. "Excess Contribution Percentage". . . . . . . . . . . . . . . .6 2.35. "Family Member" . . . . . . . . . . . . . . . . . . . . . . . .6 2.36. "Highly Compensated Employee" or "Highly Compensated Participant". . . . . . . . . . . . . . . .6 2.37. "Hours of Service". . . . . . . . . . . . . . . . . . . . . . .7 2.38. "Individual Retirement Account Rollover Contribution" . . . . . . . . . . . . . . . . . . . . . . . . .8 2.39. "Investment Committee". . . . . . . . . . . . . . . . . . . . .8 2.40. "Investment Funds". . . . . . . . . . . . . . . . . . . . . . .8 2.41. "IRS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 2.42. "Labor Department". . . . . . . . . . . . . . . . . . . . . . .8 2.43. "Normal Retirement Age" . . . . . . . . . . . . . . . . . . . .8 2.44. "Normal Retirement Date". . . . . . . . . . . . . . . . . . . .8 2.45. "Participant" . . . . . . . . . . . . . . . . . . . . . . . . .8 2.46. "Participating Company" . . . . . . . . . . . . . . . . . . . .8 2.47. "Pre-tax Contributions" . . . . . . . . . . . . . . . . . . . .9 2.48. "Pre-tax Contribution Account". . . . . . . . . . . . . . . . .9 2.49. "Plan". . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 2.50. "Plan Year" . . . . . . . . . . . . . . . . . . . . . . . . . .9 2.51. "Prior Plan". . . . . . . . . . . . . . . . . . . . . . . . . .9 2.52. "Qualified Domestic Relations Order". . . . . . . . . . . . . .9 2.53. "Qualified Plan Rollover Contribution". . . . . . . . . . . . .9 2.54. "Regulations" . . . . . . . . . . . . . . . . . . . . . . . . 10 2.55. "Rollover Contribution" . . . . . . . . . . . . . . . . . . . 10 2.56. "Salary". . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.57. "Surviving Spouse". . . . . . . . . . . . . . . . . . . . . . 10 2.58. "Taxable Year". . . . . . . . . . . . . . . . . . . . . . . . 10 2.59. "Trust" or "Trust Fund" . . . . . . . . . . . . . . . . . . . 10 2.60. "Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2.61. "Valuation Date". . . . . . . . . . . . . . . . . . . . . . . 11 2.62. "Vesting Service" . . . . . . . . . . . . . . . . . . . . . . 11 2.63. "Year of Service" . . . . . . . . . . . . . . . . . . . . . . 11 2.64. "Years of Vesting Service". . . . . . . . . . . . . . . . . . 11 3. PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.1. Date of Participation . . . . . . . . . . . . . . . . . . . . 11 3.2. Participation and Adjustments . . . . . . . . . . . . . . . . 12 3.3. Duration. . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.4. Reemployment. . . . . . . . . . . . . . . . . . . . . . . . . 12 3.5. Establishment and Maintenance of Separate Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4. SAVINGS FEATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.1. Pre-tax Contributions . . . . . . . . . . . . . . . . . . . . 12 4.2. Distribution of Excess Pre-tax Contributions. . . . . . . . . 13 4.3. Election to Institute, Change, or Resume Contributions. . . . . . . . . . . . . . . . . . . . . 13 4.4. Limitation on Pre-tax Contributions . . . . . . . . . . . . . 14 4.5. Refund of Excess Contributions. . . . . . . . . . . . . . . . 15 4.6. Rollover Contributions. . . . . . . . . . . . . . . . . . . . 17 5. COMPANY CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . 17 5.1. Company Matched Contributions . . . . . . . . . . . . . . . . 17 5.2. Company Discretionary Contributions . . . . . . . . . . . . . 17 5.3. Time of Payment of Company Contributions. . . . . . . . . . . 18 5.4. Form of Payment of Company Contributions. . . . . . . . . . . 18 5.5. Maintenance of Accounts Shall Not Vest any Right in Assets . . . . . . . . . . . . . . . . . . . . . 18 5.6. Limitation on Company Matched Contributions . . . . . . . . . 18 6. ALLOCATION OF COMPANY AND MATCHING CONTRIBUTIONS . . . . . . . . . . 21 6.1. Allocation of Discretionary Company Contributions . . . . . . 21 6.2. Discretionary Company Contribution Formula. . . . . . . . . . 21 6.3. Allocation of Matching Contribution . . . . . . . . . . . . . 22 7. INVESTMENT OF CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . 22 7.1. Investment by Trustees. . . . . . . . . . . . . . . . . . . . 22 7.2. Investment Funds. . . . . . . . . . . . . . . . . . . . . . . 22 7.3. Investment Elections. . . . . . . . . . . . . . . . . . . . . 23 8. VALUATIONS AND ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . 24 8.1. Separate Accounts . . . . . . . . . . . . . . . . . . . . . . 24 8.2. Allocation of Earnings and Losses Valuation of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 24 8.3. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 24 8.4. Allocation of Forfeitures . . . . . . . . . . . . . . . . . . 25 9. ELIGIBILITY FOR BENEFITS . . . . . . . . . . . . . . . . . . . . . . 25 9.1. Retirement Date . . . . . . . . . . . . . . . . . . . . . . . 25 9.2. Distribution of Participant's Account on Retirement, Death, or Disability. . . . . . . . . . . . . . . 25 9.3. Distribution on other Termination of Service. . . . . . . . . 26 9.4. In-Service and Hardship Withdrawals . . . . . . . . . . . . . 26 9.5. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 9.6. Restrictions on Distributions . . . . . . . . . . . . . . . . 30 10. VESTED INTERESTS. . . . . . . . . . . . . . . . . . . . . . . . . . 30 10.1. Pre-tax Contributions. . . . . . . . . . . . . . . . . . . . 30 10.2. Company Contributions. . . . . . . . . . . . . . . . . . . . 30 10.3. Transferred Accounts . . . . . . . . . . . . . . . . . . . . 30 10.4. Break in Service for Vesting . . . . . . . . . . . . . . . . 30 11. METHOD OF PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . 31 11.1. Payment of Benefits. . . . . . . . . . . . . . . . . . . . . 31 11.2. Commencement of Payment. . . . . . . . . . . . . . . . . . . 31 11.3. Time of Payment. . . . . . . . . . . . . . . . . . . . . . . 32 11.4. Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . 33 12. MAXIMUM AMOUNT OF ALLOCATION. . . . . . . . . . . . . . . . . . . . 33 12.1. Application of Section 12. . . . . . . . . . . . . . . . . . 33 12.2. Maximum Additions to Account . . . . . . . . . . . . . . . . 33 12.3. Order of Reduction . . . . . . . . . . . . . . . . . . . . . 34 12.4. Additional Account Limitations . . . . . . . . . . . . . . . 34 13. DESIGNATION OF BENEFICIARIES. . . . . . . . . . . . . . . . . . . . 35 13.1. Beneficiary Designation. . . . . . . . . . . . . . . . . . . 35 13.2. Failure to Designate Beneficiary . . . . . . . . . . . . . . 35 14. ADMINISTRATION OF THE PLAN. . . . . . . . . . . . . . . . . . . . . 36 14.1. Powers and Duties of Administrative Committee. . . . . . . . 36 14.2. Powers and Duties of Investment Committee. . . . . . . . . . 36 14.3. Powers and Duties of Trustee . . . . . . . . . . . . . . . . 36 14.4. Agents, Report of Committees to Board. . . . . . . . . . . . 36 14.5. Structure of Committees. . . . . . . . . . . . . . . . . . . 37 14.6. Adoption of Procedures of Committees . . . . . . . . . . . . 37 14.7. Demands for Money. . . . . . . . . . . . . . . . . . . . . . 37 14.8. Claims for Benefits. . . . . . . . . . . . . . . . . . . . . 38 14.9. Hold Harmless. . . . . . . . . . . . . . . . . . . . . . . . 38 14.10. Service of Process . . . . . . . . . . . . . . . . . . . . . 38 14.11. Specific Powers and Duties . . . . . . . . . . . . . . . . . 39 15. WITHDRAWAL OF PARTICIPATING COMPANY . . . . . . . . . . . . . . . . 39 15.1. Withdrawal of Participating Company. . . . . . . . . . . . . 39 15.2. Distribution after Withdrawal. . . . . . . . . . . . . . . . 39 15.3. Transfer to Successor Plan . . . . . . . . . . . . . . . . . 40 16. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST. . . . . . . . . 40 16.1. Right to Amend, Suspend or Terminate Plan. . . . . . . . . . 40 16.2. Retroactivity. . . . . . . . . . . . . . . . . . . . . . . . 41 16.3. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 16.4. No Further Contribution. . . . . . . . . . . . . . . . . . . 41 16.5. Partial Termination. . . . . . . . . . . . . . . . . . . . . 42 16.6. Exclusive Benefit of Participants and Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . 42 17. GENERAL LIMITATIONS AND PROVISIONS. . . . . . . . . . . . . . . . . 42 17.1. All Risk on Participants and Beneficiaries . . . . . . . . . 42 17.2. Trust is Sole Source of Benefits . . . . . . . . . . . . . . 42 17.3. No Right to Continued Employment . . . . . . . . . . . . . . 42 17.4. Payment on Behalf of Payee . . . . . . . . . . . . . . . . . 42 17.5. No Alienation. . . . . . . . . . . . . . . . . . . . . . . . 43 17.6. Missing Payee. . . . . . . . . . . . . . . . . . . . . . . . 43 17.7. Required Information . . . . . . . . . . . . . . . . . . . . 43 17.8. Subject to Trust Agreement . . . . . . . . . . . . . . . . . 43 17.9. Communications to Committees . . . . . . . . . . . . . . . . 44 17.10. Communications from Participating Company or Committees . . . . . . . . . . . . . . . . . . . 44 17.11. Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 17.12. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 44 17.13. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . 44 17.14. Mistake of Fact. . . . . . . . . . . . . . . . . . . . . . . 44 17.15. Qualification of Plan. . . . . . . . . . . . . . . . . . . . 44 17.16. Deductibility of Contributions . . . . . . . . . . . . . . . 45 18. TOP HEAVY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 45 18.1. Top Heavy Plan . . . . . . . . . . . . . . . . . . . . . . . 45 18.2. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 45 18.3. Top Heavy Vesting. . . . . . . . . . . . . . . . . . . . . . 47 18.4. Minimum Contribution . . . . . . . . . . . . . . . . . . . . 48 18.5. Limitations on Contributions . . . . . . . . . . . . . . . . 48 18.6. Other Plans. . . . . . . . . . . . . . . . . . . . . . . . . 48 APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 SECTION 1. PURPOSE The Ogden Food Service Corporation, a subsidiary of Ogden Services Corporation, formerly known as Ogden Allied Services Corporation, adopted the Ogden Food Service Corporation Saving and Security Plan effective as of January 1, 1982. Effective August 1, 1986, such Plan was amended, restated in its entirety and renamed the Ogden Allied Services Saving and Security Plan. As a result of an employee benefit plan reorganization, effective January 1, 1989, (i) the Ogden Allied Services Saving and Security Plan was amended, restated in its entirety and renamed the Ogden Allied Services Profit Sharing Plan (the "Plan"); (ii) the Plan was merged with (a) Ogden Corporation Profit Sharing Plan, (b) Ogden Allied Maintenance Retirement Savings Plan, (c) Ogden Allied Maintenance Security Fund and (d) Ogden Allied Facility Management Corporation of Iowa Savings and Security Plan (collectively, the "Prior Plans"); and (iii) the related trusts maintained as part of each of the Prior Plans was merged with the Ogden Allied Services Profit Sharing Plan Trust (the "Trust"). As a result of the merger, each Sponsor of the Prior Plans became a Participating Company of the Plan and the Trust. Effective January 1, 1991, the Plan was again amended and restated in its entirety and renamed the Ogden Profit Sharing Plan. Subsequently, the Atlantic Design Profit Sharing Plan (effective January 1, 1992), and the Lenzar Electro-Optics, Inc. Profit Sharing Plan (effective April 1, 1994) were merged with the Ogden Profit Sharing Plan. The purpose of the Plan is to provide eligible employees with a convenient way to save on a regular and long-term basis and by providing such employees with a beneficial interest in the profits of the business, all as set forth herein and in the Trust Agreement adopted as part of the Plan. The Plan, as hereby amended and restated and effective as herein provided, and the Trust are intended to qualify as a plan and trust which meet the requirements of Section 401(a), 401(k) and 501(a), respectively, of the Internal Revenue Code of 1986, as now in effect or hereafter amended, or any other applicable provisions of law including, without limitation, the Employee Retirement Income Security Act of 1974. If a person retired or otherwise terminated employment and is not reemployed by a Participating Company thereafter, the rights under the Plan (or the Prior Plans) in respect of him, to retirement or other benefits under the Plan (or the Prior Plans) shall be governed by the applicable provisions of the Plan (or the Prior Plans) as in effect on the date of the person's retirement or other termination of employment. SECTION 2. DEFINITIONS When used herein the following terms shall have the following meanings: 2.1. "Account" means the account established and maintained in respect of a Participant including such Participant's Company Matched Account; and Company Discretionary Account, pursuant to Sections 5.1 and 5.2; Pre-tax Contribution Account, pursuant to Section 4.1, Rollover Account and other accounts established pursuant to Appendix A. 2.2. "Act" means the Employee Retirement Income Security Act of 1974, as now in effect or as hereafter amended. 2.3. "Actual Contribution Percentage" means, for any Plan Year, the Plan's Actual Contribution Ratio of the sum of (A) the Company Matched Contributions made on account of 401(k) Matched Contributions made during the Plan Year and allocated to the Participant's Company Match Account during such Plan Year (excluding any Company Matched Contributions which are nonforfeitable when made and are subject to the IRS Regulations Section 1.401(k) - 1(b) and are used to meet the Actual Deferral Percentage test under Section 4), and (B) at the Administrative Committee's election in accordance with IRS Regulations, Pre-tax Contributions (including excess contributions under Section 4, if the contribution would have been received in cash by the Participant for the Plan Year) to the amount of the Participant's Salary for such Plan Year. 2.4. "Actual Contribution Ratio" means the average of the contribution ratios for each specified group of Eligible Employees as determined by the Administrative Committee. 2.5. "Actual Deferral Percentage" means, for any Plan Year, the Plan's Actual Deferral Ratio of the amount of contributions allocated to the Participant's Pre-tax Contribution Account (and any Company Matched Contributions which meet the requirements of Section 1.401(k)-1(b)(5) of the IRS Regulations) during the Plan Year to the amount of the Participant's Salary for such Plan Year. 2.6. "Actual Deferral Ratio" means the average of the deferral ratios for each specified group of eligible Employees, as determined by the Administrative Committee. 2.7. "Administrative Committee" means the Administrative Committee provided for in Section 14. 2.8. "Affiliate" means any corporation which is included in a controlled group of corporations (within the meaning of Section 414(b) of the Code), which includes the Company, any trade or business (whether or not incorporated) under the common control of the Company (within the meaning of Section 414(c) of the Code), any organization included in the same affiliated service group (within the meaning of Section 414(m) of the Code), as the Company, and any other entity affiliated with the Company pursuant to the Regulations under Section 414(o) of the Code, except that for purposes of applying the provisions of Sections 12 and 18 with respect to the limitation on contributions, Section 415(h) of the Code shall apply. 2.9. "Base Compensation" means Compensation paid to a Participant that does not exceed the annual Social Security taxable wage base. 2.10. "Base Contribution Percentage" means the contribution percentage as calculated in Section 6.2 which is applied to the Base Compensation. 2.11. "Beneficiary" means the beneficiary or beneficiaries designated by a Participant pursuant to Section 13 to receive the amount, if any, payable under the Plan upon the death of such Participant. 2.12. "Board of Directors" means the Board of Directors of the Company. 2.13. "Break in Service" means a Plan Year during which an individual has not completed more than 500 Hours of Service, as determined by the Administrative Committee in accordance with the Regulations. Solely for purposes of determining whether a Break in Service has occurred, an individual shall be credited with the Hours of Service which such individual would have completed but for a maternity or paternity absence, as determined by the Administrative Committee in accordance with this Section 2.13, the Code and the Regulations; provided, however, that the total Hours of Service so credited shall not exceed 501 Hours of Service, and that the individual shall timely provide the Administrative Committee with such information as it shall require. Hours of Service credited for a maternity or paternity absence shall be credited entirely (i) in the Plan Year in which the absence began if such Hours of Service are necessary to prevent a Break in Service in such Plan Year or (ii) in the following Plan Year. For purposes of this Section 2.13, maternity or paternity absence shall mean an absence from work by reason of the individual's pregnancy, the birth of the individual's child or the placement of a child with the individual in connection with the adoption of the child by such individual, or for purposes of caring for a child for the period immediately following such birth or placement. 2.14. "Code" means the Internal Revenue Code of 1986, as now in effect or as hereafter amended. All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered. 2.15. "Committee" means the Administrative Committee and the Investment Committee. For purposes of the Act, the members of the Administrative Committee and the Investment Committee shall be named fiduciaries (with respect to the matters for which they are hereby made responsible) of the Plan, and the Administrative Committee shall be the administrator of the Plan. 2.16. "Company" means Ogden Services Corporation or any successor to the Company. 2.17. "Company Contribution Account" means the Participant's Company Matched Contribution Account. 2.18. "Company Discretionary Contributions" and "Company Discretionary Contribution Account" means those Employer contributions made pursuant to Section 5.2 and that portion of the Participant's Account to which such contributions are credited. 2.19. "Company Matched Contributions" and "Company Matched Contribution Account" means those Employer contributions made pursuant to Section 5.1 and that portion of the Participant's Account to which such contributions are credited. 2.20. "Compensation" means, for each Plan Year beginning before January 1, 1994, an Employee's first $200,000 (as adjusted for cost of living to the extent permitted by the Code and IRS Regulations), and for each Plan Year beginning on or after January 1, 1994, an Employee's first $150,000 (as adjusted by the Commissioner of the IRS , for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code) (the "annual compensation limit") of total salary and other compensation paid during a Plan Year to an Employee from a Participating Company, including any amount which such Employee elects to have the Company contribute to a qualified plan under Section 401(k) of the Code, any benefit payments under a plan under Section 125 of the Code, but excluding imputed income, other non-cash compensation, lump sum severance pay, special discretionary cash profit sharing payments (an annual cash payment determined by the Compensation Committee of the Board and paid to the Employee), any contribution to the Plan or any other pension plan, profit sharing plan or qualified or non- qualified benefit plan maintained by a Participating Company, any benefit payment under the Plan or any other such plan, reimbursed expense, or any withholding tax (federal, state or local) remitted by a Participating Company on behalf of an Employee in respect of imputed income arising out of group insurance coverage of such Employee. If less than a full Plan Year of Compensation is taken into account, then the annual compensation limit shall be multiplied by the ratio obtained by dividing the number of full months in the period by 12. In determining the Compensation of a Participant for purposes of the annual compensation limit, the rules of Section 414(q)(6) shall apply, except that in applying such limitation, the term Family Member shall include only the spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the close of the Plan Year. If, as a result of the application of such rules the adjusted annual compensation limit is exceeded, then the limit shall be prorated among the affected individuals in proportion to each such individual's Compensation as determined under this Section 2.20 prior to the application of the annual compensation limit. 2.21. "Contributions" means those contributions made in respect of a Participant including Company Matched Contributions and Company Discretionary Contributions made by a Participating Company pursuant to Sections 5.1 and 5.2, Pre-tax Contributions made by a Participant on a pre-tax basis pursuant to Section 4.1, Rollover Contributions pursuant to Section 4.6, and any other contribution made in accordance with Appendix A. 2.22. "Direct Rollover" means (i) a distribution by the Plan to an Eligible Retirement Plan as specified by a Distributee and (ii) a payment by another employee retirement plan to the Plan as a Rollover Contribution as specified by an Eligible Employee. 2.23. "Disability" means an Employee's physical or mental incapacity to perform his assigned duties with the Employer, such that he is eligible to receive either benefits under the long- term disability plan of the Employer or any Affiliate, or disability benefits under the Social Security Act and such incapacity is expected to last for more than 12 months as determined in a uniform manner by the Administrative Committee after reviewing any medical evidence which the Administrative Committee considers necessary, including the reports of any medical examinations required by the Administrative Committee. 2.24. "Distributee" means a Participant or a former Participant, a Participant's or former Participant's Surviving Spouse or a former spouse of a Participant or former Participant who is a payee under a Qualified Domestic Relations Order to which a distribution is to be made under the Plan shall also be deemed to be a Distributee. 2.25. "Early Retirement Age" means the date a Participant attains age 55 and completes 10 Years of Service. 2.26. "Early Retirement Date" means the first day of the month coincident with or next following the Participant's Early Retirement Age. 2.27. "Effective Date" of this amendment and restatement means January 1, 1994. The original effective date of the Plan is January 1, 1982. 2.28. "Eligible Employee" means any Employee other than those who are included in a unit of Employees covered by a collective bargaining agreement and certain hourly employees who are in the employ of units that have been designated by the Company as being ineligible to participate in the Plan that does not provide for their participation in the Plan. 2.29. "Eligible Retirement Plan" means (i) an individual retirement account, as described in Section 408(a) of the Code, (ii) an individual retirement annuity, as described in Section 408(b) of the Code, (iii) an annuity plan, as described in Section 403(a) of the Code, and (iv) a qualified plan and trust, as described in Sections 401(a) and 501(a) of the Code; provided, however, that in the case of an Eligible Rollover Distribution to a Surviving Spouse, an Eligible Retirement Plan means an individual retirement account or an individual retirement annuity, as described in Sections 408(a) and 408(b) of the Code, respectively. 2.30. "Eligible Rollover Distribution" means any distribution from the Plan of all or any portion of the balance to the credit of a Distributee, except that an Eligible Rollover Distribution shall not include: (i) any distribution to the extent such distribution is required under Section 11.2(b) and Section 401(a)(9) of the Code, (ii) any distribution that is one of a series of the substantially equal periodic payments (not less frequently than annually) made for the life of the Distributee or the joint lives (or joint life expectancies) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's Beneficiary, or for a period of ten years or more, (iii) the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities), and (iv) after tax contributions made in accordance with Appendix A. 2.31. "Employee" means an individual in the employ of the Employer who is employed on an hourly or salaried basis. 2.32. "Employer" means the Company and each other Participating Company, or any of them. 2.33. "Excess Compensation" means Compensation paid that exceeds the annual Social Security taxable wage base. 2.34. "Excess Contribution Percentage" means the Contribution percentage as calculated in Section 6.2 and which is applied to the Excess Compensation. 2.35. "Family Member" means a spouse, lineal ascendants and descendants of an Employee or former Employee and the spouses of such lineal ascendants and descendants. 2.36. "Highly Compensated Employee" or "Highly Compensated Participant" means an Employee or Participant who, during the relevant period, is treated as a Highly Compensated Employee. A Highly Compensated Employee includes any Employee who performs Service for the Employer during the determination year and who, during the look-back year (i) received Salary from the Employer in excess of $75,000 (as adjusted pursuant to Section 415(d) of the Code); (ii) received Salary from the Employer in excess of $50,000 (as adjusted pursuant to Section 415(d) of the Code) and was a member of the top-paid group for such year; or (iii) was an officer of the Employer or an Affiliate and received Salary during such year that is greater than 50% of the dollar limitation in effect under Section 415(b)(1)(A) of the Code. The term Highly Compensated Employee also includes (1) Employees who are both described in the preceding sentence if the term determination year is substituted for the term look-back year and the Employee is one of the 100 Employees who received the most Salary from the Employer or an Affiliate during the determination year, (2) Employees who are five percent owners at any time during the look-back year or determination year, and (3) Employees who have separated from Service or deemed to have separated from Service prior to the determination year, perform no Service for the Employer or an Affiliate during the determination year and were Highly Compensated Employees for either the separation year or any determination year ending on or after such Employee's 55th birthday. For purposes of (ii) above, the top-paid group consists of the top 20% of Employees ranked on the basis of Salary received during the determination year (excluding Employees who are described in Section 414(q)(8) of the Code). For purposes of (iii) above, the number of officers shall not exceed 50, or, if less, the greater of three Employees or 10% of the Employees (excluding Employees who are described in Section 414(q)(8) of the Code). If no officer has satisfied the Salary requirement of (iii) above during either a determination year or look-back year, the highest paid officer for such year shall be treated as a Highly Compensated Employee. For purposes of this Section 2.36, the "determination year" shall be the Plan Year and the "look-back" year shall be the Plan Year or the calendar year ending with or within the applicable determination year (or, in the case of a determination year that is shorter than 12 months, the calendar year ending with or within the 12-month period ending with the end of the applicable determination year), or, if elected, the calendar year immediately preceding the calendar year determination year. If an Employee is, during a determination year or look-back year, a Family Member of either a five percent owner who is an active or former Employee or a Highly Compensated Employee who is one of the 10 most Highly Compensated Employees ranked on the basis of Salary paid by the Employer or Affiliate during such year, then the Family Member and the five percent owner or top 10 Highly Compensated Employee shall be aggregated. In such case, the Family Member and five percent owner or top 10 Highly Compensated Employee shall be treated as a single Employee receiving Salary and contributions or benefits, as applicable, equal to the sum of such Salary and contributions or benefits, as applicable, of the Family Member and five percent owner or top 10 Highly Compensated Employee. The determination of who is a Highly Compensated Employee, including the determination of the number and identity of Employees in the top-paid group, the top 100 Employees, the number of Employees treated as officers, and the Salary that is considered, will be made in accordance with Section 414(q) of the Code and IRS Regulations. Notwithstanding the foregoing, the Administrative Committee may elect the simplified definition of Highly Compensated Employee and Highly Compensated Participant contained in Section 414(q)(12) of the Code. If the Administrative Committee so elects such definition, then $50,000 (as adjusted pursuant to Section 415(d) of the Code) shall be substituted for $75,000 in (i) above and (ii) above will be disregarded. 2.37. "Hours of Service" means the hours for which an Employee shall receive credit for purposes of the Plan, as follows: (a) One hour for each hour for which he is directly or indirectly paid, or entitled to payment, by the Company or an Affiliate for the performance of duties during the applicable computation period for which his Hours of Service are being determined under the Plan. (The hours shall be credited to the Employee for the computation period or periods in which the duties were performed, and shall include hours for which back pay has been either awarded or agreed to by the Company or an Affiliate as provided by regulations under the Act, with no duplication of credit for hours.) (b) One hour for each hour, in addition to the hours in paragraph (a) above, for which he is directly or indirectly paid, or entitled to payment, by the Company or an Affiliate, for reasons other than for the performance of duties during the applicable computation periods, such as paid vacation, paid holiday, paid sickness, and similar paid periods of nonworking time (excluding time when such Employee is receiving long term disability benefits). These hours shall be counted in the computation period or periods in which the hours for which payment is made occur. (c) One hour for each hour of the normally scheduled work hours for each day during any period which he is on leave of absence from work with the Company or an Affiliate for military service with the armed forces of the United States, but not to exceed the period required under the law pertaining to veterans' reemployment rights; provided that if he fails to report for work at the end of such leave during which he has reemployment rights he shall not receive credit for hours on such leave. (d) The number of normally scheduled work hours for each day of authorized leave of absence granted by the Company or an Affiliate in accordance with reasonable policies established therefor for which he is not compensated. When no time records are available, the Employee shall be given credit for Hours of Service based upon the number of normally scheduled work hours for each day he is on the Company's or an Affiliate's payroll, as determined in accordance with reasonable standards and policies from time to time adopted by the Administrative Committee under Section 2530.200b- 2(b) and (c) of the Labor Department Regulations, which are incorporated herein by this reference thereto. 2.38. "Individual Retirement Account Rollover Contribution" means the entire amount received by an Eligible Employee from an individual retirement account representing the entire amount in the account (the "qualifying amount") if no part of the amount in the account is attributable to any source other than (i) an employer's plan and trust described in Section 401(a) of the Code, that is exempt from federal income tax under Section 501(a) of the Code, or (ii) a qualified annuity plan meeting the requirements of Section 403(a) of the Code, and any earnings on such sums. An Individual Retirement Account Rollover Contribution shall be accepted only if the entire qualifying amount was received by the Eligible Employee in cash, and only such cash amount is included in the Individual Retirement Account Rollover Contribution. The Eligible Employee may transfer any portion of such cash amount to the Trust on or before the 60th day after the day on which the Participant received the qualifying amount. 2.39. "Investment Committee" means the Investment Committee provided for in Section 14.2. 2.40. "Investment Funds" means the funds of the Trust Fund, or any additional funds which the Investment Committee may establish from time to time by written notice to the Trustee in accordance with Section 7.2. 2.41. "IRS" means the United States Internal Revenue Service. 2.42. "Labor Department" means the United States Department of Labor. 2.43. "Normal Retirement Age" means the Participant's 65th birthday. 2.44. "Normal Retirement Date" means the first day of the month coincident with or next following the Participant's Normal Retirement Age. 2.45. "Participant" means any Employee who begins to participate in the Plan as provided in Section 3, and whose participation is not terminated. 2.46. "Participating Company" means the Company or any subsidiary of, or other corporation or entity affiliated or associated with, the Company, the Board of Directors or equivalent governing body of which shall adopt the Plan and the Trust by appropriate action with the written consent of the Board of Directors. By its adoption of the Plan, a Participating Company shall be deemed to appoint the Company, each of the Committees and the Trustee its exclusive agent to exercise on its behalf all of the power and authority conferred by the Plan or by the Trust upon the Company. The authority of the Company, the Committees and the Trustee to act as such agent shall continue until the Plan is terminated as to the Participating Company and the relevant Trust Fund assets have been distributed by the Trustee as provided in Section 16 of the Plan. 2.47. "Pre-tax Contributions" means 401(k) matched contributions and 401(k) unmatched contributions as described in Section 4.1. 2.48. "Pre-tax Contribution Account" means the 401(k) matched account and the 401(k) unmatched account as described in Section 4.1. 2.49. "Plan" means this Ogden Profit Sharing Plan, as the same may be amended from time to time. 2.50. "Plan Year" means the calendar year. 2.51. "Prior Plan" means, individually or collectively, the Ogden Corporation Profit Sharing Plan, Ogden Allied Maintenance Retirement Savings Plan, Ogden Allied Maintenance Security Fund, Ogden Allied Facility Management Corporation of Iowa Savings and Security Plan, effective as of January 1, 1992, Atlantic Design Profit Sharing Plan and effective as of April 1, 1994, the Lenzar Electro-Optics, Inc. Profit Sharing Plan. 2.52. "Qualified Domestic Relations Order" means any judgment, decree or order (including approval of a settlement agreement) which has been determined by the Administrative Committee in accordance with procedures established under the Plan, to constitute a qualified domestic relations order within the meaning of Section 414(p)(1) of the Code. 2.53. "Qualified Plan Rollover Contribution" means, (a) For Rollover Contributions made prior to January 1, 1993, the balance to the credit of an Eligible Employee under an employee retirement plan meeting the requirements of Section 401(a) of the Code, paid to an Eligible Employee in one or more distributions which constitute a "lump sum distribution" within the meaning of Section 402(d)(4)(A) of the Code (determined without reference to Sections 402(d)(4)(B) and (F) of the Code) or within one taxable year of the Eligible Employee on account of a termination of such plan or, in the case of a profit sharing plan or stock bonus plan, a complete discontinuance of contributions under such plan. The maximum amount which may be transferred prior to January 1, 1993 shall not exceed the fair market value of all the property received in the distribution reduced by: (i) the Eligible Employee's own contributions under such plan and any other amounts considered as contributed by him (determined by applying Section 72(f) of the Code); less (ii) any amounts previously distributed to him from such other plan and not includible in his gross income. (b) For Rollover Contributions made after January 1, 1993, a Qualified Plan Rollover Contribution means any distribution paid to an Eligible Employee from an employee retirement plan meeting the requirements of Section 401(a) of the Code, of all or any portion of the balance to the credit of an Eligible Employee, except that a Qualified Plan Rollover Contribution shall not include: (i) any distribution to the extent such distribution is required under Section 11.2(b) and Section 401(a)(9) of the Code, (ii) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's Beneficiary, or for a period of ten years or more, and (iii) the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). A Participant must transfer any portion of his distribution to be rolled over to the Trust on or before the 60th day after the day on which he received the distribution. 2.54. "Regulations" means the applicable regulations issued under the Code, the Act or other applicable law, by the IRS, the Labor Department or any other governmental authority and any proposed or temporary regulations or rules promulgated by such authorities pending the issuance of such regulations. 2.55. "Rollover Contribution" and "Rollover Contribution Account" means any contribution made by an Eligible Employee pursuant to Section 4.6 and that portion of the Participant's Account to which such contributions are credited. 2.56. "Salary" means for each Plan Year beginning before January 1, 1994, an Employee's first $200,000 (as adjusted for cost of living to the extent permitted by the Code and IRS Regulations) of total remuneration paid or payable for Service while an Eligible Employee, without giving effect to any reduction therein pursuant to an election under Section 4.1 nor any contributions by the Employer to the Plan or any other retirement plan maintained by the Employer, as reported on IRS Form W-2. For each Plan Year beginning on or after January 1, 1994, Salary means an Employee's first $150,000 (as adjusted by the Commissioner of the IRS, for years beginning after December 31, 1993, for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code) of total remuneration paid or payable for Service while an Eligible Employee, without giving effect to any reduction therein pursuant to an election under Section 4.1 nor any contributions by the Employer to the Plan or any other retirement plan maintained by the Employer, as reported on IRS Form W-2. 2.57. "Surviving Spouse" means the survivor of a deceased former Participant to whom such deceased former Participant had been legally married (as determined by the Administrative Committee) at the time of the former Participant's death or at the time benefit payments commence, whichever is earlier. 2.58. "Taxable Year" means the calendar year. 2.59. "Trust" or "Trust Fund" means the trust established by the Company as a part of the Plan. 2.60. "Trustee" means the trustee or trustees of the Trust who shall be appointed, and may be removed, with or without cause, by the Board of Directors. 2.61. "Valuation Date" means the last day of each calendar month and such other date or dates specified by the Administrative Committee. 2.62. "Vesting Service" means Years of Vesting Service counted from each anniversary beginning on an Eligible Employee's date of hire to termination date. 2.63. "Year of Service" means any Plan Year during which an individual completed at least 1,000 Hours of Service, as determined by the Administrative Committee in accordance with the Regulations. In addition, if an Employee does not complete 1,000 Hours of Service during the Plan Year in which his employment commenced but does complete at least 1,000 Hours of Service during the 12 consecutive month period beginning on the date his employment commenced, as determined by the Administrative Committee, then, for purposes of determining whether such Employee was participating in the Plan, as provided in Section 3, he shall be credited with a Year of Service for such 12 consecutive month period. 2.64. "Years of Vesting Service" means a twelve consecutive month period commencing on an Eligible Employee's date of hire, and each anniversary thereof, in which such Eligible Employee completes at least 1,000 Hours of Service. SECTION 3. PARTICIPATION 3.1. Date of Participation. Each person who is a Participant on the Effective Date shall continue to be a Participant in the Plan on such Effective Date. An Eligible Employee in the employ of Lenzar Electro-Optics, Inc. on March 31, 1994 shall become a Participant on April 1, 1994. Each other Eligible Employee who shall have attained age 21 shall become a Participant in the Plan on the first day of the month coincident with or next following the anniversary date of his date of employment; provided, that such Participant has completed at least 1,000 Hours of Service during a 12-month period beginning on his first day of employment with a Participating Company or an Affiliate. 3.2. Participation and Adjustments. The Administrative Committee shall take all necessary or appropriate action to ensure that each Employee eligible to become a Participant under this Section 3 becomes a Participant and, if it is determined that such an Employee has for any reason not been made a Participant in the Plan, such Employee shall retroactively become a Participant. The Company Discretionary Account, as described in Section 5.2, of an Employee who retroactively becomes a Participant or for whom an administrative adjustment is made shall, upon becoming a Participant or upon such adjustment, consist solely of the aggregate amount of contributions and earnings which would have been allocated to his Account had he become a Participant when first eligible. 3.3. Duration. The participation of a Participant shall end when no further benefits are payable to him on account of his participation in the Plan. 3.4. Reemployment. (a) If a reemployed Employee was a Participant at the time of his termination of employment, he shall immediately resume active participation in the Plan upon his reemployment and credit for his Hours of Service and Years of Service prior to his termination shall be reinstated. (b) If a reemployed Employee was not a Participant at the time he was terminated, his Hours of Service shall be immediately reinstated and he shall become a Participant as provided in Section 3.1. (c) If a reemployed Employee was not a Participant at the time he was terminated, and such Employee has incurred a Break in Service, his Hours of Service will not be credited and such Employee shall be treated as a new Employee. 3.5. Establishment and Maintenance of Separate Accounts. (a) The Administrative Committee shall establish and maintain or cause to be established and maintained in respect to each Participant an Account showing his interest under the Plan and in the Trust Fund (including separate accounts showing his respective interests, if any, in each of the Investment Funds) with respect to (i) Pre-tax Contributions made under Section 4.1, (ii) Company Contributions made under Sections 5.1 and 5.2, (iii) Roll-over Contributions made pursuant to Section 4.6, (iv) other Accounts (as set forth in Appendix A), and (v) such other accounts as may be needed from time to time, and all other relevant data pertaining thereto. Each Participant shall be furnished with a written statement of his Account and the value of each such separate interest at least annually and upon any distribution to him. In maintaining the Accounts under the Plan or causing them to be maintained, the Administrative Committee may conclusively rely on the valuations of the Trust Fund made in accordance with the Plan and the terms of the Trust Agreement. (b) The establishment and maintenance of, or allocations and credits to, the Account of any Participant shall not vest in any Participant any right, title or interest in and to any Plan assets or benefits except at the time or times and upon the terms and conditions and to the extent expressly set forth in the Plan and in accordance with the terms of the Trust. SECTION 4. SAVINGS FEATURES 4.1. Pre-tax Contributions. For each Plan Year, a Participant may elect, subject to such terms and conditions as issued by the Administrative Committee, to have his Participating Company reduce his Compensation and contribute such amount (which shall be in whole percentages from 1% to 15% of his Compensation) on his behalf to the Plan as a Pre-tax Contribution. However, in no event may a Participant have a Pre-tax Contribution of more than $9,240, as adjusted, for Plan Years beginning after December 31, 1994, for increases in the cost of living in accordance with Section 402(g)(5) of the Code, contributed to the Plan on his behalf in a Plan Year. Notwithstanding the foregoing and as described in Section 4.4, the Administrative Committee reserves the right, with or without notice, to limit a Highly Compensated Participant's Pre-tax Contributions as may be necessary in order to comply with the requirements of the Code. The Company shall transfer all Pre-tax Contributions to the Trustee as soon as practical and shall credit the first 3% of contributions to the 401(k) matched account and all other Pre-tax Contributions in excess of 3% to the 401(k) unmatched account. All Pre-tax Contributions under this Section shall be made by payroll deduction. 4.2. Distribution of Excess Pre-tax Contributions. In the event that the aggregate amount of Pre-tax Contributions exceeds the limitation set forth in Section 4.1, the amount of such excess, increased by any income and decreased by any loss allocable thereto shall be distributed to the Participant making such excess Pre-tax Contributions not later than April 15 of the calendar year following the calendar year in which the excess occurred. If a Participant also participates, in any calendar year, in any other plans subject to the limitations set forth in Section 402(g) of the Code and has made excess deferrals under the Plan when combined with the other plans subject to such limits, to the extent the Participant designates, in writing submitted to the Administrative Committee no later than the March 1 of the calendar year following the calendar year for which the Pre-tax Contributions were made, any Pre-tax Contributions under the Plan as excess deferrals, the amount of such designated excess, increased by any income and decreased by any losses attributable thereto, shall be refunded to the Participant no later than April 15 of the calendar year following the calendar year for which the Pre-tax Contributions were made. The income or loss allocable to any excess deferrals distributed pursuant to this Section 4.2 shall be equal to 10% of the income or loss for the period between the end of the Plan Year and the date of such distribution multiplied by the number of calendar months which have elapsed since the end of the Plan Year. For purposes of determining a calendar month, a distribution made on or before the 15th day of the month will be treated as being made on the last day of the preceding month; a distribution made after the 15th day of the month will be treated as being made on the last day of such month. The amount of excess deferrals that may be distributed with respect to a Participant shall be reduced by any excess contributions previously distributed pursuant to Section 4.6 with respect to such Participant for the Plan Year beginning with or within the Calendar Year to which such excess deferrals relate. 4.3. Election to Institute, Change, or Resume Contributions. A Participant may elect to begin, change, resume, or suspend Pre-tax Contributions as of the first day of any month by filing a prescribed form with the Administrative Committee at least 15 days prior to such date. The Administrative Committee may, in its discretion and in a uniform and nondiscriminatory manner, waive its right to such written notice at any time and from time to time. 4.4. Limitation on Pre-tax Contributions. Notwithstanding the Pre-tax Contributions made pursuant to Section 4.1, the Actual Deferral Percentage of the Highly Compensated Employees shall not exceed the greater of (i)and (ii), where (i) is the Actual Deferral Percentage for such Plan Year for the Eligible Employees who are not Highly Compensated Employees multiplied by 1.25; and (ii) is the Actual Deferral Percentage for such Plan Year for the Eligible Employees who are not Highly Compensated Employees multiplied by 2.0; provided that the Actual Deferral Percentage of the Highly Compensated Employees does not exceed the Actual Deferral Percentage for such other Eligible Employees by more than two percentage points or that the aggregate test described in Section 4.5(d)(ii) is passed. Without the consent of a Participant, the Administrative Committee may reduce or suspend the Pre-tax Contribution rate of a Highly Compensated Employee, return the respective portions of excess Pre-tax Contributions increased by any income and decreased by any losses of Highly Compensated Employees to such Highly Compensated Employees in accordance with Section 4.5. (a) A Participant's Pre-tax Contribution will be taken into account under the Actual Deferral Percentage test, as described herein, for a Plan Year only if such Contribution relates to Compensation that either (i) would have been received by the Participant during the Plan Year, but for the election pursuant to Section 4.1 or (ii) is attributable to Hours of Service performed by such Participant during the Plan Year and would have been received by the Participant within two and one-half months after the close of the Plan Year, but for the election pursuant to Section 4.1. A Participant's Pre-tax Contribution will be taken into account under the Actual Deferral Percentage test for a Plan Year only if it is allocated to the Participant's Pre-tax Contribution Account as of a date within such Plan Year. A Pre- tax Contribution will be considered allocated within a Plan Year if such allocation is not contingent on participation or the performance of service after such date and the Pre-tax Contribution is actually paid to the Trust no later than 12 months after the Plan Year to which such contribution relates. An Eligible Employee's Actual Deferral Ratio shall be zero if no Pre-tax Contribution is made on his behalf for such Plan Year. If the Plan and one or more other plans which include cash or deferred arrangements are considered as one plan for purposes of Sections 401(a)(4) and 410(b) of the Code, the cash or deferred arrangements included in such plans shall be treated as one arrangement for purposes of this Section 4.4. The Actual Deferral Ratio under this Section 4.4 for any Highly Compensated Employee who participates in two or more Code Section 401(k) cash or deferred arrangements of the Employer, shall be determined as if all such Section 401(k) cash or deferred arrangements were treated as one Section 401(k) cash or deferred arrangement. For purposes of determining the Actual Deferral Ratio of a Participant who is a Highly Compensated Employee subject to the family aggregation rules of Section 414(q)(6) of the Code because he is either a five percent owner or one of the 10 most Highly Compensated Employees, as described in Section 414(q)(6), the Pre-tax Contributions of such Highly Compensated Employee shall include the Pre-tax Contributions and salary of his Family Members, and such Family Members shall not be considered as separate Eligible Employees in determining the Actual Deferral Ratio. 4.5. Refund of Excess Contributions. (a) The Administrative Committee shall determine as of the end of the Plan Year, and at such time or times in its discretion, whether one of the Actual Deferral Percentage tests is satisfied for such Plan Year. This determination shall be made after first determining the treatment of excess deferrals within the meaning of Section 402(g) of the Code under Section 4.1. In the event that neither of such Actual Deferral Percentage tests is satisfied, the Administrative Committee shall, to the extent permissible under the Code and IRS Regulations, refund the excess contributions in the manner described in this Section 4.5. (b) Excess Contributions shall be determined for each such Highly Compensated Employee by reducing Pre-tax Contributions made on behalf of Highly Compensated Employees as follows: First, the Actual Deferral Ratio of the Highly Compensated Employee with the highest Actual Deferral Ratio is reduced to the extent necessary to satisfy the Actual Deferral Percentage test or cause such Ratio to equal the Actual Deferral Ratio of the Highly Compensated Employee with the next highest Ratio. Second, this process shall be repeated until the Actual Deferral Percentage test is satisfied. The amount of excess contributions of a Highly Compensated Employee is then equal to the total of the Pre-tax Contributions taken into account for the Actual Deferral Percentage test less the product of the Highly Compensated Employee's reduced Actual Deferral Ratio, if applicable, as determined pursuant to this Section 4.5 and his salary. This procedure shall be known as the leveling method, as described in IRS Regulation Section 1.401(k)-1(f)(2). In the case of a Highly Compensated Employee whose Actual Deferral Ratio is determined under the family aggregation rules, the amount of excess Pre-tax Contributions, shall be determined by reducing the Actual Deferral Ratio in accordance with the leveling method described in this Section 4.5 and the excess Pre-tax Contributions are allocated among the Family Members in proportion to the contributions of each Family Member that have been combined. The distribution of such excess Pre-tax Contributions shall be made to Highly Compensated Employees to the extent practicable before the 15th day of the third month immediately following the Plan Year for which such excess Pre-tax Contributions were made, but in no event later than the end of the Plan Year following such Plan Year or, in the case of the termination of the Plan in accordance with Section 16, no later than the end of the 12-month period immediately following the date of such termination. Notwithstanding the foregoing provisions of this Section 4.5, the amount of excess Pre-tax Contributions to be distributed pursuant to Section 4.2 with respect to a Participant for a Plan Year shall be reduced by any excess Pre-tax Contributions distributed to such Participant for such Plan Year pursuant to Section 4.1. In no case may the amount of excess Pre- tax Contributions to be refunded with respect to any Highly Compensated Employee exceed the amount of Pre-tax Contributions made on behalf of the Highly Compensated Employee for the Plan Year. (c) The distribution of any excess Pre-tax Contributions shall include the gains and losses allocable thereto for the Plan Year. The gain or loss allocable to the excess Pre- tax Contributions for the period between the end of the Plan Year and the distribution date is equal to 10% of the income allocated to such excess contributions for the Plan Year multiplied by the number of calendar months which have elapsed since the end of the Plan Year. For purposes of determining the number of calendar months, a distribution occurring on or before the 15th day of the month will be treated as having been made on the last day of the preceding month, a distribution made after the 15th day of the month will be treated as having been made on the first day of the next month. Notwithstanding the foregoing provisions of this Section, the amount of excess Pre-tax Contributions to be distributed with respect to a Highly Compensated Employee for a Plan Year, shall be reduced by any excess Pre-tax Contributions distributed to such Participant for such Plan Year pursuant to Section 4.1. In no case may the amount of such distributed excess Pre-tax Contributions exceed the amount of Pre-tax Contributions made on behalf of the Highly Compensated Employee for the Plan Year. (d) (i) Notwithstanding any other provision of the Plan, the sum of the Actual Deferral Percentage of those Eligible Employees who are Highly Compensated Employees and the Actual Contribution Percentage of those Eligible Employees who are Highly Compensated Employees shall not exceed the aggregate limit determined in accordance with Section 4.5(d)(ii). (ii) For purposes of this Section 4.5(d)(ii), the "aggregate limit" for a Plan Year means the greater of (A) and (B) where (A) is the sum of (1) 1.25 multiplied by the greater of the Actual Deferral Percentage or the Actual Contribution Percentage of those Eligible Employees who are not Highly Compensated Employees, and (2) two plus the lesser of the Actual Deferral Percentage or the Actual Contribution Percentage of those Eligible Employees who are not Highly Compensated Employees, provided that the amount shall not exceed twice the lesser of the Actual Deferral Percentage or the Actual Contribution Percentage of those Eligible Employees who are not Highly Compensated Employees and (B) is the sum of (1) 1.25 multiplied by the lesser of the Actual Deferral Percentage or the Actual Contribution Percentage of those Eligible Employees who are not Highly Compensated Employees, and (2) two plus the greater of the Actual Deferral Percentage or the Actual Contribution Percentage of those Eligible Employees who are not Highly Compensated Employees, provided that this amount shall not exceed twice the greater of the Actual Deferral Percentage or the Actual Contribution Percentage of those Eligible Employees who are not Highly Compensated Employees. (iii) The Administrative Committee shall determine as of the end of the Plan Year, and at such time or times in its discretion whether the aggregate limit has been exceeded. This determination shall be made after first determining the treatment of excess deferrals within the meaning of Section 402(g) of the Code under Section 4.1, then determining the treatment of excess contributions under Section 4.1, and then determining the treatment of excess aggregate contributions under Section 5.1(d). In the event that the aggregate limit is exceeded the Actual Contribution percentage of those Eligible Employees who are Highly Compensated Employees shall be reduced in the same manner as described in Sections 5.1 until the aggregate limit is no longer exceeded. 4.6. Rollover Contributions. (a) A Participant may make a Rollover Contribution to the Plan at any time of a Qualified Plan Rollover Contribution or an Individual Retirement Account Rollover Contribution. The Plan will also accept a Direct Rollover of an amount paid to the Plan on behalf of a Participant which would qualify as a Qualified Plan Rollover Contribution if paid to the Eligible Employee. If a Participant elects to make a Rollover Contribution, the Participant shall supply the Administrative Committee with evidence, assurances, opinions and certifications it may deem necessary to establish to its satisfaction that the amounts to be contributed qualify as a Qualified Plan Rollover Contribution, an Individual Retirement Account Rollover Contribution or a Direct Rollover and will not affect the qualification of the Plan or the tax-exempt status of the Trust under Sections 401(a) and 501(a) of the Code, respectively. The amount so transferred must consist of cash distributed from such other plan or any portion of the cash proceeds from the sale of distributed property other than cash, to the extent permitted by Section 402(a)(6)(D) of the Code. (b) Any Rollover Contribution shall be allocated to the appropriate Participant's Rollover Contribution Account which shall be established and separately accounted for, shall be invested in accordance with the direction of the Participant pursuant to Section 7, be debited or credited in accordance with Section 8, and shall be distributed in the same manner and at the same time as described in Sections 9 and 11 with respect to a distribution of benefits under the Plan to such Eligible Employee. (c) Each request by any Eligible Employee to make a Rollover Contribution shall be subject to review by the Administrative Committee which shall make a case by case determination that each Rollover Contribution meets the requirements set forth in Section 4.6(a) and such other requirements or conditions as the Administrative Committee may, from time to time and in its sole discretion, impose; provided, however, that any determination made by the Administrative Committee pursuant to this Section 4.6(c) shall not have the effect of discriminating in favor of Employees who are officers, shareholders or Highly Compensated Employees. SECTION 5. COMPANY CONTRIBUTIONS 5.1. Company Matched Contributions. A Participating Company will contribute $1.00 for each $1.00 of 401(k) Matched Contributions of each Participant up to 3% of Compensation. 5.2. Company Discretionary Contributions. For each Taxable Year, a Participating Company may on a discretionary basis contribute to the Plan a fixed dollar amount or a percentage of the total Compensation paid by such Participating Company to a Participant who participated in the Plan for such Plan Year; provided however, that an Employee who was not a Participant in a Prior Plan or who was not an Employee of the Company on January 1, 1991 shall not be entitled to receive a Company contribution until the completion of at least one Year of Service with a Participating Company. Such amount or percentage, if any, shall be determined by resolution of the Board of Directors of such Participating Company following the end of each Plan Year. The Company shall deliver a copy of such resolution fixing the annual contributions of the Participating Company duly certified by the Secretary or Assistant Secretary of the Company to the Trustee as soon as practical following the end of such Plan Year. In no event shall any contribution by a Participating Company exceed the amount deductible by it for federal income tax purposes. On or about the date of determination of the contribution, the Administrative Committee shall be advised of the amount of such payment upon which its allocation is to be calculated. 5.3. Time of Payment of Company Contributions. A Participating Company may make payment of its contribution, if any, for any Taxable Year on any date or dates it elects, provided that the total amount of its contribution for any Taxable Year shall be paid in full on or before such date as the Federal income tax laws applicable to such payment require the payment to e made in order to permit deduction of such payment for such Taxable Year. 5.4. Form of Payment of Company Contributions. The Participating Company's contribution for a Taxable Year shall be paid directly by the Company to the Trustee in cash or, at the option of the Participating Company, in whole or in part in other property acceptable to the Trustee. 5.5. Maintenance of Accounts Shall Not Vest any Right in Assets. The establishment and maintenance of, or allocations and credits to, the Account of any Participant shall not vest in any Participant any right, title or interest in and to any Plan assets or benefits except at the time or times and upon the terms and conditions and to the extent expressly set forth in the Plan and in accordance with the terms of the Trust. 5.6. Limitation on Company Matched Contributions. (a) Notwithstanding any other provision of this Section 5, the Actual Contribution Percentage for the Plan Year for Highly Compensated Employees shall not exceed the greater of the following Actual Contribution Percentage tests: (A) the Actual Contribution Percentage for such Plan Year of those Eligible Employees who are not Highly Compensated Employees multiplied by 1.25, or (B) the Actual Contribution Percentage for the Plan Year of those Eligible Employees who are not Highly Compensated Employees multiplied by 2.0; provided that the Actual Contribution Percentage for Highly Compensated Employees does not exceed the Actual Contribution Percentage for such other Eligible Employees by more than two percentage points. An Eligible Employee's Actual Contribution Percentage shall be zero if no contributions are made on his behalf for such Plan Year. If the Plan and one or more other plans of the Employer to which Pre-tax Contributions, Company Matched Contributions, or Company Discretionary Contributions are made are treated as one plan for purposes of Sections 401(a)(4) and 410(b) of the Code, all Pre-tax Contributions, Company Matched Contributions, or Company Discretionary Contributions of such plans shall be treated as being made under a single plan for purposes of this Section 5.6. The Actual Contribution Ratio taken into account under this Section 5.6 for any Highly Compensated Employee who is eligible to receive Company Matched Contributions or Company Discretionary Contributions under two or more plans described in Section 401(a) of the Code or arrangements described in Section 401(k) of the Code that are maintained by the Employer shall be determined as if all such contributions were made under a single plan. The determination and treatment of the Actual Contribution Ratio of any Participant shall satisfy such other requirements as may be required by the IRS Regulations. For purposes of determining the Actual Contribution Ratio of a Participant who is a Highly Compensated Employee subject to the family aggregation rules of Section 414(q)(6) of the Code because such Highly Compensated Employee is either a five percent owner or one of the 10 most Highly Compensated Employees as described in Section 414(q)(6) of the Code, the Company Matched Contributions and Company Discretionary Contributions and salary of such Participant shall include the Company Matched Contributions and Company Discretionary Contributions and salary of Family Members and such Family Members shall not be considered as separate Eligible Employees in determining the Actual Contribution Percentage. (b) The Administrative Committee shall determine as of the end of the Plan Year, and at such time or times in its discretion, whether one of the Actual Contribution Percentage tests specified in Section 5.6 is satisfied for such Plan Year. This determination shall be made after first determining the treatment of excess deferrals within the meaning of Section 402(g) of the Code under Section 4.2 and then determining the treatment of excess Pre-tax Contributions under Section 4.5. In the event that neither of the Actual Contribution Percentage tests is satisfied, the Administrative Committee shall refund or forfeit the excess aggregate contributions in the manner described in Section 5.6. (c) For purposes of this Section 5.6, "excess aggregate contributions" means, with respect to any Plan Year and with respect to any Participant, the excess of the aggregate amount of contributions (and any earnings and losses allocable thereto) made to (A) the Company Contribution Account (except to the extent used to meet the requirements of Section 4.4), and (B) the Pre-tax Contribution Account (to the extent permitted by the IRS Regulations and if the Administrative Committee elects to take into account Pre-tax Contributions when calculating the Actual Contribution Percentage under Section 5.6(a)) of Highly Compensated Participants for such Plan Year, over the maximum amount of such contributions that could be made to the Company Contribution Account and Pre-tax Contribution Account of such Participants without violating the requirements of Section 5.6(a). The amount of each Highly Compensated Participant's excess aggregate contributions shall be determined as follows: First, the Actual Contribution Ratio of the Highly Compensated Employee with the highest Actual Contribution Ratio is reduced to the extent necessary to satisfy the Actual Contribution Percentage test under Section 5.6(a) or cause such Ratio to equal the Actual Contribution Ratio of the Highly Compensated Employee with the next highest Ratio. Second, the process is repeated until the Actual Contribution Percentage test is satisfied. The amount of excess aggregate contributions for a Highly Compensated Employee is then equal to the total of the contributions taken into account for the Actual Contribution Percentage test minus the product of the Employee's reduced Actual Contribution Ratio as determined above and the Employee's Salary. This process shall be known as the levelling method, as described in IRS Regulation Section 1.401- (m)1(e)(2). In the case of a Highly Compensated Employee whose Actual Contribution Ratio is determined under the family aggregation rules, the amount of excess aggregate contributions, as defined in this Section 5.6(c), shall be determined by reducing the Actual Contribution Ratio in accordance with the leveling method described in this Section 5.6(c) and the excess aggregate contributions are allocated among the Family Members in proportion to the contributions of each Family Member that have been combined. (d) If the Administrative Committee is required to refund or forfeit excess aggregate contributions for any Highly Compensated Participant for a Plan Year in order to satisfy the requirements of Section 5.6(a), then the refund or forfeiture of such excess aggregate contributions shall be made with respect to such Highly Compensated Participants to the extent practicable before the 15th day of the third month immediately following the Plan Year for which such excess aggregate contributions were made, but in no event later than the end of the Plan Year following such Plan Year or, in the case of the termination of the Plan in accordance with Section 16, no later than the end of the 12-month period immediately following the date of such termination. For each such Participant, amounts so refunded or forfeited shall be made in the following order of priority: (A) to the extent permitted by law, by forfeiting nonvested amounts contributed to the Company Contribution Account, and earnings thereon; (B) by distributing vested amounts contributed to the Company Contribution Account, and earnings thereon, of the Highly Compensated Participant; and (C) by distributing amounts contributed to the Pre-tax Contribution Account (to the extent such amounts are included in the Actual Contribution Percentage), including amounts contributed to the Company Contribution Account, and earnings thereon, to the extent such amounts were based on Pre-tax Contributions so distributed, and earnings thereon. However, in no case may the amount of excess aggregate contributions refunded or forfeited with respect to any Highly Compensated Employee exceed the amount of Company Matched Contributions under Section 5.1 made on behalf of the Highly Compensated Employee for the Plan Year. All such distributions and forfeitures shall be made to, or shall be with respect to, Highly Compensated Participants on the basis of the respective portions of such amounts attributable to each such Highly Compensated Participant as determined under Section 5.6(b). The distribution of any excess aggregate contributions shall include the gains and losses allocable thereto for the Plan Year, as well as for the period between the end of the Plan Year and the date of the distribution. The gain or loss allocable to excess aggregate contributions is the gain or loss allocable to the Participant's Company Contribution Account attributable to contributions under Section 5.1 (and any Pre-tax Contribution included in the Actual Contribution Percentage test) to the extent not included in the Actual Deferral Percentage test multiplied by a fraction, the numerator of which is the excess aggregate contribution for the Participant of the Plan Year and the denominator is the Participant's Company Contribution Account attributable to contributions under Section 5.1 (and all amounts treated as such for purposes of the Actual Contribution Percentage test) at the end of such Plan Year, without regard to gains and losses attributable to such Accounts for the Plan Year. The gain or loss allocable to the excess aggregate contributions for the period between the end of the Plan Year and the distribution date is equal to 10% of the income allocated to such excess aggregate contributions for the Plan Year multiplied by the number of calendar months which have elapsed since the end of the Plan Year. For purposes of determining the number of calendar months, a distribution occurring on or before the 15th day of the month will be treated as having been made on the last day of the preceding month, a distribution made after the 15th day of the month will be treated as having been made on the first day of the next month. The amount of any forfeitures made pursuant to the Section 5.6 shall be used to reduce Company Contributions in accordance with Section 8.4. SECTION 6. ALLOCATION OF COMPANY AND MATCHING CONTRIBUTIONS 6.1. Allocation of Discretionary Company Contributions. (a) The Administrative Committee shall allocate the contribution of each Participating Company made in accordance with Section 5.2 among all Participants who are (i) employed by a Participating Company as of the last day of the Plan Year and (ii) eligible to receive a Company Contribution pursuant to Section 5.2. The contribution shall be allocated to the Company Discretionary Contribution Account of each such eligible Participant based upon the formula described in Section 6.2. (b) If he was not employed by the Employer on the last day of the Plan Year, then a contribution will be allocated with respect to a Participant whose participation in the Plan terminated during the Plan Year solely because of: (i) the attainment of (1) age 65 or (2) age 55 and the completion of 10 Years of Service, (ii) his death or (iii) his Disability. If the Plan fails to satisfy Section 401(a)(26) of the Code, Company Contributions under Section 5.2 shall be allocated among the Eligible Employees who are Participants for the Plan Year in which such contributions are made, in the proportion that the Compensation of each Participant bears to the total Compensation of all Participants for such Plan Year based upon the formula described in Section 6.2. 