-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EikTaUbEmkMaVylAd3MqUShwmpiOH8fZm5rXHbWK78GIXUkX+KIlUSwxmQWT0j8x cbNIthWkPa/cxRA1ZwU4bQ== 0001005477-99-002374.txt : 19990517 0001005477-99-002374.hdr.sgml : 19990517 ACCESSION NUMBER: 0001005477-99-002374 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OGDEN CORP CENTRAL INDEX KEY: 0000073902 STANDARD INDUSTRIAL CLASSIFICATION: AIRPORTS, FLYING FIELDS & AIRPORT TERMINAL SERVICES [4581] IRS NUMBER: 135549268 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-03122 FILM NUMBER: 99624229 BUSINESS ADDRESS: STREET 1: TWO PENNSYLVANIA PLZ - 25TH FLR CITY: NEW YORK STATE: NY ZIP: 10121 BUSINESS PHONE: 2128686100 MAIL ADDRESS: STREET 1: TWO PENNSYLVANIA PLZ - 25TH FLR CITY: NEW YORK STATE: NY ZIP: 10121 10-Q 1 FORM 10-Q FORM 10-Q --------- SECURITIES AND EXCHANGE COMMISSION ---------------------------------- Washington, D.C. 20549 ---------------------- (Mark One) - ---------- |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - ---------------------------------------------------------------------- EXCHANGE ACT OF 1934 -------------------- For the quarterly period ended March 31, 1999 - ------------------------------------------------------------------------------- OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to ________________ Commission file number 1-3122 Ogden Corporation ----------------- (Exact name of registrant as specified in its charter) Delaware 13-5549268 - ------------------------------- --------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) Two Pennsylvania Plaza, New York, New York 10121 ------------------------------------------------ (Address or principal executive office) (Zip Code) (212)-868-6100 ------------------------------------------------ (Registrant's telephone number including area code) Not Applicable ------------------------------------------------ (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares outstanding of each of the issuer's classes of common stock, as of March 31, 1999; 49,060,571 shares of Common Stock, $50 par value per share. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31 ------------------------- 1999 1998 -------- -------- (In Thousands of Dollars Except Per Share Data) Service revenues $264,575 $260,209 Net sales 82,939 115,822 Construction revenues 34,101 3,332 Net gain on sale of businesses and other 14,931 5,512 -------- -------- Total revenues 396,546 384,875 -------- -------- Operating costs and expenses 219,255 195,792 Costs of goods sold 71,817 108,739 Construction costs 32,275 2,933 Selling, administrative and general expenses 27,836 29,021 Debt service charges 22,763 25,121 -------- -------- Total costs and expenses 373,946 361,606 -------- -------- Consolidated operating income 22,600 23,269 Equity in net income of investees and joint ventures 3,778 853 Interest income 3,167 3,540 Interest expense (9,584) (8,596) Other income - net 159 289 -------- -------- Income before income taxes, minority interests and the cumulative effect of change in accounting principle 20,120 19,355 Less: income taxes 7,646 7,165 minority interests 1,953 490 -------- -------- Income before cumulative effect of change in accounting principle 10,521 11,700 Cumulative effect of change in accounting principle (net of income taxes $1,313) (3,820) -------- -------- Net Income 6,701 11,700 -------- -------- Other Comprehensive Income, Net of Tax: Foreign currency translation adjustments (6,205) (261) Unrealized Gains (Losses) on Securities: Unrealized holding gains (losses) arising during period (120) 55 -------- -------- Other comprehensive income (6,325) (206) -------- -------- Comprehensive Income $ 376 $ 11,494 ======== ======== Basic Earnings Per Share Income before cumulative effect of change in accounting principle $ 0.21 $ 0.23 Cumulative effect of change in accounting principle (0.07) -------- -------- Net Income $ 0.14 $ 0.23 ======== ======== Diluted Earnings Per Share Income before cumulative effect of change in accounting principle $ 0.21 $ 0.23 Cumulative effect of change in accounting principle (0.07) -------- -------- Net Income $ 0.14 $ 0.23 ======== ========
OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
MARCH 31 DECEMBER 31, 1999 1998 ---- ---- (In Thousands of Dollars) Assets Current Assets: Cash and cash equivalents $ 150,120 $ 261,119 Marketable securities available for sale 19,331 44,685 Restricted funds held in trust 143,328 110,553 Receivables (less allowances: 1999, $30,348 and 1998, $30,595) 385,761 394,923 Inventories 30,099 31,100 Deferred income taxes 49,910 49,327 Other 68,545 62,742 ---------- ---------- Total current assets 847,094 954,449 Property, plant and equipment-net 2,137,532 1,987,643 Restricted funds held in trust 183,229 180,922 Unbilled service and other receivables 196,377 173,630 Unamortized contract acquisition costs 168,169 132,818 Goodwill and other intangible assets 166,321 130,031 Investments in and advances to investees and joint ventures 211,749 205,702 Other assets 149,024 157,648 ---------- ---------- Total Assets $4,059,495 $3,922,843 ========== ========== Liabilities and Shareholders' Equity Liabilities: Current liabilities: Notes payable $ 19,850 $ 45,600 Current portion of long-term debt 37,693 30,232 Current portion of project debt 61,902 63,201 Dividends payable 15,366 15,403 Accounts payable 112,109 94,629 Federal and foreign income taxes payable 5,700 21,776 Accrued expenses, etc. 311,057 305,942 Deferred income 48,238 47,991 ---------- ---------- Total current liabilities 611,915 624,774 Long-term debt 449,416 391,287 Project debt 1,443,593 1,367,528 Deferred income taxes 401,149 396,648 Deferred income 198,883 201,563 Other liabilities 219,092 215,119 Minority interests 49,770 28,174 Convertible subordinated debentures 148,650 148,650 ---------- ---------- Total liabilities 3,522,468 3,373,743 ---------- ---------- Shareholders' Equity: Serial cumulative convertible preferred stock, par value $1.00 per share; Authorized 4,000,000 shares; shares outstanding: 41,866 in 1999 and 42,218 in 1998, net of treasury shares of 29,820 in 1999 and 1998 42 43 Common stock, par value $.50 per share; authorized, 80,000,000 shares; shares outstanding: 49,060,571 in 1999 and 48,945,989 in 1998, net of Treasury shares of 4,641,283 and 4,561,963 in 1999 and 1998 24,530 24,473 Capital surplus 176,271 173,413 Earned surplus 359,322 367,984 Accumulated other comprehensive income (23,138) (16,813) ---------- ---------- Total Shareholders' Equity 537,027 549,100 ---------- ---------- Total Liabilities and Shareholders' Equity $4,059,495 $3,922,843
OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Three months ended Year ended March 31, 1999 December 31, 1998 Shares Amounts Shares Amounts ------------------------------------------------------- (In thousands of dollars, except per-share amounts) Serial Cumulative Convertible Preferred Stock, par value $1.00 per share; Authorized 4,000,000 shares: Balance at beginning of period 72,038 $ 73 74,166 $ 75 Shares converted into common stock (352) (1) (2,128) (2) ---------------------- ------------------------- Total 71,686 72 72,038 73 Treasury shares (29,820) (30) (29,820) (30) ---------------------- ------------------------- Balance at end of period (aggregate involuntary Liquidation value-1999, $844) 41,866 42 42,218 43 ---------------------- ------------------------- Common Stock, par value $.50 per share: Authorized, 80,000,000 shares: Balance at beginning of year 53,507,952 26,754 53,430,246 26,715 Exercise of stock options, less common stock utilized 65,000 33 Shares issued for acquisition 191,800 96 Conversion of preferred shares 2,102 1 12,706 6 ---------------------- ------------------------- Total 53,701,854 26,851 53,507,952 26,754 ---------------------- ------------------------- Treasury shares at beginning of year 4,561,963 2,281 3,135,123 1,568 Purchase of treasury shares 102,000 51 2,121,100 1,060 Exercise of stock options (22,680) (11) (694,260) (347) ---------------------- ------------------------- Treasury shares at end of period 4,641,283 2,321 4,561,963 2,281 ---------------------- ------------------------- Balance at end of period 49,060,571 24,530 48,945,989 24,473 ---------------------- ------------------------- Capital surplus: Balance at beginning of period 173,413 212,383 Exercise of stock options, less common stock utilized 413 16,355 Shares issued for acquisition 4,904 Purchase of treasury shares (2,458) (55,321) Conversion of preferred shares (1) (4) -------- -------- Balance at end of period 176,271 173,413 -------- -------- Earned Surplus: Balance at beginning of period 367,984 343,237 Net income 6,701 86,970 -------- -------- Total 374,685 430,207 -------- -------- Preferred dividends-per share 1999, $.8376, 1998, $3.35 35 144 Common dividends-per share 1999, $.3125, 1998, $1.25 15,328 62,079 -------- -------- Total Dividends 15,363 62,223 -------- -------- Balance at end of period 359,322 367,984 -------- -------- Cumulative Translation Adjustment-Net (22,237) (16,032) -------- -------- Minimum Pension Liability Adjustment (716) (716) -------- -------- Net Unrealized Loss on Securities Available For Sale (185) (65) -------- -------- CONSOLIDATED SHAREHOLDERS' EQUITY $537,027 $549,100 ======== ========
OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31 ------------------------- 1999 1998 -------- -------- (In Thousands of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,701 $ 11,700 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Depreciation and amortization 29,149 27,197 Deferred income taxes 4,969 3,533 Cumulative effect of change in accounting principle 3,820 Other (22,679) (6,873) Management of Operating Assets and Liabilities: Decrease (Increase) in Assets: Receivables 4,628 14,232 Inventories 1,181 (178) Other assets (15,790) (23,159) Increase (Decrease) in Liabilities: Accounts payable 22,138 (16,428) Accrued expenses 309 (15,568) Deferred income (993) (1,242) Other liabilities (3,850) (4,449) --------- -------- Net cash provided (used) by operating activities 29,583 (11,235) --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of business 19,827 4,267 Proceeds from sale of property, plant and equipment 1,442 811 Proceeds from sale of marketable securities available for sale 25,934 Entities purchased, net of cash acquired (64,243) Investment in marketable securities available for sale (580) Investments in Energy facilities (4,170) (4,889) Other capital expenditures (34,934) (19,296) Decrease (increase) in other receivables (9,810) 1,520 Distributions from investees and joint ventures 6,700 3,569 Increase in investment in and advances to investees and joint ventures (19,214) (40,555) --------- -------- Net cash used in investing activities (79,048) (54,573) --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Decrease (increase) in funds held in trust (35,084) 2,722 Other new debt 34,711 26,213 Payment of debt (42,894) (20,910) Dividends paid (15,400) (15,746) Purchase of treasury shares (2,509) (9,348) Proceeds from exercise of stock options 424 7,614 Other (782) (1,428) --------- -------- Net cash used in financing activities (61,534) (10,883) --------- -------- Net Decrease in Cash and Cash Equivalents (110,999) (76,691) Cash and Cash Equivalents at Beginning of Period 261,119 185,671 --------- -------- Cash and Cash Equivalents at End of Period $ 150,120 $108,980 ========= ========
ITEM 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. However, in the opinion of Management, all adjustments consisting of normal recurring accruals necessary for a fair presentation of the operating results have been included in the statements. On January 1, 1999 the Company adopted the American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP) 98-5 "Reporting on the Costs of Start-Up Activities". This SOP establishes accounting standards for these costs and requires they generally be expensed as incurred. The effect of the adoption of this SOP was a charge of $3,820,000 net of income taxes of $1,313,000 recorded as a cumulative effect of change in accounting principle in the accompanying financial statements. The accompanying financial statements for prior periods have been reclassified as to certain amounts to conform with the 1999 presentation. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: Operations: Revenues and income from operations (expressed in thousand of dollars) by segment for the three months ended March 31, 1999 and 1998 were as follows:
Information Concerning Three Months Ended March 31, Business Segments 1999 1998 - ------------------------------------------------------------------------------- Revenues: Entertainment $105,583 $ 93,331 Aviation 56,139 80,286 Energy 217,068 183,208 Other 17,756 28,050 -------- -------- Total Revenues $396,546 $384,875 ======== ======== Income (Loss) from Operations: Entertainment $ 2,023 $ 5,671 Aviation 8,961 7,610 Energy 16,814 15,577 Other (1,275) (12) -------- -------- Total Income from Operations 26,523 28,846 Equity in net income (loss) of investees and joint ventures: Entertainment (1,367) (1,088) Aviation 1,675 1,028 Energy 3,470 913 -------- -------- Total 30,301 29,699 Corporate unallocated expenses - net (3,764) (5,288) Corporate interest - net (6,417) (5,056) -------- -------- Income from operations before income taxes, minority interests and cumulative effect of change in accounting principle $ 20,120 $ 19,355 ======== ========
Revenues for the first three months of 1999 were $11,700,000 higher than the comparable period of 1998. This increase was primarily due to an increase of $33,900,000 in the Energy segment chiefly associated with an increase of $30,800,000 in construction revenues primarily reflecting increased activity in the Environmental Group and in Waste-to-Energy retrofits, and a gain on the sale of a joint venture interest. The Entertainment segment's revenues were $12,300,000 higher primarily due to the start-up at Tinseltown and the acquisition of Casino Iguazu in late 1998, increased activity at Silver Springs and the World Trade Center attractions and in concerts as well as a gain associated with the renegotiation of a management contract at Arrowhead Pond Arena, partially offset by lower activity at sports venues reflecting the delay in the start-up of the N.B.A. season. These increases in Energy and Entertainment revenues were partially offset by a decrease of $24,100,000 in the Aviation segment's revenues chiefly associated with the sale of inflight catering operations in June 1998 which had revenues of $33,100,000 in the first quarter of 1998, partially offset by the acquisition of the Flight Services Group in March 1999, Hong Kong operations which commenced in the third quarter of 1998, increased activity in European operations, and an insurance settlement in 1999. The Other segment's revenues decreased $10,300,000 chiefly associated with lower activity at Atlantic Design and on government contracts. Consolidated operating income for the first three months of 1999 was $700,000 lower than the comparable period of 1998. The Entertainment segment's operating income was $3,600,000 lower primarily reflecting the delay in the start of the N.B.A. season, losses at Casino Iguazu acquired in late 1998 and at Tinseltown due to the seasonality of these operations, and development expense relating to the opening of new themed restaurants and the acquisition of Water Parks. These decreases were partially offset by a gain of $6,025,000 due to the renegotiation of a management contract at Arrowhead Pond Arena. The Other Services segment's operating income was $1,300,000 lower primarily reflecting the sale of a business in 1998. These decreases in operating income were partially offset by an increase of $1,400,000 in the Aviation segment chiefly associated with increased activity in Latin American operations including technical service fees and an insurance settlement of $1,500,000 partially offset by lower European operating income, and an increase in the Energy segment's operating income of $1,200,000 principally due to an increase of $1,400,000 in construction income, a gain of $4,600,000 reflecting the sale of a joint venture interest, partially offset by reduced operating income in Waste-to-Energy chiefly associated with the amortization of the prepayment of a power sales agreement and lower income in Environmental operations reflecting a provision for estimated losses on a contract as well as a loss in the Spanish operations. Debt service charges decreased $2,400,000 primarily due to lower debt outstanding on various facilities. The Energy segment had interest rate swap agreements entered into as hedges against interest rate exposure on adjustable rate project debt that resulted in additional debt service expense of $730,000 and $250,000 for the periods ended March 31, 1999 and 1998, respectively. Two of three interest rate swap agreements were closed in the third and fourth quarters of 1998 relating to the refinancing of debt. Interest income for the three months ended March 31, 1999 was $400,000 lower than the comparable period of 1998 primarily reflecting lower overnight investments. Interest expense was $1,000,000 higher chiefly associated with increased borrowings relating to overseas acquisitions and expansion activities. Ogden has one interest rate swap agreement covering a notional amount of $2,800,000 which expires November 30, 2000 and was entered into to convert Ogden's variable rate debt to a fixed rate. Another swap agreement expired December 16, 1998 and was entered into in order to convert Ogden's fixed rate of $100,000,000 9.25% debentures into variable rate debt. Additional interest expense relating to these swap agreements was not significant in the first three months of March 31, 1999 and 1998, respectively. Equity in income of investees and joint ventures for the three months ended March 31, 1999 was $2,900,000 higher than the comparable period of 1998 primarily reflecting the effect of settlements with a customer amounting to $2,400,000 in an Energy joint venture and increased earnings in Aviation joint ventures in Macau and Peru. The effective income tax rate for the first three months of 1999 was 38% compared with 35.5% for the comparable period of 1998. This increase of 2.5% was chiefly associated with higher foreign income in countries with tax rates comparable with the United States and an increase in non-deductible permanent items for U.S. purposes. Capital Investment and Commitments: For the three months ended March 31, 1999, capital investments amounted to $39,100,000, of which $4,200,000, inclusive of restricted funds transferred from funds