THIS IS A CONFIRMING ELECTRONIC COPY OF THE PRELIMINARYSCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
OF EMCOR GROUP, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON SEPTEMBER 25, 1995.
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EMCOR GROUP, INC.
------------------------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified in itsIn Its Charter)
EMCOR GROUP, INC.
------------------------------------------------------------------------- --------------------------------------------------------------------------------
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Page 2
[LOGO]
EMCOR GROUP, INC.
101 MERRITT SEVEN CORPORATE PARK
NORWALK, CONNECTICUT 06851-1060
------------------------301 Merritt Seven
Norwalk, Connecticut 06851
- --------------------------------------------------------------------------------
NOTICE OF ANNUALSPECIAL MEETING
------------------------- --------------------------------------------------------------------------------
To the Stockholders of EMCOR Group, Inc.
The AnnualA Special Meeting of Stockholders of EMCOR Group, Inc. (the 'Company'"Company")
will be held inat the Boardroom, 5th Floor, 101offices of the Company, 301 Merritt Seven, Corporate Park,
Norwalk,
Connecticut 06851-1060,06851, on November 17, 1995,January 27, 2006 at 10:00 A.M. (local time) for the
following purposes:
1. To elect seven directors to serve until the next annual meeting and
until their successors are duly elected and qualify.
2. To consider adoption of a proposedapprove an amendment to the Company's Restated Certificate of
Incorporation, that would amend Article FOURTH thereofas amended, to among other
things, changeincrease the Company's capitalization by authorizing a new classnumber of 1,000,000authorized
shares of PreferredCommon Stock in such series with such designations,
powers, preferences and rights, as shall be determined by the Company's
Board of Directors.
3. To approve the adoption of the 1994 Management Stock Option Plan.
4. To approve the adoption of the 1995 Non-Employee Directors'
Non-Qualified Stock Option Plan.
5. To ratify the appointment of Arthur Andersen LLP as independent
auditors for 1995.
6.from 30,000,000 to 80,000,000 shares.
2. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on October 12, 1995December 27,
2005 as the record date for determination of stockholders entitled to receive
notice of, and to vote at, the AnnualSpecial Meeting and any adjournment thereof.
Your attention is respectfully directed to the accompanying Proxy
Statement.YOUR ATTENTION IS RESPECTFULLY DIRECTED TO THE ACCOMPANYING PROXY
STATEMENT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE
COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.
BY ORDER OF THE BOARD OF DIRECTORS
JOSEPH W. BARNETT
SecretaryBy Order of the Board of Directors
Sheldon I. Cammaker
SECRETARY
Norwalk, Connecticut
October , 1995December 29, 2005
EMCOR GROUP, INC.
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement relates to the first Annual Meeting of Stockholders of
EMCOR Group, Inc. (formerly JWP INC.), a Delaware corporation (the 'Company'),
following the Company's emergence from Chapter 11 of the United States
Bankruptcy Code upon the effectiveness on December 14, 1994 of the Third Amended
Joint Plan of Reorganization, as amended, of the Company and its subsidiary
SellCo Corporation (the 'Plan of Reorganization'). Under the Plan of
Reorganization the prepetition common stock of the Company was extinguished and
new Common Stock of the Company was issued to prepetition creditors of the
Company and to Belmont Capital Partners II, L.P. ('Belmont'), which provided the
Company with a debtor-in-possession credit facility during its Chapter 11
proceeding. Reference to Common Stock in this Proxy Statement is to the Common
Stock, par value $.01 per share, that was issued pursuant to the Plan of
Reorganization or that may hereafter be issued. The last meeting of stockholders
of the Company was held May 21, 1992.SPECIAL MEETING OF STOCKHOLDERS TO BE HELD JANUARY 27, 2006
- --------------------------------------------------------------------------------
The enclosed proxy is solicited by the Board of Directors of EMCOR
Group, Inc., a Delaware corporation (the "Company"), for use at a Special
Meeting of Stockholders (the "Special Meeting") to be held at 10:00 A.M. (local
time) on January 27, 2006 at the Company.
Itoffices of the Company, 301 Merritt Seven,
Norwalk, Connecticut 06851 and at any adjournment or postponement of such
meeting. The enclosed proxy may be revoked at any time before it is finally exercised by
delivering a written notice to the Secretary of the Company stating that the
proxy is revoked, by duly executing a subsequent proxy bearing a later date and presenting
it to the Secretary of the Company, or by attending the AnnualSpecial Meeting and
voting in person. Unless otherwise specified, the proxies from holders of the
Company's Common Stock, par value $.01 per share ("Common Stock"), will be voted
in favor of eachthe proposal set forth in the Notice of AnnualSpecial Meeting.
As of October 12, 1995,December 27, 2005, the Company had outstanding 9,360,56215,551,883 shares
of Common Stock. Only stockholders of record of Common Stock at the close of
business on October 12, 1995December 27, 2005 (the 'Record Date'"Record Date"), are entitled to notice of, and
to vote at, the annual meeting.Special Meeting. Each share of Common Stock entitles the holder
to one vote at the Special Meeting. The mailing address of the principal
executive officesoffice of the Company is 101301 Merritt Seven, Corporate Park, Norwalk, Connecticut
06851-1060,06851, and the approximate date on which this Proxy Statement and the
accompanying proxy are being first sent or given to stockholders is October December 29,
2005.
