-----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, LzQTEPS3E4cQvd6Gi7Z+21ESem2euCQ6GOEn0V5a/CHqUhhv5zRuSJ3Sn9/CWuJF Cw/UBdR5iF2r3v8adjWxsA== 0001047469-98-041127.txt : 19981118 0001047469-98-041127.hdr.sgml : 19981118 ACCESSION NUMBER: 0001047469-98-041127 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 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: 98751203 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 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 September 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------- ------------------- Commission file number 1-3122 ------------------- Ogden Corporation ------------------- (Exact name of registrant as specified in its charter) Delaware 13-5549268 - ------------------------------- -------------------------------- (State or other jurisdiction of I.R.S. Employer Identification incorporation or organization) Number) Two Pennsylvania Plaza, New York, New York 10121 ---------------------------------------------------- (Address or principal executive office) (Zip Code) (212)-868-6100 ---------------------------------------------------- (Registrant's telephone number including area code) Not Applicable ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares outstanding of each of the issuer's classes of common stock, as of September 30, 1998; 49,219,307 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
FOR THE NINE MONTHS FOR THE THREE MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, 1998 1997 1998 1997 ----------- ----------- ----------- ----------- (In Thousands of Dollars, Except per Share Data) Service revenues ............ $ 839,654 $ 860,507 $ 292,399 $ 286,213 Net sales ................... 402,604 454,069 142,884 169,309 Construction revenues ....... 10,963 5,830 Net gain on disposition of businesses .................. 45,222 26,969 7,055 ----------- ----------- ----------- ----------- Total revenues ........... 1,298,443 1,341,545 441,113 462,577 ----------- ----------- ----------- ----------- Operating costs and expenses 647,032 644,315 217,440 203,369 Costs of goods sold ......... 363,760 432,123 120,177 164,052 Construction costs .......... 9,764 5,118 Selling, administrative and general expenses ............ 84,293 83,708 24,844 26,072 Debt service charges ........ 77,390 75,762 26,949 25,219 ----------- ----------- ----------- ----------- Total costs and expenses . 1,182,239 1,235,908 394,528 418,712 ----------- ----------- ----------- ----------- Consolidated operating income 116,204 105,637 46,585 43,865 Equity in net income of investees and joint ventures 8,183 1,791 4,136 834 Interest income ............. 12,316 16,852 5,270 6,218 Interest expense ............ (25,018) (26,936) (8,123) (9,410) Other income (deductions)-net 127 (453) (45) (47) ----------- ----------- ----------- ----------- Income before income taxes and minority interests ...... 111,812 96,891 47,823 41,460 Income taxes ................ (42,488) (40,210) (18,172) (16,375) Minority interests .......... (2,409) (1,290) (1,496) (480) ----------- ----------- ----------- ----------- Net income .................. $ 66,915 $ 55,391 $ 28,155 $ 24,605 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- BASIC EARNINGS PER SHARE .... $ 1.33 $ 1.11 $ .57 $ .49 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- DILUTED EARNINGS PER SHARE .. $ 1.30 $ 1.09 $ .55 $ .48 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, 1998 1997 ----------- ----------- (In Thousands of Dollars, Except Per Share Amounts) ASSETS Current Assets: Cash and cash equivalents ..................... $ 353,669 $ 185,671 Restricted funds held in trust ................ 118,673 103,882 Receivables (less allowances: 1998, $33,893 and 1997, $20,207) .................... 380,302 393,185 Inventories ................................... 32,958 34,235 Deferred income taxes ......................... 56,491 56,690 Other ......................................... 55,816 58,408 ----------- ----------- Total current assets ........................ 997,909 832,071 Property, plant and equipment-net ............. 1,979,565 1,947,547 Restricted funds held in trust ................ 222,712 206,013 Unbilled service and other receivables (less allowances: 1997, $3,000) ............... 174,227 174,962 Unamortized contract acquisition costs ........ 138,174 136,462 Goodwill and other intangible assets .......... 113,355 79,889 Other assets .................................. 348,388 262,351 ----------- ----------- Total Assets .................................. $ 3,974,330 $ 3,639,295 ----------- ----------- ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Current Liabilities: Notes payable ................................. $ 24,374 Current portion of long-term debt ............. 33,517 $ 19,696 Current portion of project debt ............... 61,368 68,052 Dividends payable ............................. 15,415 15,721 Accounts payable .............................. 103,005 109,719 Federal and foreign income taxes payable ...... 23,755 1,913 Accrued expenses, etc ......................... 311,118 267,874 Deferred income ............................... 48,229 42,962 ----------- ----------- Total current liabilities ................... 620,781 525,937 Long-term debt ................................ 389,766 354,032 Project debt .................................. 1,407,192 1,424,648 Deferred income taxes ......................... 379,129 383,341 Deferred income ............................... 204,263 20,313 Other liabilities ............................. 249,263 187,866 Minority interests ............................ 25,406 28,417 Convertible subordinated debentures ........... 148,650 148,650 ----------- ----------- Total Liabilities ........................... 3,424,450 3,073,204 ----------- ----------- Shareholders' Equity: Serial cumulative convertible preferred stock, par value $1.00 per share; authorized 4,000,000 shares; shares outstanding: 42,684 in 1998 and 44,346 in 1997; net of treasury shares of 29,820 in 1998 and 1997, respectively ............................ 43 45 Common stock, par value $.50 per share; authorized, 80,000,000 shares; shares outstanding: 49,219,307 in 1998 and 50,295,123 in 1997, net of treasury shares of 4,232,543 and 3,135,123 in 1998 and 1997, respectively ................... 24,609 25,147 Capital surplus ............................... 178,039 212,383 Earned surplus ................................ 363,308 343,237 Cumulative translation adjustment-net ......... (15,154) (13,862) Pension liability adjustment .................. (324) (324) Net unrealized loss on securities available for sale ............................ (641) (535) ----------- ----------- Total Shareholders' Equity .................... 549,880 566,091 ----------- ----------- Total Liabilities and Shareholders' Equity .... $ 3,974,330 $ 3,639,295 ----------- ----------- ----------- -----------
OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Nine Months Ended Year Ended September 30, 1998 December 31, 1997 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 ........ 74,166 $ 75 77,509 $ 78 Shares converted into common stock .... (1,662) (2) (3,343) (3) ---------- ----------- ---------- ---------- Total ................................. 72,504 73 74,166 75 Treasury shares ....................... (29,820) (30) (29,820) (30) ---------- ----------- ---------- ---------- Balance at end of period (aggregate involuntary liquidation value - 1998 $863,000).............................. 42,684 43 44,346 45 ---------- ----------- ---------- ---------- Common Stock, Par Value $.50 Per Share; Authorized, 80,000,000 Shares: Balance at beginning of period ........ 53,430,246 26,715 53,350,650 26,675 Exercise of stock options ............. 11,680 6 59,640 30 Conversion of preferred shares ........ 9,924 5 19,956 10 ---------- ----------- ---------- ---------- Total ................................. 53,451,850 26,726 53,430,246 26,715 ---------- ----------- ---------- ---------- Treasury shares at beginning of period 3,135,123 1,568 3,606,123 1,803 Purchase of treasury shares ........... 1,824,100 912 Exercise of stock options ............. (726,680) (363) (471,000) (235) ---------- ----------- ---------- ---------- Treasury shares at end of period ...... 4,232,543 2,117 3,135,123 1,568 ---------- ----------- ---------- ---------- Balance at end of period .............. 49,219,307 24,609 50,295,123 25,147 ---------- ----------- ---------- ---------- Capital Surplus: Balance at beginning of period ........ 212,383 202,162 Exercise of stock options ............. 13,663 10,228 Purchase of treasury shares ........... (48,004) Conversion of preferred shares ........ (3) (7) ----------- ---------- Balance at end of period .............. 178,039 212,383 ----------- ---------- Earned Surplus: Balance at beginning of period ........ 343,237 330,302 Net income ............................ 66,915 75,673 ----------- ---------- Total ................................. 410,152 405,975 ----------- ---------- Preferred dividends-per share 1998, $2.5128, 1997, $3.35 .................. 109 152 Common dividends-per share 1998, $.9375 1997, $1.25 .......................... 46,735 62,586 ----------- ---------- Total dividends ....................... 46,844 62,738 ----------- ---------- Balance at end of period ............ 363,308 343,237 ----------- ---------- Cumulative Translation Adjustment-Net . (15,154) (13,862) ----------- ---------- Pension Liability Adjustment .......... (324) (324) ----------- ---------- Net Unrealized Loss on Securities Available For Sale ................... (641) (535) ----------- ---------- TOTAL SHAREHOLDERS' EQUITY ............ $ 549,880 $ 566,091 ----------- ----------
OGDEN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30 --------------------------- 1998 1997 --------- --------- (In Thousands of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income ..................................... $ 66,915 $ 55,391 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization .................. 84,533 79,825 Deferred income taxes .......................... 17,862 17,704 Other .......................................... (36,751) (18,776) Management of Operating Assets and Liabilities: Decrease (increase) in Assets: Receivables .................................... 852 100,385 Inventories .................................... 238 9,923 Other assets ................................... (27,172) (1,733) Increase (Decrease) in Liabilities: Accounts payable ............................... (16,876) 14,862 Accrued expenses ............................... 265 (54,417) Deferred income ................................ 196,272 (1,193) Other liabilities .............................. 19,087 (14,425) --------- --------- Net cash provided by operating activities ...... 305,225 187,546 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Entities purchased, net of cash acquired ....... (20,516) (20,000) Proceeds from sale of businesses ............... 79,857 57,680 Proceeds from sale of property, plant and equipment ................................. 1,029 4,137 Investments in Energy facilities ............... (15,991) (21,550) Other capital expenditures ..................... (81,527) (52,967) Decrease (increase) in other receivables ....... 5,124 (99,815) Distributions from investees and joint ventures 6,058 43,975 Increase in investment in investees and joint ventures ...................................... (45,127) (39,522) --------- --------- Net cash used in investing activities .......... (71,093) (128,062) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings for Energy facilities ............... 267,303 Other new debt ................................. 62,789 140,564 Increase in funds held in trust ................ 5,397 (20,014) Payment of debt ................................ (315,302) (77,528) Dividends paid ................................. (47,150) (46,880) Purchase of treasury shares .................... (48,916) Proceeds from exercise of stock options ........ 14,032 7,869 Other .......................................... (4,287) (4,085) --------- --------- Net cash used in financing activities .......... (66,134) (74) --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS ...... 167,998 59,410 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 185,671 140,824 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ..... $ 353,669 $ 200,234 --------- --------- --------- ---------
OGDEN CORPORATION AND SUBSIDIARIES SEPTEMBER 30, 1998 ITEM 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. However, in the opinion of management, all adjustments consisting of normal recurring accruals necessary for a fair presentation of the operating results have been included in the statements. The accompanying financial statements for prior periods have been reclassified as to certain amounts to conform with the 1998 presentation. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Revenues and income from operations (expressed in thousands of dollars) by segment for the nine months and the three months ended September 30, 1998 and 1997 were as follows: Operations:
Nine Months Ended Three Months Ended September 30 September 30 ------------------------------- ------------------------------- Information Concerning Business Segments 1998 1997 1998 1997 ----------- ----------- ----------- ----------- (In Thousands of Dollars) Revenues: Entertainment ...................... $ 385,507 $ 329,775 $ 167,475 $ 144,801 Aviation ........................... 254,496 288,503 55,993 93,955 Energy ............................. 585,228 516,725 195,775 174,916 Other .............................. 73,212 206,542 21,870 48,905 ----------- ----------- ----------- ----------- Total Revenues ..................... $ 1,298,443 $ 1,341,545 $ 441,113 $ 462,577 ----------- ----------- ----------- ----------- Income (Loss) from Operations: Entertainment ...................... $ 28,840 $ 24,592 $ 14,024 $ 14,106 Aviation ........................... 47,106 26,013 9,613 9,464 Energy ............................. 69,323 70,067 30,726 29,575 Other .............................. (1,820) 584 (1,114) (4,323) ----------- ----------- ----------- ----------- Total Income from Operations ....... 143,449 121,256 53,249 48,822 Equity in net income (loss) of investees and joint ventures: Entertainment ...................... (1,280) (1,285) 1,156 (390) Aviation ........................... (1,015) 2,301 1,249 782 Energy ............................. 10,478 642 1,731 442 Other .............................. 133 ----------- ----------- ----------- ----------- Total .............................. 151,632 123,047 57,385 49,656 Corporate unallocated expenses - net (27,118) (16,072) (6,709) (5,004) Corporate interest - net ........... (12,702) (10,084) (2,853) (3,192) ----------- ----------- ----------- ----------- Income Before Income Taxes and Minority Interest ............. $ 111,812 $ 96,891 $ 47,823 $ 41,460 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
OPERATIONS: Revenues for the first nine months of 1998 were $43,100,000 lower than the comparable period of 1997. This was due primarily to a decline of $133,300,000 in the Other segment chiefly associated with the sales of Facility Services New York Operations in July 1997 and certain operations of Atlantic Design Company (ADC), a contract manufacturing business in late 1997 and early 1998. The Entertainment segment's revenues were $55,700,000 higher primarily reflecting increased activity at certain sports venues, South America operations, the partial start-up of Entertainment sites in Arizona, Texas and Florida, and the acquisition of the Enchanted Castle in late 1997. The Aviation segment's revenues were $34,000,000 lower primarily reflecting the sale of the domestic catering operations in the second quarter of 1998, the sale of the Spanish inflight catering business and certain ground services operations in 1997, and a contract change in a ground service operation. These decreases in aviation segment's revenues were partially offset by the gain on the sale of a 5% interest in the Hong Kong ground service company. The Energy segment's revenues were $68,500,000 higher primarily due to an increase in Independent Power operations including the results of the acquisition in late 1997 of both Pacific Energy and a 60% interest in four cogeneration plants in China and increased production at the Edison Bataan facility; the buy-out of a Waste-to-Energy power purchase contract; an increase in Environmental consulting and engineering activity and increased construction revenues associated with retrofit activity at several facilities. Consolidated operating income for the first nine months of 1998 was $10,600,000 higher than the comparable period of 1997. The Entertainment segment's income from operations was $4,300,000 higher primarily reflecting increased activity at the World Trade Center, South America operations and certain sports venues, the partial start up of Entertainment sites in Arizona, Texas and Florida. These increases in Entertainment's income from operations were partially offset by start up expenses at the Tinseltown operations and lower results at our Florida Theme Park due to a decline in tourism in 1998. The Aviation segment's income from operations was $21,100,000 higher primarily reflecting the gain on the sale of the domestic inflight catering operations in June 1998, and the sale of a 5% interest in the Hong Kong ground services company. These increases in Aviation's income from operations in 1998 were offset in part by reduced European operations including a provision for restructuring operations and certain legal claims in 1998, and in part by the sale in 1997 of the Miami and Spanish inflight catering business and certain ground services operations. The Energy segment's income from operations was $800,000 lower primarily reflecting an increase in Waste-to-Energy operations chiefly associated with income from a contract termination agreement, the gain on the buy-out of a power purchase contract and increased activity at two facilities partially offset by the amortization of the prepayment of a power purchase agreement, decreased operating results at a facility due to a service agreement adjustment, increased maintenance costs at several facilities and legal settlements; Independent Power income from operations was higher primarily associated with the acquisitions in late 1997 of a 60% interest in four cogeneration plants in China, and Pacific Energy and increased activity at the Edison Bataan facility, partially offset by increased development costs and costs related to geothermal operations. These increases were more than offset by a decrease in construction income reflecting the settlement in 1997 of a contract dispute and a decrease