6.2. Discretionary Company Contribution Formula. (a) The Discretionary Company Contribution will be allocated to the Participants' Accounts by multiplying the Participant's Base Compensation by the Base Contribution Percentage and adding to the product his Excess Compensation multiplied by the Excess Contribution Percentage. (b) The Base Contribution Percentage shall equal the Company Discretionary Contribution divided by the sum of the Base Compensation of all Participants plus 2 times the Excess Compensation of all Participants. The Excess Contribution Percentage shall equal 2 times the Base Contribution Percentage, but in no event shall it be more than 5.7 percentage points above the base contribution percentage or such other maximum as may be announced by the IRS. 6.3. Allocation of Matching Contribution. A Participating Company's Company Matching Contributions for any Taxable Year under Section 5.1 shall be allocated by the Administrative Committee or its agent, as promptly as administratively possible after such Contribution shall have been made, to the Matching Contribution Account of each Participant of such Participating Company on whose behalf a Matching Contribution has been made. SECTION 7. INVESTMENT OF CONTRIBUTIONS 7.1. Investment by Trustees. All monies, securities or other property received as contributions under the Plan shall be delivered to the Trustee, to be managed, invested, reinvested and distributed for the exclusive benefit of the Participants and their Beneficiaries in accordance with the Plan, the Trust and any agreement with an insurance company or other financial institution constituting a part of the Plan and the Trust. 7.2. Investment Funds. (a) The Trust shall consist of the Investment Funds, in each of which each Participant who has any interest therein shall have an undivided proportionate interest. The Investment Committee shall have, from time to time and at any time, the right to establish additional Investment Funds to implement and carry out investment objectives and policies as established by the Investment Committee. The Investment Committee may from time to time delete Investment Funds on at least 30 days' prior written notice to the Trustee. Each Participant's undivided proportionate interest in each Investment Fund of the Trust shall be measured by the proportion that his account balance in such Investment Fund bears to the total account balances of all Participants in that Investment Fund as of the date that such interest is being determined. Interest, dividends and other distributions received and gains realized on securities or other property held in any Investment Fund shall be reinvested in such Investment Fund. (b) The Investment Funds shall consist of the following investments: (1) A "Company Stock Fund" which shall be invested in the common stock of Ogden Corporation and cash; (2) An "Equity Fund" which shall be invested by a professional manager or managers in such other companies' common stocks and other securities whose investment objectives are a blend of targets for appreciation, current income and growth in dividends; (3) A "Fixed Income Fund" which shall be invested in guaranteed interest or bank investment contracts or synthetic guaranteed interest or investment contracts, with the earnings of such contracts being blended for allocation purposes; (4) A "Merrill Lynch Treasury Fund", a mutual fund which invests in a portfolio of United States Treasury securities and equivalents; and, effective October 1, 1994, (5) The "Fidelity Magellan Fund" which shall be invested by a professional manager or managers in common stock and securities convertible into common stock of domestic, foreign and multinational issuers of all sizes that offer potential for growth; and (6) The "T. Rowe Price International Stock Fund" which shall be invested by Rowe Price-Fleming International Inc. in primarily common stocks of established non-United States companies in the Far East, Europe, South Africa, Australia, Canada and other areas. 7.3. Investment Elections. (a) A Participant's Pre-tax Contributions and Company Contributions shall be invested, at the written election of the Participant, in accordance with one of the following options: (i) 100% in one of the available Investment Funds; or (ii) in more than one Investment Fund in multiples of 5%. If a Participant does not make a written election, he shall be deemed to have elected to have his Account invested in the Merrill Lynch Treasury Fund. Each Participant is solely responsible for the selection of his investment options and the availability of an Investment Fund to Participants for investment under the Plan shall not be construed as a recommendation for investment in such Investment Fund. (b) Any investment direction given by a Participant shall be deemed to be a continuing direction until changed. A Participant may change his investment election under Section 7.3(a) with respect to future contributions as of the first day of each calendar quarter, provided, that such direction is given in writing, by filing an appropriate form with the Administrative Committee at least 30 days prior to such date or such earlier date as permitted by the Administrative Committee in accordance with rules uniformly applicable to Participants on a nondiscriminatory basis. (c) Subject to such rules as may be imposed by the Trustee or other financial institution, a Participant may elect to transfer amounts in his Account among the Investment Funds as of the first day of each calendar quarter, provided that such direction is given in writing by filing an appropriate form with the Administrative Committee at least 30 days prior to such date. A Participant may transfer such amounts among the Investment Funds such that the value of his Account is invested 100% in one of the available Investment Funds or in more than one Investment Fund, allocated in multiples of 5%. (d) The net credit balances in Participants' Accounts in the respective Investment Funds of the Trust Fund shall be adjusted, upward or downward, pro rata, so that such net credit balances will reflect the investment earnings of each Investment Fund of the Trust Fund as of that Valuation Date, using fair market values as determined by the Trustee and reported to the Administrative Committee, after such investment earnings for the appropriate Investment Fund has been reduced by any expenses chargeable to that Investment Fund which have been paid and which may be incurred but not yet paid. SECTION 8. VALUATIONS AND ADJUSTMENTS 8.1. Separate Accounts. The Administrative Committee shall maintain separate accounts in accordance with Section 4 and 5 for each Participant in the Plan and such other accounts pursuant to Appendix A. The Account of each Participant shall be credited with Contributions made on his behalf by a Participating Company and with earnings attributable to the assets held in his Account in accordance with Section 8.2. A Participant's Account shall be reduced by (i) all payments made to him or on his behalf, (ii) any amounts forfeited by him in accordance with Section 10.4, and (iii) any net losses attributable to the assets held in his Account. 8.2. Allocation of Earnings and Losses Valuation of Trust. (a) As of each Valuation Date in a Plan Year, and after giving effect to any hardship withdrawal under Section 9.4(b), any loan under Section 9.5, any transfer or rollover under Appendix A, but before giving effect to the receipt and allocation of any Company Contribution or Employee Pre-tax Contributions, and before giving effect to any repayments of loans under Section 9.5, the participation of any new Participants in the Plan, any adjustments, or any distributions under Section 11, all assets of the respective Investment Funds shall be valued at fair market value as determined by the Trustee. The Trustee shall adjust the net credit balances in the Accounts in the respective Investment Funds of the Trust Fund, upward or downward, pro rata, so that such net credit balances will reflect the investment earnings or losses of each Investment Fund of the Trust Fund as of that Valuation Date, using fair market values as determined by the Trustee and reported to the Administrative Committee. All determinations made by the Trustee with respect to fair market values and investment earnings shall be made in accordance with generally accepted principles of trust accounting, and such determinations when so made by the Trustee and any determinations by the Administrative Committee based thereon, shall be conclusive and binding upon all persons having an interest under the Plan. (b) With respect to the valuation of the shares held in the Company Stock Fund pursuant to Section 7.2(b), the cash withheld from Participants shall be delivered to the Trustee as soon as practicable. Upon receipt of such cash, the Trustee shall purchase shares in the Company Stock Fund as may be needed and as soon as practicable. The shares purchased shall be valued under the Plan at the closing price as of the next succeeding Valuation Date. Subsequent to the valuation of shares upon first entering the Company Stock Fund, such shares shall be valued at the closing price as of each Valuation Date thereafter. 8.3. Expenses. The expenses of administering the Plan, including (i) the fees and expenses of any Employee, investment manager, and of the Trustee for the performance of their duties under the Plan and the Trust, (ii) the expenses incurred by the members of each of the Committees in the performance of their duties under the Plan (including reasonable compensation for any legal counsel, certified public accountants, consultants, and agents and cost of services rendered in respect of the Plan), and (iii) all other proper charges and disbursements of the Trustee or the members of the Committees (including settlements of claims or legal actions approved by counsel to the Plan) may be paid out of the Trust Fund, and allocated to and deducted from the Accounts of Participants by the Committees in accordance with the provisions of Section 8.2 above, if the Company does not pay such expenses directly. However, the fees, expenses, charges and disbursements attributable to any Investment Fund shall be charged against the investment earnings of such Investment Fund as provided in Section 8.2 unless such expenses are deducted from the income of such Investment Fund, or, if such Investment Fund has no investment earnings in that Plan Year, shall be deducted pro rata from the Accounts of Participants electing to invest in such Investment Fund. The Administrative Committee may, at its discretion, direct that certain expenses shall be paid out of specified Investment Funds if the Administrative Committee deems it appropriate to reflect the cost of such Investment Funds. 8.4. Allocation of Forfeitures. Subject to Section 10.4(a), any forfeitures arising under the Plan shall be used to reduce the Company Contributions specified in Section 5. SECTION 9. ELIGIBILITY FOR BENEFITS 9.1. Retirement Date. (a) Any Participant who has attained his Normal Retirement Age or his Early Retirement Date, shall have a nonforfeitable right to the value of his Account (reduced by any unpaid loans) and shall be entitled to benefits equal to the full value of his Account. (b) If a Participant remains in employment after his Normal Retirement Date, or becomes a Participant after such date, he shall participate in the contributions and benefits of the Plan in the same manner as any other Participant. The deferred retirement date of a Participant who continues in employment after his Normal Retirement Date shall be the date of his termination of service. (c) A Participant shall be considered to have retired for the purposes of the Plan on the date his employment terminates on account of his Disability, regardless of his age. The determination of the Administrative Committee as to whether a Participant is disabled and the date of such Disability shall be final, binding and conclusive. 9.2. Distribution of Participant's Account on Retirement, Death, or Disability. (a) Upon the termination of service of a Participant on or after his Normal Retirement Date, Early Retirement Date, (or by reason of his death or Disability), an amount equal to the value of the Participant's Account as of the Valuation Date coincident with or next following (i) the date Service is terminated, provided that the Committee has received all the necessary forms from the Participant shall be paid from the Trust Fund. Such payment shall be by the method of distribution described and at the time specified in Section 11. (b) Subject to Section 11.3, if a former Participant dies before payment of the full value of his Account from the Trust Fund, an amount equal to the value of the unpaid portion thereof shall be paid to his Beneficiary from the Trust Fund. Such payment shall be made as specified in Section 11. 9.3. Distribution on other Termination of Service. Upon the termination of employment of any Participant which occurs other than on his retirement and for any reason other than death or Disability, the terminated Participant shall be paid in a lump sum (other than shares held in the Company Stock Fund) an amount equal to the vested value of his Account. If the terminated Participant files appropriate forms requesting a distribution from the Plan, his Account will be valued as of the Valuation Date coincident with or next following the later of (i) the effective date of termination of employment, (ii) the date of termination from the payroll and (iii) the receipt by the Company of the appropriate forms requesting a distribution. 9.4. In-Service and Hardship Withdrawals. (a) Notwithstanding the provisions of Section 9.2 and Section 9.3 the Administrative Committee may distribute to a Participant on the first day of any month following (i) his attainment of age 59-1/2 and (ii) the receipt of a written application, in a lump sum an amount equal to all or any part of the vested value of a Participant's Account. Notwithstanding the provisions of Section 9.2 and Section 9.3, the Administrative Committee may distribute to a Participant on the first day of any month following the receipt of a written application, in a lump sum an amount equal to all or any part of the value of the Participants' After-Tax Account (as provided for in Appendix A). (b) Upon the receipt of a written application from a Participant, the Administrative Committee may distribute to a Participant any vested portion or all of a Participant's Account that has been vested to the extent necessary to enable such Participant to meet an immediate and heavy financial need in his financial affairs, provided that (i) such Participant shall establish to the satisfaction of the Administrative Committee, in accordance with principles and procedures established by the Administrative Committee which are applicable to all persons similarly situated, that a withdrawal to be made by him pursuant to this Section 9.4(b) is to be made by reason of an immediate and heavy financial need as defined below and that such withdrawal is not in excess of the amount required to relieve such immediate and heavy financial need, and (ii) no amount in a Participant's Account that is deemed invested in an outstanding loan to the Participant may be withdrawn. A withdrawal by reason of an immediate and heavy financial need under this Section 9.4(b) may be requested by a Participant only after he has (i) withdrawn all employee contributions permitted to be withdrawn under this or any other plan maintained by the Employer and (ii) made all loans currently available under Section 9.5 or under any other plan maintained by the Employer. The amount of any withdrawal pursuant to this Section 9.4(b) shall not exceed the amount required to meet the financial emergency (including all applicable income taxes and penalties). Subject to the provisions of this Section 9.4(b), each Participant may withdraw all or any portion of the vested aggregate amount of his Pre-tax Contribution Account (excluding earnings on post 1988 Pre-tax Contributions) twice in a Plan Year. A Participant shall give the Administrative Committee written notice of a request for a withdrawal pursuant to the provisions of this Section 9 in accordance with such procedures as the Administrative Committee shall establish. No withdrawal pursuant to this Section 9 shall be of an aggregate amount less than $500. Withdrawals shall become effective on the last day of the month during which the Administrative Committee receives a properly executed withdrawal form, unless a later date is requested therein, provided such request is received within the first 15 days of the month in which the withdrawal is requested. Payment of any withdrawals pursuant to this Section 9.4(b) shall be made solely in cash. A Participant who makes a hardship withdrawal pursuant to this Section 9.4(b) shall be suspended from making any further Pre- tax Contributions for a period of twelve months, effective as of the next practicable payroll following the effective date of the withdrawal. Notwithstanding any other provision of the Plan, the Pre-tax Contributions of a Participant made in the Plan Year following the Plan Year during which a withdrawal pursuant to Section 9.4(b) was made, shall not exceed the applicable limit under Section 402(g) of the Code for such Plan Year less the amount of Pre-tax Contributions made by the Participant during the Plan Year during which the withdrawal pursuant to Section 9.4(b) was made. For purposes of this Section, the term "immediate and heavy financial need" means a situation in which a Participant or his dependents are confronted by extreme financial need that cannot be satisfied from other sources and shall be limited to the need of Funds for: (i) the payment of medical expenses described in Section 213(d) of the Code incurred by, or necessary (even though not yet incurred)/or the treatment of, the Participant, the Participant's spouse, or any dependents of the Participant (as defined in Section 152 of the Code); (ii) the Purchase (excluding mortgage payments) of a principal residence for the Participant; (iii) the payment of tuition and related educational expenses for the 12 months following the date of the withdrawal for post- secondary education of the Participant, his spouse, children, or dependents (as defined in Section 152 of the Code); (iv) the prevention of the eviction of the Participant from his principal residence or the prevention of foreclosure on the mortgage of the Participant's principal residence; or (v) such other immediate and heavy financial emergency as determined by the Administrative Committee pursuant to uniformly applicable guidelines and IRS Regulations. 9.5. Loans. (a) A Participant shall be entitled to apply for a loan from the vested value of his Account (other than shares held in the Company Stock Fund); provided, however, such Participant gives at least 15 days' prior written notice to the Administrative Committee. The maximum amount available for a loan under the Plan (when added to the outstanding balance of all other loans from the Plan to the Participant) shall not exceed 50% of the vested portion of the Participant's Account up to the maximum of $50,000, reduced by the excess (if any) of (i) the highest outstanding loan balance attributable to the Account of the Participant requesting the loan during the one year period ending on the day preceding the date of the loan, over (ii) the outstanding balance of all other loans from the Plan to the Participant on the date of the loan. Loans shall be granted in $50 increments with $500 established as the minimum amount of any loan. Authorization for such loans and the terms thereof shall be in the sole discretion of the Administrative Committee pursuant to uniform, nondiscriminatory rules consistently applied to all Participants. Effective January 1, 1995, only two outstanding loans are permissible under the Plan. There will be an administration fee charged for any second loan. Such administration fee will be paid directly by the Participant to the Company. For any loan approved prior to December 31, 1994, the Committee shall not grant a loan to any Participant unless and until a current unpaid loan for the same purpose including accrued interest, has been liquidated. (b) As a condition for obtaining a loan, the Participant shall execute a promissory note payable to the Trust Fund authorizing the repayment of the loan through payroll deductions, a reasonable maturity date (subject to the restrictions described below) and a rate of interest equal to the Trustee's announced prime lending rate plus 1% as in effect on the first business day of each month. The payment schedule shall provide for substantially level amortization with payments not less frequently than quarterly, equal to the amount necessary to amortize the balance due at maturity. The maturity date for any loan will not be more than five years after the date of the loan except for loans to acquire a principal residence which will have a maturity date that is not more than ten years after the date of the loan. A loan may not have a maturity date of less than six months after the date of the loan. Each payment of principal and interest shall be transmitted to the Trustee as soon as practicable after receipt by the Participating Company. The outstanding balance of any loan may be fully repaid at any time without penalty. (c) If a Participant has obtained a loan and subsequently defaults in making any repayment installment when due, and such default continues for 90 days thereafter, or in the event of the Participant's bankruptcy, impending bankruptcy, insolvency or impending insolvency, the loan shall be deemed to be in default and the entire unpaid balance shall immediately become due and payable. However, at the option of the Administrative Committee, the installments in default and all future installments may instead be withheld from the Participant's salary. If the unpaid balance becomes due and payable at any time, the Administrative Committee may direct the Trustee to pursue collection of the debt by any means generally available to a creditor where a promissory note is in default. If there remains any unpaid balance due on a loan to a Participant at the time his employment terminates for any reason, the loan shall terminate and the Trustee shall distribute to the Participant the promissory note evidencing the loan. However, the Participant, or his Beneficiary, shall have the right to repay such unpaid balance before receiving a distribution of his Account pursuant to Section 11. In no event shall any repayment of principal amounts on a loan obtained under this Section, or interest thereon, be taken into account in determining whether the limitations described in Section 12 (to conform to the requirements of Section 415 of the Code) are exceeded. (d) A loan shall be deemed an investment of the borrowing Participant's Account and shall not reduce the amount credited to his Account. At the time a loan is made, the amount loaned shall first be deemed an investment of, and allocated to, the Participant's Vested Interest in his Company Matched Contribution Account; to the extent the loan is in excess of such amounts, it shall then be deemed an investment of, and allocated to the Participant's 401(k) Matched Account not already allocated to a loan; to the extent it is in excess of such amounts, it shall then be deemed an investment of, and allocated to, the Participant's 401(k) Unmatched Account not already allocated to a loan; for those Participants that participated in the Lenzar Electro-Optic, Inc. Profit Sharing Plan, to the extent it is in excess of such amounts, it shall be deemed an investment of and allocated to such Participants' Prior 401(k) Account, as described in Appendix A, not already allocated to a loan; to the extent it is in excess of such amounts, it shall then be deemed an investment of, and allocated to, the Participant's Vested Interest in his Company Discretionary Account not already allocated to a loan and, for those Participants who participated in the Prior Plans, to the extent it is in excess of such amounts, it shall be deemed an investment of and allocated to their (i) Prior Company Accounts, (ii) Rollover Contribution Accounts and (iii) After-Tax Accounts, in such order, to extent the loan is in excess of such amounts. (e) The Investment Funds in which the Participant's Account is invested in accordance with Section 7 of the Plan shall be reduced by the amount of any loan made hereunder in the ratio that the value of each such Investment Fund bears to the value of all Investment Funds in which the Participant's Accounts are invested; provided, however, that the Company Stock Fund may not be reduced for any loan made hereunder. (f) The Administrative Committee shall, in accordance with its established standards, review and approve or disapprove a completed application as soon as practicable after its receipt thereof, and shall promptly notify the applicant of such approval or disapproval. In addition, in the event the Trustee, in its sole discretion, determines that it is not reasonably and prudently able, in the interests of Participants and Beneficiaries, to liquidate the necessary amount from any of the Investment Funds, the Trustee shall notify the Administrative Committee, and the amount to be paid to each Participant whose completed application designated that a loan be made from such Investment Fund shall be reduced in proportion to the ratio which the aggregate amount that the Trustee has advised the Administrative Committee may prudently be liquidated bears to the aggregate amount which all such Participants designated to be paid from such Investment Fund. (g) The right to receive loan repayments, including interest thereon, shall be considered an asset of the Plan and all loan repayments of principal and interest shall be credited to the Investment Funds that the Participant's future contributions are allocated on the date of such repayment in the same proportion as that in which each was liquidated and credited to the Account in the order reversed to the order used to make payment of the loan proceeds to the Participant. (h) Outstanding loans shall share in Plan expenses in a manner determined by the Administrative Committee. The Administrative Committee shall apply these rules on a uniform and nondiscriminatory basis. With appropriate notice, the Administrative Committee may amend these rules, including amendments that affect outstanding loans, as may be required to conform to applicable law or regulation. 9.6. Restrictions on Distributions. Notwithstanding any other provision of the Plan, a Participant's Pre-tax Contribution Account may not be distributed earlier than upon one of the following events: (i) The Participant's Retirement, death, Disability or termination of employment; (ii) the termination of the Plan without the establishment or maintenance of another defined contribution plan (other than an employee stock ownership plan or a simplified employee plan); (iii) the Participant's attainment of age 59-1/2 or upon the Participant's Hardship as described in Section 9.4(b); or (iv) the sale or disposition by the Employer to an unrelated corporation of (1) substantially all of the assets used in a trade of business or (2) the Employer's interest in a subsidiary, but only with respect to Participants who continue employment with the acquiring corporation or the subsidiary, as the case may be, and the acquiring corporation does not maintain the Plan after the disposition. SECTION 10. VESTED INTERESTS 10.1. Pre-tax Contributions. A Participant will be 100% vested and have a nonforfeitable right to the value of his Pre-tax Contribution Account. 10.2. Company Contributions. A Participant will become 100% vested and have a nonforfeitable right to the value of the Company Contribution Account upon his (i) Normal Retirement Age, (ii) Early Retirement Date, (iii) death, (iv) Disability, or (v) completion of five Years of Vesting Service. Any Participant who was eligible to participate in the Plan on December 31, 1990 shall be 100% vested in his Account. An Eligible Employee in the employ of Lenzar Electro-Optics, Inc. who became a Participant on April 1, 1994, shall be 100% vested in his Account. 10.3. Transferred Accounts. A Participant will be 100% vested in any account transferred to the Plan as referenced in Appendix A. 10.4. Break in Service for Vesting. (a) If a terminated Participant incurs five consecutive Breaks in Service before he returns to the employment of the Employer, any excess of the amount credited to such terminated Participant's Account over his Vested Interest shall be permanently forfeited by him upon the fifth such consecutive Break in Service, or upon receipt of his Vested Interest upon termination of service, whichever is earlier. (b) If the terminated Participant returns to the employment of the Employer prior to incurring five consecutive Breaks in Service, any excess of the amount credited to such terminated Participant's Account over his Vested Interest shall be reinstated and recredited, if necessary, by additional Company Contributions by his Participating Company to the Participant's Company Contribution Account as of the last day of the month in which the terminated Participant performs an Hour of Service, the last day of the next following month or by a priority reallocation of the then current forfeitures. As of any Valuation Date thereafter, such Participant's Vested Interest shall be determined by (i) adjusting the amount of his Account on the date of his most recent termination of employment as if such amount had been held in the Trust since the date of distribution as provided in Section 8, and then (ii) multiplying his Vested Interest by such adjusted total account, and then (iii) subtracting the amount of his distribution on his most recent termination of employment, adjusted as if such distribution had been held in the Trust since the date of his distribution as provided in Section 8, from his adjusted total account. Such Participant may repay to the Plan, in one lump cash sum within two years after reemployment, the full amount distributed to him pursuant to his prior termination of employment. Any amount repaid pursuant to this Section 10.4(b) shall be invested in the Investment Funds in the proportions selected in the most recent written election filed by the Participant with the Administrative Committee pursuant to Section 7.3 SECTION 11. METHOD OF PAYMENT OF BENEFITS 11.1. Payment of Benefits. Any benefit payable under the Plan pursuant to Section 9 shall be paid in one lump cash sum; provided, however, that a Participant may elect to receive the value of his Company Stock Fund in shares of Ogden Corporation Common Stock; further, provided, that with respect to a Participant's March 31, 1994 account balance under the Lenzar Electro-Optics, Inc. Profit Sharing Plan, such Participant may elect to have said account balance distributed by any method of payment which was available under such Plan as in effect on March 31, 1994. 11.2. Commencement of Payment. (a) Any benefit payable to a Participant under Section 11.1 shall be paid within 60 to 90 days after the end of the Plan Year in which an event specified in Section 9 occurs; provided, however, that a Participant may defer the distribution. Any amount so deferred shall remain in the Participant's Account until distributed; provided, however, such Participant shall not share in any contribution pursuant to Sections 5.1 or 5.2 but shall share in any earnings, losses, and expenses pursuant to Sections 8.2 and 8.3. (b) Notwithstanding any other provision of the Plan, unless otherwise provided by law, any benefit payable to a Participant shall commence no later than the April 1st of the calendar year following the calendar year in which such Participant attains age 70-1/2; provided, however, if a Participant attained age 70-1/2 prior to January 1, 1988, except as otherwise provided, any benefit payable to such Participant shall commence no later than April 1st of the calendar year following the later of (i) the calendar year in which the Participant attains age 70-1/2 or (ii) the calendar year in which the Participant retires. Such benefit shall be paid, in accordance with the IRS Regulations, over a period not extending beyond the life expectancy of such Participant and his Beneficiary. Life expectancy for purposes of this Section shall not be recalculated annually in accordance with the Regulations. (c) If distribution of a Participant's benefit has commenced prior to a Participant's death, and such Participant dies before his entire benefit is distributed to him, distribution of the remaining portion of the Participant's benefit to the Participant's Beneficiary shall be made at least as rapidly as under the method of distribution in effect as of the date of the Participant's death. (d) If a Participant dies before distribution of his benefit has commenced, distributions to any Beneficiary shall be made on or before the December 31st of the calendar year which contains the fifth anniversary of the date of such Participant's death; provided, however, at the Beneficiary's irrevocable election, duly filed with the Administrative Committee before the applicable commencement date set forth in the following sentence, any distribution to a Beneficiary may be made over a period not extending beyond the life expectancy of the Beneficiary. Such distribution shall commence not later than the December 31st of the calendar year immediately following the calendar year in which the Participant would have attained age 70-1/2, if later (or, in either case, on any later date prescribed by IRS Regulations). If such Participant's Surviving Spouse dies after such Participant's death but before distributions to such Surviving Spouse commence, this Section 11.2(d) shall be applied to require payment of any further benefits as if such Surviving Spouse were the Participant. (e) Pursuant to IRS Regulations, any benefit paid to a child shall be treated as if paid to a Participant's Surviving Spouse if such amount will become payable to such Surviving Spouse on the child's attaining majority, or other designated event permitted by the Regulations. (f) If a Participant who is a 5% owner attained age 70-1/2 before January 1, 1988, any benefit payable to such Participant shall commence no later than the April 1st of the calendar year following the later of (i) the calendar year in which the Participant attains age 70-1/2 or (ii) the earlier of (A) the calendar year within which the Participant becomes a 5% owner or (B) the calendar year in which the Participant retires. For purposes of this Section 11.2(f), a 5% owner shall mean a five percent owner of such Participant's Employer as defined in Section 416(i) of the Code at any time during the Plan Year in which such owner attains age 66 or any subsequent Plan Year. (g) All distributions made hereunder shall be made in accordance with the provisions of Section 401(a)(9) of the Code and IRS Regulations thereunder. 11.3. Time of Payment (a) Any election under Section 11.1 must be made by the payee upon or following the Participant's termination of employment by reason of his retirement, death, or Disability and prior to the date that payments commence pursuant to the provisions of the Plan. Subject to Section 11.3(b), payments shall be made no later than the 90th day following the date on which the amount of the payment under the Plan (or in the case of more than one payment, the first said payment) can be ascertained under the Plan. (b) Notwithstanding any other provision of the Plan, to the extent required by the Code and IRS Regulations, if the value of a Participant's Account exceeds or ever exceeded $3,500, no distribution shall be made to such Participant prior to the date he attains his Normal Retirement Age without his written consent. In the absence of receipt of such consent by the Administrative Committee prior to the 60th day following the date of the Participant's termination of Service, payment of the benefit to such Participant may commence as soon as practical after the Participant's attainment of Normal Retirement Age, which benefit shall be in an amount equal to the value of the Participant's Account as of the Valuation Date coincident with or immediately following the Participant's attainment of Normal Retirement Age and, during the period of deferral mandated by the absence of receipt of written consent, the Participant may change his investment direction under Section 7. (c) Benefits payable under the Plan to a Participant or Beneficiary from the Company Stock Fund, other than for a withdrawal due to an immediate and heavy financial need, an after-tax withdrawal, or loans, made pursuant to Section 9, shall be paid in cash, unless the Participant elects to receive such distribution in whole shares of the stock held in such Investment Fund or Funds (containing such legends and upon such terms and conditions and restrictions as the Administrative Committee may, in its sole discretion, direct), together with any cash credited to his Account either awaiting investment in such stock or representing fractional shares of such stock. 11.4. Direct Rollovers. Effective on or after January 1, 1993 a Distributee may elect, at a time and manner as permitted by the Administrative Committee, to have any portion of an Eligible Rollover Distribution paid as a Direct Rollover to an Eligible Retirement Plan, as specified by the Distributee. SECTION 12. MAXIMUM AMOUNT OF ALLOCATION 12.1. Application of Section 12. The provision of this Section 12 shall govern notwithstanding any other provisions of the Plan. 12.2. Maximum Additions to Account. Annual Additions to a Participant's Account may not exceed the lesser of (a) $30,000 or, if greater, one-fourth of the defined benefit dollar limitation set forth in Section 415(b)(1)(A) of the Code as in effect, or (b) 25% of the Participant's Salary. For this purpose, the term "Annual Additions" shall mean the sum of the following amounts which without regard to this Section 12 would have been credited to the Participant's Account for any Plan Year under the Plan and under any other defined contribution plans of the Employer or an Affiliate: (i) Company Contributions; (ii) Pre-tax Contributions and all elective contributions made under any cash or deferred arrangement within the meaning of Section 1.401(k)-1(g)(3) of IRS Regulations including excess deferrals; (iii) voluntary employee after-tax contributions made under any qualified employee pension benefit plan; (iv) forfeitures, if applicable; (v) contributions allocated to any individual medical account defined in Section 415(l)(2) of the Code that is part of a defined benefit plan maintained by the Company or Affiliate; and (vi) the amount allocated to a separate account established for post-retirement medical or life insurance benefits described in Section 419A(d)(1) of the Code.419A(d)(1) of the Code for such Participant, provided that the Participant is a "Key employee" as defined in Section 419A(d)(3) of the Code. The term Annual Additions shall include, whether or not refunded, excess deferrals, excess contributions and excess aggregate contributions, as described in Sections 4.2 and 4.5. Solely for purposes of this Section, Annual Additions shall include a Participant's contributions under a qualified cost-of-living arrangement described in Section 415(k)(2) of the Code but shall exclude Rollover Contributions. 12.3. Order of Reduction. If as a result of a reasonable error in estimating a Participant's Compensation, a reasonable error in determining the amount of Pre-tax Contributions, allocation of forfeitures, or under such other facts and circumstances as determined by the IRS, including the limitations of Section 12.2, amounts which would otherwise be allocated to a Participant's Account must be reduced, such reduction shall be made in the following order of priority, but only to the extent necessary: (a) Company Contributions made, first, pursuant to Section 5.1 and, second, pursuant to 5.2, and allocable to such Participant in respect of such Plan Year shall be reduced and the amount of such reduction shall be utilized to reduce Company Contributions which would otherwise be made to the Plan; and then (b) to the extent permitted by the Code and IRS Regulations, the amount of Pre-tax Contributions, exclusive of any earnings of the Trust Fund attributable thereto, shall be refunded to the Participant or, to the extent required by law, shall be held unallocated in a suspense account and shall be applied, as directed by the Administrative Committee in accordance with the law and regulations, as a credit to reduce the contributions of the Employer for the next Plan Year and in the event of termination of the Plan shall be returned to the Employer. 12.4. Additional Account Limitations. (a) In the event that, in any Plan Year and with respect to any Participant, the sum of the "Defined Contribution Fraction" (as defined in paragraph (b)(1)), and the "Defined Benefit Fraction" (as defined in paragraph (b)(2)) would otherwise exceed 1.0, the benefit payable under the defined benefit plan shall be reduced in accordance with the provisions of that plan, but only to the extent necessary to ensure that such limitation is not exceeded. (b) For purposes of Section 12.4(a), the following terms shall have the following meanings: (1) "Defined Contribution Fraction" shall mean, as to any Participant for any Plan Year, a fraction, (A) the numerator of which is the sum of the Annual Additions, for the Plan Year and all prior Plan Years, as of the close of the Plan Year and (B) the denominator of which is the sum of the lesser of the following amounts, determined for such Plan Year and for each prior Plan Year (A) the product of 1.25 multiplied by the dollar limitation in effect for such Plan Year under Section 12.2(a) or (B) the product of 1.4 multiplied by the amount which may be taken into account under Section 12.2(b) with respect to the Participant for such Plan Year; provided, however, that, for years ending prior to January 1, 1976, the numerator of such fraction shall in no event be deemed to exceed the denominator of such fraction; and, further provided, that the Administrative Committee, in determining the Defined Contribution Fraction may elect to use the special transitional rules permitted by Section 415 of the Code and IRS Regulations thereunder; and (2) "Defined Benefit Fraction" shall mean, as to any Participant for any Plan Year, a fraction, (i) the numerator of which is the projected annual benefit (determined as of the close of the Plan Year and in accordance with IRS Regulations) of the Participant under any defined benefit plan (as defined in Sections 414(j) and 415(k) of the Code) maintained by the Company or any of its Affiliates and (ii) the denominator is the lesser of (A) the product of 1.25 multiplied by the dollar limitation in effect under Section 415(b)(1)(A) of the Code for such Plan Year or (B) the product of 1.4 multiplied by an amount equal to 100% of the Participant's average for his high three years within the meaning of Section 415(b)(3) of the Code for such Plan Year. SECTION 13. DESIGNATION OF BENEFICIARIES 13.1. Beneficiary Designation. Each Participant shall file with the Administrative Committee a written designation of one or more persons as the Beneficiary who, subject to this Section 13.1, shall be entitled to receive the amount, if any, payable under the Plan upon his death. A Participant may from time to time revoke or change his beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Administrative Committee; provided, however, that if a Participant's spouse has consented to the designation of a Beneficiary as provided in Section 13.1, and the Participant revokes such beneficiary designation, no new beneficiary designation shall be effective unless it complies with Section 13.1. The last such designation received by the Administrative Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Administrative Committee prior to the Participant's death, and in no event shall it be effective as of a date prior to such receipt. If a Beneficiary shall die prior to receiving the distribution that would have been made to such Beneficiary had such Beneficiary's death not occurred, then for the purposes of the Plan the distribution that would have been received by such Beneficiary shall be made to the Participant's estate. 13.2. Failure to Designate Beneficiary. Subject to Section 13.1, if no such beneficiary designation is legally in effect at the time of a Participant's death, or if no designated Beneficiary survives the Participant, the payment of the amount, if any, payable under the Plan upon his death shall be made to the Participant's estate. If the Administrative Committee is in doubt as to the right of any person to receive such amount, the Administrative Committee may direct the Trustee to retain such amount, without liability for any interest thereon, until the rights thereto are determined, or the Administrative Committee may direct the Trustee to pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Plan and the Trust. SECTION 14. ADMINISTRATION OF THE PLAN 14.1. Powers and Duties of Administrative Committee. The Administrative Committee shall have general responsibility for the administration and interpretation of the Plan (including, but not limited to, complying with reporting and disclosure requirements, and establishing and maintaining Plan records). The Administrative Committee shall engage certified public accountants, who may be accountants for the Company, as it shall require or may deem advisable for purposes of the Plan. The Administrative Committee shall communicate any requirements and objectives of the Plan, and any audit information which may be pertinent to the investment of Plan assets to the Investment Committee, which shall establish investment standards and policies and communicate the same to the Trustee (or other funding agencies under the Plan). The Administrative Committee shall have no responsibility for the investment of assets under the Plan or the Trust. 14.2. Powers and Duties of Investment Committee. The Investment Committee shall periodically review the investment performance and methods of the Trustee and any other funding agency, including any insurance company, under the Plan. The Investment Committee shall have the authority to appoint, remove or change the Trustee and any other funding agency. The Investment Committee shall have the power to appoint or remove one or more investment advisers and to delegate to such adviser authority and discretion to manage (including the power to acquire and dispose of) the assets of the Plan, provided that (i) each adviser with such authority and discretion shall be either a bank, an insurance company or a registered investment adviser under the Investment Advisers Act of 1940, and shall acknowledge in writing that it is a fiduciary with respect to the Plan and (ii) the Investment Committee shall periodically review the investment performance and methods of each adviser with such authority and discretion. If annuities are to be purchased under the Plan, the Investment Committee shall determine what contracts should be made available to terminated Participants or purchased by the Trust. 14.3. Powers and Duties of Trustee. The Trustee shall have responsibility under the Plan for the management and control of the assets of the Plan and shall have responsibility for the investment and management of such assets to the extent that such assets are invested in an Investment Fund or the Trustee has been appointed an investment adviser pursuant to Section 14.2. 14.4. Agents, Report of Committees to Board. The Administrative Committee and the Investment Committee may arrange for the engagement of such legal counsel who may be counsel for the Employer, and make use of such agents and clerical or other personnel as they each shall require or may deem advisable for purposes of the Plan. Each of the Committees may rely upon the written opinion of such counsel and the accountants engaged by the Administrative Committee and may delegate to any such agent or to any subcommittee or member of such Committee its authority to perform any act hereunder, including without limitation, those matters involving the exercise of discretion, provided that such delegation shall be subject to revocation at any time at the discretion of each of the said Committees. Each of the Committees shall report to the Board of Directors, or to a committee of the Board of Directors designated for that purpose, as frequently as shall be specified by the Board of Directors or such committee, with regard to the matters for which it is responsible under the Plan. 14.5. Structure of Committees. The Administrative Committee and the Investment Committee each shall consist of three or more members, each of whom shall be appointed by, shall remain in office at the will of, and may be removed, with or without cause, by the Board of Directors. A majority of the members of the Administrative Committee shall be Employees (who may also be Directors.) Any member of either of the Committees may resign at any time. No member of either of the Committees shall be entitled to act on or decide any matter relating solely to himself or any of his rights or benefits under the Plan. In the event the Administrative Committee is unable to act in any matter by reason of the foregoing restriction, the Board of Directors shall act on such matter. The members of the Committees shall not receive any special compensation for serving in their capacities as members of such Committees but shall be reimbursed for any reasonable expenses incurred in connection therewith. Except as otherwise required by the Act, no bond or other security need be required of the Committees or any member thereof in any jurisdiction. Any person may serve on both of the Committees and any member of either of the Committees, any subcommittee or agent to whom either of the Committees delegates any authority, and any other person or group of persons, may serve in more than one fiduciary capacity (including service both as a trustee and administrator) with respect to the Plan. 14.6. Adoption of Procedures of Committees. Each Committee shall establish its own procedures and the time and place for its meetings, and provide for the keeping of minutes of all meetings. A majority of the members of a Committee shall constitute a quorum for the transaction of business at a meeting of such Committee. Any action of a Committee may be taken upon the affirmative vote of a majority of the members of the Committee at a meeting or without a meeting, by mail, telegraph or telephone, provided that all of the members of the Committee are informed by mail or telegraph of their right to vote on the proposal and of the outcome of the vote thereon. 14.7. Demands for Money. All demands for money of the Plan shall be signed by an officer or officers or such other person or persons as the Administrative Committee may from time to time designate in writing who shall cause to be kept full and accurate accounts of receipts and disbursements of the Plan, shall cause to be deposited all funds of the Plan to the name ad credit of the Plan, in such depositories as may be designated by the Investment Committee, shall cause to be disbursed the monies and funds of the Plan when so authorized by the Administrative Committee and shall generally perform such other duties as may be assigned to him from time to time by either of the Committees. 14.8. Claims for Benefits. All claims for benefits under the Plan shall be submitted in writing to, and within a reasonable period of time decided by, one person designated in writing by the Administrative Committee. Written notice of the decision on each such claim shall be furnished reasonably promptly to the claimant. If the claim is wholly or partially denied, such written notice shall set forth an explanation of the specific findings and conclusions on which such denial is based. A claimant may review all pertinent documents and may request a review by the Administrative Committee of such a decision denying the claim. Such a request shall be made in writing and filed with the Administrative Committee within a reasonable period of time, as specified by the Administrative Committee in writing from time to time, after delivery to said claimant of written notice of said decision by the Administrative Committee. Such written request for review shall contain all additional information which the claimant wishes the Administrative Committee to consider. The Administrative Committee may hold any hearing or conduct any independent investigation which it deems necessary to render its decision, and the decision on review shall be made as soon as possible after the Administrative Committee's receipt of the request for review. Written notice of the decision on review shall be promptly furnished to the claimant and shall include specific reasons for such decision by the Administrative Committee. For all purposes under the Plan, such decisions on claims (where no review is requested) and decisions on review (where review is requested) shall be final, binding and conclusive on all interested persons as to participation and benefit eligibility, the employee's amount of Compensation and as to any other matter of act or interpretation relating to the Plan. 14.9. Hold Harmless. To the maximum extent permitted by law, no member of the Administrative Committee or the Investment Committee shall be personally liable by reason of any contract or other instrument executed by him or on his behalf in his capacity as a member of such Committee nor for any mistake of judgment made in good faith, and the Employer shall indemnify and hold harmless, directly from its own assets (including the proceeds of any insurance policy the premiums of which are paid from the Employer's owns assets), each member of the Administrative Committee and the Investment Committee and each other officer, employee, or director of the Employer to whom any duty or power relating to the administration or interpretation of the Plan or to the management and control of the assets of the Plan may be delegated or allocated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the Plan unless arising out of such person's own fraud or bad faith. 14.10. Service of Process. The Secretary of the Company, or such other person as may from time to time be designated by the Board of Directors shall be the agent for service of process under the Plan. 14.11. Specific Powers and Duties. The Administrative Committee and the Investment Committee each shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under the Plan or the Trust as such Plan or Trust may be amended from time to time. It is intended that each of the Committees shall be responsible for the proper exercise of its own powers, duties, responsibilities, and obligations and shall not be responsible for any act or failure to act on the part of another Committee or of another fiduciary. SECTION 15. WITHDRAWAL OF PARTICIPATING COMPANY 15.1. Withdrawal of Participating Company. Any Participating Company (other than the Company) may withdraw from participation in the Plan by giving the Administrative Committee and the Trustee prior written notice in a resolution by its board of directors specifying a withdrawal date which shall be the last day of a month at least 30 days subsequent to the date such notice is received by the Trustee. The Administrative Committee may require any Participating Company to withdraw from the Plan, as of any withdrawal date specified by the Administrative Committee, for the failure of the Participating Company to make proper contributions or to comply with any other provision of the Plan and shall require a Participating Company's withdrawal upon complete and final discontinuance of the contributions. In the event of any such withdrawal, the Administrative Committee shall promptly notify the IRS and request such determination as counsel to the Plan may recommend and as the Administrative Committee may deem desirable. In such event, the Plan and the Trust as applied to the Employees of such Participating Company shall thereafter be administered by such Participating Company as a separate plan and trust whose terms are identical to the term of the Plan and the Trust as in effect immediately prior to such separation (except that such Participating Company alone shall be deemed the "Company" and its board of directors shall be deemed the "Board of Directors" thereunder) and the assets allocated to such separate trust shall be appropriately segregated; provided, however, that in the event of any transfer of assets to a successor employee benefit plan the provisions of Section 15.3 will apply. The decision of the Administrative Committee shall be final as to the assets to be allocated to such separate plan and trust in accordance herewith. 15.2. Distribution after Withdrawal. Upon withdrawal from the Plan by any Participating Company (other than the Company), such Participating Company shall not make any further contributions under the Plan and no amount shall thereafter be payable under the Plan to or in respect of any Participants then employed by such Participating Company except as provided in this Section 15. To the maximum extent permitted by the Act, any rights of Participants no longer employed by such Participating Company and of former Participants and their Beneficiaries under the Plan shall be unaffected by such withdrawal and any transfers, distributions or other dispositions of the assets of the Plan as provided in this Section 15 shall constitute a complete discharge of all liabilities under the Plan with respect to such Participating Company's participation in the Plan and any Participant then employed by such Participating Company. All determinations, approvals and notifications referred to above shall be in form and substance and from a source satisfactory to counsel for the Plan. To the maximum extent permitted by the Act, the withdrawal from the Plan by any Participating Company shall not in any way affect any other Participating Company's participation in the Plan. 15.3. Transfer to Successor Plan. No transfer of the Plan's assets and liabilities to a successor employee benefit plan (whether by merger or consolidation with such successor plan or otherwise) shall be made unless each Participant would, if either the Plan or such successor plan then terminated, receive a benefit immediately after such transfer which (after taking account of any distributions or payments to them as part of the same transaction) is equal to or greater than the benefit he would have been entitled to receive immediately before such transfer if the Plan had then been terminated. The Administrative Committee may also request appropriate indemnification from the employer or employers maintaining such successor plan before making such a transfer. SECTION 16. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST 16.1. Right to Amend, Suspend or Terminate Plan. (a) Subject to the provisions of Section 16.1(c), the Board of Directors reserves the right at any time to amend, suspend or terminate the Plan, any contributions thereunder, the Trust or any contract issued by an insurance carrier forming a part of the Plan, in whole or in part and for any reasons and without the consent of any Participating Company, Participant, Beneficiary or Surviving Spouse. Each Participating Company by its adoption of the Plan shall be deemed to have delegated this authority to the Board of Directors. The Plan shall automatically be terminated upon complete and final discontinuance of contributions thereunder. (b) The Administrative Committee may adopt any amendment which may be necessary or appropriate to facilitate the administration, management and interpretation of the Plan or to conform the Plan thereto, or to qualify or maintain the Plan and the Trust as a plan and trust, meeting the requirements of Sections 401(a) and 501(a) of the Code or any other applicable section of law (including the Act) and the Regulations issued thereunder, provided said amendment does not have any material effect on the currently estimated cost to the Employer of maintaining the Plan. Each Participating Company by its adoption of the Plan shall be deemed to have delegated this authority to the Administrative Committee. (c) No amendment or modification shall be made which would retroactively impair any rights to any benefit under the Plan which any Participant or Beneficiary would otherwise have had at the date of such amendment by reason of the contributions theretofore made and credited to his Account, except as provided in Section 16.2 below. 16.2. Retroactivity. Subject to the provisions of Section 16.1, any amendment, modification, suspension or termination of any provision of the Plan may be made retroactively if necessary or appropriate to qualify or maintain the Plan, the Trust and any contract with an insurance company which may form a part of the Plan as a plan and a trust, meeting the requirements of Sections 401(a), 401(k) and 501(a) of the Code or any other applicable section of law (including the Act) and the Regulations issued thereunder. 16.3. Notice. Notice of any amendment, modification, suspension or termination of the Plan shall be given by the Board of Directors, or the Administrative Committee, whichever adopts the amendment, to the other, and to the Trustee, and all Participating Companies. 16.4. No Further Contribution. Upon termination of the Plan, no Participating Company shall make any further contributions under the Plan and no amount shall thereafter be payable under the Plan to or in respect of any Participant except as provided in this Section 16. To the maximum extent permitted by the Act, transfers, distributions or other dispositions of the assets of the Plan as provided in this Section 16 shall constitute a complete discharge of all liabilities under the Plan. The Administrative Committee and the Investment Committee shall each remain in existence and all of the provisions of the Plan which in the opinion of such Committee are necessary for the administration of the Plan and the administration, distribution, transfer or other disposition of the assets of the Plan in accordance with this Section 16.4 shall remain in force. After (i) payment of or provision for all expenses and charges referred to in Section 8.3 and appropriate adjustment of all Accounts for such expenses and charges in the manner described in Section 8.3, (ii) appropriate adjustment of the Accounts of Participants who are employed as of the date of such termination in the manner described in Section 6.1 for any forfeitures arising under the Plan prior to such date (treating, for this purpose, any Participant whose service had terminated but who had not incurred five consecutive Breaks in Service immediately prior to such date) and (iii) adjustment for profits and losses of the Trust to such termination date in the manner described in Section 8.2, the interest of each Participant who is employed as of the date of such termination in the amount, if any, credited to his Account shall be nonforfeitable as of such date. In the event that upon or after the termination of the Plan, the Board of Directors shall determine that the continuance of the Trust is not in the best interest of the Participants, the Board of Directors may terminate the Trust and upon such termination the Trustee shall pay in a lump sum to each Participant the full amount credited to his individual account, without limiting the foregoing, any such distributions may be made in case or in property, or both, as the Administrative Committee in its sole discretion may direct. All determinations, approvals and notifications referred to above shall be in form and substance and from a source satisfactory to counsel for the Plan. 16.5. Partial Termination. In the event that a partial termination (within the meaning of the Act) of the Plan has occurred then (i) the interest of each Participant in his Account as to whom such termination occurred shall thereupon be fully vested, but shall otherwise be payable as though such termination had not occurred and (ii) the provisions of Sections 16.2, 16.3, 16.4 and Section 15.2 which, in the opinion of the Administrative Committee, are necessary for the execution of the Plan and the allocation and distribution of the assets of the Plan shall apply. 16.6. Exclusive Benefit of Participants and Beneficiaries. Except as provided in Sections 17.4, 17.15 and 17.16 or as required by a Qualified Domestic Relations Order, in no event shall any part of the funds of the Plan (other than such part as is required to pay taxes, if any, and administration expenses as provided in Section 8.3) be used for or diverted to any purposes other than for the exclusive benefit of Participants and their Beneficiaries and Surviving Spouses under the Plan. Upon the transfer by a Participating Company of any money to the Trustee, all interest of the Participating Company therein shall cease and terminate. SECTION 17. GENERAL LIMITATIONS AND PROVISIONS 17.1. All Risk on Participants and Beneficiaries. Each Participant, former Participant, Surviving Spouse, and Beneficiary shall assume all risk in connection with any decrease in the value of the assets of the Trust and the Participants' Accounts and neither the Employer nor the Committees shall be liable or responsible therefor. 17.2. Trust is Sole Source of Benefits. The Trust shall be the sole source of benefits under the Plan and, except as otherwise required by the Act, the Employer, and the Committees assume no liability or responsibility for payment of such benefits, and each Participant, Surviving Spouse, Beneficiary or other person who shall claim the right to any payment under the Plan shall be entitled to look only to the Trust for such payment and shall not have any right, claim or demand therefor against the Employer, the Committees or any member thereof, or any employee, officer or director of the Employer. 17.3. No Right to Continued Employment. Nothing contained in the Plan shall give any employee the right to be retained in the employment of the Employer or any of its subsidiaries or affiliated or associated corporations or affect the right of any such employer to dismiss any employee. The adoption and maintenance of the Plan shall not constitute a contract between the Employer and any employee or consideration for, or an inducement to or condition of, the employment of any employee. 17.4. Payment on Behalf of Payee. If the Administrative Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his affairs because of illness or accident, or is a minor, or has died, then any payment due him or his estate (unless a prior claim for such amount has been made by a duly appointed legal representative) may, if the Administrative Committee so elects, be paid to his spouse, a child, a relative, an institution maintaining or having custody of such person, or any other person deemed by the Administrative Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Plan and the Trust therefor. 17.5. No Alienation. Except insofar as may otherwise be required by law or pursuant to the terms of a Qualified Domestic Relations order, no amount payable at any time under the Plan and the Trust shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person and any attempt to so alienate or subject any such amount, whether presently or thereafter payable, shall be void, if any person shall attempt to, or shall alienate, sell, transfer, assign, pledge, attach, charge or otherwise encumber any amount payable under the Plan and the Trust, or any part thereof, or if by reason of his bankruptcy or other event happening at any such time such amount would be made subject to his debts or liabilities or would otherwise not be enjoyed by him, then the Administrative Committee, if it so elects, may direct that such amount be withheld and that the same or any part thereof be paid or applied to or for the benefit of such person, his spouse, children or other dependents, or any of them, in such manner and proportion as the Administrative Committee may deem proper. The prohibition against assignment or alienation of benefits contained in this Section 17.5 shall not apply to any loan to a Participant made under Section 9.5. 17.6. Missing Payee. If the Administrative Committee cannot ascertain the whereabouts of any person to whom a payment is due under the Plan, and if, after five years from the date such payment is due, a notice of such payment due is mailed to the last known address of such person, as shown on the records of the Administrative Committee or the Employer, and within three months after such mailing such person has not made written claim therefor, the Administrative Committee, if it so elects, after receiving advise from counsel to the Plan, may direct that such payment and all remaining payments otherwise due to such person be canceled on the records of the Plan and the amount thereof applied to reduce the contributions of the Participating Company, and upon such cancellation, the Plan and the Trust shall have no further liability therefor except that, in the event such person later notifies the Administrative Committee of his whereabouts and requests the payment or payments due to him under the Plan, the amount so applied shall be paid to him as provided in Section 11. 17.7. Required Information. Each Participant shall file with the Administrative Committee such pertinent information concerning himself, his Surviving Spouse or Beneficiary as the Administrative Committee may specify, and no Participant, Surviving Spouse, Beneficiary, or other person shall have any rights or be entitled to any benefits under the Plan unless such information is filed by or with respect to him. 17.8. Subject to Trust Agreement. Any and all rights or benefits accruing to any persons under the Plan shall be subject to the terms of the trust agreement which the Company shall enter into with the Trustee providing for the administration of the Trust Fund. If the payment of any benefit under the Plan is provided for by a contract with an insurance company, the payment of such benefit shall also be subject to all the provisions of such contract. 17.9. Communications to Committees. All elections, designations, requests, notices, instructions, and other communications from a Participating Company, a Participant, Surviving Spouse, Beneficiary or other person to the Committees required or permitted under the Plan shall be in such form as is prescribed from time to time by each such Committee, shall be mailed by first- class mail or delivered to such location as shall be specified by each such Committee, and shall be deemed to have been given and delivered only upon actual receipt thereof by such Committee at such location. 17.10. Communications from Participating Company or Committees. All notices, statements, reports and other communications from a Participating Company or any of the Committees to any employee, Participant, Surviving Spouse, Beneficiary or other person required or permitted under the Plan shall be deemed to have been duly given when delivered to, or when mailed by first-class mail, postage prepaid and addressed to, such employee, Participant, Surviving Spouse, Beneficiary or other person at his address last appearing on the records of the Administrative Committee, or when posted by the Participating Company or such Committee as permitted by law. 17.11. Gender. Whenever used in the Plan the masculine gender includes the feminine. 17.12. Captions. The captions preceding the sections of the Plan have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provisions of the Plan. 17.13. Applicable Law. The Plan and all rights thereunder shall be governed by and construed in accordance with the Act, the Code and the laws of the State of New York. 17.14. Mistake of Fact. Notwithstanding any other provisions herein contained, if any contribution is made by a mistake of fact, such contribution shall upon the direction of the Administrative Committee, which shall be given in conformity with the provisions of the Act, be returned, without liability to any person. 17.15. Qualification of Plan. Notwithstanding any other provisions herein contained, the Plan is amended and restated on the condition that the Plan, and the trust agreement established hereunder shall be approved by the IRS as a qualified and exempt plan and trust under the provisions of the Code and IRS Regulations so that contributions to the Trust may be deducted for federal income tax purposes, within the limits of such Code and Regulations, and to be non-taxable to Participants when contributed. If such approval should be denied for any reason (including failure to comply with any conditions for such approval imposed by the IRS), contributions made after the execution of the trust agreement and prior to such denial shall be returned, without any liability to any person, within one year after the date of denial of such approval. 17.16. Deductibility of Contributions. Notwithstanding any other provisions herein contained, all contributions are hereby expressly conditioned upon their deductibility under Section 404 of the Code and IRS Regulations, as amended from time to time, and if the deduction for any contribution is disallowed in whole or in part, then such contribution (to the extent the deduction is disallowed) shall upon direction of the Administrative Committee, which shall be given in conformity with the provisions of the Act, be returned, without liability to any person, within one year after such disallowance. SECTION 18. TOP HEAVY PROVISIONS 18.1. Top Heavy Plan. The Plan will be considered a Top Heavy Plan for any Plan Year if it is determined to be a Top Heavy Plan as of the last day of the preceding Plan Year (or, with respect to the first Plan Year, the last day of such Plan Year). For purposes of determining whether the Plan is a Top Heavy Plan, actuarial assumptions which reflect reasonable mortality experience and a reasonable interest rate that uniformly applies for accrual purposes under all plans maintained by the Company and Affiliates shall be used. The Value of a Participant's Account shall be determined as of the last valuation date used for computing Plan costs for minimum contribution purposes which occurs within the Plan Year in which the determination is being made, and shall include amounts distributed to or on behalf of the Participant within the four preceding Plan Years. Notwithstanding any other provisions in the Plan, the provisions of this Section 18 shall apply and supersede all other provisions in the Plan during each Plan Year with respect to which the Plan is determined to be a Top Heavy Plan. 18.2. Definitions. For purposes of this Section 18 and as otherwise used in the Plan, the following terms shall have the meanings set forth below: (a) "Determination Date" means the last day of the preceding Plan Year or the last day of the first Plan Year. (b) "Key Employee" means: (1) each person (and his Beneficiary) who at any time during the five Plan Years ending on the Determination Date: (i) was an officer of the Company having an annual Salary greater than 50% of the amount in effect under Section 415(b)(1)(A) of the Code for any such Plan Year; (ii) was one of the 10 Employees owning the largest interest of the Company and its Affiliates but only if he received Salary equal to or greater than the dollar amount applied for purposes of Section 415(c)(1)(A) of the Code for the calendar year ending coincident with or immediately after the Determination Date; or (iii) owned at least 5% of the Company's outstanding shares of stock or at least 5% of the total combined voting power of Ogden Corporation's shares of stock, or owned at least 1% of Ogden Corporation's shares of stock, and whose annual Salary from Ogden Corporation exceeds $150,000. (2) The following special rules apply to this definition: (i) No more than 50 officers, or, if less, the greater of three or 10% of all Employees will be Key Employees under Section 18.2(b)(i)(A). If there are more officers than are counted under the preceding sentence, only those who had the highest aggregate Salary during the five Plan Years ending on the Determination Date will be considered Key Employees. (ii) A person is an officer only if he is in regular and continued employment as an administrative executive of the Company or Participating Company. (iii) No person will be a Key Employee under more than one paragraph of this definition unless he also is a Beneficiary of a deceased Key Employee. (iv) A person will be treated as owning all shares of stock which he owns directly or constructively by application Section 318 of the Code. (v) For purposes of determining whether a person is a 1% or 5% owner of Ogden Corporation, his ownership interest in any entity related to Ogden Corporation solely by reason of Sections 414(b), (c) or (m) of the Code will be disregarded. (iv) For purposes of determining whether a person receives an annual Salary in excess of $150,000, Salary received from each Company and Affiliate shall be taken into account. (c) "Non-Key Employee" means: (i) any Employee who is not a Key Employee, or (ii) a Beneficiary of a Non-Key Employee. (d) "Permissive Aggregation Group" means all qualified employee pension benefit plans in the Required Aggregation Group and any qualified employee pension benefit plans sponsored by the Employer which are not part of the Required Aggregation Group, but which satisfy the requirements of Sections 401(a)(4) and 410 of the Code when considered together with the Required Aggregation Group and which the Company elects to have included in the Permissive Aggregation Group. (e) "Required Aggregation Group" means the Plan and any other qualified employee pension benefit plan sponsored by the Employer (i) in which a Key Employee participates or (ii) which enables the Plan to meet the requirements of Sections 401(a)(4) or 410 of the Code. (f) "Top Heavy Group" means all qualified employee pension benefit plans of the Employer in the Required Aggregation Group and any other qualified employee benefit plan of the Employer which the Employer elects to aggregate as part of a Permissive Aggregation Group if, on any Determination Date, the Value of the cumulative annual accrued benefits for Key Employees under all defined benefit plans and the aggregate Value of all Key Employees' accounts under all defined contribution plans exceed 60% of a similar sum determined for all Employees. For purposes of that computation, the account balances and cumulative annual accrued benefits of a Participant (i) who is a Non-Key Employee but who was a Key Employee in a prior Plan Year, or (ii) who has not been credited with one Hour of Service with any Employer at any time during the Five Year period ending on the Determination Date will be disregarded. If the aggregated plans do not have the same Determination Date, this test will be made using the Value calculated as of each such plan's Determination Date occurring during the same Plan Year. (g) "Top Heavy Plan" means the Plan if, on any Determination Date, the present Value of the Account under the Plan for Key Employees exceeds 60% of the Value of the Accounts under the Plan for all Employees. For purposes of the comparison, the Accounts of all Non-Key Employees who were, but no longer are, Key Employees will be disregarded. The Plan is Super Top Heavy if it would be a Top Heavy Plan if 90% were substituted for 60% wherever it appears in the definition of Top Heavy and Top Heavy Group. (h) "Top Heavy Plan Year" means any Plan Year during which the Plan is Top Heavy or part of a Top Heavy Group. (i) "Value" means: (i) for all defined benefit plans, the present value calculated as provided in those plans; and (ii) for all defined contribution plans, the fair market value of each Participant's account (including amounts attributable to voluntary employee contributions from a qualified employee pension benefit plan sponsored by the Company or an Affiliate) determined as of the most recent Determination Date increased by: (A) distributions made during the five Plan Years ending on the Determination Date (except distributions already included in determining the Value of the Accounts distributions made during the Five Plan Years preceding the Determination Date under a terminated plan which, if it had not been terminated, would have been required to be included in the Required Aggregation Group); and (B) all rollover contributions distributed from the plans to a qualified employee benefit plan not sponsored by the Company or an Affiliate, and decreased by; (C) any deductible employee contributions; (D) rollover contributions received by the plans after December 31, 1983 from a qualified employee benefit plan not sponsored by the Company or an Affiliate; and (E) rollover contributions distributed from the Plan to a qualified employee pension benefit plan by the Company or an Affiliate. 18.3. Top Heavy Vesting. (a) If a Plan is a Top Heavy Plan with respect to any Plan Year, a Participant's nonforfeitable percentage of his Company Contribution Account shall not be less than the amount determined in accordance with the following vesting schedule:
Years of Vesting Service Percentage less than 3 0% 3 or more 100%
(b) In the event the vesting provisions of Section 10.2 are amended, or changed on account of the Plan becoming or ceasing to be a Top Heavy Plan, any Participant who has completed at least three Years of Service, for purposes of determining a Participant's nonforfeitable right to his Company Contribution Account, may elect to have the nonforfeitable percentage of such Company Contribution Account computed under the Plan without regard to such amendment or change by notifying the Administrative Committee in writing within the election period hereinafter described. The election period shall begin on the date such amendment is adopted or the date such change is effective, as the case may be, and shall end no earlier than the latest of the following dates: (i) the date which is 60 days after the day such amendment is adopted; (ii) the date which is 60 days after the day such amendment or change becomes effective; or (iii) the date which is 60 days after the day the Participant is given written notice of such amendment or change by the Administrative Committee. Any election made pursuant to this Section 18.3(b) shall be irrevocable. 18.4. Minimum Contribution. Subject to Section 18.5, for each Plan Year that the Plan is a Top Heavy Plan, the Company Contribution allocable to the Account of each Non-Key Employee who has satisfied the eligibility requirements of Section 3.1, whether or not a Participant in the Plan and who is in the employ of the Employer at the end of the Plan Year, regardless of his Salary, shall not be less than the lesser of (i) 3% of such Non-Key Employee's Salary, within the meaning of Section 415 of the Code, or (ii) the percentage at which contributions and forfeitures for such Plan Year are made and allocated on behalf of the Key Employee for whom such percentage is the highest. For the purpose of determining the appropriate percentage under clause (ii), all defined contribution plans required to be included in a Required Aggregation Group shall be treated as one plan. Clause (ii) shall not be applicable if the Plan is included in a Required Aggregation Group which enables a defined benefit plan also required to be included in said Required Aggregation Group to satisfy Sections 401(a)(4) or 410 of the Code. 18.5. Limitations on Contributions. (a) For each Plan Year that the Plan is a Top Heavy Plan, 1.0 shall be substituted for 1.25 as the multiplicand of the dollar limitation in determining the denominator of the defined benefit plan fraction and of the defined contribution plan fraction for purposes of Section 415(e) of the Code. (b) If, after substituting 90% for 60% wherever the latter appears in Section 416(g) of the Code, the Plan is not determined to be a Top Heavy Plan, the provisions of Section 18.5(a) shall not be applicable if the minimum Company Contribution allocable to the Account of any Participant who is not a Key Employee as specified in Section 18.4 is determined by substituting "4%" for "3%". 18.6. Other Plans. The Administrative Committee shall, to the extent permitted by the Code and in accordance with IRS Regulations, apply the provisions of this Section 18 by taking into account the benefits payable and the contributions made under any other plans maintained by the Employer or any of its subsidiaries or affiliated or associated entities which are qualified under Section 401(a) of the Code to prevent inappropriate omissions or required duplication of minimum benefits or contributions. OGDEN SERVICES PROFIT SHARING PLAN APPENDIX A In accordance with Section 8.1, this Appendix A serves to identify the various accounts maintained under the Plan, as in effect on January 1, 1995, that were transferred from plans and trusts sponsored and maintained by Affiliates of the Company or Ogden Corporation and that were qualified and tax exempt under Sections 401(a) and 501(c) of the Code. These accounts are subject to all of the provisions of the Plan except where otherwise noted. 1. AFTER-TAX ACCOUNT - This account was established to receive the after-tax contributions (and earnings thereon) of employees who formerly participated in the Ogden Allied Services Saving and Security Plan and the Ogden Corporation Profit Sharing Plan. No further contributions will be credited to this account under any circumstances. Any Participant on whose behalf such an account was established shall be fully vested in such account at all times. 2. PRIOR COMPANY ACCOUNT - This account was established to receive the (i) Company Contributions (and earnings thereon) credited to the accounts of employees who formerly participated in the Allied Maintenance Corporation Variable Income (Stock Savings) Retirement Plan, the Ogden Allied Services Saving and Security Plan, the Ogden Food Service Corporation Pension Plan and the Nedicks Pension Plan, Ogden Corporation Profit Sharing Plan, and the Atlantic Design Profit Sharing Plan and (ii) the company contributions (and earnings thereon) credited to the accounts of employees who formerly participated in the Lenzar Electro-Optics, Inc. Profit Sharing Plan. No further contributions will be credited to this account under any circumstances. Any Participant on whose behalf such an account was established shall be fully vested in such account at all times. 3. ROLLOVER ACCOUNT - This account was established to receive rollover contributions credited to the rollover account of Participants who formerly participated in any qualified employees retirement plan other than the Plan. Effective January 1, 1994, this account was merged into the Plan's Rollover Contribution Account. 4. PRIOR 401(k) ACCOUNT - This account was established to receive the 401(k) contributions (and earnings thereon credited to the accounts of employees who formerly participated in the Lenzar Electro-Optics, Inc. Profit Sharing Plan. No further contributions will be credited to this account under any circumstances. Any Participant on whose behalf such an account was established shall be fully vested in such account at all times. EX-10 6 EXHIBIT 10.7(U)(I) EXHIBIT 10.7(u)(i) AMENDMENT This Amendment, dated as of December 29th, 1994, to the Employees' Stock Option Plan (the "Plan") of Ogden Projects, Inc. ("OPI"). WHEREAS, OPI has entered into an Amended and Restated Agreement and Plan of Merger, dated as of September 27, 1994 (the "Merger Agreement"), by and among Ogden Corporation, a Delaware corporation ("Ogden"), OPI Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Ogden ("Acquisition"), and OPI, whereby Acquisition will merge with and into OPI (the "Merger") and OPI will become a wholly-owned subsidiary of Ogden; and WHEREAS, the Merger will become effective upon the filing of a Certificate of Merger with the Office of the Secretary of State of the State of Delaware in accordance with the Delaware General Corporation Law (the "Effective Date"); and WHEREAS, on the Effective Date, the holders of shares of common stock of OPI, par value $.50 per share (the "OPI Common Stock"), outstanding on the Effective Date will be entitled to receive 0.84 of a share of common stock of Ogden, par value $.50 per share (the "Ogden Common Stock"), in exchange for each outstanding share of OPI Common Stock (the "Exchange Ratio"); and WHEREAS, Section 3.1 (d) of the Merger Agreement provides that upon the Effective Date, each option granted under the Plan to purchase shares of OPI Common Stock which is outstanding prior to the Effective Date will be converted into an option to purchase shares of Ogden Common Stock on the terms set forth below. NOW, THEREFORE, OPI hereby amends the Plan as follows: 1. Conversion of Options under the Plan. Pursuant to Section 3.1 (d) of the Merger Agreement, each option granted under the Plan to purchase shares of OPI Common Stock (the "OPI Stock Options") which are outstanding immediately prior to the Effective Date will be converted into the right to purchase a number of shares of Ogden Common Stock equal to the number of whole shares of Ogden Common Stock (rounded down to nearest whole number) into which the number of shares of OPI Common Stock subject to such OPI Stock Option immediately prior to the Effective Date would have been converted, had they been converted in the Merger, at an option price per share equal to the option price per share immediately prior to the Effective Date divided by the Exchange Ratio. Fractional shares of Ogden Common Stock will not be issuable upon the exercise of such options; any fractions will be rounded down to the nearest whole number. No options, other than OPI Stock Options which are outstanding immediately prior to the Effective Date, may be granted under the Plan on or after the Effective Date. 2. Except as set forth above, each OPI Stock Option that is outstanding immediately prior to the Effective Date will otherwise be exercisable upon the same terms and conditions as set forth in each option agreement relating to such OPI Stock Option. IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed as of the day and year first above written and certifies that the provisions of this Amendment, as set forth in the Merger Agreement, were unanimously approved by the Board of Directors of OPI on September 27, 1994. OGDEN PROJECTS, INC. By: /s/J.L. Effinger J. L. Effinger, Assistant Secretary EX-10 7 EXHIBIT 10.7(W)(I) EXHIBIT 10.7(w)(i) OGDEN PROJECTS PROFIT SHARING PLAN OGDEN PROJECTS PROFIT SHARING PLAN Table of Contents Section Page SECTION 1. PURPOSE . . . . . . . . . . . . . . . . . . . . . 1 SECTION 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . 2 SECTION 3. PARTICIPATION . . . . . . . . . . . . . . . . . . 11 3.1 Date of Participation. . . . . . . . . . . . . . . . 11 3.2 Participation and Adjustments. . . . . . . . . . . . 12 3.3 Duration. . . . . . . . . . . . . . . . . . . . . . 12 3.4 Reemployment. . . . . . . . . . . . . . . . . . . . 12 3.5 Establishment and Maintenance of Separate Account. 12 3.6 Maintenance of Accounts Shall Not Vest Any Right in Plan Assets. . . . . . . . . . . . . . . . 13 SECTION 4. PRE-TAX CONTRIBUTIONS AND AFTER-TAX CONTRIBUTIONS . . . . . . . . . . . . 13 4.1 Pre-Tax Contributions. . . . . . . . . . . . . . . . 13 4.2 Refund of Excess Contributions. . . . . . . . . . . 17 4.3 After-Tax Contributions. . . . . . . . . . . . . . . 17 4.4 Institute, Change, Resume, Suspend, Contributions. . . . . . . . . . . . . . . . . . . . 17 4.5 Rollover Contributions. . . . . . . . . . . . . . . 17 SECTION 5. PARTICIPATING COMPANY CONTRIBUTIONS . . . . . . . 18 5.1 Participating Company Contributions. . . . . . . . . 18 5.2 Limitation on After-Tax Contributions. . . . . . . . 18 5.3 Allocation of Participating Company Contributions. . . . . . . . . . . . . . . . . . . . 21 5.4 Time of Payment of Participating Company Contributions. . . . . . . . . . . . . . . . . . . . 22 5.5 Form of Payment of Participating Company Contributions. . . . . . . . . . . . . . . . . . . . 22 5.6 Return of Employer Contributions. . . . . . . . . . 22 SECTION 6. INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . 22 6.1 Investment by Trustees. . . . . . . . . . . . . . . 22 6.2 Investment Funds. . . . . . . . . . . . . . . . . . 22 6.3 Investment Elections. . . . . . . . . . . . . . . . 23 6.4 Company Liability. . . . . . . . . . . . . . . . . . 24 SECTION 7. VALUATIONS AND ADJUSTMENTS OF PARTICIPANTS' ACCOUNTS. . . . . . . . . . . . . 24 7.1 Allocation of Earnings and Losses - Valuation of Trust. . . . . . . . . . . . . . . . . . . . . . 24 7.2 Expenses.. . . . . . . . . . . . . . . . . . . . . . 25 7.3 Allocation of Forfeitures. . . . . . . . . . . . . . 25 SECTION 8. ELIGIBILITY FOR BENEFITS. . . . . . . . . . . . . 26 8.1 Distribution of Participant's Account on Retirement and Disability. . . . . . . . . . . . . . 26 8.2 Distribution of Participant's Account on Death. . . . . . . . . . . . . . . . . . . . . . . 26 8.3 Distribution on other Termination of Service. . . . . . . . . . . . . . . . . . . . . . . 26 8.4 Hardship Withdrawals; In-Service Withdrawals. . . . . . . . . . . . . . . . . . . . . 26 8.5 Loans. . . . . . . . . . . . . . . . . . . . . . . . 28 8.6 Restrictions on Distributions. . . . . . . . . . . . 30 SECTION 9. VESTING . . . . . . . . . . . . . . . . . . . . . 31 9.1 Vesting. . . . . . . . . . . . . . . . . . . . . . . 31 9.2 Vesting Schedule. . . . . . . . . . . . . . . . . . 31 9.3 Break in Service for Vesting.. . . . . . . . . . . . 31 9.4 Full Vesting. . . . . . . . . . . . . . . . . . . . 32 SECTION 10. METHOD OF PAYMENT OF BENEFITS . . . . . . . . . . 32 10.1 Payment of Benefits. . . . . . . . . . . . . . . . 32 10.2 Commencement of Benefits. . . . . . . . . . . . . . 32 10.3 Time of Payment. . . . . . . . . . . . . . . . . . 34 10.4 Latest Commencement Date. . . . . . . . . . . . . . 34 10.5 Direct Rollover. . . . . . . . . . . . . . . . . . 35 10.6 Special Tax Notice. . . . . . . . . . . . . . . . . 35 SECTION 11. DESIGNATION OF BENEFICIARIES . . . . . . . . . . 35 11.1 Beneficiary Designation. . . . . . . . . . . . . . 35 11.2 Failure to Designate Beneficiary. . . . . . . . . . 35 SECTION 12. ADMINISTRATION OF THE PLAN. . . . . . . . . . . . 36 12.1 Powers and Duties of Administrative Committee. . . . . . . . . . . . . . . . . . . . . 36 12.2 Powers and Duties of the Investment Committee.. . . . . . . . . . . . . . . . . . . . . 36 12.3 Powers and Duties of Trustees. . . . . . . . . . . 36 12.4 Agents, Reports of Committees. . . . . . . . . . . 37 12.5 Structure of the Committees. . . . . . . . . . . . 37 12.6 Adoption of Procedures of Committees. . . . . . . . 37 12.7 Demands for Money. . . . . . . . . . . . . . . . . 37 12.8 Hold Harmless; Indemnification. . . . . . . . . . . 38 12.9 Claims for Benefits. . . . . . . . . . . . . . . . 38 12.10 Communications. . . . . . . . . . . . . . . . . . . 39 12.11 Participant Information. . . . . . . . . . . . . . 40 12.12 Service of Process. . . . . . . . . . . . . . . . . 40 12.13 Specific Powers and Duties. . . . . . . . . . . . . 40 SECTION 13. TERMINATION OR WITHDRAWAL OF PARTICIPATING COMPANY PARTICIPATION . . . . . . 40 13.1 Termination or Withdrawal of Participating Company. . . . . . . . . . . . . . . . . . . . . . . 40 13.2 Distributions Upon Termination or Withdrawal . . . . 40 13.3 Transfer to Successor Plan. . . . . . . . . . . . . 41 SECTION 14. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST. . . . . . . . . . . . . . . 42 14.1 Right to Amend, Suspend or Terminate Plan. . . . . 42 14.2 Retroactivity. . . . . . . . . . . . . . . . . . . 42 14.3 Notice. . . . . . . . . . . . . . . . . . . . . . . 42 14.4 No Further Contributions. . . . . . . . . . . . . . 42 14.5 Partial Termination. . . . . . . . . . . . . . . . 43 14.6 Exclusive Benefit.. . . . . . . . . . . . . . . . . 43 SECTION 15. GENERAL LIMITATIONS AND PROVISIONS. . . . . . . . 44 15.1 All Risk on Participants and Beneficiaries. . . . . 44 15.2 No Right to Continued Employment. . . . . . . . . . 44 15.3 Payment of Behalf of Payee. . . . . . . . . . . . . 44 15.4 No Alienation. . . . . . . . . . . . . . . . . . . 44 15.5 Missing Payee. . . . . . . . . . . . . . . . . . . 45 15.6 Subject to Trust Agreement. . . . . . . . . . . . . 45 15.7 Gender; Singular. . . . . . . . . . . . . . . . . . 45 15.8 Captions. . . . . . . . . . . . . . . . . . . . . . 45 15.9 Applicable Law. . . . . . . . . . . . . . . . . . . 45 SECTION 16. MAXIMUM AMOUNT OF ALLOCATION. . . . . . . . . . . 45 16.1 Application of Section 16. . . . . . . . . . . . . 45 16.2 Maximum Annual Additions to Account. . . . . . . . 45 16.3 Order of Reduction. . . . . . . . . . . . . . . . . 46 16.4 Additional Account Limitations. . . . . . . . . . . 47 SECTION 17. TOP HEAVY PROVISIONS. . . . . . . . . . . . . . . 48 17.1 Top Heavy Plan. . . . . . . . . . . . . . . . . . . 48 17.2 Top Heavy Plan Definitions. . . . . . . . . . . . . 49 17.3 Top Heavy Plan Minimum Contribution. . . . . . . . 51 17.4 Top Heavy Plan Annual Addition Limitations. . . . . 52 17.5 Other Plans. . . . . . . . . . . . . . . . . . . . 52 APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . 53 APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . . 55 SECTION 1. PURPOSE The purpose of the Ogden Projects Profit Sharing Plan (the "Plan") is to continue to provide retirement benefits and certain other benefits to eligible employees of Ogden Projects, Inc. and its participating subsidiaries and other participating companies, or to the beneficiaries of such employees, and thereby to continue to encourage employees to make and continue careers with Ogden Projects, Inc., all as set forth herein and in the trust adopted as a part of the Plan. Prior to the adoption of the Plan, Ogden Projects, Inc. and several other subsidiaries of Ogden Corporation were each a "Participating Company" under the Ogden corporation Profit Sharing Plan (the "Prior Plan"), and the related trust thereunder (the "Prior Plan Trust"). As a result of the Tax Reform Act of 1986, Ogden Corporation, parent of the sponsor of the Prior Plan, determined that it would be in the best interest of all Prior Plan Participating Companies, and their respective employees, to elect whether to continue to be a Participating Company under the Prior Plan or to establish a separate defined contribution plan. Effective as of January 1, 1989, Ogden Projects, Inc. determined that it was in the best interest of Ogden Projects, Inc., its subsidiaries, affiliated companies and the employees of such companies to adopt the Plan, such plan being substantially similar and a continuation of the Prior Plan. All service credited to an individual as a participant under the Prior Plan was credited to such individual under the Plan; provided, that such individual became a Participant of the Plan on or after January 1, 1989, and further provided, that such service was credited solely in accordance with the terms and provisions of the Plan. With the adoption of the Plan, the trustee of the Prior Plan Trust segregated a proportional share of the assets of the Prior Plan, including any earnings, and transferred such assets to the trustee of the Plan's trust to be held in trust for the Participants of the Prior Plan who continue to be participants of the Plan. By letter dated June 19, 1991, the District Director of Internal Revenue, Baltimore, Maryland determined that (i) the adoption of the Plan and its related trust, (ii) the spinoff and transfer of assets and liabilities from the Prior Plan and Prior Plan Trust to the Plan and the Plan's trust, and (iii) the crediting of service, as described herein, satisfied the requirements of Sections 401(a), 401(k) and 501(a) of the Internal Revenue Code of 1986. Subsequent to the issuance of the District Director's favorable determination letter, effective December 31, 1991, the Ogden Environmental Services ("OES") Profit Sharing Plan merged with the Plan. In addition to OES (now known as Ogden Waste Treatment Services, Inc.), Ogden Yorkshire Water Co. participates in the Plan. The Plan, as set forth herein, constitutes an amendment and restatement of the Plan through January 1, 1994. Although this restatement is generally effective January 1, 1989, the enactment of the Unemployment Compensation Amendments of 1992, and the Omnibus Budget Reconciliation Act of 1993, as well as the adoption of miscellaneous administrative and operational changes, necessitates different effective dates for different Plan Sections. The Plan, as amended and restated, and maintained hereunder, is intended to continue to qualify as a plan and a trust which meet the requirements of Sections 401(a), 401(k) and 501(a) of the Internal Revenue Code of 1986, as now in effect or hereafter amended, or any other applicable provisions of law, including, without limitation, the Employee Retirement Income Security Act of 1974. The rights of any person who terminated employment or who retired on or before the effective date of a particular amendment, including his eligibility for benefits and the time and form in which benefits, if any, will be paid, and the actuarial assumptions used to compute such benefits, shall be determined solely under the terms of the Prior Plan or the Plan as in effect on the date of his termination of employment or retirement, unless such person is thereafter reemployed and again becomes a participant in the Plan. SECTION 2. DEFINITIONS When used herein the following terms shall have the following meanings: 2.1 "Account" or "Participant's Account" means the Account established and maintained on behalf of a Participant, including such Participant's Company Contribution Account, Pre-Tax Contribution Account, After-Tax Contribution Account, Roll-over Contribution Account and any other account establishing pursuant to Appendix A. 2.2 "Act" means the Employee Retirement Income Security Act of 1974, as now in effect or as hereafter amended. 2.3 "Administrative Committee" means the OPI Administrative Committee as provided for in Section 12. For purposes of the Act, the Administrative Committee shall be the administrator of the Plan and its members shall be named fiduciaries with respect to matters for which they are responsible under the Plan. 2.4 "Affiliate" means any corporation which is included in a controlled group of corporations (within the meaning of Section 414(b) of the Code) which includes the Company, any trade or business (whether or not incorporated) which is under common control with the Company (within the meaning of Section 414(c) of the Code), any organization included in the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Company and any other entity required to be aggregated with the Company pursuant to the IRS Regulations under Section 414(o) of the Code; except that for purposes of applying the provisions of Sections 16 and 17 with respect to the limitations on contributions, Section 415(h) of the Code shall apply. 2.5 "After-Tax Contributions" and "After-Tax Contribution Account" means those After-Tax contributions made pursuant to Section 4.3 and that portion of the Participant's Account to which such contributions are credited. 2.6 "Annual Net Profit" means current and accumulated net income and earnings of each Participating Company, as determined by each Participating Company, in accordance with generally accepted accounting principles, without regard to any federal, state, and local income taxes. If any Participating Company is prevented from making a contribution by reason of having insufficient Annual Net Profit, then any other Participating Company who, along with such Participating Company, is a member of an "affiliated group" within the meaning of Section 1504 of the Code and does have sufficient Annual Net Profit, may make a contribution on behalf of such Participating Company, up to the amount so prevented. 2.7 "Beneficiary" means the beneficiary or beneficiaries designated by a Participant pursuant to Section 11 to receive the amount, if any, payable under the Plan upon the death of such Participant. 2.8 "Board of Directors" means the Board of Directors of the Company. 2.9 "Break in Service" means a Plan Year during which an individual has not completed more than 500 Hours of Service, as determined by the Administrative Committee in accordance with the Regulations. Solely for purposes of determining whether a Break in Service has occurred, an individual shall be credited with the Hours of Service which such individual would have completed but for a maternity or paternity absence, as determined by the Administrative Committee in accordance with this Section 2.9 and the Labor Department Regulations; provided, however, that the total Hours of Service so credited shall not exceed 501 Hours of Service and that the individual timely provides the Administrative Committee with such information as it may require. Hours of Service credited for a maternity or paternity absence shall be credited entirely (i) in the Plan Year in which the absence began if such Hours of Service are necessary to prevent a Break in Service in such Plan Year, or (ii) in the following Plan Year. For purposes of this Section 2.9, maternity or paternity absence shall mean an absence from work by reason of the individual's pregnancy, the birth of the individual's child or the placement of a child with the individual in connection with adoption of the child by such individual, or for purposes of caring for a child for the period immediately following such birth or placement. 2.10 "Code" means the Internal Revenue Code of 1986, as now in effect or as hereafter amended. All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered. 2.11 "Committee" means the Administrative Committee and the Investment Committee. 2.12 "Company" means Ogden Projects, Inc., a State of Delaware corporation. 2.13 "Company Contributions" and "Company Contribution Account" means those Company Contributions made pursuant to Section 5.1 and that portion of the Participant's Account to which such contributions are credited. 2.14 "Compensation" means for each Plan Year beginning before January 1, 1994, an Employee's first $200,000 (as adjusted for cost of living to the extent permitted by the Code and IRS Regulations) and for each Plan Year beginning on or after January 1, 1994, Compensation means an Employee's first $150,000 (as adjusted by the Commissioner of the IRS, for years beginning after December 31, 1993, for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code) (the "annual compensation limit"), of remuneration paid or payable for Service while an Employee and a Participant and performed during the Plan Year and, but for the Eligible Employee's Pre-Tax Contributions, would have been received by such Employee by the March 15 following the close of the Plan Year, without giving effect to any reduction therein pursuant to such Participant's election under Section 4.1. Compensation includes any deferred income earned by the Employee, salary deferrals made pursuant to Section 4.1 and Section 125 of the Code, but excludes imputed income, other non-cash compensation, amounts of special discretionary cash compensation, severance payments, contributions to the Plan or any other pension, profit sharing or benefit plan maintained by a Participating Company, any benefit payment under the Plan, or any other similar plan, reimbursed expenses and withholding taxes remitted by a Participating Company on behalf of the Employee with respect to imputed income. If less than a full Plan Year of Compensation is taken into account, then the annual compensation limit shall be multiplied by the ratio obtained by dividing the number of full months in the period by 12. In determining the Compensation of a Participant for purposes of the annual compensation limit, the rules of Section 414(q)(6) of the Code shall apply, except that in applying such rules, the term Family Member shall include only the spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the close of the Plan Year. If, as a result of the application of such rules the adjusted annual compensation limit is exceeded, then the limit shall be prorated among the affected individuals in proportion to each such individual's Compensation as determined under this Section 2.14 prior to the application of the annual compensation limit. 2.15 "Direct Rollover" means (i) a distribution by the Plan to an Eligible Retirement Plan as specified by a Distributee and (ii) a payment by another employee retirement plan to the Plan as a Rollover Contribution as specified by an Eligible Employee. 2.16 "Disability" means an Employee's physical or incapacity to perform his assigned duties with the Employer, such that he is eligible to receive either benefits under the long-term disability plan of the Company or any Affiliate, or disability benefits under the Social Security Act and such incapacity is expected to last for more than 12 months as determined in a uniform manner by the Administrative Committee after reviewing any medical evidence which the Administrative Committee considers necessary, including the reports of any medical examinations required by the Administrative Committee. 2.17 "Distributee" means a Participant or a former Participant. A Participant's or former Participant's Surviving Spouse or a former spouse of a Participant or former Participant who is a payee under a Qualified Domestic Relations Order to which a distribution is to be made under the Plan shall also be deemed to be a Distributee. 2.18 "Early Retirement Age" means the date on which a Participant has attained age 55 and has completed five Years of Service. 2.19 "Early Retirement Date" means the first day of the month coincident with or next following a Participant's retirement after reaching his Early Retirement Age but prior to his Normal Retirement Age. 2.20 "Effective Date" means, for this amendment and restatement, January 1, 1994. The original effective date of the Plan is January 1, 1989. 2.21 "Eligible Employee" means any Employee excluding (i) any nonresident alien, (ii) any Employee who is included in a unit of Employees covered by a collective bargaining agreement which does not provide for his participation in the Plan, (iii) any Employee paid on a hourly basis and who are in the employ of units that have been designated by the Company as being ineligible to participate in the Plan, and for the 1994 Plan Year, (iv) any Highly Compensated Employee designated by the Administrative Committee to be ineligible to participate in the Plan, unless or until the Administrative Committee rescinds such prohibition. 2.22 "Eligible Retirement Plan" means (i) an individual retirement account, as described in Section 408(a) of the Code, (ii) an individual retirement annuity, as described in Section 408(b) of the Code, (iii) an annuity plan, as described in Section 403(a) of the Code, and (iv) a qualified plan and trust, as described in Sections 401(a) and 501(a) of the Code; provided, however, that in the case of an Eligible Rollover Distribution to a Surviving Spouse, an Eligible Retirement Plan means an individual retirement account or an individual retirement annuity, as described in Sections 408(a) and 408(b) of the Code, respectively. 2.23 "Eligible Rollover Distribution" means any distribution from the Plan of all or any portion of the balance to the credit of a Distributee, except that an Eligible Rollover Distribution shall not include: (i) any distribution to the extent such distribution is required under Section 10.2(c) and Section 401(a)(9) of the Code, (ii) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's Beneficiary, or for a period of ten years or more, and (iii) the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities), and (iv) After-Tax Contributions made in accordance with the Plan. 2.24 "Employee" means an individual in the employ of the Employer. 2.25 "Employer" means the Company and each other Participating Company, or any of them. 2.26 "Family Member" means a spouse, lineal ascendants and descendants of the Employee or former Employee and the spouses of such lineal ascendants and descendants. 2.27 "Highly Compensated Employee" or "Highly Compensated Participant" means an Employee or Participant who, during the relevant period, is treated as a Highly Compensated Employee. A Highly Compensated Employee includes any Employee who performs Service for the Employer during the determination year and who, during the look-back year (i) received Salary from the Employer in excess of $75,000 (as adjusted pursuant to Section 415(d) of the Code); (ii) received Salary from the Employer in excess of $50,000 (as adjusted pursuant to Section 415(d) of the Code) and was a member of the top-paid group for such year; or (iii) was an officer of the Employer or an Affiliate and received Salary during such year that is greater than 50% of the dollar limitation in effect under Section 415(b)(1)(A) of the Code. The term Highly Compensated Employee also includes (1) Employees who are both described in the preceding sentence if the term determination year is substituted for the term look-back year and the Employee is one of the 100 Employees who received the most Salary from the Employer or an Affiliate during the determination year, (2) Employees who are five percent owners at any time during the look-back year or determination year, and (3) Employees who have separated from Service or deemed to have separated from Service prior to the determination year, perform no Service for the Employer or an Affiliate during the determination year and were Highly Compensated Employees for either the separation year or any determination year ending on or after such Employee's 55th birthday. For purposes of (ii) above, the top-paid group consists of the top 20% of Employees ranked on the basis of Salary received during the determination year (excluding Employees who are described in Section 414(q)(8) of the Code). For purposes of (iii) above, the number of officers shall not exceed 50, or, if less, the greater of three Employees or 10% of the Employees (excluding Employees who are described in Section 414(q)(8) of the Code). If no officer has satisfied the Salary requirement of (iii) above during either a determination year or look-back year, the highest paid officer for such year shall be treated as a Highly Compensated Employee. For purposes of this Section 2.27, the "determination year" shall be the Plan Year unless the Employer elects a calendar year and the "look-back" year shall be the 12-month period immediately preceding the determination year, or, if elected by the Employer, the calendar year ending with or within the applicable determination year (or, in the case of a determination year that is shorter than 12 months, the calendar year ending with or within the 12-month period ending with the end of the applicable determination year), or, if elected, the calendar year immediately preceding the calendar year determination year. If an Employee is, during a determination year or look-back year, a Family Member of either a five percent owner who is an active or former Employee or a Highly Compensated Employee who is one of the 10 most Highly Compensated Employees ranked on the basis of Salary paid by the Employer or Affiliate during such year, then the Family Member and the five percent owner or top 10 Highly Compensated Employee shall be aggregated. In such case, the Family Member and five percent owner or top 10 Highly Compensated Employee shall be treated as a single Employee receiving Salary and contributions or benefits, as applicable, equal to the sum of such Salary and contributions or benefits, as applicable, of the Family Member and five percent owner or top 10 Highly Compensated Employee. The determination of who is a Highly Compensated Employee, including the determination of the number and identity of Employees in the top-paid group, the top 100 Employees, the number of Employees treated as officers, and the Salary that is considered, will be made in accordance with Section 414(q) of the Code and IRS Regulations. 2.28 "Hours of Service" means the hours for which an Employee shall receive credit for purposes of the Plan, as follows: (a) One hour for each hour for which he is directly or indirectly paid, or entitled to payment, by the Company or an Affiliate for the performance of duties during the applicable computation period for which his Hours of Service are being determined under the Plan. (These hours shall be credited to the Employee for the computation period or periods in which the duties were performed, and shall include hours for which back pay has been either awarded or agreed to by the Company or Affiliate as provided by Labor Department Regulations under the Act, with no duplication of credit for hours.) (b) One hour for each hour, in addition to the hours in Section 2.28(a), above, for which he is directly or indirectly paid, or entitled to payment, by the Company or Affiliate, for reasons other than for the performance of duties during the applicable computation periods, such as paid vacation, paid holiday, paid sickness, and similar paid periods of nonworking time. (These hours shall be counted in the computation period or periods in which the hours for which payment is made occur.) (c) One hour for each hour of the normally scheduled work hours for each day during any period he is on leave of absence from work with the Company or Affiliate for military service with the armed forces of the United States, but not to exceed the period required under the law pertaining to veterans' reemployment rights; provided that if he fails to report for work at the end of such leave during which he has reemployment rights he shall not receive credit for hours on such leave. (d) The number of normally scheduled work hours for each day of authorized leave of absence granted by the Company or Affiliate in accordance with reasonable policies established therefor for which he is not compensated. When no time records are available, the Employee shall be given credit for Hours of Service based upon the number of normally scheduled work hours for each day he is on the Company's or Affiliate's payroll, as determined in accordance with reasonable standards and policies from time to time adopted by the Administrative Committee under Section 2530.200b-2(b) and (c) of the Labor Department Regulations, which are incorporated herein by this reference thereto. Notwithstanding the foregoing, an Employee shall be credited with 45 Hours of Service with respect to each week for which he is entitled to be credited with at least one Hour of Service. 2.29 "Individual Retirement Account Rollover Contribution" means the entire amount received by an Eligible Employee from an individual retirement account representing the entire amount in the account (the "qualifying amount") if no part of the amount in the account is attributable to any source other than (i) an employer's plan and trust described in Section 401(a) of the Code, that is exempt from federal income tax under Section 501(a) of the Code, or (ii) a qualified annuity plan meeting the requirements of Section 403(a) of the Code, and any earnings on such sums. An Individual Retirement Account Rollover Contribution shall be accepted only if the entire qualifying amount was received by the Eligible Employee in cash, and only such cash amount is included in the Individual Retirement Account Rollover Contribution. The Eligible Employee may transfer any portion of such cash amount to the Trust on or before the 60th day after the day on which the Participant received the qualifying amount. 2.30 "Investment Committee" means the OPI Investment Committee as provided for in Section 12. 2.31 "Investment Fund" means the investment fund or funds, or any additional funds which the Investment Committee may establish or adopt from time to time by written notice to the Trustee. 2.32 "Investment Manager" means an Investment Manager, as that term is defined in Section 3(38) of the Act, appointed by the Investment Committee in accordance with Section 12.2 hereof. 2.33 "IRS" means the United States Internal Revenue Service. 2.34 "Labor Department" means the United States Department of Labor. 2.35 "Normal Retirement Age" means the date which is the Participant's 65th birthday. Upon attainment of Normal Retirement Age, the Participant shall have a nonforfeitable right to his entire Account balance. 2.36 "Normal Retirement Date" means the first day of the month coincident with or next following a Participant's attainment of his Normal Retirement Age. 2.37 "Participant" means any Eligible Employee who participates in the Plan as provided in Section 3. 2.38 "Participating Company" means an Affiliate of the Company, designated by the Board of Directors as such, the board of directors or equivalent governing body of which shall adopt the Plan and the Trust Agreement by appropriate action and the Employees of which shall be eligible to participate in the Plan in the manner and to the extent determined by the Board of Directors so long as such Affiliate remains so designated. Any such Affiliate so designated and which adopts the Plan shall be deemed thereby to appoint the Company, the Administrative Committee, the Investment Committee and the Trustee its exclusive agents to exercise on its behalf all of the powers and authority conferred hereby, or by the Trust Agreement, upon the Company, and shall make its allocable contributions to the Plan. The authority of the Company, the Administrative Committee, the Investment Committee and the Trustee to act as such agent shall continue until the Plan has terminated as to such Affiliate and the relevant Trust Fund assets have been distributed by the Trustee as provided in Section 14.4 hereof. 2.39 "Plan" means the OPI Profit Sharing Plan, as set forth herein and as the same may be amended from time to time. 2.40 "Plan Year" means the calendar year. 2.41 "Pre-Tax Contributions" and "Pre-Tax Contribution Account" mean those contributions made by the Employer on behalf of a Participant in accordance with such Participant's election pursuant to Section 4.1 and that portion of the Participant's Account to which such contributions are credited. 2.42 "Prior Plan" means the Ogden Profit Sharing Plan, as in effect on January 1, 1989. 2.43 "Qualified Domestic Relations Order" means any judgment, decree or order (including approval of a settlement agreement) which has been determined by the Administrative Committee in accordance with procedures established under the Plan, to constitute a qualified domestic relations order within the meaning of Section 414(p)(1) of the Code. 2.44 "Qualified Plan Rollover Contribution" means, (a) For Rollover Contributions made prior to January 1, 1993, the balance to the credit of an Eligible Employee under an employee retirement plan meeting the requirements of Section 401(a) of the Code, paid to an Eligible Employee in one or more distributions which constitute a "lump sum distribution" within the meaning of Section 402(d)(4)(A) of the Code (determined without reference to Sections 402(d)(4)(B) and (F) of the Code) or within one taxable year of the Eligible Employee on account of a termination of such plan or, in the case of a profit sharing plan or stock bonus plan, a complete discontinuance of contributions under such plan. The maximum amount which may be transferred prior to January 1, 1993 shall not exceed the fair market value of all the property received in the distribution reduced by: (i) the Eligible Employee's own contributions under such plan and any other amounts con- sidered as contributed by him (determined by applying Section 72(f) of the Code); less (ii) any amounts previously distributed to him from such other plan and not includible in his gross income. (b) For Rollover Contributions made on or after January 1, 1993, a Qualified Plan Rollover Contribution means any distribution paid to an Eligible Employee from an employee retirement plan meeting the requirements of Section 401(a) of the Code, of all or any portion of the balance to the credit of an Eligible Employee, except that a Qualified Plan Rollover Contribution shall not include: (i) any distribution to the extent such distribution is required under Section 10.2 and Section 401(a)(9) of the Code, (ii) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's Beneficiary, or for a period of ten years or more, and (iii) the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). A Participant must transfer any portion of his distribution to be rolled over to the Trust on or before the 60th day after the day on which he received the distribution. 2.45 "Regulations" means the applicable regulations issued under the Code (referred to herein as "IRS Regulations"), the Act (referred to herein as "Labor Department Regulations") or other applicable law, by the IRS, the Labor Department or any other governmental authority and any temporary regulations or rules promulgated by such authorities pending the issuance of such regulations. 2.46 "Rollover Contribution" and "Rollover Contribution Account" means any contribution made by a Participant pursuant to Section 4.5 and that portion of the Participant's Account to which such contributions are credited. 2.47 "Salary" means for each Plan Year beginning before January 1, 1994, an Employee's first $200,000 (as adjusted for cost of living to the extent permitted by the Code and IRS Regulations) of total remuneration paid or payable for Service while an Eligible Employee, without giving effect to any reduction therein pursuant to an election under Section 4.1(a) nor any contributions by the Employer to the Plan or any other retirement plan maintained by the Employer, as reported on IRS Form W-2. For each Plan Year beginning on or after January 1, 1994, Salary means an Employee's first $150,000 (as adjusted by the Commissioner of the IRS, for years beginning after December 31, 1993, for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code) of total remuneration paid or payable for Service while an Eligible Employee, without giving effect to any reduction therein pursuant to an election under Section 4.1(a) nor any contributions by the Employer to the Plan or any other retirement plan maintained by the Employer, as reported on IRS Form W-2. 2.48 "Service" means employment or reemployment (whether or not as an Eligible Employee) with the Company, any Participating Company or with any subsidiary of or other corporation or entity affiliated or associated with the Company which is a member of the same controlled group of corporations (within the meaning of Section 1563(a) of the Code), including all periods of employment rendered by an individual from his date of employment or reemployment, as the case may be, with the Employer and all Service credited to a Participant while a participant under the Prior Plan, in accordance with the terms and conditions of the Prior Plan. 2.49 "Surviving Spouse" means the survivor of a deceased Participant or a deceased former Participant to whom such deceased Participant or deceased former Participant had been legally married (as determined by the Administrative Committee) on the date of the Participant's death or at the time payments commence, whichever is earlier. 2.50 "Trust" or "Trust Fund" means the trust established by the Company pursuant to the Trust Agreement as a part of the Plan. 2.51 "Trustee" means the trustee of the Trust. 2.52 "Trust Agreement" means the agreement entered into between the Company and the Trustee regarding the investment and holding of Plan assets as provided in the Plan, as amended or restated from time to time. 2.53 "Valuation Date" means the last day of each Plan Year and the last day of any calendar month or months in a Plan Year and any other date as the Administrative Committee in its discretion may specify or determine from time to time. 2.54 "Vested Interest" means the portion of a Participant's Account which has become nonforfeitable pursuant to Section 9.2. 2.55 "Year of Service" means any Plan Year during which an Employee completed at least 1,000 Hours of Service as determined by the Administrative Committee in accordance with the Regulations. In addition, solely for purposes of determining whether an Eligible Employee is enrolled as a Participant as provided in Section 3, if an Employee does not complete 1,000 Hours of Service during the Plan Year in which his Service commenced but does complete at least 1,000 Hours of Service during the 12 consecutive month period beginning on the date his Service commenced, as determined by the Administrative Committee, then, he shall be credited with a Year of Service for such 12 consecutive month period. In determining the number of Years of Service a Participant is to be credited with all years of service credited to such Participant, as of December 31, 1988, under the Prior Plan. SECTION 3. PARTICIPATION 3.1 Date of Participation. Each Employee who is an Eligible Employee on the Effective Date and who was a Participant in the Plan on Effective Date shall continue to be a Participant on such Effective Date. Each Employee who was an Eligible Employee on the Effective Date but who was not a Participant in the Plan prior to that date, shall become a Participant in the Plan on the earliest of (i) the date the Eligible Employee would become a Participant under the terms of the Plan prior to the Effective Date or (ii) the first day of the month coincident with or next following the later of (1) date on which the Eligible Employee has completed six months of Service, or (2) the date on which the Eligible Employee has completed 1,000 Hours of Service with the Employer, commencing on the day such Eligible Employee completed one Hours of Service provided that such Eligible Employee is employed by the Employer on that date. Each other Employee who is an Eligible Employee hired on or after the Effective Date shall become a Participant in the Plan on the first day of the month coincident with or next following the later of (i) the date on which the Eligible Employee has completed six months of Service or (ii) the date on which the Employee has completed 1,000 Hours of Service with the Employer, commencing on the day such Eligible Employee completed one Hour of Service, provided such Eligible Employee is employed by the Employer on that date. 3.2 Participation and Adjustments. A Participant shall file with the Administrative Committee a written application form which shall include an election to reduce the Participant's Compensation, specifying the amount of contributions elected under Section 4 and authorizing any necessary payroll deductions, investment direction, beneficiary designation and an agreement to be bound by all the terms and conditions of the Plan and the Trust and any agreement with any other funding agency, including an insurance company, constituting a part of the Plan and the Trust Fund. 3.3 Duration. The participation of a Participant shall end when no further benefits are payable to him or his Beneficiary from his Account under the Plan. 3.4 Reemployment. (a) Subject to Section 3.4(b), if a reemployed Employee was a Participant at the time of his termination of employment, he shall immediately resume active participation in the Plan upon his reemployment and credit for his Hours of Service and Years of Service prior to his termination shall be reinstated. (b) If a reemployed Employee was not a Participant at the time he was terminated, his Hours of Service shall be immediately reinstated. If he had fulfilled the service requirements of Section 3.1 at the time of his prior termination, but terminated employment prior to becoming a Participant, he shall become a Participant on the first day of the month following the date of his reemployment. If he had not fulfilled such service requirement at the time of his termination, he shall become a Participant as provided in Section 3.1. 3.5 Establishment and Maintenance of Separate Account. (a) The Administrative Committee shall establish and maintain or cause to be established and maintained in respect to each Participant an Account showing his interest under the Plan and in the Trust Fund (including, but not limited to, separate accounts showing his respective interests, if any, in each of the Investment Funds) with respect to (i) Pre-Tax Contributions made under Section 4.1, (ii) Company Contributions made under Section 5.1, (iii) After-Tax Contributions made under Section 4.1 and (iv) Rollover Contributions made pursuant to Section 4.5, such other accounts as described in Appendix A, and all other relevant data pertaining thereto. Each Participant shall be furnished with a written statement of his Account and the value of each such separate interest at least annually and upon any distribution to him. In maintaining the Accounts under the Plan or causing them to be maintained, the Administrative Committee may conclusively rely on the valuations of the Trust Fund made in accordance with the Plan and the terms of the Trust Agreement. 3.6 Maintenance of Accounts Shall Not Vest Any Right in Plan Assets. The establishment and maintenance of, or allocations and credits to, the Account of any Participant shall not vest in any Participant any right, title or interest in and to any Plan assets or benefits except at the time or times and upon the terms and conditions and to the extent expressly set forth in the Plan and in accordance with the terms of the Trust. SECTION 4. PRE-TAX CONTRIBUTIONS AND AFTER-TAX CONTRIBUTIONS 4.1 Pre-Tax Contributions. (a) A Participant may elect to reduce his Compensation by an amount not less than one percent and not more than ten percent of such Compensation for a Plan Year in any whole percentage in accordance with procedures adopted by the Administrative Committee, and the Employer shall contribute such amount to the Plan on behalf of the Participant as a Pre-Tax Contribution. Notwithstanding the foregoing, such Pre-Tax Contributions in any calendar year shall not exceed $9,240, as adjusted, for years beginning after December 31, 1993, for increases in the cost of living in accordance with Section 402(g)(5) of the Code. In the event that the aggregate amount of Pre-Tax Contributions for a Participant exceeds the limitation in the previous sentence, the amount of such excess, increased by any gains and decreased by any losses attributable thereto, shall be refunded to the Participant no later than the April 15th of the calendar year following the calendar year for which the Pre-Tax Contributions were made. If a Participant also participates, in any calendar year, in any other plans subject to the limitation set forth in Section 402(g) of the Code and has made deferrals under the Plan when combined with the other plans subject to such limits in excess of the limitation described above, to the extent the Participant designates, in writing submitted to the Administrative Committee no later than the March 1 of the calendar year following the calendar year for which the Pre-Tax Contributions were made, any Pre-Tax Contributions under the Plan as excess deferrals, the amount of such designated excess, increased by any gains and decreased by any losses attributable thereto, shall be refunded to the Participant no later than the April 15 of the calendar year following the calendar year for which the Pre-Tax Contributions were made. The amount of such excess gains or losses is determined by multiplying the gain or loss for the calendar year allocable to the excess deferrals of the Participant by a fraction, the numerator of which is the excess deferral amount made by the Participant for the calendar year and the denominator of which is the balance of the Pre-Tax Contribution Account as of the end of such calendar year, without regard to any gain or loss, allocable to such Account for the calendar year. The gain or loss allocable to the excess deferrals for the period between the end of the Plan Year and the distribution date is equal to 10% of the income allocated to such excess deferrals for the Plan Year multiplied by the number of calendar months which have elapsed since the end of the Plan Year. For purposes of determining the number of calendar months, a distribution occurring on or before the 15th day of the month will be treated as having been made on the last day of the preceding month, a distribution made after the 15th day of the month will be treated as having been made on the first day of the next month. The amount of excess deferrals that may be distributed pursuant to this Section 4.1(a) with respect to a Participant shall be reduced by any excess contributions (as defined in Section 4.1(b)(ii)) previously distributed to the Participant for the Plan Year beginning with or within the calendar year to which such excess deferrals relate. Notwithstanding the foregoing, in no event may the total of the Participant's Pre-Tax Contributions and After-Tax Contributions, as described in Section 4.3, in any Plan Year exceed ten percent of his Compensation. (b)(i) Notwithstanding any other provision of this Section 4.1, the actual deferral percentage for the Plan Year for Highly Compensated Employees shall not exceed the greater of the following actual deferral percentage tests: (a) the actual deferral percentage for such Plan Year of those Eligible Employees who are not Highly Compensated Employees multiplied by 1.25, or (b) the actual deferral percentage for the Plan Year of those Eligible Employees who are not Highly Compensated Employees multiplied by 2.0; provided that the actual deferral percentage for Highly Compensated Employees does not exceed the actual deferral percentage for such other Eligible Employees by more than two percentage points. For purposes of this Section 4.1, the "actual deferral percentage" for a Plan Year means, for each specified group of Eligible Employees, the average of the ratios (calculated separately for each Eligible Employee in such group) (the "actual deferral ratio") of (A) the amount of contributions allocated to the Participant's Pre-Tax Contribution Account (and any contribution under Section 5.1(a) which meets the requirements of Section 1.401(k)-1(b)(5) of the IRS Regulations) during the Plan Year, to (B) the amount of the Participant's Salary for the Plan Year. A Participant's Pre-Tax Contribution will be taken into account under the actual deferral percentage test, as described herein, for a Plan Year only if such contribution relates to Compensation that either would have been received by the Employee during the Plan Year, but for the election pursuant to Section 4.1(a), or is attributable to Service performed by the Employee during the Plan Year and would have been received by the Employee within two and one-half months after the close of the Plan Year, but for the election pursuant to Section 4.1(a). A Pre-Tax Contribution will be taken into account under the actual deferral percentage test for a Plan Year only if it is allocated to the Participant's Pre-Tax Contribution Account as of a date within such Plan Year. For purposes of the actual deferral percentage test described herein, a Pre-Tax Contribution will be considered allocated within a Plan Year if such allocation is not contingent on participation or the performance of Service after such date and the Participant's Pre-Tax Contribution is actually paid to the Trust no later than 12 months after the Plan Year to which such contribution relates. An Eligible Employee's actual deferral ratio shall be zero if no Pre-Tax Contributions are made on his behalf for such Plan Year. If the Plan and one or more other plans which include cash or deferred arrangements are considered as one plan for purposes of Sections 401(a)(4) and 410(b) of the Code, the cash or deferred arrangements included in such plans shall be treated as one arrangement for purposes of this Section 4.1(b). The actual deferral ratio taken into account under this Section 4.1(b) for any Highly Compensated Employee who is a participant under two or more Section 401(k) of the Code cash or deferred arrangements of the Employer shall be determined as if all such Section 401(k) cash or deferred arrangements were treated as one Section 401(k) cash or deferred arrangement. For purposes of determining the actual deferral ratio of a Participant who is a Highly Compensated Employee subject to the family aggregation rules of Section 414(q)(6) of the Code because such Employee is either a five-percent owner or one of the ten most Highly Compensated Employees as described in Section 414(q)(6) of the Code, the Pre-Tax Contributions and Salary of such Participant shall include Pre-Tax Contributions and Salary of Family Members, and such Family Members shall not be considered as separate Eligible Employees in determining actual deferral percentages. (ii) The Administrative Committee shall determine as of the end of the Plan Year, and at such time or times in its discretion, whether one of the actual deferral percentage tests specified in Section 4.1(b)(i) is satisfied for such Plan Year. This determination shall be made after first determining the treatment of excess deferrals within the meaning of Section 402(g) of the Code under Section 4.1(a). The Administrative Committee may, in its sole discretion, and without the consent of a Participant, reduce or suspend the Salary Reduction Contributions of a Highly Compensated Employee, or return excess Salary Reduction Contributions, such Contributions increased by any income and decreased by any losses to the extent necessary to satisfy one of the actual deferral percentage tests. In the event that neither of such actual deferral percentage tests is satisfied, the Administrative Committee shall, to the extent permissible under the Code and IRS Regulations, refund the excess contributions in the manner described in Section 4.1(b)(iii). For purposes of this Section 4.1, "excess contributions" means, with respect to any Plan Year, the excess of the aggregate amount of Pre-Tax Contributions (and any earnings and losses allocable thereto) made to the Pre-Tax Contribution Accounts of Highly Compensated Participants for such Plan Year, over the maximum amount of such contributions that could be made to the Pre-Tax Contribution Accounts of such Participants without violating the requirements of Section 4.1(b)(i), determined for each such Highly Compensated Participant by reducing Pre-Tax Contributions made on behalf of Highly Compensated Participants as follows: First, the actual deferral ratio of the Highly Compensated Employee with the highest actual deferral ratio is reduced to the extent necessary to satisfy the actual deferral percentage test or cause such ratio to equal the actual deferral ratio of the Highly Compensated Employee with the next highest ratio. Second, this process shall be repeated until the actual deferral percentage test is satisfied. The amount of excess contributions of a Highly Compensated Employee is then equal to the total of the Pre-Tax Contributions taken into account for the actual deferral percentage test less the product of the Highly Compensated Employee's reduced actual deferral ratio as determined pursuant to this Section 4.1(b)(ii) and his Salary. This process shall be known as the leveling method, as described in IRS Regulation Section 1.401(k)-1(f)(2). (iii) If required in order to comply with the provisions of Section 4.l(b)(i) and the Code, the Administrative Committee shall refund excess contributions for a Plan Year. The distribution of such excess contributions shall be made to Highly Compensated Participants to the extent practicable before the 15th day of the third month immediately following the Plan Year for which such excess contributions were made, but in no event later than the end of the Plan Year following such Plan Year or, in the case of the termination of the Plan in accordance with Section 14, no later than the end of the 12-month period immediately following the date of such termination. Any such distribution shall be made to each Highly Compensated Participant on the basis of the respective portions of such amounts attributable to each such Highly Compensated Participant determined under Section 4.1(b)(ii). The distribution of any excess contributions shall include the gains and losses allocable thereto for the Plan Year as well as for the period between the end of the Plan Year and the date of the distribution. The gain or loss allocable to excess contributions for a Plan Year is the gain or loss allocable to the Participant's Pre-Tax Contribution Account for the Plan Year multiplied by a fraction, the numerator of which is the Participant's Pre-Tax Contributions for the year and the denominator of which is the Participant's Pre-Tax Contribution Account as of the end of such Plan Year without regard to any gain or loss for the Plan Year. The gain or loss allocable to the excess contributions for the period between the end of the Plan Year and the distribution date is equal to 10% of the income allocated to such excess contributions for the Plan Year multiplied by the number of calendar months which have elapsed since the end of the Plan Year. For purposes of determining the number of calendar months, a distribution occurring on or before the 15th day of the month will be treated as having been made on the last day of the preceding month, a distribution made after the 15th day of the month will be treated as having been made on the first day of the next month. In the case of a Highly Compensated Employee whose actual deferral percentage is determined under the family aggregation rules, the amount of excess contributions, as defined in Section 4.1(b)(ii), shall be determined by reducing the actual deferral percentage in accordance with the leveling method described in Section 4.1(b)(ii) and the excess contributions are allocated among the Family Members in proportion to the contributions of each Family Member that have been combined. (iv) Notwithstanding the foregoing provisions of this Section 4.1(b), the amount of excess contributions to be distributed pursuant to Section 4.1 with respect to a Highly Compensated Employee for a Plan Year, shall be reduced by any excess deferrals distributed to such Participant for such Plan Year pursuant to Section 4.1(a). In no case may the amount of such distributed excess contributions exceed the amount of Pre-Tax Contributions made on behalf of the Highly Compensated Employee for the Plan Year. (v) Notwithstanding any other provision of the Plan, the sum of the actual deferral percentage determined in accordance with Section 4.l(b)(i) of those Eligible Employees who are Highly Compensated Employees and the actual contribution percentage determined in accordance with Section 5.2(a) of those Eligible Employees who are Highly Compensated Employees shall not exceed the aggregate limit determined in accordance with this Section 4.1(b)(iv). The "aggregate limit" for a Plan Year means the greater of (A) or (B) where (A) is the sum of (1) 1.25 multiplied by the greater of the actual deferral percentage or the actual contribution percentage of those Eligible Employees who are not Highly Compensated Employees, and (2) two plus the lesser of the actual deferral percentage or the actual contribution percentage of those Eligible Employees who are not Highly Compensated Employees, provided that the amount shall not exceed twice the lesser of the actual deferral percentage or the actual contribution percentage of those Eligible Employees who are not Highly Compensated Employees; and (B) is the sum of (1) 1.25 multiplied by the lesser of the actual deferral percentage or the actual contribution percentage of those Eligible Employees who are not Highly Compensated Employees, and (2) two plus the greater of the actual deferral percentage or the actual contribution percentage of those Eligible Employees who are not Highly Compensated Employees, provided that this amount shall not exceed twice the greater of the actual deferral percentage or the actual contribution percentage of those Eligible Employees who are not Highly Compensated Employees. 