On December 15, 2005, the Company's Board of Directors unanimously
adopted a resolution declaring it advisable to amend Article Fourth of the
Company's Restated Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), 1995.subject to stockholder approval, to increase the number of
shares of Common Stock authorized for issuance under the Certificate of
Incorporation from 30,000,000 to 80,000,000. The proposed amendment to
effectuate the increase in the Company's authorized Common Stock is attached
hereto as Appendix A (the "Amendment").
The Common Stock was the only voting security of the Company
outstanding and entitled to vote on the Record Date. HoldersThe holders of record of a
majority of the outstanding shares of Common Stock are entitled to one vote per share on each matter to be voted uponwill
constitute a quorum for the transaction of business at the AnnualSpecial Meeting.
Assuming the presence of a quorum at the AnnualSpecial Meeting, the affirmative vote of
the holders of a plurality of the votes cast by the holders of shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting is necessary for the election of Directors. The affirmative vote
of the holders of a majority of the outstanding shares of Common Stock entitled
to vote at the Annual Meetingthereon is required for the adoption of the proposed
amendment to the Certificate of Incorporation of the Company. The affirmative
vote of the holders of a majority of the shares of Common Stock present in
person or represented by proxy and entitled to vote at the Annual Meeting is
required for approval of the 1994 Management Stock Option Plan and the 1995
Non-Employee Directors' Non-Qualified Stock Option Plan and for the ratification
of appointment of auditors.Amendment. With respect to
an abstention from voting on any
matter,the proposal and broker "non-votes," the shares
will be considered present and entitled to vote at the AnnualSpecial Meeting for
purposes of determining a quorum. A broker "non-vote" occurs if a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on the proposal. Accordingly, abstentions and theybroker
"non-votes" will have the same effect as votesof a vote against the matter.proposal.
AMENDMENT TO CERTIFICATE OF INCORPORATION
If approved by the stockholders, the proposed Amendment would increase
the authorized Common Stock from 30,000,000 to 80,000,000 shares.
The stockholders are being asked to vote in favor of the proposed
Amendment. If the Amendment is approved, it will become effective upon the
filing of the Amendment with the Secretary of State of the State of Delaware. To
the extent not used to effect the 2-for-1 stock split described below and not
reserved for issuance in respect of equity based compensation plans and
programs, the authorized but unissued shares of Common Stock would be available
for issuance from time to time for such purposes and for such consideration as
the Board of Directors may determine to be appropriate without further action by
the stockholders, except as may be required by law or the applicable regulations
of the New York Stock Exchange.
The additional shares of authorized Common Stock, when issued, would
have the same rights as privileges as the shares of Common Stock currently
issued and outstanding.
If the proposed Amendment is not approved by stockholders, the
Amendment will not be adopted and the 2-for-1 stock split described below will
not be implemented.
PURPOSES OF THE PROPOSED AMENDMENT
The primary purpose of the proposed Amendment is to provide a
sufficient number of shares of Common Stock to effect a 2-for-1 stock split in
the form of a 100% stock distribution declared by the Board of Directors on
December 15, 2005, subject to stockholder approval. Pursuant to the stock
distribution, each stockholder of record on January 30, 2006 would be entitled
to receive one additional share of Common Stock for each share of Common Stock
held on January 30, 2006.
Assuming stockholder approval of the Amendment, as of the Record Date,
the Company would have 64,448,117 shares of Common Stock authorized and
available for issuance. With respect to broker non-votes,such shares authorized and available for
issuance after giving effect to the Amendment, it is contemplated that
15,551,883 shares willwould be issued in respect of the 2-for-1 stock split and, in
order to prevent dilution under the Company's equity based plans and programs,
2,541,476 shares would be added to the number currently reserved for issuance
under such plans and programs, of which 1,264,935 shares would be issuable under
stockholder approved plans programs and 1,276,541 shares would be issuable under
plans and programs not approved by stockholders; therefore, leaving a net number
of 43,813,282 shares of Common Stock authorized and available for future
issuance.
In order to have additional authorized but unissued shares of Common
Stock available for issuance to meet business needs as they arise without the
expense or delay of another special meeting of stockholders to approve
additional authorized shares at that time, the Board of Directors believes that
it is in the Company's best interest to increase the number of shares of Common
Stock beyond the number necessary to effect the stock split and to be considered entitled to vote
at the Annual Meetingreserved
for such matter. Thus, the broker non-votes will have the
practical effect of (i) votes against theissuance under equity based plans and programs. Such business needs may
include future stock dividends or splits, equity financings, acquisitions,
adoption of new or modifying current employee benefit plans and other proper
corporate purposes identified by the Board of Directors in the future. However,
any future issuance of such shares of Common Stock of the Company would remain
subject to separate stockholder approval if required by law or the applicable
regulations of the New York Stock Exchange. Other than with respect to the
planned 2-for-1 stock split and the increase of shares reserved for issuance
under equity based compensation plans and programs discussed previously, the
Company has no existing or proposed plans, agreements or understandings to
issue, or reserve for issuance, any of the additional shares of Common Stock
that would be authorized by the proposed amendment toAmendment.
OTHER POTENTIAL EFFECTS OF THE PROPOSED AMENDMENT
There are numerous situations where the Company may issue additional
shares of Common Stock without seeking stockholder approval. The issuance of
additional shares of Common Stock, other than in connection with a stock split,
could have a dilutive effect on earnings per share, voting power and holdings of
current stockholders. Under the Company's Certificate of Incorporation, its
stockholders do not have preemptive rights to subscribe for additional
securities that may be issued by the Company. In addition, the proposed
Amendment, could under certain circumstances, have an anti-takeover effect.