held in trust, was for Energy facilities and $34,900,000 was for normal replacement and growth in Entertainment ($26,300,000), Aviation ($4,700,000), Energy ($3,200,000), Other ($500,000), and Corporate ($200,000) operations. At March 31, 1999, capital commitments amounted to $265,900,000, which included $206,700,000 for normal replacement, modernization, and growth in Entertainment ($184,600,000), Aviation ($5,700,000), and Energy ($16,400,000) operations. Energy also has a commitment to pay, in 2008, $10,600,000 for a service contract extension at a waste-to-energy facility. Also included was $48,600,000 for Energy's coal-fired power project in the Philippines, a natural gas-fired power plant in Bangladesh, and an investment in a joint venture, reflecting $26,900,000 for the remaining mandatory equity contributions, $5,700,000 for contingent equity contributions, and $16,000,000 for standby letters of credit in support of debt service reserve requirements. Funding for the remaining mandatory equity contributions is being provided through bank credit facilities, which must be repaid in June 2000 through December 2001. The Corporation also has a $21,800,000 contingent equity contribution in Entertainment ($11,400,000) and Aviation ($10,400,000) joint ventures. In addition, compliance with the standards and guidelines under the Clean Air Act Amendments of 1990 may require further Energy capital expenditures of approximately $50,000,000, including amounts that would be required if certain service agreement amendments are finalized, through December 2000 subject to the final time schedules determined by the individual states in which the Corporation's waste-to-energy facilities are located. Ogden and certain of its subsidiaries have issued or are party to performance bonds and guarantees and related contractual obligations undertaken mainly pursuant to agreements to construct and operate certain waste-to-energy, entertainment, and other facilities. In the normal course of business, they are involved in legal proceedings in which damages and other remedies are sought. In connection with certain contractual arrangements, Ogden has agreed to provide a vendor with a specified amount of business over a two-year period. If this amount is not provided the Corporation may be liable for prorated damages of up to approximately $3,000,000. Management does not expect that these contractual obligations, legal proceedings, or any other contingent obligations incurred in the normal course of business will have a material adverse effect on Ogden's Consolidated Financial Statements. During 1994, a subsidiary of Ogden entered into a 30-year facility management contract, pursuant to which it agreed to advance funds to a customer, and if necessary, to assist the customer's refinancing of senior secured debt incurred in connection with the construction of the facility. Ogden is obligated to purchase such senior secured debt in the amount of $97,050,000 on December 23, 2002, if the debt is not refinanced prior to that time. Ogden is also required to repurchase the outstanding amount of certain subordinated secured debt of such customer on December 23, 2002. At March 31, 1999, the amount outstanding was $51,625,000. In addition, on March 31, 1999, the Corporation has guaranteed $3,313,000 of senior secured term debt of an affiliate and principal tenant of this customer and has guaranteed up to $3,300,000 of the tenant's secured revolving debt. In addition, Ogden is obligated to purchase $19,878,000 of the tenant's secured subordinated indebtedness on January 29, 2004, if such indebtedness has not been repaid or refinanced prior to that time. Ogden has guaranteed approximately $6,900,000 of borrowings of joint ventures in which Ogden has an equity interest. Management does not expect that these arrangements will have a material adverse effect on Ogden's Consolidated Financial Statements. Liquidity/Cash Flow: Net cash provided from operating activities was $40,800,000 higher than the comparable period of 1998, primarily reflecting an increase in accounts payable and accrued expenses of $54,400,000 principally associated with an increase in Energy construction and retrofit activity, customer prepayments as well as the timing of payments, partially offset by a decrease of $9,600,000 in the collection of receivables. Net cash used in investing activities increased $24,500,000 primarily reflecting the purchase of operations in the Philippines, Thailand and the Flight Services Group in the United States amounting to $64,200,000, an increase in capital expenditures of $15,000,000 and an increase in other receivables of $11,300,000. These increases were partially offset by the proceeds from the sale of marketable securities of $25,300,000 and an increase in the proceeds from the sale of businesses and other of $15,600,000 and a decrease in net investments in and advances to joint ventures of $24,500,000. Net cash used in financing activities was $50,700,000 higher primarily reflecting an increase of funds held in trust of $37,800,000 in the Energy group, lower proceeds from the exercise of stock options of $7,200,000 and a net decrease of $13,600,000 in debt, partially offset by a decrease in purchases of treasury stock of $6,800,000. Exclusive of changes in Energy facility construction activities and the contracts discussed herein, the Corporation's other types of contracts are not expected to have a material effect on liquidity. Debt service associated with project debt, which is an explicit component of a client community's obligation under its service agreement, is paid as it is billed and collected. Cash required for investing and financing activities is expected to be satisfied from operating activities; available funds, including short-term investments; proceeds from the sale of noncore businesses; proceeds from the sale of debt or equity securities; and the Corporation's unused credit facilities to the extent needed. At March 31, 1999, the Corporation had $150,120,000 in cash and cash equivalents and unused revolving credit lines of $200,000,000. In 1998, Ogden's Board of Directors authorized the purchase of shares of the Corporation's common stock in an amount up to $200,000,000. Through March 31, 1999, 2,223,000 shares of common stock were purchased for $58,891,000. Year 2000 Issues: Background: The term `Year 2000 issue' generally refers to the problems that may occur from the improper processing of date sensitive calculations, date comparisons, and leap year determination by computers and other machinery containing computer chips (i.e. "embedded systems"). In an effort to save expensive memory and processing time, historically most of the world's computer hardware and software used only two digits to identify the year in a date. If not corrected or replaced, many systems will fail to distinguish between the years `2000' and `1900' and will incorrectly process related date information. State of Readiness: Ogden has established a Year 2000 Project that is actively addressing its Year 2000 issues. The project is comprised of four phases: awareness, assessment, action, and anticipation. The awareness phase included the education of Ogden's Board of Directors, management, and staff regarding the Year 2000 issue and Ogden's strategy to address it. The awareness phase of the project is completed. The objective of the project's assessment phase is to inventory and assess the Year 2000 compliance of Ogden's internal information technology and embedded systems, as well as to ascertain the compliance of the products and services provided to Ogden by third parties. Ogden's internal assessment is complete. The assessment of third parties on which Ogden relies for key products and services is considered an iterative process that will continue through the end of 1999. Ogden's action phase includes the prioritization, remediation, and testing of Year 2000 solutions. Ogden is remediating all its mission critical systems, through a series of projects with completion dates between January 1997 and October 1999. The fourth phase of Ogden's Year 2000 Project, the anticipation phase, includes the development and implementation of contingency plans for mission critical business functions. The anticipation phase of the project has begun and is expected to continue throughout 1999. Ogden has made considerable progress towards Year 2000 compliance, as a result of its initiative to improve access to business information through the implementation of common, integrated computing systems across the operations of Ogden. Early in the process, Ogden adopted the strategy of implementing industry standard compliant packages, rather than remediate the code of its legacy systems. The initiative commenced in 1996, with the replacement of Ogden's domestic administrative systems with the PeopleSoft systems and the upgrade of associated infrastructure. The implementations of these Year 2000 compliant systems are completed. Additional efforts to replace or upgrade the international administrative systems and a variety of key operating systems are on schedule for completion. Ogden has not deferred any specific information technology project as a result of the implementation of the Year 2000 Project. Costs: The total cost associated with resolving Ogden's Year 2000 issues