4.2 Refund of Excess Contributions. The Administrative Committee shall determine as of the end of the Plan Year, and at such time or times in its discretion whether the aggregate limit has been exceeded. This determination shall be made after first determining the treatment of excess deferrals within the meaning of Section 402(g) of the Code under Section 4.1. In the event that the aggregate limit is exceeded the actual deferral percentage of those Eligible Employees who are Highly Compensated Employees shall be reduced in the same manner as described in Section 4.1 until the aggregate limit is no longer exceeded. 4.3 After-Tax Contributions. Subject to the provisions of Section 5.2, a Participant may elect to make After-Tax Contributions to the Plan of an amount of up to ten percent of his Compensation in any whole percentage through payroll deductions, in accordance with procedures adopted by the Administrative Committee. 4.4 Institute, Change, Resume or Suspend Contributions. A Participant may suspend Pre-Tax Contributions made on his behalf or his After-Tax Contribution, or both, or institute or change the rate of the reduction of his Compensation pursuant to Section 4.1, or the rate of his After-Tax Contribution, or both, upward or downward within the percentage limitations set forth in Section 4.1, without terminating his participation in the Plan, upon 30 days advance written notice thereof to the Administrative Committee. Such change shall be effective as of the first day of any calendar quarter. A suspension shall be effective as of the first day of any calendar month. A Participant may not change the rate of the reduction of his Compensation or the rate of his After-Tax Contribution more frequently than once every three months. The Administrative Committee may, in its discretion and in a uniform and nondiscriminatory manner, waive its right to such written notice at any time and from time to time. 4.5 Rollover Contributions. (a) A Participant may make a Rollover Contribution to the Plan at any time of a Qualified Plan Rollover Contribution or an Individual Retirement Account Rollover Contribution. If the Participant elects to make a Rollover Contribution, the Participant shall supply the Administrative Committee with evidence, assurances, opinions and certifications it may deem necessary to establish to its satisfaction that the amounts to be contributed qualify as a Qualified Plan Rollover Contribution, an Individual Retirement Account Rollover Contribution or a Direct Rollover and will not affect the qualification of the Plan or the tax-exempt status of the Trust under Sections 401(a) and 501(a) of the Code, respectively. The amount so transferred must consist of cash distributed from such other plan or any portion of the cash proceeds from the sale of distributed property other than cash, to the extent permitted by Section 402(a)(6)(D) of the Code. (b) Any Rollover Contribution shall be allocated to the appropriate Participant's Rollover Contribution Account which shall be established and separately accounted for, shall be invested in accordance with the direction of the Participant pursuant to Section 6, be debited or credited in accordance with Section 7, and shall be distributed in the same manner and at the same time as described in Sections 8 and 10 with respect to a distribution of benefits under the Plan to such Participant. (c) Each request by any Eligible Employee to make a Rollover Contribution shall be subject to review by the Administrative Committee which shall make a case by case determination that each Rollover Contribution meets the requirements set forth in this Section 4.5 and such other requirements or conditions as the Administrative Committee may, from time to time and in its sole discretion, impose; provided, however, that any determination made by the Administrative Committee shall not have the effect of discriminating in favor of Employees who are officers, shareholders or Highly Compensated Employees. SECTION 5. PARTICIPATING COMPANY CONTRIBUTIONS 5.1 Participating Company Contributions. For each Plan Year, a Participating Company may contribute to the Plan a fixed dollar amount or a percentage of the total Compensation earned by such Participating Company to its Eligible Employees who participated in the Plan for such Plan Year. Such amount or percentage, if any, shall be determined by resolution of the board of directors of such Participating Company as soon as practical following the close of the Plan Year. The Company shall deliver a copy of such resolution fixing the annual contributions of the Participating Company, duly certified by the Secretary or Assistant Secretary of the Company, to the Trustee as soon as practical following the close of the Plan Year. In no event shall any contribution by a Participating Company exceed the amount deductible by it for federal income tax purposes. On or about the date of determining the annual contribution, the Administrative Committee shall be advised of the amount of such annual contribution upon which its allocation is to be calculated. Any Participating Company contributions made hereunder shall be reduced to the extent necessary to comply with the requirements of Section 415 of the Code. 5.2 Limitation on After-Tax Contributions. (a) Notwithstanding any other provision of this Section 5.1, the actual contribution percentage for the Plan Year for Highly Compensated Employees shall not exceed the greater of the following actual contribution percentage tests: (A) the actual contribution percentage for such Plan Year of those Eligible Employees who are not Highly Compensated Employees multiplied by 1.25, or (B) the actual contribution percentage for the Plan Year of those Eligible Employees who are not Highly Compensated Employees multiplied by 2.0; provided that the actual contribution percentage for Highly Compensated Employees does not exceed the actual contribution percentage for such other Eligible Employees by more than two percentage points. For purposes of this Section 5.2, the "actual contribution percentage" for a Plan Year means, for each specified group of Eligible Employees, the average of the ratios (calculated separately for each Eligible Employee in such group) (the "actual contribution ratio") of (A) the sum of (I) After-Tax Contributions credited to his After-Tax Contribution Account if such After-Tax Contributions are paid to the Trust during the Plan Year or paid to an agent of the Plan and transmitted to the Trust within a reasonable period after the end of the Plan Year and if the Administrative Committee so elects in accordance with and to the extent permitted by IRS Regulations, (II) Pre-Tax Contributions (including excess contributions under Section 4.1(b) if the contribution would have been received in cash by the Participant had the Participant not elected to defer such amounts under Section 4.1(a)) credited to his Pre-Tax Contribution Account, to (B) the amount of the Participant's Salary for the Plan Year. An Eligible Employee's actual contribution percentage shall be zero if no contributions are made on his behalf for such Plan Year. If the Plan and one or more other plans of the Employer to which Pre-Tax Contributions, After-Tax Contributions or Company Contributions are made are treated as one plan for purposes of Sections 401(a)(4) and 410(b) of the Code, all Pre-Tax Contributions, After-Tax Contributions or Company Contributions of such plans shall be treated as being made under a single plan for purposes of this Section 5.2. The actual contribution ratio taken into account under this Section 5.2 for any Highly Compensated Employee who is eligible to make After-Tax Contributions or receive Employer contributions under two or more plans described in Section 401(a) of the Code or arrangements described in Section 401(k) of the Code that are maintained by the Employer shall be determined as if all such contributions were made under a single plan. The determination and treatment of the actual contribution ratio of any Participant shall satisfy such other requirements as may be required by the IRS Regulations. For purposes of determining the actual contribution ratio of a Participant who is a Highly Compensated Employee subject to the family aggregation rules of Section 414(q)(6) of the Code because such Employee is either a five percent owner or one of the 10 most Highly Compensated Employees as described in Section 414(q)(6) of the Code, the Employer contributions and After-Tax Contributions and Salary of such Participant shall include the Employer contributions and After-Tax Contributions and Salary of Family Members, and such Family Members shall not be considered as separate Eligible Employees in determining actual contribution percentage. (b) The Administrative Committee shall determine as of the end of the Plan Year, and at such time or times in its discretion, whether one of the actual contribution percentage tests specified in Section 5.2(a) is satisfied for such Plan Year. This determination shall be made after first determining the treatment of excess deferrals within the meaning of Section 402(g) of the Code under Section 4.1(a) and then determining the treatment of excess contributions under Section 4.1(b). In the event that neither of the actual contribution percentage tests is satisfied, the Administrative Committee shall refund or forfeit the excess aggregate contributions in the manner described in Section 5.2(c). For purposes of this Section 5.2, "excess aggregate contributions" means, with respect to any Plan Year and with respect to any Participant, the excess of the aggregate amount of contributions (and any earnings and losses allocable thereto) made to (A) the After-Tax Contribution Account and (B) the Pre-Tax Contribution Account (to the extent permitted by the IRS Regulations and if the Administrative Committee elects to take into account Pre-Tax Contributions when calculating the actual contribution percentage under Section 5.2(a) of Highly Compensated Participants for such Plan Year, over the maximum amount of such contributions that could be made to the After-Tax Contribution Account and Pre-Tax Contribution Account of such Participants without violating the requirements of Section 5.2(a). The amount of each Highly Compensated Participant's excess aggregate contributions shall be determined as follows: First, the actual contribution ratio of the Highly Compensated Employee with the highest actual contribution ratio is reduced to the extent necessary to satisfy the actual contribution percentage test under Section 5.2(a) or cause such ratio to equal the actual contribution ratio of the Highly Compensated Employee with the next highest ratio. Second, the process is repeated until the actual contribution percentage test is satisfied. The amount of excess aggregate contributions for a Highly Compensated Employee is then equal to the total of the contributions taken into account for the actual contribution percentage test minus the product of the Employee's reduced actual contribution ratio as determined above and the Employee's Salary. This process shall be known as the leveling method, as described in IRS Regulation Section 1.401(m)- 1(e)(2). In the case of a Highly Compensated Employee whose actual contribution ratio is determined under the family aggregation rules, the amount of excess aggregate contributions, as defined in this Section 5.2(b) shall be determined by reducing the actual contribution ratio in accordance with the leveling method described in this Section 5.2(b) and the excess aggregate contributions are allocated among the Family Members in proportion to the contributions of each Family Member that have been combined. (c) If the Administrative Committee is required to refund or forfeit excess aggregate contributions for any Highly Compensated Participant for a Plan Year in order to satisfy the requirements of Section 5.2(a), then the refund or forfeiture of such excess aggregate contributions shall be made with respect to such Highly Compensated Participants to the extent practicable before the 15th day of the third month immediately following the Plan Year for which such excess aggregate contributions were made, but in no event later than the end of the Plan Year following such Plan Year or, in the case of the termination of the Plan in accordance with Section 14, no later than the end of the 12-month period immediately following the date of such termination. For each such Participant amounts so refunded or forfeited shall be made in the following order of priority: (A) by distributing amounts contributed to the After-Tax Contribution Account, and earnings thereon; and (B) by distributing amounts contributed to the Pre-Tax Contribution Account (to the extent such amounts are included in the actual contribution percentage), and earnings thereon. However, in no case may the amount of excess aggregate contributions refunded or forfeited with respect to any Highly Compensated Employee exceed the amount of After-Tax Contributions made on behalf of the Highly Compensated Employee for the Plan Year. All such distributions and forfeitures shall be made to, or shall be with respect to, Highly Compensated Participants on the basis of the respective portions of such amounts attributable to each such Highly Compensated Participant as determined under Section 5.2(b). The distribution of any excess aggregate contributions shall include the gains and losses allocable thereto for the Plan Year as well as for the period between the end of the Plan Year and the date of the distribution. The gain or loss allocable to excess aggregate contributions is the gain or loss allocable to the Participant's After-Tax Contributions Account (and any Pre-Tax Contribution included in the actual contribution percentage test) to the extent not included in the actual deferral percentage test multiplied by a fraction, the numerator of which is the excess aggregate contribution for the Participant for the Plan Year and the denominator is the Participant's After-Tax Contributions (and all amounts treated as such for purposes of the actual contribution percentage test) at the end of such Plan Year, without regard to gains and losses attributable to such Accounts for the Plan Year. The gain or loss allocable to the excess aggregate contributions for the period between the end of the Plan Year and the distribution date is equal to 10% of the income allocated to such excess aggregate contributions for the Plan Year multiplied by the number of calendar months which have elapsed since the end of the Plan Year. For purpose of determining the number of calendar months, a distribution occurring on or before the 15th day of the month will be treated as having been made on the last day of the preceding month, a distribution made after the 15th day of the month will be treated as having been made on the first day of the next month. 5.3 Allocation of Participating Company Contributions. (a) The Administrative Committee shall allocate the contribution of each Participating Company made in accordance with Section 5.1 among all Participants who were employed by such Participating Company or an Affiliate as of the last day of the Plan Year. The contribution shall be allocated to the Company Contribution Account of each Employee of the Participating Company who was a Participant in the Plan for a Plan Year in the same proportion that his Compensation bears to the Compensation of all Employees of the Participating company who were Participants in the Plan for such Plan Year. Notwithstanding the foregoing, (i) no contribution shall be allocated in respect of a Participant who did not complete at least one Hour of Service with a Participating Company during such Plan Year; and (ii) a contribution shall be allocated with respect to a Participant whose participation in the Plan terminated during the Plan Year because of (1) the attainment of his Early Retirement Date or his Normal Retirement Date, (2) his death, or (3) his Disability, even if he was not employed by a Participating Company on the last day of the Plan Year. (b) In the event that a Participating Company is unable to make its full contribution because of the limitations specified in Section 2.6 (to the extent such contribution is not paid on such Participating Company's behalf pursuant to such Section) the amount allocated to such Participant in respect of his employment during such Plan Year with such Participating Company shall be reduced proportionately so that the total amounts allocable to Participants in respect of employment with the Participating Company do not exceed the actual amount of the contribution made by such Participating Company. If the Plan fails to satisfy Section 401(a)(26) of the Code, Participating Company contributions under Section 5.1 shall be allocated among the Eligible Employees who are Participants for the Plan Year in which such contributions are made, in the proportion that the Compensation of each Participant bears to the total Compensation of all Participants for such Plan Year. 5.4 Time of Payment of Participating Company Contributions. The Company Contributions made by a Participating Company under Section 5.1 shall be paid as soon as practicable to the Trustee following the approval of such contribution by the Board of Directors; provided that the total amount of the contribution under the Plan for any taxable year shall be paid in full on or before such date as the federal income tax laws applicable to such payment require the payment to be made in order to permit deduction of such payment for such taxable year. 5.5 Form of Payment of Participating Company Contributions. The Pre-Tax Contributions made for a taxable year pursuant to Section 4.1, the Company Contributions made for a taxable year pursuant to Section 5.4 and the Participants' After-Tax Contributions under Section 4.3, shall be paid directly by the Company to the Trustee in cash, or, at the option of the Company, in whole or in part in other property acceptable to the Trustee. 5.6 Return of Employer Contributions. Any contribution made by an Employer because of a mistake of fact shall be returned to the Employer which made such contribution within one year of such contribution. Any contribution made by an Employer is conditioned upon the contribution's deductibility or the Plan's initial qualification under the Code, and if either the deduction or the initial qualification is denied, such contribution shall be returned to the Employer which made such contribution within one year after the date such deduction or qualification is denied. SECTION 6. INVESTMENT OF CONTRIBUTIONS 6.1 Investment by Trustees. All amounts of money, securities or other property received as contributions under the Plan shall be delivered to the Trustee to be managed, invested, reinvested and distributed for the exclusive benefit of the Participants and their Beneficiaries in accordance with the Plan, the Trust and any agreement with an insurance company or other financial institution constituting a part of the Plan and the Trust. 6.2 Investment Funds. (a) The Trustee shall cause to be established and maintained separate Investment Funds in each of which each Participant who has any interest therein shall have an undivided proportionate interest. The Investment Committee shall have, from time to time and at any time, the right to establish additional Investment Funds to implement and carry out investment objectives and policies as established by the Investment Committee. The Investment Committee may from time to time delete Investment Funds on at least 30 days' prior written notice to the Trustee. Each Participant's undivided proportionate interest in each Investment Fund of the Trust shall be measured by the proportion that his account balance in such Investment Fund bears to the total account balances of all Participants in that Investment Fund as of the date that such interest is being determined. Interest, dividends and other distributions received and gains realized on securities or other property held in any Investment Funds shall be reinvested in such Investment Funds. (b) The Investment Funds shall consist of the following investments: (1) A "Company Stock Fund" which shall be invested in the common stock of Ogden Corporation; (2) An "Equity Fund" which shall be invested by a professional manager or managers in such other companies' common stocks and other securities whose investment objectives are a blend of targets for appreciation, current income and growth in dividends; (3) A "Fixed Income Fund" which shall be invested in guaranteed interest or bank investment contracts or synthetic guaranteed interest or investment contracts, with the earnings of such contracts being blended for allocation purposes; (4) A "Merrill Lynch Treasury Fund" a mutual fund which shall invest in a portfolio of United States Treasury securities and equivalents; (5) Effective October 1, 1994, the "Fidelity Magellan Fund" which shall be invested by a professional manager or managers in common stock and securities convertible into common stock of domestic, foreign and multinational issuers of all sizes that offer potential for growth; and (c) Effective October 1, 1994, the "T. Rowe Price International Stock Fund" which shall be invested by Rowe Price-Fleming International Inc. in primarily common stocks of established non-United States companies in the Far East, Europe, South Africa, Australia, Canada and other areas. 6.3 Investment Elections. (a) A Participant's Pre-Tax Contributions, Company Contributions, After-Tax Contributions and Rollover Contributions shall be invested, at the written election of the Participant, in accordance with one of the following options: (i) 100% in one of the available Investment Funds; or (ii) in more than one Investment Fund in multiples of five percent. If a Participant does not make a written election, he shall be deemed to have elected to have his Account invested in the Merrill Lynch Treasury Fund. Each Participant is solely responsible for the selection of his investment options and the availability of an Investment Fund to Participants for investment under the Plan shall not be construed as a recommendation for investment in such Investment Fund. (b) Any investment direction given by a Participant shall be deemed to be a continuing direction until changed. A Participant may change his investment election under Section 6.3 (a) with respect to future contributions as of the first day of each calendar quarter, provided, that such direction is given in writing, by filing an appropriate form with the Administrative Committee at least 30 days prior to such date or such earlier date as permitted by the Administrative Committee in accordance with rules uniformly applicable to Participants on a nondiscriminatory basis. (c) Subject to such rules as may be imposed by the Trustee or other financial institution, a Participant may elect to transfer amounts in his Account among the Investment Funds as of the first day of each calendar quarter, provided that such direction is given in writing by filing an appropriate form with the Administrative Committee at least 30 days prior to such date. A Participant amy transfer such amounts among the Investment Funds such that the value of his Account is invested 100% in one of the available Investment Funds or in more than one Investment Fund, allocated in multiples of five percent. (d) The net credit balances in Participants' Accounts in the respective Investment Funds of the Trust Fund shall be adjusted, upward or downward, pro rata, so that such net credit balances will reflect the investment earnings of each Investment Fund of the Trust Fund as of the Valuation Date, using fair market values as determined by the Trustee and reported to the Administrative Committee, after such investment earnings for the appropriate Investment Fund has been reduced by any expenses chargeable to that Investment Fund which have been paid and which may be incurred but not yet paid. 6.4 Company Liability. Any losses related to the compliance by the Company with respect to the Participant's investment direction shall be borne by the Participant's Account. The Company, each Participating Company, the Investment Committee and the Administrative Committee shall not be liable for any loss or expense which may arise from or result from compliance with any investment direction from a Participant. SECTION 7. VALUATIONS AND ADJUSTMENTS OF PARTICIPANTS' ACCOUNTS 7.1 Allocation of Earnings and Losses - Valuation of Trust. (a) As of each Valuation Date in a Plan Year, and after giving effect to any hardship withdrawal under Section 8.4, any loan under Section 8.5, any Direct Rollover under Section 10.5, or transfer under Appendix A, but before giving effect to the receipt and allocation of any Company Contribution, Pre-Tax Contributions or After-Tax Contributions, and before giving effect to any repayments of loans under Section 8.5, the participation of any new Participants in the Plan, any adjustments, or any distributions under Section 10, all assets of the respective Investment Funds shall be valued at fair market value as determined by the Trustee. The Trustee shall adjust the net credit balances in the Accounts in the respective Investment Funds of the Trust Fund, upward or downward, pro rata, so that such net credit balances will reflect the investment earnings or losses of each Investment Fund of the Trust Fund as of that Valuation Date, using fair market values as determined by the Trustee and reported to the Administrative Committee. All determinations made by the Trustee with respect to fair market values and investment earnings shall be made in accordance with generally accepted principles of trust account, and such determinations when so made by the Trustee and any determinations by the Administrative Committee based thereon, shall be conclusive and binding upon all persons having an interest under the Plan. (b) With respect to the valuation of the shares held in the Company Stock Fund pursuant to Section 6.2(b)(1), the cash withheld from Participants shall be delivered to the Trustee as soon as practicable. Upon receipt of such cash, the Trustee shall purchase shares in the Company Stock Fund as may be needed and as soon as practicable. The shares purchased shall be valued under the Plan at the closing price as of the next succeeding Valuation Date. Subsequent to the valuation of shares upon first entering the Company Stock Fund, such shares shall be valued at the closing price as of each Valuation Date thereafter. 7.2 Expenses. The expenses of administering the Plan, including (i) the fees and expenses of (1) any Employee, (2) the Trustee and (3) any Investment Manager, for the performance of their duties under the Plan and the Trust, (ii) the expenses incurred by the members of the Administrative Committee and of the Investment Committee in the performance of their duties under the Plan (including reasonable compensation for any legal counsel, certified public accountants, consultants, and agents and cost of services rendered in respect of the Plan), and (iii) all other proper charges and disbursements of the Trustee or members of either the Administrative Committee or the Investment Committee (including settlements of claims or legal actions approved by counsel to the Plan) may be paid out of the Trust Fund, and allocated to and deducted from the Participants' Accounts by the Administrative Committee in accordance with the provisions of Section 7.1 above, if the Company does not pay such expenses directly. However, the fees, expenses, charges and disbursements attributable to any Investment Fund shall be charged against the investment earnings of such Investment Fund as provided in Section 7.1 unless such expenses are deducted from the income of such Investment Fund, or, if such Investment Fund has no investment earnings in that Plan Year, shall be deducted pro rata from the Accounts of Participants electing to invest in such Investment Fund. The Administrative Committee may, at its discretion, direct that certain expenses shall be paid out of specified Investment Funds if the Administrative Committee deems it appropriate to reflect the cost of such Investment Funds. 7.3 Allocation of Forfeitures. As of the last day of each Plan Year, any forfeitures arising under the Plan during such Plan Year shall be allocated by the Administrative Committee to Participants' Accounts in the same manner as contributions provided in Section 5. For this purpose, all Participants of all Participating Companies shall be treated as Eligible Employees of a single employer. SECTION 8. ELIGIBILITY FOR BENEFITS 8.1 Distribution of Participant's Account on Retirement and Disability. Upon termination of a Participant's Service on or after his Normal Retirement Date or his Early Retirement Date or by reason of his Disability and subject to Sections 10.2 and 10.4, a benefit equal to the value of the Participant's Account (less any unpaid loans) as of the Valuation Date coincident with or next following the date on which his Service is terminated shall be paid from the Trust Fund; provided that the Administrative Committee has received all the necessary forms from the Participant. Such payment shall be made by a method of distribution described and at the time specified in Section 10. 8.2 Distribution of Participant's Account on Death. (a) Upon the death of a Participant while an Employee, benefits equal to the value of the Participant's Account (reduced by any unpaid loans) as of the Valuation Date coincident with or next following the date of his death shall be payable to the Beneficiary of such Participant (as determined in Section 11) from the Trust by a method of distribution described and at the time specified in Section 10; provided that the Administrative Committee has received all the necessary forms from the Beneficiary. (b) If a former Employee who was a Participant dies before payment of the full value of his Account from the Trust Fund, an amount equal to the value of the unpaid portion thereof as of the Valuation Date coincident with or next following the date of his death shall be paid to the Beneficiary of such former Participant (as determined under Section 11) in accordance with a method of distribution described and at the time specified in Section 10; provided that the Administrative Committee has received all necessary forms from the Beneficiary. 8.3 Distribution on other Termination of Service. (a) Upon the termination of employment of any Participant which occurs other than on his Normal Retirement Date or his Early Retirement Date or for any reason other than death or Disability and subject to Sections 10.2 and 10.4, the Participant shall be paid an amount equal to the value of his Account, after reduction for the amount of any unpaid loans, as of the Valuation Date coincident with or next following the date on which his Service is terminated and all necessary forms are received by the Administrative Committee, of the sum of the Participant's (i) Pre-Tax Contribution Account, (ii) After-Tax Contribution Account, (iii) Vested Interest (as determined in Section 9.2) in his Company Contribution Account, and (iv) Rollover Contribution Account; provided the Administrative Committee receives all of the necessary forms from the Participant. Such distribution shall be made as soon as practicable thereafter by a method of distribution described and at the time specified in Section 10. Any excess of the amount credited to such Participant's Company Contribution Account over his Vested Interest in such Account shall be forfeited. 8.4 Hardship Withdrawals; In-Service Withdrawals. (a) Upon the receipt of a written application from a Participant, the Administrative Committee may distribute to a Participant any vested portion or all of a Participant's account that has been vested to the extent necessary to enable such Participant to meet an immediate and heavy financial need in his financial affairs, provided that (i) such Participant shall establish to the satisfaction of the Administrative Committee, in accordance with principles and procedures established by the Administrative Committee which are applicable to all persons similarly situated, that a withdrawal to be made by him pursuant to this Section 8.4(a) is to be made by reason of an immediate and heavy financial need as defined below and that such withdrawal is not in excess of the amount required to relieve such immediate and heavy financial need, and (ii) no amount in a Participant's Account that is deemed invested in an outstanding loan to the Participant may be withdrawn. A withdrawal by reason of an immediate and heavy financial need under this Section 8.4(a) may be requested by a Participant only after he has (i) withdrawn all employee contributions permitted to be withdrawn under any other plan maintained by the Employer, and (ii) made all loans currently available under Section 8.5 or under any other plan maintained by the Employer. The amount of any withdrawal pursuant to this Section 8.4(a) shall not exceed the amount required to meet the financial emergency (including amounts needed to pay any taxes or penalties as a result of such withdrawal). Subject to the provisions of this Section 8.4(a), each Participant may withdraw all or any portion of the vested aggregate amount of his Pre-Tax Contribution Account (excluding earnings on post-1988 Pre-Tax Contributions) twice in a Plan Year. (b) A Participant shall give the Administrative Committee written notice of a request for a withdrawal pursuant to the provisions of this Section 8.4 in accordance with such procedures as the Administrative Committee shall establish. No withdrawal pursuant to this Section 8 shall be of an aggregate amount less than $500. Withdrawals shall become effective on the last day of the month during which the Administrative Committee receives a properly executed withdrawal form, unless a later date is requested therein, provided such request is received within the first 15 days of the month in which a withdrawal is requested. Payment of any withdrawals pursuant to this Section 8.4 shall be made solely in cash. A Participant who makes a hardship withdrawal pursuant to this Section 8.4 shall be suspended from making any further Pre-Tax Contributions for a period of twelve months, effective as of the next practicable payroll following the effective date of the withdrawal. Notwithstanding any other provision of the Plan, the Pre-Tax Contributions of a Participant made in the Plan Year following the Plan Year during which a withdrawal pursuant to this Section 8.4 was made, shall not exceed the applicable limit under Section 402(g) of the Code for such Plan Year less the amount of Pre-Tax Contributions made by the Participant during the Plan Year during which the withdrawal pursuant to this Section 8.4 was made. (c) For purposes of this Section, the term immediate and "heavy financial need" means a situation in which a Participant or his dependents are confronted by extreme financial need that cannot be satisfied from other sources and shall be limited to the need of funds for: (i) the payment of medical expenses described in Section 213(d) of the Code incurred by, or necessary (even though not yet incurred/or the treatment of, the Participant, the Participant's spouse, or any dependents of the Participant (as defined in Section 152 of the Code); (ii) the purchase (excluding mortgage payments) of a principal residence for the Participant, (iii) the payment of tuition and related educational expenses for the next 12 months following the date of the withdrawal for post-secondary education of the Participant, his spouse, children, or dependents (as defined in Section 152 of the Code), (iv) the prevention of the eviction of the Participant from his principal residence or the prevention of foreclosure on the mortgage of the Participant's principal residence, or (v) such other immediate and heavy financial emergency as determined by the Administrative Committee pursuant to uniformly applicable guidelines and IRS Regulations. (d) Notwithstanding Sections 8.1, 8.2 and 8.3, the Administrative Committee may distribute to a Participant on the first day of any month following the receipt of a written application, the balance then credited to his After-Tax Contribution Account. 8.5 Loans. (a) A Participant shall be entitled to apply for a loan from the vested value of his Account (other than shares held in the Company Stock Fund and the Stock Bonus Account); provided, however, such Participant gives at least 30 days' prior written notice to the Administrative Committee. The maximum amount available for a loan under the Plan (when added to the outstanding balance of all other loans from the Plan to the Participant) shall not exceed 50% of the vested portion of the Participant's Account up to the maximum of $50,000 reduced by the excess (if any) of (i) the highest outstanding loan balance attributable to the Account of the Participant requesting the loan during the one-year period ending on the day preceding the date of the loan, over (ii) the outstanding balance of all other loans from the Plan to the Participant on the date of the loan. Loans shall be granted in $50 increments with $1,000 established as the minimum amount of any loan. Authorization for such loans and the terms thereof shall be in the sole discretion of the Administrative Committee pursuant to uniform, nondiscriminatory rules consistently applied to all Participants. Effective January 1, 1995, only two outstanding loans are permissible under the Plan. For any loan approved prior to December 31, 1994, the Committee shall not grant a loan to any Participant unless and until a current unpaid loan for the same purpose including accrued interest, has been liquidated. (b) As a condition for obtaining a loan, the Participant shall execute a promissory note payable to the Trust fund authorizing the repayment of the loan through payroll deductions, a reasonable maturity date (subject to the restrictions described below) and a rate of interest equal to the Trustee's announced prime lending rate plus one percent as in effect on the first business day of each month. The payment schedule shall provide for substantially level amortization with payments not less frequently than quarterly, equal to the amount necessary to amortize the balance due at maturity. The maturity date for any loan will not be more than five years after the date of the loan except for loans to acquire a principal residence which will have a maturity date that is not more than ten years after the date of the loan. A loan may not have a maturity date of less than 12 months after the date of the loan. Each payment of principal and interest shall be transmitted to the Trustee as soon as practicable after receipt by the Participating Company. The outstanding balance of any loan may be fully repaid at any time without penalty. (c) If a Participant has obtained a loan and subsequently defaults in making any repayment installment when due, and such default continues for 90 days thereafter, or in the event of the Participant's bankruptcy, impending bankruptcy, insolvency or impending insolvency, the loan shall be deemed to be in default and the entire unpaid balance shall immediately become due and payable. However, at the option of the Administrative Committee, the installments in default and all future installments may instead be withheld from the Participant's salary. If the unpaid balance becomes due and payable at any time, the Administrative Committee may direct the Trustee to pursue collection of the debt by any means generally available to a creditor where a promissory note is in default. If there remains any unpaid balance due on a loan to a Participant at the time his employment terminates for any reason, the loan shall terminate and the Trustee shall distribute to the Participant the promissory note evidencing the loan. However, the Participant, or his Beneficiary, shall have the right to repay such unpaid balance before receiving a distribution of his Account pursuant to Section 10. In no event shall any repayment of principal amounts on a loan obtained under this Section, or interest thereon, be taken into account in determining whether the limitations described in Section 10 (to conform to the requirements of Section 415 of the Code) are exceeded. (d) A loan shall be deemed an investment of the borrowing Participant's Account and shall not reduce the amount credited to his Account. At the time a loan is made, the amount loaned shall first be deemed an investment of, and allocated to, the Participant's Vested Interest and his Company Contribution Account; to the extent the loan is in excess of such amounts, it shall then be deemed an investment of, and allocated to the Participant's Pre-Tax Contribution Account not already allocated to a loan; to the extent it is in excess of such amounts, it shall then be deemed an investment of, and allocated to, the Participant's After-Tax Contribution Account not already allocated to a loan; to the extent it is in excess of such amounts, it shall be deemed an investment of and allocated to such Participants' Roll-over Contribution Account; to the extent it is in excess of such amounts, it shall then be deemed an investment of, and allocated to, the Participant's Vested Interest in any account (except as provided to the contrary herein) described in Appendix A, not already allocated to a loan. (e) The Investment funds in which the Participant's Account is invested in accordance with Section 6 of the Plan shall be reduced by the amount of any loan made hereunder in the ratio that the value of each such Investment Fund bears to the value of all Investment Funds in which the Participant's Account are invested; provided, however, that the Company Stock Fund and Stock Bonus Fund may not be reduced for any loan made hereunder. (f) The Administrative Committee shall, in accordance with its established standards, review and approve or disapprove a completed application as soon as practicable after its receipt thereof, and shall promptly notify the applicant of such approval or disapproval. In addition, in the event the Trustee, in its sole discretion, determines that it is not reasonably and prudently able, in the interests of Participants and Beneficiaries, to liquidate the necessary amount from any of the Investment Funds, the Trustee shall notify the Administrative Committee, and the amount to be paid to each Participant whose completed application designated that a loan be made from such Investment Fund shall be reduced in proportion to the ratio which the aggregate amount that the Trustee has advised the Administrative Committee may prudently be liquidated bears to the aggregate amount which all such Participants designated to be paid from such Investment Fund. (g) The right to receive loan repayments, including interest thereon, shall be considered an asset of the Plan and all loan repayments of principal and interest shall be credited to the Investment Funds that the Participant's future contributions are allocated on the date of such repayment in the same proportion as that in which each was liquidated and credited to the Account in the order reversed to the order used to make payment of the loan proceeds to the Participant. (h) Outstanding loans shall share in Plan expenses in a manner determined by the Administrative Committee. The Administrative Committee shall apply these rules on a uniform and nondiscriminatory basis. With appropriate notice, the Administrative Committee may amend these rules, including amendments that affect outstanding loans, as may be required to conform to applicable law or regulation. 8.6 Restrictions on Distributions. Notwithstanding the foregoing, a Participant's Pre-Tax Contribution Account may not be distributed earlier than upon one of the following events: (a) The Participant's retirement, death, Disabil- ity or termination of Service; (b) The termination of the Plan without the establishment or maintenance of another de- fined contribution plan (other than an employee stock ownership plan or a simplified employee plan); (c) The Participant's attainment of age 59-1/2 or upon the Participant's hardship, if so per- mitted by the Plan; or (d) The sale or disposition by the Employer to an unrelated corporation of (i) substantially all of the assets used in a trade of business or (ii) the Employer's interest in a subsidi- ary, but only with respect to Participants who continue employment with the acquiring corporation or the subsidiary, as the case may be, and the acquiring corporation does not maintain the Plan after the deposition. SECTION 9. VESTING 9.1 Vesting. At all times, each Participant shall have a nonforfeitable right to 100% of the value of his Pre-Tax Contribution Account, his After-Tax Contribution Account and his Rollover Contribution Account, if any, and such other accounts as set forth in Appendix A, except as otherwise provided therein. 9.2 Vesting Schedule. A Participant's interest in his Company Contribution Account shall vest according to the following vesting schedule:
Nonforfeitable Full Years of Service Percentage less than 1 Year of Service 0% 1 but less than 2 Years of Service 20% 2 but less than 3 Years of Service 40% 3 but less than 4 Years of Service 60% 4 but less than 5 Years of Service 80% 5 or more Years of Service 100%
9.3 Break in Service for Vesting. (a) If a terminated Participant incurs five consecutive Breaks in Service before he returns to the employment of the Employer, any excess of the amount credited to such terminated Participant's Account over his Vested Interest shall be permanently forfeited by him upon the fifth such consecutive Break in Service, or upon receipt of his Vested Interest upon termination of employment, whichever is earlier. (b) If the terminated Participant returns to the employment of the Employer prior to incurring five consecutive Breaks in Service, any excess of the amount credited to such terminated Participant's Account over his Vested Interest shall be reinstated and recredited, if necessary, by additional Company Contributions by his Participating Company to the Participant's Company Contribution Account as of the last day of the month in which the terminated Participant performs an Hour of Service, the last day of the next following month or by a priority reallocations of the current forfeitures. As of any Valuation Date thereafter, such Participant's Vested Interest shall be determined by (i) adjusting the amount of his Account on the date of his most recent termination of employment as if such amount had been held in the Trust since the date of distribution as provided in Section 8, and then (ii) multiplying his Vested Interest by such adjusted total account, and then (iii) subtracting the amount of his distribution on his most recent termination of employment, adjusted as if such distribution had been held in the Trust since the date of his distribution as provided in Section 8, from his adjusted total account. Such Participant may repay to the Plan, in one lump cash sum within two years after reemployment, the full amount distributed to him pursuant to his prior termination of employment. Any amount repaid pursuant to this Section 9.3(b) shall be invested in the Investment Funds in the proportions selected in the most recent written election filed by the Participant with the Administrative Committee pursuant to Section 6.3. 9.4 Full Vesting. Notwithstanding the foregoing, a Participant or his Beneficiary, whichever is appropriate, shall be fully vested in the entire value of the Participant's Account upon the Participant's attainment of his Normal Retirement Age, Early Retirement Age, or upon such Participant's Disability or death. SECTION 10. METHOD OF PAYMENT OF BENEFITS 10.1 Payment of Benefits. Subject to the provisions of this Section 10, any benefit payable under Section 8 of the Plan shall be paid in one of the following methods of distribution, as the Participant (or in the case of his death, either the Participant or his Beneficiary as provided in Section 8) may elect: (1) One lump sum payment from the Trust Fund; or (2) With respect to any benefit earned or accrued on or before December 31, 1988 under the Prior Plan, a Participant may elect either a lump sum payment in accordance with this Section 10.1 or any method of payment which was available under the Prior Plan as in effect on December 31, 1988, consisting of equal monthly, quarterly and annual installments. If the Participant elects to receive the December 31, 1988 value of his Account in such installments, in no event may the present value of such installments be less than 50% of the installments projected to be paid to the Participant and his Beneficiary. 10.2 Commencement of Benefits. (a) If the Participant or Beneficiary fails to select a distribution method at least 30 days prior to the date by which distribution must commence, such benefits shall be paid in one lump sum payment. If a Participant has elected an installment method of payment pursuant to Section 10.1(2) and such Participant dies before the distribution of his entire Account has been made, his Beneficiary shall be entitled to a lump sum payment of such remaining Account balance. (b) Any Disability benefit payable to a Participant under Section 8, shall be paid in accordance with the following provisions: (i) If a disabled Participant files appropriate forms requesting a distribution from the Plan by the end of the month in which he suffered his Disability, the Administrative Committee shall distribute the proceeds of his Account, valued as of the last Valuation Date of the month in which the Participant suffered such Disability, by the next succeeding month, or as soon as administratively practicable thereafter. (ii) If the disabled Participant files appropriate forms after the end of the month in which he suffered his Disability, the Administrative Committee shall distribute the proceeds of his Account, valued as of the last Valuation Date of the month such form is received, by the next succeeding month, or as soon as administratively practicable thereafter. (c) Notwithstanding any other provision of the Plan, unless otherwise provided by law, any benefit payable to a Participant shall commence no later than the April 1st of the calendar year following the calendar year in which such Participant attains age 70 1/2; provided, however, if a Participant attained age 70 1/2 prior to January 1, 1988, except as otherwise provided in Section 10.2(e), any benefit payable to such Participant shall commence no later than the April 1st of the calendar year following the later of (i) the calendar year in which the Participant attains age 70 1/2 or (ii) the calendar year in which the Participant retires. Such benefit shall be paid, in accordance with IRS Regulations, over a period not extending beyond the life expectancy of such Participant or the joint life expectancies of such Participant and his Beneficiary. Life expectancy for purposes of this Section shall not be recalculated annually in accordance with IRS Regulations. (d) If distribution of a Participant's benefit has commenced prior to a Participant's death, and such Participant dies before his entire benefit is distributed to him, distribution of the remaining portion of the Participant's benefit to the Participant's Beneficiary shall be made at least as rapidly as under the method of distribution in effect as of the date of the Participant's death. (e) If a Participant dies before distribution of his benefit has commenced, distributions to any Beneficiary shall be made on or before the December 31st of the calendar year which contains the fifth anniversary of the date of such Participant's death; provided, however, at the Beneficiary's irrevocable election, duly filed with the Administrative Committee before the applicable commencement date set forth in the following sentence, any distribution to a Beneficiary may be made over a period not extending beyond the life expectancy of the Beneficiary. Such distribution shall commence not later than the December 31st of the calendar year immediately following the calendar year in which the Participant died or, in the event such Beneficiary is the Participant's Surviving Spouse, on or before the December 31st of the calendar year in which such Participant would have attained age 70 1/2, if later (or, in either case, on any later date prescribed by IRS Regulations). If such Participant's Surviving Spouse dies after the Participant's death but before distributions to such Surviving Spouse commence, this Section 10.2(e) shall be applied to require payment of any further benefits as if the Surviving Spouse were the Participant. (f) Pursuant to IRS Regulations, any benefit paid to a child shall be treated as if paid to a Participant's Surviving Spouse if such amount will become payable to such Surviving Spouse on the child's attaining majority, or other designated event permitted by IRS Regulations. (g) If a Participant who is a five percent owner attained age 70 1/2 before January 1, 1988, any benefit payable to such Participant shall commence no later than the April 1st of the calendar year following the later of (i) the calendar year in which the Participant attains age 70 1/2 or (ii) the earlier of (A) the calendar year within which the Participant becomes a five percent owner or (B) the calendar year in which the Participant retires. For purposes of this Section 10.2(g), a five percent owner shall mean a five percent owner of such Participant's Employer as defined in Section 416(i) of the Code at any time during the Plan Year in which such owner attains age 66 1/2 or any subsequent Plan Year. (h) All distributions made hereunder shall be made in accordance with the provisions of Section 401(a)(9) of the Code and IRS Regulations thereunder. (i) Notwithstanding the foregoing, distributions to a Participant may be made in accordance with a written designation made before January 1, 1984 by the Participant if such designation satisfied the requirements of Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982. 10.3 Time of Payment. (a) Any election under Section 10.1 must be made by the payee prior to the 60th day following the date of the Participant's termination of employment by reason of his retirement, death, or Disability and prior to the date that payments commence pursuant to the provisions of the Plan. Subject to Section 10.3(b), payments shall be made no later than the 60th day following the date on which the amount of the payment under the Plan (or in the case of more than one payment, the first said payment) can be ascertained under the Plan. (b) Notwithstanding any other provision of the Plan, to the extent required by the Code and IRS Regulations, (i) if the value of a Participant's Account does not or never has exceeded $3,500, a distribution may be made to such Participant prior to the date he attains his Normal Retirement Age without his written consent and (ii) if the value of a Participant's Account exceeds or has ever exceeded $3,500, no distribution may be made to such Participant prior to the date he attains his Normal Retirement Age without his written consent. In the absence of receipt of such consent by the Administrative Committee prior to the 60th day following the date of the Participant's termination of Service, payment of the benefit to such Participant shall commence as soon as practicable after the Participant's attainment of Normal Retirement Age, which benefit shall be in an amount equal to the value of the Participant's distributable Account as of the Valuation Date coincident with or immediately following the Participant's attainment of Normal Retirement Age. During the period of deferral mandated by the absence of receipt of consent, the Participant may change his investment direction under Section 6. (c) Benefits payable under the Plan to a Participant or Beneficiary from the Company Stock Fund, other than a withdrawal due to an immediate and heavy financial need or loans made pursuant to Section 8, shall be paid in cash unless the participant elects to receive such distributions in whole shares of the stock held in such Investment Fund or Funds (containing such legends and upon such terms and conditions and restrictions as the Administrative Committee may, in its sole discretion, direct), together with any cash credited to his Account either awaiting investment in such stock or representing fractional shares of such stock. 10.4 Latest Commencement Date. Unless the Participant elects otherwise, the payment of benefits under the Plan shall commence not later than the 60th day after the latest of the close of the Plan Year in which (i) the Participant obtains age 65, (ii) occurs the 10th anniversary of the year the Participant commenced participation under the Plan, and (iii) the Participant terminates employment with the Company or an Affiliate. 10.5 Direct Rollover. (a) Effective on or after January 1, 1993, a Distributee may elect, at a time and manner prescribed by the Administrative Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by such Distributee in the form of a Direct Rollover. 10.6 Special Tax Notice. Notwithstanding any other provision of the Plan, no distribution may be made to a Participant unless the Participant receives from the Administrative Committee an officially approved tax notice (pursuant to the Code and IRS Regulations) which specifies certain information regarding the federal income tax treatment of Plan benefits paid in the form of a lump cash sum no less than 30 days and no more than 90 days before the date benefits are to be distributed. Such distribution may commence less than 30 days after the required notice is given, provided that (i) the Administrative Committee clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution, and (ii) the Participant, after receiving the notice, affirmatively elects a distribution. SECTION 11. DESIGNATION OF BENEFICIARIES 11.1 Beneficiary Designation. Each Participant shall file with the Administrative Committee a written designation of one or more persons (which may include the Participant's spouse) as the Beneficiary who shall be entitled to receive the amount, if any, payable under the Plan upon his death. A Participant may from time to time revoke or change his Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Administrative Committee. Notwithstanding the foregoing, if the Participant is married, his spouse must consent, in writing, to the designation of a Beneficiary other than the Participant's spouse (unless the Administrative Committee makes a written determination in accordance with the Code and IRS Regulations that no such consent is required). The last such designation received by the Administrative Committee shall be controlling, provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Administrative Committee prior to the Participant's death, and in no event shall it be effective as of a date prior to such receipt. 11.2 Failure to Designate Beneficiary. If no such Beneficiary designation is in effect at the time of a Participant's death, or if no designated Beneficiary survives the Participant, the Participant shall be deemed to have designated his Surviving Spouse, if any, as Beneficiary, or if the Participant has no Surviving Spouse, then the Participant's estate. If the Administrative Committee is in doubt as to the right of any person to receive such amount, the Administrative Committee may direct the Trustee to retain such amount, without liability for any interest thereon, until the rights thereto are determined, or the Administrative Committee may direct the Trustee to pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Plan and the Trust therefor. SECTION 12. ADMINISTRATION OF THE PLAN 12.1 Powers and Duties of Administrative Committee. The Administrative Committee shall have general responsibility and discretionary authority for the administration, establishment and interpretation of the Plan (including but not limited to complying with reporting and disclosure requirements, establishing and maintaining Plan records, adopting amendments to the Plan as described in Section 14.1, deciding all questions arising in connection with the Plan including eligibility, benefit payments, vesting and factual questions). The Administrative Committee shall engage such certified public accountants, who may be accountants for the Company, as it shall require or may deem advisable for purposes of the Plan. The Administrative Committee shall have sole discretionary authority to determine, a Participant's or Beneficiary's benefit eligibility. The Administrative Committee shall communicate any requirements and objectives of the Plan, and any audit information which may be pertinent to the investment of Plan assets to the Investment Committee, which shall establish investment standards and policies and communicate the same to the Trustee (or other funding agencies under the Plan). The Administrative Committee shall have no responsibility for the investment of assets under the Plan or the Trust. 12.2 Powers and Duties of the Investment Committee. The Investment Committee shall periodically review the investment performance and methods of the Trustee and any other funding agency, including any insurance company, under the Plan, and may appoint and remove or change the Trustee and any such funding agency. The Investment Committee shall have the power to appoint or remove one or more Investment Managers and to delegate to such Investment Manager the authority and discretion to manage (including the power to acquire and dispose of) the assets of the Plan, provided that (i) each Investment Manager with such authority and discretion shall be either a bank, an insurance company or a registered investment adviser under the Investment Advisers Act of 1940, and shall acknowledge in writing that it is a fiduciary with respect to the Plan and (ii) the Investment Committee shall periodically review the investment performance and methods of each Investment Manager with such authority and discretion. If annuities are to be purchased under the Plan, the Investment Committee shall determine what contracts should be made available to terminated Participants or purchased by the Trust. 12.3 Powers and Duties of Trustees. The Trustee shall have responsibility under the Plan for the management and control of the assets of the Plan and shall have responsibility for the investment and management of such assets to the extent that such assets are invested in an Investment Fund or the Trustee has been appointed an investment advisor pursuant to Section 12.2. 12.4 Agents, Reports of Committees. The Administrative Committee and the Investment Committee (collectively the "Committees") may arrange for the engagement of such legal counsel who may be counsel for the Company, and make use of such agents and clerical or other personnel as they each shall require or may deem advisable for purposes of the Plan. Each of the Committees may rely upon the written opinion of such counsel and the accountants engaged by the Committee and may delegate to any such agent or to any subcommittee or member of such Committee its authority to perform any act hereunder, including, without limitation, those matters involving the exercise of discretion (including the appointment of an Investment Manager), provided that such delegation shall be subject to revocation at any time at the discretion of such Committee. Each of the Committees shall report to the Board of Directors, or to a committee of the Board of Directors designated for that purpose, no less frequently than at each annual meeting as shall be specified by the Board of Directors, or such committee with regard to the Board of Directors the matters for which it is responsible under the Plan. 12.5 Structure of the Committees. The Administrative Committee and the Investment Committee shall consist of at least three members, each of whom shall be appointed by, shall remain in office at the will of, and may be removed, with or without cause, by the Board of Directors. Any member of the Committees may resign at any time. No member of either of said Committees shall be entitled to act on or decide any matter relating solely to himself or any of his rights or benefits under the Plan. The members of the Administrative Committee and of the Investment Committee shall not receive any special compensation for serving in their capacities as members of such Committees but shall be reimbursed for any reasonable expenses incurred in connection therewith. Except as otherwise required by the Act, no bond or other security need be required of the Administrative Committee or the Investment Committee or any member thereof in any jurisdiction. Any person may serve on both Committees, and any member of either Committee, any subcommittee or agent to whom either Committee delegates any authority, and any other person or group of persons, may serve in more than one fiduciary capacity (including service both as a trustee and administrator) with respect to the Plan. 12.6 Adoption of Procedures of Committees. Each Committee shall elect or designate its own Chairman, establish its own procedures and the time and place for its meetings, and provide for the keeping of minutes of all meetings. A majority of the members of a Committee shall constitute a quorum for the transaction of business at a meeting of such Committee. Any action of a Committee may be taken upon the affirmative vote of a majority of the members of the Committee at a meeting or, at the direction of its Chairman, without a meeting, by mail, telegraph, telex, telecopier or telephone, provided that all of the members of the Committee are informed by mail, telex, telecopier or telegraph of their right to vote on the proposal and of the outcome of the vote thereon. 12.7 Demands for Money. All demands for money of the Plan shall be signed by an officer or officers or such other person or persons as the Administrative Committee may from time to time designate in writing who shall cause to be kept full and accurate accounts of receipts and disbursements of the Plan, shall cause to be deposited all funds of the Plan to the name and credit of the Plan, in such depositories as may be designated by the Investment Committee, shall cause to be disbursed the monies and funds of the Plan when so authorized by the Administrative Committee and shall generally perform such other duties as may be assigned to him from time to time by either Committee. 12.8 Hold Harmless; Indemnification. All benefits and other amounts payable hereunder shall be paid exclusively from the Trust Fund, and neither the Company, Participating Company, any Affiliate, any Trustee, nor any director, officer, Employee or agent of the Company or the Participating Company assumes any responsibility or liability therefor. The Trust Fund may be commingled for investment purposes with like separate trust funds of any other plans and trusts of the Company, Participating Company, or any Affiliate which meet the requirements of Sections 401(a) and 501(a) of the Code. Each Participant, each Beneficiary or each other person who shall claim the right to any payment under the Plan shall look exclusively to the Trust Fund therefor and shall not have any right or claim therefor against the Company, any Participating Company, any Trustee, or any director, officer, Employee or agent of the Company. Except as otherwise required by the Act, neither the Company, Participating Company, nor any member of the Administrative Committee or the Investment Committee, any director, officer, Employee or agent of the Company or the Participating Company shall be required to inquire into or be responsible for any act or failure to act of any Trustee or any Participant. To the maximum extent permitted by the Act and applicable state law, each Trustee, each member of the Administrative Committee and the Investment Committee, each director and officer of the Company, any Participating Company and each Employee who performs service on behalf of the Plan or the Trust, shall be indemnified and saved harmless by the Company or by the Participating Company out of its own assets (including the proceeds of any insurance policy the premiums of which are paid by the Company) from and against any and all losses, costs and expense (including any amounts paid in settlement of a claim with the Company or Administrative Committee's approval) to which any of them may be subjected by reason of any act done or omitted to be done in good faith in their official capacities with respect to the Plan or the Trust Agreement, including all expenses reasonably incurred in their defense. 