However, the Board of Directors does not intend or view the increase in the
authorized Common Stock as an anti-takeover measure, and (ii) reducing the numberBoard of affirmative votes required to achieveDirectors
is not aware of any proposed or contemplated transaction of such type.
BOARD RECOMMENDATION
The Board of Directors recommends a majority vote for"FOR" the approval of the
1994
Management Stock Option Plan andAmendment to the 1995 Non-Employee Directors' Non-Qualified
Stock Option Plan and ratificationCertificate of the appointment of auditors by reducing
the total number of shares from which the majority is calculated.Incorporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of October 12, 1995December 27, 2005, certain
information regarding beneficial ownership of the Common Stock by each person or
group known by the Company to be a beneficial owner of more than five percent of
the Company'soutstanding shares of Common Stock. ExceptStock as otherwise noted, to the Company's knowledge,
each person or group listed below has sole voting and investment power with
respect to the shares listed next to its name.
of such date.
NUMBER OF
SHARES
BENEFICIALLY PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED OWNEDAmount and Nature Percent
Name and Address of Beneficial Owner of Beneficial Ownership Owned
- -------------------------------------- ------------ ------------------------------------------------------ ------------------------------------------
Belmont Capital Partners II, L.P. .... 740,482(1)(2) 7.9%FMR Corp 1,970,372(2) 13%
82 Devonshire Street
F7C
Boston, Massachusetts 02109
Cumberland Associates ................ 558,174(3) 6.0%
1114 Avenue of the Americas
New York, New York 10036
The TCW Group, Inc. .................. 940,978(2) 10.1%
8651,888,748(1) 12%
86 South Figueroa Street
Los Angeles, California 90017
- --------------------------------------------------------------------------------------------------
(1) Includes 672,158 shares of Common Stock and 28,272 shares, 28,272 shares,
and 11,780 shares issuable upon exercise of like number of the Company's
Series X Warrants, Series Y Warrants, and Series Z Warrants.
(2) There isBased on a reserve of 127,957 shares of Common Stock for disputed claims
against the Company to be issued to holders of prepetition unsecured allowed
claims including Belmont Capital Partners II, L.P. ('Belmont') andSchedule 13G Information Statement filed by The TCW Group, Inc.
('TCW'("TCW"). To on behalf of the extent such disputed claims are disallowed,TCW Business Unit, which consists of TCW and its
direct and indirect subsidiaries. The Schedule 13G discloses that the number of shares issued to Belmont and TCW
will increase in a presently
undeterminable amount.
(3) Cumberland AssociatesBusiness Unit has no voting power with respect to any of these
shares. However, as to 489,598 of these shares it has soleshared power to disposevote or direct the dispositionvote of them,1,771,938 of
such shares and as to 68,576 of these shares it has shared power to dispose or to direct the disposition
of them.
ELECTION OF DIRECTORS
At1,888,748 shares.
(2) Based on a Schedule 13G Information Statement filed by FMR Corp. ("FMR"),
Edward C. Johnson, 3rd ("Mr. Johnson") and Abigail P. Johnson
(collectively, the Annual Meeting, seven directors are to be elected by"Reporting Persons"). The Schedule 13G Information
Statement discloses that the holdersReporting Persons own beneficially 1,970,372
shares of Common Stock, have sole power to serve untilvote or to direct the next annual meetingvote of
stockholders20,500 of such shares, sole power to dispose or to direct the disposition
of the 1,970,372 shares, and until
their successors have been duly electedthe interest of Fidelity Low Price Stock Fund
in such shares amounted to 1,467,872 shares. The Schedule 13G also
discloses that Fidelity Management & Research Company ("Fidelity"), a
wholly owned subsidiary of FMR and qualify. To be electedan investment adviser, is the
beneficial owner of 1,949,872 of such 1,970,372 shares as a director,result of
acting as investment adviser to various investment companies, including
Fidelity Low Price Fund, and that Mr. Johnson, Chairman of FMR, and FMR,
through its control of Fidelity and certain investment companies, each nominee must receive the favorable vote of a pluralityhas
sole power to dispose of the 1,949,872 shares, present in person or represented by proxy and entitledthat neither FMR nor Mr.
Johnson has sole power to vote ator direct the meeting. Certain information concerning the nominees for election at the annual
meeting, eachvoting of whom is presently a director, is set forth below. While the
Board of Directors has no reason to believesuch 1,949,872
shares, that any of those named will not be
available as a candidate, should such a situation arise, the proxy may be voted
for the election of other nominees in the discretion of the persons acting
pursuant to the proxy. In accordance with the provisions of the Plan of
Reorganization, the Board of Directors of theFidelity Management Trust Company was reconstituted
effective December 15, 1994. Each of the Directors, other than Mr. Frank T.
MacInnis, Chairman of the Board, President and Chief Executive Officer of the
Company, and Mr. Thomas D. Cunningham, became a director on December 15, 1994.
Mr. MacInnis was elected a director by the Board on April 18, 1994 when he
became Chairman of the Board, President and Chief Executive Officer of the
Company, and Mr. Cunningham became a director on January 17, 1995 when he was
elected by the Board to fill a vacancy.
FRANK T. MACINNIS, Age 48; Chairman of the Board, President and Chief
Executive Officer of the Company since April 18, 1994. From April 1990 to April
1994 Mr. MacInnis served as President and Chief Executive Officer, and from
August 1990 to April 1994 as Chairman of the Board, of Comstock Group Inc.("FMT"), a nationwide electrical contracting company. In addition, from 1986 to April 1994
Mr. MacInnis was also President of Spie Group Inc., which owns Comstock Group
Inc., Spie Construction Inc., a Canadian pipeline construction company, and Spie
Horizontal Drilling Inc., a U.S. company engaged in underground drilling for,
and installation of, pipelines and communications cable.