is not expected to be material to Ogden's financial condition. Based on assessments and remediation plans, the estimated costs of Ogden's Year 2000 Project are $11,200,000. Ogden has spent approximately $2,500,000 to date. Ogden anticipates the majority of its Year 2000 cost will be incurred during the summer months. Ogden implemented a number of systems (e.g., PeopleSoft) as part of its initiative to improve access to key business information. Those costs of implementing those systems are not included in these estimates. Risks: Ogden believes that the diversity of its business and the implementation of its Year 2000 project will significantly reduce the possibility of interruptions of normal operations. At this point, Ogden believes that its most reasonably likely worst case scenario will result from challenges presented by Year 2000 disruptions experienced by third parties, such as suppliers, customers, utilities, etc. A significant interruption in goods or services provided by such third parties could cause a disruption in normal operations at one or more Ogden facilities. Ogden operates a large number of geographically dispersed sites, has a large supplier base and believes that these factors will mitigate an adverse impact. Ogden does not believe that the Year 2000 issue will have a material adverse effect on Ogden's financial condition. However, there is inherent uncertainty in the Year 2000 problem which may result in an adverse effect on Ogden's operations. At this time, it is not possible to reasonably quantify the business disruption and costs that may be incurred. Ogden will continue to monitor business conditions with the aim of assessing and quantifying material adverse effects, if any, that result or may result from Year 2000 issues. Contingency Plans: Ogden's Year 2000 project strategy includes the development of contingency plans for any mission critical business functions determined to be at risk. While Ogden is not presently aware of any significant exposure, there can be no assurances that all Year 2000 remediation processes will be completed and properly tested before the Year 2000, or that contingency plans will sufficiently mitigate the risk of a Year 2000 compliance problem. Ogden has begun the development of its contingency plans. The contingency planning process is ongoing and will continue through 1999 as Ogden obtains relevant Year 2000 compliance information resulting from its internal remediation and testing efforts, as well as from third parties. Any statements in this communication, including but not limited to the "Year 2000 Issue" discussion, which may be considered to be "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995, are subject to certain risk and uncertainties. The factors that could cause actual results to differ materially from those suggested by any such statements include, but are not limited to, those discussed or identified from time to time in the Corporation's public filings with the Securities and Exchange Commission and more generally, general economic conditions, including changes in interest rates and the performance of the financial markets; changes in domestic and foreign laws, regulations, and taxes; changes in competition and pricing environments; and regional or general changes in asset valuations. PART II - OTHER INFORMATION Item 1. Legal Proceedings Ogden Corporation and its subsidiaries (the "Company") are parties to various legal proceedings involving matters arising in the ordinary course of business. The Company does not believe that there are any pending legal proceedings for damages against the Company, other than ordinary routine litigation incidental to its business, the outcome of which would have a material adverse effect on the Company on a consolidated basis. (a) Environmental Matters The Company conducts regular inquiries of its subsidiaries regarding litigation and environmental violations which include determining the nature, amount and likelihood of liability for any such claims, potential claims or threatened litigation. In the ordinary course of its business, the Company may become involved in Federal, state, and local proceedings relating to the laws regulating the discharge of materials into the environment and the protection of the environment. These include proceedings for the issuance, amendment, or renewal of the licenses and permits pursuant to which a Company subsidiary operates. Such proceedings also include actions brought by individuals or local governmental authorities seeking to overrule governmental decisions on matters relating to the subsidiaries' operations in which the subsidiary may be, but is not necessarily, a party. Most proceedings brought against the Company by governmental authorities or private parties under these laws relate to alleged technical violations of regulations, licenses, or permits pursuant to which a subsidiary operates. The Company believes that such proceedings will not have a material adverse effect on the Company's consolidated financial statements. The Company's operations are subject to various Federal, state and local environmental laws and regulations, including the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and Resource Conservation and Recovery Act (RCRA). Although the Company operations are occasionally subject to proceedings and orders pertaining to emissions into the environment and other environmental violations, the Company believes that it is in substantial compliance with existing environmental laws and regulations. In connection with certain previously divested operations, the Company may be identified, along with other entities, as being among potentially responsible parties responsible for contribution for costs associated with the correction and remediation of environmental conditions at various hazardous waste disposal sites subject to CERCLA. In certain instances the Company may be exposed to joint and several liability for remedial action or damages. The Company's ultimate liability in connection with such environmental claims will depend on many factors, including its volumetric share of waste, the total cost of remediation, the financial viability of other companies that also sent waste to a given site and its contractual arrangement with the purchaser of such operations. II-1 The potential costs related to such matters and the possible impact on future operations are uncertain due in part to the complexity of government laws and regulations and their interpretations, the varying costs and effectiveness of cleanup technologies, the uncertain level of insurance or other types of recovery, and the questionable level of the Company's responsibility. Although the ultimate outcome and expense of environmental remediation is uncertain, the Company believes that required remediation and continuing compliance with environmental laws will not have a material adverse effect on the Company's consolidated financial statements. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 2 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 Corporation sub. and Ogden Projects, Inc., dated as of September 27, 1994.* 3 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 April 8, 1998.* 4 Instruments Defining Rights of Security Holders. 4.1 Fiscal Agency Agreement between Ogden and Bankers Trust Company, dated as of June 1, 1987 and Offering Memorandum dated June 12, 1987, relating to U.S. $85 million Ogden 6% Convertible Subordinated Debentures, Due 2002.* 4.2 Fiscal Agency Agreement between Ogden and Bankers Trust Company, dated as of October 15, 1987, and Offering Memorandum, dated October 15, 1987, relating to U.S. $75 million II-2 Ogden 5-3/4% Convertible Subordinated Debentures, Due 2002.* 4.3 Indenture dated as of March 1, 1992 from Ogden Corporation to The Bank of New York, Trustee, relating to Ogden's $100 million debt offering.* 10 Material Contracts 10.1 (a) U.S. $95 million Term Loan and Letter of Credit and Reimbursement Agreement among Ogden, the Deutsche Bank AG, New York Branch and the signatory Banks thereto, dated March 26, 1997.* (b) Ogden $200 million Credit Agreement by and among Ogden, The Bank of New York, as Agent and the signatory Lenders thereto dated as of June 30, 1997.* 10.2 Rights Agreement between Ogden Corporation and Manufacturers Hanover Trust Company, dated as of September 20, 1990.*. 10.3 Executive Compensation Plans and Agreements. (a) Ogden Corporation 1990 Stock Option Plan.* i. Ogden Corporation 1990 Stock Option Plan as Amended and Restated as of January 19, 1994.* ii. Amendment adopted and effective as of September 18, 1997.* (a) (a) Ogden Corporation 1999 Stock Option Plan. (b) Ogden Services Corporation Executive Pension Plan.* (c) Ogden Services Corporation Select Savings Plan.* i. Ogden Services Corporation Select Savings Plan Amendment and Restatement as of January 1, 1995.* ii. Amendment Number One to the Ogden Services Corporation Select Savings Plan as amended and restated January 1, 1995, effective January 1, 1998.* (d) Ogden Services Corporation Select Savings Plan Trust.* i. Ogden Services Corporation Select Savings Plan II-3 Trust Amendment and Restatement as of January 1, 1995.* (e) Ogden Services Corporation Executive Pension Plan Trust.* (f) Changes effected to the Ogden Profit Sharing Plan effective January 1, 1990.