in the Environmental income from operations chiefly associated with the write off of uncollectible notes receivable, the settlement of a contract. The Other segment's loss from operations was $2,400,000 lower chiefly associated with the sale of a business and an investment in Universal Ogden in 1997. Corporate unallocted expenses - net for the nine months ended September 30, 1998 increased $11,000,000 over the comparable period of 1997. This increase was primarily due to restructuring costs, settlement of certain litigations and proxy related charges. Equity in net income of investees and joint ventures for the nine months ended September 30, 1998 was $6,400,000 higher than the comparable period of 1997 chiefly associated with the results of Pacific Energy joint ventures which included the buy-out of an energy sales agreement with respect to a 50% joint venture, acquired in September 1997, and increased activity at several Entertainment and Aviation joint ventures. These increases were partially offset by start-up costs of the Bogota, Colombia operations as well as low activity in Entertainment's Spanish theme park joint venture. The Energy segment had three interest rate swap agreements entered into as hedges against interest rate exposure on three series of adjustable rate project debt that resulted in additional debt service costs of $847,000 and $328,000 for the first nine months of 1998 and 1997, respectively. Interest income for the first nine months of 1998 was $4,500,000 lower than the comparable period of 1997 primarily reflecting the repayment of debt by customers. Interest expense was $1,900,000 lower chiefly associated with reduced borrowings and payments on outstanding debt, partially offset by increased interest on notes issued in connection with the acquisition of Pacific Energy in September 1997. Ogden has two interest rate swap agreements covering notional amounts of $100,000,000 and $3,900,000, respectively. The first swap agreement expires on December 16, 1998 and was entered into in order to convert Ogden's fixed rate $100,000,000 9.25% debentures into variable rate debt. The second swap agreement expires on November 30, 2000 and was entered into in order to convert Ogden's $3,900,000 variable rate debt to a fixed rate. These agreements resulted in additional interest expense of $194,000 and $133,000 for the first nine months of 1998 and 1997, respectively. The effective income tax rate for the first nine months of 1998 was 38% compared with 42% for the comparable period of 1997. This decrease of 4% was chiefly associated with higher foreign earnings in countries with lower income tax rates, and non-conventional fuel tax credits generated by Pacific Energy. Revenues for the three months ended September 30, 1998 were $21,500,000 lower than the comparable period of 1997. The Entertainment segment's revenues were $22,700,000 higher reflecting increased customer activity at sport venues and amphitheaters and an increase in South American operations. The Aviation segment's revenues were $38,000,000 lower primarily reflecting the sale of the domestic inflight catering operations in June 1998. The Other segment's revenues decreased $27,000,000 chiefly associated with the previous sale of certain operations of ADC and Facility Services New York operations. The Energy segment's revenues increased $20,900,000 primarily due to Independent Power operations including the results of the acquisitions in late 1997 of both Pacific Energy and a 60% interest in four cogeneration plants in China and increased production of the Edison Bataan facility and increased construction activity. Consolidated operating income for the three months ended September 30, 1998 was $2,700,000 higher than the comparable period of 1997. The Entertainment segment's income from operations was comparable with the prior period primarily reflecting increased activity at several sports venues and amphitheaters and in South American operations. These increases were offset by increased development and overhead expenses, reduced activity at a Florida Theme Park location and the gain on the cancellation of a contract in 1997. The Aviation segment's income from operations was comparable with the prior period primarily reflecting decreases due to the sale of the domestic catering business in the second quarter of 1998 and the settlement of an insurance claim in 1997. These decreases were offset by management fees in 1998 relating to the sale of the catering operations. The Energy segment's income from operations was $1,200,000 higher primarily due to an increase in Independent Power operations primarily reflecting companies acquired in 1997. This increase was partially offset by reduced income relating to the amortization of a power purchase agreement prepayment and increased maintenance costs at several facilities partially offset by a payment on a contract termination; and lower construction income. The Other segment's loss from operations decreased $3,200,000 chiefly associated with the previous sale of ADC businesses. Unallocated corporate expenses for the three months ended September 30, 1998 were $1,700,000 higher than the comparable period of 1997 primarily due to severance costs. Equity in net income of investees and joint ventures for the three months ended September 30, 1998 was $3,300,000 higher than the comparable period of 1997 primarily reflecting an increase in Entertainment's Metropolitan Entertainment joint venture, Energy's Pacific Energy joint ventures, and increased activity in several Aviation joint ventures. At September 30, 1998, the Energy segment had three interest rate swap agreements which resulted in additional debt service expense of $492,000 and $101,000 for the three months ended September 30, 1998 and 1997, respectively. Interest income for the three months ended September 30, 1998 was $900,000 lower than the comparable period of 1997, chiefly associated with the repayment of debt by customers partially offset by higher average cash and cash equivalents. Interest expense was $1,300,000 lower chiefly associated with reduced borrowings. Ogden has two interest rate swap agreements which resulted in additional interest expense of $4,000 and $56,000 for the three months ended September 30, 1998 and 1997, respectively. The effective income tax rate for the three months ended September 30, 1998 was 38% compared with 40% for the comparable period of 1997. This decrease of 2% primarily reflects higher foreign earnings in countries with lower tax rates and non-conventional fuel tax credits. Capital Investments and Commitments: During the first nine months of 1998, capital investments amounted to $97,500,000, of which $16,000,000, inclusive of restricted funds transferred from funds held in trust, was for Energy facilities and $81,500,000 was for normal replacement and growth in Entertainment ($44,800,000), Aviation ($27,600,000), Energy ($7,900,000) and Other ($1,200,000) operations. At September 30, 1998, capital commitments amounted to $100,300,000 which included $62,400,000 for normal replacement, modernization and growth in Entertainment ($49,600,000), Aviation ($2,900,000) and Energy ($9,700,000) and Corporate ($200,000) operations. Also included was $37,900,000 for Energy's coal-fired power project in The Philippines reflecting $18,500,000 for the remaining mandatory equity contribution, $5,700,000 for contingent equity contributions, and $13,700,000 for a standby letter of credit in support of debt service reserve requirements. Funding for the remaining mandatory equity contribution is being provided through a bank credit facility, which must be repaid in December 2001. The Corporation also has a $21,000,000 equity commitment in an Aviation investment in Argentina and a $11,400,000 contingent equity commitment in an entertainment joint venture. In addition, compliance with standards and guidelines under the Clean Air Act Amendments of 1990 will require further Energy capital expenditures estimated at $25,000,000 by December 2000 subject to the final time schedules determined by the individual states in which the Company's waste-to-energy facilities are located. Ogden and certain of its subsidiaries have issued or are party to performance bonds and guarantees and related contractual obligations undertaken mainly pursuant to agreements to construct and operate certain waste-to-energy, entertainment, and other facilities. In the normal course of business, they are involved in legal proceedings in which damages and other remedies are sought. In connection with certain contractual arrangements, Ogden has agreed to provide a vendor with specified amounts of business over a three year period. If these amounts are not provided, the corporation may be liable for prorated damages of up to approximately $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 customers' refinancing of senior secured debt incurred in connection with the construction of the facility. During 1997, Ogden purchased the customer's senior secured debt in the amount of $95,000,000, using borrowed funds, which senior secured debt was subsequently sold and the borrowed funds repaid. Ogden is obligated to repurchase such senior secured debt in the amount of $97,050,000 on December 30, 2002, if the debt is not refinanced prior to that time. Ogden's repurchase obligation is collateralized by bank letters of credit. Ogden is also required to repurchase the outstanding amount of certain subordinated secured debt of such customer on December 30, 2002. At September 30, 1998, the amount outstanding was $51,625,000. In addition, the Corporation has guaranteed indebtedness of $19,333,000 of an affiliate and principal tenant of this customers, which indebtedness is due in November 1998 and is in the process of being refinanced by the customer. Ogden also has guaranteed borrowings of a customer amounting to approximately $12,990,000 as well as $12,748,000 of borrowings of a joint venture 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 $117,700,000 higher than the comparable period of 1997 primarily reflecting an increase of $197,500,000 chiefly associated with the prepayment of a power purchase agreement for the Haverhill waste-to-energy plant partially offset by the collection in 1997 of $41,700,000 relating to certain legal settlements; as well as the collection of receivables relating to businesses sold. Net cash used in investing activities decreased $57,000,000 primarily reflecting a net decrease in loans to customers of $104,900,000, and increased proceeds from the sale of businesses of $22,100,000. These decreases in net cash used in investing activities were partially offset by increased capital expenditures of $23,000,000 primarily in the Entertainment and Aviation segments, and increased net investments in joint ventures of $43,500,000. Net cash used in financing activities was $66,100,000 higher chiefly associated with a net reduction of $48,200,000 of debt and $48,900,000 for the purchase of treasury shares. These increases of net cash used in financing activities were partially offset by an increase of $25,400,000 of funds held in trust and $6,200,000 increase in proceeds from the exercise of stock options. At September 30, 1998, the Corporation has $353,700,000 in cash and cash equivalents and unused revolving credit lines of $200,000,000. In 1998, Ogden's Board of Directors increased the authorization to purchase shares of the Corporation's common stock up to a total of $200,000,000. From January 1 through November 5, 1998, 1,899,100 shares of common stock were purchased for $50,900,000. 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 - The Company 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 the Company's board of directors, management, and staff regarding the Year 2000 issue and the Company's strategy to address the problem. 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 the Company's internal information technology and embedded systems, as well as to ascertain the compliance of the products and services provided to the Company by third parties. The Company's internal assessment is largely completed. The assessment of third-parties that the Company relies on for key services and products is in progress. The assessment phase is expected to be completed by the end of the first quarter of 1999, which is slightly behind the original schedule. The Company's action phase includes the prioritization, remediation, and testing of Year 2000 solutions. The Company has begun the remediation of all its mission critical systems, through a series of projects with completion dates between January 1997 and October 1999. Additional corrective efforts will be initiated as assessments are finalized and the related issues prioritized. The fourth phase of the Company's Year 2000 Project, the anticipation phase, includes the development and implementation of contingency plans for key business functions that are in jeopardy of not being thoroughly tested or Year 2000 compliant on a timely basis. The anticipation phase of the project is scheduled to commence in the first quarter of 1999 and is expected to continue throughout 1999. The Company has made considerable progress towards Year 2000 compliance, as a result of the Company's initiative to improve access to business information through the implementation of common, integrated computing systems across the operations of the Company. This initiative commenced in 1996, with the replacement of the Company's domestic administrative systems with PeopleSoft systems and the upgrade of associated infrastructure. The implementations of these Year 2000 compliant systems are 70% completed, with all expected to be achieved by the first Quarter of 1999. Additionally, efforts are in progress to replace or upgrade the international administrative systems and a variety of key operating systems. The Company 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 the Company's Year 2000 issues is not expected to be material to the Company's financial condition. Based on the assessments completed to date, the estimated costs of the Company's Year 2000 Project are $10,000,000. The estimated cost will be refined upon completion of the Company's remaining Year 2000 systems' assessments. The Company is implementing or upgrading a number of systems (e.g., PeopleSoft), as part of its initiative to improve the Company's access to key business information. The costs of implementing those systems are not included in these estimates. Risks - The Company 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. The Company believes by the end of the first quarter of 1999, it will be able to fully determine its most reasonably likely worst case scenarios. Based on the assessment efforts to date, the Company does not believe that the Year 2000 issue will have a material adverse effect on its financial condition . However, failing to resolve Year 2000 issues on a timely basis could have a material adverse effect on the Company's operations, although it is not possible at this time to quantify the amount of business that may be lost or the costs that may be incurred. Contingency Plans - The Company's Year 2000 project strategy includes the development of contingency plans for any business functions determined to be at risk of being unable to remediate or properly test Year 2000 issues on a timely basis. While the Company is not presently aware of any significant exposure that its systems will not be properly remediated on a timely basis, 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. The Company expects to develop and implement contingency plans starting in the first quarter of 1999. The Company's contingency planning process is an ongoing one which will continue through 1999 as the Company 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 Plan of Acquisition, Reorganization Arrangement, Liquidation or Succession. 2.1 Agreement and Plan of Merger, dated as of October 31, 1989, among Ogden, ERCI Acquisition Corporation and ERC International, Inc.* 2.2 Agreement and Plan of Merger among Ogden Corporation, ERC International Inc., ERC Acquisition Corporation and ERC Environmental and Energy Services Co., Inc. dated as of January 17, 1991.* 2.3 Amended and Restated Agreement and Plan of Merger among Ogden Corporation, OPI Acquisition Corporation sub. and Ogden Projects, Inc., dated as of September 27, 1994.* 3 Articles of Incorporation and By-Laws. 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.* 10.6 Rights Agreement between Ogden Corporation and Manufacturers Hanover Trust Company, dated as of September 20, 1990.*. 10.7 Executive Compensation Plans and Agreements. (a) Ogden Corporation 1990 Stock Option Plan.* i. Ogden Corporation 1990 Stock Option Plan as Amended and Restated as of January 19, 1994.* ii. Amendment adopted and effective as of September 18, 1997.* (b) Ogden Services Corporation Executive Pension Plan.* (c) Ogden Services Corporation Select Savings Plan.* i. Ogden Services Corporation Select Savings Plan Amendment and Restatement as of January 1, 1995.* ii. Amendment Number One to the Ogden Services Corporation Select Savings Plan as amended and restated January 1, 1995, effective January 1, 1998.* (d) Ogden Services Corporation Select Savings Plan Trust.* i. Ogden Services Corporation Select Savings Plan Trust Amendment and Restatement as of January 1, 1995.* II-3 (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 CEO Formula Bonus Plan.* (o) Ogden Key Management Incentive Plan.* 10.8 Employment Agreements (a) Employment Letter Agreement between Ogden Corporation and Lynde H. Coit, Senior Vice President and General Counsel, dated January 30, 1990.* II-4 (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 Ogden Corporation and Quintin G. Marshall, Senior Vice President--Corporate Development, effective as of October 1, 1998. II-5 (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. 10.9 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.* 10.10 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 There were no Form 8-K Current Reports filed during the Third Quarter of 1998. 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: November 16, 1998 By /s/ Raymond E. Dombrowski, Jr. ------------------------------- Raymond E. Dombrowski, Jr. Senior Vice President and Chief Financial Officer Date: November 16, 1998 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.
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. 10.6 Rights Agreement between Ogden Filed as Exhibit (10)(h) to Ogden's Corporation and Manufacturers Hanover Form 10-K for the fiscal year ended Trust Company, dated as of September December 31, 1990 and incorporated 20, 1990 and amended August 15, 1995 herein by reference. to provide The Bank of New York as successor agent.