STEPHEN W. BERSHAD, Age 53; Chairman and Chief Executive Officer for more
than the past five years of Vernitron Corporation, a manufacturer of electronic
components and controls; Director of the Company since December 15, 1994.
2
DAVID A.B. BROWN, Age 51; President of The Windsor Group, a management
consulting firm of which he is a co-founder, for more than the past five years.
Mr. Brown is also a director of BTU International, Inc. and The Western Company
of North America; Director of the Company since December 15, 1994.
THOMAS C. CUNNINGHAM, Age 46; Executive Vice President and Chief Financial
Officer and a director of The Forschner Group, Inc., an importer and distributor
of Swiss Army knives and watches and Sabatier and Forschner cutlery, since March
1994. For more than five years prior thereto, Mr. Cunningham was a Managing
Director of J.P. Morgan & Co. Incorporated, an international bank; Director of
the Company since January 17, 1995.
ALBERT FRIED, JR., Age 65; Managing Partner of Albert Fried & Company, a
broker/dealer and member of the New York Stock Exchange, since 1955. Mr. Fried
is also Chairman of the Board of Directors of Portec, Inc., a manufacturer of
engineered products for the construction equipment, material handling and
railroad industries, and is Vice Chairman of the Board of Directors of Oneita
Industries, Inc., a manufacturer and marketer of activewear, including T-shirts
and fleecewear; Director of the Company since December 15, 1994.
MALCOLM T. HOPKINS, Age 67; Private investor since 1984. Retired Vice
Chairman and Chief Financial Officer of the former St. Regis Corporation, a
forest products, oil, gas and insurance company. Mr. Hopkins is also a director
of The Columbia Gas System, Inc., KinderCare Learning Centers, Inc., MAPCO Inc.,
Metropolitan Series Fund, Inc. and U.S. Home Corporation and serves as Trustee
of The Biltmore Funds; Director of the Company since December 15, 1994.
KEVIN C. TONER, Age 31; Private Investor since March 1995; Managing
Director from December 1991 to March 1995 of UBS Securities Inc., a
broker/dealer and member of the New York Stock Exchange, engaged in corporate
finance, underwriting and distribution of high grade U.S. corporate issues and
Eurobonds. From March 1991 to December 1991 Mr. Toner was a Vice President of
UBS Securities and for more than five years prior thereto he held various
positions with CS First Boston, an investment banking firm; Director of the
Company since December 15, 1994.
COMMITTEES OF THE BOARD
The Company has standing Audit, Compensation and Personnel, and Corporate
Governance Committees of the Board of Directors.
The Audit Committee, comprised of Messrs. Brown, Cunningham and Hopkins,
serves as the focal point for communication between the Board of Directors and
the Company's independent auditors, chief internal auditor and management, to
the extent that their duties relate to financial or accounting reporting and
controls. The Audit Committee is responsible for engaging and discharging the
independent auditors for the Company, reviewing their fees, reviewing the scope
and procedures of the independent auditors, reviewing annual financial
statements, reviewing quarterly and annual financial results prior to their
release, and meeting with the Company's internal auditors and independent
auditors on matters relating to, among other things, the adequacy of the
Company's internal audit controls and accounting and auditing personnel.
The Compensation and Personnel Committee, comprised of Messrs. Cunningham,
Fried and Hopkins, reviews and advises the Board with respect to the
qualifications of individuals identified as candidates for positions as the
Company's Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer and General Counsel and for the position of Chief Executive Officer of
each subsidiary of
FMR, is the Company whose proposed annual compensation is $200,000beneficial owner of 20,500 of such 1,970,372 shares of Common
Stock, that Mr. Johnson and FMR, through its control of FMT, each has sole
dispositive power over the 20,500 shares and sole power to vote or more. It also reviews and recommends to
direct the Board for its approval any
employment, severance or similar contracts, or modifications thereof, for the
Chairmanvoting of the Board and Chief Executive Officer of the Company and is charged
with fixing on an annual basis his compensation, subject to the approval of the
Board. The Compensation and Personnel Committee also is responsible for fixing,
based on proposals made by the Chief Executive Officer, compensation for the
Chief Operating Officer, Chief Financial Officer and General Counsel of the
Company as well as the compensation of other officers and employees of the
Company and each subsidiary whose annual compensation is $200,000 or more and
approving any employment, severance or similar contracts for them, or
modifications thereof. The Compensation and Personnel Committee also is to
recommend to the Board for its approval any incentive, benefit, award or bonus
plans and programs for employees, to administer the 1994 Management Stock Option
Plan and to review executive development plans.
3such 20,500 shares.
The Corporate Governance Committee, comprised of Messrs. Bershad, Brown and
Toner, is responsible to the Board for the review and recommendation of director
candidates; recommendations regarding directors' retirement age and removal;
review of all committees of the Board and recommendations regarding their
number, function and membership; recommendations with respect to compensation of
and other benefits for non-employee directors; review of and recommendations
with respect to directors' and officers' liability insurance and indemnification
agreements between the Company and its officers and directors. The Corporate
Governance Committee will consider nominees recommended by stockholders. Such
recommendations should be sent to the Secretary, EMCOR Group, Inc., 101 Merritt
Seven Corporate Park, Norwalk, Connecticut 06851-1060.