* (g) 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.* (h) Ogden Corporation Core Executive Benefit Program.* (i) Ogden Projects Pension Plan.* (j) Ogden Projects Profit Sharing Plan.* (k) Ogden Projects Supplemental Pension and Profit Sharing Plans.* (l) Ogden Projects Core Executive Benefit Program.* (m) Form of amendments to the Ogden Projects, Inc. Pension Plan and Profit Sharing Plans effective as of January 1, 1994.* i. Form of amended Ogden Projects Profit Sharing Plan effective as of January 1, 1994.* ii. Form of amended Ogden Projects Pension Plan, effective as of January 1, 1994.* (n) Ogden Corporation Amended and Restated CEO Formula Bonus Plan.* (o) Ogden Key Management Incentive Plan.* 10.4 Employment Agreements II-4 (a) Employment Letter Agreement between Ogden Corporation and Lynde H. Coit, Senior Vice President and General Counsel, dated March 1, 1999.* (b) Employment Agreement between R. Richard Ablon, President, Chairman and C.E.O., and Ogden dated as of January 1, 1998.* (c) Separation Agreement between Ogden and Philip G. Husby, Senior Vice President and C.F.O., dated as of September 17, 1998.* (d) Employment Agreement between Ogden Corporation and Ogden's Chief Accounting Officer dated as of December 18, 1991.* (e) Employment Agreement between Scott G. Mackin, Executive Vice President and Ogden Corporation dated as of October 1, 1998. (f) Employment Agreement between Ogden Corporation and David L. Hahn, Senior Vice President - Aviation, dated December 1, 1995.* i. Letter Amendment to Employment Agreement between Ogden Corporation and David L. Hahn, Senior Vice President - Aviation effective as of October 1, 1998.* (g) Employment Agreement between Ogden Corporation and Rodrigo Arboleda, Senior Vice President dated January 1, 1997.* i. Letter Amendment to Employment Agreement between Ogden Corporation and Rodrigo Arboleda, Senior Vice President, effective as of October 1, 1998.* (h) Employment Agreement between Ogden Projects, Inc. and Bruce W. Stone, dated June 1, 1990.* (i) Employment Agreement between Ogden Corporation and Quintin G. Marshall, Senior Vice President - Corporate Development, dated October 30, 1996.* i. Letter Amendment to Employment Agreement between II-5 Ogden Corporation and Quintin G. Marshall, Senior Vice President - Corporate Development, effective as of October 1, 1998.* (j) Employment Agreements between Ogden and Jesus Sainz, Executive Vice President, effective as of January 1, 1998.* i. Letter Amendment to Employment Agreement between Ogden Corporation and Jesus Sainz, Executive Vice President, effective as of October 1, 1998.* (k) Employment Agreement between Alane Baranello, Vice President - Human Resources, and Ogden Services Corporation dated October 28, 1996.* i. Letter Amendment to Employment Agreement between Ogden Corporation and Alane Baranello, Vice President - Human Resources, dated as of October 13, 1998.* (l) Employment Agreement between Peter Allen, Senior Vice President, and Ogden Corporation dated July 1, 1998.* (m) Employment Agreement between Ogden Corporation and Raymond E. Dombrowski, Jr., Senior Vice President and C.F.O., dated as of September 21, 1998.* 10.5 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.* 10.6 Ogden Corporation Guaranty Agreement made as of January 30, 1992 by Ogden Corporation for the benefit of Allstate Insurance Company and Ogden Martin Systems of Huntington Resource Recovery Nine Corp.* 11 Detail of Computation of Earnings applicable to Common Stock. 27 Financial Data Schedule (EDGAR Filing Only). * Incorporated by reference as set forth in the Exhibit Index of this Form 10-Q. (b) Reports on Form 8-K A Form 8-K Current Report was filed on March 12, 1999 and is incorporated herein by reference. II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized. OGDEN CORPORATION (Registrant) Date: May 14, 1999 By /s/ Raymond E. Dombrowski, Jr. --------------------------------- Raymond E. Dombrowski, Jr. Senior Vice President and Chief Financial Officer Date: May 14, 1999 By: /s/ Robert M. DiGia --------------------------------- Robert M. DiGia Vice President, Controller and Chief Accounting Officer II-7 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 By-Laws as amended. Filed as Exhibit 3.2 to Ogden's Form 10-Q for the quarterly period ended March 31, 1998 and incorporated herein by reference. 4 Instruments Defining Rights of Security Holders.
1
EXHIBIT NO. DESCRIPTION OF DOCUMENT FILING INFORMATION - ------- ----------------------- ------------------ 4.1 Fiscal Agency Agreement between Filed as Exhibits (C)(3) and Ogden and Bankers Trust Company, (C)(4) to Ogden's Form 8-K dated as of June 1, 1987 and filed with the Securities and Offering Memorandum dated June Exchange Commission on July 7, 12, 1987, relating to U.S. 1987 and incorporated herein $85 million Ogden 6% Convertible by reference. Subordinated Debentures, Due 2002. 4.2 Fiscal Agency Agreement between Filed as Exhibit (4)to Ogden's Ogden and Bankers Trust Company, Form S-3 Registration Statement dated as of October 15, 1987, filed with the Securities and and Offering Memorandum, dated Exchange Commission on December October 15, 1987, relating to 4, 1987, Registration No. U.S. $75 million Ogden 5-3/4% 33-18875, and incorporated Convertible Subordinated herein by reference. Debentures, Due 2002. 4.3 Indenture dated as of March 1, Filed as Exhibit (4)(C) to 1992 from Ogden Corporation to Ogden's Form 10-K for fiscal The Bank of New York, Trustee, year ended December 31, 1991, relating to Ogden's $100 million and incorporated herein by debt offering. reference. 10 Material Contracts 10.1(a) U.S. $95 million Term Loan and Letter Filed as Exhibit 10.6 to Ogden's of Credit and Reimbursement Agreement Form 10-Q for the quarterly period among Ogden, the Deutsche Bank AG, ended March 31, 1997 and New York Branch and the signatory incorporated herein by reference. Banks thereto, dated March 26, 1997. 10.1(b) $200 million Credit Agreement among Filed as Exhibit 10.1(i) to Ogden's Ogden, The Bank of New York as Agent Form 10-Q for the quarterly period and the signatory Lenders thereto, dated ended June 30, 1997 and as of June 30, 1997. incorporated herein by reference. 10.2 Rights Agreement between Ogden Filed as Exhibit (10)(h) to Ogden's Corporation and Manufacturers Hanover Form 10-K for the fiscal year ended Trust Company, dated as of September 20, December 31, 1990 and incorporated 1990 and amended August 15, 1995 to herein by reference. provide The Bank of New York as successor agent.
2 10.3 Executive Compensation Plans. (a) Ogden Corporation 1990 Stock Filed as Exhibit (10)(j) to Ogden Option Plan. Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. i. Ogden Corporation 1990 Filed as Exhibit 10.6(b)(i) to Ogden's Stock Option Plan as Amended Form 10-Q for the quarterly period ended and Restated as of January September 30, 1994 and incorporated 19, 1994. herein by reference. ii. Amendment adopted and Filed as Exhibit 10.7(a)(ii) to Ogden's effective as of Form 10-K for fiscal period ended September 18, 1997. December 31, 1997 and incorporated herein by reference. (a) (a) Ogden Corporation 1999 Transmitted herewith as Exhibit Stock Option Plan. 10.3(a)(a). (b) Ogden Services Corporation Filed as Exhibit (10)(k) to Ogden's Executive Pension Plan. Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. (c) Ogden Services Corporation Filed as Exhibit (10)(l) to Ogden Select Savings Plan. Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. (i) Ogden Services Corporation Filed as Exhibit 10.7(d)(I) to Ogden's Select Savings Plan Form 10-K for the fiscal year ended Amendment and Restatement December 31, 1994 and incorporated as of January 1, 1995. herein by reference. (ii) Amendment Number One to Filed as Exhibit 10.7(c)(ii) to Ogden's the Ogden Services Form 10-K for the fiscal year ended December 31, 1997 and incorporated herein by reference.
3 Corporation Select Savings Plan as Amended and Restated January 1, 1995, effective January 1, 1998. (d) Ogden Services Corporation Filed as Exhibit (10)(m) to Ogden's Select Savings Plan Trust. Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. i. Ogden Services Corporation Filed as Exhibit 10.7(e)(i) to Ogden's Select Savings Plan Trust Form 10-K for the fiscal year ended Amendment and Restatement December 31, 1994 and incorporated as of January 1, 1995. herein by reference. (e) Ogden Services Corporation Filed as Exhibit (10)(n) to Ogden's Executive Pension Plan Trust. Form 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. (f) Changes effected to the Ogden Filed as Exhibit (10)(o) to Ogden's Profit Sharing Plan Form 10-K for the fiscal year ended effective January 1, 1990. December 31, 1990 and incorporated herein by reference. (g) Ogden Corporation Profit Filed as Exhibit 10.8(p) to Ogden's Sharing Plan. Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (i) Ogden Profit Sharing Plan Filed as Exhibit 10.8(p)(i) to Ogden's as amended and restated Form 10-K for fiscal year ended January 1, 1991 and as December 31, 1993 and incorporated in effect through herein by reference. January 1, 1993. (ii) Ogden Profit Sharing Plan Filed as Exhibit 10.7(p)(ii) to Ogden's as amended and restated Form 10-K for fiscal year ended effective as of December 31, 1994 and incorporated January 1, 1995. herein by reference.