10.7 Executive Compensation Plans. (a) Ogden Corporation 1990 Stock Filed as Exhibit (10)(j) to Ogden Form Option Plan. 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. i. Ogden Corporation Filed as Exhibit 10.6(b)(i) to Ogden's 1990 Stock Form 10-Q for the quarterly period ended Option Plan as September 30, 1994 and incorporated herein Amended and by reference. Restated as of January 19, 1994. ii. Amendment adopted Filed as Exhibit 10.7(a)(ii) to Ogden's and effective as of Form 10-K for fiscal period ended December September 18, 1997. 31, 1997 and incorporated herein by reference. (b) Ogden Services Corporation Filed as Exhibit (10)(k) to Ogden's Form Executive Pension Plan. 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 Form Select Savings Plan. 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. (i) Ogden Services Filed as Exhibit 10.7(d)(I) to Ogden's Corporation Form 10-K for the fiscal year ended Select Savings December 31, 1994 and incorporated herein Plan Amendment by reference. and Restatement as of January 1, 1995. (ii) Amendment Number Filed as Exhibit 10.7(c)(ii) to Ogden's One to the Ogden Form 10-K for the fiscal year ended Services Corporation December 31, 1997 and incorporated herein Select Savings by reference. Plan as Amended and Restated
January 1, 1995, effective January 1, 1998. (d) Ogden Services Corporation Filed as Exhibit (10)(m) to Ogden's Form Select Savings Plan Trust. 10-K for the fiscal year ended December 31, 1990 and incorporated herein by reference. i. Ogden Services Filed as Exhibit 10.7(e)(i) to Ogden's Corporation Select Form 10-K for the fiscal year ended Savings Plan Trust December 31, 1994 and incorporated herein Amendment and by reference. Restatement as of January 1, 1995. (e) Ogden Services Corporation Filed as Exhibit (10)(n) to Ogden's Form Executive Pension Plan Trust. 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 Form Profit Sharing Plan effective 10-K for the fiscal year ended December January 1, 1990. 31, 1990 and incorporated herein by reference. (g) Ogden Corporation Profit Filed as Exhibit 10.8(p) to Ogden's Form Sharing Plan. 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (i) Ogden Profit Sharing Filed as Exhibit 10.8(p)(i) to Ogden's Plan as amended and Form 10-K for fiscal year ended December restated January 1, 31, 1993 and incorporated herein by 1991 and as in reference. effect through January 1, 1993. (ii) Ogden Profit Sharing Filed as Exhibit 10.7(p)(ii) to Ogden's Plan as amended and Form 10-K for fiscal year ended December restated effective as 31, 1994 and incorporated herein by of January 1, 1995. reference. (h) Ogden Corporation Core Filed as Exhibit 10.8(q) to Ogden's Form Executive Benefit Program. 10-K for fiscal year ended December 31, 1992 and incorporated
herein by reference. (i) Ogden Projects Pension Plan. Filed as Exhibit 10.8(r) to Ogden's Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (j) Ogden Projects Profit Sharing Filed as Exhibit 10.8(s) to Ogden's Plan. Form 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (k) Ogden Projects Supplemental Filed as Exhibit 10.8(t) to Ogden's Form Pension and Profit Sharing 10-K for fiscal year ended December 31, Plans. 1992 and incorporated herein by reference. (l) Ogden Projects Core Executive Filed as Exhibit 10.8(v) to Ogden's Form Benefit Program. 10-K for fiscal year ended December 31, 1992 and incorporated herein by reference. (m) Form of amendments to the Filed as Exhibit 10.8(w) to Ogden's Form Ogden Projects, Inc. Pension 10-K for fiscal year ended December 31, Plan and Profit Sharing Plans 1993 and incorporated herein by reference. effective as of January 1, 1994. (i) Form of amended Filed as Exhibit 10.7(w)(i) to Ogden's Ogden Projects Form 10-K for fiscal year ended December Profit Sharing Plan 31, 1994 and incorporated herein by effective as of reference. January 1, 1994. (ii) Form of amended Filed as Exhibit 10.7(w)(ii) to Ogden's Ogden Projects Form 10-K for fiscal year ended December Pension Plan, 31, 1994 and incorporated herein by effective as of reference. January 1, 1994. (n) Ogden Corporation CEO Formula Filed as Exhibit 10.6(w) to Ogden's Form Bonus Plan. 10-Q for the quarterly period ended September 30, 1994 and incorporated herein by reference. (o) Ogden Key Management Filed as Exhibit 10.7(p) to Ogden's Form Incentive Plan. 10-K for the fiscal year ended December 31, 1997 and incorporated herein by reference.
10.8 Employment Agreements (a) Employment Letter Agreement Filed as Exhibit (10)(p) to Ogden's Form between Ogden Corporation 10-K for the fiscal year ended December and Lynde H. Coit, Senior Vice 31, 1990 and incorporated herein by President and General Counsel reference. dated January 30, 1990. (b) Employment Agreement between Filed as Exhibit 10.3(h) to Ogden's Form 10-Q R. Richard Ablon and Ogden for the quarterly period ended June 30, dated as of January 1, 1998. 1998 and incorporated herein by reference. (c) Separation Agreement between Transmitted herewith as Exhibit 10.8(c). Ogden Corporation and Philip G. Husby, Senior Vice President and C.F.O., dated as of September 17, 1998. (d) Employment Agreement between Filed as Exhibit 10.2(q) to Ogden's Form 10-K Ogden Corporation and Ogden's for fiscal year ended December 31, Chief Accounting Officer 1991 and incorporated herein by reference. dated as of December 18, 1991. (e) Employment Agreement between Transmitted herewith as Exhibit 10.8(e). Scott G. Mackin, Executive Vice President, and Ogden Corporation dated as of October 1, 1998. (f) Employment Agreement Filed as Exhibit 10.8(i) to Ogden's Form between Ogden Corporation 10-K for fiscal year ended December 31, and David L. Hahn, Senior 1995 and incorporated herein by reference. Vice President - Aviation, dated December 1, 1995. i. Letter Amendment to Transmitted herewith as Exhibit 10.8(f)(i). Employment Agreement between Ogden Corporation and David L. Hahn, effective as of October 1, 1998.
(g) Employment Agreement between Filed as Exhibit 10.8(j) to Ogden's Form Ogden Corporation and Rodrigo 10-K for fiscal year ended December 31, Arboleda, Senior Vice 1996 and incorporated herein by reference. President dated January 1, 1997. i. Letter Amendment to Transmitted herewith as Exhibit 10.8(g)(i). Employment Agreement between Ogden Corporation and Rodrigo Arboleda, Senior Vice President, effective as of October 1, 1998. (h) Employment Agreement between Filed as Exhibit 10.8(k) to Ogden's Form 10-K Ogden Projects, Inc. and for fiscal year ended December 31, Bruce W. Stone, dated June 1, 1996 and incorporated herein by reference. 1990. (i) Employment Agreement between Filed as Exhibit 10.8(l) to Ogden's Form Ogden Corporation and Quintin 10-K for fiscal year ended December 31, G. Marshall, Senior Vice 1996 and incorporated herein by reference. President dated October 30, 1996. i. Letter Amendment to Transmitted herewith as Exhibit 10.8(i)(i). Employment Agreement between Ogden Corporation and Quintin G. Marshall, Senior Vice President - Corporate Development effective as of October 1, 1998. (j) Employment Agreements between Filed as Exhibit 10.8(m) to Ogden's Form Ogden and Jesus Sainz, 10-K for the fiscal year ended December Executive Vice President, 31, 1997 and incorporated herein by effective as of January 1, reference. 1998. i. Letter Amendment to Transmitted herewith as Exhibit 10.8(j)(i). Employment Agreement between Ogden Corporation and Jesus Sainz, Executive Vice President, effective as of October 1, 1998.
(k) Employment Agreement between Filed as Exhibit 10.3(m) to Ogden's Form Alane Baranello, Vice 10-Q for the quarterly period ended June President - Human Resources 30, 1998 and incorporated herein by and Ogden Services reference. Corporation dated October 28, 1996. i. Letter Amendment to Transmitted herewith as Exhibit 10.8(k)(i). Employment Agreement between Ogden Corporation and Alane Baranello, Vice President - Human Resources, dated as of October 13, 1998. (l) Employment Agreement between Filed herewith as Exhibit 10.3(M)(1) to Peter Allen, Senior Vice Ogden's Form 10-Q for the quarterly ended President, and Ogden June 30, 1998 incorporated herein by Corporation dated July 1, reference. 1998. (m) Employment Agreement Transmitted herewith as Exhibit 10.8(M). between Ogden Corporation and Raymond E. Dombrowski, Jr., Senior Vice President and C.F.O., dated as of September 21, 1998. 10.9 First Amended and Restated Ogden Filed as Exhibit 10.3(b)(i) to Ogden's Corporation Guaranty Agreement made as Form 10-K for fiscal year ended December of January 30, 1992 by Ogden 31, 1991 and incorporated herein by Corporation for the benefit of Mission reference. Funding Zeta and Pitney Bowes Credit. 10.10 Ogden Corporation Guaranty Agreement Filed as Exhibit 10.3(b)(iii) to Ogden's made as of January 30,1992 by Ogden Form 10-K for fiscal year ended December Corporation for the benefit of 31, 1991 and incorporated herein by Allstate Insurance Company and Ogden reference. Martin Systems of Huntington Resource Recovery Nine Corp. 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.
EX-10.8(C) 2 EXHIBIT 10.8(C) Exhibit 10.8(c) SEPARATION AGREEMENT OGDEN CORPORATION (the "Company"), and PHILIP G. HUSBY (the "Executive") agree to enter into this SEPARATION AGREEMENT dated as of the 17th day of September, 1998 as follows: 1. Resignation from Offices and Directorships. Executive hereby tenders, and the Company accepts, his resignation from all his positions as an officer of the Company and of any of the Company's direct or indirect subsidiaries or affiliates, as a director of any of the Company's direct or indirect subsidiaries or affiliates, and as member of any of the Company's committees, effective as of September 17, 1998 (the "Resignation Date"). Executive agrees that his employment with the Company and the Company's direct or indirect subsidiaries or affiliates will terminate as of the Resignation Date. 2. Cooperation. During the period from the Resignation Date until December 31, 1998, Executive agrees to make himself reasonably available to assist his successor and cooperate with the Company in effecting a smooth transition of the management with respect to the duties and responsibilities which Executive performed for the Company and its direct and indirect subsidiaries and affiliates. Such assistance is to be rendered at the mutual convenience of the parties. Notwithstanding the foregoing, the Company expressly acknowledges and agrees that nothing contained in this Agreement or any other agreement between the parties shall restrict Executive from seeking, obtaining or commencing employment with another company as of the Resignation Date. 3. Termination of Employment Agreement. The parties agree that the Employment Agreement between Executive and the Company dated July 2, 1990 (the "Employment Agreement") will terminate as of the date of this Agreement, and shall be null and void and of no further force and effect and neither party shall have any further obligation to the other pursuant to the Employment Agreement, except as otherwise specifically provided in this Separation Agreement. Executive relinquishes and forever waives any and all rights in or claims that he now has or may have under the Employment Agreement. Executive represents that with the termination of the Employment Agreement he has no other present or future contract or agreement of employment with the Company, whether written or oral, express or implied. 4. Separation Benefits. In consideration for Executive's execution of this Separation Agreement and compliance with the terms and conditions contained herein, the Company shall provide Executive with the benefits described below: (a) Compensation and Benefits Through December 31,1998. During the period beginning on the Resignation Date and ending on December 31, 1998, the Company shall continue to provide Executive with compensation and benefits at the same level as was in effect immediately prior to the date of this Agreement, provided that (i) Executive will not be entitled to receive any bonus payment for fiscal year 1998 and (ii) Executive will not be eligible for any cash distributions under the profit sharing plan. During such period, Executive also will continue to be entitled to use Company-provided business equipment and devices, including, but not limited to, e-mail, voicemail, computer equipment, and facsimile machines. In addition, Executive will continue to be entitled to use the company-provided telephone credit card until the end of such period and VTS travel services, provided that costs, unless for travel on behalf of the Company, will be paid by Executive. (b) Salary Continuation. The Company shall pay Executive an amount equal to his base salary at the rate of $312,000.00 per year which would have been payable to him during the period beginning on January 1, 1999 and ending on June 30, 2002. Payments will be made at the same time and in the same manner as such base salary would have been paid if Executive had remained employed until June 30, 2002, unless Executive elects to accelerate the remaining payments in accordance with Section 4(k) below. (c) Additional Payments. The Company shall pay Executive the gross amount of $822,500.00, reduced by federal, state and local withholding taxes. The amount payable under this Section 4(c) is calculated as 3.5 times $235,000.00, which amount is equal to the annual incentive bonus paid in 1998 to Executive for fiscal year 1997. Such gross amount shall be payable in four installments as follows unless Executive elects to accelerate the remaining payments in accordance with Section 4(k) below: (i) $235,000.00 payable on January 15, 1999; (ii) $235,000.00 payable on January 15, 2000; (iii) $235,000.00 payable on January 15, 2001; and (iv) $117,500.00 payable on January 15, 2002. (d) Payment in lieu of 401(k) Plan Participation. The Company shall pay Executive the gross amount of $19,200.00, reduced by applicable federal, state and local withholding taxes. The amount payable under this Section 4(d) is equal to 4 times $4,800.00, the maximum amount of the company matching contributions which can be allocated to his account under the Ogden 401(k) Plan for the 1998 plan year. Such amount shall be paid in a single lump sum cash payment on January 15, 1999. (e) Medical and Dental Benefits. The Company will continue for Executive, his spouse, and his eligible dependent children (as defined as dependents under the relevant plans, programs or arrangements), all medical, dental, and prescription drug, plans, programs or arrangements, whether group or individual, in which Executive was participating immediately prior to the Resignation Date, as follows: (i) The Company will provide such continued medical, dental, and prescription drug coverage until the earliest of (A) June 30, 2002, (B) Executive's death (provided that benefits payable to his spouse and dependents shall not terminate upon his death), or (C) with respect to any particular benefit coverage, the date Executive first becomes eligible for such particular coverage offered by a subsequent employer. Executive's cost for such coverage will be the same as the cost charged to senior executives of the Company who are provided with similar coverages. (ii) Upon Executive's death, his surviving spouse, and any eligible dependent children shall have the right to continue the medical, dental, and prescription drug coverages in effect on the date of his death until the earlier of June 30, 2002 or the date his surviving spouse becomes eligible for other employer-provided group health coverage. The cost for such continued coverage will be the same as the cost charged to senior executives of the Company who are provided with similar coverages for spouses and dependent children. (iii) The Company reserves the right to change, modify, or discontinue medical, dental, and prescription drug, plans, programs or arrangements on a consistent and non-discriminatory basis applicable to all senior executives. In such case, Executive shall have the right to participate in any successor plan, program or arrangement. In the event that Executive's participation in any such plan, program, or arrangement of the Company is prohibited, the Company will arrange to provide Executive with benefits substantially similar to those provided under such plan, program, or arrangement. The cost for such continued coverage will be the same as the cost charged to senior executives of the Company who are provided with similar coverages. (iv) At the end of the continued coverage period, Executive, his spouse, and dependents, if then eligible, may elect to continue such coverages at Executive's expense in accordance with the group health continuation requirements of COBRA. (f) Life Insurance. Subject to Executive's provision of satisfactory evidence of insurability for Executive and his spouse pursuant to the same standard of insurability applicable to senior executives eligible for such coverage, the Company completely at its expense will continue for Executive, his spouse, and his dependents, all life insurance plans, programs or arrangements, whether group or individual, in which Executive was participating immediately prior to the Resignation Date. Such coverage shall remain in effect until the earliest of (A) June 30, 2002, (B) Executive's death, or (C) the date Executive first becomes eligible for life insurance coverage offered by a subsequent employer. The Company reserves the right to change, modify, or discontinue such plans, programs or arrangements on a consistent and non-discriminatory basis applicable to all senior executives. In the event that Executive's participation in any such plan, program, or arrangement of the Company is prohibited, the Company will arrange to provide Executive with benefits substantially similar to those provided under such plan, program, or arrangement. The cost for such continued coverage will be the same as the cost charged to senior executives of the Company who are provided with similar coverages. (g) Ogden Executive Pension Plan. Executive may elect to have payment of his pension benefit under the Ogden Executive Pension Plan as of any of the following dates (1) January 15, 1999; (2) the date on which accelerated payment of Executive's salary continuation is made pursuant to Executive's acceleration election under Section 4(k) in connection with Executive's commencement of new employment or a change in control; or (3) June 30, 2002. Executive's pension benefit shall be determined as follows: (i) In the event that Executive elects to have payment made on January 15, 1999, the amount of pension benefit shall be determined in accordance with the terms of the Executive Pension Plan as in effect on the Resignation Date as if he had continued in active employment until December 31, 1998 and had continued to accrue credited service until December 31, 1998. (ii) If Executive elects to receive accelerated payment of his salary continuation pursuant to Section 4(k), then Executive's accrual of credited service will be determined as follows: (A) if Executive's acceleration election is made in connection with new employment, the accrual of credited service will end as of the date on which accelerated payment of Executive's salary continuation is made regardless of whether Executive elects to defer payment of the pension benefit; and (B) if Executive's acceleration election is made in connection with a Change in Control (as defined in Appendix A attached hereto), the accrual of credited service will continue until June 30, 2002 regardless of when Executive elects to receive payment of the pension benefit. (ii) If Executive does not elect accelerated payment of his salary continuation, Executive will accrue credited service until June 30, 2002. (iii) The pension benefit shall be computed by including the payment made pursuant to Section 4(b) and (c) above. (v) The calculation of the amount of pension benefits payable under this Section 4(g) will be made by the Hewitt Associates, the actuaries for the Company's tax-qualified defined benefit retirement plan. (h) Ogden Select Plan. For purposes of the Ogden Select Plan, Executive will be considered to have terminated employment on the date on which the Company makes the final salary continuation payment under Section 4(b) above. (i) Stock Options. Stock options granted to Executive under the Ogden Corporation Stock Option Plan shall be treated as follows: (i) Such options shall continue to vest during the period from the Resignation Date until the date on which the Company makes the final salary continuation payment under Section 4(b) above; and (ii) Each such option shall continue to be exercisable by Executive until the earlier of (A) the last day of the one-year period beginning on the date on which the Company makes the final salary continuation payment under Section 4(b) above or (B) the date any such option expires by its terms. (j) Outplacement Services. The Company at its expense will provide Executive with executive-level outplacement services during the 18-month period beginning on the date of this Separation Agreement at an agency selected by the Company and accepted by Executive. (k) Acceleration of Payment. In the event that (i) Executive commences employment with a new employer or becomes self-employed on a bona fide basis as part of either a corporate entity or partnership or (ii) a "Change in Control" of the Company (as defined in Appendix A of this Separation Agreement) occurs, then the Executive may elect to have the remaining balance of any amounts payable to Executive under Section 4(b) and 4(c) and his pension benefit under 4(g) above shall be paid to Executive in a single lump sum within 15 business days after Executive notifies the Company that he has commenced new employment or becomes self-employed or the date of such Change in Control, as applicable. 