There were ten meetings of the Board of Directors during 1994. During 1994
the Board of Directors did not have any Committees. Only Mr. MacInnis served as
a director of the Company prior to December 15, 1994, the date the Company's
Plan of Reorganization became effective. The Board of Directors as constituted
following the effectiveness of the Company's Plan of Reorganization on December
15, 1994 did not hold any meetings in 1994. During the period January 1, 1995
through September 30, 1995, the Board of Directors of the Company held 8
meetings.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of December 27, 2005, certain
information with respect toregarding the beneficial ownership of the Company's Common Stock as of October 12, 1995 by its
directors, its chief executive officer, each of
the twoCompany's directors, its Chief Executive Officer, each of the other four other
most highly compensated executive officers of the Company for its fiscal year ended
December 31, 1994 who remain in the employ of the Company, and all its directors
and executive officers as a group. Except as otherwise noted, to the Company's
knowledge, each of the persons listed below has sole voting power and investment
power with respect to the shares listed next to his name.
AMOUNT AND
NATURE OF
BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP(1) PERCENTAmount and Nature of
Name of Beneficial Owner Beneficial Ownership(1) Percent
- ------------------------------------------------- ------------ -------------------------------------------------- ------------------------------------------
Frank T. MacInnis................................ -- --MacInnis 699,150(2) 4.5
Stephen W. Bershad............................... 17,500(2)Bershad 65,994(3) *
David A.B. Brown................................. 7,500(2)Brown 49,994(3) *
Thomas D. Cunningham............................. 7,500(2)Larry J. Bump 32,894(3) *
Albert Fried, Jr. ............................... 197,952(2)(3) 2.1%
Malcolm65,494(3) *
Richard F. Hamm, Jr. 44,994(3) *
Michael T. Hopkins............................... 12,500(2)Yonker 34,327(3) *
Kevin C. Toner................................... 12,500(2)Anthony J. Guzzi 46,244(2) *
Sheldon I. Cammaker.............................. -- --
Jeffrey M. Levy.................................. -- --Cammaker 139,701(2) *
Leicle E. Chesser 157,823(2) 1.0
R. Kevin Matz 124,898(2) *
All directors and executive officers as a group.. 255,452(2) 2.7%group 1,546,527(4) 9.9
- --------------------------------------------------------------------------------------------------
* Represents less than 1%.
(1) The information contained in the table reflects 'beneficial ownership'"beneficial ownership" as
defined in Rule 13d-3 of the Securities Exchange Act of 1934.1934, as amended.
All percentages set forth in this table have been rounded.
(2) Includes options granted to each non-employee Director on March 20, 1995
pursuant toin the Company's 1995 Non-Employee Directors' Non-Qualified Stock
Option Plan, which is subject to the approvalcase of stockholders of the Company
at the annual meeting, to purchase 7,500 shares of Common Stock, at an
exercise price of $5.125 per share, which price was equal to the market
price for the Common Stock on the date of grant.
(3) Amount includes beneficial ownership of 190,452 shares of Common Stock by
Albert Fried & Company ('AF&C'), of which Mr. Fried is the managing partner.
AF&C received certain of these shares of Common Stock in its capacity as a
holder of prepetition unsecured claims against the Company. There is a
reserve of 127,957 shares of Common Stock for disputed claims against the
Company to be issued to the holders of prepetition general unsecured allowed
claims, including AF&C, and to Belmont. To the extent such disputed claims
are disallowed, the number of shares issued to AF&C will increase in a
presently undeterminable amount.
4
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following Summary Compensation Table sets forth the compensation
awarded to, earned by or paid to each of the Chief Executive Officer and the
other four most highly compensated executive offices of the Company
(collectively the 'named executive officers') during the fiscal years ended
December 31, 1994, 1993 and 1992 for services rendered in all capacities to the
Company and its subsidiaries. On April 18, 1994, Mr. Edward F. Kosnik resigned
as Chairman of the Board, President and Chief Executive Officer of EMCOR and Mr.
Frank T. MacInnis assumed such offices. For information regarding Mr. Kosnik's
resignation and the employment agreements, if any, of the named executive
officers, see 'Employment Contracts and Termination of Employment and Change of
Control Arrangements' below.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION AWARDS(4)
-----------------------------
NUMBER OF
ANNUAL COMPENSATION RESTRICTED SECURITIES
------------------- OTHER ANNUAL STOCK UNDERLYING ALL OTHER
SALARY(2) BONUS COMPENSATION(3) AWARD(5) OPTIONS/SARS(6) COMPENSATION(8)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
- ------------------------------ ---- --------- ------- ---------------- ----------- --------------- ---------------
Frank T. MacInnis(1) ......... 1994 426,923 250,000 None None (7) 261,356(9)
Chairman of the Board, 1993 -- -- -- -- -- --
President and Chief 1992 -- -- -- -- -- --
Executive Officer
Edward F. Kosnik(1) .......... 1994 146,154 None None None None 251,800(10)
Former Chairman of the 1993 483,460 80,000 None None None 7,800
Board, President and Chief 1992 30,769 None None 300,000 100,000 None
Executive Officer
Sheldon I. Cammaker .......... 1994 361,322 50,000 None None (7) 176,700(11)
Executive Vice President and 1993 357,450 50,000 None None None 8,875
General Counsel 1992 362,600 50,000 None 54,375 37,622 13,110
Jeffrey M. Levy(1) ........... 1994 247,500 175,000 None None (7) 6,300
Executive Vice President and 1993 195,000 150,000 None None 46,500 7,650
Chief Operating Officer 1992 120,000 100,000 None None None None
Stephen H. Meyers(1) ......... 1994 186,923 None None None None 248,435(12)
Former Senior Vice 1993 217,212 40,000 None 181,250 50,000 5,175
President--Finance 1992 -- -- -- -- -- --
- ------------------
(1) As Mr. MacInnis joined549,107 shares, in the Company on April 18, 1994, the blanks opposite
his name indicate that during 1992 and 1993 Mr. MacInnis was not employed
by the Company, and, accordingly, there is no compensation information to
report for him in respect of such years. In addition, amounts shown for Mr.