4 (h) Ogden Corporation Core Filed as Exhibit 10.8(q) to Ogden's Executive Benefit Program. Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (i) Ogden Projects Pension Plan. Filed as Exhibit 10.8(r) to Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (j) Ogden Projects Profit Sharing Plan. Filed as Exhibit 10.8(s) to Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (k) Ogden Projects Supplemental Filed as Exhibit 10.8(t) to Ogden's Pension and Profit Sharing Form 10-K for fiscal year ended Plans. December 31, 1992 and incorporated herein by reference. (l) Ogden Projects Core Executive Filed as Exhibit 10.8(v) to Ogden's Benefit Program. Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (m) Form of amendments to the Ogden Filed as Exhibit 10.8(w) to Ogden's Projects, Inc. Pension Plan Form 10-K for fiscal year ended and Profit Sharing Plans December 31, 1993 and incorporated effective as of January 1, 1994. herein by reference. (i) Form of amended Ogden Filed as Exhibit 10.7(w)(i) to Projects Profit Sharing Plan Ogden's Form 10-K for fiscal year effective as of ended December 31, 1994 and January 1, 1994. incorporated herein by reference. (ii) Form of amended Ogden Filed as Exhibit 10.7(w)(ii) to Projects Pension Plan, Ogden's Form 10-K for fiscal year effective as of ended December 31, 1994 and January 1, 1994. incorporated herein by reference. (n) Ogden Corporation Amended Filed as Exhibit 10.3(n) to Ogden's and Restated CEO Formula Form 10-K for the fiscal year ended Bonus Plan. December 31, 1998 and incorporated herein by reference.
5 (o) Ogden Key Management Filed as Exhibit 10.7(p) to Ogden's Incentive Plan. Form 10-K for the fiscal year ended December 31, 1997 and incorporated herein by reference. 10.4 Employment Agreements (a) Employment Letter Agreement Filed as Exhibit 10.4(a) to Ogden's between Ogden Corporation and Form 10-K for the fiscal year ended Lynde H. Coit, Senior Vice December 31, 1998 and incorporated President and General Counsel herein by reference. dated March 1, 1999. (b) Employment Agreement between Filed as Exhibit 10.3(h) to Ogden's R. Richard Ablon and Ogden Form 10-Q for the quarterly period dated as of January 1, 1998. ended June 30, 1998 and incorporated herein by reference. (c) Separation Agreement between Filed as Exhibit 10.8(c) to Ogden's Ogden Corporation and Philip Form 10-Q for the quarterly period G. Husby, Senior Vice ended September 30, 1998 and President and C.F.O., dated as incorporated herein by reference. of September 17, 1998. (d) Employment Agreement between Filed as Exhibit 10.2(q) to Ogden's Ogden Corporation and Ogden's Form 10-K for fiscal year ended Chief Accounting Officer dated December 31, 1991 and incorporated as of December 18, 1991. herein by reference. (e) Employment Agreement between Filed as Exhibit 10.8(e) to Ogden's Scott G. Mackin, Executive Form 10-Q for the quarter ended Vice President, and Ogden September 30, 1998 and incorporated Corporation dated as of herein by reference. October 1, 1998. (f) Employment Agreement Filed as Exhibit 10.8(i) to Ogden's between Ogden Corporation Form 10-K for fiscal year ended and David L. Hahn, Senior Vice December 31, 1995 and incorporated President - Aviation, dated herein by reference. December 1, 1995. i. Letter Amendment to Transmitted herewith as Exhibit
6 Employment Agreement 10.8(f)(i) to Ogden's Form 10-Q for between Ogden Corporation the quarterly period ended and David L. Hahn, effective September 30, 1998 and as of October 1, 1998. incorporated herein by reference. (g) Employment Agreement between Filed as Exhibit 10.8(j) to Ogden's Ogden Corporation and Rodrigo Form 10-K for fiscal year ended Arboleda, Senior Vice December 31, 1996 and incorporated President dated January 1, herein by reference. 1997. i. Letter Amendment to Filed as Exhibit 10.8(g)(i) to Ogden's Employment Agreement Form 10-Q for the quarterly period ended between Ogden Corporation September 30, 1998 and incorporated and Rodrigo Arboleda, herein by reference. Senior Vice President, effective as of October 1, 1998. (h) Employment Agreement between Filed as Exhibit 10.8(k) to Ogden's Ogden Projects, Inc. and Bruce Form 10-K for fiscal year ended W. Stone, dated June 1, 1990. December 31, 1996 and incorporated herein by reference. (i) Employment Agreement between Filed as Exhibit 10.8(l) to Ogden's Ogden Corporation and Quintin Form 10-K for fiscal year ended G. Marshall, Senior Vice December 31, 1996 and incorporated President dated October 30, herein by reference. 1996. i. Letter Amendment to Employment Filed as Exhibit 10.8(i)(i) to Ogden's Agreement between Ogden Form 10-Q for the quarter ended Corporation and Quintin G. September 30, 1998 and incorporated Marshall, Senior Vice herein by reference. President - Corporate Development effective as of October 1, 1998. (j) Employment Agreements Filed as Exhibit 10.8(m) to Ogden's between Ogden and Jesus Sainz, Form 10-K for the fiscal year ended Executive Vice President, December 31, 1997 and incorporated effective as of January 1, 1998. herein by reference. i. Letter Amendment to Filed as Exhibit 10.8(j)(i) to Ogden's Employment Agreement Form 10-Q for the quarter ended
7 between Ogden Corporation September 30, 1998 and incorporated and Jesus Sainz, Executive herein by reference. Vice President, effective as of October 1, 1998. (k) Employment Agreement between Filed as Exhibit 10.3(m) to Ogden's Alane Baranello, Vice Form 10-Q for the quarterly period ended President Human Resources and June 30, 1998 and incorporated herein Ogden Services Corporation by reference. dated October 28, 1996. i. Letter Amendment to Employmen Filed as Exhibit 10.8(k)(i) to Ogden's Agreement between Ogden From 10-Q for the quarter ended Corporation and Alane September 30, 1998 and incorporated Baranello, Vice President - herein by reference. Human Resources, dated as of October 13, 1998. (l) Employment Agreement between Filed herewith as Exhibit 10.3(M)(1) Peter Allen, Senior Vice to Ogden's Form 10-Q for the quarterly President, and Ogden ended June 30, 1998 incorporated Corporation dated July 1, herein by reference. 1998. (m) Employment Agreement between Filed as Exhibit 10.4(m) to Ogden's Ogden Corporation and Raymond Form 10-Q for the quarter ended E. Dombrowski, Jr., Senior September 30, 1998 and incorporated Vice President and C.F.O., herein by reference. dated as of September 21, 1998. 10.5 First Amended and Restated Ogden Filed as Exhibit 10.3(b)(i) to Ogden's Corporation Guaranty Agreement made Form 10-K for fiscal year ended as of January 30, 1992 by Ogden December 31, 1991 and incorporated Corporation for the benefit of Mission herein by reference. Funding Zeta and Pitney Bowes Credit. 10.6 Ogden Corporation Guaranty Filed as Exhibit 10.3(b)(iii) to Ogden's Agreement made as of January 30, 1992 Form 10-K for fiscal year ended by Ogden Corporation for the benefit of December 31, 1991 and incorporated Allstate Insurance Company and Ogden herein by reference. Martin Systems of Huntington Resource Recovery Nine Corp.
8 11 Ogden Corporation and Subsidiaries Transmitted herewith as Exhibit 11. Detail of Computation of Earnings Applicable to Common Stock. 27 Financial Data Schedule. Transmitted herewith as Exhibit 27.