5. Expenses. The Company shall promptly reimburse Executive for all outstanding but unpaid business expenses incurred by Executive prior to the Resignation Date. 6. Death or Total Disability. In the event of Executive's death or total disability (within the meaning of the Company's long-term disability benefits plan), at any time, Executive (or Executive's estate, designated beneficiary, or legal representative) will continue to be entitled to the compensation and benefits described in Section 4 of this Separation Agreement. 7. General Release of Claims Against the Company and Other Released Parties. Executive knowingly and voluntarily releases and forever discharges the Company and any and all of the Company's partners, affiliates, owners, agents, officers, directors, employees, successors and assigns, and all related persons, individually and in their official capacities (hereinafter collectively referred to as the "Released Parties"), of and from any and all claims, known and unknown, that Executive, his heirs, executors, administrators, successors, and assigns, have or may have as of the date of execution of this Separation Agreement, including, but not limited to, any alleged violation of: X The National Labor Relations Act; X Title VII of the Civil Rights Act of 1964; X Sections 1981 through 1988 of Title 42 of the United States Code; X The Employee Retirement Income Security Act of 1974; X The Age Discrimination in Employment Act of 1967; X The Immigration Reform and Control Act; X The Americans with Disabilities Act of 1990; X The Fair Labor Standards Act; X The Occupational Safety and Health Act; X The Family and Medical Leave Act of 1993; X The New York Human Rights Law; X The New York Labor Law; X The New York Equal Rights Law Section 40-c et seq.; X The New York Minimum Wage Law; X The New York Equal Pay Law; X The New York City Administrative Code, Title 8; X any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance; X any public policy, contract, tort, or common law; or X any allegation for costs, fees, or other expenses including attorneys' fees incurred in these matters. 8. Release of Claims Against Executive. The Company, and its direct or indirect subsidiaries and affiliates (the "Ogden Group"), voluntarily releases and forever discharges Executive of and from any and all actions or causes of action, suits, claims, debts, charges, complaints, contracts (whether oral or written, express or implied from any source) and promises whatsoever, in law or equity, that the Ogden Group, has or may have, upon or by reason of any matter, cause or thing whatsoever, and any statutory, tort and/or contract claim as of the date of this Separation Agreement based upon any act or event occurring before the effective date of this Separation Agreement including, without limitation, any claim arising out of Executive's employment by the Ogden Group and his ownership of the shares in CODAD; provided, however, that if any member of the Ogden Group did not have knowledge prior to the effective date of this Separation Agreement of any action or event, the release and discharge set forth in this section shall not apply with respect to such action or event to the extent that Executive's actions are found to constitute fraud, willful misconduct or violation of law. 9. Indemnification of Executive. Executive will continue to be indemnified with respect to any actions taken or omissions occurring while he was an employee of the Ogden Group (a) by any indemnity provisions contained in the Company's Restated Certificate of Incorporation and By-Laws or any applicable resolutions of the Company's Board of Directors immediately prior to the Resignation Date and (b) by any directors and officers insurance maintained by the Company or any other applicable agreement in effect as of the Resignation Date. 10. CODAD Stock. (a) Executive agrees to execute a Power of Attorney in the form attached as Exhibit A hereto and any other documentation provided to Executive by the Company necessary to transfer title in all shares of CODAD held in his name to the Company or such other entity as may be designated by the Company. Executive agrees that no consideration is payable for such transfer. (b) The Company will indemnify and hold harmless Executive against any and all actions or causes of action, or suits brought against Executive based upon or arising out of his ownership of the CODAD Stock. 11. Survival of Restrictive Covenants Under Employment Agreement. Notwithstanding anything in this Separation Agreement to the contrary, Executive and the Company agree that (a) the restrictive covenant with respect to trade secrets set forth in Section 12 of the Employment Agreement shall remain in full force and effect, (b) the restrictive covenant with respect to the Company's customer list set forth in Section 13 of the Employment Agreement shall remain in full force and effect until December 31, 2003 at which time such covenant shall terminate, and (c) the enforcement provisions set forth in Section 15 of the Employment Agreement shall remain in full force and effect. The parties agree that the limited covenant not to compete set forth in Section 14 of the Employment Agreement shall not be applicable to Executive on or after the Resignation Date. 12. Breach of Agreement. By signing this Separation Agreement, Executive is providing a complete waiver of all claims that may have arisen, whether known or unknown, up until the time that this Separation Agreement is executed. If Executive breaches this Separation Agreement by filing a claim against the Released Parties arising out of any claim arising as of the Resignation Date other than a claim to enforce the provisions of this Separation Agreement, Executive agrees to pay all legal fees and costs incurred by the Released Parties in the event that such action is dismissed as a matter of law. Notwithstanding the foregoing, nothing herein shall preclude Executive from commencing an action against any of the Released Parties for acts committed following the Resignation Date. 13. Withholding of Taxes. The Company may withhold from any compensation and benefits payable under this Separation Agreement all applicable federal, state, local, or other withholding taxes. 14. Non-Disclosure. Executive agrees that he will not disclose the existence or terms of this Separation Agreement to any third party other than his immediate family, attorney, accountants, or other consultants or advisors, except as may be required by law. The Company agrees that it will not disclose the existence or terms of this Separation Agreement to any third party other than its attorneys, accountants, or other consultants or advisors and such of directors and/or officers of any of the Released Parties as the Company reasonably determines necessary, except as may be required by law. 15. Nonadmission of Wrongdoing. The parties understand and agree that neither the making of this Separation Agreement nor anything contained herein shall in any way be construed or considered as an admission on the part of any of the parties regarding any liability, wrongdoing, or unlawful conduct of any kind. The parties further understand and agree that Executive's resignation from his offices, directorships and memberships, and termination of employment, in accordance with the terms of this Separation Agreement has occurred for reasons other than cause. 16. Successors and Assignment. (a) Company Successor. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Separation Agreement in the same manner and to the same extent as the Company would be required to perform it if no such succession had taken place. As used in this Agreement, the term "the Company" shall mean the Company as defined in the first sentence of this Agreement and any successor to all or substantially all its business or assets or which otherwise becomes bound by all the terms and provisions of this Separation Agreement, whether by the terms hereof, by operation of law or otherwise. (b) Executive's Successor. This Separation Agreement shall inure to the benefit of and be enforceable by Executive and his personal or legal representatives and successors in interest under this Separation Agreement. (c) Assignment by Executive. The rights and benefits of Executive under this Separation Agreement are personal to him and no such right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer; provided, however, that nothing in this Section 16 shall preclude Executive from designating a beneficiary or beneficiaries to receive any benefit payable on his death. 17. Governing Law. This Separation Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in that State, without regard to its conflict of laws provisions. The parties consent to the exclusive jurisdiction of the state and Federal courts within New York County, New York in connection with any controversy or claim arising out of Executive's employment or arising under this Separation Agreement. 18. Separability. If any provision of the Separation Agreement is deemed legally or factually invalid or unenforceable to any extent or in any application, then the remainder of the provision and the Separation Agreement, except to such extent or in such application, shall not be affected, and each and every provision of the Separation Agreement shall be valid and enforceable to the fullest extent and in the broadest application permitted by law. 19. Miscellaneous. (a) Entire Agreement; Amendment. This Separation Agreement shall supersede the Employment Agreement and any and all existing oral or written agreements, representations, or warranties between Executive and the Company or any of the Released Parties. It may not be amended except by a written agreement signed by both parties and shall be binding on the parties and their legal representatives, heirs, successors and assigns. (b) Waiver. The failure of a party to insist upon strict adherence to any term of this Separation Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Separation Agreement. (c) Headings. Section headings are used herein for convenience of reference only and shall not affect the meaning of any provision of this Separation Agreement. (d) Counterparts. This Separation Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts will together constitute but one Agreement. Since Executive's execution of this Separation Agreement releases the Company and the other Released Parties from all claims Executive may have, Executive should review this carefully before signing it. Executive acknowledges that he has had at least twenty-one (21) days to consider its meaning and effect and to determine whether he wishes to enter into it. During that time, Executive is advised to consult with anyone of his choosing, including an attorney, prior to executing this Separation Agreement. Once Executive has signed this Separation Agreement, he may choose to revoke his execution within seven (7) days. Any revocation of this Separation Agreement must be in writing and personally delivered to Alane Baranello at Ogden Corporation, Two Pennsylvania Plaza, New York, New York 10121, or if mailed, postmarked within seven (7) days of the date upon which it was signed by him. The Company will not make any payments pursuant to this Separation Agreement until after the seven (7) day period expires. IN WITNESS WHEREOF, the parties hereto have duly executed this Separation Agreement as of the day and year first above written. OGDEN CORPORATION By: /s/ Alane Baranello -------------------- Name: Alane Baranello Title: V.P. Human Resources EXECUTIVE /s/ Philip G. Husby ------------------- Philip G. Husby APPENDIX A DEFINITION OF CHANGE IN CONTROL The following definition of "Change in Control" shall apply for purposes of Section 4(k) of the Separation Agreement: Change in Control. A "Change in Control" of the Company shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied: (a) Any person, or more than one person acting as a group (within the meaning of the Securities Exchange Act of 1934), other than a trustee or other fiduciary holding securities under an employee benefit plan sponsored by the Company, becomes the beneficial owner, directly or indirectly, of securities of the Company, representing more than twenty-five percent (25%) of the combined voting power of the Company's then outstanding securities; (b) Individuals who, as of May 20, 1998, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 20, 1998, whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or (c) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all the Company's assets; or (iii) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. EX-10.8(E) 3 EXHIBIT 10.8(E) Exhibit 10.8(e) CONFIDENTIAL AND LEGALLY PRIVILEGED EMPLOYMENT AGREEMENT THIS AGREEMENT, made and entered into as of the 1st day of October , 1998, by and between OGDEN CORPORATION, a Delaware corporation maintaining its principal office at Two Pennsylvania Plaza, New York, New York (the "Company") and Scott G. Mackin, now residing at 1 Robin Court, Morristownship, New Jersey 07960 (the "Employee"). WITNESSETH: WHEREAS, the Employee is currently serving as President and Chief Operating Office of Ogden Energy Group, Inc., a wholly owned subsidiary of the Company ("Ogden Energy"); and WHEREAS, the Employee is currently employed under an employment agreement with Ogden Energy dated January 1, 1994 and which was amended on December 20, 1996 (the "Old Agreement"); and WHEREAS, Ogden Energy, Company and Employee desire to terminate the Old Agreement and enter into a new employment agreement with the Company on such terms and conditions as set forth herein; and WHEREAS, the Company desires to ensure that the Employee will continue to be available to provide services in the capacity of President and Chief Operating Officer of Ogden Energy in the future, which services are significant to the Company's long-range prospects; WHEREAS, to induce the Employee to continue to provide such services, the Company is offering to provide the Employee with the compensation, benefits and security provided for in this Agreement. NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto agree as follows: 1. Employment/Capacity/Term. The Company agrees to and does hereby continue to employ the Employee, and the Employee agrees to and does hereby continue in the employ of the Company upon the terms and conditions set forth in this Agreement. Such employment shall be in an executive capacity as Executive Vice President of the Company and as President and Chief Operating Officer of Ogden Energy. This Agreement shall commence on October 1, 1998 and shall continue through September 30, 2003, and from year to year thereafter subject to the right of the Employee or the Company to terminate the Agreement as of September 30, 1999, or any subsequent September 30, by written notice given to the other party at least sixty (60) days prior to such termination date stating an intention to so terminate. Termination by the Company, in accordance with the provisions of the preceding sentence, shall obligate the Company to make a severance payment as provided in Paragraph 9. hereof. Termination by either party, in accordance with the provisions of the above referenced sentence, shall not require a statement of the reason or cause for such termination and shall not be deemed a breach or violation of this Agreement by the party giving such notice so long as, in the case of the Company, termination is effected with said severance payment. As used in this Agreement, the phrase "term of this Agreement" shall be deemed to include the period subsequent to the date hereof and prior to termination of this Agreement; however, such phrase shall not be construed as limiting the enforceability by either party of any rights which survive termination of this Agreement. 2. Time and Effort/Absences. During the "term of this Agreement", the Employee shall devote his entire time and attention during normal business hours to the business of the Company and Ogden Energy and its subsidiaries (the "Ogden Energy Group"), subject to the supervision of the Board of Directors of the Company, and he shall not engage in any other business activity whether or not such business activity is pursued for gain, profit, or other pecuniary advantage, but this restriction shall not be construed to restrict the Employee (i) from performing services as a member of the Board of Directors, Board of Trustee or the like of any not-for-profit entity for which the Employee receives no compensation or as a member of the Board of a for-profit corporation with the prior written approval of the Chairman of the Board of the Company, provided that, in each case such services do not unreasonably interfere with the ability of the Employee to perform the services and discharge the responsibilities required of him under this Agreement, and (ii) from investing his assets in such form or manner as will not require any services on the part of the Employee in the operation of the business of the entity in which such investments are made. The Employee shall be excused from rendering his services during reasonable vacation periods and during other reasonable temporary absences as authorized from time to time by the Chairman of the Board of Directors of the Company. At the date hereof, the principal office of the Company is located in the metropolitan New York area and the principal office of Ogden Energy is located in Fairfield, New Jersey, considered to be a New York suburb and part of the metropolitan New York area. It is understood that the Employee will not be required to relocate from the metropolitan New York area to discharge his responsibilities under this Agreement. 3. Corporate Offices. If elected, the Employee will serve, without additional compensation, as an officer and director (or in either capacity) of the Company, Ogden Energy and the Ogden Energy Group. 