MacInnis for 1994 reflect less than a full year of compensation. As Mr.
Kosnik joined the Company in November 1992, and Mr. Levy joined the Company
in May 1992, amounts shown for each of them for 1992 reflect less than a
full year of compensation. Mr. Meyers joined the Company in January 1993
and the blanks opposite his name indicate that during 1992 there is no
compensation information to report for him in respect of such year. In
addition, amounts shown for Mr. Levy during 1992 and 1993 represent
compensation for Mr. Levy's service as President of EMCOR Mechanical/
Electrical Services (East), Inc., a subsidiary of the Company. Inasmuch
as Mr. Kosnik and Mr. Meyers left the Company's employ on April 18, 1994
and October 21, 1994, respectively, the amounts shown for them for 1994
reflect less than a full year of compensation. See 'Employment Contracts
and Termination of Employment and Change of Control Arrangements' below
for a descriptioncase of Mr.
Kosnik's and Mr. Meyers' termination arrangements.
(Footnotes continued on next page)
5
(Footnotes continued from previous page)
(2) Amounts shown include amounts the named executive officers earned but chose
to defer pursuant to the Company's 401(k) Retirement Savings Plan (the
'401(k) Plan'). Pursuant to the 401(k) Plan, Mr. Cammaker deferred $9,240
for 1994 and $8,994 for 1993 and 1992. Messrs. Kosnik, Levy and Meyers were
only eligible to contribute to the 401(k) Plan during 1994 and 1993, and
the amounts each of them deferred were $9,240 for 1994 and $8,994 for 1993.
Mr. MacInnis was not eligible to participateGuzzi 26,833 shares, in the 401(k) Plan during
1994. Amounts shown for the named executive officers also include the
amounts applied, if any, by them to payment of their respective medical
insurance premiums made pursuant to the Company's Premium Conversion Plan
(the 'Medical Plan'), a Cafeteria Plan established under Section 125 of the
Internal Revenue Code of 1986, as amended. Pursuant to the Medical Plan,
during 1994, the following amounts were applied by each of the following
named executive officers: Mr. Kosnik, $792, Mr. Cammaker, $4,208, Mr. Levy,
$2,453, and Mr. Meyers, $2,453; and during 1993, $2,275 was applied by each
of them. During 1992, Mr. Kosnik did not participate in the Medical Plan,
Mr. Cammaker applied $1,250 to the Medical Plan, and Mr. Levy applied $609
to the Medical Plan.
(3) The personal benefits provided to the named executive officers did not
exceed the disclosure threshold established by the SEC pursuant to
applicable rules.
(4) The column specified by the rules promulgated under the Securities Exchange
Act of 1934 to report Long-Term Incentive Plan Payouts has been excluded
because the Company has no long-term incentive compensation plans and has
not had any such plan during any portion of fiscal years 1994, 1993 or
1992.
(5) The dollar amounts shown for restricted stock awards are based on the
market prices for the Company's previously outstanding common stock (all of
which was canceled on December 15, 1994, the effective date of the Plan of
Reorganization) on the dates the respective awards were made. As of
December 31, 1994, none of the named executive officers held any restricted
stock awards since the Company's previously outstanding common stock was
canceled on the Effective Date. The 1992 restricted stock awards to Mr.
Cammaker reported in the table vested 50% on January 2, 1994 and would have
vested 50% on January 2, 1995. Upon joining the Company in November 1992,
Mr. Kosnik was awarded a grant of 100,000 shares of restricted stock,
one-third of which vested in November 1993 and the remaining shares were
forfeited upon his resignation. The award of restricted stock made in 1993
to Mr. Meyers vested one-third in January 1994 and the remainder vested in
October 1994 when Mr. Meyers' employment with the Company was terminated.
(6) The awards set forth in this column are of stock options only. The Company
did not award stock appreciation rights. The stock options refer to the
Company's previously outstanding common stock, all of which was canceled on
the effective date of the Plan of Reorganization.
(7) Mr. MacInnis received on April 5, 1995 an option to purchase 200,000 shares
of Common Stock at an exercise price of $4.75 per share, which price was
equal to the market price for the Common Stock on that date. Mr. Cammaker
and Mr. Levy each received on April 5, 1995 an option to purchase 50,000
shares of Common Stock at an exercise price of $5.13 per share, which price
was equal to the average market price for the Common Stock over the 20 day
trading period immediately preceding the issuance of the options.
(8) The amounts reported in this column include matching contributions made by
the Company under the 401(k) Plan during 1994, 1993 and 1992 for the
account of the named executive officers as follows: 1994 and 1993--Messrs.
Kosnik, Cammaker, Levy and Meyers, each $1,800; 1992--Mr. Cammaker, $1,800.