9 EX-10.3(A)(A) 2 1999 STOCK OPTION PLAN OGDEN CORPORATION 1999 STOCK OPTION PLAN (Effective May 20, 1999) 1. Purpose. The purposes of this Ogden Corporation 1999 Stock Option Plan (the "Plan") are to induce certain individuals to remain in the employ of, or to continue to serve as directors of, Ogden Corporation (the "Company") and its present and future subsidiary corporations (each a "Subsidiary"), as defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the "Code"), to attract new individuals to enter into such employment and service and to encourage such individuals to secure or increase on reasonable terms their stock ownership in the Company. The Board of Directors of the Company (the "Board") believes that the granting of stock options and other awards (the "Awards") under the Plan will promote continuity of management and increased incentive and personal interest in the welfare of the Company and aid in securing its continued growth and financial success. 2. Shares Subject to Plan. The maximum number of shares of the common stock, par value $.50 per share (the "Common Stock"), of the Company that may be delivered to participants ("Participants") and their beneficiaries under the Plan shall be 4,000,000. For purposes of this Section 2, the number of shares that may be delivered under the Plan shall be determined after giving effect to the use by a Participant of the right, if granted, to cause the Company to withhold from the shares of Common Stock otherwise deliverable to him or her upon the exercise of stock options shares of Common Stock in payment of all or a portion of his or her withholding obligation arising from such exercise (i.e., only the number of shares issued net of the shares tendered shall be deemed delivered for purposes of determining the maximum number of shares available for delivery under the Plan). If any Awards expire or terminate for any reason without having been exercised in full, new Awards may thereafter be granted with respect to the unpurchased shares subject to such expired or terminated Awards. 3. Administration. (A) The Plan shall be administered by a committee (the "Committee") which shall consist of three or more members of the Board. The Committee shall be appointed annually by the Board, which may at any time and from time to time remove any members of the Committee, with or without cause, appoint additional members to the Committee and fill vacancies, however caused, in the Committee. In the event that no Committee shall have been appointed, the Plan shall be administered by the Board. A majority of the members of the Committee shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members present at a meeting duly called and held except that the Committee may delegate to any one of its members the authority of the Committee with respect to the grant of Awards to an employee who shall not be an officer and/or director of the Company and who is not, and may not reasonably be expected to become, a "covered employee" within the meaning of section 162(m)(3) of the Code. Any decision or determination of the Committee reduced to writing and signed by all of the members of the Committee (or by a member of the Committee to whom authority has been delegated) shall be fully as effective as if it had been made at a meeting duly called and held. (B) The Committee's powers and authority shall include, but not be limited to (i) selecting individuals for participation who are employees of the Company and any subsidiary of the Company and members of the Board; (ii) determining the types and terms and conditions of all awards granted, including performance and other earnout and/or vesting contingencies; (iii) permitting transferability of awards to third parties; (iv) interpreting the Plan's provisions; and (v) administering the Plan in a manner that is consistent with its purpose. The Committee's determination on the matters referred to in this Section 3(B) shall be conclusive. Any dispute or disagreement which may arise under or as a result of or with respect to any Award shall be determined by the Committee, in its sole discretion, and any interpretations by the Committee of the terms of any Award shall be final, binding and conclusive. 4. Types of Awards. An Award may be granted singularly, in combination with another Award(s) or in tandem whereby exercise or vesting of one Award held by a Participant cancels another award held by the Participant. Subject to Section 6 hereof, an Award may be granted as an alternative to or replacement of an existing Award under the Plan or under any other compensation plans or arrangements of the Company, including the plan of any entity acquired by the Company. The types of Awards that may be granted under the Plan include: (A) A stock option, which represents a right to purchase a specified number of shares of Common Stock during a specified period at a price per share which is no less than that required by Section 6 hereof. Options will be either (a) "incentive stock options" (which term, when used herein, shall have the meaning ascribed thereto by the provisions of section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code")) or (b) options which are not incentive stock options ("non-qualified stock options"), as determined at the time of the grant thereof by the Committee. (B) A stock appreciation right, which is a right to receive a payment in cash, shares of Common Stock or a combination, equal to the excess of the aggregate market price at time of exercise of a specified number of shares of Common Stock over the aggregate exercise price of the stock appreciation rights being exercised. (C) A cash award, which is a right denominated in cash or cash units to receive a cash payment, based on the attainment of pre-established performance goals and such other conditions, restrictions and contingencies as the Committee shall determine. The performance goals that may be used by the Committee for such awards shall consist of cash generation targets, profits, revenue and market share targets, profitability targets as measured by return ratios and shareholder returns. The Committee may designate a single goal criterion or multiple goal criteria for performance measure purposes with the measurement based on absolute Company or business unit performance and/or on performance as compared with that of other publicly traded companies. (D) The Committee may provide a loan to any Participant in an amount determined by the Committee to enable the Participant to pay (i) any federal, state or local income taxes arising out of the exercise of an Award or (ii) the exercise price with respect to any Award or (iii) to purchase shares of Common Stock on the open market. Any such loan (i) shall be for such term and at such rate of interest as the Committee may determine, (ii) shall be evidenced by a promissory note in a form determined by the Committee and executed by the Participant and (iii) shall be subject so such other terms and conditions as the Committee may determine. 5. Eligibility. An Award may be granted only to (i) employees of the Company or a Subsidiary, (ii) directors of the Company who are not employees of the Company or a Subsidiary and (iii) employees of a corporation which has been acquired by the Company or a Subsidiary, whether by way of exchange or purchase of stock, purchase of assets, merger or reverse merger, or otherwise, who hold options with respect to the stock of such corporation which the Company has agreed to assume. 6. Stock Option Prices and Fair Market Value. (A) Except as otherwise provided in Section 14 hereof, the initial per share option price of any stock option shall not be less than the fair market value of a share of Common Stock on the date of grant; provided, however, that, in the case of a Participant who owns (within the meaning of section 424(d) of the Code) more than 10% of the total combined voting power of the Common Stock at the time a stock option which is an incentive stock option is granted to him or her, the initial per share option price shall not be less than 110% of the fair market value of a share of Common Stock on the date of grant. (B) For all purposes of this Plan, the fair market value of a share of Common Stock on any date shall be (i) the average of the high and low sales prices on such day of a share of Common Stock as reported on the principal securities exchange on which shares of Common Stock are then listed or admitted to trading or (ii) if not so reported, the average of the closing bid and ask prices on such date as reported on the National Association of Securities Dealers Automated Quotation System or (iii) if not so reported, as furnished by any member of the National Association of Securities Dealers, Inc. selected by the Committee. In the event that the price of a share of Common Stock shall not be so reported, the Fair Market Value of a share of Common Stock shall be determined by a qualified appraiser selected by the Committee. 7. Option Term. Options shall be granted for such term as the Committee shall determine, not in excess of ten years from the date of the granting thereof; provided, however, that, except as otherwise provided in Section 14 hereof, in the case of a Participant who owns (within the meaning of section 424(d) of the Code) more than 10% of the total combined voting power of the Common Stock at the time an Option which is an incentive stock option is granted to him or her, the term with respect to such Option shall not be in excess of five years from the date of the granting thereof. 8. Limitation on Amount of Awards Granted. (A) Except as otherwise provided in Section 14 hereof, the aggregate fair market value of the shares of Common Stock for which any Participant may be granted incentive stock options which are exercisable for the first time in any calendar year (whether under the terms of the Plan or any other stock option plan of the Company) shall not exceed $100,000. (B) No Participant shall be granted stock options and/or stock appreciation rights during any calendar year to purchase more than an aggregate of 500,000 shares of Common Stock. (C) Subject to Section 8(D), the following additional maximums are imposed under the Plan. The maximum number of shares of Common Stock that may be covered by stock options intended to be incentive stock options shall be 4,000,000. The maximum payment that may be made for awards granted to any one individual pursuant to Section 4(C) hereof shall be $3,000,000 for any single or combined performance goals established for a specified performance period. A specified performance period for purposes of this performance goal payment limit shall not exceed a sixty (60) consecutive month period. (D) Subject to the overall limitation on the number of shares of Common Stock that may be delivered under the Plan, the Committee may use available shares of Common Stock as the form of payment for compensation, grants or rights earned or due under any other compensation plans or arrangements of the Company, including the plan of any entity acquired by the Company. 