4. Salary/Bonus/Other Benefits. In consideration of the services and duties to be rendered and performed by the Employee during the term of this Agreement, the Company agrees to pay and provide for the Employee the compensation and benefits described below: 2 (a) Consistent with the Company's policy concerning its executives, the Employee's annual salary shall be reviewed by the Board of Directors or an appropriate committee of the Board of Directors of the Company on a calendar year basis, with any increases therein being within the sole discretion of the Board of Directors or an appropriate committee of the Board of Directors and shall become effective on March 1st of the following year. The minimum annual salary payable to the Employee under this Agreement shall be in the amount of Five Hundred Seventeen Thousand Two Hundred Seventy Five and 00/100 Dollars ($517,275), payable in equal monthly or bi-weekly installments. (b) An annual incentive bonus in such amount as may from time to time be fixed by the Board of Directors or an appropriate committee of the Board of Directors of the Company, provided that in determining the annual incentive bonus the Board of Directors or appropriate Committee shall utilize standards which are reasonably applied to the Employee and other executives of the Company on a non-discriminatory basis. (c) Other Benefits. It is intended that the Company and Ogden Energy shall continue to provide the Employee with benefits at least as favorable as benefits provided on behalf of other executives of the Company and the Ogden Energy Group who furnish services of comparable significance, as they may exist from time to time. Such benefits presently include Group Life Insurance, Group Health Insurance, Automobile Allowance, and Pension, Profit Sharing and 401(k) Plans. Except as otherwise provided herein, any such participation shall be in accordance with the provisions of such plans and nothing contained in this Agreement is intended to or shall be deemed to affect adversely any of the Employee's rights as a participant under any such plan. Nothing herein shall prevent the Company from modifying or discontinuing any benefit plan on a consistent and non-discriminatory basis applicable to all such executives. 5. Expense. The Employee shall be reimbursed for out-of-pocket expenses incurred from time to time on behalf of the Company and the Ogden Energy Group or in the performance of his duties under this Agreement, upon the presentation of such supporting documents and forms as the Company shall reasonably request. 6. Medical Leave, Reasonable Accommodation, Termination for Medical Incapacity and Disability Benefits. The Company agrees to provide the Employee with a leave of absence not to exceed six (6) months in duration in any twelve (12) month period if the Employee has a medical condition that precludes the Employee from being fully functional in his or her position. 3 The term "fully functional" means able to travel to and from work, be at work, perform satisfactorily all essential functions of the position and the conditions of employment without significant risk of substantial harm to self or others. Any leave entitlement granted by Federal, state or local law shall run concurrently with the commencement of his or her six month period of leave, whether such leave is taken all at once, intermittently or on a reduced time basis. Nothing herein is intended to diminish any entitlement granted by law. If appropriate, the Company will support the Employee's application for disability benefits. If the Employee is not able to return to the position in a fully functional capacity at the conclusion of six months of medical leave in a twelve month period, this Agreement may be terminated by the Board of Directors of the Company at its sole discretion, without prior notice. Unless otherwise prohibited by law, the Employee agrees that the Employee will furnish for review by a medical professional designated by the Company, copies of the Employee's medical records pertaining to any medical condition for which the Employee requests a medical leave of more than twelve (12) weeks in duration, return to work from any such leave, work restrictions, modification or accommodation; or the Employee or the Company believes that the Employee has a medical condition that may be causing or contributing to performance or conduct deficiencies. The Employee also agrees to authorize any health care professional from who the Employee is receiving diagnostic evaluation, treatment or other medical care to discuss the Employee's medical condition with the medical professional designated by the Company to receive and review the Employee's medical records. The Employee further agrees that he or she will undergo, at the sole expense of the Company, any medical specialty evaluation if requested to do so by the Company. The Company agrees to provide the Employee, if he or she is otherwise qualified for the position, with medically necessary accommodation if it likely will enable the employee to be fully functional in the position and is reasonable, feasible and will not impose undue hardship on Company operations. The term "medically necessary" means that the accommodation has risk-avoiding or therapeutic value in accordance with scientifically valid medical principles and practice and that the Employee requires similar accommodation when performing comparable non-work functions. The inability of the Employee to be fully functional in his or her position for medical reasons shall not constitute a breach of this Agreement by the Employee. If this Agreement is terminated by the Company because the Employee is not fully functional in his or her position for medical reasons, as provided for in this paragraph, the Company shall be obligated to continue the salary of the Employee as provided in Paragraph 4. (a) for a period equal to the greater of (a) twelve (12) months, or (b) such longer period as may be determined by the Board of Directors of the Company, in each case, reduced by any disability insurance benefits provided for the benefit of the Employee at the expense of the Company. 4 7. Death/Death Benefit. In the event of the death of the Employee during the term of this Agreement, this Agreement shall terminate and the Employee's salary shall continue to be paid to his designated beneficiary, or if none, to his personal representative, through the last day of the month in which such death occurs. In addition, the Employee, his personal representative(s) and/or his beneficiaries will be entitled to such death benefits as are provided to Employee under Paragraph 4 hereof. 8. Company Stock Option Plan. The Board of Directors of the Company has awarded and may from time to time in the future award to the Employee non-qualified stock options to purchase shares of the Company's Common Stock. If the employment of the Employee terminates under circumstances entitling him to a Severance Payment (as defined in Paragraph 9.), he shall thereupon be entitled to exercise any and all options granted to him, to the extent permitted pursuant to the terms and conditions of the Company's Stock Option Plan. 9. Severance Payment. (A) If the Company gives notice to terminate in accordance with Paragraph 1. of this Agreement or if the employment of the Employee is terminated at any time (i) by the Employee for Good Reason (as defined in Paragraph 10.), or (ii) by the Company for any reason other than for Cause (as hereinafter defined), the Company will be obligated to pay the following amounts to the Employee (the "Severance Payment") within 30 days following Employee's date of termination: (i) Earned But Unpaid Compensation. The Company shall pay Employee any accrued but unpaid base salary for services rendered to Employee's termination date, any accrued but unpaid expenses required to be reimbursed under this Agreement and any vacation accrued to Employee's termination date. (ii) Lump Sum Payment. The Company shall pay Employee an amount equal to the product of five times the sum of (a) and (b) below: (a) Employee's annualized base salary at the highest annual rate in effect at any time prior to the Employee's termination date; and (b) The highest amount of annual bonus payable to Employee at any time prior to the Employee's termination date. (iii) Gross-Up Payment. In the event that any portion of the benefits payable under this Section 9.(A) and any other payments and benefits under any other agreement with or plan of the Company or Ogden Energy (in the aggregate, "Total Payments") are deemed to constitute an "excess parachute payment" within the meaning of Section 280G of the Internal 5 Revenue Code (the "Code"), then the Company shall pay Employee as promptly as practicable following such determination an additional amount (the "Gross-Up Payment") calculated as described below to reimburse Employee on an after tax basis for any excise tax imposed on such payments under Section 4999 of the Code. The Gross-up Payment shall equal the amount, if any, needed to ensure that the net parachute payments (including the Gross-up Payment) actually received by Employee after the imposition of federal and state income and excise taxes (including any interest or penalties imposed by the Internal Revenue Service), is equal to the amount that Employee would have netted after the imposition of federal and state income taxes had the Total Payments not been subject to the taxes imposed by Section 4999. For purposes of this calculation, it shall be assumed that Employee's tax rate will be the maximum marginal federal and state income tax rate on earned income, with such maximum federal rate to be computed with regard to Section 1(a) of the Code. In the event that Employee and the Company are unable to agree as to the amount of the Gross-up Payment, if any, Employee shall select a law firm or accounting firm among those regularly consulted (during the 12-month period immediately prior to the Employee's termination date) by the Company regarding federal income tax matters and such law firm or accounting firm shall determine the amount of Gross-up Payment and such determination shall be final and binding upon Employee and the Company. (iv) Other Benefits. Any benefits to which Employee may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(c) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements. (v) No Mitigation Required. Employee shall not be required to mitigate the amount of any compensation provided for under this Section 9.(A) by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by the Employee as the result of employment with another employer after the Employee's termination date or by any other compensation. (vi) Non-Competition Covenant Does Not Apply. The restrictive covenant prohibiting competitive activity set forth in Section 14. hereof shall not be applicable to Employee and shall be null and void. (vii) No Other Benefits or Compensation. Except as may be provided under this Agreement, under the terms of any incentive compensation, employee benefit, or fringe benefit plan, applicable to Employee at the time of Employee's termination or resignation of employment, Employee shall have no right to receive any other compensation, or to participate in any 6 other plan, arrangement or benefit, with respect to future periods after such termination or resignation". (B) Termination of the Employee's employment on account of his disability, death or retirement (as defined in this Agreement) will not be considered a termination of the Employee's employment by the company and will not require the Company to pay and provide any Severance Payment. No Severance Payment will be required if the employment of the Employee is terminated by the Company for Cause (as hereinafter defined) or by the Employee (other than for Good Reason as defined in Paragraph 10) or if the Employee gives notice to terminate in accordance with Paragraph 1. hereof. The Severance Payment provided herein in is provided in order to reinforce and encourage the continued loyalty, attention, and dedication of the Employee to the Company's business and affairs without the concerns which normally arise from the possibility of a loss of employment security. As used herein, the terms "Retirement" and "Cause" shall have the following meanings, respectively: (a) Retirement. Termination of the Employee's employment on account of "Retirement" shall mean termination on or after the Employee's normal retirement date in accordance with the terms of the Ogden Energy pension plan (or any successor or substitute plan or plans of Ogden Energy Group under which the Employee may be a participant); and (b) Cause. Termination by the Company of the Employee's employment for "Cause" shall mean termination as a result of (i) the willful and continued failure by the Employee to devote the time, attention and effort necessary to perform substantially the services contemplated by this Agreement in a manner consistent with the Employee's past performance (other than any such failure resulting from the Employees incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Employee by a member or representative of the Board of Directors of the Company which specifically identifies the manner in which it is alleged that the Employee has not devoted such time, attention and effort necessary to substantially perform such services, or (ii) the willful engaging by the Employee in gross misconduct which is materially and demonstrably injurious to the Company; provided that, no act, or failure to act, on the Employee's part shall be considered "willful" unless done, or omitted to be done, in bad faith and without reasonable belief that such action or omission was in, or not opposed to, the best interests of the Company. It is also expressly understood that the Employee's attention to or engagement in matters not directly related to the business of the Company shall not provide a basis for termination for Cause if such attention or engagement is authorized by the terms of this Agreement or has otherwise been approved by the Board of Directors of the Company. Anything in this 7 Agreement to the contrary notwithstanding, the Employee's employment may not be terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board (after reasonable notice to the Employee and an opportunity for the Employee, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Employee was guilty of the conduct set forth in clause (i) or (ii) of this subparagraph (b) and specifying the particulars thereof in detail. Except as otherwise provided in Paragraph 1 and Paragraph 6, no purported termination by the Company of the Employee's employment which is not justified as a termination of the Employee's employment for Cause shall be effective. 10. Termination by the Employee for Good Reason. The termination by the Employee of this Agreement and his employment for "Good Reason" shall be deemed a justifiable termination of his employment and shall excuse the Employee from the obligation to render services as provided in Paragraph 2 hereof. Upon such termination, the Employee shall be entitled to the Severance Payment in accordance with the provisions of Paragraph 9. (A) hereof. As used herein, the phrase "Good Reason" shall mean: (a) a change in the Employee's status, title or position(s) in an executive capacity as set forth in Paragraph 1 hereof, which in his reasonable judgment, does not represent a promotion from or enhancement of his status, title and position, or the assignment by the Board of Directors of the Company to the Employee of any duties or responsibilities which, in his reasonable judgment, are inconsistent with such status, title or position, or any removal of the Employee from or any failure to reappoint or reelect him to such positions, except in connection with a justifiable termination by ------ the Company of the Employee's employment for Cause or on account of disability, the Retirement or death of the Employee or the termination by the employee of his employment other than for Good Reason; or (b) a reduction in the Employee's annual salary or a failure by the Company to pay to the Employee any installment of the annual salary required by Paragraph 4 hereof, which failure continues for a period of twenty (20) days after written notice thereof is given by the Employee to the Company; or (c) the Company's requiring the Employee to be based anywhere other than the metropolitan New York area, except for required travel on the business of the Company or the Ogden Energy Group to an extent substantially consistent with the business travel obligations which the Employee has previously undertaken on behalf of the Company or the Ogden Energy Group; or 8 (d) the failure by the Company to obtain the assumption of this Agreement in form and substance to the reasonable satisfaction of the Employee by any permitted successor (other than by permitted merger or consolidation for which no separate assumption is necessary) as referred to in Paragraph 17; or (e) any refusal by the Company to allow the Employee to attend to matters or engage in activities not directly related to the business of the Company which is permitted by this Agreement or which, prior thereto, was permitted by the Board of Directors of the Company; or (f) any "Change in Control" of the Company as defined in Appendix A to this Agreement. 11. Notice of Termination. Any purported notice of termination of this Agreement and the Employee's employment shall be communicated in writing and delivered to the other party as provided in Paragraph 18 (hereinafter a "Notice of Termination"). For purposes of this Agreement a "Notice of Termination" shall mean a notice complying with the terms of this Agreement and which specifics the termination provision relied upon by the party giving such notice and shall set forth in detail such facts and circumstances claimed by said party to provide a justified basis for termination of the Employee's employment under the provision(s) so indicated. 12. Trade Secrets, Etc. The Employee acknowledges that prior to his initial employment by the Company and Ogden Energy he had no knowledge of the formulae, processes or methods of manufacture or other trade secrets of the Company and Ogden Energy. Upon the termination of his employment, the Employee agrees forthwith to deliver up to the Company notebooks and other data relating to research or experiments as conducted by him or relating to the products, formulae, processes or methods of manufacture of the Company and Ogden Energy. 13. Customer List. The Employee recognizes and acknowledges that the written list of the customers of the Company, its subsidiaries, the Ogden Energy Group, and affiliates, as they may exist from time to time, is a valuable, special and unique asset. The Employee agrees that he will not during the term of his employment or within five (5) years thereafter, use for his own personal benefit or disclose the written list of the customers of the Company, its subsidiaries, the Ogden Energy Group and affiliates or any part thereof, to any person, firm, corporation, association or other entity for any reason or purpose whatsoever. 14. Limited Covenant Not to Compete. If the employment of the Employee hereof is terminated (i) by the Employee pursuant to Paragraph 1 hereof or (ii) by the Company for Cause (as defined in Paragraph 9.(B)(b) above), then in either case (y) the Employee will not, for a period of five (5) years from 9 such termination of employment, within the territorial confines of the United States of America, directly or indirectly, own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation or control of any business in competition with the business conducted by the Company and the Ogden Energy Group at the time of such termination, and (z) the Employee will, for a period of five (5) years from such termination refrain from carrying on a business similar to that presently carried on by the Company and the Ogden Energy Group within the states in which the business of the Company and the Ogden Energy Group has been carried on, so long as the Company and the Ogden Energy Group carries on like business therein. 15. Injunctive Relief. In the event of a breach by the Employee of the provisions of Paragraph 12, 13 or 14 during or after the "term of this Agreement", the Company shall be entitled to an injunction restraining the Employee from violation of such paragraph. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedy it may have in the event of breach of this Agreement by the Employee. 