12.9 Claims for Benefits. (a) All claims for benefits under the Plan shall be submitted in writing to and within a reasonable period of time decided by, a person or persons designated in writing by the Administrative Committee. If the claim is wholly or partially denied, written notice of the denial shall be furnished within 90 days after receipt of the claim; provided that, if special circumstances require an extension of time for processing the claim, an additional 90 days from the end of the initial period shall be allowed for processing the claim, in which event the claimant shall be furnished with a written notice of the extension prior to the termination of the initial 90-day period indicating the special circumstances requiring an extension. The written notice denying the claim shall set forth the reasons for the denial, including specific reference to pertinent provisions of the Plan on which the denial is based, a description of any additional information necessary to perfect the claim and information regarding review of the claim and its denial. (b) A claimant may review all pertinent documents and may request a review by the Administrative Committee of a decision denying the claim. Such a request shall be made in writing and filed with the Administrative Committee within 60 days after delivery to the claimant of written notice of the decision. Such written request for review shall contain all additional information which the claimant wishes the Administrative Committee to consider. The Administrative Committee may hold a hearing or conduct an independent investigation, and the decision on review shall be made as soon as possible after the Administrative Committee's receipt of the request for review. Written notice of the decision on review shall be furnished to the claimant within 60 days after receipt by the Administrative Committee of a request for review, unless special circumstances require an extension of time for processing, in which event an additional 60 days shall be allowed for review and the claimant shall be so notified in writing. Written notice of the decision on review shall include specific reasons for the decision. For all purposes under the Plan, such decision on claims (where no review is requested) and decision on review (where review is requested) shall be in the sole discretion of the Administrative Committee, final, binding and conclusive on all interested persons as to participation and benefits eligibility, the amount of benefits and as to any other matter of fact or interpretation relating to the Plan. 12.10 Communications. Any notice, election, application, instruction, designation or other form of communication required to be given or submitted by any Participant, other Employee or Beneficiary shall be in such form as is prescribed from time to time by the Administrative Committee or Investment Committee, sent by first class mail or delivered in person, and shall be deemed to be duly given only upon actual receipt thereof by such Committee. Any notice, statement, report and other communication from the Company or either Committee to any Participant, other Employee, or Beneficiary required or permitted by the Plan shall be deemed to have been duly given when delivered to such person or mailed by first class mail to such person at his address last appearing on the records of the Company or the Administrative Committee. Each person entitled to receive a payment under the Plan shall file in accordance herewith his complete mailing address and each change therein. A check or communication mailed to any person at his address on file with the Company or the appropriate Committee shall be deemed to have been received by such person for all purposes of the Plan, and no Employee or agent of the Company, of a Participating Company or member of the Administrative Committee or the Investment Committee shall be obliged to search for or ascertain the location of any such person except as required by the Act. If the Administrative Committee shall be in doubt as to whether payments are being received by the person entitled thereto, it may, by registered mail addressed to such person at his address last known to the Administrative Committee notify such person that all future payments will be withheld until such person submits to the Administrative Committee his proper mailing address and such other information as the Administrative Committee may reasonably request. 12.11 Participant Information. Each Participant shall file with the Administrative Committee such pertinent information concerning himself and his Beneficiary, and each Beneficiary shall file with the Administrative Committee such information concerning himself, as the Administrative Committee may specify, and in such manner and form as the Administrative Committee may specify or provide, and no Participant or Beneficiary shall have any right or be entitled to any benefits or further benefits under the Plan unless such information is filed by him or on his behalf. 12.12 Service of Process. The agent for the service of legal process of the Plan shall be the Secretary of the Company or such other person as may from time to time be designated by the Board of Directors. 12.13 Specific Powers and Duties. The Administrative Committee and the Investment Committee each shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under the Plan or the Trust as such Plan or Trust may be amended from time to time. It is intended that each Committee shall be responsible for the proper exercise of its own powers, duties, responsibilities, and obligations and shall not be responsible for any act or failure to act on the part of another Committee or of another fiduciary. SECTION 13. TERMINATION OR WITHDRAWAL OF PARTICIPATING COMPANY PARTICIPATION 13.1 Termination or Withdrawal of Participating Company. Any Participating Company may withdraw from participation in the Plan by giving the Administrative Committee prior written notice specifying a termination date which shall be the last day of a month at least 60 days subsequent to the date such notice is received by the Administrative Committee. The Administrative Committee may terminate any Participating Company's participation in the Plan, as of any termination date specified by the Administrative Committee, for the failure of the Participating Company to make proper contributions or to comply with any other provision of the Plan and shall terminate a Participating Company's participation upon complete and final discontinuance of the contributions. In the event of any such termination, the Administrative Committee shall promptly notify the IRS and request such determination as counsel to the Plan may recommend and as the Administrative Committee may deem desirable. 13.2 Distributions Upon Termination or Withdrawal. Upon termination of the Plan as to any Participating Company, such Participating Company shall not make any further contributions under the Plan and no amount shall thereafter be payable under the Plan to or in respect of any Participants then employed by such Participating Company except as provided in this Section 13. In such event, the Plan and the Trust as applied to the Employees of such Participating Company shall thereafter be administered by such Participating Company as a separate plan and separate trust whose terms are identical to the terms of the Plan and the Trust as in effect immediately prior to such separation (except that such Participating Company alone shall be deemed the "Company" and its board of directors shall be deemed the "Board of Directors" thereunder) and the assets allocated to such separate trust shall be appropriately segregated; provided, however, that in the event of any transfer of assets to a successor employee benefit plan the provisions of Section 13.3 will apply. The decision of the Trustee shall be final as to the assets to be allocated to such separate plan and trust in accordance herewith. To the maximum extent permitted by the Act, any rights of Participants no longer employed by such Participating Company and of former Participants and their Beneficiaries and Surviving Spouses under the Plan shall be unaffected by such termination and any transfers, distributions or other dispositions of the assets of the Plan as provided in this Section 13 shall constitute a complete discharge of all liabilities under the Plan with respect to such Participating Company's participation in the Plan and any Participant then employed by such Participating Company. The interest of each such Participant in Service with such Participating Company as of the termination date in the amount, if any, credited to his Account after payment of or provision for expenses and charges and appropriate adjustment of the Accounts of all such Participants for expenses, charges, forfeitures and profits and losses as described in Section 14.4, shall be nonforfeitable as of the termination date, and upon receipt by the Administrative Committee of IRS approval of such termination, the full current value of such amount, reduced by any unpaid loans, shall be paid from the Trust Fund in the manner described in Section 14.4 or transferred to a successor employee benefit plan which is qualified under Section 401(a) of the Code; provided, however, that in the event of any transfer of assets to a successor employee benefit plan the provisions of Section 13.3 will apply. All determinations, approvals and notifications referred to above shall be in form and substance from a source satisfactory to counsel for the Plan. To the maximum extent permitted by the Act, the termination of the Plan as to any Participating Company shall not in any way affect any other Participating Company's participation in the Plan. 13.3 Transfer to Successor Plan. No transfer of the Plan's assets and liabilities to a successor employee benefit plan (whether by merger or consolidation with such successor plan or otherwise) shall be made unless each Participant would, if either the Plan or such successor plan then terminated, receive a benefit immediately after such transfer which (after taking account of any distributions or payments to them as part of the same transaction) is equal to or greater than the benefit he would have been entitled to receive immediately before such transfer if the Plan had then been terminated. The Administrative Committee or the Investment Committee or both of the Committees may request appropriate indemnification from the employer or employers maintaining such successor plan before making such a transfer. SECTION 14. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST 14.1 Right to Amend, Suspend or Terminate Plan. (a) Subject to the provisions of Section 14.1(c), the Board of Directors reserves the right at any time, by majority consent in writing or by a meeting, to amend, suspend or terminate the Plan, any contributions thereunder, the Trust, in whole or in part, for any reason and without the consent of any Participating Company, Participant, other Employee, Beneficiary or Surviving Spouse. Each Participating Company by its adoption of the Plan shall be deemed to have delegated this authority to the Board of Directors and the Administrative Committee. The Plan shall automatically be terminated upon complete and final discontinuance of contributions thereunder. (b) The Administrative Committee may adopt amendments, by majority consent in writing or by a meeting, which may be necessary or appropriate to facilitate the administration, management, or interpretation of the Plan or to conform the Plan thereto, or to qualify or maintain the Plan and the Trust as a plan and trust meeting the requirements of Sections 401(a), 401(k) and 501(a) of the Code or any other applicable section of law (including the Act) and the Regulations, provided that any such amendment does not materially increase the cost to the Employers of maintaining the Plan. (c) No amendment or modification shall be made which would retroactively impair any right to any benefit under the Plan which any Participant, Beneficiary or Surviving Spouse would otherwise have had at the date of such amendment by reason of the contributions theretofore made and credited to his Account, except as provided in Section 14.2 below. 14.2 Retroactivity. Subject to the provisions of Section 14.1, any amendment, modification, suspension or termination of any provisions of the Plan may be made retroactively if necessary or appropriate to qualify or maintain the Plan and the Trust as a plan and trust meeting the requirements of Sections 401(a), 401(k) and 501(a) of the Code or any other applicable section of law (including the Act) and the Regulations issued thereunder. 14.3 Notice. Notice of any amendment, modification, suspension or termination of the Plan shall be given by the Board of Directors or the Administrative Committee, whichever adopts the amendment to the other and to the Trustee and all Participating Companies and, where and to the extent required by law, to Participants and other interested parties. 14.4 No Further Contributions. Upon termination of the Plan, the Employer shall not make any further contributions under the Plan and no amount shall thereafter be payable under the Plan in respect of any Participant except as provided in this Section 14. To the maximum extent permitted by the Act, transfers, distributions or other dispositions of the assets of the Plan as provided in this Section 14 shall constitute a complete discharge of all liabilities under the Plan. The Administrative and Investment Committees shall remain in existence and all of the provisions of the Plan which in the opinion of the Administrative Committee are necessary for the execution of the Plan and the administration and distribution, transfer or other disposition of the assets of the Plan in accordance with this Section 14.4 shall remain in force. After (i) payment of or provision for all expenses and charges referred to in Section 7.2 and appropriate adjustment of all Accounts for such expenses and charges in the manner described in Section 7.2, (ii) appropriate adjustment of the Accounts of Participants who are employed as of the date of such termination in the manner described in Section 7.3 for any forfeitures arising under the Plan prior to such date (treating, for this purpose, any Participant who had a termination of Service but who had not incurred five consecutive Breaks in Service prior to such date as having incurred such Break in Service immediately prior to such date), and (iii) adjustment for profits and losses of the Trust to such termination date in the manner described in Section 7.1, the interest of each Participant in Service as of the date of such termination in the amount, if any, credited to his Account shall be nonforfeitable as of such date. The full current value of such adjusted amount, reduced by the amount of any unpaid loans to the Participant, shall be paid from the Trust to each Participant and former Participant, (or, in the event of the death of such Participant or former Participant, the Beneficiary or Surviving Spouse thereof) in any manner of distribution specified in Section 10 above, including payments which are deferred until the Participant's termination of Service, as the Administrative Committee shall determine in a nondiscriminatory manner. Without limiting the foregoing, any such distributions may be made in cash or in property, or both, as the Administrative Committee in its sole discretion may direct. All determinations, approvals and notifications referred to above shall be in form and substance and from a source satisfactory to counsel for the Plan. 14.5 Partial Termination. In the event a partial termination (within the meaning of the Act) of the Plan has occurred then (i) the interest of each Participant affected thereby in his Account shall be nonforfeitable as of the date of such partial termination and (ii) the provisions of Sections 14.2, 14.3 and 14.4 and Section 13.2 which in the opinion of the Administrative Committee are necessary for the execution of the Plan and the allocation and distribution of the assets of the Plan shall apply. 14.6 Exclusive Benefit. Except as provided in Section 5.6 of the Plan, Section 414(p) of the Code, or any other federal law, in no event shall any part of the funds of the Plan (other than such part as is required to pay taxes, if any, and expenses as provided in Section 7) be used for or diverted to any purposes other than for the exclusive benefit of Participants and their Beneficiaries and Surviving Spouses under the Plan. SECTION 15. GENERAL LIMITATIONS AND PROVISIONS 15.1 All Risk on Participants and Beneficiaries. Each Participant, former Participant, Beneficiary and Surviving Spouse shall assume all risk in connection with any decrease in the value of the assets of the Trust and the Participants' Accounts or special accounts and neither the Employer nor the Administrative Committee nor the Investment Committee shall be liable or responsible therefor. 15.2 No Right to Continued Employment. Nothing contained in the Plan shall give any Employee the right to be retained in the employment of the Company, any Participating Company or any of its subsidiaries or affiliated or associated corporations or affect the right of any such Employer to dismiss any Employee. The adoption and maintenance of the Plan shall not constitute a contract between an Employer and any Employee or consideration for, or an inducement to or condition of, the employment of any Employee. 15.3 Payment of Behalf of Payee. If the Administrative Committee shall find that any person to whom any amount is payable under the Plan is found by a court of competent jurisdiction to be unable to care for his affairs because of illness or accident, or is a minor, or has died, then any payment due him or his estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Administrative Committee so elects, be paid to his spouse, a child, a relative, an institution maintaining or having custody of such person, or any other person deemed by the Administrative Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Plan and the Trust therefor. 15.4 No Alienation. Except insofar as may otherwise be required by law or pursuant to the terms of a Qualified Domestic Relations Order, no amount payable at any time under the Plan and the Trust shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person and any attempt to so alienate or subject any such amount, whether presently or thereafter payable, shall be void. If any person shall attempt to, or shall, alienate, sell, transfer, assign, pledge, attach, charge or otherwise encumber any amount payable under the Plan and the Trust, or any part thereof, or if by reason of his bankruptcy or other event happening at any such time such amount would be made subject to his debts or liabilities or would otherwise not be enjoyed by him, then the Administrative Committee, if it so elects, may direct that such amount be withheld and that the same or any part thereof be paid or applied to or for the benefit of such person, his spouse, children or other dependents, or any of them, in such manner and proportion as the Administrative Committee may deem proper. The prohibition against assignment or alienation of benefits contained in this Section 15.4 shall not apply to any loan to a Participant made under the Plan. 15.5 Missing Payee. If the Administrative Committee cannot ascertain the whereabouts of any person to whom a payment is due under the Plan, and if, after five years from the date such payment is due or upon the termination of the Plan in accordance with Section 16, a notice of such payment due is mailed to the last known address of such person, as shown on the records of the Administrative Committee or the Employer, and within three months after such mailing such person has not made written claim therefor, the Administrative Committee, if it so elects, after receiving advice from counsel to the Plan, may direct that such payment and all remaining payments otherwise due to such person be canceled on the records of the Plan and the amount thereof applied to reduce the contributions of the Employer or, in the case of the termination of the Plan, allocated on a pro rata basis among the Participants of the Plan, and upon such cancellation, the Plan and the Trust shall have no further liability therefor except that, in the event such person later notifies the Administrative Committee of his whereabouts and requests the payment or payments due to him under the Plan, the amount so applied shall be paid to him as provided in Section 10. 15.6 Subject to Trust Agreement. Any and all rights or benefits accruing to any persons under the Plan shall be subject to the terms of the Trust Agreement which the Company shall enter into with the Trustee providing for the administration of the Trust Fund. 15.7 Gender; Singular. Whenever used in the Plan the masculine gender includes the feminine gender and the singular includes the plural, unless the context indicates otherwise. 15.8 Captions. The captions preceding the sections of the Plan have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provisions of the Plan. 15.9 Applicable Law. The Plan and all rights thereunder shall be governed by and construed in accordance with the Act and the laws of the State of New York. SECTION 16. MAXIMUM AMOUNT OF ALLOCATION 16.1 Application of Section 16. The provisions of this Section 18 shall govern notwithstanding any other provisions of the Plan. 16.2 Maximum Annual Additions to Account. Annual Additions to a Participant's Account in respect of any Plan Year may not exceed the lesser of (a) $30,000 or, if greater, one-fourth of the defined benefit dollar limitation set forth in Section 415(b)(1)(A) of the Code as in effect for such Plan Year; or (b) 25% of the Participant's Salary for such Plan Year. For this purpose, the term "Annual Additions" shall mean the sum of the following amounts which, without regard to this Section 16, would have been credited to the Participant's Account for any Plan Year under the Plan and under any other defined contribution plans of the Employer or an Affiliate: (i) Company Contributions; (ii) Pre-Tax Contributions and all elective contributions made under any cash or deferred arrangement within the meaning of Section 1.401(k)-1(g)(3) of the IRS Regulations including excess deferrals; (iii) After-Tax Contributions made under the Plan and any other qualified employee pension benefit plan; (iv) forfeitures, if applicable; and, with respect to any plan maintained by the Employer or an Affiliate (v) contributions allocated to any individual medical account defined in Section 415(l)(2) of the Code that is part of a defined benefit plan maintained by the Employer; and (vi) in the case of a Participant who is a "key employee," as defined in Section 419A(d)(3) of the Code, the amount allocated to a separate account established for post-retirement medical or life insurance benefits of such Participant described in Section 419A(d)(1) of the Code under a welfare benefit fund as defined in Section 419(e) of the Code, and as maintained by the Employer. The term Annual Additions shall not include any Rollover Contributions made pursuant to Section 4.5 but shall include, whether or not refunded, excess deferrals as described in Section 4.1, excess contributions as defined in Section 4.1, and excess aggregate contributions as defined in Section 5.1. Solely for the purposes of Section 16.4(a), Annual Additions shall include a Participant's contributions under a qualified cost-of-living arrangement described in Section 415(k)(2) of the Code. 16.3 Order of Reduction. If the limitations of Section 16.2 are violated as a result of the allocation of (i) forfeitures, (ii) a reasonable error in estimating a Participant's Compensation or Salary, (iii) or under such other facts and circumstances as determined by the IRS, amounts which would otherwise be allocated to a Participant's Account must be reduced by reason of the limitations of Section 16.2, such reduction shall be made in the following order of priority, but only to the extent necessary: 1. The amount of the Participant's After-Tax Contributions, exclusive of any earnings of the Trust Fund attributable thereto, shall be refunded to the Participant; then 2. Forfeitures arising under the Plan and allocable to such Participant in respect of such Plan Year shall be allocated to the Accounts of other Participants as of the end of the Plan Year for which such reduction is made in the manner provided under Section 7.3 and then allocated to such Participant in respect of such Plan year; and then 3. Company Contributions made pursuant to Section 5.1 allocable to such Participant in respect of such Plan Year shall be reduced and the amount of such reduction shall be utilized to reduce Company Contributions which would otherwise be made to the Plan; and then 4. To the extent permitted by the Code and IRS Regulations, the amount of Pre-Tax Contributions, exclusive of any earnings of the Trust Fund attributable thereto, shall be refunded to the Participant or, to the extent required by law, shall be held unallocated in a suspense account and shall be applied, as directed by the Administrative Committee in accordance with the law and regulations, as a credit to reduce the contributions of the Participant's Employer for the next Plan Year and in the event of termination of the Plan shall be returned to the Participant's Employer. 16.4 Additional Account Limitations. (a) Subject to Sections 16.4(c) and 16.4(d), in the event that, in any Plan Year and with respect to any Participant, the sum of the "Defined Contribution Fraction" (as defined in Section 16.4(b)) and the "Defined Benefit Fraction" (as defined in Section 16.4(b)) would otherwise exceed 1.0, then the benefit payable under the defined benefit plan or plans shall be reduced in accordance with the provisions of that plan or those plans, but only to the extent necessary to ensure that such limitation is not exceeded. If this reduction does not ensure that the limitation set forth in this Section 16.4 is not exceeded, then the Annual Addition to any defined contribution plan, other than the Plan, shall be reduced in accordance with the provisions of that plan but only to the extent necessary to ensure that such limitation is not exceeded. (b) For purposes of this Section 16.4, the following terms shall have the following meanings: 1. "Defined Contribution Fraction" shall mean, as to any Participant for any Plan Year, a fraction, (A) the numerator of which is the sum of Annual Additions, for the Plan Year and all prior Plan Years, as of the close of the Plan Year and (B) the denominator of which is the sum of the lesser of the follow- ing amounts, determined for such Plan Year and for each prior Year of Service (i) the product of 1.25 multiplied by the dollar limitation in effect for such Year under Sec- tion 16.2(a) or (ii) the product of 1.4 multiplied by the amount which may be taken into account under Section 16.2(b) with respect to the Participant for such Year; provided, however, that for years ending prior to January 1, 1976, the numerator of such fraction shall in no event be deemed to exceed the denominator of such fraction; and, further provided, that the Administrative Committee, in determining the Defined Contribution Fraction may elect to use the special transitional rules permitted by Section 415 of the Code and IRS Regulations thereunder; and 2. "Defined Benefit Fraction" shall mean, as to any Participant for any Plan Year, a frac- tion, (A) the numerator of which is the pro- jected annual benefit (determined as of the close of the Plan Year and in accordance with IRS Regulations) of the Participant under any defined benefit plan (as defined in Sections 414(j) and 415(k) of the Code) maintained by the Company or any of its Affiliates and (B) the denominator is the lesser of (i) the product of 1.25 multiplied by the dollar limitation in effect under Section 415(b)(1) (A) of the Code for such Plan Year or (ii) the product of 1.4 multiplied by an amount equal to 100% of the Participant's average compensation for his high three years within the meaning of Section 415(b)(3) of the Code for such Plan Year. (c) In the case of a Participant with respect to whom the sum of the Defined Contribution Fraction and the Defined Benefit Fraction exceeds 1.0 with respect to the last Plan Year beginning before January 1, 1983, an amount, determined in accordance with IRS Regulations, may be subtracted from the numerator of the Defined Contribution Fraction (not exceeding such numerator) so that the sum of such Participant's Defined Contribution Fraction and his Defined Benefit Fraction computed under Section 16.4(a) does not exceed 1.0 for the last Plan Year beginning before January 1, 1983. (d) Notwithstanding the foregoing provisions of this Section 16.4, in determining the maximum Annual Addition for any Plan Year beginning before January 1, 1987, the Annual Addition shall not be recomputed to treat all After-Tax Contributions as an Annual Addition. SECTION 17. TOP HEAVY PROVISIONS 17.1 Top Heavy Plan. The Plan will be considered a Top Heavy Plan for any Plan Year if it is determined to be a Top Heavy Plan as of the last day of the preceding Plan Year (or, with respect to the first Plan Year, the last day of such Plan Year). For purposes of determining whether the Plan is a Top Heavy Plan, when appropriate, actuarial assumptions which reflect reasonable mortality experience and a reasonable interest rate that uniformly applies for accrual purposes under all plans maintained by the Company and its Affiliates shall be used. The Value of a Participant's Account shall be determined as of the last Valuation Date used for computing Plan costs for minimum contribution purposes which occurs within the Plan Year in which the determination is being made, and shall include amounts distributed to or on behalf of the Participant within the four preceding Plan Years. Notwithstanding any other provisions of the Plan, the provisions of this Section 17 shall apply and supersede all other provisions of the Plan during each Plan Year with respect to which the Plan is determined to be a Top Heavy Plan. 17.2 Top Heavy Plan Definitions. For purposes of this Section 17 and as otherwise used in the Plan, the following terms shall have the meanings set forth below: (a) "Determination Date" means the last day of the preceding Plan Year or the last day of the first Plan Year. (b) "Key Employee" means (i) each person (and his Beneficiary) who at any time during the five Plan Years ending on the Determination Date: (A) was an officer of the Company or an Affiliate having an annual Salary greater than 50% of the amount in effect under Section 415(b)(1)(A) of the Code for any such Plan Year; (B) was one of the 10 Employees owning the largest interest of the Company and its Affiliates but only if he received Salary equal to or greater than the dollar amount applied for purposes of Section 415(c)(1)(A) of the Code for the calendar year ending coincident with or immediately after the Determination Date; (C) owned at least five percent of the an Employer's outstanding shares of stock or at least five percent of the total combined voting power of the Employer's shares of stock; or (D) owned at least one percent of the Employer's shares of stock or at least one percent of the total combined voting power of an Employer's shares of stock, and whose annual Salary from the Employer exceeds $150,000. (ii) The following special rules apply to this definition: (A) No more than 50 officers, or, if less, the greater of three or 10% of all Employees will be Key Employees under Section 17.2(b)(i)(A). If there are more officers than are counted under the preceding sentence, only those who had the highest aggregate Salary, during the five Plan Years ending on the Determination Date will be considered Key Employees. (B) A person is an officer only if he is in regular and continued service as an administrative executive of the Company or a Participating Company. (C) No person will be a Key Employee under more than one paragraph of this definition unless he also is a Beneficiary of a deceased Key Employee. (D) A person will be treated as owning all shares of stock which he owns directly or constructively by application of Section 318 of the Code. (E) For purposes of determining whether a person is a one percent or five percent owner of the Company or any Affiliate, his ownership interest in any entity related to the Company solely by reason of Sections 414(b), (c) and (m) of the Code shall be disregarded. (F) For purposes of determining whether a person receives an annual Salary of more than $150,000, Salary received from each Employer required to be aggregated under Sections 414(b), (c) and (m) of the Code shall be taken into account. (c) "Non-Key Employee" means (i) any Employee who is not a Key Employee, or (ii) a Beneficiary of a Non-Key Employee. (d) "Permissive Aggregation Group" means all qualified employee pension benefit plans in the Required Aggregation Group and any qualified employee pension benefit plans sponsored by the Company or an Affiliate which are not part of the Required Aggregation Group, but which satisfy the requirements of Sections 401(a)(4) and 410 of the Code when considered together with the Required Aggregation Group and which the Company elects to have included in the Permissive Aggregation Group. (e) "Required Aggregation Group" means the Plan and any other qualified employee pension benefit plan that was sponsored during the five year period ending on the applicable Determination Date by the Company or an Affiliate (i) in which a Key Employee participates or (ii) which enables the Plan to meet the requirements of Sections 401(a)(4) or 410 of the Code. (f) "Top Heavy Group" means all qualified employee pension benefit plans of the Company and its Affiliates in the Required Aggregation Group and any other qualified employee benefit plan of the Company and its Affiliates which the Company elects to aggregate as part of a Permissive Aggregation Group if, on any Determination Date, the Value of the cumulative annual accrued benefits for Key Employees under all defined benefit plans and the aggregate Value of all Key Employees' accounts under all defined contribution plans exceed 60% of a similar sum determined for all Employees. For purposes of this computation, the account balances and cumulative annual accrued benefits of a Participant (i) who is a Non-Key Employee but who was a Key Employee in a prior Plan Year, or (ii) who has not been credited with at least one Hour of Service with any Employer at any time during the five year period ending on the Determination Date will be disregarded. If the aggregated plans do not have the same Determination Date, this test will be made using the Value calculated as of each plan's Determination Date occurring during the same Plan Year. (g) "Top Heavy Plan" means the Plan if, on any Determination Date, the present Value of the Accounts under the Plan for Key Employees exceeds 60% of the Value of the Accounts under the Plan for all Employees. For purposes of the comparison, the Accounts of all Non-Key Employees who were, but no longer are, Key Employees will be disregarded. The Plan is Super Top Heavy if it would be a Top Heavy Plan if 90% were substituted for 60% wherever it appears in the definition of Top Heavy Plan and Top Heavy Group. (h) "Top Heavy Plan Year" means any Plan Year during which the Plan is Top Heavy or part of a Top Heavy Group. (i) "Value" means" (i) for all defined benefit plans, the present value calculated as provided in those plans; and (ii) for all defined contribution plans, the fair market value of each Participant's account (including amounts attributable to voluntary employee contributions from a qualified employee pension benefit plan sponsored by the Company or an Affiliate) determined as of the most recent Determination Date increased by: (A) distributions made during the five Plan Years ending on the Determination Date (except distributions already included in determining the Value of the accounts and distributions made during the five Plan Years preceding the Determination Date under a terminated plan which, if it had not been terminated, would have been required to be included in the Required Aggregation Group); and (B) all rollover contributions distributed from the plans to a qualified employee benefit plan not sponsored by the Company or an Affiliate, and decreased by; (C) any deductible Employee contributions; and (D) rollover contributions received by the plans from a qualified employee benefit plan not sponsored by the Company or an Affiliate; and (E) rollover contributions distributed from the Plan to a qualified employee pension benefit plan sponsored by the Company or an Affiliate. 17.3 Top Heavy Plan Minimum Contribution. Subject to Section 17.4, for each Plan Year that the Plan is a Top Heavy Plan, the Employer's contribution allocable to the Account of each Non-Key Employee, regardless of his Salary, who has satisfied the eligibility requirements of Section 3.1, whether or not a Participant in the Plan, and who is in Service at the end of the Plan Year shall not be less than the lesser of (i) three percent of such Non-Key Employee's Salary (or to the extent required by the Code or Section 1.415-2(d) of the IRS Regulations), or (ii) the percentage at which contributions for such Plan Year are made and allocated on behalf of the Key Employee for whom such percentage is the highest. For the purpose of determining the appropriate percentage under clause (ii), all defined contribution plans required to be included in an Aggregation Group shall be treated as one plan. Clause (ii) shall not be applicable if the Plan is required to be included in an Aggregation Group which enables a defined benefit plan also required to be included in said Aggregation Group to satisfy Sections 401(a)(4) or 410 of the Code. 17.4 Top Heavy Plan Annual Addition Limitations. (a) For each Plan Year that the Plan is a Top Heavy Plan, 1.0 shall be substituted for 1.25 as the multiplicand of the dollar limitation in determining the denominator of the defined benefit plan fraction and of the defined contribution plan fraction for purposes of Section 16.4. (b) If, after substituting 90% for 60% wherever the latter appears in Section 416(g) of the Code, the Plan is not determined to be a Top Heavy Plan, the provisions of Section 17.4(a) shall not be applicable if the minimum contribution by the Employer allocable to the Account of any Participant who is a Non-Key Employee as specified in Section 17.3 is determined by substituting "four percent" for "three percent". 17.5 Other Plans. If, with respect to a Non-Key Employee who benefits in a Plan Year under both a defined contribution and defined benefit plan which are Top Heavy Plans maintained by the Employer, a top-heavy minimum benefit is not provided for such Plan Year under both plans, then such determination for such Plan Year shall be made in conformity with the comparability analysis described in Q&A M-12 of Section 1.416-1 of the IRS Regulations. Such analysis shall be modified, where a factor of 1.25 is utilized for such Plan Year in connection with the satisfaction of the limitations set forth in Section 415(e) of the Code, in accordance with the last sentence of Q&A M-14 of Section 1.416-1 of the IRS Regulations. OGDEN PROJECTS PROFIT SHARING PLAN APPENDIX A This Appendix A serves to identify the various accounts maintained under the Plan that were transferred from Ogden Corporation retirement plans that are qualified under Code Section 401(a) and are exempt from tax under Code Section 501(a). These accounts are subject to all of the provisions under the Plan except where otherwise noted. (1) AFTER-TAX PRE-87 ACCOUNT - This account was established to receive the after-tax contributions (and earnings thereon) of employees who formerly participated in the Ogden Allied Services Savings and Security Plan. No further contributions may be credited to this account under any circumstances. Any Participant in whose behalf such an account was established shall be fully vested in such account at all times. (2) COMPANY MATCHING CONTRIBUTION ACCOUNT - This account was established to receive matching contributions (and earnings thereon) credited to the accounts of employees who formerly participated in the Ogden Allied Services Savings and Security Plan. No further contributions may be credited to this account under any circumstances. Any Participant in whose behalf such an account was established shall continue to vest in such account in accordance with the vesting schedule set forth in Section 9.2 of the Plan. (3) RETIREMENT A ACCOUNT - This account was established to receive company contributions credited to the accounts of employees who participated in the Ogden Food Service Corporation Pension plan and the Nedicks Pension Plan. No further contributions may be credited to this account under any circumstances. All funds credited to this account are fully vested at all times. (4) RETIREMENT B ACCOUNT - This account was established to receive employee contributions credited to the accounts of those employees who participated in the Ogden Food Service Corporation Pension Plan and the Nedicks Pension Plan. No further contributions may be credited to this account under any circumstances. Any Participant in whose behalf such an account was established shall be fully vested in such account at all times. (5) PENSION SUPPLEMENT ACCOUNT - This account was established to receive supplemental contributions (and earnings thereon) credited to the accounts of employees who formerly participated in the Ogden Allied Services Saving and Security Plan. No further contributions may be credited to this account under any circumstances. Any Participant in whose behalf such an account was established shall be fully vested in such account at all times. (6) ATLANTIC DESIGN COMPANY PRIOR ACCOUNT - This account was established to receive profit sharing contributions (and earnings thereon) credited to the accounts of employees who formerly participated in the Atlantic Design Profit Sharing and Retirement Plan. No further contributions may be credited to this account under any circumstances. Any Participant in whose behalf such an account was established shall continue to vest in such account in accordance with the vesting schedule set forth in Section 9.2 of the Plan. (7) STOCK BONUS ACCOUNT - This account was established to receive stock bonus contributions (and earnings thereon) credited to the accounts of employees who formerly participated in the Allied Maintenance Corporation Variable Income (Stock Savings) Retirement Plan and the Ogden Allied Services Saving and Security Plan. No further contributions may be credited to this account under any circumstances. Any Participant in whose behalf such an account was established shall be fully vested in such account at all times. OGDEN PROJECTS PROFIT SHARING PLAN APPENDIX B METHOD OF PAYMENT OF RETIREMENT AND DEATH BENEFITS FROM CERTAIN ACCOUNTS Introduction. The purpose of this Appendix B is to establish the rules concerning the distribution of benefits from the Retirement A Account, Retirement B Account and the Atlantic Design Company Prior Account. Any reference in this Appendix B to accounts or benefits shall only apply to these three accounts and the benefits derived from these three accounts. B1.01. Payment of Benefits. Any distribution from the Retirement A Account, Retirement B Account or Atlantic Design Company Prior Account to which a Participant is entitled under Sections 8.1, 8.2 or 8.4 of the Plan shall be paid as follows: (a) Subject to Section B1.02, a Participant who is married on the date his benefits are scheduled to begin, will receive his benefits in the form of a nontransferable annuity contract which provides a survivor benefit equal to 50% of the rate at which such benefit was payable to the Participant during his lifetime ("Retirement Annuity"). (b) Subject to Section B1.02, a Participant who is unmarried on the date his benefits are scheduled to begin, will receive his benefits in the form of an annuity payable for his lifetime ("Life Annuity"). (c) Subject to Section B1.02, if a Participant (who is married on the date of his death) dies before receiving a distribution from the Plan, his interest shall be distributed to his surviving spouse in the form of an annuity which is payable for the spouse's lifetime ("Preretirement Annuity"). (d) If a Participant (who is unmarried on the date of his death) dies before receiving a distribution from the Plan, his interest shall be distributed to his Beneficiary in one lump sum payment. B1.02. Procedures Concerning Waiver of Annuities. (a) Within a reasonable time of a Participant's Normal Retirement Date, the Administrative Committee will provide the Participant with a general written explanation of the Retirement Annuity (or, as the case may be, Life Annuity) form of payment and the financial effect on the Participant's benefit if he decides to waive the annuity. With the consent of his spouse (if there is one), pursuant to Section B1.02(d) below, a Participant may waive the Retirement Annuity within the 90 day period prior to the date on which his payments are scheduled to commence. A Participant who waives the Retirement Annuity or Life Annuity under this Section may cancel his waiver at any time prior to the date on which payments begin, by submitting a written cancellation to the Administrative Committee. (b) The Administrative Committee will provide the Participant with a general written explanation of the Preretirement Annuity form of payment and the financial effect on the Participant's benefit if he decides to waive the annuity. A Participant may elect to waive the Preretirement Annuity, provided his spouse (if there is one), consents, pursuant to Section B1.02(d) below, from the first day of the Plan Year during which the Participant attains age 32 until his death. If a Participant terminates employment, he shall have the same election period as though he had not terminated. A Participant who waives the Preretirement Annuity under this Section, may cancel his waiver at any time during the election period. (c) Any explanation distributed by the Administrative Committee under Sections B1.02(a) or (b) above shall include the terms and conditions of the Retirement Annuity, Life Annuity or the Preretirement Annuity; the Participants right to make, and the effect of, an election to waive a Retirement Annuity, Life Annuity or Preretirement Annuity; the rights of the Participant's spouse with regard to the election to waive the Retirement Annuity or Preretirement Annuity; and the right of the Participant to revoke the election to waive the Retirement Annuity, Life Annuity or the Preretirement Annuity, and the effect of such a revocation. (d) Any election to waive a Retirement Annuity or Preretirement Annuity will not be effective unless the Participant's spouse consents in writing to such election or to the alternate beneficiary, or both, and the spouse's consent acknowledges the effect of the election and is witnessed by a Plan representative or a notary public. Notwithstanding the foregoing, the consent of the Participant's spouse to the waiver will not be required if it is established to the Administrative Committee's satisfaction that there is no spouse, or that the spouse cannot be located. (e) Subject to Section B1.02(d) above, if a Participant elects to waive the annuity form or benefit specified in Sections B1.01(a), (b) or (c) above, his accounts shall be distributed to him in one lump sum payment in accordance with Section 10.1(a) herein. (f) If a Participant dies without having waived the Preretirement Annuity, his spouse may waive the annuity within one year of his death, and elect a lump sum payment in lie thereof. B1.03. Timing of Distribution. (a) Subject to Section B1.03(b) below, if a Participant terminates employment before attaining his Normal Retirement Age, and files appropriate forms requesting a distribution from the Plan by the end of the month in which he terminated, the Administrative Committee shall distribute his interest by the next succeeding month or as soon as practicable thereafter. If such Participant files such forms after the month in which he terminated employment, but prior to the last day of the calendar year in which he terminated, the Administrative Committee shall distribute his interest as soon as practicable after the last day of the calendar year in which he terminated. However, if such Participant does not file such forms until after the calendar year in which he terminated employment, the Administrative Committee shall distribute his interest upon his attainment of the Plan's Normal Retirement Age, or as soon as practicable thereafter. (b) No such distributions under Section B1.03(a) of this Section may be made unless the Participant's spouse (if there is one) consents in writing to such distribution. EX-10 8 EXHIBIT 10.7(W)(II) EXHIBIT 10.7(w)(ii) OGDEN PROJECTS PENSION PLAN OGDEN PROJECTS PENSION PLAN TABLE OF CONTENTS Section Page 1 INTRODUCTION AND PURPOSE . . . . . . . . . . . . . . . . . . . 1 2 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 MEMBERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.1 Date of Membership . . . . . . . . . . . . . . . . . . . 10 3.2 Enrollment and Adjustment. . . . . . . . . . . . . . . . 11 3.3 Duration . . . . . . . . . . . . . . . . . . . . . . . . 11 3.4 Reemployment . . . . . . . . . . . . . . . . . . . . . . 11 4 RETIREMENT DATE. . . . . . . . . . . . . . . . . . . . . . . . 11 4.1 Normal Retirement and Deferred Retirement Dates. . . . . . . . . . . . . . . . . . . . . 11 4.2 Early Retirement Date . . . . . . . . . . . . . . . . . . 11 5 ACCRUED BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . 12 5.1 Computation of Accrued Benefit . . . . . . . . . . . . . 12 5.2 Effect of Reemployment on Accrued Benefit. . . . . . . . . . . . . . . . . . . . . . . . . 12 6 NORMAL RETIREMENT BENEFIT. . . . . . . . . . . . . . . . . . . 12 6.1 Normal Retirement Benefit. . . . . . . . . . . . . . . . 12 7 EARLY RETIREMENT BENEFIT . . . . . . . . . . . . . . . . . . . 12 7.1 Early Retirement Benefit . . . . . . . . . . . . . . . . 12 7.2 Deferral of Payment After Early Retirement Age . . . . . . . . . . . . . . . . . . . . . 12 8 TERMINATION OF SERVICE BEFORE RETIREMENT . . . . . . . . . . . 13 8.1 Vesting. . . . . . . . . . . . . . . . . . . . . . . . . 13 8.2 Payments After Termination of Service at Early Retirement Date . . . . . . . . . . . . 13 8.3 Consent of Member. . . . . . . . . . . . . . . . . . . . 13 8.4 Forfeitures. . . . . . . . . . . . . . . . . . . . . . . 13 9 DISABILITY BEFORE RETIREMENT. . . . . . . . . . . . . . . . . . . . 14 9.1 Disability Prior to Retirement. . . . . . . . . . . . . . . . 14 10 DEATH BENEFITS BEFORE RETIREMENT. . . . . . . . . . . . . . . . . . 14 10.1 Death Benefit Before Retirement. . . . . . . . . . . . . . . 14 10.2 Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 11 METHOD OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . 14 11.1 Payment of Benefits. . . . . . . . . . . . . . . . . . . . . 14 11.2 Optional Forms of Benefits . . . . . . . . . . . . . . . . . 15 11.3 Preretirement Survivor Annuity . . . . . . . . . . . . . . . 16 11.4 Commencement of Payment. . . . . . . . . . . . . . . . . . . 17 11.5 Explanation of Annuities . . . . . . . . . . . . . . . . . . 18 11.6 Small Amounts. . . . . . . . . . . . . . . . . . . . . . . . 18 11.7 Suspension of Retirement Benefits. . . . . . . . . . . . . . 19 11.8 Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . 19 11.9 Deemed Distribution. . . . . . . . . . . . . . . . . . . . . 19 11.10 Automatic Payment of Retirement Benefits . . . . . . . . . . 19 11.11 Direct Rollover. . . . . . . . . . . . . . . . . . . . . . . 19 12 MAXIMUM AMOUNT OF RETIREMENT BENEFIT. . . . . . . . . . . . . . . . 20 12.1 Application of Section 12. . . . . . . . . . . . . . . . . . 20 12.2 Maximum Benefit. . . . . . . . . . . . . . . . . . . . . . . 20 12.3 Adjustment to Maximum Benefit. . . . . . . . . . . . . . . . 20 12.4 Inapplicability of Section 12. . . . . . . . . . . . . . . . 21 12.5 Limitation Prior to October 3, 1973. . . . . . . . . . . . . 22 12.6 Limitation Prior to December 31, 1982. . . . . . . . . . . . 22 12.7 Additional Limitations . . . . . . . . . . . . . . . . . . . 22 12.8 Maximum Limitations. . . . . . . . . . . . . . . . . . . . . 23 13 DESIGNATION OF BENEFICIARIES. . . . . . . . . . . . . . . . . . . . 24 13.1 Beneficiary Designation. . . . . . . . . . . . . . . . . . . 24 13.2 Failure to Designate Beneficiary . . . . . . . . . . . . . . 24 14 FUNDING AND CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 24 14.1 Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . 24 14.2 Actuarial Assumptions. . . . . . . . . . . . . . . . . . . . 25 14.3 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 25 14.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 25 14.5 Return of Contributions. . . . . . . . . . . . . . . . . . . 25 15 ADMINISTRATION OF THE PLAN. . . . . . . . . . . . . . . . . . . . . 26 15.1 Powers and Duties of Administrative Committee. . . . . . . . . . . . . . . . . . . . . . . . . . 26 15.2 Powers and Duties of Investment Committee. . . . . . . . . . 26 15.3 Agents; Reports to Board of Directors. . . . . . . . . . . . 26 15.4 Structure of Committees. . . . . . . . . . . . . . . . . . . 27 15.5 Adoption of Procedures of Committee. . . . . . . . . . . . . 27 15.6 Demands for Money. . . . . . . . . . . . . . . . . . . . . . 27 15.7 Trust Agreement; Powers and Duties of Trustee; Trust Fund. . . . . . . . . . . . . . . . . . . . . 28 15.8 Hold Harmless; Indemnification . . . . . . . . . . . . . . . 28 15.9 Claims for Benefits. . . . . . . . . . . . . . . . . . . . . 28 15.10 Communications . . . . . . . . . . . . . . . . . . . . . . . 29 15.11 Agent for Service of Process . . . . . . . . . . . . . . . . 30 15.12 Specific Powers and Duties . . . . . . . . . . . . . . . . . 30 16 TERMINATION OF PARTICIPATING COMPANY PARTICIPATION. . . . . . . . . 30 16.1 Termination of Participating Company Participation. . . . . . 30 16.2 Rights of Former Members. . . . . . . . . . . . . . . . . . . 30 16.3 Transfer to Successor Plan. . . . . . . . . . . . . . . . . . 30 17 AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST. . . . . . . . . 31 17.1 Right to Amend, Suspend or Terminate Plan . . . . . . . . . . 31 17.2 Retroactivity . . . . . . . . . . . . . . . . . . . . . . . . 32 17.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 17.4 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 32 17.5 Not a Title IV Termination. . . . . . . . . . . . . . . . . . 32 17.6 Title IV Termination. . . . . . . . . . . . . . . . . . . . . 32 17.7 Asset Allocation by Court . . . . . . . . . . . . . . . . . . 34 17.8 Partial Termination . . . . . . . . . . . . . . . . . . . . . 34 18 TOP HEAVY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 34 18.1 Top Heavy Plan. . . . . . . . . . . . . . . . . . . . . . . . 34 18.2 Definition for Section 18 . . . . . . . . . . . . . . . . . . 35 18.3 Minimum Vesting . . . . . . . . . . . . . . . . . . . . . . . 37 18.4 Minimum Benefits. . . . . . . . . . . . . . . . . . . . . . . 38 18.5 Limitations on Benefits . . . . . . . . . . . . . . . . . . . 38 18.6 Other Plans . . . . . . . . . . . . . . . . . . . . . . . . . 38 19 LIMITATIONS ON DISTRIBUTIONS TO CERTAIN HIGHLY PAID EMPLOYEES . . . . . . . . . . . . . . . . . . . 39 19.1 Limitations of Section 19 . . . . . . . . . . . . . . . . . . 39 19.2 Application of Section 19 . . . . . . . . . . . . . . . . . . 39 19.3 Limitation on Benefits. . . . . . . . . . . . . . . . . . . . 39 19.4 Unrestricted Benefits . . . . . . . . . . . . . . . . . . . . 40 19.5 Use of Reserves Resulting from Limitations. . . . . . . . . . 40 20 GENERAL LIMITATIONS AND PROVISIONS. . . . . . . . . . . . . . . . . 40 20.1 No Right to Continued Employment . . . . . . . . . . . . . . 40 20.2 Trust is Sole Source of Benefits . . . . . . . . . . . . . . 40 20.3 Payment on Behalf of Payee . . . . . . . . . . . . . . . . . 41 20.4 No Alienation. . . . . . . . . . . . . . . . . . . . . . . . 41 20.5 Missing Payee. . . . . . . . . . . . . . . . . . . . . . . . 41 20.6 Subject to Trust Agreement . . . . . . . . . . . . . . . . . 42 20.7 Required Information . . . . . . . . . . . . . . . . . . . . 42 20.8 Subject to Insurance Contract. . . . . . . . . . . . . . . . 42 20.9 Communications to Committees . . . . . . . . . . . . . . . . 42 20.10 Communications from Participating Company or Committees. . . . . . . . . . . . . . . . . . . . . . . . 42 20.11 Gender; Tense. . . . . . . . . . . . . . . . . . . . . . . . 42 20.12 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 42 20.13 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . 42 APPENDIX I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 SECTION 1. INTRODUCTION AND PURPOSE 1.1 The purpose of the Ogden Projects Pension Plan (the "Plan") is to provide retirement benefits and certain other benefits to eligible employees of Ogden Projects, Inc. and its participating subsidiaries and other participating companies, or to the beneficiaries of such employees, and thereby to continue to encourage employees to make and continue careers with Ogden Projects, Inc., all as set forth herein and in the related trust thereunder (the "Trust") adopted as a part of the Plan. 1.2 Prior to the adoption of the Plan, Ogden Projects, Inc. was a "Participating Company" under the Ogden Corporation Pension Plan (the "Prior Plan"), as such term is defined therein, and the related trust thereunder (the "Prior Plan Trust"). As a result of the Tax Reform Act of 1986, the sponsor of the Prior Plan, Ogden Corporation, determined that it would be in the best interest of all Prior Plan Participating Companies, and their respective employees, to elect whether to continue to be a Participating Company under the Prior Plan or to establish a separate defined benefit plan. Effective as of January 1, 1989, Ogden Projects, Inc. determined that it was in the best interest of Ogden Projects, Inc. and its employees to adopt the Plan, such plan being substantially similar to, and a continuation of, the Prior Plan. All service credited to an individual as a participant under the Prior Plan was credited to such individual under the Plan; provided that such individual becomes a participant of the Plan on or after January 1, 1989, and further provided, that such service be credited solely in accordance with the terms and provisions of the Plan. With the adoption of the Plan, the trustee of the Prior Plan Trust segregated a proportional share of the assets of the Prior Plan, including surplus and any earnings, and held in trust for the participants of the Prior Plan who continue to be participants of the Plan. 1.3 Simultaneously with the establishment of the Plan, another Participating Company under the Prior Plan, Ogden Environmental Services Corporation ("OES") determined that it would be in the best interest of OES' employees to establish a separate defined benefit plan. Effective January 1, 1989, OES adopted the Ogden Environmental Services Pension Plan ("OES Plan"), such plan being substantially similar to, and a continuation of, the Prior Plan. All service credited to an individual as a participant under the Prior Plan was credited to such individual under the OES Plan under certain conditions and requirements, all as contained within the OES Plan. With the adoption of the OES Plan, the trustee of the Prior Plan Trust segregated a proportional share of the assets of the Prior Plan, including surplus and earnings, and held in trust for the employees of OES who participated in the OES Plan. 1.4 As a result of a corporate reorganization, OES was merged into Ogden Projects, Inc. Effective January 1, 1992, the OES Pension Plan was merged into, and became a part of, the Plan. OES became a participating company as defined herein (a "Participating Company") and all service credited to a participant, and all benefits accrued by the participant, under the OES Plan, was credited and transferred to the Plan. 1.5 As a result of the enactment of the Tax Reform Act of 1986, and the establishment of the Plan and the Trust, an application was filed with the District Director of Internal Revenue, requesting a determination that the Plan and the Trust, continued to be a qualified and tax-exempt plan and trust under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986 (the "Code"). By letter dated May 5, 1993, the District Director determined that the Plan and Trust was qualified and tax-exempt. 1.6 With the passage of the Unemployment Compensation Amendments of 1992, and the Omnibus Budge Reconciliation Act of 1993, the issuance of Treasury Regulations and related rulings and procedures, the Plan has been amended and restated. The Plan, as hereby amended and restated, and the Trust, are intended to continue to qualify as a plan and a trust which meet the requirements of Sections 401(a) and 501(a), respectively, of the Code, amended, or any other applicable provisions of law, including, without limitation, the Employee Retirement Income Security Act of 1974, as now in effect or hereafter amended. 1.7 The Plan, as set forth herein, constitutes a restatement of the Plan through January 1, 1994. Although this restatement is generally effective January 1, 1994, the inclusion of amendments to conform with the Tax Reform Act of 1986 and other applicable laws necessitates different effective dates for certain Plan provisions. Accordingly, notwithstanding the general effective date of this restatement, Plan sections as amended, shall be effective as indicated therein. 1.8 The rights of any person who terminated employment or who retired on or before the effective date of a particular amendment, including his eligibility for benefits and the time and form in which benefits, if any, will be paid, shall be determined solely under the terms of the Prior Plan, the OES Plan or the Plan as in effect on the date of his termination of employment or retirement, unless such person is thereafter reemployed and again becomes a Member. SECTION 2. DEFINITIONS When used herein the following terms shall have the following meanings: 2.1 "Accrued Benefit" means a Ten Year Certain and Life Annuity commencing at age 65 or at any later date specified under the Plan, whichever is applicable. 2.2 "Act" means the Employee Retirement Income Security Act of 1974, as now in effect or as hereafter amended. 2.3 "Actuary" means the enrolled actuary (within the meaning of the Act) engaged by the Administrative Committee. 2.4 "Administrative Committee" means the OPI Administrative Committee as provided for in Section 15. For purposes of the Act, the Administrative Committee shall be the administrator of the Plan and its members shall be named fiduciaries with respect to matters for which they are responsible under the Plan. 2.5 "Affiliate" means any corporation which is included in a controlled group of corporations (within the meaning of Section 414(b) of the Code) which includes the Company, any trade or business (whether or not incorporated) which is under common control with the Company (within the meaning of Section 414(c) of the Code), any organization included in the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Company and any other entity required to be aggregated with the Company pursuant to Regulations under Section 414(o) of the Code; except that for purposes of applying the provisions of Sections 12 and 18 with respect to the limitations on benefits, Section 415(h) of the Code shall apply. 2.6 "Beneficiary" means the beneficiary or beneficiaries designated by a Member pursuant to Section 13 to receive the amount, if any, payable under the plan upon the death of such Member. 2.7 "Board of Directors" means the Board of Directors of the Company. 2.8 "Break in Service" means a Plan Year during which an individual has not completed more than 500 Hours of Service, as determined by the Administrative Committee in accordance with the Regulations. Solely for purposes of determining whether a Break in Service has occurred, an individual shall be credited with the Hours of Service which such individual would have completed but for a maternity or paternity absence, as determined by the Administrative Committee in accordance with this Section 2.8 and the Labor Department Regulations; provided, however, that the total Hours of Service so credited shall not exceed 501 Hours and that the individual timely provide the Administrative Committee with such information as it shall require. Hours of Service credited for a maternity or paternity absence shall be credited entirely (i) in the Plan Year in which the absence began if such Hours of Service are necessary to prevent a Break in Service in such Plan Year, or (ii) in the following Plan Year. For purposes of this Section 2.8, maternity or paternity absence shall mean an absence from work by reason of the individual's pregnancy, the birth of the individual's child or the placement of a child with the individual in connection with adoption of the child by such individual, or for purposes of caring for a child for the period immediately following such birth or placement. 2.9 "Code" means the Internal Revenue Code of 1986, as now in effect or as hereafter amended. All citations to Sections of the Code are to such sections as they may from time to time be amended or renumbered. 2.10 "Committee" means the Administrative Committee and the Investment Committee. 2.11 "Company" means Ogden Projects, Inc., a Delaware corporation. 2.12 "Compensation" means for each Plan Year beginning before January 1, 1994, an Employee's first $200,000 (as adjusted for cost of living to the extent permitted by the Code and IRS Regulations) of total remuneration paid or payable for Service while an Employee, without giving effect to any reduction therein pursuant to an election under Sections 125 and 401(k) of the Code nor any contributions by the Employer to the Plan as reported on IRS Form W-2. For each Plan Year beginning on or after January 1, 1994, Compensation means an Employee's first $150,000 (as adjusted by the Commissioner of the IRS, for years beginning after December 31, 1993, for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code) ("annual salary limit") of total remuneration paid or payable for Service while an Employee, without giving effect to any reduction therein pursuant to an election under Sections 125 and 401(k) of the Code. Compensation does not include imputed income or other noncash compensation, severance pay, any contributions to the Plan, reimbursed expenses and contributions to the plan maintained by the Employer except to Section 125 or 401(k) Plan. If less than a full Plan Year of Salary is taken into account, then the annual salary limit shall be multiplied by the ratio obtained by dividing the number of full months in the period by 12. In determining the Salary of a Member for purposes of the annual salary limit, the rules of Section 414(q)(6) of the Code shall apply, except that in applying such rules, the term Family Member shall include only the spouse of the Member and any lineal descendants of the Member who have not attained age 19 before the close of the Plan Year. If, as a result of the application of such rules the adjusted annual salary limit is exceeded, then the limit shall be prorated among the affected individuals in proportion to each such individual's Compensation as determined under this Section 2.12 prior to the application of the annual salary limit. 2.13 "Credited Service" means the number of full years and months of employment beginning on the date the Employee first performed an Hour of Service with the Employer and ending on the date of his retirement or other termination of employment. If an Employee was a participant of the Prior Plan on December 31, 1988 and thereafter becomes a Participant of the Plan, Credited Service shall also include his period of Service under the Prior Plan, as defined by such Prior Plan. Years and months of employment shall be determined by the Administrative Committee in accordance with the Regulations. 2.14 "Direct Rollover" means (i) a distribution by the Plan to an Eligible Retirement Plan as specified by a Distributee. 2.15 "Disabled" or "Disability" means a Member's inability to perform the duties of employment with an Employer as would constitute disability under the Employer's long term disability plan. 2.16 "Distributee" means a Member or a former Member. A Member's or former Member's spouse or a former spouse of a Member or former Member who is a payee under a Qualified Domestic Relations Order to which a distribution is to be made under the Plan shall also be deemed to be a Distributee. 2.17 "Early Retirement Age" means the date on which a Member has attained age 55 and has completed 10 years of Credited Service. 2.18 "Early Retirement Date" means the first day of the month coincident with or next following a Member's retirement after reaching his Early Retirement Age but prior to his Normal Retirement Age. 2.19 "Effective Date" means, for this amendment and restatement, January 1, 1994, and for the Plan, January 1, 1989. 2.20 "Eligible Employee" means any Employee and any leased employee who completes at least 1,000 Hours of Service during a Plan Year, but excluding (i) any nonresident alien, and (ii) any Employee who is included in a unit of Employees covered by a collective bargaining agreement which does not provide for his membership in the Plan, and for the 1994 Plan Year, (iii) any Highly Compensated Employee designated by the Administrative Committee to be ineligible to participate in the Plan unless the Administrative Committee rescinds such prohibition. A director of the Employer is not eligible for membership in the Plan unless he is also an Eligible Employee. For all purposes of the Plan, a "leased employee" means (i) any individual who provides services pursuant to an agreement between the Employer and any other person, (ii) such individual performs such services for the Employer on a substantially full time basis for a period of at least one year, and (iii) such services are of a type historically performed, in the business field of the Employer, by Employees. Notwithstanding the foregoing, if such leased employees constitute less than 20% of the Employer's nonhighly compensated work force within the meaning of Section 414(n)(5)(C)(ii) of the Code, such leased employees are not Employees if they are covered by a plan meeting the requirements of Section 414(n)(5)(B) of the Code. 2.21 "Eligible Retirement Plan" means (i) an individual retirement account, as described in Section 408(a) of the Code, (ii) an individual retirement annuity, as described in Section 408(b) of the Code, (iii) an annuity plan, as described in Section 403(a) of the Code, and (iv) a qualified plan and trust, as described in Sections 401(a) and 501(a) of the Code; provided, however, that in the case of an Eligible Rollover Distribution to a spouse, an Eligible Retirement Plan means an individual retirement account or an individual retirement annuity, as described in Sections 408(a) and 408(b) of the Code, respectively. 2.22 "Eligible Rollover Distribution" means any distribution from the Plan of all or any portion of the balance to the credit of a Distributee, except that an Eligible Rollover Distribution shall not include: (i) any distribution to the extent such distribution is required under Section 11.4 and Section 401(a)(9) of the Code, (ii) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's Beneficiary, or for a period of ten years or more, and (iii) the portion of any distribution that is not includible in gross income. 2.23 "Employee" means any individual in the employ of the Employer. 