9. Adjustment of Number of Shares. (A) In the event that a dividend shall be declared upon the Common Stock payable in shares of Common Stock, the number of shares of Common Stock then subject to any Award, the number of shares of Common Stock available for purchase or delivery under the Plan but not yet covered by an Award shall be adjusted by adding to each share the number of shares which would be distributable thereon if such shares had been outstanding on the date fixed for determining the stockholders entitled to receive such stock dividend. In the event that the outstanding shares of Common Stock shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation, whether through reorganization, recapitalization, stock split-up, combination of shares, sale of assets, merger or consolidation in which the Company is the surviving corporation, then, there shall be substituted for each share of Common Stock then subject to any Award, for each share of Common Stock which may be issued under the Plan but not yet covered by an Award, for each share of Common Stock which may be purchased upon the exercise of stock options granted under the Plan but not yet covered by a stock option and for each share of Common Stock referred to in Section 8B, the number and kind of shares of stock or other securities into which each outstanding share of Common Stock shall be so changed or for which each such share shall be exchanged. (B) In the event that there shall be any change, other than as specified in Section 9(A) hereof, in the number or kind of outstanding shares of Common Stock, or of any stock or other securities into which the Common Stock shall have been changed, or for which it shall have been exchanged, then, if the Committee shall, in its sole discretion, determine that such change equitably requires an adjustment in the number or kind of shares then subject to any Award and the number or kind of shares available for issuance in accordance with the provisions of the Plan but not yet covered by an Award, such adjustment shall be made by the Committee and shall be effective and binding for all purposes of the Plan and of each Award. (C) In the case of any substitution or adjustment in accordance with the provisions of this Section 9, the option price in each stock option for each share covered thereby prior to such substitution or adjustment shall be the option price for all shares of stock or other securities which shall have been substituted for such share or to which such share shall have been adjusted in accordance with the provisions of this Section 9. (D) No adjustment or substitution provided for in this Section 9 shall require the Company to issue a fractional share under any Award or to sell a fractional share under any stock option. (E) In the event of the dissolution or liquidation of the Company, or a merger, reorganization or consolidation in which the Company is not the surviving corporation, the Board, in its discretion, may accelerate the payment of any Award, the exercisability of each Award and/or terminate the same within a reasonable time thereafter. (F) (i) Notwithstanding the foregoing provisions of this Section 9, in the event of a Change in Control, each Award shall become fully vested and exercisable. (ii) As used herein, "Change in Control" shall mean: (I) any Person (as such term is defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the "beneficial owner" (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company's then outstanding securities, other than beneficial ownership by a Participant, the Company, any employee benefit plan of the Company or any person or entity organized, appointed or established, pursuant to the terms of any such benefit plan; (II) the Company's stockholders approve an agreement to merge or consolidate the Company with another corporation, or an agreement providing for the sale of substantially all of the assets of the Company to one or more corporations, in any case other than with or to a corporation 50% or more of which is controlled by, or is under common control with, the Company; or (III) during any two-year period, individuals who at the date on which the period commences constitute a majority of the Board cease to constitute a majority of thereof for any reason; provided, however, that a director who was not a director at the beginning of such period shall be deemed to have satisfied the two-year requirement if such director was elected by, or on the recommendation of, at least two-thirds of the directors who were directors at the beginning of such period (either actually or by prior operation of this provision), other than any director who is so approved in connection with any actual or threatened contest for election to positions on the Board. 10. Purchase for Investment, Waivers and Withholding. (A) Unless the delivery of shares under any Award shall be registered under the Securities Act of 1933, such Participant shall, as a condition of the Company's obligation to deliver such shares, be required to represent to the Company in writing that he or she is acquiring such shares for his or her own account as an investment and not with a view to, or for sale in connection with, the distribution of any thereof. (B) In the event of the death of a Participant, an additional condition of exercising any Award shall be the delivery to the Company of such tax waivers and other documents as the Committee shall determine. (C) An additional condition of exercising any non-incentive stock option shall be the entry by the Participant into such arrangements with the Company with respect to withholding as the Committee shall determine. 11. No Stockholder Status; No Restrictions on Corporate Acts; No Employment Right. (A) Neither any Participant nor his or her legal representatives, legatees or distributees shall be or be deemed to be the holder of any share of Common Stock covered by an Award unless and until a certificate for such share has been issued. Upon payment of the purchase price therefor, a share issued upon exercise of an Award shall be fully paid and non-assessable. (B) Neither the existence of the Plan nor any Award shall in any way affect the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding whether of a similar character or otherwise. (C) Neither the existence of the Plan nor the grant of any Award shall require the Company or any Subsidiary to continue any Participant in the employ or service of the Company or such Subsidiary. 12. Termination and Amendment of the Plan. The Board may at any time terminate the Plan or make such modifications of the Plan as it shall deem advisable; provided, however, that the Board may not, without further approval of the holders of the shares of Common Stock, increase the number of shares of Common Stock as to which Awards may be granted under the Plan (as adjusted in accordance with the provisions of Section 9 hereof), or change the class of persons eligible to participate in the Plan, or change the manner of determining stock option prices. Except as otherwise provided in Section 14 hereof, no termination or amendment of the Plan may, without the consent of the Participant to whom any Award shall theretofore have been granted, adversely affect the rights of such Participant under such Award. 13. Expiration and Termination of the Plan. The Plan shall terminate on May 19, 2009 or at such earlier time as the Board may determine; provided, however, that the Plan shall terminate as of its effective date in the event that it shall not be approved by the stockholders of the Company at its 1999 Annual Meeting of Stockholders. Awards may be granted under the Plan at any time and from time to time prior to its termination. Any Award outstanding under the Plan at the time of the termination of the Plan shall remain in effect until such Award shall have been exercised or shall have expired in accordance with its terms. 14. Stock Options Granted in Connection With Acquisitions. In the event that the Committee determines that, in connection with the acquisition by the Company or a Subsidiary of another corporation which will become a Subsidiary or division of the Company (such corporation being hereafter referred to as an "Acquired Subsidiary"), stock options may be granted hereunder to employees and other personnel of an Acquired Subsidiary in exchange for then outstanding stock options to purchase securities of the Acquired Subsidiary. Such stock options may be granted at such option prices, may be exercisable immediately or at any time or times either in whole or in part, and may contain such other provisions not inconsistent with the Plan, or the requirements set forth in Section 12 hereof that certain amendments to the Plan be approved by the stockholders of the Company, as the Committee, in its discretion, shall deem appropriate at the time of the granting of such stock options. EX-11 3 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 OGDEN CORPORATION AND SUBSIDIARIES DETAIL OF COMPUTATION OF EARNINGS APPLICABLE TO COMMON STOCK
FOR THE THREE MONTHS ENDED MARCH 31, ---------------------------------------------------------------------------------- 1999 1998 ---------------------------------------------------------------------------------- Income Shares Per-Share Income Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ----------- ------------- ------ ----------- ------------- ------ (In Thousands, Except for Share Amounts) Income before cumulative effect of change in accounting principle $10,521 $11,700 Less: preferred stock dividend 35 37 ------- ------- Basic Earnings Per Share 10,486 48,960 $0.21 11,663 50,361 $0.23 ----- ----- Effect of Dilutive Securities: Stock options 494 1,222 Convertible preferred stock 35 251 37 263 6% convertible debentures (A) (A) 5 3/4% convertible debentures (A) (A) ------- ------ ------- ------ Diluted Earnings per Share $10,521 49,705 $0.21 $11,700 51,846 $0.23 ------- ------ ----- ------- ------ -----
(A) Antidulitive
FOR THE THREE MONTHS ENDED MARCH 31, ---------------------------------------------------------------------------------- 1999 1998 ---------------------------------------------------------------------------------- Income Shares Per-Share Income Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ----------- ------------- ------ ----------- ------------- ------ (In Thousands, Except for Share Amounts) Net income $ 6,701 $11,700 Less: preferred stock dividend 35 37 ------- ------- Basic Earnings Per Share 6,666 48,960 $0.14 11,663 50,361 $0.23 ----- ----- Effect of Dilutive Securities: Stock options 494 1,222 Convertible preferred stock 35 251 37 263 6% convertible debentures (A) (A) 5 3/4% convertible debentures (A) (A) ------- ------ ------- ------ Diluted Earnings per Share $ 6,701 49,705 $0.14 $11,700 51,846 $0.23 ------- ------ ----- ------- ------ -----
(A) Antidulitive Note: Earnings per common share was computed by dividing net income, reduced by preferred stock dividend requirements, by the weighted average of the number of shares of common stock outstanding during each period. Diluted earnings per common share was computed on the assumption that all convertible debentures, convertible preferred stock, and stock options converted or exercised during each period or outstanding at the end of each period were converted at the beginning of each period or the date of issuance or grant, if dilutive. This computation provides for the elimination of related convertible debenture interest and preferred dividends. EX-27 4 ART. 5 FDS FOR YEAR 1999 10-K
5 1,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 150,120 19,331 416,109 30,348 30,099 847,094 2,803,897 666,365 4,059,495 611,915 2,041,659 0 42 24,530 512,455 4,059,495 82,939 396,546 71,817 273,974 0 319 9,584 20,120 7,646 10,521 0 0 (3,820) 6,701 0.14 0.14
-----END PRIVACY-ENHANCED MESSAGE-----