16. Certain Proprietary Rights. Employee agrees to and hereby does assign to the Company all his right, title and interest in and to all inventions, whether or not patentable, which are made or conceived solely or jointly by him: (a) At any time during the term of his employment by the Company in an executive, managerial, planning, technical research or engineering capacity (including development, manufacturing, systems, applied science and sales), or (b) During the course of or in connection with his duties during the "term of this Agreement", or (c) With the use of time or materials of the Company. The Employee agrees to communicate to the Company or its representatives all facts known to him concerning such inventions, to sign all rightful papers, make a rightful oaths and generally to do every thing possible to aid the Company in obtaining and enforcing proper patent protection for all such inventions in all countries and in vesting title to such inventions and patents in the Company. For the purpose of this Agreement, the subject matter of any application for patent naming Employee as a sole or joint inventor filed during the course of employment or within one year subsequent to the termination thereof shall be deemed to be an invention made or conceived by him during the course of his employment by the Company and assignable to the Company hereunder, unless the Employee establishes by a preponderance of the evidence that such invention was made or conceived by him subsequent to termination of his employment hereunder. At the Company's request 10 (during or after the "term of this Agreement") and expense, the Employee will promptly execute a specific assignment of title to the Company, and perform any other acts reasonably necessary to implement the foregoing assignment. 17. Binding Effect. This Agreement shall be binding upon and inure to the benefit of: (a) The Company and any successors or assigns of the Company, whether by way of a merger or consolidation, or liquidation of the Company, or by way of the Company selling all or substantially all of the assets of the Company, or a division thereof, to a successor entity; however, in the event of the assignment by the Company of this Agreement, the Company shall nevertheless remain liable and obligated to the Employee in accordance with the terms hereof; and (b) The Employee, his estate, his executors, administrators, heirs and beneficiaries. 18. Notice. Any notice or other communication required under this Agreement shall be in writing, shall be deemed to have been given and received when delivered in person, or, if mailed, shall be deemed to have been given when deposited in the United States mail, first class, registered or certified, return receipt requested, with proper postage prepaid, and shall be deemed to have been received on the third business day thereafter, and shall be addressed as follows: If to the Company, addressed to: Ogden Corporation Two Pennsylvania Plaza, 25th Floor New York, New York 10121 Attention: Chairman of the Board, President and Chief Executive Officer With a copy to: Senior Vice President and General Counsel If to the Employee, addressed to: Scott G. Mackin 1 Robin Court Morris Township, New Jersey 07960 11 or such address as to which any party hereto may have notified the other in writing. 19. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York. 20. Entire Agreement. This Agreement contains or refers to the entire arrangement or understanding between the Employee and the Company relating to the employment of the Employee by the Company. No provision of the Agreement may be modified or amended except by an instrument in writing by or for both parties hereto. 21. Waiver. Failure of either party hereto to insist upon strict compliance by the other party with any term, covenant or condition hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment or failure to insist upon strict compliance or any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. 22. Prior Employment Agreement. This Employment Agreement supercedes and replaces the Old Agreement between the Employee and Ogden Energy dated as of January 1, 1994 as amended December 20, 1996 which shall become null and void as of the date hereof. 23. Assignment by Employee. The rights and benefits of the Employee under this Agreement are personal to him and no such right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer; provided, however, that nothing in this Paragraph 23 shall preclude the Employee from designating a beneficiary or beneficiaries to receive any benefit payable on his death. OGDEN CORPORATION By: /s/ R. Richard Ablon ----------------------------------- Chairman of the Board, President and Chief Executive Officer /s/ Scott G. Mackin - ------------------- Scott G. Mackin 12 APPENDIX A DEFINITION OF CHANGE IN CONTROL The following definition of Change in Control shall apply for purposes of Paragraph 10.(e) of the Employment Agreement: Change in Control. Change in Control of the Company shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied: (a) Any person, or more than one person acting as a group (within the meaning of the Securities Exchange Act of 1934), other than a trustee or other fiduciary holding securities under an employee benefit plan sponsored by the Company, becomes the beneficial owner, directly or indirectly, of securities of the Company, representing more than twenty-five percent (25%) of the combined voting power of the Company's then outstanding securities; (b) Individuals who, as of May 20, 1998, constitute the Board of Directors of the Company (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 20, 1998, whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or (c) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all of the Company's assets; or (iii) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. 13 EX-10.8(F)(I) 4 EXHIBIT 10.8(F)(I) Exhibit 10.8(f)(i) September __, 1998 Mr. David L. Hahn 19 Jones Lane Lloyd Harbor, New York 11743 Dear Mr. Hahn: This letter will confirm the agreement between you and Ogden Corporation (the "Company") that, effective as of October 1, 1998, the Employment Agreement between you and the Company, dated as of December 1, 1995 (the "Employment Agreement") is hereby amended as follows, all other terms and conditions of the Employment Agreement remain unchanged and in full force and effect: I. The first sentence only of Paragraph 1. (b) Employment/Capacity/Term. of the Employment Agreement is hereby amended to read as follows, all other terms of Paragraph 1. remain unchanged and in full force and effect: "(b) Such employment shall commence on October 1, 1998 and shall continue through September 30, 1999 and from year to year thereafter subject to the right of the Employee or the Company to terminate such employment as of October 1, 1999, or any subsequent October 1, by written notice given to the other party at least sixty (60) days prior to such termination date stating an intention to so terminate such employment". II. Paragraph 4. (a) Salary/Bonus/Other Benefits of the Employment Agreement is hereby amended to read as follows, all other terms of Paragraph 4. remain unchanged and in full force and effect: "(a) an annual salary payable in equal monthly or bi-weekly installments, in the amount of Three Hundred Thousand Dollars ($300,000) or in such greater amount as may from time to time be fixed by the Board of Directors of the Company". III. Paragraph 8. Severance Pay. of the Employment Agreement is hereby amended in its entirety to read as follows: "8. Severance Pay. (A) If the Company gives notice to terminate in accordance with Paragraph 1. (b) of this Agreement or if the employment of the Employee is terminated at any time (i) by the Employee for Good Reason (as defined in Paragraph 9.), or (ii) by the Company for any reason other than for Cause (as hereinafter defined), the Company will be obligated to pay the following amounts to the Employee (the "Severance Pay"): (i) Earned But Unpaid Compensation. The Company shall pay Employee any accrued but unpaid base salary for services rendered to Employee's termination date, any accrued but unpaid expenses required to be reimbursed under this Agreement and any vacation accrued to Employee's termination date. (ii) Lump Sum Payment. The Company shall pay Employee an amount equal to the product of five times the sum of (a) and (b) below: (a) Employee's annualized base salary at the highest annual rate in effect at any time prior to the Employee's termination date; and (b) The highest amount of annual bonus payable to Employee at any time prior to the Employee's termination date. (c) The foregoing amount will be paid to Executive (less required withholding taxes) in a single lump sum payment within 30 business days after the Termination Date or, at the election of the Employee such amount shall be paid in sixty (60) equal monthly payments, with the first payment commencing on the Termination Date. (iii) Other Benefits. Any benefits to which Employee may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(c) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements. (iv) No Mitigation Required. Except as otherwise provided herein, Employee shall not be required to mitigate the amount of any compensation provided for under this Section 8. by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by the Employee as the result of employment with another employer after the Employee's termination date or by any other compensation. 2 (v) Non-Competition Covenant Does Not Apply. The restrictive covenant prohibiting competitive activity set forth in Section 13. below shall not be applicable to Employee and shall be null and void. (vi) No Other Benefits or Compensation. Except as may be provided under this Agreement, under the terms of any incentive compensation, employee benefit, or fringe benefit plan, applicable to Employee at the time of Employee's termination or resignation of employment, Employee shall have no right to receive any other compensation, or to participate in any other plan, arrangement or benefit, with respect to future period after such termination or resignation. (B) No Severance Pay will be required if the employment of the Employee is terminated by the Company for Cause (as hereinafter defined) or by the Employee (other than for Good Reason as defined in Paragraph 9) or if the Employee gives notice to terminate in accordance with Paragraph 1. The Severance Pay provided herein is provided in order to reinforce and encourage the continued loyalty, attention, and dedication of the Employee to the Company's business and affairs without the concerns which normally arise from the possibility of a loss of employment security. As used herein, the terms "Retirement" and "Cause" shall have the following meanings, respectively: (a) Retirement. Termination of the Employee's employment on account of "Retirement" shall mean termination on or after the Employee's normal retirement date in accordance with the terms of the Ogden 401(k) Plan; and (b) Cause. Termination by the Company of the Employee's employment for "Cause" shall mean termination as a result of (i) the willful and continued failure by the Employee to perform substantially the services contemplated by this Agreement (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Employee by a member or representative of the Board of Directors of the Company which specifically identifies the manner in which it is alleged that the Employee has not substantially performed such services, or (ii) the willful engaging by the Employee in gross misconduct which is materially and demonstrably injurious to the Company; provided that, no act, or failure to act, on the Employee's part shall be considered "willful" unless done, or omitted to be done, in bad faith and without 3 reasonable belief that such action or omission was in, or not opposed to, the best interests of the Company." (IV) Paragraph 9. Termination by the Employee for Good Reason of the Employment Agreement is amended by adding the following Subparagraph (e) thereto, all other terms of Paragraph 9. remain unchanged and in full force and effect: "(e) any "Change in Control" of the Company as defined in Appendix A to this Agreement". AGREED AND ACCEPTED Very truly yours, Ogden Corporation Date: September __, 1998 By /s/ David L. Hahn /s/ R. Richard Ablon - -------------------- ----------------------- David L. Hahn Chairman of the Board, President and Chief Executive Officer 4 APPENDIX A DEFINITION OF CHANGE IN CONTROL The following definition of Change in Control shall apply for purposes of Paragraph 9.(e) of the Employment Agreement: Change in Control. Change in Control of the Company shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied: (a) Any person, or more than one person acting as a group (within the meaning of the Securities Exchange Act of 1934), other than a trustee or other fiduciary holding securities under an employee benefit plan sponsored by the Company, becomes the beneficial owner, directly or indirectly, of securities of the Company, representing more than twenty-five percent (25%) of the combined voting power of the Company's then outstanding securities; (b) Individuals who, as of May 20, 1998, constitute the Board of Directors of the Company (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 20, 1998, whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or (c) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all of the Company's assets; or (iii) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. EX-10.8(G)(I) 5 EXHIBIT 10.8(G)(I) Exhibit 10.8(g)(i) September __, 1998 Mr. Rodrigo Arboleda 611 North Mashta Drive Key Biscayne, Florida 33149 Dear Mr. Arboleda: This letter will confirm the agreement between you and Ogden Corporation (the "Company") that, effective as of October 1, 1998, Paragraph 9. Termination by the Employee for Good Reason of the Employment Agreement between you and the Company, dated as of January 1, 1997 (the "Employment Agreement") is hereby amended by adding the following Subparagraph (e) thereto: "(e) any "Change in Control" of the Company as defined in Appendix A to this Employment Agreement." All other terms and conditions of the Employment Agreement remain unchanged and in full force and effect. AGREED AND ACCEPTED Very truly yours, Ogden Corporation /s/ Rodrigo Arboleder - --------------------- Date: September __, 1998 By /s/ R. Richard Ablon Rodrigo Arboleda ---------------------------- Chairman of the Board, President and Chief Executive Officer APPENDIX A DEFINITION OF CHANGE IN CONTROL The following definition of Change in Control shall apply for purposes of Paragraph 9.(e) of the Employment Agreement: Change in Control. Change in Control of the Company shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied: (a) Any person, or more than one person acting as a group (within the meaning of the Securities Exchange Act of 1934), other than a trustee or other fiduciary holding securities under an employee benefit plan sponsored by the Company, becomes the beneficial owner, directly or indirectly, of securities of the Company, representing more than twenty-five percent (25%) of the combined voting power of the Company's then outstanding securities; (b) Individuals who, as of May 20, 1998, constitute the Board of Directors of the Company (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 20, 1998, whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or (c) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all of the Company's assets; or (iii) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. 2 EX-10.8(I)(I) 6 EXHIBIT 10.8(I)(I) Exhibit 10.8(i)(i) September __, 1998 Mr. Quintin G. Marshall 69 Indian Head Road Riverside, Connecticut 06878 Dear Mr. Marshall: This letter will confirm the agreement between you and Ogden Corporation (the "Company") that, effective as of October 1, 1998, the Employment Agreement between you and the Company, dated as of October 30, 1996 (the "Employment Agreement") is hereby amended as follows, all other terms and conditions of the Employment Agreement remain unchanged and in full force and effect: I. Paragraph 1.(a) and the first sentence only of Paragraph 1.(b) Employment/Capacity/Term. of the Employment Agreement are hereby amended to read as follows, all other terms of Paragraph 1. remain unchanged and in full force and effect: "(a) The Company agrees to and does hereby employ the Employee, and the Employee agrees to and hereby does enter into the employ of the Company upon the terms and conditions set forth in this Agreement. Such employment shall be in an executive capacity as Senior Vice President, Corporate Development of the Company." "(b) This Agreement and such employment shall commence on October 1, 1998 and shall continue through September 30, 1999 (the "Initial Term") and from year to year thereafter (the "Extended Term") subject to the right of the Employee or the Company to terminate this Agreement and such employment as of October 1, 1999 or any subsequent October 1, by written notice stating an intention to terminate such employment at least thirty (30) days prior to such termination date stating an intention to terminate such employment (the "Termination Date"). II. Paragraph 4. (a) Salary/Bonus/Other Benefits of the Employment Agreement is hereby amended to read as follows, all other terms of Paragraph 4. remain unchanged and in full force and effect: "(a) an annual salary payable in equal monthly or bi-weekly installments, in the amount of Two Hundred Fifty Thousand Dollars ($250,000) or in such greater amount as may from time to time be fixed by the Board of Directors of the Company". III. Paragraph 8. Severance Pay. of the Employment Agreement is hereby amended in its entirety to read as follows: "8. Severance Pay. (A) If the Company gives notice to terminate in accordance with Paragraph 1. (b) of this Agreement or if the employment of the Employee is terminated at any time (i) by the Employee for Good Reason (as defined in Paragraph 9.), or (ii) by the Company for any reason other than for Cause (as hereinafter defined), the Company will be obligated to pay the following amounts to the Employee (the "Severance Pay"): (i) Earned But Unpaid Compensation. The Company shall pay Employee any accrued but unpaid base salary for services rendered to Employee's Termination Date, any accrued but unpaid expenses required to be reimbursed under this Agreement and any vacation accrued to Employee's Termination Date. (ii) Lump Sum Payment. The Company shall pay Employee an amount equal to the product of five times the sum of (a) and (b) below: (a) Employee's annualized base salary at the highest annual rate in effect at any time prior to the Employee's termination date; and (b) The highest amount of annual bonus payable to Employee at any time prior to the Employee's termination date. (c) The foregoing amount will be paid to Executive (less required withholding taxes) in a single lump sum within 30 business days after the Termination Date. (iii) Other Benefits. Any benefits to which Employee may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(c) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements. (iv) No Mitigation Required. Except as otherwise provided herein, Employee shall not be required to mitigate the amount of any compensation provided for under this Section 8. by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any 2 compensation earned by the Employee as the result of employment with another employer after the Employee's termination date or by any other compensation. (v) Non-Competition Covenant Does Not Apply. The restrictive covenant prohibiting competitive activity set forth in Section 11. below shall not be applicable to Employee and shall be null and void. (vi) No Other Benefits or Compensation. Except as may be provided under this Agreement, under the terms of any incentive compensation, employee benefit, or fringe benefit plan, applicable to Employee at the time of Employee's termination or resignation of employment, Employee shall have no right to receive any other compensation, or to participate in any other plan, arrangement or benefit, with respect to future period after such termination or resignation. (B) No Severance Pay will be required if the employment of the Employee is terminated by the Company for Cause (as hereinafter defined) or by the Employee (other than for Good Reason as defined in Paragraph 9) or if the Employee gives notice to terminate in accordance with Paragraph 1. The Severance Pay provided herein is provided in order to reinforce and encourage the continued loyalty, attention, and dedication of the Employee to the Company's business and affairs without the concerns which normally arise from the possibility of a loss of employment security. As used herein, the terms "Retirement" and "Cause" shall have the following meanings, respectively: (a) Retirement. Termination of the Employee's employment on account of "Retirement" shall mean termination on or after the Employee's normal retirement date in accordance with the terms of the Ogden 401(k) Plan; and (b) Cause. Termination by the Company of the Employee's employment for "Cause" shall mean termination as a result of (i) the willful and continued failure by the Employee to perform substantially the services contemplated by this Agreement (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Employee by a member or representative of the Board of Directors of the Company which specifically identifies the manner in which it is alleged that the Employee has not substantially performed such services, or (ii) the willful engaging 3 by the Employee in gross misconduct which is materially and demonstrably injurious to the Company; provided that, no act, or failure to act, on the Employee's part shall be considered "willful" unless done, or omitted to be done, in bad faith and without reasonable belief that such action or omission was in, or not opposed to, the best interests of the Company." (IV) Paragraph 9. Termination by the Employee for Good Reason of the Employment Agreement is amended by adding the following Subparagraph (e) thereto, all other terms of Paragraph 9. remain unchanged and in full force and effect: "(e) any "Change in Control" of the Company as defined in Appendix A to this Agreement". AGREED AND ACCEPTED Very truly yours, Ogden Corporation /s/ Quintin G. Marshall - ----------------------- Date: September __, 1998 By /s/ R. Richard Ablon Quintin G. Marshall -------------------------- Chairman of the Board, President and Chief Executive Officer 4 APPENDIX A DEFINITION OF CHANGE IN CONTROL The following definition of Change in Control shall apply for purposes of Paragraph 9.