The amounts reported for 1994 also include contributions to be paid during
1995 in respect of 1994 by the Company for the account of the named
executive officers pursuant to the Company's Money Purchase Plan, a defined
contribution pension plan, as follows: Mr. Cammaker and Mr. Levy, each
$4,500. Messrs. MacInnis, Kosnik and Meyers were not eligible to
participate in the Money Purchase Plan for 1994 and Mr. MacInnis was not
eligible to participate in the 401(k) Plan for 1994. The amounts reported
for 1993 also include contributions made during 1994 in respect of 1993 by
the Company for the account of the named executive officers pursuant to the
Money Purchase Plan as follows: Mr. Kosnik, $6,000;
(Footnotes continued on next page)
6
(Footnotes continued from previous page)
Mr. Cammaker, $7,075; Mr. Levy, $5,850; and Mr. Meyers, $3,375. The amounts
reported for 1992 also include $6,866 as a contribution made during 1993 in
respect of 1992 by the Company for the accountcase of Mr. Cammaker pursuant to
the Money Purchase Plan. Messrs. Kosnik and Levy were not eligible to
participate128,778 shares, in the
Money Purchase Plan for 1992. For 1992, the amounts
reported also include a contribution made during 1992 in respectcase of 1991
pursuant to the Company's Employee Stock Ownership Plan of $4,444 for Mr. Cammaker. Inasmuch as Mr. MacInnis was not eligible to participateChesser 128,778 shares, and in the 401(k) Plan or the Money Purchase Plan for 1994, the amounts reported in
this column forcase of Mr. MacInnis include $6,300 payable to him under a
supplemental retirement plan in accordance with the terms of his employment
agreement.
(9) Amount includes a signing bonus of $250,000 paid to Mr. MacInnis upon his
joining the Company on April 18, 1994 and $5,056 representing amounts
reimbursed to him during 1994 pursuant to his employment contract for the
payment of taxes on fringe benefits.
(10) Amount includes payments of $100,000 in each of February and March 1994 and
$50,000 in April 1994 paid to induce Mr. Kosnik to remain with the Company
for a period of time to enable the Company to find a successor.
(11) Amount includes a stay bonus of $170,400 paid to Mr. Cammaker pursuant to
the EMCOR Group, Inc. Employees' Severance Pay/Stay Bonus Plan on September
30, 1994.
(12) Amount includes a stay bonus of $112,500 paid to Mr. Meyers on September
30, 1994 and a severance payment of $112,500 paid to Mr. Meyers on October
31, 1994 after Mr. Meyers' employment with the Company terminated on
October 21, 1994. This amount also includes an aggregate of $21,635 in
severance payments paid to Mr. Meyers in November and December of 1994. A
remaining $203,365 in severance payments owed to Mr. Meyers will be paid to
him in equal weekly installments during 1995. All of these payments to Mr.
Meyers were made pursuant to the EMCOR Group, Inc. Employees' Severance
Pay/Stay Bonus Plan.
EMPLOYEE OPTION EXERCISES AND HOLDINGS
All outstanding options to purchaseMatz 108,853
shares, of the previously outstanding
common stock of the Company held during 1994 by the named executive officers
were canceled on December 15, 1994, the effective date of the Plan of
Reorganization (the 'Effective Date'). In accordance with the terms of his
employment agreement, on April 5, 1995, Mr. MacInnis received an option pursuant
to the Company's 1994 Management Stock Option Plan to purchase 200,000 shares of
Common Stock at an exercise price of $4.75 per share, which price was equal to
the market price for the Common Stock on that date. On April 5, 1995, Mr.
Cammaker and Mr. Levy each received an option pursuant to the 1994 Management
Stock Option Plan to purchase 50,000 shares of Common Stock at an exercise price
of $5.13 per share, which price was equal to the average market price for the
Common Stock over the 20 day trading period immediately preceding the issuance
of the options. Options granted pursuant to the 1994 Management Stock Option
Plan are not exercisable until one year after the date of grant, at which time
one-third of the options become exercisable; thereafter, on each of the two
succeeding anniversary dates of the option grants another one-third of the
options become exercisable. See 'Approval of 1994 Management Stock Option Plan.'
No named executive officer exercised any options during 1994. No named executive
officer holds or held any stock appreciation rights.
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
EMPLOYMENT AGREEMENTS
The Company has entered into an Employment Agreement, dated as of April 18,
1994, with Frank T. MacInnis (the 'Agreement') providing for his employment as
Chief Executive Officer and President of the Company during the period April 18,
1994 through December 31, 1997. The Agreement provides that the term of
7
employment will automatically be extended for successive one-year periods unless
the Company or Mr. MacInnis gives written notice not to extend at least six
months prior to the end of such period. The Company is also to use its best
efforts to ensure his election as Chairman of the Board of Directors of the
Company.
Pursuant to the Agreement, the Company is to pay Mr. MacInnis an annual
base salary of $600,000 and to increase such base salary on the first day of
each calendar year during his employment by at least the percentage increase for
the prior year in a specified consumer price index. In addition, Mr. MacInnis is
entitled to receive an annual bonus, which, for the period ended on December 31,
1994, was to be no less than $150,000. For each calendar year thereafter, Mr.
MacInnis' bonus will be determined by a formula agreed upon by Mr. MacInnis and
the Compensation and Personnel Committee of the Board of Directors of the
Company. In addition to his salary and bonus, Mr. MacInnis has been paid a
one-time cash payment of $250,000 and received an option (the 'Option') to
purchase 200,000 shares of Common Stock. In accordance with the Agreement, the
Option was issued at an exercise price of $4.75 per share, which price was equal
to the market price for the Common Stock on April 5, 1995.