2.24 "Employer" means the Company and each other Participating Company, or any of them. 2.25 "Equivalent Actuarial Value" or "Actuarial Equivalent" means, unless otherwise specified in the Plan, a benefit of equivalent value to another form of benefit, computed on the basis of the actuarial tables and interest rates specified in Appendix I attached hereto; provided, however, that the interest rate used to determine the Equivalent Actuarial Value of any lump sum payment that may be made under the Plan shall not be greater than: (i) the applicable interest rate if the accrued benefit (using such rate) is not in excess of $25,000; or (ii) 120 percent of the applicable interest rate if the accrued benefit exceeds $25,000 (as determined under clause (i)). In no event shall the present value determined under clause (i) be less than $25,000. For purposes of clauses (i) and (ii), the applicable interest rate shall mean the interest rate or rates announced by the PBGC as of the first day of each Plan Year in which a distribution occurs for purposes of determining the present value of a Member's benefits under the Plan if the Plan had terminated on the date distribution commences with insufficient assets to provide benefits guaranteed by the PBGC on that date. In no event shall the amount of any benefit or annuity determined hereunder exceed the maximum benefit permitted under Section 415 of the Code. 2.26 "Family Member" means a spouse, lineal ascendants and descendants of the Employee or former Employee and the spouses of such lineal ascendants and descendants. 2.27 "Final Average Compensation" means a Member's average annual Compensation for the five consecutive calendar years out of his last 10 (or fewer) consecutive Years of Service rendered immediately prior to his Normal Retirement Date, or his earlier retirement or other termination of employment, as the case may be, during which his Compensation was the highest. 2.28 "High-3 Year Average Compensation" means the average annual amount of the Participant's total renumeration from the Company for the three consecutive Years of Service during which such renumeration was the highest. 2.29 "Hours of Service" means the hours for which an Employee shall receive credit for purposes of the Plan, as follows: (a) One hour for each hour for which he is directly or indirectly paid, or entitled to payment, by the Company or an Affiliate for the performance of duties during the applicable computation period for which his Hours of Service are being determined under the Plan. (These hours shall be credited to the Employee for the computation period or periods in which the duties were performed, and shall include hours for which back pay has been either awarded or agreed to by the Company or an Affiliate as provided by the Regulations under the Act, with no duplication of credit for hours.) (b) One hour for each hour, in addition to the hours in paragraph (a) above, for which he is directly or indirectly paid, or entitled to payment, by the Company or an Affiliate, for reasons other than for the performance of duties during the applicable computation periods, such as paid vacation, paid holiday, paid sickness, and similar paid periods of nonworking time. (These hours shall be counted in the computation period or periods in which the hours for which payment is made occur). (c) One hour for each hour of the normally scheduled work hours for each day during any period he is on leave of absence from work with the Company or an Affiliate for military service with the armed forces of the United States, but not to exceed the period required under the law pertaining to veterans' reemployment rights; provided, that if he fails to report for work at the end of such leave during which he has reemployment rights he shall not receive credit for hours on such leave. (d) The number of normally scheduled work hours for each day of authorized leave of absence granted by the Company or an Affiliate in accordance with reasonable policies established therefor for which he is not compensated. When no time records are available, the Employee shall be given credit for Hours of Service based upon the number of normally scheduled work hours for each day he is on the Company's or an Affiliate's payroll, as determined in accordance with reasonable standards and policies from time to time adopted by the Administrative Committee under Section 2530.200b-2(b) and (c) of the Regulations, which are incorporated herein by this reference thereto. Notwithstanding the foregoing, an Employee shall be credited with 45 Hours of Service with respect to each week for which he is entitled to be credited with at least one Hours of Service. The Administrative Committee may, on a uniform, nondiscriminatory basis, give credit to Participants for Hours of Service for employment with employers other than the Company or an Affiliate. 2.30 "IRS" means the United States Internal Revenue Service. 2.31 "Investment Committee" means the OPI Investment Committee as provided for in Section 15. For purposes of the Act, the members of the Investment Committee shall be the named fiduciaries (with respect to the matters for which they are hereby made responsible under the Plan) of the Plan. 2.32 "Labor Department" means the United States Department of Labor. 2.33 "Member" means any Eligible Employee who is enrolled in the membership of the Plan as provided in Section 3. 2.34 "Normal Retirement Age" means the date which is the Member's 65th birthday. 2.35 "Normal Retirement Date" means the first day of the month coincident with or next following a Member's attainment of his Normal Retirement Age. 2.36 "Participating Company" means an Affiliate of the Company, designated by the Board of Directors as such, the board of directors or equivalent governing body of which shall adopt the Plan and the Trust Agreement by appropriate action and the Employees of which shall be eligible to participate in the Plan in the manner and to the extent determined by the Board of Directors so long as such Affiliate remains so designated. Any such Affiliate so designated and which adopts the Plan shall be deemed thereby to appoint the Company, the Administrative Committee, the Investment Committee and the Trustee its exclusive agents to exercise on its behalf all of the powers and authority conferred hereby, or by the Trust Agreement, upon the Company and shall make its allocable contributions to the Plan. The authority of the Company, the Administrative Committee, the Investment Committee, and the Trustee to act as such agent shall continue until the Plan has terminated as to such Affiliate and the relevant Trust Fund assets have been distributed by the Trustee as provided in Section 16 of the Plan. 2.37 "PBGC" means the Pension Benefit Guaranty Corporation. 2.38 "Plan" means the Ogden Projects Pension Plan, as set forth herein and as may be amended from time to time. 2.39 "Plan Year" means the calendar year. 2.40 "Preretirement Survivor Annuity" means a benefit providing for payment of a survivor annuity to a Member's Surviving Spouse, if any, for the life of such Surviving Spouse equal to 50% of the annuity which would have been payable for the life of the Member under a Qualified Joint and Survivor Annuity. 2.41 "Prior Plan" means the Ogden Corporation Pension Plan. 2.42 "Qualified Domestic Relations Order" means any judgment, decree, or order (including approval of a property settlement agreement) which has been determined by the Administrative Committee in accordance with procedures established under the Plan, to constitute a qualified domestic relations order within the meaning of Section 414(p)(1) of the Code. 2.43 "Qualified Joint and Survivor Annuity" means a benefit providing an annuity for the life of the Member, ending with the payment due on the first day of the month coincident with or preceding the date of his death, and, if the Member dies leaving a Surviving Spouse, a survivor annuity for the life of such Surviving Spouse equal to 50% of the annuity payable for the life of the Member under his Qualified Joint and Survivor Annuity, commencing on the first day of the month following the date of the Member's death and ending with the payment due on the first day of the month coincident with or preceding the date of such Surviving Spouse's death. 2.44 "Regulations" means the applicable regulations issued under the Code (referred to herein as "IRS Regulations"), the Act (referred to herein as "Labor Department Regulations") or other applicable law, by the IRS, the PBGC, the Labor Department or any other governmental authority and any temporary regulations or rules promulgated by such authorities pending the issuance of such regulations. 2.45 "Retirement Benefit" means a benefit payable on the dates, in the forms and in the amounts specified in Sections 6, 7, and 8, whichever is applicable. 2.46 "Retirement Date" means a Member's Early Retirement Date, Normal Retirement Date or any other retirement date that has become effective in lieu thereof pursuant to Section 4. 2.47 "Salary" means for each Plan Year beginning before January 1, 1994 an Employee's first $200,000 and for Plan Years beginning on or after January 1, 1994, an Employee's first $150,000 (adjusted for cost of living in accordance with Section 401(a)(17) of the Code) of total salary and other compensation earned (whether or not received by an Employee during such Plan Year) for the benfit of an Employee by a Participating Company, including any amount which such Employee elects to have the Company contribute to a qualified plan under Section 401(k) of the Code or benefit payments under a plan under Section 125 of the Code, but does not include imputed income or other non-cash compensation, severance pay, any contributions to the Plan other than such contributions under Section 401(k) of the Code or benefit payments under a plan under Section 125 of the Code or reimbursed expenses. 2.48 "Service" means employment or reemployment (whether or not as an Eligible Employee) with the Company, any Participating Company or with any subsidiary of or other corporation or entity affiliated or associated with the Company which is a member of the same controlled group of corporations (within the meaning of Section 1563(a) of the Code). Service includes all periods of employment credited to a Member while a participant under the Prior Plan. 2.49 "Straight Life Annuity" means an annuity payable for the life of a Member, ending with the payment due on the first day of the month coincident with or preceding the date of the annuitant's death. 2.50 "Surviving Spouse" means the survivor of a deceased Member or a deceased former Member to whom such deceased Member or deceased former Member has been legally married (as determined by the Administrative Committee) throughout the one- year period ending on the earlier of (i) the date as of which payments commence under the Plan, or (ii) the date of the Member's death. For purposes of Section 11, if a Member marries within one year of the date as of which payments commence under the Plan and was married to that spouse for at least a one-year period ending on or before the date of the Member's death, such Member and his spouse shall be treated as having been married throughout the one-year period ending on the date as of which payments commence. 2.51 "Ten Year Certain and Life Annuity" means a benefit providing an annuity for the life of the Member, ending with the payment due on the first day of the month coincident with or preceding the date of his death, with a guaranteed payment period of 120 months. 2.52 "Trust" or "Trust Fund" means the Trust established by the Company pursuant to the Trust Agreement as a part of the Plan. 2.53 "Trustee" means the trustee or trustees of the Trust. 2.54 "Trust Agreement" means the agreement entered into between the Company and the Trustee regarding the investment and holding of Plan assets, as provided in the Plan, as amended or restated from time to time. 2.55 "Year of Service" means any Plan Year during which an individual completed at least 1,000 Hours of Service as determined by the Administrative Committee in accordance with the Regulations. In addition, solely for purposes of determining whether an Eligible Employee is enrolled as a Member as provided in Section 3 and his vested interest under Section 8.1 and 18.3, if an Employee does not complete 1,000 Hours of Service during the Plan Year in which his Service commenced but does complete at least 1,000 Hours of Service during the 12 consecutive month period beginning on the date his Service commenced, as determined by the Administrative Committee, then, he shall be credited with a Year of Service for such 12 consecutive month period. In determining the number of Years of Service a Member is credited with, he shall be credited with all years of service he had completed, as of December 31, 1988, under the Prior Plan. SECTION 3. MEMBERSHIP 3.1 Date of Membership. (a) Each Eligible Employee who was a Member of the Plan on December 31, 1993, shall continue to be enrolled in the membership of the Plan, and each Eligible Employee in Service on December 31, 1993, but who was not then a Member of the Plan shall be enrolled in the membership of the Plan on the first day of the month coincident with or next following the earlier of: (i) the date on which he satisfies the requirements for membership in the Plan as in effect on December 31, 1993; and (ii) the date on which he satisfies the requirements of Section 3.1(b) for enrollment in the membership of the Plan. (b) Each Eligible Employee who commences Service on or after the January 1, 1994 shall be automatically enrolled in the membership of the Plan on the first day of the month coincident with or next following the date on which the Eligible Employee has (i) attained age 21, and (ii) the later of (a) the completion of one Year of Service, and (b) the date which is the anniversary of the Eligible Employee's date of hire; provided, he is an Eligible Employee on such date. 3.2 Enrollment and Adjustment. The Administrative Committee shall take any necessary or appropriate action to enroll each Eligible Employee who has met the requirements of this Section 3 and, if it is determined that an Eligible Employee has for any reason not been enrolled in the membership of the Plan or, if an administrative adjustment is required, such Employee shall be retroactively enrolled or such administrative adjustment shall be made. 3.3 Duration. The membership of a Member shall cease upon his Retirement Date or death or upon any Break in Service. The membership of a Member who, without any Break in Service, ceases to be an Eligible Employee shall not cease on account thereof but, notwithstanding Section 2.48, no subsequent Service shall be treated as Credited Service unless and until he again becomes an Eligible Employee. 3.4 Reemployment. (a) If a Member without any nonforfeitable right to his Retirement Benefit (as determined under Section 8.1) incurs any Break in Service and if the number of consecutive Plan Years in which he incurred a Break in Service equals or exceeds the greater of five or the aggregate number of his Years of Service prior to such Break in Service (excluding any Years of Service previously disregarded under this Section), then, in the event that he returns to Service, he shall be treated as a new Employee for all purposes of the Plan. (b) In all other cases following a Break in Service, if a former Member completes one Year of Service he shall again be enrolled in the membership of the Plan as of the first day of the month coincident with or next following the date such Year of Service commenced, except that, if he is not then an Eligible Employee, he shall again be enrolled in the membership of the Plan as of the first day of the month coincident with or next following the date, if any, on which he again becomes an Eligible Employee. SECTION 4. RETIREMENT DATE 4.1 Normal Retirement and Deferred Retirement Dates. Any Member may retire on his Normal Retirement Date. Notwithstanding the previous sentence, a Member may elect to defer his Normal Retirement Date. A retiring Member shall submit a written application for benefits to the Administrative Committee not less than 30 days nor more than 90 days prior to the day the Member will retire from Service. The Deferred Retirement Date of a Member shall be the first day of the month coincident with or next following the date of his termination of Service following this Normal Retirement Age. Notwithstanding any provision in the Plan to the contrary, a Member shall have a 100% vested right to his Retirement Benefit upon attaining his Normal Retirement Age. 4.2 Early Retirement Date. A Member may retire on his Early Retirement Date. A Member must make written application to the Administrative Committee specifying an Early Retirement Date which is the first day of a month and not less than 30 nor more than 90 days following the date of the filing of the application. SECTION 5. ACCRUED BENEFIT 5.1 Computation of Accrued Benefit. As of any date, a Member's Accrued Benefit is equal to (a) less (b) where: (a) is 1.5% of his Final Average Compensation multiplied by his years of Credited Service; and (b) is the amount of his Prior Plan accrued benefit determined as of December 31, 1988. 5.2 Effect of Reemployment on Accrued Benefit. If a Member who incurs a Break in Service for any reason returns to Service and is treated as a new Eligible Employee pursuant to Section 3.4, then on his subsequent retirement or termination of Service, his Accrued Benefit shall be based only upon his Credited Service subsequent to his return to Service. In all other cases following a Break in Service, a Member's Accrued Benefit shall be based on his total Credited Service (provided this does not decrease his Accrued Benefit), reduced by the Equivalent Actuarial Value of any payments to him before his return to Service. SECTION 6. NORMAL RETIREMENT BENEFIT 6.1 Normal Retirement Benefit. Subject to Section 11.4, a Member who retires from Service on his Normal Retirement Date shall be entitled to receive a Retirement Benefit equal to his Accrued Benefit (or any larger Retirement Benefit he could have received commencing on any date which could have been his Early Retirement Date), commencing on the first day of the month in which his Normal Retirement Date occurs. SECTION 7. EARLY RETIREMENT BENEFIT 7.1 Early Retirement Benefit. A Member who retires from Service on an Early Retirement Date shall be entitled to receive, commencing on the first day of the month in which his Early Retirement Date occurs, a Retirement Benefit which is the Actuarial Equivalent of the Retirement Benefit which would be payable on his Normal Retirement Date reduced by an early retirement factor of .5% for each month between the day on which his payments would have commenced if he had not retired until the first date of the month coincident with or next following the Member's Normal Retirement Age. 7.2 Deferral of Payment After Early Retirement Age. Subject to Section 11.4, a Member who retires on an Early Retirement Date may elect, at least 60 days prior to his Early Retirement Date, to defer commencement of the payment of his Retirement Benefit until the first day of any month after his Early Retirement Date but no later than the first month in which his Normal Retirement Date could have occurred. Such an election may be revoked only with the consent of the Administrative Committee. If a Member makes such an election and dies before the payment of his Retirement Benefit commences, then except as provided in Section 10 or 11.3 no benefit shall be payable under the Plan. SECTION 8. TERMINATION OF SERVICE BEFORE RETIREMENT 8.1 Vesting. Subject to Section 11.4, a Member whose Service terminates, after his completion of five Years of Service, for any reason other than death, Disability or retirement shall have a nonforfeitable right to a Retirement Benefit equal to his Accrued Benefit as of the date of his termination of Service and shall be entitled to receive his Retirement Benefit commencing on the first day of the month following the month in which he attains his Normal Retirement Age. 8.2 Payment after Termination of Service at Early Retirement Date. A Member who has completed 10 years of Credited Service and who has terminated his Service as described in Section 8.1 may elect, by written notice to the Administrative Committee at least 30 days prior to his Early Retirement Date, to commence payment of his Retirement Benefit on his Early Retirement Date or on the first day of any subsequent month, but not later than the first day of the month in which the first date which could have been his Normal Retirement Date occurs, actuarially reduced. Such an election may be revoked only with the consent of the Administrative Committee. 8.3 Consent of Member. Notwithstanding any other provisions of this Section 8, to the extent required by the Code and IRS Regulations, if the Equivalent Actuarial Value of the Retirement Benefit of a Member is in excess of $3,500 at the time of the distribution or any prior distribution, no benefit shall be paid pursuant to this Section 8 prior to his Normal Retirement Date without the Member's written consent, and if the Member is married at the date payments would otherwise commence and his benefit is to be paid in a form other than a Qualified Joint and Survivor Annuity, the written consent of the Member's Surviving Spouse. Absence of any required consent shall be deemed to be an election under Section 8.2 to receive the Actuarial Equivalent of the Member's Retirement Benefit commencing at the earlier of (i) the later of (A) the first day of the month following receipt of the required consent by the Administrative Committee or (B) the date otherwise designated under Section 8.2, or (ii) the Member's Normal Retirement Date. 8.4 Forfeitures. If a Member's Service terminates for any reason other than death, Disability or retirement (as provided in Sections 6, 7, 9 and 10) prior to his completion of five Years of Service, no benefit shall be payable under the Plan. In determining whether a Member has completed five Years of Service for this purpose, his Years of Service before any Break in Service shall be disregarded if he had not then completed five Years of Service and if the number of consecutive Plan Years in which he incurred a Break in Service equals or exceeds the greater of five or the aggregate number of his Years of Service prior to such Break in Service (excluding any Years of Service previously disregarded under this Section). SECTION 9. DISABILITY BEFORE RETIREMENT 9.1 Disability Prior to Retirement. A Member who is Disabled shall have a nonforfeitable right to a Retirement Benefit, determined as of the date of the Member's Disability, in accordance with the provisions of Section 5.1 and shall not thereafter be credited with Credited Service. Such Retirement Benefit shall commence on his Normal Retirement Date. SECTION 10. DEATH BENEFITS BEFORE RETIREMENT 10.1 Death Benefit Before Retirement. Subject to 11.3, the Beneficiary of a Participant who dies before the payment of his Retirement Benefit commences shall have a nonforfeitable right to a Retirement Benefit equal to the Participant's Accrued Benefit, such Retirement Benefit to commence on his Early Retirement Date, reduced as provided in Section 7.1. A Participant shall receive any death benefit to which he was entitled under the Prior Plan as in effect on December 31, 1984 for benefits accrued prior to January 1, 1985. 10.2 Consent. Notwithstanding the foregoing Section 10.1 to the extent required by the Code and IRS Regulations, if, immediately prior to his death, the Member had a Retirement Benefit and the Equivalent Actuarial Value of such Retirement Benefit is in excess of $3,500 at the time of the distribution or any prior distribution, no lump sum cash payment shall be made under Section 10.1 to the Member's Surviving Spouse prior to the date which was or would have been the Member's Normal Retirement Date (had he lived) without the Surviving Spouse's written consent. SECTION 11. METHOD OF PAYMENT 11.1 Payment of Benefits. The Retirement Benefit to which an unmarried Member or a Member who has not been legally married for at least one year ending on the date as of which payment of his Retirement Benefit commences, is entitled under the Plan shall, except as otherwise provided in this Section 11, be payable in the form of a Ten Year Certain and Life Annuity. The Equivalent Actuarial Value of the Retirement Benefit to which a Member who has been legally married for at least one year ending on the date as of which payment of his Retirement Benefit commences is entitled under the Plan shall, except as otherwise provided in this Section 11, be payable in the form of a Qualified Joint and Survivor Annuity with a Ten Year Certain Payment Period. A "Qualified Joint and Survivor Annuity with a Ten Year Certain Payment Period" is a Qualified Joint and Survivor Annuity that provides a guaranteed 120 month payments. If the Member dies after the date his Retirement Benefit begins but prior to receiving 120 monthly payments, the remainder of such 120 payments shall be paid to his Surviving Spouse. After receiving the remainder of such 120 payments, the Surviving Spouse shall receive a monthly payment for life equal to 50% of such amount. 11.2 Optional Forms of Benefits. (a) Subject to the provisions of Sections 11.4 and 11.5, in lieu of receiving his Retirement Benefit in the form described in Section 11.1, a Member may elect to receive his Retirement Benefit in any one of the optional forms described in Sections 11.2(a)(i) through (v) below; provided, however, that the benefits under such options shall be the Equivalent Actuarial Value of the Retirement Benefits described in Section 11.1. (i) Ten Year Certain and Life Annuity. In lieu of receiving the continuing monthly payments as provided by a Ten Year Certain and Life Annuity, the Member's Beneficiary may elect, within 60 days after the date of the Member's death, to receive in one lump cash sum the Actuarial Equivalent of such payments. (ii) Qualified Joint and Survivor Annuity. A married Member with a Surviving Spouse may elect to receive the Equivalent Actuarial Value of his Retirement Benefit in the form of a Qualified Joint and Survivor Annuity. (iii) Contingent Annuitant Option. A Member may elect a benefit of Equivalent Actuarial Value payable to him for life with payments to be made, after his death, in 100% of such amount or 50% of such amount, to the Beneficiary designated by such Member, if living, for the life of such Beneficiary. The designation of a Beneficiary may be revoked or changed at any time prior to the date the Member's Retirement Benefit is to begin. In the event of the death of either the Member or the Beneficiary prior to the date such Retirement Benefit is to begin, the election of this option shall be inoperative. (iv) Contingent Annuitant Option; Ten Year Certain Payment Period. A Member may elect a benefit of Equivalent Actuarial Value payable to him for life with monthly payments to be made, after his death, in the same amount, or 50% of such amount, to the Beneficiary designated by him, if living, for the life of such Beneficiary. If the Participant dies after the date his Retirement Benefit commences but prior to receiving 120 monthly payments, the remainder of such 120 monthly payments will be paid to his Beneficiary (or, in the event of the death of the Beneficiary after the death of the Member, to the Beneficiary's estate). After such 120 monthly payments have been made, the Beneficiary shall receive monthly payments for life in the same amount, or 50% of such amount, in accordance with the Member's election. The designation of a Beneficiary may be revoked or changed at any time prior to the date payment of such Retirement Benefit commences. In the event of the death of the Member prior to the date payment of the Member's Retirement Benefit begins, the election of the contingent annuitant portion of this option shall be inoperative. (v) Straight Life Annuity. A Participant may elect to receive the Equivalent Actuarial Value of his Retirement Benefit in the form of a Straight Life Annuity. (b) If a Member has elected an option in accordance with this Section 11.2 and dies prior to the date payment of his Retirement Benefit commences (i) without leaving a Surviving Spouse, or (ii) leaving a Surviving Spouse and having made a valid election to waive the Preretirement Survivor Annuity in accordance with Section 11.5, then such optional form of benefit shall become payable to his Beneficiary in the same amount, if any, that would have been payable to such Beneficiary if the payments thereunder had commenced to the Member on the first day of the month coincident with or preceding the date of the Member's death. If such Member dies prior to the date payment of his Retirement Benefit commences, leaving a Surviving Spouse and without having made a valid election to waive the Preretirement Survivor Annuity in accordance with Section 11.5, then the election under this Section 11.2 shall be null and void, and the Surviving Spouse shall receive the Preretirement Survivor Annuity in accordance with Section 11.3. (c) If a person entitled to receive payments under this Section 11.2 is not the spouse of the Member, the Equivalent Actuarial Value of the benefits allocated to such person shall not be greater than one-half of the Equivalent Actuarial Value of the Retirement Benefit which the Member could otherwise have received. 11.3 Preretirement Survivor Annuity. Subject to Section 11.5, a Preretirement Survivor Annuity shall be paid to the Surviving Spouse of a Member or former Member who, after earning a nonforfeitable right to his Accrued Benefit, dies before the commencement of payment of his Retirement Benefit. In the case of a Member who dies on or after the first date which could have been his Early Retirement Date but before payment of his Retirement Benefit has commenced, the Preretirement Survivor Annuity shall be based on the Qualified Joint and Survivor Annuity which would have been payable if the Member had retired and payments under the Qualified Joint and Survivor Annuity had commenced on the first day of the month coincident with or preceding the date of his death. In the case of a Member who dies before the first date which could have been his Early Retirement Date, the Preretirement Survivor Annuity shall be based on the Qualified Joint and Survivor Annuity which would have been payable if the Member had terminated Service on the date of death, survived until the first date which could have been his Early Retirement Date, immediately began receiving payments under the Qualified Joint and Survivor Annuity and died on the day following such Early Retirement Date. Payment of a Preretirement Survivor Annuity shall commence on the last day of the month following the later of (i) the first month in which the Member could have attained his Normal Retirement Date (had he lived), or (ii) the month in which the Member dies; provided, however, to the extent required by the Code and IRS Regulations, if the Equivalent Actuarial Value of a Preretirement Survivor Annuity is in excess of $3,500 at the time of distribution or any prior distribution, it shall not commence to be paid prior to the date which was or would have been the Member's Normal Retirement Date (had the Member lived) without the written consent of the Member's Surviving Spouse. In the absence of consent, payment of the Preretirement Survivor Annuity shall not be made until the earlier of (i) the first day of the month following receipt of the required consent by the Administrative Committee, or (ii) the date which would have been the Member's Normal Retirement Date had the Member lived. 11.4 Commencement of Payment. (a) Notwithstanding any other provision of the Plan, unless otherwise provided by law, any benefit payable to a Member shall commence no later than the April 1st of the calendar year following the calendar year in which such Member attains age 70-1/2; provided, however, if a Member attained age 70-1/2 prior to January 1, 1988, except as otherwise provided in Section 11.4(e), any benefit payable to such Member shall commence no later than the April 1st of the calendar year following the later of (i) the calendar year in which the Member attains age 70-1/2; or (ii) the calendar year in which the Member retires. Such benefit shall be paid, in accordance with IRS Regulations, over a period not extending beyond the life expectancy of such Member or the joint life expectancies of such Member and his Beneficiary. Life expectancy for purposes of this Section shall not be recalculated annually in accordance with the Regulations. (b) If distribution of a Member's benefit has commenced prior to a Member's death, and such Member dies before his entire benefit is distributed to him, distribution of the remaining portion of the Member's benefit to the Member's Beneficiary shall be made at least as rapidly as under the method of distribution in effect as of the date of the Member's death. (c) If a Member dies before distribution of his benefit has commenced, distributions to any Beneficiary shall be made on or before the December 31st of the calendar year which contains the fifth anniversary of the date of such Member's death; provided, however, at the Beneficiary's irrevocable election, duly filed with the Administrative Committee before the applicable commencement date set forth in the following sentence, any distribution to a Beneficiary may be made over the life of the Beneficiary or a period not extending beyond the life expectancy of the Beneficiary. Such distribution shall commence not later than the December 31st of the calendar year immediately following the calendar year in which the Member died or, in the event such Beneficiary is the Member's spouse, on or before the December 31st of the calendar year in which such Member would have attained age 70-1/2, if later (or, in either case, on any later date prescribed by IRS Regulations). If such Member's spouse dies after such Member's death but before distributions to such spouse commence, this Section 11.4(c) shall be applied to require payment of any further benefits as if such spouse were the Member. (d) Pursuant to IRS Regulations, any benefit paid to a child shall be treated as if paid to a Member's spouse if such amount will become payable to such spouse on the child's attaining majority, or other designated event permitted by the Regulations. (e) If a Member who is a five percent owner attained age 70-1/2 before January 1, 1988, any benefit payable to such Member shall commence no later than the April 1st of the calendar year following the later of (i) the calendar year in which the Member attains age 70-1/2 or (ii) the earlier of (A) the calendar year within which the Member becomes a five percent owner or (B) the calendar year in which the Member retires. For purposes of this Section 11.4(e), a five percent owner shall mean a five percent owner of such Member's Employer as defined in Section 416(i) of the Code at any time during the Plan Year in which such owner attains age 66-1/2 or any subsequent Plan Year. (f) All distributions made hereunder shall be made in accordance with the provisions of Section 401(a)(9) of the Code and IRS Regulations thereunder. (g) Notwithstanding the foregoing, distributions to a Member may be made in accordance with a written designation made before January 1, 1984 by the Member if such designation satisfied the requirements of Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982. 11.5 Explanation of Annuities. The Administrative Committee shall furnish or cause to be furnished to each married Member, to the extent required by the Code and IRS Regulations at least 30 days but no more than 90 days prior to the date a distribution is to be made under the Plan, explanations of the Qualified Joint and Survivor Annuity and the Preretirement Survivor Annuity under procedures developed by the Administrative Committee in accordance with the Code and IRS Regulations. A Member may, with the written consent of his Surviving Spouse (unless the Administrative Committee makes a written determination in accordance with the Code and IRS Regulations that no such consent is required), elect in writing (i) to receive his Retirement Benefit in one of the optional forms described in Section 11.2 in lieu of a Qualified Joint and Survivor Annuity within the 90-day period ending on the date payment of his Retirement Benefit commences, or (ii) to waive the Preretirement Survivor Annuity within the period beginning on the first day of the Plan Year in which the Member attains age 35 and ending on the date of his death. Any election made pursuant to this Section 11.5 may be revoked by a Member, without spousal consent, at any time within which such election could have been made. Such an election or revocation must be made in accordance with procedures developed by the Administrative Committee in accordance with the Code and IRS Regulations. 11.6 Small Amounts. Notwithstanding any other provisions of this Section 11, any annuity amounting to less than $10 per month shall be paid in quarterly or semi-annual installments, and payment of any Retirement Benefit with an Equivalent Actuarial Value of $3,500 or less at the time of the distribution or any prior distribution shall be made in a lump sum cash payment in full settlement of the Plan's liability therefor, provided, however, that in the case of an Member, no such lump sum payment shall be made after benefits have commenced without the consent of the Member and, if the Member is married at the time such payment would otherwise commence, the consent of the Member and his spouse or, if the Member has died, the Member's Surviving Spouse or Beneficiary. 11.7 Suspension of Retirement Benefits. Except as may be otherwise required in Section 11.4 and notwithstanding any other provisions of this Section 11, if a Member for any reason returns to Service, payment of his Retirement Benefit, if any, shall, to the extent permitted under the Regulations, be suspended until his subsequent termination of Service or retirement. To the extent that the application of this Section 11.7 constitutes a suspension of benefits, such suspension shall be in accordance with the Act, the Code and the Regulations. 11.8 Consent. Notwithstanding any other provisions of this Section 11, to the extent required by the Code and IRS Regulations, if the Equivalent Actuarial Value of the Retirement Benefit of a Member who retires is, or has been, in excess of $3,500, no benefit shall be paid until the Member's Normal Retirement Date without the Member's written consent, and if the Member is married at the date payment would otherwise commence and his benefit is to be paid in a form other than a Qualified Joint and Survivor Annuity, no benefit shall be paid without the written consent of the Member's Surviving Spouse, unless it is paid on the Member's Normal Retirement Date. 11.9 Deemed Distribution. If the Member's non-forfeitable Retirement Benefit on the date he terminates Service equals zero, such Member shall be deemed to have received his Retirement Benefit on the date he terminates Service. 11.10 Automatic Payment of Retirement Benefits. Notwithstanding any other provision of the Plan, unless a Member elects to otherwise defer his distribution, payment of his Retirement Benefit shall commence on the 60th day after the close of the Plan Year following (i) the date the Member reaches his Normal Retirement Date, (ii) the 10th anniversary of the date the Member's membership in the Plan began, or (iii) the date the Member terminates Service with the Employer, whichever is the latest to occur. 11.11 Direct Rollover. (a) A Distributee may elect, at a time and manner prescribed by the Administrative Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by such Distributee in the form of a Direct Rollover. A Distributee may not elect to make a Direct Rollover if the total Eligible Rollover Distributions to which the Distributee is entitled during the calendar year equal, or are reasonable expected to equal, less than $200. A Distributee may not elect to make a Direct Rollover of any portion of an Eligible Rollover Distribution if that portion is not at least $500 or more. A Distributee may not make a Direct Rollover of less than the entire amount of an Eligible Rollover Distribution if the entire Eligible Rollover Distribution equals less than $500. (b) The provisions of this Section 11.11 shall be effective January 1, 1993, with respect to distributions made on or after that date. SECTION 12. MAXIMUM AMOUNT OF RETIREMENT BENEFIT 12.1 Application of Section 12. The provisions of this Section 12 shall govern the benefits to which it is applicable notwithstanding any other provision of the Plan. The benefits to which this Section 12 is applicable are: (i) any annuity payable to a Member for life as part of a Qualified Joint and Survivor Annuity or as part of a survivorship option elected by the Member under Section 11.2 and having the effect of a Qualified Joint and Survivor Annuity (excluding in either case any survivor annuity payable to a Surviving Spouse thereunder); (ii) any Single Life Annuity payable to a Member under Section 11.1 or elected by a Member under Section 11.2; and (iii) any other option elected by a Member under Section 11.2 (including both the annuity payable to the Member and any other annuity or benefit payable thereunder). 12.2 Maximum Benefit. The benefits to which this Section 12 is applicable may not exceed the Actuarial Equivalent of a Single Life Annuity equal to the lesser of (i) $90,000 (the "Dollar Limitation"), or (ii) 100 percent of the Member's High-3 Year Average Compensation (the "Compensation Limitation"), subject, however, to the following provisions of Section 12. 12.3 Adjustments to Maximum Benefit. The limitations on the maximum amount of benefits contained in Section 12.2 shall be adjusted as follows: (a) The Dollar Limitation shall be adjusted annually, for Plan Years beginning after December 31, 1987, for increases in the cost-of-living in accordance with IRS Regulations and, in the case of Members who have separated from Service, the Compensation Limitation shall be adjusted annually for increases in the cost-of-living in accordance with IRS Regulations. As a result of such an adjustment, a benefit which had been limited by the provisions of this Section in a previous Plan Year may be increased with respect to future payments to the least of (i) the adjusted Dollar Limitation amount, (ii) the adjusted Compensation Limitation or (iii) the amount of benefit which would have been payable under the Plan without regard to the provisions of this Section 12. (b) In the case of a benefit beginning prior to a Member's "social security retirement age", as defined in Section 415(b)(8) of the Code, but on or after age 62, the Dollar Limitation applicable to such benefit shall be reduced as follows: (i) If a member's social security retirement age is 65, the Dollar Limitation for benefits commencing on or after age 62 is determined by reducing the Dollar Limitation by 5/9 of one percent for each month by which benefits commence before the month in which the Member attains age 65. (ii) If a Member's social security retirement age is greater than 65, the Dollar Limitation for benefits commencing on or after age 62 is determined by reducing the Dollar Limitation by 5/9 of one percent for each of the first 36 months and 5/12 of one percent for each of the additional months (up to 24 months) by which benefits commence before the month of the Member's social security retirement age. The adjustment provided for in the preceding sentence shall be made in such manner as IRS Regulations may prescribe which is consistent with the reduction for old-age insurance benefits commencing before the social security retirement age under the Social Security Act. (c) If the annual benefit of a Member commences prior to age 62, the Dollar Limitation shall be the actuarial equivalent of an annual benefit beginning at age 62 reduced for each month by which benefits commence before the month in which the Member attains age 62. A decrease in the Dollar Limitation determined in accordance with this Section 12.3(c) shall not reflect the mortality decrement to the extent that benefits will not be forfeited upon the death of the Member. (d) In the case of a benefit beginning after the Member's social security retirement age, the Dollar Limitation shall be adjusted in accordance with IRS Regulations to an amount which is equal to a Straight Life Annuity commencing at the same time, which is the Actuarial Equivalent of a Single Life Annuity equal to the Dollar Limitation commencing at social security retirement age. For the purposes of this Section 12.3, actuarial equivalence shall have the same meaning as described in Section 2.25, except the interest rate assumptions for the purposes of Sections 12.3(b) and (c) shall not be less than the greater of the interest rate assumptions provided in the Plan or five percent, and the interest rate assumption for the purposes of this Section 12.3(d) shall not be greater than the lesser of five percent or the rate specified in the Plan. (e) If a Member has fewer than 10 years of Plan participation, the Dollar Limitation shall be multiplied by a fraction, the numerator of which is the number of years (computed to fractional parts of a year) of participation in the Plan, and the denominator of which is 10. If the Member has fewer than 10 Years of Service, the Compensation Limitation shall be multiplied by a fraction, the numerator being the Member's Years of Service (computed to fractional parts of a year) and the denominator of which is 10. (f) In no event shall Section 12.3(e) above reduce the Dollar Limitation and the Compensation Limitation to an amount less than one-tenth of the applicable limitation (determined without regard to Section 12.3(e)). To the extent provided by IRS Regulations and pronouncements, Section 12.3(e) above shall be applied separately with respect to each change in the benefit structure of the Plan. 12.4 Inapplicability of Section 12. The limitations contained in Section 12.2 shall not be applicable if (i) the annual benefits subject to Section 12 with respect to the Member do not exceed $10,000 and (ii) the Member has not participated in any defined contribution plan (within the meaning of Section 414(i) of the Code) maintained by the Company; provided, however, that the $10,000 limitation contained in this Section 12.4 shall be reduced in the same manner as the Compensation Limitation is reduced under Section 12.3(d). 12.5 Limitation Prior to October 3, 1973. In the case of any individual who was a Member prior to October 3, 1973 the benefits to which Section 12 is applicable may not exceed the greater of (i) the limitations contained in either Section 12.2 or Section 12.4, adjusted as described in Section 12.3, or (ii) the smallest of (A) the Actuarial Equivalent of a Single Life Annuity (as described in Section 11.2) equal to 100% of the Member s annual rate of Compensation on October 2, 1973 (or the date of his termination of Service, if earlier), (B) the Actuarial Equivalent of the benefits which would have been provided under the Plan as in effect on October 2, 1973 without taking account of any increases in his annual rate of compensation after such date, or (C) in the case of a Member whose Service terminated prior to October 2, 1973, the Actuarial Equivalent of his nonforfeitable benefits after his termination of Service. 12.6 Limitation Prior to December 31, 1982. Notwithstanding the foregoing provisions of this Section 12, the maximum limitation on a Member's Retirement Benefits, with respect to any person who was a Member prior to December 31, 1982 and whose Retirement Benefit (determined without regard to any changes in the Plan after July 1, 1982 and without regard to cost-of-living adjustments, if any, occurring after July 1, 1982) as of December 31, 1982, exceeds the limitations set forth in Section 12.2, shall be such Member's Retirement Benefit as of December 31, 1982; provided that, such Member's Retirement Benefit did not exceed the maximum limitation thereon as of December 31, 1982. 12.7 Additional Limitations. (a) Notwithstanding the foregoing provisions of this Section 12, and subject to the provisions of Section 12.7(c), if a Member in the Plan also participates or ever participated in any defined contribution plan (as defined in Sections 414(i) and 415(k) of the Code) currently or formerly maintained by the Company or any of its Affiliates, the sum of the Member's "Defined Benefit Fraction" (as defined in Section 12.7(b)(1)) and the Member's "Defined Contribution Fraction" (as defined in Section 12.7(b)(2)) shall not exceed 1.0. If the Plan satisfied the applicable requirements of Section 415 of the Code as in effect for all Limitation Years beginning before January 1, 1987, an amount shall be subtracted from the numerator of the Defined Contribution Fraction (not exceeding such numerator) as prescribed by IRS Regulations so that the sum of the defined benefit plan fraction and defined contribution plan fraction computed under Section 415(e)(1) of the Code does not exceed 1.0 for such Limitation Year. In the event that in any Plan Year the sum of a Member's Defined Benefit Fraction and the Member's Defined Contribution Fraction exceeds 1.0, then the Retirement Benefit payable under the Plan shall be reduced so that the sum of such fractions in respect of that Member will not exceed 1.0. (b) For purposes of Section 12.7(a) the following terms shall have the meanings set forth below: (1) "Defined Benefit Fraction" shall mean as to any Member for any Plan Year, a fraction, (A) the numerator of which is the projected annual Retirement Benefit the Member is expected to receive under the Plan determined as of the end of the Plan Year and in accordance with the IRS Regulations and (B) the denominator of which is the lesser of (i) the product of 1.25 multiplied by the dollar limitation in effect under clause (i) of Section 12.2 for the Plan Year, or (B) the product of 1.4 multiplied by the amount which may be taken into account under clause (ii) of Section 12.2 with respect to the Member for the Plan Year; and (2) "Defined Contribution Fraction" shall mean, as to any Member for any Plan Year, a fraction, (A) the numerator of which is the sum of the annual additions (as defined in Section 415(c)(2) of the Code) credited to the accounts of the Member under any defined contribution plan (as defined in Sections 414(i) and 415(k) of the Code) maintained by the Company or any of its Affiliates for the Plan Year and for all prior Plan Years, and (B) the denominator of which is the sum of the lesser of the following amounts, determined for such Plan Year and for each prior Year of Service (regardless of whether the Member was a participant in the defined contribution plan during any such prior Year of Service) (i) the product of 1.25 multiplied by the dollar limitation in effect under Section 415(c)(1)(A) of the Code for such year, or (ii) the product of 1.4 multiplied by the amount which may be taken into account under Section 415(c)(1)(B) of the Code with respect to the Member for such year; provided, however, that for years ending prior to January 1, 1976, the numerator of such fraction shall in no event be deemed to exceed the denominator of such fraction; further provided, that the Administrative Committee, in determining the Defined Contribution Fraction, with respect to defined contribution plans in existence on July 1, 1982, for Plan Years ending after December 31, 1982, may elect to use the special transitional rule provided for in Section 415(e)(6) of the Code. (c) In the case of a Member with respect to whom the sum of the Defined Benefit Fraction and the Defined Contribution Fraction exceed 1.0 with respect to the last Plan Year beginning before January 1, 1983, an amount, determined in accordance with IRS Regulations, may be subtracted from the numerator of the Defined Contribution Fraction (not exceeding such numerator) so that the sum of such Member's Defined Benefit Fraction and his Defined Contribution Fraction computed under Section 12.7(b) does not exceed 1.0 for the last Plan Year beginning before January 1, 1983. 12.8 Maximum Limitations. Notwithstanding the foregoing provisions of this Section 12, the maximum limitation on Retirement Benefits, with respect to any person who is a Member prior to January 1, 1987 and whose Retirement Benefit (determined without regard to any changes in the Plan after May 6, 1986 and without regard to cost of living adjustments occurring after December 31, 1986), exceeds the limitations set forth in Section 12.2, then, for purposes of such section and Section 415(b) and (e) of the Code, the Dollar Limitation with respect to such Member shall be equal to such Member's accrued Retirement Benefit as of December 31, 1986; provided that such Member's Retirement Benefit did not exceed the maximum limitation as in effect for all Plan Years commencing prior to January 1, 1987. SECTION 13. DESIGNATION OF BENEFICIARIES 13.1 Beneficiary Designation. Each Member shall file with the Administrative Committee a written designation of one or more persons as the Beneficiary who, subject to Section 11.5, shall be entitled to receive the amount, if any, payable under the Plan upon his death. Subject to the requirements of Section 11, a Member may from time to time revoke or change his Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Administrative Committee. The last such designation received by the Administrative Committee shall be controlling, provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Administrative Committee prior to the Member's death, and in no event shall it be effective as of a date prior to such receipt. However, if a Member is married, his Beneficiary shall be his spouse unless such spouse has consented in writing to such other designation, on a form supplied by the Administrative Committee and has waived her rights pursuant to Section 11.5 of the Plan. 13.2 Failure to Designate Beneficiary. If no such Beneficiary designation is in effect at the time of a Member's death, or if no designated Beneficiary survives the Member, the payment of the amount, if any, payable under the Plan upon his death shall be made to the Member's Surviving Spouse, if any, or if the Member has no Surviving Spouse, then the following persons (if then living) in the following order of priority; (i) children, in equal shares, (ii) parents, in equal shares, and (iii) the Member's estate. If the Administrative Committee is in doubt as to the right of any person to receive such amount, the Administrative Committee may direct the Trustee to retain such amount, without liability for any interest thereon, until the rights thereto are determined, or the Administrative Committee may direct the Trustee to pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Plan and the Trust therefor. SECTION 14. FUNDING AND CONTRIBUTIONS 14.1 Funding. Subject to the provisions of Sections 16 and 17, the Company shall contribute to the Trust, not less frequently than quarterly during each Plan Year, the amounts recommended by the Actuary to the Administrative Committee as necessary to maintain the Plan on a sound actuarial basis, in accordance with the Act and the Code. The Administrative Committee shall arrange for the establishment and maintenance by the Actuary, or in accordance with his recommendations, of such funding accounts as are required by the Act. 14.2 Actuarial Assumptions. The Administrative Committee shall adopt and may change from time to time, in accordance with the provisions of the Act and the Code, such actuarial assumptions and methods as are recommended by the Actuary for purposes of actuarial valuations of the Plan. The Actuary shall make an annual actuarial valuation of the Plan and shall estimate the contributions required under Section 14.1 on the basis thereof. At least once in each three year period the Actuary shall make an actuarial study of the mortality, Service and compensation experience of the Members of the Plan and the investment experience and any other relevant experience gains and losses under the Plan, including such calculations as may be necessary to determine whether the Plan is adequately funded, and shall report the results of its study to the Administrative Committee. Prior to termination of the Plan, forfeitures of benefits arising from termination of Service, death or any other reason under the Plan shall not be applied to increase the benefits that any Member would otherwise be entitled to receive under the Plan, but may be anticipated in estimating costs under the Plan and shall be applied to reduce the Company's contributions under the Plan. 14.3 Trustee. All monies, securities or other property received as contributions under the Plan shall be delivered to the Trustee under the Trust, to be managed, invested, reinvested and distributed in accordance with the Plan, the Trust and any agreement with an insurance company or other financial institution constituting a part of the Plan and the Trust. 14.4 Expenses. The expenses of administering the Plan including (i) the fees and expenses of any Employee and of the Trustee for the performance of their duties under the Trust, (ii) the expenses incurred by the members of the Administrative Committee and of the Investment Committee in the performance of their duties under the Plan (including reasonable compensation for any legal counsel, certified public accountants and any agents and cost of services rendered in respect of the Plan), and (iii) all other proper charges and disbursements of the Trustee or the members of the Administrative Committee and of the Investment Committee (including settlements of claims or legal actions approved by counsel to the Plan) are to be paid out of the Trust unless the Participating Companies pay such expenses directly in such proportions as shall be determined by the Administrative Committee. In estimating costs under the Plan, administrative costs may be anticipated. 14.5 Return of Contributions. Any contribution made by an Employer because of a mistake of fact shall be returned to the Employer which made such contribution within one year of such contribution. Any contribution made by an Employer that is conditioned upon the contribution's deductibility or the Plan's initial qualification under the Code, and if either the deduction or the initial qualification is denied, such contribution shall be returned to the Employer which made such contribution within one year after the date such deduction or qualification is denied. SECTION 15. ADMINISTRATION OF THE PLAN 15.1 Powers and Duties of Administrative Committee. The Administrative Committee shall have general responsibility and discretionary authority for the administration, establishment and interpretation of the Plan (including, but not limited to, complying with reporting and disclosure requirements, establishing and maintaining Plan records, adopting amendments to the Plan as described in Section 17.1, deciding all questions arising in connection with the Plan, including eligibility, benefit payments, vesting and factual questions). The Administrative Committee shall engage the Actuary and such certified public accountants, who may be accountants for the Company, as it shall require or may deem advisable for purposes of the Plan. The Administrative Committee shall have sole discretionary authority to determine, a Member's or Beneficiary's benefit eligibility. The Administrative Committee shall communicate any requirements and objectives of the Plan, and any audit information which may be pertinent to the investment of Plan assets to the Investment Committee, which shall establish investment standards and policies and communicate the same to the Trustee (or other funding agencies under the Plan). The Administrative Committee shall have no responsibility for the investment of assets under the Plan and the Trust. 15.2 Powers and Duties of Investment Committee. The Investment Committee shall periodically review the investment performance and methods of the Trustee and any other funding agency, including any insurance company, under the Plan and may appoint and remove or change the Trustee and any such funding agency. The Investment Committee shall have the power to appoint or remove one or more Investment Managers and to delegate to such Investment Manager authority and discretion to manage (including the power to acquire and dispose of) the assets of the Plan, or any portion thereof, provided that (i) each Investment Manager with such authority and discretion shall be either a bank, an insurance company or a registered investment adviser under the Investment Advisers Act of 1940, and shall acknowledge in writing that it is a fiduciary with respect to the Plan and (ii) the Investment Committee shall periodically review the investment performance and methods of each Investment Manager with such authority and discretion. The Administrative Committee shall communicate any requirements and objectives of the Plan (including any interest rate or other actuarial assumptions) which may be pertinent to the investment of Plan assets, to the Investment Committee which shall establish investment standards and policies incorporating such requirements and objectives and communicate the same to the Trustee (or other funding agencies under the Plan). If annuities are to be purchased under the Plan, the Investment Committee shall determine what contracts should be made available to terminated Members or purchased by the Trust. 15.3 Agents; Reports to Board of Directors. The Administrative Committee and the Investment Committee may arrange for the engagement of legal counsel, who may be counsel for the Company, and make use of such agents and clerical or other personnel as they each shall require or may deem advisable for purposes of the Plan. The Committees may rely upon the written opinion of such counsel and the Actuary and accountants engaged by the Administrative Committee and may delegate to any agent or to any sub-committee or member of such Committee its authority to perform any act hereunder, including, without limitation, those matters involving the exercise of discretion (including the appointment of an Investment Manager), provided that such delegation shall be subject to revocation at any time at the discretion of the Committee. The Committees shall report to the Board of Directors, or to a committee of the Board of Directors designated for that purpose, no less frequently than at each annual meeting as shall be specified by the Board of Directors, or such committee with respect to the Board of Directors with regard to the matters for which it is responsible under the Plan. 15.4 Structure of Committees. The Administrative Committee and the Investment Committee shall consist of at least three members, each of whom shall be appointed by, shall remain in office at the will of, and may be removed, with or without cause, by the Board of Directors. Any member of either of said Committees may resign at any time. No member of either of said Committees shall be entitled to act on or decide any matter relating solely to himself or any of his rights or benefits under the Plan. The members of the Administrative Committee and of the Investment Committee shall not receive any special compensation for serving in their capacities as members of such Committees but shall be reimbursed for any reasonable expenses incurred in connection therewith. Except as otherwise required by the Act, no bond or other security need be required of the Administrative Committee or the Investment Committee or any member thereof in any jurisdiction. Any person may serve on both Committees, and any member of either Committee, any sub-committee or agent to whom either Committee delegates any authority, and any other person or group of persons, may serve in more than one fiduciary capacity (including service both as a trustee and administrator) with respect to the Plan. 15.5 Adoption of Procedures of Committee. Each Committee shall elect or designate its own Chairman, establish its own procedures and the time and place for its meetings, and provide for the keeping of minutes of all meetings. A majority of the members of a Committee shall constitute a quorum for the transaction of business at a meeting of such Committee. Any action of a Committee may be taken upon the affirmative vote of a majority of the members of such Committee at a meeting or, at the direction of its Chairman, without a meeting by mail, telegraph, telex, telecopier or telephone, provided that all of the members of such Committee are informed by mail, telegraph, telex, telecopier or telephone, of their right to vote on the proposal and of the outcome of the vote thereon. 15.6 Demands for Money. All demands for money of the Plan shall be signed by an officer or officers or such other person or persons as the Administrative Committee may from time to time designate in writing who shall cause to be kept full and accurate accounts of receipts and disbursements of the Plan, shall cause to be deposited all funds of the Plan to the name and credit of the Plan, in such depositories as may be designated by the Investment Committee, shall cause to be disbursed the monies and funds of the Plan when so authorized by the Administrative Committee and shall generally perform such other duties as may be assigned to him from time to time by either such Committee. 15.7 Trust Agreement; Powers and Duties of Trustee; Trust Fund. The Company has entered into the Trust Agreement with the Trustee providing for the administration and management of the Trust Fund. The Trustee shall have responsibility under the Plan for the management and control of the assets of the Plan but shall have no discretionary responsibility for the investment and management of such assets unless, and if so, only to the extent that the Trustee has been appointed an investment adviser pursuant to Section 15.2. All benefits and other amounts payable hereunder shall be paid exclusively from the Trust Fund, and neither the Company, any Affiliate, any Trustee, nor any director, officer, Employee or agent of the Company assumes any responsibility or liability therefor. The Trust Fund may be commingled for investment purposes with like separate trust funds of any other plans and trusts of the Company or any Affiliate which meet the requirements of Sections 401(a) and 501(a) of the Code. 15.8 Hold Harmless; Indemnification. Each Member, each Beneficiary or each other person who shall claim the right to any payment under the Plan shall look exclusively to the Trust Fund therefor and shall not have any right or claim therefor against the Company, any Participating Company, any Trustee, or any director, officer, Employee or agent of the Company. Except as otherwise required by the Act, neither the Company, nor any member of the Administrative Committee or the Investment Committee, any director, officer, Employee or agent of the Company shall be required to inquire into or be responsible for any act or failure to act of any Trustee or any Member. To the maximum extent permitted by the Act and applicable state law, each Trustee, each member of the Administrative Committee and the Investment Committee, each director and officer of the Company, any Participating Company and each Employee who performs service on behalf of the Plan or the Trust, shall be indemnified and saved harmless by the Company and by the Participating Company out of their own assets (including the proceeds of any insurance policy the premiums of which are paid by the Company) from and against any and all losses, costs and expense (including any amounts paid in settlement of a claim with the Company's or Administrative Committee's approval) to which any of them may be subjected by reason of any act done or omitted to be done in good faith in their official capacities with respect to the Plan or the Trust Agreement, including all expenses reasonably incurred in their defense. 15.9 Claims for Benefits. (a) All claims for benefits under the Plan shall be submitted to, and within a reasonable period of time decided by, a person or persons designated in writing by the Administrative Committee. If the claim is wholly or partially denied, written notice of the denial shall be furnished within 90 days after receipt of the claim; provided that, if special circumstances require an extension of time for processing the claim, an additional 90 days from the end of the initial period shall be allowed for processing the claim, in which event the claimant shall be furnished with a written notice of the extension prior to the termination of the initial 90 day period indicating the special circumstances requiring an extension. The written notice denying the claim shall set forth the reasons for the denial, including specific reference to pertinent provisions of the Plan on which the denial is based, a description of any additional information necessary to perfect the claim and information regarding review of the claim and its denial. (b) A claimant may review all pertinent documents and may request a review by the Administrative Committee of such a decision denying the claim. Such a request shall be made in writing and filed with the Administrative Committee within 60 days after delivery to the claimant of written notice of the decision. Such written request for review shall contain all additional information which the claimant wishes the Administrative Committee to consider. The Administrative Committee may hold a hearing or conduct any independent investigation, and the decision on review shall be made as soon as possible after the Administrative Committee's receipt of the request for review. Written notice of the decision on review shall be furnished to the claimant within 60 days after receipt by the Administrative Committee of a request for review, unless special circumstances require an extension of time for processing, in which event an additional 60 days shall be allowed for review and the claimant shall be so notified in writing. Written notice of the decision on review shall include specific reasons for the decision. For all purposes under the Plan, such decisions on claims (where no review is requested) and decisions on review (where review is requested) shall be final, binding and conclusive on all interested persons as to participation and benefits eligibility, the amount of benefits and as to any other matter of fact or interpretation relating to the Plan. 15.10 Communications. Any notice, election, application, instruction, designation or other form of communication required to be given or submitted by any Member, other Employee or Beneficiary shall be in such form as is prescribed from time to time by the Administrative Committee or Investment Committee, sent by first class mail or delivered in person, and shall be deemed to be duly given only upon actual receipt thereof by such Committee. Any notice, statement, report and other communication from the Company or either Committee to any Member, other Employee or Beneficiary required or permitted by the Plan shall be deemed to have been duly given when delivered to such person or mailed by first class mail to such person at his address last appearing on the records of the Company or the Committee. Each person entitled to receive a payment under the Plan shall file in accordance herewith his complete mailing address and each change therein. A check or communication mailed to any person at his address on file with the Company or the appropriate Committee shall be deemed to have been received by such person for all purposes of the Plan, and no Employee or agent of the Company, of a Participating Company or member of the Administrative Committee or the Investment Committee shall be obliged to search for or ascertain the location of any such person except as required by the Act. If the Administrative Committee shall be in doubt as to whether payments are being received by the person entitled thereto, it may, by registered mail addressed to such person at his address last known to the Administrative Committee notify such person that all future payments will be withheld until such person submits to the Administrative Committee his proper mailing address and such other information as the Administrative Committee may reasonably request. 15.11 Agent for Service of Process. The agent for the service of legal process of the Plan shall be the Secretary of the Company or such other person as may from time to time be designated by the Board of Directors. 