(e) of the Employment Agreement: Change in Control. Change in Control of the Company shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied: (a) Any person, or more than one person acting as a group (within the meaning of the Securities Exchange Act of 1934), other than a trustee or other fiduciary holding securities under an employee benefit plan sponsored by the Company, becomes the beneficial owner, directly or indirectly, of securities of the Company, representing more than twenty-five percent (25%) of the combined voting power of the Company's then outstanding securities; (b) Individuals who, as of May 20, 1998, constitute the Board of Directors of the Company (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 20, 1998, whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or (c) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all of the Company's assets; or (iii) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. 5 EX-10.8(J)(I) 7 EXHIBIT 10.8(J)(I) Exhibit 10.8(j)(i) October 13, 1998 Mr. Jesus Sainz Paseo Conde de los Gaitanes, 34 La Moraleja 28109 Madrid, Spain Dear Mr. Sainz: This letter will confirm the agreement between you and Ogden Corporation (the "Company") that, effective as of October 1, 1998, Paragraph 9. Termination by the Employee for Good Reason of the Employment Agreement between you and the Company, dated as of January 15, 1997 (the "Employment Agreement") is hereby amended by adding the following Subparagraph (e) thereto: "(e) any "Change in Control" of the Company as defined in Appendix A to this Employment Agreement". All other terms and conditions of the Employment Agreement remain unchanged and in full force and effect. AGREED AND ACCEPTED Very truly yours, Ogden Corporation /s/ Jesus Sainz Date: October __, 1998 By /s/ R. Richard Ablon - --------------- --------------------------- Jesus Sainz Chairman of the Board, President and Chief Executive Officer APPENDIX A DEFINITION OF CHANGE IN CONTROL The following definition of Change in Control shall apply for purposes of Paragraph 9.(e) of the Employment Agreement: Change in Control. Change in Control of the Company shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied: (a) Any person, or more than one person acting as a group (within the meaning of the Securities Exchange Act of 1934), other than a trustee or other fiduciary holding securities under an employee benefit plan sponsored by the Company, becomes the beneficial owner, directly or indirectly, of securities of the Company, representing more than twenty-five percent (25%) of the combined voting power of the Company's then outstanding securities; (b) Individuals who, as of May 20, 1998, constitute the Board of Directors of the Company (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 20, 1998, whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or (c) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all of the Company's assets; or (iii) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. 2 EX-10.8(K)(I) 8 EXHIBIT 10.8(K)(I) Exhibit 10.8(k)(i) Octoer 3, 1998 Mrs. Alane Baranello 54 Castle Ridge Road Manhasset, New York 11030 Dear Mrs. Baranello: This letter will confirm that the Employment Agreement between you and Ogden Services Corporation dated as of October 28, 1996 (the "Employment Agreement") is hereby amended effective as of October 1, 1998 as follows: (i) Ogden Corporation is hereby substituted for Ogden Services Corporation as the Employer and Company under the Employment Agreement, and (ii), Paragraph 9. Termination by the Employee for Good Reason of the Employment Agreement is hereby amended by adding the following Subparagraph (e) thereto: "(e) any "Change in Control" of the Company as defined in Appendix A to this Employment Agreement." All other terms and conditions of the Employment Agreement remain unchanged and in full force and effect. AGREED AND ACCEPTED Very truly yours, Ogden Corporation /s/ Alane G. Baranello Date: October 3, 1998 By /s/ R. Richard Ablon - ---------------------- -------------------------- Alane G. Baranello Chairman of the Board, President and Chief Executive Officer APPENDIX A DEFINITION OF CHANGE IN CONTROL The following definition of Change in Control shall apply for purposes of Paragraph 9.(e) of the Employment Agreement: Change in Control. Change in Control of the Company shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied: (a) Any person, or more than one person acting as a group (within the meaning of the Securities Exchange Act of 1934), other than a trustee or other fiduciary holding securities under an employee benefit plan sponsored by the Company, becomes the beneficial owner, directly or indirectly, of securities of the Company, representing more than twenty-five percent (25%) of the combined voting power of the Company's then outstanding securities; (b) Individuals who, as of May 20, 1998, constitute the Board of Directors of the Company (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 20, 1998, whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or (c) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all of the Company's assets; or (iii) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. 2 EX-10.8(M) 9 EXHIBIT 10.8(M) Exhibit 10.8(m) EMPLOYMENT AGREEMENT OGDEN CORPORATION (the "Company") and RAY DOMBROWSKI ("Executive") agree to enter into this EMPLOYMENT AGREEMENT dated as of September 21, 1998, as follows: 1. Employment. The Company hereby agrees to employ Executive, and Executive hereby agrees to be employed by the Company, upon the terms and subject to the conditions set forth in this Agreement. 2. Employment Term. The period of Executive's employment under this Agreement shall begin as of September 21, 1998 (the "Effective Date") and shall continue until terminated in accordance with Section 5 below (the "Employment Term"). 3. Duties and Responsibilities. (a) The Company will employ Executive as its Chief Financial Officer. In such capacity, Executive shall perform the customary duties and have the customary responsibilities of such position and such other duties as may be assigned to Executive from time to time by the Company's Chief Executive Officer or by the Company's Board of Directors (the "Board"). (b) Executive agrees to faithfully serve the Company, devote his full working time, attention and energies to the business of the Company its subsidiaries and affiliated entities, and perform the duties under this Agreement to the best of his abilities. Executive may perform services without direct compensation therefor in connection with the management of personal investments or in connection with charitable or civic organizations. (c) Executive agrees (i) to comply with all applicable laws, rules and regulations, and all requirements of all applicable regulatory, self-regulatory, and administrative bodies; (ii) to comply with the Company's Policy of Business Conduct; and (iii) not to engage in any other business or employment without the written consent of the Company except as otherwise specifically provided herein. 4. Compensation and Benefits. (a) Signing Bonus. The Company shall pay the Executive a signing bonus ("Signing Bonus") in the amount of $50,000 as soon as practicable following the execution of this Agreement, but in no event sooner than seven (7) days thereafter. In the event that the Executive's employment with the Company is either terminated by the Company for Cause pursuant to Section 5(c) or by the Executive pursuant to Section 5(e) for other than Good Reason prior to September 21, 1999, the Signing Bonus shall be repaid by the Executive to the Company. (b) Base Salary. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $300,000 per year or such higher rate as may be determined from time to time by the Board ("Base Salary"). Such Base Salary shall be paid in accordance with the Company's standard payroll practice for senior executives. (c) Annual Incentive Bonus. During the Employment Term, the Company will be eligible for an annual incentive bonus in such amount as may be determined by the Board, provided that Executive's target incentive bonus for 1998 will be $220,000 and the minimum bonus payable to Executive for 1998 will be at least $110,000. The actual amount of the bonus will be calculated based on the Company's financial performance and Executive's achievement of pre-determined goals. (d) Initial Stock Option Grant. Executive will be granted options to purchase 50,000 shares of Ogden common stock pursuant to the Ogden Stock Option Plan. During the Employment Term, Executive also will be considered for the grant of additional stock options from year-to-year as determined by the Board. (e) Expense Reimbursement. The Company shall promptly reimburse Executive for the ordinary and necessary business expenses incurred by Executive in the performance of the duties under this Agreement in accordance with the Company's customary practices applicable to senior executives, provided that such expenses are incurred and accounted for in accordance with the Company's policy. (f) Other Benefit Plans, Fringe Benefits and Vacations. Executive shall be eligible to participate in or receive benefits under any pension plan, profit sharing plan, 401(k) plan, non-qualified deferred compensation plan, supplemental executive retirement plan, medical and dental benefits plan, life insurance plan, short-term and long-term disability plans, incentive compensation plans, vacations, or any other fringe benefit plan, generally made available by the Company to senior executives. Except as otherwise provided in this Agreement, any such participation shall be in accordance with the provisions of such plans and nothing contained in this Agreement is intended to, or shall be deemed to, affect adversely any of Executive's rights as a participant under any such plans. Nothing herein shall prevent the Board from (i) paying a bonus to Executive under any incentive plan which it adopts and in which the other executives participate or (ii) modifying or discontinuing any benefit plan on a consistent and non-discriminatory basis applicable to all such executives. (g) New York City Apartment. The Company will provide Executive with an apartment located near the Company's principal place of business in New York City selected by mutual agreement of the parties for the Executive's sole use during the Employment Term. 5. Termination of Employment. Executive's employment under this Agreement may be terminated under the following circumstances: (a) Death. Executive's employment shall terminate upon Executive's death. (b) Total Disability. The Company may terminate Executive's upon his becoming "Totally Disabled". For purposes of this Agreement, Executive shall be "Totally Disabled" if he is physically or mentally incapacitated so as to render him incapable of performing his usual and customary duties under this Agreement. Executive's receipt of disability benefits under the Company's long-term disability plan or receipt of Social Security disability benefits shall be deemed conclusive evidence of Total Disability for purpose of this Agreement; provided, however, that in the absence of Executive's receipt of such long-term disability benefits or Social Security benefits, the Board may, in its reasonable discretion (but based upon appropriate medical evidence), determine that Executive is Totally Disabled. (c) Termination by the Company for Cause. The Company may terminate Executive's employment for "Cause". Such termination shall be effective as of the date specified in the written Notice of Termination provided to Executive. (i) Termination of employment by the Company for Cause shall be deemed to have occurred only if such termination directly results from: (A) an act or acts of dishonesty on Executive's part constituting a felony; (B) Executive's willful and continued failure to devote the time, attention, and effort necessary to substantially perform his duties as an executive officer of the Company in a manner consistent with Executive's past performance (other than any such failure resulting from Executive's incapacity due to physical or mental illness), after a demand for substantial performance is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed his duties and Executive is given a reasonable time after such demand substantially to perform his duties; (C) gross misconduct or gross negligence in connection with the business of the Company or an affiliate which has substantial effect on the Company or the affiliate; or (D) a material breach of any of the covenants set forth in Section 7 hereof. (ii) Executive's employment shall in no event be considered to have been terminated by the Company for Cause if the act or failure to act upon which such termination is based: (A) was done or omitted to be done as a result of bad judgment or negligence on Executive's part, or without intent of gaining therefrom directly or indirectly a profit to which Executive was not legally entitled, or as a result of Executive's good faith belief that such act or failure to act, was, and is, not opposed to the interests of the Company; or (B) is an act or failure to act in respect of which Executive meets the applicable standard of conduct prescribed for indemnification or reimbursement or payment of expenses under the By-laws of the Company or the laws of the state of its incorporation or the liability insurance covering directors and officers of the Company, in each case as in effect at the time of such act or failure to act. (iii) Any determination of Cause under this Agreement shall be made by resolution duly adopted by the affirmative vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to Executive and an opportunity for Executive, together with Executive's counsel, to be heard before the Board), finding that in the good faith opinion of the Board that Executive was guilty of conduct set forth above in clause (i) of this Section 5(c) and specifying the particulars thereof in detail. (d) Termination by the Company without Cause. The Company may terminate Executive's employment under this Agreement without Cause at any time after providing Notice of Termination to Executive. (e) Termination by Executive. Executive may terminate his employment under this Agreement at any time after providing Notice of Termination to the Company. Such Notice shall state whether the Executive's termination is for "Good Reason". Termination of employment by Executive for Good Reason shall be deemed to have occurred, if Executive provides the Notice of Termination within 60 days after the occurrence of any of the following: (i) A change in Executive's responsibilities, status, title, or position, which, in Executive's reasonable judgment, represents a diminution of Executive's responsibilities, status, title, or position offices, or any removal of Executive from, or any failure to re-elect Executive to, any of such titles, offices, or positions, provided that this clause shall not apply if -------- Executive's employment is terminated as a result of: (A) Executive's death, (B) Executive's Total Disability in accordance with Section 5(c), (C) Cause in accordance with Section 5(d), or (D) Executive's voluntary termination in accordance with this Section 5(e) other than for Good Reason. (ii) A reduction by the Company in Executive's Base Salary. (iii) The failure of the Company substantially to maintain and to continue Executive's participation in the Company's benefit plans (other than those plans or improvements that have expired thereafter in accordance with their original terms), or the taking of any action which would materially reduce Executive's benefits under any of such plans or deprive Executive of any material fringe benefit enjoyed by him. (iv) The failure by the Company to pay any material amount of current compensation owing to Executive, or any material amount of compensation deferred under any plan, agreement or arrangement of or with the Company owing to Executive, within 20 days after the Executive makes written demand for such amount. (v) The failure by the Company to obtain an assumption of the obligations of the Company under this Agreement by any successor to the Company. (vi) Any purported termination of Executive's employment which is not effected pursuant to a Notice of Termination, and for purposes of this Agreement, no such purported termination shall be effective. (vii) Any "Change in Control" of the Company as defined in Appendix A to this Agreement. (f) Notice of Termination. Any termination of Executive's employment by the Company or by Executive (other by reason of Executive's death) shall be communicated by written Notice of Termination to the other party in accordance with Section 16 below. For purposes of this Agreement, a "Notice of Termination" shall mean a notice in writing which shall indicate the specific termination provision in this Agreement relied upon to terminate Executive's employment and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated. (g) Termination Date. Termination Date means (i) if Executive's employment is terminated because of his death, the date of death, or (ii) if employment is terminated for any other reason, the date specified in the Notice of Termination. 