15.12 Specific Powers and Duties. The Administrative Committee and the Investment Committee each shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under the Plan or the Trust as such plan or Trust may be amended from time to time. It is intended that each Committee shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations and shall not be responsible for any act or failure to act on the part of the other Committee or of another fiduciary. SECTION 16. TERMINATION OF PARTICIPATING COMPANY PARTICIPATION 16.1 Termination of Participating Company Participation. Any Participating Company may terminate its participation in the Plan by giving the Administrative Committee prior written notice specifying a termination date which shall be the last day of a month at least 60 days subsequent to the date such notice is received by the Administrative Committee. The Administrative Committee may terminate any Participating Company's participation in the Plan, as of any termination date specified by the Administrative Committee, for the failure of the Participating Company to make proper contributions or to comply with any other provision of the Plan. In the event of any such termination, the Administrative Committee shall promptly notify the IRS and request such determination as counsel to the Plan may recommend and as the Administrative Committee may deem desirable. 16.2 Rights of Former Members. To the maximum extent permitted by the Act, any rights of Members no longer employed by the Participating Company, former Member's and their Beneficiaries, Surviving Spouses and other eligible survivors under the Plan shall be unaffected by a termination of the Plan as to any Participating Company. Subject to the provisions of Section 17.8, the benefits provided under the Plan with respect to each member who is employed by such Participating Company as of the termination date will be paid or forfeited in accordance with the Plan as if such termination had not occurred except that the Administrative Committee may direct the Trustee to segregate such portion of the assets of the Trust (the "Distributable Reserve") as the Actuary shall determine to be properly allocable in accordance with the Act to the Members who are Employees of such Participating Company and direct the Trustee to apply the Distributable Reserve for the benefit of the Participants employed by the Participating Company as of the termination date in such matter as the Administrative Committee shall determine including, without limitation, payment to such Members in lump cash sums, cash installments, or the purchase of immediate or deferred annuities, a transfer to a successor employee benefit plan which is qualifie3d under Section 401(a) of the Code, or any combination thereof; provided, however, that in the event of any transfer of assets to a successor employee benefit plan the provisions of Section 16.3 will apply. Any such payments or transfers of the Distributable Reserve shall constitute a complete discharge of all liabilities under the Plan with respect to such Participating Company's participation in the Plan and any Member then employed by such Participating Company. To the maximum extent permitted by the Act, the termination of the Plan as to any Participating Company shall not in any way affect any other Participating Company's participation in the Plan. 16.3 Transfer to Successor Plan. No transfer of the Plan's assets and liabilities to a successor employee benefit plan (whether by merger or consolidation with such successor plan or otherwise) shall be made unless each Member would, if either the Plan or such successor plan then terminated, receive a benefit immediately after such transfer which (after taking account of any distributions or payments to them as part of the same transaction) is equal to or greater than the benefit he would have been entitled to receive immediately before such transfer if the Plan had then been terminated. The Administrative Committee or the Investment Committee or both of the Committees may also request appropriate indemnification from the employer or employers maintaining such successor plan before making such a transfer. SECTION 17. AMENDMENT OR TERMINATION OF THE PLAN AND THE TRUST 17.1 Right to Amend, Suspend or Terminate Plan. (a) Subject to the provisions of Section 17.1(b), the Board of Directors reserves the right at any time, by majority consent in writing or by a meeting, to amend, suspend or terminate the Plan, any contributions thereunder, the Trust or any contract issued by an insurance carrier forming a part of the Plan, in whole or in part and for any reason and without the consent of any Participating Company, Member, other Employee Beneficiary or Surviving Spouse. Each Participating Company by its adoption of the Plan shall be deemed to have delegated this authority to the Board of Directors and the Administrative Committee. (b) The Administrative Committee may adopt amendments, by majority consent in writing or by a meeting, which may be necessary or appropriate to facilitate the administration, management, or interpretation of the Plan or to conform the Plan thereto, or to qualify or maintain the Plan and the Trust as a plan and trust meeting the requirements of Sections 401(a) and 501(a) of the Code or any other applicable section of law (including the Act) and the Regulations, provided that any such amendment does not materially increase the cost to the Employer of maintaining the Plan. (c) No amendment or modification shall be made which would retroactively impair any right to any benefit under the Plan which any Member, Beneficiary or Surviving Spouse would otherwise have had at the date of such amendment by reason of the contributions theretofore made, except as provided in Section 17.2 below, or (ii) make it possible for any part of the funds of the Plan (other than such part as is required to pay taxes, if any, and administrative expenses as provided in Section 13.4) to be used for or diverted to any purposes other than for the exclusive benefit of Members and their Beneficiaries and Surviving Spouses under the Plan prior to the satisfaction of all liabilities with respect thereto. 17.2 Retroactivity. Subject to the provisions of Section 17.1, any amendment, modification, suspension or termination of any provisions of the Plan may be made retroactively if necessary or appropriate to qualify or maintain the Plan, the Trust and any contract with an insurance company which may form a part of the Plan as a plan and trust meeting the requirements of Sections 401(a) and 501(a) of the Code or any other applicable section of law (including the Act) and the Regulations issued thereunder. 17.3 Notices. Notice of any amendment, modification, suspension or termination of the Plan shall be given by the Board of Directors or the Administrative Committee, whichever adopts the amendment to the other and to the Trustee, and all Participating Companies and, where and to the extent required by law, to Members and other interested parties. 17.4 Termination. Upon termination of the Plan, no amount shall thereafter be payable under the Plan to or in respect of any Member except as provided in this Section 17. To the maximum extent permitted by the Act, transfers, distributions or other disposition of the assets of the Plan as provided in this Section 17 shall constitute a complete discharge of all liabilities under the Plan. The Administrative and Investment Committees shall remain in existence and all of the provisions of the Plan which in the opinion of the Administrative Committee are necessary for the execution of the Plan and the administration and distribution transfer or other disposition of the assets of the Plan in accordance with this Section 17.4 shall remain in force. 17.5 Not a Title IV Termination. If the termination of the Plan does not constitute a plan termination for purposes of Title IV of the Act, the assets of the Plan shall be applied for the benefit of Members, former Members, Beneficiaries and Surviving Spouses in such manner as the Administrative Committee shall determine; provided, however, that in the event of any transfer of assets to a successor employee benefit plan the provisions of Section 16.3 will apply. 17.6 Title IV Termination. (a) If the termination of the Plan does constitute a plan termination for purposes of Title IV of the Act, then the rights of all Members to their Retirement Benefits accrued to the date of such termination shall thereupon be nonforfeitable, but only to the extent that such Retirement Benefits have then been funded by contributions made prior to such termination and that such funds are available to provide such Retirement Benefits upon the allocations hereinafter provided in this Section 17.6. (b) Upon receipt by the Administrative Committee of all necessary PBGC regulatory approvals with respect to the sufficiency of the assets of the Plan to discharge when due all obligations thereunder with respect to benefits which are guaranteed by the PBGC under Title IV of the Act, the assets of the Plan which remain after reservation of an amount sufficient to pay all expenses of final administration shall be allocated, to the extent sufficient, in the following order of priority: (i) To provide for the benefits payable under Section 11 of the Plan or, if the Plan existed on December 31, 1975, the corresponding Section or Sections of the Plan as in effect on December 31, 1975, to or in respect of Members who retired or died, who could have retired, or who, having terminated Service, either began receiving payments of such benefits or could have begun receiving such payments if they had not elected to defer commencement of such payments, at least three years prior to the termination date, determined in each case on the basis of the provisions of the Plan at any time during the five year period ending on the termination date when such benefits were or would have been the lowest and without regard to any increases in such benefits which accrued less than three years prior to the termination date; then (ii) To provide all other benefits under the Plan which are guaranteed by the PBGC under Title IV of the Act, or which would be guaranteed if Sections 4022(B)(a) and 4022(b)(5) of the Act were not applicable, but which have not been allocated under (i) above; then (iii) To provide all other benefits which had become nonforfeitable under the Plan prior to the termination date but which have not been allocated under (i) or (ii) above; then (iv) To provide all other benefits which had accrued under the Plan prior to the termination date but which have not been allocated under (i), (ii) or (iii) above; then (v) Any surplus assets of the Plan remaining after the payment of all expenses of final administration and after the satisfaction of all liabilities accrued to the termination date with respect to Members, former Members, Beneficiaries and Surviving Spouses under the Plan shall revert to the Company. (c) The foregoing allocations shall be made by the Administrative Committee in accordance with determinations made pursuant to the Labor Department Regulations. If the balance remaining for allocation under any of the foregoing Sections 17.6(b)(i), (ii), (iii), (iv) or (v) is insufficient to provide in full the allocations under such Section, allocations to individuals under such Section shall be reduced pro rata (except that, under Section 17.6(b)(iii) only, such balance shall first be allocated to provide the benefits described therein determined on the basis of the provisions of the Plan which were in effect at the beginning of the five year period ending on the termination date and then, if the balance remaining for allocation is sufficient, to provide the benefits described therein which result from each successive amendment to the Plan during such five year period until the first such amendment as to which such balance is insufficient before reducing such allocation pro rata) and no allocations shall be made under a subsequent Section. The assets of the Plan allocated in accordance with Sections 17.6(b)(i), (ii), (iii) and (iv) above shall be distributed in such manner as the Administrative Committee shall determine, including without limitation, lump sum cash payments, cash installments, the purchase of immediate or deferred annuities or any combination of the foregoing as the PBGC and, if applicable, the IRS, may approve. 17.7 Asset Allocation by Court. Notwithstanding the provisions of Section 17.6, if the PBGC notifies the Administrative Committee that it is unable to determine whether the assets of the Plan are sufficient (or that such assets are insufficient) to discharge when due all obligations thereunder with respect to benefits which are guaranteed by the PBGC under Title IV of the Act, then the assets of the Plan shall be allocated and distributed only as a court having competent jurisdiction over the Plan and the Trust, or a trustee appointed by such court, shall direct or permit. 17.8 Partial Termination. In the event of a partial termination (within the meaning of the Act) of the Plan has occurred then (i) the rights of all Members affected thereby to their Accrued Benefits accrued to the date of such partial termination shall thereupon be nonforfeitable, but only to the extent that such Accrued Benefits have then been funded by such portion of the assets of the Trust as are determined to be properly allocable to such Members and that such portion of assets is available to provide such Retirement Benefits upon the allocations provided in Section 17.6, and (ii) the provisions of Sections 16.3, 17.2, 17.3, 17.4 and 17.7 which in the opinion of the Administrative Committee are necessary for the execution of the Plan and the allocation and distribution of the assets of the Plan shall apply. If a partial termination of the Plan has occurred as to any Participating Company, then to the maximum extent permitted by the Act, only the Participating Company as to which the partial termination of the Plan has occurred shall be liable to the PBGC for any insufficiency of assets. SECTION 18. TOP HEAVY PROVISIONS 18.1 Top Heavy Plan. The Plan will be considered a Top Heavy Plan for any Plan Year if it is determined to be a Top Heavy Plan as of the last day of the preceding Plan Year (or, with respect to the first Plan Year, the last day of such Plan Year). For purposes of determining whether the Plan is a Top Heavy Plan, when appropriate, actuarial assumptions which reflect reasonable mortality experience and a reasonable interest rate that uniformly applies for accrual purposes under all plans maintained by the Company and its Affiliates shall be used. Such actuarial assumptions shall be the same assumptions used to determine benefits under Section 11. The present value of a Member's Accrued Benefit shall be determined as of the last Valuation Date used for computing Plan costs for minimum funding purposes which occurs within the Plan Year in which the determination is being made, and shall include amounts distributed to or on behalf of the Member within the four preceding Plan Years. Notwithstanding any other provisions of the Plan, the provisions of this Section 18 shall apply and supersede all other provisions of the Plan during each Plan Year with respect to which the Plan is determined to be a Top Heavy Plan. 18.2 Definition for Section 18. For purposes of this Section 18 and as otherwise used in the Plan, the following terms shall have the meanings set forth below: (a) "Determination Date" means the last day of the preceding Plan Year or the last day of the first Plan Year. (b) "Key Employee" means (i) each person (and his Beneficiary) who at any time during the five Plan Years ending on the Determination Date: (A) was an officer of the Company or an Affiliate having an annual Salary greater than 50% of the amount in effect under Section 415(b)(1)(A) of the Code for any such Plan Year; (B) was one of the 10 Employees owning the largest interest of the Company and its Affiliates but only if he received Salary equal to or greater than the dollar amount applied for purposes of Section 415(c)(1)(A) of the Code for the calendar year ending coincident with or immediately after the Determination Date; (C) owned at least five percent of an Employer's outstanding shares of stock or at least five percent of the total combined voting power of an Employer's shares of stock; or (D) owned at least one percent of an Employer's shares of stock or at least one percent of the total combined voting power of an Employer's shares of stock, and whose annual Salary from the Employer exceeds $150,000. (ii) The following special rules apply to this definition: (A) No more than 50 officers, or, if less, the greater of three or 10% of all Employees will be Key Employees under Section 18.2(b)(i)(A). If there are more officers than are counted under the preceding sentence, only those who had the highest aggregate Salary, during the five Plan Years ending on the Determination Date will be considered Key Employees. (B) A person is an officer only if he is in regular and continued service as an administrative executive of the Company or a Participating Company. (C) No person will be a Key Employee under more than one paragraph of this definition unless he also is a Beneficiary of a deceased Key Employee. (D) A person will be treated as owning all shares of stock which he owns directly or constructively by application Section 318 of the Code. (E) For purposes of determining whether a person is a one percent or five percent owner of the Company or any Affiliate, his ownership interest in any entity related to the Company solely by reason of Sections 414(b), (c) and (m) of the Code shall be disregarded. (F) For purposes of determining whether a person receives an annual Salary of more than $150,000, Salary received from each Employer required to be aggregated under Sections 414(b), (c) and (m) of the Code shall be taken into account. (c) "Non-Key Employee" means (i) any Employee who is not a Key Employee, or (ii) a Beneficiary of a Non-Key Employee. (d) "Permissive Aggregation Group" means all qualified employee pension benefit plans in the Required Aggregation Group and any qualified employee pension benefit plans sponsored by the Company or an Affiliate which are not part of the Required Aggregation Group, but which satisfy the requirements of Sections 401(a)(4) and 410 of the Code when considered together with the Required Aggregation Group and which the Company elects to have included in the Permissive Aggregation Group. (e) "Required Aggregation Group" means the Plan and any other qualified employee pension benefit plan that was sponsored during the five year period ending on the applicable Determination Date by the Company or an Affiliate (i) in which a Key Employee participates or (ii) which enables the Plan to meet the requirements of Sections 401(a)(4) or 410 of the Code. (f) "Top Heavy Group" means all qualified employee pension benefit plans of the Company and its Affiliates in the Required Aggregation Group and any other qualified employee benefit plan of the Company and its Affiliates which the Company elects to aggregate as part of a Permissive Aggregation Group if, on any Determination Date, the Value of the cumulative annual accrued benefits for Key Employees under all defined benefit plans and the aggregate Value of all Key Employees' accounts under all defined contribution plans exceed 60% of a similar sum determined for all Employees. For purposes of this computation, the account balances and cumulative annual accrued benefits of a Member (i) who is a Non-Key Employee but who was a Key Employee in a prior Plan Year, or (ii) who has not been credited with at least one Hour of Service with any Employer at any time during the five year period ending on the Determination Date will be disregarded. If the aggregated plans do not have the same Determination Date, this test will be made using the Value calculated as of each plan's Determination Date occurring during the same Plan Year. (g) "Top Heavy Plan" means the Plan if, on any Determination Date, the present Value of the cumulative accrued benefits under the Plan for Key Employees exceeds 60% of the Value of the cumulative accrued benefits under the Plan for all Employees. For purposes of the comparison, the cumulative accrued benefits of all Non-Key Employees who were, but no longer are, Key Employees will be disregarded. The Plan is Super Top Heavy if it would be a Top Heavy Plan if 90% were substituted for 60% wherever it appears in the definition of Top Heavy Plan and Top Heavy Group. (h) "Top Heavy Plan Year" means any Plan Year during which the Plan is Top Heavy or part of a Top Heavy Group. (i) "Value" means: (i) for all defined benefit plans, the present value calculated as provided in those plans; and (ii) for all defined contribution plans, the fair market value of each Member's account (including amounts attributable to voluntary employee contributions from a qualified employee pension benefit plan sponsored by the Company or an Affiliate) determined as of the most recent Determination Date increased by: (A) distributions made during the five Plan Years ending on the Determination Date (except distributions already included in determining the Value of the accounts and distributions made during the five Plan Years preceding the Determination Date under a terminated plan which, if it had not been terminated, would have been required to be included in the Required Aggregation Group); and (B) all rollover contributions distributed from the plans to a qualified employee benefit plan not sponsored by the Company or an Affiliate, and decreased by; (C) any deductible employee contributions; and (D) rollover contributions received by the plans from a qualified employee benefit plan not sponsored by the Company or an Affiliate; and (E) rollover contributions distributed from the Plan to a qualified employee pension benefit plan sponsored by the Company or an Affiliate. 18.3 Minimum Vesting. (a) If a Plan is a Top Heavy Plan with respect to any Plan Year, the nonforfeitable percentage of the Accrued Benefit derived from Company contributions of each Member who is credited with at least one Hour of Service on or after the date the Plan becomes Top Heavy shall not be less than the amount determined in accordance with the following vesting schedule:
Years of Service Percentage Less than 2 years 0% 2 years but less than 3 years 20% 3 years but less than 4 years 40% 4 years but less than 5 years 60% 5 years but less than 6 years 80% 6 or more 100%
(b) In the event the vesting provisions of Section 8.1 are amended, or changed on account of the Plan becoming or ceasing to be a Top Heavy Plan, any Member who has completed at least three Years of Service may elect to have the amount of his nonforfeitable right to his Retirement Benefit computed under the Plan without regard to such amendment or change by notifying the Administrative Committee in writing within the election period hereinafter described. The election period shall begin on the date such amendment is adopted or the date such change is effective, as the case may be, and shall end no earlier than the latest of the following dates: (i) the date which is 60 days after the day such amendment is adopted; or (ii) the date which is 60 days after the day such amendment or change becomes effective; or (iii) the date which is 60 days after the day the Member is given written notice of such amendment or change by the Administrative Committee. Any election made pursuant to this Section 18.3(b) shall be irrevocable. 18.4 Minimum Benefits. (a) Subject to the provisions of Section 18.5, if the Plan is a Top Heavy Plan at any point in time, the Accrued Benefit derived from the Company's contributions for each Member who has completed a Year of Service regardless of whether he is employed by the Employer on the last day of the Plan Year and who is a Non-Key Employee shall not, regardless of the Member's Salary, at such point, be less than such Member's Average Compensation, multiplied by the lesser of (i) two percent multiplied by the number of Years of Service or (ii) 20%. For purposes of the preceding sentence, Years of Service shall not include any Year of Service credited with respect to Plan Years which began prior to January 1, 1984, or any other Year of Service credited with respect to a Plan Year during which the Plan was not a Top Heavy Plan. (b) For purposes of this Section 18.4, "Average Compensation" shall mean the average of a Member's Salary (or to the extent required by the Code or Section 1.415-2(d) of the IRS Regulations) for the period of five consecutive years (or, if the Member does not have five consecutive years, his actual number of consecutive years) during which the Member had the greatest Salary (or to the extent required by the Code or Section 1.415-2(d) of the IRS Regulations). 18.5 Limitations on Benefits. (a) For each Plan Year that the Plan is a Top Heavy Plan, 1.0 shall be substituted for 1.25 as the multiplicand of the dollar limitation in determining the denominator of the defined benefit plan fraction and of the defined contribution plan fraction for purposes of Section 12. (b) If, after substituting 90% for 60% wherever the latter appears in Section 416(g) of the Code, the Plan is not determined to be a Top Heavy Plan then the provisions of Section 18.5(a) shall not be applicable if the Accrued Benefit of any Member who is a Non-Key Employee is determined in accordance with Section 18.4(a) by substituting "three percent" for "two percent" in Section 18.4(a) and increasing "20%" in Section 18.4(a) by one for each Plan Year described in the last sentence of Section 18.4(a), but not beyond "30%". 18.6 Other Plans. If, with respect to a Non-Key Employee who benefits in a Plan Year under both a defined contribution and defined benefit plan which are Top Heavy Plans maintained by the Employer, a top heavy minimum benefit is not provided for such Plan Year under both plans, then such determination for such Plan Year shall be made in conformity with the comparability analysis described in Q&A M-12 of Section 1.416-1 of the IRS Regulations. Such analysis shall be modified, where a factor of 1.25 is utilized for such Plan Year in connection with the satisfaction of the limitations set forth in Section 415(e) of the Code, in accordance with the last sentence of Q&A M-14 of Section 1.416-1 of the IRS Regulations. SECTION 19. LIMITATIONS ON DISTRIBUTIONS TO CERTAIN HIGHLY PAID EMPLOYEES 19.1 Limitations of Section 19. In order to qualify the Plan and the Trust as a qualified plan and trust under the Code the benefits to be provided to certain Members will be subject to the limitations set forth in this Section 19. 19.2 Application of Section 19. The provisions of this Section 19.2, and Sections 19.3, 19.5 and 19.6 shall apply for Plan Years prior to January 1, 1994, to any Member who on any "Commencement Date" is one of the 25 highest paid employees of the Employer and whose anticipated annual benefit under the Plan, commencing at his Normal Retirement Date, provided by contributions of the Employer will be in excess of $1,500 annually. Commencement Date for purposes of this Section 19 shall mean the Effective Date of the Plan or any subsequent amendment to the Plan which increases the benefits of the Plan. 19.3 Limitation on Benefits. Notwithstanding any other provision of the Plan, if during the first 10 years following a Commencement Date, the Plan is terminated or benefits become payable to a Member described in Section 19.2 above during such 10 year period, the amount of contributions (or funds attributable thereto) by the Employer which may be applied for the benefit of any such Member shall be limited so that such amount so applied under the Plan shall not exceed the largest of: (a) The Employer's contributions (or funds attributable thereto) which would have been applied to provide benefits for the Member if the Plan, as in effect on the day immediately preceding the Commencement Date, had been continued without change; (b) $20,000; (c) The sum of (i) the Employer's contributions (or funds attributable thereto) which would have been applied to provide benefits for the Member if the Plan had been terminated on the day immediately preceding such Commencement Date, plus (ii) an amount computed by multiplying the smaller of $10,000 or 20% of the Member's average annual Salary during his last five Years of Service by the number of years since such Commencement Date; (d) if the Plan is subject to Section 4021(a) of the Act and if the Member is a "substantial owner" (as defined in Section 4022(b)(5) of the Act), the present value of the benefit guaranteed for such Member under Section 4022 of the Act (or which would have been guaranteed under such section if the Plan had terminated on the date payment of the Retirement Benefit commenced); or (e) if the Plan is subject to Section 4021(a) of the Act and if the Member is not a substantial owner the present value of the maximum benefit guaranteed under Section 4022(b)(3)(B) of the Act (or which would have been guaranteed under such section if the Plan had terminated on the date payment of his Retirement Benefit commenced) without regard to any other limitation imposed by Section 4022 of the Act. 19.4 Unrestricted Benefits. The limitations established under this Section 19 shall not restrict either the payment of any monthly benefit due prior to the termination of the Plan, or the payment of benefits to a Member's Surviving Spouse under the Plan at any time if such payment shall have commenced prior to the date of such termination. If the foregoing limitations would otherwise become applicable the Administrative Committee may, if it so elects, nevertheless pay full benefits to or in respect of any Member who executes an agreement with the Trustee, in form and in substance satisfactory to the Administrative Committee, which is adequately secured and which guarantees the repayment of any payment subject to such limitations. 19.5 Use of Reserves Resulting from Limitations. Any additional reserves arising by the application of the foregoing limitations shall be used and applied for the benefit of the other Members and their Beneficiaries and Surviving Spouses under the Plan; provided, however, that if sufficient funds are available to provide in full for the benefits accrued for all such other Members and their Beneficiaries and Surviving Spouses under the Plan, then such additional reserves shall be used, to the extent available, to provide the benefits under the Plan of the Members whose benefits would otherwise have been restricted by operation of this Section 19. SECTION 20. GENERAL LIMITATIONS AND PROVISIONS 20.1 No Right to Continued Employment. Nothing contained in the Plan shall give any Employee the right to be retained in the employment of the Company, any Participating Company or any of its subsidiaries or affiliated or associated corporations or affect the right of any such Employer to dismiss any Employee. The adoption and maintenance of the Plan shall not constitute a contract between the Employer and any Employee or consideration for, or an inducement to or condition of, the employment of any Employee. 20.2 Trust is Sole Source of Benefits. The Trust shall be the sole source of benefits under the Plan and, except as otherwise required by the Act, the Employer, the Administrative Committee, and the Investment Committee, assume no liability or responsibility for payment of such benefits, and each Member, Surviving Spouse, Beneficiary or other person who shall claim the right to any payment under the Plan shall be entitled to look only to the Trust for such payment and shall not have any right, claim or demand therefor against the Employer, or the Administrative Committee or the Investment Committee or any member thereof or any Employee or director of the Employer. 20.3 Payment on Behalf of Payee. If the Administrative Committee shall find that any person to whom any amount is payable under the Plan is found by a court of competent jurisdiction to be unable to care for his affairs because of illness or accident, or is a minor, or has died, then any payment due him or his estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Administrative Committee so elects, be paid to his spouse, a child, a relative, an institution maintaining or having custody of such person, or any other person deemed by the Administrative Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Plan and the Trust therefor. 20.4 No Alienation. Except insofar as may otherwise be required by law or pursuant to the terms of a Qualified Domestic Relations Order, no amount payable at any time under the Plan and the Trust shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person and any attempt to so alienate or subject any such amount, whether presently or thereafter payable, shall be void. If any person shall attempt to, or shall, alienate, sell, transfer, assign, pledge, attach, charge or otherwise encumber any amount payable under the Plan and Trust, or any part thereof, or if by reason of his bankruptcy or other event happening at any such time such amount would be made subject to his debts or liabilities or would otherwise not be enjoyed by him, then the Administrative Committee, if it so elects, may direct that such amount be withheld and that the same or any part thereof be paid or applied to or for the benefit of such person, his spouse, children or other dependents, or any of them, in such manner and proportion as the Administrative Committee may deem proper. 20.5 Missing Payee. If the Administrative Committee cannot ascertain the whereabouts of any person to whom a payment is due under the Plan, and if, after five years from the date such payment is due, a notice of such payment due is mailed to the last known address of such person, as shown on the records of the Administrative Committee or the Employer, and within three months after such mailing such person has not made written claim therefor, the Administrative Committee, if it so elects, after receiving advice from counsel to the Plan, may direct that such payment and all remaining payments otherwise due to such person be canceled on the records of the Plan and the amount thereof applied to reduce the contributions of the Participating Company, that had employed the Member, and upon such cancellation, the Plan and the Trust shall have no further liability therefor, except that, in the event such person later notifies the Administrative Committee of his whereabouts and requests the payment or payments due to him under the Plan, the amount so applied shall be paid to him as provided in Section 11. 20.6 Subject to Trust Agreement. Any and all rights or benefits accruing to any persons under the Plan shall be subject to the terms of the Trust Agreement which the Company shall enter into with the Trustee providing for the administration of the Trust Fund. 20.7 Required Information. Each Member shall file with the Administrative Committee such pertinent information concerning himself, his spouse, his Beneficiary or any other person as the Administrative Committee may specify and in such manner and form as the Administratice Committee may specify or provide, and no Member, Surviving Spouse or Beneficiary, or other person shall have any rights or be entitled to any benefits or further benefits under the Plan unless such information is filed by or with respect to, him. 20.8 Subject to Insurance Contract. If the payment of any benefit under the Plan is provided for by a contract with an insurance company the payment of such benefit shall be subject to all the provisions of such contract. 20.9 Communications to Committees. All elections, designations, requests, notices, instructions, and other communications from a Participating Company, a Member, Beneficiary, Surviving Spouse or other person to the Administrative Committee required or permitted under the Plan shall be in such form as is prescribed from time to time by the Administrative Committee, shall be mailed by first-class mail or delivered to such location as shall be specified by the Administrative Committee, and shall be deemed to have been given and delivered only upon actual receipt thereof by the Administrative Committee at such location. 20.10 Communications from Participating Company or Committees. All notices, statements, reports and other communications from a Participating Company or either Committee to any Eligible Employee, Member, Beneficiary or other person required or permitted under the Plan shall be deemed to have been duly given when delivered to, or when mailed by first class mail, postage prepaid and addressed to, such Eligible Employee, Member, Beneficiary or other person at his address last appearing on the records of the Administrative Committee. 20.11 Gender; Tense. Whenever used in the Plan the masculine gender includes the feminine gender and the singular includes the plural, unless the content indicates otherwise. 20.12 Captions. The captions preceding the Sections of the Plan have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provisions of the Plan. 20.13 Applicable Law. The Plan and all rights thereunder shall be governed by and construed in accordance with the Act and the laws of the State of New York. OGDEN PROJECTS PENSION PLAN APPENDIX I ACTUARIAL ASSUMPTIONS AND TABLES Except as limited in Section 2.25, the actuarial tables and interest rates used to calculate the Equivalent Actuarial Value or Actuarial Equivalent of a particular form of benefit shall be as follows: Interest: Eight percent, compounded annually. Mortality: 1983 Group Annuity Table weighted to reflect 80% of the male and 20% of the female annuity rates. Provided, however, that for purposes of calculating Equivalent Actuarial Values under Section 11.6, the interest rate shall be equal to the rate promulgated by the Pension Benefit Guaranty Corporation for valuing annuities of pension plans terminating as the first day of the Plan Year that contains the proposed distribution date. EX-11 9 EXHIBIT 11 OGDEN CORPORATION AND SUBSIDIARIES DETAIL OF COMPUTATION OF EARNINGS APPLICABLE TO COMMON STOCK FOR THE THREE YEARS ENDED DECEMBER 31, 1994
1994 1993 1992 NUMBER OF SHARES USED FOR COMPUTATION OF EARNINGS PER SHARE: Average number of common shares 43,610,000 43,378,000 43,086,000 NUMBER OF SHARES USED FOR COMPUTATION OF EARNINGS PER SHARE ASSUMING FULL DILUTION: Average number of common shares 43,610,000 43,378,000 43,086,000 Issuable for options-treasury stock method Shares issuable for conversion of preferred stock 329,000 356,000 382,000 Shares issuable for conversion of debentures 42,000 115,000 Number of shares used for computation 43,939,000 43,776,000 43,583,000 COMPUTATION OF EARNINGS APPLICABLE TO COMMON SHARES: Income from continuing operations before cumulative effect of changes in accounting principles $67,826,000 $62,130,000 $60,767,000 Add (deduct): Adjustments arising from minority interest in consolidated subsidiaries 10,000 32,000 13,000 Dividends on Ogden preferred stock (184,000) (199,000) (213,000) Consolidated income applicable to Ogden common stock $67,652,000 $61,963,000 $60,567,000 Cumulative effect of changes in accounting principles ($1,520,000) ($5,340,000) ($5,186,000) COMPUTATION OF EARNINGS APPLICABLE TO COMMON SHARE ASSUMING FULL DILUTION: Income from continuing operations before cumulative effect of changes in accounting principles $67,826,000 $62,130,000 $60,767,000 Add: Adjustments arising from minority interest in consolidated subsidiaries 10,000 32,000 13,000 Debenture interest (net of applicable income taxes) 16,000 49,000 Consolidated income applicable to Ogden common stock $67,836,000 $62,178,000 $60,829,000 Cumulative effect of changes in accounting principles ($1,520,000) ($5,340,000) ($5,186,000) Note: Current options result in less than three percent dilution with the expectation of continuing at less than three percent dilution.
EX-13 10 EXHIBIT 13 Ogden Corporation and Subsidiaries Management's Discussion and Analysis of Consolidated Operations At December 31, 1994, in connection with Ogden's acquisition of the publicly traded shares of Ogden Projects, Inc. (OPI), Ogden reclassified its business segments. Ogden now classifies its business segments as Services (formerly "Operating Services") and Projects (formerly "Waste-to-Energy Operations"). Independent power activities, formerly part of Operating Services, are now part of Projects, reflecting consolidation of the overall management of these activities within OPI. Projects now includes waste-to-energy activities, the independent power business, water and wastewater projects, and Ogden's construction activities. Within the Services segment, certain business activities have been reclassified. The Environmental Services group no longer includes independent power; the Government Services group has been renamed Technology Services; and all facility management service contracts for government customers have been transferred to the Facility Management Services group. The discussion and analysis that follow reflect these reclassifications. Operations: Revenues for 1994 were $70,800,000 higher than the comparable period of 1993, primarily due to increased revenues of $24,100,000 in Aviation Services reflecting the start-up of operations in Brazil and increased activity in Venezuela, Chile, and European operations; $30,200,000 in Technology Services, primarily in the Atlantic Design group and the Systems Engineering group reflecting several new contracts and increased customer activity; $18,500,000 in Environmental Services, primarily reflecting increased activity in the consulting group; $26,900,000 in waste-to-energy services due primarily to increased revenues at the Detroit, Michigan; Hartford, Connecticut; and Honolulu, Hawaii, facilities acquired in January 1993 and the start-up and full operation of the Union County, New Jersey, facility; $3,800,000 in the independent power group, reflecting increased geothermal power production; and $26,100,000, relating to the gain on the sale of limited partnership interests in and related tax benefits of the Onondaga County, New York, facility. These increases were partially offset by lower revenues of $24,800,000 in the Facility Management Services group due primarily to the loss of several building cleaning contracts and certain utility maintenance contracts and a reduction in construction revenues of $35,300,000, primarily due to reduced construction activity at the Union County facility completed in May 1994, and the Lee County, Florida, facility completed in December 1994. Consolidated operating income was $16,200,000 higher than 1993, primarily due to an increase of $3,500,000 in Technology Services reflecting several new contracts and increased customer activity in the Atlantic Design group; an increase of $1,600,000 in waste-to-energy services (service revenues less operating costs and debt service charges), chiefly associated with the start-up and full commercial operations of the Union County facility and partially offset by additional maintenance work at the Detroit facility, additional provisions totaling $8,000,000 for deferred proposal costs, litigation and contractor settlement costs, and increased debt service charges of $1,700,000; an increase of $1,700,000 in independent power, primarily reflecting increased activity; an increase in construction income (construction revenues less construction costs) of $2,600,000, primarily due to increased activity at the Montgomery County, Maryland, facility; and a gain of $26,100,000 from the sale of limited partnership interests in and related tax benefits of the Onondaga County facility. These increases were partially offset by lower earnings of $5,000,000 in Facility Management Services, reflecting the loss of several building cleaning and utility maintenance contracts; lower earnings of $2,500,000 in Aviation Services, reflecting lower margins in the in-flight catering group and a loss on the devaluation of the Mexican peso, partially offset by increased earnings in overseas ground services operations; and lower earnings of $2,200,000 in Entertainment Services, primarily reflecting the effect of the baseball strike and hockey lockout and start-up of overseas operations, partially offset by the opening of Arrowhead Pond of Anaheim and several new customers. Selling, administrative, and general expenses increased $10,600,000 due primarily to increased overhead costs including marketing efforts related to new industries and international markets for both the Projects and Services segments. Debt service charges increased $1,700,000. This increase was due to higher interest rates resulting from the conversion of one series of adjustable-rate project debt to fixed rates in 1993 and higher interest rates resulting from two fixed interest rate swap agreements entered into as hedges against two series of adjustable-rate project debt. The swap agreements resulted in additional debt service charges of $1,400,000 and $1,500,000 in 1994 and 1993, respectively. Interest income for 1994 was $3,500,000 higher than in 1993, primarily reflecting interest earned on loans made in the second half of 1994 and higher interest rates on earnings from investments. Interest expense for 1994 was $3,400,000 higher than in 1993, reflecting higher borrowings and a reduction of $2,600,000 in income received on two interest rate swap agreements covering notional amounts of $100,000,000 each. One swap agreement expired in March 1994. The other swap agreement expires on December 16, 1998. These swap agreements were entered into in order to convert Ogden's fixed-rate $100,000,000 9.25% debentures to variable-rate debt. Income received on these swaps was $800,000 and $3,400,000 in 1994 and 1993, respectively. The effective income tax rate for 1994 was 44.4%, compared with 45.0% for 1993. This decrease reflects a charge of $4,100,000 in 1993 reflecting the adjustment of prior years' deferred income tax balances to the new 35% rate enacted in 1993 in accordance with Statement of Financial Accounting Standards (SFAS) 109, offset by $3,600,000 in 1994 due to the recapture of investment tax credits relating to the sale of certain tax benefits with respect to the Onondaga County facility. Note 20 to the Consolidated Financial Statements contains a more detailed reconciliation of the variances from the Federal statutory income tax rate. Revenues for 1993 were $270,500,000 higher than the comparable period of 1992, reflecting increased revenues of $30,400,000 in Entertainment Services primarily due to new contracts and increased customer activity principally at sports venues; $17,500,000 in Aviation Services, chiefly associated with the in-flight catering group and the Mexican and European ground handling operations due to increased customer activity and the start-up of operations at Schiphol Airport in Holland; and $3,200,000 in Environmental Services, reflecting the acquisition of a Spanish environmental services company in 1993. Waste-to-energy service revenues increased $60,900,000, primarily due to the operations of the three waste-to-energy plants acquired from RRS Holdings, Inc. (RRS), the waste-to-energy subsidiary of Asea Brown Boveri Inc., on January 8, 1993; independent power production increased $4,100,000, chiefly associated with increased activity; and construction revenues increased $161,800,000 due to increased construction activity at the Lee County, Detroit, and Montgomery County waste-to-energy facilities. These increases were partially offset by a reduction of $7,700,000, arising from the sale of limited partnership interests in and related tax benefits of the Huntington, New York, waste-to-energy facility in 1992. Consolidated operating income was $8,800,000 higher than 1992, primarily reflecting an increase in waste-to-energy service income (service revenues less operating costs and debt service charges) of $9,100,000, chiefly associated with increased activity at existing facilities, the addition of three RRS plants in January 1993, and a decrease in debt service charges of $1,100,000; $500,000 in independent power operations, reflecting increased production; $14,000,000 in construction income due to increased activity; $3,900,000 in Entertainment Services due to new contracts and increased customer activity, principally at sports venues; $1,900,000 at Universal Ogden, reflecting increased activity in the offshore remote services business; and $300,000 in Environmental Services, primarily due to the acquisition of a Spanish environmental services company. These increases were partially offset by a reduction of $7,700,000, reflecting the gain in 1992 from the sale of limited partnership interests in and related tax benefits of the Huntington waste-to-energy facility. Selling, administrative, and general expenses for both the Projects and Services segments increased $14,300,000 due to increased overhead costs including marketing efforts relating to new industries and international markets. Debt service charges were $1,100,000 lower due primarily to a repayment of project debt from excess construction proceeds as part of a refinancing. This decrease was partially offset by higher interest rates on certain variable-rate debt and higher interest expense resulting from two interest rate swap agreements entered into in May 1993 as hedges against interest rate exposure on two series of adjustable-rate project debt. The interest rate swap agreements resulted in an additional $1,500,000 of debt service charges in 1993. In December 1993, the Corporation adopted a plan to discontinue its fixed-site hazardous waste business. The net charge for all discontinued operations' activity in 1993, which was not material, has been included in operating costs and expenses. See Note 21 to the Consolidated Financial Statements for a more detailed discussion of Discontinued Operations. Interest income for 1993 was $200,000 lower than 1992, primarily reflecting income from the investment of the proceeds from the 9.25% debentures issued in March 1992, partially offset by lower interest rates on investments and the collection of a subordinated note bearing interest above the prime rate. Interest expense for 1993 was $600,000 higher than 1992, primarily reflecting interest costs on the 9.25% debentures issued in March 1992, partially offset by lower interest costs on the Corporation's variable-rate debt and increased income received on two interest rate swap agreements covering notional amounts of $100,000,000 each. One swap was entered into in November 1993. These swaps were entered into in order to convert Ogden's fixed-rate $100,000,000 9.25% debentures to variable-rate debt. Income received on these swaps amounted to $3,400,000 and $2,300,000 in 1993 and 1992, respectively. The effective income tax rate for 1993 was 45.0%, compared with a 40.1% rate for the comparable period of 1992. This increase of 4.9% is chiefly associated with the Omnibus Budget Reconciliation Act of 1993, signed in August 1993, which increased the Federal income tax rate from 34% to 35% retroactively to January 1, 1993. As a consequence, deferred income tax balances were adjusted to reflect the new tax rate as required by SFAS 109, which resulted in a one-time charge for Federal income taxes of $4,100,000 in 1993. Note 20 to the Consolidated Financial Statements contains a more detailed reconciliation of the variances from the Federal statutory income tax rate. Capital Investments, Commitments, and Liquidity: During 1994, capital investments amounted to $119,700,000, of which $76,700,000, inclusive of restricted funds transferred from funds held in trust, was for Projects' waste-to-energy operations and $43,000,000 was for normal replacement and growth in Services, Projects, and for Corporate equipment. At December 31, 1994, capital commitments amounted to $49,900,000, which includes commitments for equity investments (over and above restricted funds provided by revenue bonds issued by municipalities) of $2,600,000 for Projects' waste-to-energy facilities and $47,300,000 for normal replacement, modernization, and growth in Services' and Projects' operations. In 1994, Ogden Corporation's Board of Directors increased from 2,000,000 to 3,200,000 the number of shares authorized to be repurchased by the Corporation from time to time in the open market. The Corporation has not purchased any of its shares. Ogden and certain of its subsidiaries have issued or are party to performance bonds and guarantees and related contractual obligations undertaken mainly pursuant to agreements to construct and operate certain waste-to-energy, entertainment, and other facilities. In the normal course of business, they are involved in legal proceedings in which damages and other remedies are sought. Management does not expect that these contractual obligations, legal proceedings, or any other contingent obligations incurred in the normal course of business will have a material adverse effect on Ogden's Consolidated Financial Statements. During 1994, a subsidiary of the Corporation has entered into a 30-year facility management contract pursuant to which it has agreed to advance funds to a customer, if necessary and only upon satisfactory completion of construction of the facility, to assist refinancing senior secured debt incurred in connection with construction of the facility. Such refinancing requirements are not expected to exceed $67,000,000 at maturity of the senior secured debt, which is expected to be on or about March 1, 2001. Ogden continues as guarantor of surety bonds and letters of credit totaling approximately $19,200,000 on behalf of International Terminal Operating Co. Inc. and has guaranteed borrowings of certain customers amounting to approximately $20,300,000. Management does not expect that these arrangements will have a material adverse effect on Ogden's Consolidated Financial Statements. Ogden's obligation as guarantor on behalf of Avondale Industries, Inc., with respect to $36,000,000 of Industrial Revenue Bonds as well as other contingent obligations under which Ogden may have been required to purchase Avondale preferred stock, ended June 1, 1994. Projects' waste-to-energy facilities are financed to a large degree by revenue bonds issued by the municipalities for facility construction. Other 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 December 31, 1994, the Corporation had $204,000,000 in cash, cash equivalents, and marketable securities and unused revolving credit lines of $162,000,000. Ogden expects to continue its strategy of developing and offering new services to an increasing number of customers. This strategy includes the expansion of the waste-to-energy business, independent power generating capabilities, and the development of water and wastewater treatment projects as well as the continued development of the Corporation's services product lines, both in the United States and abroad. Acquisitions are expected to be a continuing factor in the future growth of Ogden. Ogden Corporation and Subsidiaries Selected Financial Data
December 31, 1994 1993 1992 1991 1990 (In thousands of dollars, except per-share amounts) Total Revenues $2,110,185 $2,039,337 $1,768,815 $1,567,568 $1,556,406 Income (Loss) From: Continuing operations 67,826 62,130 60,767 57,604 58,072 Discontinued operations ---- ---- ---- (13,880) (2,160) Cumulative effect of changes in accounting principles (1,520) (5,340) (5,186) --- --- Net income 66,306 56,790 55,581 43,724 55,912 Earnings (Loss) Per Common Share: Continuing operations 1.55 1.43 1.41 1.33 1.36 Discontinued operations --- --- --- (0.32) (0.05) Cumulative effect of changes in accounting principles (0.03) (0.12) (0.12) --- --- Total 1.52 1.31 1.29 1.01 1.31 Earnings (Loss) Per Common Share- Assuming Full Dilution: Continuing operations 1.54 1.42 1.40 1.32 1.34 Discontinued operations --- --- --- (0.32) (0.05) Cumulative effect of changes in accounting principles (0.03) (0.12) (0.12) Total 1.51 1.30 1.28 1.00 1.29 Total Assets 3,644,886 3,340,729 3,187,826 2,846,254 2,690,448 Long-Term Obligations 2,047,031 1,946,547 2,003,091 1,781,576 1,682,354 Shareholders' Equity 596,818 l486,267 481,084 478,122 484,482 Shareholders' Equity Per Common Share 12.21 11.15 11.11 11.09 11.26 Cash Dividends Declared Per Common Share $1.25 $1.25 $1.25 $1.25 $1.31 Net income in 1993 was reduced by $.08 per share, reflecting the retroactive effect of the increased Federal income tax rate that was enacted in August 1993 on the prior years' deferred income tax balances.
Ogden Corporation and Subsidiaries Statements of Consolidated Income
For the years ended December 31, 1994 1993 1992 Service revenues $1,414,348,000 $1,367,557,000 $1,283,453,000 Net sales 456,586,000 423,329,000 390,994,000 Construction revenues 213,125,000 248,451,000 86,687,000 Gain on sale of limited partnership interests 26,126,000 --- 7,681,000 Total revenues 2,110,185,000 2,039,337,000 1,768,815,000 Operating costs and expenses 1,125,303,000 1,073,684,000 989,771,000 Costs of goods sold 405,190,000 376,553,000 359,736,000 Construction costs 194,022,000 231,956,000 84,212,000 Selling, administrative, and general expenses 135,852,000 125,219,000 110,872,000 Debt service charges 100,358,000 98,664,000 99,734,000 Total costs and expenses 1,960,725,000 1,906,076,000 1,644,325,000 Consolidated operating income 149,460,000 133,261,000 124,490,000) Interest income 12,709,000 9,181,000 9,359,000 Interest expense (23,655,000) (20,289,000) (19,721,000) Other income (deductions)-net 850,000 3,348,000 (1,253,000) Income before income taxes and minority interests 139,364,000 125,501,000 112,875,000 Less: income taxes 61,883,000 56,526,000 45,255,000 minority interests 9,655,000 6,845,000 6,853,000 Income before cumulative effect of changes in accounting principles 67,826,000 62,130,000 60,767,000 Cumulative effect of changes in accounting principles (net of income taxes of $1,100,000 and $3,710,000 for 1994 and 1993, respectively, and including minority interest of $6,582,000 for 1992) (1,520,000) (5,340,000) (5,186,000) Net income $66,306,000 $56,790,000 $55,581,000 Earnings (Loss) Per Common Share: Income before cumulative effect of changes in accounting principles $1.55 $1.43 $1.41 Cumulative effect of changes in accounting principles (0.03) (0.12) (0.12) Total $1.52 $1.31 $1.29 Earnings (Loss) Per Common Share-Assuming Full Dilution: Income before cumulative effect of changes in accounting principles $1.54 $1.42 $1.40 Cumulative effect of changes in accounting principles (0.03) (0.12) (0.12) Total $1.51 $1.30 $1.28 See Notes to Consolidated Financial Statements
Ogden Corporation and Subsidiaries Consolidated Balance Sheets
Assets December 31, 1994 1993 Current Assets: Cash and cash equivalents $117,359,000 $109,097,000 Marketable securities available for sale 86,676,000 94,247,000 Restricted funds held in trust 104,700,000 132,273,000 Receivables (less allowances: 1994, $32,783,000 and 1993, $25,547,000) 585,959,000 506,727,000 Deferred income taxes 26,451,000 28,219,000 Other 74,752,000 61,995,000 Total current assets 995,897,000 932,558,000 Property, plant, and equipment-net 1,884,774,000 1,693,801,000 Restricted funds held in trust 203,244,000 227,143,000 Unbilled service and other receivables 171,441,000 145,542,000 Unamortized contract acquisition costs 133,172,000 111,681,000 Goodwill and other intangible assets 100,416,000 83,552,000 Other assets 155,942,000 146,452,000 Total Assets $3,644,886,000 $3,340,729,000 Liabilities and Shareholders' Equity Current Liabilities: Current portion of long-term debt $3,483,000 $3,070,000 Current portion of project debt 45,279,000 32,632,000 Dividends payable 13,637,000 13,594,000 Accounts payable 93,362,000 84,917,000 Federal income taxes payable 10,141,000 453,000 Accrued expenses, etc. 346,997,000 295,181,000 Total current liabilities 512,899,000 429,847,000 Long-term debt 304,393,000 276,063,000 Project debt 1,593,988,000 1,518,734,000 Deferred income taxes 281,065,000 227,275,000 Other liabilities 196,305,000 176,682,000 Minority interest 10,768,000 74,111,000 Convertible subordinated debentures 148,650,000 151,750,000 Total Liabilities 3,048,068,000 2,854,462,000 Shareholders' Equity 596,818,000 486,267,000 Total Liabilities and Shareholders' Equity $3,644,886,000 $3,340,729,000 See Notes to Consolidated Financial Statements
Ogden Corporation and Subsidiaries Statements of Shareholders' Equity
For the years ended December 31, 1994 1993 1992 Serial Cumulative Convertible Preferred Stock, Par Value $1.00 Per Share; Authorized, 4,000,000 Shares: Balance at beginning of year $57,000 $62,000 $68,000 Shares converted into common stock (3,000) (5,000) (6,000) Balance at end of year (shares outstanding: 54,000 in 1994, 57,000 in 1993, 62,000 in 1992; aggregate involuntary liquidation value-1994, $1,078,000) l54,000 l57,000 l62,000 Common Stock, Par Value $.50 Per Share; Authorized, 80,000,000 Shares: Balance at beginning of year 21,750,000 21,595,000 21,497,000 Acquisition of Ogden Projects, Inc., minority interests 2,570,000 --- --- Exercise of stock options, less common stock utilized 57,000 95,000 76,000 Conversion of preferred shares 11,000 14,000 18,000 Conversion of 5% debentures --- 46,000 4,000 Balance at end of year (shares outstanding: 48,777,000 in 1994, 43,499,000 in 1993, 43,190,000 in 1992) 24,388,000 21,750,000 21,595,000 Capital Surplus: Balance at beginning of year 100,223,000 94,659,000 90,551,000 Acquisition of Ogden Projects, Inc., minority interests 91,876,000 --- --- Exercise of stock options, less common stock utilized 2,164,000 3,640,000 2,623,000 Capital transactions of subsidiary companies-net 241,000 696,000 1,379,000 Conversion of preferred shares (8,000) (10,000) (12,000) Conversion of 5% debentures --- 1,238,000 118,000 Balance at end of year 194,496,000 100,223,000 l94,659,000 Earned Surplus: Balance at beginning of year 370,231,000 367,908,000 366,410,000 Net income 66,306,000 56,790,000 55,581,000 Total 436,537,000 424,698,000 421,991,000 Preferred dividends-per share 1994, 1993, and 1992, $3.35 184,000 199,000 213,000 Common dividends-per share 1994, 1993, and 1992, $1.25 54,489,000 54,268,000 53,870,000 Total dividends 54,673,000 54,467,000 54,083,000 Balance at end of year 381,864,000 370,231,000 367,908,000 Cumulative Translation Adjustment-Net (1,399,000) (4,639,000) (2,544,000) Pension Liability Adjustment (441,000) (928,000) --- Net Unrealized Loss on Securities Available For Sale (2,144,000) --- --- Net Unrealized Loss on Noncurrent Marketable Equity Securities --- (427,000) (596,000) Total Shareholders' Equity $596,818,000 $486,267,000 $481,084,000 See Notes to Consolidated Financial Statements
Ogden Corporation and Subsidiaries Statements of Consolidated Cash Flows
For the years ended December 31, 1994 1993 1992 Cash Flows From Operating Activities: Net income $66,306,000 $56,790,000 $55,581,000 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and amortization 90,545,000 85,643,000 77,048,000 Deferred income taxes 37,704,000 47,598,000 37,547,000 Cumulative effect of changes in accounting principles 1,520,000 5,340,000 5,186,000 Other 44,062,000 24,653,000 20,322,000 Management of Operating Assets and Liabilities: Decrease (Increase) in Assets: Accounts receivable (72,067,000) (61,559,000) (72,751,000) Other assets (58,727,000) (36,450,000) (29,684,000) Increase (Decrease) in Liabilities: Accounts payable 3,153,000 8,087,000 383,000 Accrued expenses 17,629,000 38,481,000 12,993,000 Deferred income 1,222,000 (1,152,000) (926,000) Other liabilities 35,218,000 24,315,000 (6,864,000) Net cash provided by operating activities 166,565,000 191,746,000 98,835,000 Cash Flows From Investing Activities: Entities purchased, net of cash acquired (32,404,000) (54,224,000) (7,940,000) Proceeds from sale of marketable securities available for sale 63,545,000 88,775,000 136,154,000 Purchase of marketable securities available for sale (56,418,000) (83,084,000) (199,178,000) Proceeds from sale of business 12,516,000 --- --- Proceeds from sale of property, plant, and equipment 2,824,000 8,185,000 1,234,000 Investments in waste-to-energy facilities (76,686,000) (77,777,000) (29,856,000) Other capital expenditures (42,961,000) (38,423,000) (34,201,000) Decrease (increase) in other receivables (21,127,000) (7,920,000) 12,490,000 Other 268,000 7,111,000 7,658,000 Net cash used in investing activities (150,443,000) (157,357,000) (113,639,000) Cash Flows From Financing Activities: Borrowings for waste-to-energy facilities --- --- 225,686,000 Decrease (increase) in funds held in trust for waste-to-energy facilities 52,337,000 60,347,000 (132,428,000) Other new debt 31,589,000 680,000 114,125,000 Payment of debt (38,455,000) (49,973,000) (116,248,000) Dividends paid (54,630,000) (54,347,000) (54,054,000) Proceeds from exercise of stock options 3,524,000 5,366,000 5,000,000 Other (2,043,000) (3,488,000) (1,932,000) Net cash provided (used) by financing activities (7,678,000) (41,415,000) 40,149,000 Effect of foreign currency exchange rate changes on cash and cash equivalents (182,000) (334,000) (493,000) Net Increase (Decrease) in Cash and Cash Equivalents 8,262,000 (7,360,000) 24,852,000 Cash and Cash Equivalents at Beginning of Year 109,097,000 116,457,000 91,605,000 Cash and Cash Equivalents at End of Year $117,359,000 $109,097,000 $116,457,000 See Notes to Consolidated Financial Statements
Ogden Corporation and Subsidiaries Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Policies Principles of Consolidation, Combinations, etc.: The Consolidated Financial Statements include the accounts of Ogden Corporation and its subsidiaries (Ogden). Companies in which Ogden has equity investments of 50% or less are accounted for using the "Equity Method," if appropriate. All intercompany transactions and balances have been eliminated. On December 29, 1994, in a transaction accounted for as a purchase, Ogden acquired the minority interest in Ogden Projects, Inc. (OPI), for .84 of an Ogden common share for each OPI share. The transaction required the issuance of 5,139,939 shares of Ogden common stock valued at $18.375 per share on the closing date, for a total purchase price of $94,446,000. The excess purchase price over the net book value of the minority interest acquired was allocated to the fair value of the net assets acquired. During 1994 in other transactions accounted for as purchases, Ogden subsidiaries acquired the shares of SkyCare Cargo Limited, a cargo handling company at Heathrow Airport in the United Kingdom; Second Imperial Geothermal Company; and 60% of the common stock of a Brazilian company involved in airport, entertainment, and industrial feeding activities for a total cost of $32,404,000. The operations of these companies have been included in the accompanying financial statements from the dates of acquisition. If Ogden had acquired these companies at January 1, 1993, total revenues, net income, and earnings per share would have been $2,165,000,000, $76,483,000, and $1.57 and $2,073,000,000, $62,305,000, and $1.28 for 1994 and 1993, respectively. Cash and Cash Equivalents: Cash and cash equivalents include all cash balances and highly liquid investments having original maturities of three months or less. Marketable Securities: Ogden adopted Statement of Financial Accounting Standards (SFAS) 115, "Accounting for Certain Investments in Debt and Equity Securities," at January 1, 1994. In accordance with SFAS 115, prior years' financial statements have not been restated to reflect the change in accounting method. Under this Statement, the Corporation's marketable securities have been classified as available for sale and are recorded at current market value with an offsetting adjustment to Shareholders' Equity. The adoption of this Statement did not have a significant effect on the Corporation's consolidated financial position. At December 31, 1993, marketable securities were carried at the lower of cost or market. Net unrealized losses on noncurrent marketable equity securities were charged to Shareholders' Equity (see Note 2). Contracts and Revenue Recognition: Service revenues primarily include only the fees for cost-plus contracts and the gross billings for fixed-fee and other types of contracts. Both the service revenues and operating costs and expenses exclude reimbursed expenditures of $439,195,000, $432,891,000, and $405,362,000 for the years ended December 31, 1994, 1993, and 1992, respectively. Subsidiaries engaged in governmental contracting recognize revenues from cost-plus-fixed-fee contracts on the basis of direct costs incurred plus indirect expenses and the allocable portion of the fixed fee. Revenues under time and material contracts are recorded at the contracted rates as the labor hours and other direct costs are incurred. Revenues under fixed-price contracts are recognized on the basis of the estimated percentage of completion of services rendered. Service revenues also include the fees earned under contracts to operate and maintain the waste-to-energy facilities and to service the facilities' debt, with additional fees earned based on excess tonnage processed and energy generation. Long-term unbilled service receivables related to waste-to-energy operations are discounted in recognizing the present value for services performed currently. Such unbilled receivables amounted to $92,522,000 and $81,082,000 at December 31, 1994 and 1993, respectively. Subsidiaries engaged in long-term construction contracting record income on the percentage-of-completion method of accounting and recognize income as the work progresses. Anticipated losses on contracts are recognized as soon as they become known. Revenues include the gain on sales of limited partnership interests in and related tax benefits of waste-to-energy facilities. Inventories: Inventories, consisting primarily of finished goods, are recorded principally at the lower of first-in, first-out cost or market. Property, Plant, and Equipment: Property, plant, and equipment is stated at cost. For financial reporting purposes, depreciation is provided by the straight-line method over the estimated useful lives of the assets, which range generally from five years for machinery and equipment to 50 years for waste-to-energy facilities. Accelerated depreciation is generally used for Federal income tax purposes. Leasehold improvements are amortized by the straight-line method over the terms of the leases or the estimated useful lives of the improvements as appropriate. Landfills are amortized based on the quantities deposited into each landfill compared to the total estimated capacity of such landfill. Contract Acquisition Costs: Costs associated with the acquisition of specific contracts are amortized over their respective terms. Bond Issuance Costs: Costs incurred in connection with the issuance of revenue bonds are amortized over the terms of the respective debt issues. Deferred Charges on Projects: Costs incurred in connection with certain project development efforts are deferred until the award of the related project is determined. Costs on awarded projects are deferred until the commencement of construction, at which time they are either capitalized in property, plant, and equipment for privately owned facilities or charged to construction costs for municipally owned facilities. Costs associated with projects, which are no longer under consideration, are charged to operating costs. Restricted Funds: Restricted funds represent proceeds from the financing of waste-to-energy facilities. Funds are held in trust and released as expenditures are made or upon satisfaction of conditions provided under the respective trust agreements. Goodwill: Goodwill acquired subsequent to 1970 is being amortized by the straight-line method over periods ranging from 20 to 40 years. Goodwill acquired prior to 1970 is not being amortized. Where there has been a loss of value, goodwill is written off. Retirement Plans: Ogden and certain subsidiaries have several retirement plans covering all salaried and hourly employees. Certain subsidiaries also contribute to multiemployer plans for unionized hourly employees that cover, among other benefits, pensions and postemployment health care. During 1992, the cost of retiree health care and life insurance benefits for employees not covered by multiemployer plans was recognized as expense as claims were paid. For 1992, these costs were not significant. Ogden adopted SFAS 106, "Employers' Accounting for Postretirement Benefits Other than Pensions," as of January 1, 1993. The effect of adopting SFAS 106 is shown in the accompanying financial statements for 1993 as a cumulative effect of a change in accounting principle and is reflected as a charge to income of $5,340,000 (see Note 17). Ogden adopted SFAS 112, "Employers' Accounting for Postemployment Benefits," as of January 1, 1994. The effect of adopting SFAS 112 is shown as a cumulative effect of a change in accounting principle and is reflected as a charge to income of $1,520,000 in 1994. Income Taxes: Ogden files a consolidated Federal income tax return, which includes all eligible United States subsidiary companies. Foreign subsidiaries are taxed according to regulations existing in the countries in which they do business. Provision has not been made for United States income taxes on distributions, which may be received from foreign subsidiaries, that would be substantially offset by foreign tax credits. Investment credits are accounted for by the "flow-through" method, and provisions for income taxes have been reduced by the amount of investment credits earned. Ogden adopted SFAS 109, "Accounting for Income Taxes," as of January 1, 1992. The effect of adopting SFAS 109 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 $5,186,000 (see Note 20). Reclassification: The accompanying financial statements have been reclassified to conform with the 1994 presentation. 2. Investments in Marketable Securities Available for Sale Ogden adopted SFAS 115, "Accounting for Certain Investments in Debt and Equity Securities," at January 1, 1994, and has classified its marketable securities as available for sale and recorded them at current market value with an offsetting adjustment to Shareholders' Equity. In accordance with SFAS 115, prior years' financial statements have not been restated to reflect this change in accounting. At December 31, 1993, marketable securities were carried at the lower of cost or market. Net unrealized losses on noncurrent marketable equity securities were charged to Shareholders' Equity. At December 31, 1993, noncurrent marketable securities having a cost of $5,549,000 and a market value of $4,846,000 resulted in an unrealized loss of $703,000, which was offset by deferred income taxes of $276,000. The net valuation allowance of $427,000 was charged to Shareholders' Equity. At December 31, 1994 and 1993, marketable equity and debt securities available for current operations are classified in the balance sheet as current assets while securities held for noncurrent uses such as nonqualified pension liabilities and a deferred compensation plan are classified as long-term assets. Marketable securities at December 31, 1994 (expressed in thousands of dollars), include the following:
Market Value Cost Classified as Current Assets: United States government securities $1,567 $1,736 Tax-exempt municipal bonds 52,158 53,295 Mortgage-backed securities 31,146 31,669 Other securities 1,805 1,954 Total current 86,676 88,654 Classified as Noncurrent Assets: United States government securities 236 236 Corporate debt securities 12,174 14,122 Total noncurrent 12,410 14,358 Total $99,086 $103,012
Unrealized holding losses at December 31, 1994, amounted to $3,926,000. Deferred tax benefits on these losses amounted to $1,782,000, resulting in a net charge of $2,144,000 to Shareholders' Equity. Proceeds and realized gains and losses from the sales of securities classified as available for sale for the year ended December 31, 1994, were $63,545,000, $256,700, and $476,700, respectively. For the purpose of determining realized gains and losses, the cost of securities sold is based on specific identification. 3. Restricted Funds Held in Trust Funds held by trustees from proceeds received from the financing of waste-to-energy facilities are segregated principally for the construction of the facilities, debt service reserves for payment of principal and interest on revenue bonds, capitalized interest for payment of interest generally during the construction period, and deposits of revenues received. Such funds are invested principally in United States Treasury bills and notes and United States government agencies securities. Fund balances (expressed in thousands of dollars) were as follows:
1994 1993 Current Noncurrent Current Noncurrent Construction funds $20,734 --- $52,596 $19,129 Debt service funds 36,803 $165,938 35,851 161,798 Capitalized interest funds 8,847 --- 10,442 8,847 Revenue funds 21,013 --- 19,292 --- Other funds 17,303 37,306 14,092 37,369 Total $104,700 $203,244 $132,273 $227,143
4. Property, Plant, and Equipment Property, plant, and equipment (expressed in thousands of dollars) consisted of the following:
1994 1993 Land $6,698 $6,853 Waste-to-energy facilities 1,577,147 1,539,373 Geothermal power plant 105,738 --- Buildings and improvements 155,904 143,165 Machinery and equipment 313,404 285,066 Landfills 9,841 8,464 Construction in progress 161,303 95,789 Total 2,330,035 2,078,710 Less accumulated depreciation and amortization 445,261 384,909 Property, plant, and equipment-net $1,884,774 $1,693,801
5. Other Assets Other assets (expressed in thousands of dollars) consisted of the following:
1994 1993 Investment in and advances to joint ventures $38,926 $30,239 Unamortized bond issuance costs 29,290 35,581 Spare parts 13,915 12,753 Noncurrent securities available for sale 12,410 5,549 Deferred charges on projects 5,708 12,704 Insurance deposits 5,388 5,388 Other 50,305 44,238 Total $155,942 $146,452
6. Accrued Expenses, etc. Accrued expenses, etc. (expressed in thousands of dollars), consisted of the following:
1994 1993 Debt service charges and interest $38,278 $38,527 Payroll 31,493 28,212 Deferred income 26,843 25,620 Insurance 25,983 24,380 Construction costs 25,442 27,314 Operating expenses 21,802 17,656 Billings in excess of costs 19,167 17,938 Municipalities' share of energy revenues 17,756 18,747 Retainage payable 17,550 4,757 Lease payments 16,193 13,829 Payroll and other taxes 10,533 9,098 Pension and profit sharing 6,499 6,199 Professional fees 4,663 3,807 Other 84,795 59,097 Total $346,997 $295,181
7. Long-Term Debt Long-term debt (expressed in thousands of dollars) consisted of the following:
1994 1993 Adjustable-rate revenue bonds due 2014 through 2024 $124,755 $124,755 9.25% debentures due 2022 100,000 100,000 Variable-rate revolving credit lines due 1997 26,820 20,680 Other long-term debt 52,818 30,628 Total $304,393 $276,063
The adjustable-rate revenue bonds are adjusted periodically to reflect current market rates for similar issues, generally with an upside cap of 15%. The average rate for this debt was 2.79% and 2.24% in 1994 and 1993, respectively. These bonds were issued under agreements that contain various restrictions, the most significant being the requirement to maintain Shareholders' Equity of $400,000,000. At December 31, 1994, Ogden had $196,818,000 in excess of the required amount. At December 31, 1994, Ogden had a long-term interest rate swap agreement, covering a notional amount of $100,000,000, which expires December 16, 1998. This swap was entered into to convert Ogden's fixed-rate $100,000,000 9.25% debentures due in 2022 to variable-rate debt. Ogden receives a fixed rate of 5.52% per annum paid on a semi-annual basis and pays a floating rate of three months LIBOR set in arrears on a quarterly basis. At December 31, 1994, the three-month LIBOR rate was 6.50%. The counterparty to this interest rate swap is a major financial institution. Management believes its credit risk associated with nonperformance by the counterparty is not significant. Other long-term debt includes an obligation for approximately $28,400,000, representing the proceeds of a sale and leaseback arrangement relating to a waste-to-energy facility. This arrangement is accounted for as a financing, has an effective interest rate of 5%, and extends through 2017. Additionally, in November 1994, limited partnership interests in and related tax benefits of the Onondaga County, New York, waste-to-energy facility were sold. As part of this transaction, $22,450,000 of the proceeds relating to the sale of the partnership interests have been accounted for as a financing for accounting purposes. This obligation has an effective interest rate of 10% and extends through 2015. The maturities on long-term debt (expressed in thousands of dollars) at December 31, 1994, were as follows: 1995 $3,483 1996 7,652 1997 20,784 1998 824 1999 529 Later years 274,604 Total 307,876 Less current portion 3,483 Total long-term debt $304,393
8. Project Debt Project debt (expressed in thousands of dollars) consisted of the following:
1994 1993 Revenue Bonds Issued by and Prime Responsibility of Municipalities: 4.4-10% serial revenue bonds due through 2005 $222,036 $239,180 5.4-10% term revenue bonds due through 2019 939,740 934,685 Adjustable-rate revenue bonds due through 2013 10,875 15,526 Total 1,172,651 1,189,391 Revenue Bonds Issued by Municipal Agencies with Sufficient Service Revenues Guaranteed by Third Parties: 4.95-8.9% serial revenue bonds due through 2007 78,591 85,040 7.25-7.4% term revenue bonds due 1999 through 2011 106,109 105,610 Adjustable-rate revenue bonds due through 2011 133,467 138,693 Total 318,167 329,343 Other project debt 103,170 --- Total long-term project debt $1,593,988 $1,518,734
Project debt associated with the financing of waste-to-energy facilities is generally arranged by municipalities through the issuance of tax- exempt and taxable revenue bonds. The category, "Revenue Bonds Issued by and Prime Responsibility of Municipalities," includes bonds issued with respect to which debt service is an explicit component of the client community's obligation under the related service agreement. In the event that a municipality is unable to satisfy its payment obligations, the bondholders'recourse with respect to the Corporation is limited to the waste-to-energy facilities and restricted funds pledged to secure such obligations. The category, "Revenue Bonds Issued by Municipal Agencies with Sufficient Service Revenues Guaranteed by Third Parties," includes bonds issued to finance three facilities for which contractual obligations of third parties to deliver waste and related third-party power purchase agreements ensure sufficient revenues to pay debt service, although such debt service is not an explicit component of a third party's service fee obligation. Payment obligations for the revenue bonds, which are nonrecourse to the Corporation subject to construction and operating performance guarantees and commitments, are secured by the revenues pledged under various indentures and are collateralized principally by a mortgage lien and a security interest in each of the respective waste-to-energy facilities and related assets. At December 31, 1994, such revenue bonds were collateralized by property, plant, and equipment with a net carrying value of $1,568,747,000, credit enhancements of approximately $193,000,000 for which Ogden has certain reimbursement obligations, and substantially all restricted funds (see Note 3). The adjustable-rate revenue bonds are adjusted periodically to reflect current market rates for similar issues, generally with an upside cap of 15%. The average rate for such revenue bonds was 3.33% and 2.65% in 1994 and 1993, respectively. At December 31, 1994, Ogden had two interest rate swap agreements relating to the revenue bonds. These interest rate swaps had notional amounts at December 31, 1994, of $91,070,000 and $43,765,000, respectively, which are reduced periodically and expire in May 1999. Under the former swap agreement, Ogden pays a fixed rate of 3.95% per annum on a semi-annual basis and receives a floating rate based on an index of tax-exempt, variable-rate obligations. Under the latter swap agreement, Ogden pays a fixed rate of 5.25% per annum on a semi-annual basis and receives a floating rate based on a defined commercial paper rate. At December 31, 1994, the floating rates on the two swaps were 5.53% and 6.03%, respectively. These swap agreements were entered into to convert from floating rates to fixed interest rates $91,070,000 of tax-exempt, adjustable-rate revenue bonds due 1995 to 2011 and $43,765,000 of taxable adjustable-rate revenue bonds due 1995 to 2011. The counterparties to these interest rate swaps are major financial institutions. Management believes the credit risk associated with nonperformance by the counterparties is not significant. Other project debt is an obligation of a special-purpose limited partnership acquired by two special-purpose subsidiaries of Ogden in December 1994 and represents the lease of a geothermal power plant, which has been accounted for as a financing. This obligation has an effective interest rate of 5.3% and extends through 2008 with options to renew for additional periods and has a fair market value purchase option at the conclusion of the initial lease term. Payment obligations under this lease arrangement are limited to assets of the limited partnership and revenues derived from a power purchase agreement with a third party, which are expected to provide sufficient revenues to make rental payments. Such payment obligations are secured by all the assets, revenues, and other benefits derived from the geothermal power plant, which had a net carrying value of approximately $114,093,000 at December 31, 1994. The maturities on project debt (expressed in thousands of dollars) at December 31, 1994, were as follows: 1995 $45,279 1996 56,296 1997 61,065 1998 67,338 1999 74,613 Later years 1,334,676 Total 1,639,267 Less current portion 45,279 Total long-term project debt $1,593,988
9. Debt Service Charges Debt service charges for Ogden's project debt (expressed in thousands of dollars) consisted of the following:
1994 1993 1992 Interest incurred on taxable and tax-exempt borrowings $109,586 $107,846 $99,828 Interest earned on temporary investment of borrowings during construction, etc. 6,782 9,985 6,095 Net interest incurred 102,804 97,861 93,733 Interest capitalized during construction in property, plant, and equipment 8,893 5,538 753 Interest expense-net 93,911 92,323 92,980 Amortization of bond issuance costs 6,447 6,341 6,754 Debt service charges $100,358 $98,664 $99,734
10. Credit Arrangements At December 31, 1994, Ogden had unused revolving credit lines amounting to $162,000,000, of which $155,000,000 is available under its principal revolving credit line at various borrowing rates including prime, the London interbank offering rate plus .30%, or certificate-of-deposit rates plus .425%. Ogden is not required to maintain compensating balances; however, Ogden pays a facility fee of 3/16 of 1% on its principal revolving credit line of $175,000,000, which expires October 29, 1997. 11. Convertible Subordinated Debentures Convertible subordinated debentures (expressed in thousands of dollars) consisted of the following:
1994 1993 6% debentures due June 1, 2002 $85,000 $85,000 5 3/4% debentures due October 20, 2002 63,650 66,750 Total $148,650 $151,750
The 6% convertible subordinated debentures are convertible into Ogden common stock at the rate of one share for each $39.077 principal amount of debentures. The debentures are redeemable at Ogden's option at 103% of principal amount during the year commencing June 1, 1994, and at decreasing prices thereafter. The 5 3/4% convertible subordinated debentures are convertible into Ogden common stock at the rate of one share for each $41.772 principal amount of debentures. The debentures are redeemable at Ogden's option at 100% of face value. During 1994, the Corporation purchased $3,100,000 face value of these debentures at prevailing market rates. The net gain on the acquisition of these securities amounted to $620,000 and is included in Other Income. 12. Preferred Stock The outstanding Series A $1.875 Cumulative Convertible Preferred Stock is convertible at any time at the rate of 5.97626 common shares for each preferred share. Ogden may redeem the outstanding shares of preferred stock at $50 per share, plus all accrued dividends. These preferred shares are entitled to receive cumulative annual dividends at the rate of $1.875 per share, plus an amount equal to 150% of the amount, if any, by which the dividend paid or any cash distribution made on the common stock in the preceding calendar quarter exceeded $.667 per share. During 1994, 1993, and 1992, 3,694, 4,697, and 6,013 preferred shares were converted into 22,054, 28,046, and 35,908 shares of common stock, respectively. 13. Common Stock and Stock Options In 1986, Ogden adopted a nonqualified stock option plan (the "1986 Plan"). Under the 1986 Plan, options and/or stock appreciation rights may be granted to key management employees to purchase Ogden common stock at prices not less than the fair market value at the time of grant, which become exercisable during a five-year period from the date of grant, except for the grant to the Chairman of the Board, which vested in its entirety six months after the date of the grant. As adopted, and as adjusted for stock splits, the 1986 Plan calls for up to an aggregate of 2,700,000 shares of Ogden common stock to be available for issuance upon the exercise of options and stock appreciation rights, which may be granted over a ten-year period ending March 10, 1996. At December 31, 1994, all of the authorized shares of this plan had been granted. In October 1990, Ogden adopted the Ogden 1990 Stock Option Plan (the "1990 Plan"). Under the 1990 Plan, nonqualified options, incentive stock options, and/or stock appreciation rights and stock bonuses may be granted to key management employees and outside directors to purchase Ogden common stock at an exercise price to be determined by the Ogden Compensation Committee. Pursuant to the 1990 Plan, which was amended in 1994 to increase the number of shares available by 3,200,000 shares, an aggregate of 6,200,000 shares of Ogden common stock is available for issuance upon the exercise of such options, rights, and bonuses, which may be granted over a ten-year period ending October 11, 2000; 2,382,500 shares were available for grant at December 31, 1994. Under the foregoing plans, Ogden issued 4,713,000 limited stock appreciation rights in conjunction with the stock options granted. These limited rights are exercisable only during the period commencing on the first day following the occurrence of any of the following events and terminate 90 days after such date: the acquisition by any person of 20% or more of the voting power of Ogden's outstanding securities; the approval by Ogden shareholders of an agreement to merge or to sell substantially all of its assets; or the occurrence of certain changes in the membership of the Ogden Board of Directors. The exercise of these limited rights entitles participants to receive an amount in cash with respect to each share subject thereto, equal to the excess of the market value of a share of Ogden common stock on the exercise date or the date these limited rights become exercisable, over the related option price. In connection with the acquisition of ERC International, Inc. (ERCI), Ogden assumed pre-existing ERCI stock option plans and converted all options then outstanding into options to acquire shares of Ogden common stock. No further options will be granted under the ERCI plans. These options expired in 1993. In connection with the acquisition of the minority interest of OPI, Ogden assumed the pre-existing OPI stock option plan then outstanding and converted these options into options to acquire shares of Ogden common stock. No further options will be granted under this plan. Information regarding the Corporation's stock option plans is summarized as follows:
Option Available Price For Per Share Outstanding Exercisable Grant 1986 Plan: December 31, 1991, balance $14.98-28.54 1,226,400 664,400 105,500 Became exercisable --- --- 150,000 --- Exercised 14.98 (136,400) (136,400) --- Cancelled 28.54 (10,000) (10,000) 10,000 December 31, 1992, balance 14.98-28.54 1,080,000 668,000 115,500 Became exercisable --- --- 144,000 --- Exercised 14.98 (49,313) (49,313) --- December 31, 1993, balance 14.98-28.54 1,030,687 762,687 115,500 Granted 22.50 115,500 --- (115,500) Became exercisable --- --- 134,000 --- Exercised 14.98 (18,644) (18,644) --- December 31, 1994, balance $14.98-28.54 1,127,543 878,043 --- 1990 Plan: December 31, 1991, balance 18.31-20.31 2,681,000 498,000 319,000 Granted 21.19 40,000 --- (40,000) Became exercisable --- --- 539,400 --- Cancelled $18.31-21.19 (66,000) --- 66,000 December 31, 1992, balance 18.31-21.19 2,655,000 1,037,400 345,000 Granted 23.56 158,000 --- (158,000) Became exercisable --- --- 522,900 --- Exercised 18.31-20.31 (123,000) (123,000) --- Cancelled $18.31-20.31 (50,000) (4,000) 50,000 December 31, 1993, balance 18.31-23.56 2,640,000 1,433,300 237,000 Increase in authorized option shares --- --- --- 3,200,000 Granted 21.50-22.50 1,169,500 --- (1,169,500) Became exercisable --- --- 507,500 --- Exercised 18.31-20.31 (109,000) (109,000) --- Cancelled $18.31-23.56 (115,000) (32,000) 115,000) December 31, 1994, balance $18.31-23.56 3,585,500 1,799,800 2,382,500 Conversion of ERCI Plan: December 31, 1991, balance 21.05-35.55 137,958 121,715 --- Became exercisable --- --- 16,243 --- Exercised 21.05 (15,890) (15,890) --- Cancelled 21.05-35.55 (51,951) (51,951) --- December 31, 1992, balance 21.05-24.74 70,117 70,117 --- Exercised 21.05 (23,102) (23,102) --- Cancelled $21.05-24.74 (47,015) (47,015) --- December 31, 1993 and 1994, balance --- --- --- --- Conversion of OPI Plan: December 29, 1994 $14.17-29.46 266,561 266,561 --- December 31, 1994, balance $14.17-29.46 266,561 266,561 --- Total December 31, 1994 $14.17-29.46 4,979,604 2,944,404 2,382,500
At December 31, 1994, there were 11,380,791 shares of common stock reserved for the exercise of stock options and the conversion of preferred shares and debentures. 14. Preferred Stock Purchase Rights On September 20, 1990, the Board of Directors declared a dividend of one preferred stock purchase right (Right) on each outstanding share of common stock. Among other provisions, each Right may be exercised to purchase a one one-hundredth share of a new series of cumulative participating preferred stock at an exercise price of $80, subject to adjustment. The Rights may only be exercised after a party has acquired 15% or more of the Corporation's common stock or commenced a tender offer to acquire 15% or more of the Corporation's common stock. The Rights do not have voting rights, expire October 2, 2000, and may be redeemed by the Corporation at a price of $.01 per Right at any time prior to the acquisition of 15% of the Corporation's common stock. In the event a party acquires 15% or more of the Corporation's outstanding common stock in accordance with certain defined terms, each Right will then entitle its holder (other than such party) to purchase, at the Right's then-current exercise price, a number of the Corporation's common shares having a market value of twice the Right's exercise price. At December 31, 1994, 48,777,000 preferred stock purchase rights were outstanding. 15. Sale of Limited Partnership Interests 1994 revenues include $26,100,000 from the sale of limited partnership interests in and related tax benefits of the Onondaga County waste-to- energy facility, which was partially offset by the recapture of investment tax credits and minority interests. In 1992, revenues included $7,700,000 from the sale of the remaining limited partnership interests in and related tax benefits of the Huntington, New York, waste-to-energy facility. 16. Retirement Plans Ogden has retirement plans that cover substantially all of its employees. A substantial portion of hourly employees of Ogden Services Corporation participates in defined contribution plans. Other employees participate in defined benefit or defined contribution plans. The defined benefit plans provide benefits based on years of service and either employee compensation or a flat benefit amount. Ogden's funding policy for those plans is to contribute annually an amount no less than the minimum funding required by ERISA. Contributions are intended to provide not only benefits attributed to service to date but also for those expected to be earned in the future. The following table sets forth the defined benefit plans' funded status and related amounts recognized in Ogden's Consolidated Balance Sheets (expressed in thousands of dollars):
1994 1993 Assets Accumulated Assets Accumulated Exceed Benefits Exceed Benefits Accumulated Exceed Accumulated Exceed Benefits Assets Benefits Assets Accumulated Benefit Obligation: Vested $5,408 $ 7,800 $5,356 $8,888 Nonvested 311 413 879 1,511 Total $5,719 $8,213 $6,235 $10,399 Projected benefit obligation for services rendered to date $8,278 $11,733 $8,723 $12,889 Plan assets at fair value 7,832 5,138 7,903 7,880 Underfunded projected benefits $446 $6,595 $820 $5,009 Source of Underfunded Status: Unrecognized net (loss) from past experience different from that assumed and effects of changes in assumptions $(1,251) $(625) $(1,356) $(1,415) Unrecognized net transition asset (obligation) at January 1, 1986, being recognized over 13 years 566 (390) 728 (300) (Pension liability) prepaid pension costs (412) (1,997) (192) 228 Unrecognized prior service costs 651 (3,583) --- (3,522) Underfunded projected benefits $446 $6,595 $820 $5,009
At December 31, 1994 and 1993, the accumulated benefit obligation of certain pension plans exceeded plan assets. As required by SFAS 87, the Corporation's liability for such excess was $1,677,000 and $2,765,000 at December 31, 1994 and 1993, respectively. These liabilities were offset by intangible assets and reductions in Shareholders' Equity, net of income taxes of $441,000 and $928,000 at December 31, 1994 and 1993, respectively. Pension costs for Ogden's defined benefit plans included the following components (expressed in thousands of dollars):
1994 1993 1992 Service cost on benefits earned during the period $1,979 $1,610 $1,592 Interest cost on projected benefit obligation 1,629 1,457 1,301 Net amortization and deferral (436) 40 161 Actual return on plan assets 32 (979) (1,227) Net periodic pension cost $3,204 $2,128 $1,827
The weighted-average discount rate and rate of increase in future compensation levels used in determining the actuarial present value of the projected benefit obligations were 8 1/4% and 5% for 1994, 7 1/2% and 4 1/2% for 1993, and 8 1/2% and 5% for 1992, respectively. The expected long-term rate of return on plan assets was 8% for each year. Contributions and costs for defined contribution plans are determined by benefit formulas based on percentage of compensation as well as discretionary contributions and totaled $12,052,000, $13,061,000, and $11,397,000 in 1994, 1993, and 1992, respectively. Plan assets at December 31, 1994, 1993, and 1992, primarily consisted of common stocks, United States government securities, and guaranteed insurance contracts. With respect to union employees, the Corporation is required under contracts with various unions to pay, generally based on hours worked, retirement, health, and welfare benefits. These multiemployer defined benefit and defined contribution plans are not controlled or administered by the Corporation. The amount charged to expense for such plans during 1994, 1993, and 1992 was $30,100,000, $32,000,000, and $32,000,000, respectively. 17. Postretirement Health Care and Life Insurance Benefits In 1992, the Corporation discontinued its policy of providing postretirement health care and life insurance benefits for all salaried employees, except those employees who were retired or eligible for retirement at December 31, 1992, or who were covered under certain company-sponsored union plans. The Corporation adopted SFAS 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," as of January 1, 1993. SFAS 106 requires the accrual method of accounting for postretirement health care and life insurance benefits, based on actuarial determined costs to be recognized over the period from the date of hire to the full eligibility date of employees who are expected to qualify for such benefits. As of January 1, 1993, the Corporation recognized the full amount of its estimated accumulated postretirement benefit obligation, representing the present value of the estimated future benefits payable to current retirees, and a pro rata portion of estimated benefits payable to eligible active employees after retirement. The effect of recognizing SFAS 106 at January 1, 1993, 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 $5,340,000 (net of income taxes of $3,710,000) or $.12 per share. For the years ended December 31, 1994 and 1993, the components of the periodic expense for these benefits were as follows: Recognition of Components of Net Periodic Postretirement Benefit Costs for the Years Ended December 31:
1994 1993 Service costs $162,107 $140,157 Interest 775,142 747,665 Amortization of unrecognized net loss 67,820 --- Total $1,005,069 $887,822
As of December 31, 1994 and 1993, the actuarial recorded liabilities for these postretirement benefits, none of which have been funded, were as follows: Accumulated Postretirement Benefit Obligation: Retirees $3,884,885 $3,948,954 Eligible active participants 4,581,234 4,957,341 Other active 1,480,725 1,654,000 Total accumulated postretirement obligation 9,946,844 $10,560,295 Unrecognized net loss 117,947 1,135,080 Accrued postretirement benefit liability $9,828,897 $9,425,215
The accumulated postretirement benefit obligation was determined using discount rates of 8 1/4% and 7 1/2%; an estimated increase in compensation levels of 5% and 4 1/2% for 1994 and 1993, respectively; and a health care cost rate of approximately 14 1/2%, decreasing in subsequent years until it reaches 6% in the year 2008 and thereafter. The effect of a one percentage point increase in the assumed health care cost trend rates for each future year on the aggregate of the service and interest cost components of net periodic postretirement health care benefit cost and the accumulated postretirement benefit obligation for health care benefits would be $69,248 and $652,360, respectively. 18. Foreign Exchange Foreign exchange translation adjustments for 1994, 1993, and 1992, amounting to $3,240,000, $(2,095,000), and $(2,931,000), respectively, have been credited (charged) directly to Shareholders' Equity. Foreign exchange transaction adjustments for 1994, amounting to $1,844,000, have been charged directly to income. 19. Leases Total rental expense amounted to $77,190,000, $73,138,000, and $65,822,000 (net of sublease income of $328,000, $2,606,000, and $3,633,000) for 1994, 1993, and 1992, respectively. Included in rental expense are amounts based on contingent factors (principally sales) in excess of minimum rentals, amounting to $15,181,000, $19,836,000, and $14,332,000 for 1994, 1993, and 1992. Principal leases are for leaseholds, sale and leaseback arrangements on waste-to-energy facilities, trucks and automobiles, airplane, and machinery and equipment. Some of these operating leases have renewal options. The following is a schedule (expressed in thousands of dollars), by year, of future minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 1994: 1995 $49,978 1996 47,160 1997 42,378 1998 36,660 1999 35,717 Later years 272,174 Total $484,067
These future minimum rental payment obligations include $114,153,000 of future nonrecourse rental payments that relate to a waste-to-energy facility, which are supported by third-party commitments to provide sufficient service revenues to meet such obligations. Also included are $96,520,000 of nonrecourse rental payments relating to a hydroelectric power generating facility operated by a special-purpose subsidiary, which are supported by contractual power purchase obligations of a third party and which are expected to provide sufficient revenues to make the rent payments. These nonrecourse rental payments (in thousands of dollars) are due as follows: 1995 $16,695 1996 18,698 1997 19,197 1998 19,492 1999 20,797 Later years 115,794 Total $210,673
20. Income Taxes Ogden adopted the provisions of SFAS 109, "Accounting for Income Taxes," as of January 1, 1992. SFAS 109 requires recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or income tax returns. Under this method, deferred income tax liabilities and assets are based on the difference between the financial statements and the tax bases of assets and liabilities, using tax rates currently in effect. As of January 1, 1992, Ogden recorded a deferred income tax charge of $5,186,000 or $.12 per share, which represented a net increase to the deferred tax liability as of that date. This amount has been included in the Statements of Consolidated Income as a cumulative effect of a change in accounting principle. In August 1993, the Omnibus Budget Reconciliation Act was enacted, which increased the corporate Federal income tax rate from 34% to 35% retroactive to January 1, 1993. As a consequence, deferred Federal income tax balances were adjusted to this new rate as required by SFAS 109, which resulted in a one-time charge for Federal income taxes of $4,066,000 in 1993. The components of the provision for income taxes (expressed in thousands of dollars) were as follows:
1994 1993 1992 Current: Federal $10,141 $453 --- State 11,616 6,999 $5,498 Foreign 2,422 1,476 2,210 Total current $24,179 $8,928 $7,708 Deferred: Federal $36,520 $43,295 $32,392 State 1,184 4,303 5,155 Total deferred 37,704 47,598 37,547 Total provision for income taxes $61,883 $56,526 $45,255
The current provision for Federal income tax results principally from the alternative minimum tax. The provision for income taxes (expressed in thousands of dollars) varied from the Federal statutory income tax rate due to the following:
1994 1993 1992 Percent Percent Percent of Income of Income of Income Amount Before Amount Before Amount Before of Tax Taxes of Tax Taxes of Tax Taxes Taxes at statutory rate $48,777 35.0% $43,925 35.0% $38,378 34.0% Adjustment of deferred income tax balances --- --- 4,066 3.2 --- --- State income taxes, net of Federal tax benefit 8,320 6.0 7,346 5.8 7,030 6.2 Recapture (benefit) of investment tax credits 1,807 1.3 (1,807) (1.4) --- --- Other-net 2,979 2.1 2,996 2.4 (153) (.1) Provision for income taxes $61,883 44.4% $56,526 45.0% $45,255 40.1%
The components of the net deferred income tax liability (expressed in thousands of dollars) as of December 31, 1994 and 1993, were as follows:
1994 1993 Deferred Tax Assets: Deferred income $16,291 $18,922 Accrued expenses 51,055 46,465 Other liabilities 16,779 17,758 Investment tax credits 31,064 33,844 Alternative minimum tax credits 19,387 9,246 Net operating loss carryforwards 137,488 185,210 Total deferred tax assets 272,064 311,445 Deferred Tax Liabilities: Unbilled accounts receivable 47,119 44,784 Property, plant, and equipment 445,699 435,580 Other 33,860 30,137 Total deferred tax liabilities 526,678 510,501 Net deferred tax liability $254,614 $199,056
Deferred tax assets and liabilities are presented as follows in the accompanying balance sheets:
1994 1993 Net deferred tax liability- noncurrent $281,065 $227,275 Less net deferred tax asset-current 26,451 28,219 Net deferred tax liability $254,614 $199,056
At December 31, 1994, for Federal income tax purposes, the Corporation had investment and energy tax credit carryforwards of approximately $31,064,000 and net operating loss carryforwards of approximately $336,744,000, which will expire in 2004 through 2008. Deferred Federal income taxes have been reduced by the tax effect of these amounts. 21. Discontinued Operations In December 1991, the Corporation discontinued the on-site remediation business, utilizing mobile technology, of OPI. During 1993, the Corporation recognized a pretax gain of $12,379,000 resulting primarily from the receipt of amounts previously withheld pending satisfactory completion of obligations under existing contracts and from proceeds from the sale of assets in excess of previously estimated net realizable values. In December 1993, the Corporation discontinued its fixed-site hazardous waste business. Provision was made in 1993 for the write-down of assets, primarily development costs, resulting in a pretax loss of $12,629,000. For the year ended December 31, 1993, the $250,000 net loss from both discontinued operations is reported as Operating Costs and Expenses in the Statements of Consolidated Income. 22. Earnings Per Share Earnings per common share were computed by dividing net income, 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 year. 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 year or outstanding at the end of each year, were converted at the beginning of each year or at the date of issuance or grant, if dilutive. This computation provided for the elimination of related convertible debenture interest and preferred dividends. The weighted-average number of shares used in computing earnings per common share was as follows:
1994 1993 1992 Primary 43,610,000 43,378,000 43,086,000 Assuming full dilution 43,939,000 43,776,000 43,583,000
23. Commitments and Contingent Liabilities Ogden and certain of its subsidiaries have issued or are party to performance bonds and guarantees and related contractual obligations undertaken mainly pursuant to agreements to construct and operate certain waste-to-energy, entertainment, and other facilities. In the normal course of business, they are involved in legal proceedings in which damages and other remedies are sought. Management does not expect that these contractual obligations, legal proceedings, or any other contingent obligations incurred in the normal course of business will have a material adverse effect on Ogden's Consolidated Financial Statements. During 1994, a subsidiary of the Corporation has entered into a 30-year facility management contract pursuant to which it has agreed to advance funds to a customer, if necessary and only upon satisfactory completion of construction of the facility, to assist refinancing senior secured debt incurred in connection with construction of the facility. Such refinancing requirements are not expected to exceed $67,000,000 at maturity of the senior secured debt, which is expected to be on or about March 1, 2001. Ogden continues as guarantor of surety bonds and letters of credit totaling approximately $19,200,000 on behalf of International Terminal Operating Co. Inc. (ITO) and has guaranteed borrowings of certain customers amounting to approximately $20,300,000. Management does not expect that these arrangements will have a material adverse effect on Ogden's Consolidated Financial Statements. Ogden's obligation as guarantor on behalf of Avondale Industries, Inc., with respect to $36,000,000 of Industrial Revenue Bonds as well as other contingent obligations under which Ogden may have been required to purchase Avondale preferred stock, ended June 1, 1994. As of December 31, 1994, capital commitments amounted to $49,900,000, which includes commitments for equity investments (over and above restricted funds provided by revenue bonds issued by municipalities) of $2,600,000 for waste-to-energy facilities and $47,300,000 for normal replacement, modernization, and growth in Services and Projects. 24. Information Covering Business Segments In connection with Ogden's acquisition of the publicly traded shares of OPI, Ogden's business segments have been reclassified. Ogden now classifies its business segments as Services and Projects. The Services segment (formerly "Operating Services") includes principally ground services, fueling, cargo, food catering, and related services to the aviation industry; food and beverage, janitorial, maintenance, and other services related to the management and operations of arenas, stadiums, amphitheaters, and parks; management, maintenance, security, janitorial, and related services to commercial office buildings and industrial and other facilities; and professional technical and environmental consulting services to a wide range of customers. Independent power activities, namely, the operation of two geothermal power stations and related well field activities and a hydroelectric power station, formerly part of Operating Services, are now included in the Projects segment because the activities and strategic direction of the business activities of the Projects segment largely involve power generation. The Projects segment (formerly "Waste-to-Energy Operations") now includes all of Ogden's waste-to-energy activities, its independent power business, its water and wastewater project business, and its construction activities, all of which activities are now commonly managed by OPI. The information that follows reflects this reclassification. Revenues and income from continuing operations (expressed in thousands of dollars) for the years ended December 31, 1994, 1993, and 1992, were as follows:
1994 1993 1992 Revenues: Services $1,379,450 $1,330,104 $1,278,715 Projects 730,735 709,233 490,100 Total revenues $2,110,185 $2,039,337 $1,768,815 Income from Operations: Services. $52,719 $63,611 $58,661 Projects 109,775 83,749 75,354 Total income from operations 162,494 147,360 134,015 Corporate unallocated income and expenses-net (12,184) (10,751) (10,778) Corporate interest-net (10,946) (11,108) (10,362) Consolidated Income from Continuing Operations Before Income Taxes and Minority Interest $139,364 $125,501 $112,875
Services' revenues include $248,500,000, $245,100,000, and $251,300,000 from United States government contracts for the years ended December 31, 1994, 1993, and 1992, respectively. Total revenues by segment reflect sales to unaffiliated customers. In computing income from operations, none of the following have been added or deducted: unallocated corporate expenses, nonoperating interest expenses, interest income, and income taxes. A summary (expressed in thousands of dollars) of identifiable assets, depreciation and amortization, and capital additions for the years ended December 31, 1994, 1993, and 1992, is as follows:
Identifiable Depreciation and Capital Assets Amortization Additions 1994 Services $800,011 $39,658 $37,207 Projects 2,556,655 49,061 82,418 Corporate 288,220 1,826 22 Consolidated $3,644,886 $90,545 $119,647 1993 Services $719,964 $35,973 $33,877 Projects 2,361,499 47,186 81,852 Corporate 259,266 2,484 471 Consolidated $3,340,729 $85,643 $116,200 1992 Services $650,030 $32,272 $30,691 Projects 2,261,764 42,166 33,341 Corporate 276,032 2,610 25 Consolidated $3,187,826 $77,048 $64,057
25. Supplemental Disclosure of Cash Flow Information
(Expressed in thousands of dollars) 1994 1993 1992 Cash Paid for Interest and Income Taxes: Interest (net of amounts capitalized) $119,997 $117,733 $115,316 Income taxes 8,298 3,197 6,328 Noncash Investing and Financing Activities: Conversion of preferred shares for common shares 3 5 6 Conversion of debentures for common shares --- 1,287 122 Adjustment to property, plant, and equipment and deferred income taxes in connection with adoption of SFAS 109 --- --- 38,051 Contract acquisition costs, etc. --- 22,539 --- Future contract obligations --- (22,539) --- Acquisition of net assets in connection with merger --- --- 4,375 Purchase of Minority Interest: Common stock issued 94,446 --- --- Adjustment to net assets for excess of purchase price over book value of net assets acquired 21,589 --- --- Detail of Entities Acquired: Fair value of assets acquired 158,212 76,875 9,420 Liabilities assumed (125,808) (22,651) (1,480) Net cash paid for acquisitions 32,404 54,224 7,940
26. Fair Value of Financial Instruments The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of SFAS 107, "Disclosures About Fair Value of Financial Instruments." The estimated fair-value amounts have been determined using available market information and appropriate valuation methodologies. However, considerable judgment is necessarily required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that Ogden would realize in a current market exchange. The estimated fair value (expressed in thousands of dollars) of financial instruments at December 31, 1994 and 1993, is summarized as follows:
1994 1993 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Assets: Cash and cash equivalents $117,359 $117,359 $109,097 $109,097 Marketable securities- available for sale 99,086 99,086 98,953 98,792 Receivables 757,400 761,092 652,270 658,006 Restricted funds 307,944 306,876 359,416 366,006 Other assets 33,875 32,885 29,808 28,709 Liabilities: Long-term debt 307,876 298,648 279,133 274,467 Convertible subordinated debentures 148,650 119,770 151,750 142,919 Project debt 1,639,267 1,661,813 1,551,366 1,691,939 Other liabilities 34,906 34,906 30,839 29,714 Off Balance-Sheet Financial Instruments: Unrealized losses on interest rate swap agreements --- 9,355 --- 832 Unrealized gains on interest rate swap agreements --- 8,716 --- ---
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: For cash and cash equivalents, the carrying value of these amounts is a reasonable estimate of their fair value. The fair value of long-term unbilled receivables is estimated by using a discount rate that approximates the current rate for comparable notes. Marketable securities' fair values are based on quoted market prices or dealer quotes. The fair value of restricted funds held in trust is based on quoted market prices of the investments held by the trustee. The fair value of noncurrent receivables is estimated by discounting the future cash flows using the current rates at which similar loans would be made to such borrowers based on the remaining maturities, consideration of credit risks, and other business issues pertaining to such receivables. Other assets, consisting primarily of insurance and escrow deposits and other miscellaneous financial instruments used in the ordinary course of business, are valued based on quoted market prices or other appropriate valuation techniques. Fair values for short-term debt and long-term debt were determined based on interest rates that are currently available to the Corporation for issuance of debt with similar terms and remaining maturities for debt issues that are not traded or quoted on an exchange. With respect to convertible subordinated debentures, fair values are based on quoted market prices. The fair value of project debt is estimated based on quoted market prices for the same or similar issues. Other borrowings and liabilities are valued by discounting the future stream of payments using the incremental borrowing rate of the Corporation. The fair value of the Corporation's interest rate swap agreements is the estimated amount that the Corporation would receive or pay to terminate the swap agreements at the reporting date based on third-party quotations. The fair value of Ogden financial guarantees provided on behalf of ITO and customers (see Note 23) would be zero because Ogden receives no fees associated with such commitments. The fair-value estimates presented herein are based on pertinent information available to management as of December 31, 1994 and 1993. Although management is not aware of any factors that would significantly affect the estimated fair-value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date, and current estimates of fair value may differ significantly from the amounts presented herein. Independent Auditors' Report Deloitte & Touche LLP Two World Financial Center New York, NY 10281 The Board of Directors and Shareholders of Ogden Corporation: We have audited the accompanying consolidated balance sheets of Ogden Corporation and subsidiaries as of December 31, 1994 and 1993 and the related statements of shareholders' equity, consolidated income and cash flows for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of the companies at December 31, 1994 and 1993 and the results of their operations and cash flows for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles. As discussed in Note 1 to the financial statements, in 1994 the Corporation changed its methods of accounting for postemployment benefits to conform with Statement of Financial Accounting Standards No. 112 and for certain investments in debt and equity securities to conform with Statement of Financial Accounting Standards No. 115. In 1993, the Corporation changed its method of accounting for postretirement benefits other than pensions to conform with Statement of Financial Accounting Standards No. 106 and in 1992 changed its method of accounting for income taxes to conform with Statement of Financial Accounting Standards No. 109. February 3, 1995 Ogden Corporation and Subsidiaries Report of Management Ogden's management is responsible for the information and representations contained in this annual report. Management believes that the financial statements have been prepared in conformity with generally accepted accounting principles appropriate in the circumstances to reflect in all material respects the substance of events and transactions that should be included and that the other information in the annual report is consistent with those statements. In preparing the financial statements, management makes informed judgments and estimates of the expected effects of events and transactions currently being accounted for. In meeting its responsibility for the reliability of the financial statements, management depends on the Corporation's internal control structure. This structure is designed to provide reasonable assurance that assets are safeguarded and transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. In designing control procedures, management recognizes that errors or irregularities may nevertheless occur. Also, estimates and judgments are required to assess and balance the relative cost and expected benefits of such controls. Management believes that the Corporation's internal control structure provides reasonable assurance that errors or irregularities that could be material to the financial statements are prevented and would be detected within a timely period by employees in the normal course of performing their assigned functions. The Board of Directors pursues its oversight role for these financial statements through the Audit Committee, which is composed solely of nonaffiliated directors. The Audit Committee, in this oversight role, meets periodically with management to monitor their responsibilities. The Audit Committee also meets periodically with the independent auditors and the internal auditors, both of whom have free access to the Audit Committee without management present. The independent auditors elected by the shareholders express an opinion on our financial statements. Their opinion is based on procedures they consider to be sufficient to enable them to reach a conclusion as to the fairness of the presentation of the financial statements. R. Richard Ablon Philip G. Husby President and Senior Vice President, Chief Executive Officer Chief Financial Officer, and Treasurer Ogden Corporation and Subsidiaries Quarterly Results of Operations
1994 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 (In thousands of dollars, except per share amounts) Total revenues $479,319 $527,718 $546,699 $556,449 Gross profit $ 87,946 $ 97,668 $ 98,578 $101,478 Income before cumulative effect of change in accounting principle $ 15,328 $ 17,640 $ 18,742 $ 16,116 Cumulative effect of change in accounting principle (1,520) Net Income $ 13,808 $ 17,640 $ 18,742 $ 16,116 Earnings (Loss) Per Common Share: Income before cumulative effect of change in accounting principle $ 0.35 $ 0.40 $ 0.43 $ 0.37 Cumulative effect of change in accounting principle (0.03) Total $ 0.32 $ 0.40 $ 0.43 $ 0.37 Earnings (Loss) Per Common Share - Assuming Full Dilution: Income before cumulative effect of change in accounting principle $ 0.34 $ 0.40 $ 0.43 $ 0.37 Cumulative effect of change in accounting principle (0.03) Total $ 0.31 $ 0.40 $ 0.43 $ 0.37 1993 Quarter Ended March 31 June 30 Sept. 30 Dec. 31 (In thousands of dollars, except per-share amounts) Total revenues $458,491 $516,157 $540,856 $523,833 Gross profit $ 82,240 $ 86,330 $ 94,105 $ 94,469 Income before cumulative effect of change in accounting principle $ 13,822 $ 16,092 $ 14,723 $ 17,493 Cumulative effect of change in accounting principle (5,340) Net income $ 8,482 $ 16,092 $ 14,723 $ 17,493 Earnings (Loss) Per Common Share: Income before cumulative effect of change in accounting principle $ 0.32 $ 0.37 $ 0.34 $ 0.40 Cumulative effect of change in accounting principle (0.12) Total $ 0.20 $ 0.37 $ 0.34 $ 0.40 Earnings (Loss) Per Common Share - Assuming Full Dilution: Income before cumulative effect of change in accounting principle $ 0.31 $ 0.37 $ 0.34 $ 0.40 Cumulative effect of change in accounting principle (0.12) Total $ 0.19 $ 0.37 $ 0.34 $ 0.40 Notes: Net income was reduced by $.10 per share ($4,300,000) for the September 30, 1993 quarter reflecting the retroactive effect of the increased Federal income tax rate. The $.10 per-share reduction includes $.08 per share for a net one-time charge due to the adjustment of prior years' deferred income tax balances and $.02 per share for the 1% increase in tax rate for the first nine months of 1993. The cumulative effect of changes in accounting principles reflects the adoption of SFAS 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," effective January 1, 1993, and SFAS 112, "Employers' Accounting for Postemployment Benefits," effective January 1, 1994.
Ogden Corporation and Subsidiaries Price Range of Stock and Dividend Data
1994 1993 High Low High Low Common: First Quarter 24 3/8 21 1/4 24 1/8 21 1/2 Second Quarter 23 3/8 19 7/8 26 1/2 22 1/8 Third Quarter 23 1/8 20 1/2 27 21 5/8 Fourth Quarter 21 5/8 17 3/4 26 22 Preferred: First Quarter 137 137 Not Traded Second Quarter 128 1/2 128 1/2 146 146 Third Quarter 131 1/2 131 1/2 145 131 1/2 Fourth Quarter 122 122 Not Traded Quarterly common stock dividends of $.3125 per share were paid to shareholders of record for the four quarters of 1994 and 1993, the dividends for the last quarters of 1994 and 1993 being paid in January of the subsequent years. Quarterly dividends of $.8376 were paid for the four quarters of 1994 and 1993 on the $1.875 preferred stock. Ogden common and $1.875 preferred stocks are listed on the New York Stock Exchange.
EX-21 11 EXHIBIT 21
December 31, 1994 OGDEN CORPORATION - U.S. SUBSIDIARIES (See Attachment A for foreign subsidiaries) PERCENT DOMESTIC COMPANY OWNERSHIP STATE Ogden Corporation Delaware Ogden Management Services, Inc. 100 Delaware OFS Equity of Babylon, Inc. 100 New York OFS Equity of Huntington, Inc. 100 New York Ogden Services Corporation 100 Delaware Ogden Environmental and Energy Services Co., Inc. 100 Delaware Analytical Technologies, Inc. 100 Delaware G A Technical Services, Inc. 100 Tennessee Multiple Dynamics Corporation 100 Michigan Ogden Environmental and Energy Services Co., Inc. of Ohio 100 Ohio Ogden Environmental & Engineering Services Co., Inc. 100 N. Carolina Ogden Environmental Services Alaska Co., Inc. 100 Delaware Ogden Power Corporation 100 Delaware Geothermal, Inc. 100 Virginia Imperial Power Services, Inc. 100 California New Martinsville Hydro Operations Corporation 100 W. Virginia Ogden Brandywine Operations, Inc. 100 Delaware Ogden Geothermal Operations, Inc. 100 Delaware Ogden Hydro Operations, Inc. 100 Tennessee Ogden Oil & Gas, Inc. 100 Delaware Ogden Power Equity Corporation 100 Delaware Catalyst New Martinsville Hydroelectric Corporation 100 Delaware ERC Energy, Inc. 100 Delaware Ogden Heber Field Energy, Inc. 100 Delaware Ogden Hydro Energy, Inc. 100 Delaware Ogden Power International Holdings, Inc. 100 Delaware Ogden SIGC Energy, Inc. 100 Delaware AMOR 14 Corporation 100 Delaware Ogden SIGC Energy II, Inc. 100 California Ogden SIGC Geothermal Operations, Inc. 100 California Ogden Remediation Services Co., Inc. 100 Florida Ogden Entertainment Services, Inc. 100 Delaware Doggie Diner, Inc. 100 Delaware Offshore Food Service, Inc. 100 Louisiana Gulf Coast Catering Company, Inc. 100 Louisiana Ogden Allied Maintenance Corporation of New England 100 Mass. Ogden Allied Security Services, Inc. 100 Delaware Ogden American Food Services, Inc. 100 Ohio Ogden Aviation Food Services, Inc. 100 Delaware Ogden Aviation Food Services (ALC), Inc. 100 New York Ogden-Burtco Services, Inc. 100 Washington Alpine Food Products, Inc. 100 Washington Ogden Facility Management of Alaska, Inc. 100 Alaska Ogden Corporation Page 2 Ogden Services Corporation Ogden Entertainment Services, Inc. (con't.) Ogden Entertainment Services of Indiana, Inc. 100 Delaware Ogden Facility Management Corporation 100 New York Ogden Facility Management Corporation of Anaheim 100 California Ogden Facility Management Corporation of California 100 California Ogden Facility Management Corporation of Iowa 100 Iowa Ogden Facility Management Corporation of Pensacola 100 Florida Ogden Food Service Corporation 100 Delaware Ogden Confection Corporation 100 Delaware Ogden Food Service Corporation of Connecticut 100 Connecticut Ogden Food Service Corporation of Indiana 100 Indiana Ogden Food Service Corporation of Kansas 100 Kansas Ogden Food Service Corporation of Miami, Inc. 100 Florida Ogden Food Service Corporation of Milwaukee 100 Wisconsin Ogden Food Service Corporation of Texas 100 Texas Ogden Food Service Corporation of Wisconsin 100 Wisconsin Ogden Leisure, Inc. 100 Delaware Ogden Fairmount, Inc. 100 Delaware WDRA, Inc. 100 W. Virginia Ogden Leisure Services of New York, Inc. 100 New York ERC International Inc. 100 Delaware Ogden Communications, Inc. 100 Delaware Ogden Government Services Corporation 100 Virginia DK Associates, Inc. 100 Delaware ERC Field Services Corporation 100 Virginia Logistics Operations, Inc. 100 Virginia Ogden BioServices Corporation 100 Virginia Ogden Professional Services Southwest, Inc. 100 Delaware InterCAD Corporation 100 Maryland W. J. Schafer Associates, Inc. 100 Mass. Laser Corporation of America 49.92 Mass. Laser Royalties, Inc. 100 Delaware Lawrence Associates, Inc. 100 Delaware Ogden Facility Services, Inc. 100 Delaware Ogden Industrial Services, Inc. 100 Delaware OGDEN CISCO, INC. 100 Delaware Ogden Allied Maintenance Corporation 100 New York Atlantic Design Company, Inc. 100 New York Atlantic Design Technicals, Inc. 100 New Jersey Lenzar Electro-Optics, Inc. 100 Delaware Hawaiian Building Maintenance Company, Limited 100 Hawaii Ogden Allied Building & Airport Services Inc. 100 Delaware Ogden Allied Building Service Corporation 100 Delaware Ogden Allied Commercial Cleaning Systems Corporation 100 California Ogden Allied Eastern States Maintenance Corporation 100 Delaware Ogden/ERC Aviation Technology Services, Inc. 100 Delaware Ogden Range Services, Inc. 100 Delaware Ogden Allied Maintenance Company of Hawaii, Inc. 100 Hawaii Ogden Corporation Page 3 Ogden Services Corporation Ogden Allied Maintenance Corporation (con't.) Ogden Allied Maintenance Corporation of Pennsylvania 100 Delaware Ogden Allied Maintenance Corporation of Texas 100 Texas Ogden Allied Payroll Services, Inc. 100 New York Ogden Allied Service Agency Corporation 100 Delaware Ogden Allied Window Cleaning Company, Inc. 100 New York Ogden Aviation Distributing Corp. 100 New York Ogden Aviation Fueling Company, Inc. 100 Delaware Ogden Aviation Fueling Company of Atlanta, Inc. 100 Georgia Ogden Aviation Fueling Company of Houston, Inc. 100 Texas Ogden Aviation Fueling Company of St. Louis, Inc. 100 Delaware Ogden Aviation Fueling Company of Texas, Inc. 100 Texas Ogden Aviation Fueling Company of Virginia, Inc. 100 Delaware Ogden Aviation Service Company of Colorado, Inc. 100 Colorado Ogden Aviation Service Company of Hawaii, Inc. 100 Hawaii Ogden Aviation Service Company of Kansas City, Inc. 100 Missouri Ogden Aviation Service Company of New Jersey, Inc. 100 New Jersey Ogden Aviation Service Company of New York, Inc. 100 New York Ogden Ground Services, Inc. 100 Delaware ARA Sunset Airport Systems, Inc. 100 California Kenworthy Air Freight Services, Inc. 100 Indiana Ogden Aviation Service Company of Pennsylvania, Inc. 100 Penn. Ogden Aviation Service Company of Texas, Inc. 100 Delaware Ogden Aviation Service Company of Washington, Inc. 100 Delaware Ogden Aviation Service International Corporation 100 New York Ogden Aviation, Inc. 100 Delaware Ogden Aviation Security Services of Indiana, Inc. 100 Indiana Ogden Central and South America, Inc. 100 Delaware Ogden Pacific Services, Inc. 100 Delaware Ogden Aviation Terminal Services, Inc. 100 Mass. Ogden CISCO Maintenance, Inc. 100 Delaware Ogden Consolidated Aviation Services of Houston, Inc. 100 Texas Ogden New York Services, Inc. 100 New York Ogden Pipeline Services Corporation 100 Delaware Ogden Plant Maintenance Company, Inc. 100 New Jersey Ogden Plant Maintenance Company of Missouri 100 Missouri Ogden Plant Maintenance Company of North Carolina 100 N. Carolina Ogden Support Services, Inc. 100 Delaware Tridon Supply Company, Inc. 100 New York Ogden International Europe Inc. 100 Delaware Ogden Resource Recovery Support Services, Inc. 100 Delaware Ogden Plant Services of New Jersey, Inc. 100 New Jersey Ogden Allied Abatement & Decontamination Service, Inc. 100 New York Ogden Projects, Inc. 100 Delaware (See Attachment B for subsidiaries) Ogden Corporation (con't.) Page 4 Ogden Financial Services, Inc. 100 Delaware B D C Liquidating Corp. 100 Delaware Bouldin Development Corp. 100 California Ogden Bulk Systems Company, Inc. 90 New York BiE Leasing Company 100 Delaware Greenway Insurance Company of Vermont 100 Vermont International Terminal Operating Co., Inc. 50 Delaware OFS Equity of Delaware, Inc. 100 Delaware OFS Equity of Alexandria/Arlington, Inc. 100 Virginia OFS Equity of Indianapolis, Inc. 100 Indiana OFS Equity of Stanislaus, Inc. 100 California Ogden Allied Financial Services Corporation 100 Delaware Ogden Allied Maintenance Securities, Inc. 100 Delaware Denver Fuel Facilities Corporation 100 Colorado Kansas City International Fueling Facilities Corporation 100 Missouri LaGuardia Fuel Facilities Corporation 100 New York Lambert Field Fueling Facilities Corporation 100 Delaware Love Field Fueling Facilities Corporation 100 Texas Newark Automotive Fuel Facilities Corporation 100 New Jersey Ogden Allied Facilities, Inc. 100 New York Philadelphia Fuel Facilities Corporation 100 Penn. Rototest Laboratories, Inc. 91 California
ATTACHMENT A 12/31/94 OGDEN CORPORATION - FOREIGN SUBSIDIARIES PERCENT DOMESTIC COMPANY OWNERSHIP COUNTRY Ogden Corporation Ogden Projects, Inc. 100 DE/U.S.A. Ogden Martin Systems, Inc. 100 DE/U.S.A. Ogden Martin Systems, Ltd. 100 Ontario Ogden Martin Systems of Nova Scotia, Ltd. 100 Nova Scotia Ogden Projects Asia Pacific Limited 50 Hong Kong (50% held by Ogden Power Systems, Inc.) Ogden Projects GmbH 100 Germany Ogden Projects Holdings, Inc. 100 DE/U.S.A. Ogden Projects (U.K.) Limited 100 U.K. Ogden Projects (Birmingham) Limited 100 U.K. Ogden Waste Treatment Services, Inc. 100 DE/U.S.A. Ogden Environmental Services Limited 100 Canada OPI Quezon, Inc. 100 Delaware Ogden Quezon Power, Inc. 75 Cayman Islands Projets Ogden Quebec Inc. 100 Quebec Ogden Services Corporation 100 DE/U.S.A. Ogden Aviation Services Limited 100 U.K. Ogden Aviation Engineering Limited 100 U.K. Ogden Entertainment Services (UK) Ltd. 100 U.K. SkyCare Cargo Limited 100 U.K. SkyCare Limited 100 U.K. Air Cargo Enterprises Limited 50 U.K. Ogden International Europe Inc. 100 DE/U.S.A. Ogden Holdings B.V. 100 Netherlands Compania General de Sondeos CGS, S.A. 100 Spain Czech-Ogden Airhandling s.r.o. 50 Czech Rep. Ogden Aviation Holdings (Deutschland) GmbH 100 Germany Ogden Allied Services GmbH 100 Germany Ogden Aviation Services GmbH & Co. KG 100 Germany Ogden Services GmbH, Gesellschaft fur Kultur-, Medien- und Veranstaltungsmanagement 100 Germany Ogden Tegel Verwaltungs GmbH 100 Germany Tegel Aircraft Handling GmbH 100 Germany Verwaltung Ogden Aviation Services GmbH 100 Germany Ogden Aviation (Schiphol) B.V. 100 Netherlands Ogden Cargo B.V. 100 Netherlands Ogden Aviation Services Portugal, SA 100 Portugal Ogden Aviation Spain S.A. 100 Spain Ogden Environmental and Energy Services Co., Inc. 100 DE/U.S.A. IEA of Japan Company Ltd. 50 Japan Ogden umwelt und energie systeme GmbH 100 Germany IEAL energie consult GmbH 100 Germany IEAL energie + umwelt consult, Berlin 100 Germany Olmec Insurance, Ltd. 100 Bermuda Page 2 Ogden Corporation Ogden Serivces Corporation (con't) Ogden Entertainment Services, Inc. 100 DE/U.S.A. Ogden Entertainment Services (Canada) Inc. - Services de Divertissements Ogden (Canada) Inc. 100 Canada Fortier Associates International, Inc. 100 Canada The Ogden Northmount Evergreen Group Limited 100 Canada Ogden Palladium Services (Canada) Inc. 100 Canada Ogden Entertainment Services de Mexico, S.A. de C.V. 100 Mexico Servicios de Alimentos Bebidas Especializados, S.A. de CV 51 Mexico Ogden Allied Maintenance Corporation 100 NY/U.S.A. Ogden Allied Eastern States Maintenance Corporation 100 DE/U.S.A. Ogden Servicios de Seguridad, S.A. 100 Costa Rica Ogden Agencia de Seguridad, S.A. 100 Panama Ogden Aviation Service International Corporation 100 NY/U.S.A. Ogden Aviation Services (NZ) Limited 100 New Zealand Ogden Aviation Services (Venezuela), S.A. 100 Venezuela Servicios de Despachos Garcia, C.A. 100 Venezuela Ogden & Talma Aviation Services of Peru S.A. 54 Peru Ogden Central and South America, Inc. 100 Delaware Ogden Aviation Services (Chile) Limitada 99 Chile (1% held by Ogden Pacific Services Inc.) Aviation Services Leader S.A. 80 Chile Ogden Aviation Services (Panama) Corp. 85 Panama Ogden Ground Services of Panama Corp. 75 Panama Ogden do Brazil Participacoes S/C Ltda. 100 Brazil Ogden Hellen's International Ltda. 60 Brazil Ogden - Servicos de Atendimento Aeroterrestre Ltda. ("SERVAIR") 100 Brazil Ogden Alimentos Comercio e Servicoes Ltda. 100 Brazil Ogden Ground Services, Inc. 100 Virgin (St. Thomas) Islands Ogden Servair Servicios Aeroportuarios, S.A. 50 Mexico Servicios Especializados Para la Industria del Transporte, S.A. 94.9 Mexico SEITSA Leasing, S.A. de C.V. 94.9 Mexico Ogden Pacific Services, Inc. 100 DE/USA Ogden Aviation Services (Australia) Pty. Ltd. 100 Australia Ogden Aviation Service Company of New York, Inc. 100 NY/U.S.A. Ogden Ground Services, Inc. 100 DE/U.S.A. Ogden Saint Maarten Ground Services, N.V. 100 Netherlands Antilles Ogden/Air Aruba Ground Services N.V. 49 Aruba Allied Aviation Service Company of Newfoundland, Ltd. 100 Canada Page 3 Ogden Corporation (con't.) Ogden Services Corporation (con't.) Ogden Allied Maintenance Corporation (con't.) Ogden Services of Canada Inc. 100 Canada Cafas Inc. 100 Canada Airconsol Aviation Services Ltd. - Les Services D'Aviation Airconsol Limitee 100 Canada Ogden Ground Services (Canada) Ltd. 100 Canada Aircraft Services Ltd. 100 Canada Consolidated Aviation Fueling and Services (Pacific) Limited 100 Canada Consolidated Aviation Fueling of Toronto Limited 100 Ontario Consolidated Aviation Services of Alberta Limited 100 Canada Consolidated Plant Maintenance Ltd. 100 Ontario Consolidated Plant Maintenance of Alberta Limited 100 Canada Ogden Allied Security Services Inc. - Services de Securite Ogden Allied Inc. 100 Canada Ogden Allied Services Inc. - Services Ogden Allied Inc. 100 Canada
ATTACHMENT B 12/31/94 OGDEN PROJECTS, INC. - U.S. SUBSIDIARIES (See Attachment A for foreign subsidiaries) PERCENT DOMESTIC COMPANY OWNERSHIP STATE Ogden Projects, Inc. 100 Delaware Ogden Energy Resource Corp. 100 Delaware Ogden Land Management, Inc. 100 Delaware Ogden Land Management of Warren, Inc. 100 New Jersey Ogden Projects, of Campo, Inc. 100 California Ogden Projects of Haverhill, Inc. 100 Mass. Ogden Projects of Lawrence, Inc. 100 Mass. Ogden Power Systems, Inc. 100 Delaware Ogden Power Systems 7, Inc. 100 Delaware Ogden Projects Americas, Inc. 100 Delaware Ogden Projects Holdings, Inc. 100 Delaware Ogden Wallingford Associates, Inc. 100 Connecticut OPW Associates, Inc. 100 Connecticut OPWH, Inc. 100 Delaware Ogden Martin Systems, Inc. 100 Delaware Grey Acre Development Corporation 100 Mass. Ogden Engineering Services, Inc. 100 New Jersey Ogden Marion Land Corp. 100 Oregon Ogden Martin Systems of Alexandria/Arlington, Inc. 100 Virginia OMS Equity of Alexandria/Arlington, Inc. 100 Virginia Ogden Martin Systems of Babylon, Inc. 100 New York Ogden Martin Systems of Bristol, Inc. 100 Connecticut Ogden Martin Systems of Clark, Inc. 100 Ohio OMSC One, Inc. 100 Delaware OMSC Two, Inc. 100 Delaware OMSC Three, Inc. 100 Delaware OMSC Four, Inc. 100 Delaware Ogden Martin Systems of Dakota, Inc. 100 Minnesota Ogden Martin Systems of Eastern/Central Connecticut, Inc. 100 Connecticut Ogden Martin Systems of Fairfax, Inc. 100 Virginia Ogden Martin Systems of Ford Heights, Inc. 100 Illinois Ogden Martin Systems of Haverhill, Inc. 100 Mass. Haverhill Power, Inc. 100 Mass. LMI, Inc. 100 Mass. Ogden Omega Lease, Inc. 100 Delaware Ogden Haverhill Properties, Inc. 100 Mass. Ogden Martn Systems of Hillsborough, Inc. 100 Florida Ogden Martin Systems of Hudson, Inc. 100 New Jersey Ogden Martin Systems of Huntington, Inc. 100 New York Ogden Martin Systems of Huntington Resource Recovery One Corp. 100 Delaware Ogden Martin Systems of Huntington Resource Recovery Two Corp. 100 Delaware Ogden Martin Systems of Huntington Resource Recovery Three Corp. 100 Delaware Ogden Martin Systems of Huntington Resource Recovery Four Corp. 100 Delaware Ogden Martin Systems of Huntington Resource Recovery Five Corp. 100 Delaware Page 2 Ogden Projects, Inc. Ogden Martin Systems, Inc. (con't.) Ogden Martin Systems of Huntington Resource Recovery Six Corp. 100 Delaware Ogden Martin Systems of Huntington Resource Recovery Seven Corp. 100 Delaware Ogden Martin Systems of Huntsville, Inc. 100 Alabama Ogden Martin Systems of Indianapolis, Inc. 100 Indiana Ogden Martin Systems of Kent, Inc. 100 Michigan Ogden Martin Systems of Knox, Inc. 100 Tennessee NRG/Recovery Group, Inc. 100 Florida Ogden Martin Systems of Lancaster, Inc. 100 Penn. Ogden Martin Systems of Lawrence, Inc. 100 Mass. Ogden Martin Systems of Lee, Inc. 100 Florida Ogden Martin Systems of Long Island, Inc. 100 Delaware Ogden Martin Systems of L.A., Inc. 100 Delaware Ogden Martin Systems of Marion, Inc. 100 Oregon Ogden Martin Systems of Mercer, Inc. 100 New Jersey Ogden Martn Systems of Montgomery, Inc. 100 Maryland Ogden Martin Systems of Morris, Inc. 100 New Jersey Ogden Martin Systems of North Carolina, Inc. 100 N. Carolina Ogden Martin Systems of Oakland, Inc. 100 Michigan Ogden Martin Systems of Onondaga, Inc. 100 New York Ogden Martin Systems of Onondaga Two Corp. 100 Delaware Ogden Martin Systems of Onondaga Three Corp. 100 Delaware Ogden Martin Systems of Onondaga Four Corp. 100 Delaware Ogden Martin Systems of Onondaga Five Corp. 100 Delaware OMS Onondaga Operations, Inc. 100 Delaware Ogden Martin Systems of Pasco, Inc. 100 Florida Ogden Martin Systems of Rhode Island, Inc. 100 R.I. Ogden Martin Systems of San Bernardino, Inc. 100 California Ogden Martin Systems of San Diego, Inc. 100 California Ogden Martin Systems of Stanislaus, Inc. 100 California OMS Equity of Stanislaus, Inc. 100 California Ogden Martin Systems of Tulsa, Inc. 100 Oklahoma Ogden Martin Systems of Union, Inc. 100 New Jersey Ogden Recycling Systems, Inc. 100 Delaware Ogden Recycling Systems of Chicago, Inc. 100 Illinois Ogden Recycling Systems of Fairfax, Inc. 100 Virginia Ogden Recycling Systems of Indianapolis, Inc. 100 Indiana Ogden Waste Treatment Services, Inc. 100 Delaware Ogden Environmental Services of Houston, Inc. 100 Texas American Envirotech,Inc. 100 Texas Stockton Soil Treatment Facility, Inc. 100 California Ogden Water Holdings, Inc. 100 Delaware Ogden Water Systems, Inc. 100 Delaware Ogden Water Systems of Jerusalem, Inc. 100 Delaware Ogden Water Systems of Lee County, Inc. 100 Florida OPI Quezon, Inc. 100 Delaware RRS Holdings Inc. 100 Delaware Michigan Waste Energy Recovery, Inc. 100 Delaware Oahu Waste Energy Recovery, Inc. 100 California Ogden Projects of Hawaii, Inc. 100 Hawaii Resource Recovery Systems of Connecticut, Inc. 100 Connecticut
EX-23 12 EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT Ogden Corporation: We consent to the incorporation by reference in Registration Statement Nos. 33-36658, 33-38489, 33-36667, 33-36657, 33-17558, 33-54143 of Ogden Corporation on Forms S-8 of our reports dated February 3, 1995 (which express an unqualified opinion and include an explanatory paragraph relating to the adoption of Statements of Financial Accounting Standards Nos. 106, 109, 112 and 115) appearing or incorporated by reference in this Annual Report on Form 10-K of Ogden Corporation for the year ended December 31, 1994. /s/Deloitte & Touche LLP New York, New York March 29, 1995 EX-27 13
5 1,000 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 117,359 86,676 606,162 32,783 16,231 995,897 2,330,035 445,261 3,644,886 512,899 2,047,031 24,388 0 54 572,376 3,644,886 456,586 2,110,185 405,190 1,413,814 0 5,869 23,655 139,364 61,883 67,826 0 0 (1,520) 66,306 $1.52 $1.51