6. Compensation Following Termination of Employment. (a) Termination by Reason of Death. In the event that Executive's employment is terminated by reason of Executive's death, the Company shall pay the following amounts to Executive's beneficiary or estate: (i) Earned But Unpaid Compensation. Any accrued but unpaid Base Salary for services rendered to the date of death, any accrued but unpaid expenses required to be reimbursed under this Agreement, and any vacation accrued to the date of death. (ii) Lump Sum Payment. An amount equal to the Base Salary (at the rate in effect as of the date of Executive's death) which would have been payable to Executive if Executive had continued in employment until the last day of the month in which Executive's death occurs. Such amount shall be paid in a single lump sum cash payment within 30 days after Executive's death. (iii) Other Benefits. Any benefits to which Executive may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(e) hereof as determined and paid in accordance with the terms of such plans, policies and arrangements. (b) Termination by Reason of Total Disability. In the event that Executive's employment is terminated by reason of Executive's Total Disability prior to the last day of the Employment Term as determined in accordance with Section 5(b), the Company shall pay the following amounts to Executive: (i) Earned But Unpaid Compensation. Any accrued but unpaid Base Salary for services rendered to Executive's Termination Date, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to the Termination Date. (ii) Continuation of Base Salary. An amount equal to (A) the Base Salary (at the rate in effect as of the date of Executive's Total Disability) which would have been payable to Executive if Executive had continued in active employment until the end of the 12-month period following Executive's Termination Date, or such longer period as may be determined by the Board, (B) reduced by amount of disability insurance benefits payable to Executive during such period under any employer-paid disability insurance plan. Payment shall be made at the same time and in the same manner as such compensation would have been paid if Executive had remained in active employment until the end of such period. (iii) Other Benefits. Any benefits to which Executive may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(e) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements. (c) Termination for Cause or Termination By Executive for Other Than Good Reason. In the event that Executive's employment is terminated by the Company for Cause pursuant to Section 5(c), or by Executive pursuant to Section 5(e) for other than Good Reason, the Company shall pay the following amounts to Executive: (i) Earned But Unpaid Compensation. Any accrued but unpaid Base Salary for services rendered to Executive's Termination Date, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to Executive's Termination Date. (ii) Other Benefits. Any benefits to which Executive may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(e) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements. (d) Termination By the Company Without Cause or Termination by Executive for Good Reason. Executive shall be entitled to the benefits described in this Section 6(d) in the event that Executive's employment is terminated (i) by the Company pursuant to Section 5(d) for reasons other than death, Total Disability, or Cause, or (ii) by Executive for Good Reason pursuant to Section 5(e). (i) Earned But Unpaid Compensation. The Company shall pay Executive any accrued but unpaid Base Salary for services rendered to Executive's Termination Date, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to Executive's Termination Date. (ii) Lump Sum Payment. The Company shall pay Executive an amount equal to the product of five times the sum of (A) and (B) below: (A) Executive's annualized Base Salary at the highest annual rate in effect at any time prior to the Termination Date; and (B) the amount of annual bonus payable to Executive for the calendar year ending immediately prior to the calendar year in which the Termination Date occurs. This amount will be paid to Executive in a single lump sum within 30 business days after the Termination Date. (iii) Gross-Up Payment. In the event that any portion of the benefits payable under this Section 6(d) and any other payments and benefits under any other agreement with or plan of the Company (in the aggregate, "Total Payments") constitute an "excess parachute payment" within the meaning of Section 280G of the Internal Revenue Code (the "Code"), then the Company shall pay Executive as promptly as practicable following such determination an additional amount (the "Gross-up Payment") calculated as described below to reimburse Executive on an after tax basis for any excise tax imposed on such payments under Section 4999 of the Code. The Gross-up Payment shall equal the amount, if any, needed to ensure that the net parachute payments (including the Gross-up Payment) actually received by Executive after the imposition of federal and state income and excise taxes (including any interest or penalties imposed by the Internal Revenue Service), is equal to the amount that Executive would have netted after the imposition of federal and state income taxes had the Total Payments not been subject to the taxes imposed by Section 4999. For purposes of this calculation, it shall be assumed that Executive's tax rate will be the maximum marginal federal and state income tax rate on earned income, with such maximum federal rate to be computed with regard to Section 1(a) of the Code. In the event that Executive and the Company are unable to agree as to the amount of the Gross-up Payment, if any, Executive shall select a law firm or accounting firm from among those regularly consulted (during the 12-month period immediately prior to the Termination Date) by the Company regarding federal income tax matters and such law firm or accounting firm shall determine the amount of Gross-up Payment and such determination shall be final and binding upon Executive and the Company. (iv) Other Benefits. Any benefits to which Executive may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(e) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements. (v) No Mitigation Required. Executive shall not be required to mitigate the amount of any compensation provided for under this Section 6(d) by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by the Employee as the result of employment with another employer after the Termination Date or by any other compensation. (vi) Non-Competition Covenant Does Not Apply. The restrictive covenant prohibiting competitive activity set forth in Section 7(b) below shall not be applicable to Executive and shall be null and void. (e) No Other Benefits or Compensation. Except as may be provided under this Agreement, under the terms of any incentive compensation, employee benefit, or fringe benefit plan, applicable to Executive at the time of Executive's termination or resignation of employment, Executive shall have no right to receive any other compensation, or to participate in any other plan, arrangement or benefit, with respect to future periods after such termination or resignation. 7. Restrictive Covenants. (a) Protected Information. Executive recognizes and acknowledges that he will have access to various confidential or proprietary information concerning the Company and entities affiliated with the Company of a special and unique value which may include, without limitation, (i) books and records relating to operations, finance, accounting, sales, personnel and management, (ii) policies and matters relating particularly to operations such as customer service requirements, costs of providing service and equipment, operating costs and pricing matters, and (iii) various trade or business secrets, including business opportunities, marketing or business diversification plans, business development and bidding techniques, methods and processes, financial data and the like (collectively, the "Protected Information"). Executive therefore covenants and agrees that he will not at any time, either while employed by the Company or afterwards, knowingly make any independent use of, or knowingly disclose to any other person or organization (except as authorized by the Company) any of the Protected Information. (b) Competitive Activity. Executive covenants and agrees that at all times during his period of employment with the Company, and for a period of two (2) years after the date of termination of his employment by reason of (i) termination by the Company for Cause in accordance with Section 5(c) above, or (ii) termination by the Executive in accordance with Section 5(e) above for other than Good Reason, he will not, directly or indirectly, engage in, assist, or have any active interest or involvement whether as an employee, agent, consultant, creditor, advisor, officer, director, stockholder (excluding holding of less than 1% of the stock of a public company), partner, proprietor or any type of principal whatsoever, in any person, firm, or business entity which, directly or indirectly, is engaged in the same business as that conducted and carried on by the Company, without the Company's specific written consent to do so. (c) Return of Documents and Other Materials. Executive shall promptly deliver to the Company, upon termination of his employment, or at any other time as the Company may so request, all customer lists, leads and refunds, data processing programs and documentation, employee information, memoranda, notes, records, reports, tapes, manuals, drawings, blueprints, programs, and any other documents and other materials (and all copies thereof) relating to the Company's business or that of its customers, and all property associated therewith, which Executive may then possess or have under his control. 8. Enforcement of Covenants. (a) Right to Injunction. Executive acknowledges that a breach of the covenants set forth in Section 7 hereof will cause irreparable damage to the Company with respect to which the Company's remedy at law for damages will be inadequate. Therefore, in the event of breach or anticipatory breach of the covenants set forth in this section by Executive, Executive and the Company agree that the Company shall be entitled to the following particular forms of relief, in addition to remedies otherwise available to it at law or equity, injunctions, both preliminary and permanent, enjoining or retraining such breach or anticipatory breach and Executive hereby consents to the issuance thereof forthwith and without bond by any court of competent jurisdiction. (b) Separability of Covenants. The covenants contained in Section 7 hereof constitute a series of separate covenants, one for each applicable State in the United States and the District of Columbia, and one for each applicable foreign country. If in any judicial proceeding, a court shall hold that any of the covenants set forth in Section 7 exceed the time, geographic, or occupational limitations permitted by applicable laws, Executive and the Company agree that such provisions shall and are hereby reformed to the maximum time, geographic, or occupational limitations permitted by such laws. Further, in the event a court shall hold unenforceable any of the separate covenants deemed included herein, then such unenforceable covenant or covenants shall be deemed eliminated from the provisions of this Agreement for the purpose of such proceeding to the extent necessary to permit the remaining separate covenants to be enforced in such proceeding. Executive and the Company further agree that the covenants in Section 7 shall each be construed as a separate agreement independent of any other provisions of this Agreement, and the existence of any claim or cause of action by Executive against the Company whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any of the covenants of Section 7. 9. Certain Proprietary Rights. Executive agrees to and hereby does assign to the Company all his right, title and interest in and to all inventions, whether or not patentable, which are made or conceived solely or jointly by him: (a) at any time during the term of his employment by the Company in an executive, managerial, or planning capacity (including development and sales); or (b) during the course of or in connection with his duties during the Employment Term; or (c) with the use of time or materials of the Company. Executive agrees to communicate to the Company or its representatives all facts known to him concerning such inventions, to sign all rightful papers, make all rightful oaths and generally to do everything possible to aid the Company in obtaining and enforcing proper patent protection for all such inventions in all countries and in vesting title to such inventions in all countries and in vesting title to such inventions and patents in the Company. For the purpose of this Agreement, the subject matter of any application for patent naming Employee as a sole or joint inventor filed during the course of employment or within one year subsequent to the termination thereof shall be deemed to be an invention made or conceived by him during the course of his employment by the Company and assignable to the Company hereunder, unless Executive establishes by a preponderance of the evidence that such invention was made or conceived by him subsequent to termination of his employment hereunder. At the Company's request (during or after the term of this Agreement) and expense, Executive will promptly execute a specific assignment of title to the Company, and perform any other acts reasonably necessary to implement the foregoing assignment. 10. Withholding of Taxes. The Company shall withhold from any compensation and benefits payable under this Agreement all applicable federal, state, local, or other taxes. 11. Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise, shall be paid from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets made, to assure payment. Executive shall have no right, title or interest whatever in or to any investments which the Company may make to aid the Company in meeting its obligations under this Agreement. To the extent that any person acquires a right to receive payments from the Company under this Agreement, such right shall be no greater than the right of an unsecured creditor of the Company and its affiliates. 12. Successor and Binding Agreement. (a) Company Successor. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Executive to compensation from the Company in the same amount and on the same terms as Executive would be entitled to under this Agreement if Executive had given Notice of Termination for Good Reason as of the day immediately before such succession became effective and had specified that day in the notice of termination. As used in this Agreement, "Company" shall mean the Company as defined in the first sentence of this Agreement and any successor to all or substantially all its business or assets or which otherwise becomes bound by all the terms and provisions of this Agreement, whether by the terms hereof, by operation of law or otherwise. (b) Executive's Successor. This Agreement shall inure to the benefit of and be enforceable by Executive and his personal or legal representatives and successors in interest under this Agreement. (c) Facility of Payment. In the event of Executive's legal incapacity, the Company may make any payments due under this Agreement to his legal representative. In the event of Executive's death, the Company may make any payment due under this Agreement to his surviving spouse or, if none, to Executive's estate. Any payment made in accordance with this provision fully discharges the obligation of the Company therefor. 13. Assignment by Executive. The rights and benefits of Executive under this Agreement are personal to him and no such right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer; provided, however, that nothing in this Section 13 shall preclude Executive from designating a beneficiary or beneficiaries to receive any benefit payable on his death. 14. Entire Agreement; Amendment. This Agreement shall supersede any and all existing oral or written agreements, representations, or warranties between Executive and the Company or any of its subsidiaries or affiliated entities relating to the terms of Executive's employment during the Employment Term. It may not be amended except by a written agreement signed by both parties. 15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in that State, without regard to its conflict of laws provisions. 16. Notices. Any notice, consent, request or other communication made or given in connection with this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by registered or certified mail, return receipt requested, or by facsimile or by hand delivery, to those listed below at their following respective addresses or at such other address as each may specify by notice to the others: To the Company: Ogden Corporation Two Pennsylvania Plaza New York, New York 10121 Attention: General Counsel To Executive: Ray Dombrowski 120 Glenwood Road Haddonfield, New Jersey 08033 17. Miscellaneous. (a) Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. (b) Separability. If any term or provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such term or provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect. (c) Headings. Section headings are used herein for convenience of reference only and shall not affect the meaning of any provision of this Agreement. (d) Rules of Construction. Whenever the context so requires, the use of the singular shall be deemed to include the plural and vice versa. (e) Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts will together constitute but one Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year set forth below. OGDEN CORPORATION EXECUTIVE By:/s/ R. Richard Ablon ----------------------------- R. Richard Ablon Ray Dombrowski President and Chief Executive Officer Date: /s/ Ray Dombrowski ---------------------------- Date: ---------------------------- APPENDIX A DEFINITION OF CHANGE IN CONTROL The following definition of "Change in Control" shall apply for purposes of Paragraph 5(e)(vii) of the Employment Agreement: Change in Control. A "Change in Control" of the Company shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied: (a) Any person (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), becomes the beneficial owner, directly or indirectly, of securities of the Company, representing more than twenty-five percent (25%) of the combined voting power of the Company's then outstanding securities; (b) Individuals who, as of May 20, 1998, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to May 20, 1998, whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or (c) The stockholders of the Company approve: (i) a plan of complete liquidation of the Company; or (ii) an agreement for the sale or disposition of all or substantially all the Company's assets; or (iii) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. EX-11 10 EXHIBIT 11 EXHIBIT 11 OGDEN CORPORATION AND SUBSIDIARIES DETAILS OF COMPUTATION OF EARNINGS PER SHARE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------------------------------ 1998 1997 ---------------------------------------- --------------------------------------- INCOME SHARES PER-SHARE INCOME SHARES PER-SHARE (NUMERATOR) (DENOMINATOR) (AMOUNT) (NUMERATOR) (DENOMINATOR) AMOUNT ----------- ------------- --------- ----------- ------------- --------- (In Thousands) Net income ................... $66,915 $55,391 Less: preferred stock dividend 109 115 ------- ------- Basic Earnings Per Share ..... 66,806 50,071 $ 1.33 55,276 49,951 $ 1.11 ------- -------- Effect of Dilutive Securities: Stock Options ................ 887 374 Convertible preferred stock .. 109 258 115 278 6% convertible debentures .... 1,582 1,450 1,540 1,450 5 3/4% Convertible debentures 1,155 1,016 1,105 1,016 ------- ------- ------- ------- Diluted Earnings Per Share ... $69,652 53,682 $ 1.30 $58,036 53,069 $ 1.09 ------- ------- ------- ------- ------- --------
FOR THE THREE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------------------------------ 1998 1997 ---------------------------------------- --------------------------------------- INCOME SHARES PER-SHARE INCOME SHARES PER-SHARE (NUMERATOR) (DENOMINATOR) (AMOUNT) (NUMERATOR) (DENOMINATOR) AMOUNT ----------- ------------- --------- ----------- ------------- --------- (In Thousands) Net income ................... $28,155 $24,605 Less: preferred stock dividend 36 38 ------- ------- Basic Earnings Per Share ..... 28,119 49,653 $ 0.57 24,567 50,048 $ 0.49 ------- -------- Effect of Dilutive Securities: Stock Options ................ 575 555 Convertible preferred stock .. 36 255 38 272 6% convertible debentures .... 807 2,175 793 2,175 5 3/4% Convertible debentures 589 1,524 574 1,524 ------- ------- ------- ------- Diluted Earnings Per Share ... $29,551 54,182 $ 0.55 $25,972 54,574 $ 0.48 ------- ------- ------- ------- ------- --------
Note: Basic 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 11 EXHIBIT 27
5 1,000 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 353,669 0 414,195 33,893 32,958 997,909 2,608,034 628,469 3,974,330 620,781 1,945,608 0 43 24,609 525,228 3,974,330 402,604 1,298,443 363,760 732,068 0 2,118 25,018 111,812 42,488 66,915 0 0 0 66,915 1.33 1.30
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