Under the terms of the Agreement, Mr. MacInnis has been provided with
certain benefits customarily accorded to the Company's senior executive officers
as well as supplemental benefits such that he will become fully vested in the
Company's Money Purchase Plan and 401(k) Plan. In addition, Mr. MacInnis is
entitled to $600 per month for leasing (plus maintenance and insurance) of an
automobile; reimbursement for all initiation fees and monthly dues for
membership in a club suitable for entertaining clients of the Company; all legal
expenses incurred by him in connection with the Agreement; and the cost of any
increased tax liability to him caused by the receipt of these fringe benefits.
If Mr. MacInnis' employment is terminated during the term of the Agreement
by the Company other than for Cause (as defined in the Agreement) or he
terminates his employment for Good Reason (as defined in the Agreement), Mr.
MacInnis will be entitled to receive a cash payment equal to the sum of: (i) the
greater of (A) his base salary at the highest annual rate in effect during his
employment from the date of termination through December 31, 1997 or (B) two
times his base salary at its then current annual rate and (ii) an amount equal
to the product of the highest bonus paid to him during his employment (but in no
event less than $150,000) times (A) the number of full or partial years
remaining from the date of termination through December 31, 1997 or (B) two,
whichever is greater; however, in the event of a termination following a Change
in Control (as defined in the Agreement), the factor of two in clause (i)(B)
above will be increased to three. In addition, Mr. MacInnis will be entitled to
receive all unpaid amounts in respect of any bonus for any calendar year ending
before the date of termination.
During 1994, the Company had an employment contract with Sheldon I.
Cammaker, expiring January 31, 1999, pursuant to which Mr. Cammaker serves as a
senior executive officer of the Company. Mr. Cammaker received an annual base
salary of $361,322 in 1994 which salary increases on the first day of each
calendar year during his employment by at least 6%. In addition, pursuant to the
terms of his employment contract, Mr. Cammaker is eligible to receive annual
bonuses, has been provided with certain benefits customarily accorded the
Company's senior executive officers and is provided with a Company automobile.
Mr. Cammaker's employment contract provides that, in the event of a change
in control of the Company and within two years thereafter Mr. Cammaker is
terminated or elects to terminate his employment, Mr. Cammaker would be entitled
to retain any shares of restricted stock of the Company previously issued to him
and to be paid an amount equal to the sum of (i) $470,000, (ii) $320,000
multiplied by each full calendar year remaining under his employment agreement,
and (iii) $320,000 less, with respect to clause (iii), the base salary already
paid to him for the year of termination.
Mr. Meyers, whose employment with the Company was terminated on October
21, 1994, had an employment agreement with the Company without a fixed term. Mr.
Meyers received a base salary at the annual rate of $225,000 and was eligible
for an annual bonus. Upon joining the Company, Mr. Meyers received a grant of an
option to purchase 50,000 shares of common stock, at an exercise price of $3.625
per share (the fair market value of a share of common stock on the date of
grant, January 15, 1993), in addition to a grant of 50,000 shares of restricted
stock. The option was canceled pursuant to the Plan of Reorganization.
8
Mr. Edward F. Kosnik joined the Company in November 1992 as Executive Vice
President and Chief Financial Officer. In April 1993 he became President and
Chief Executive Officer and became Chairman of the Board as of July 1, 1993. In
April 1994 Mr. Kosnik resigned as Chairman of the Board, President and Chief
Executive Officer of the Company. When Mr. Kosnik joined the Company he received
an employment agreement without a fixed term. Prior to becoming President and
Chief Executive Officer, his base salary was at the rate of $400,000 per annum
in accordance with the terms of his employment agreement, and thereafter his
salary was at the annual rate of $500,000. Pursuant to the employment agreement,
Mr. Kosnik received an option to purchase 100,000 shares of common stock, at an
exercise price of $3.00 per share (the fair market value of a share of common
stock on the date of grant, November 24, 1992), in addition to a grant of
100,000 shares of restricted stock. The restricted stock was to vest, and the
stock options were to become exercisable, one-third in November 1993, one-third
in November 1994 and one-third in November 1995. Mr. Kosnik's employment
agreement also provided that he was eligible for an annual bonus. In December
1993 Mr. Kosnik indicated a desire to leave the Company, and in order to induce
him to remain with the Company for a period of time to enable the Company to
find a successor, Mr. Kosnik was paid $250,000 in 1994 in addition to his base
salary and in addition to a bonus of $80,000 paid to him in respect of 1993.
Following his resignation, Mr. Kosnik's options lapsed and he forfeited 66,667
shares of the restricted stock issued to him that had not vested.
TERMINATION ARRANGEMENTS
Stephen H. Meyers' employment with the Company terminated pursuant to a
termination agreement dated October 21, 1994 (the 'Meyers Termination
Agreement'). Pursuant to the Meyers Termination Agreement, Mr. Meyers resigned
as an officer of the Company as of the close of business on October 31, 1994.
Mr. Meyers agreed to provide to the Company, upon reasonable notice, consulting
services of up to 40 hours during the period November 1, 1994 through February
28, 1995 without any charge to the Company, and at the rate of $125 per hour for
such services in excess of 40 hours. Mr. Meyers also agreed, following
reasonable notice, to use his best efforts to make himself reasonably available
for consulting services to the Company after February 28, 1995 at a rate of $125
per hour plus reimbursement of any reasonable and necessary out-of-pocket
expenses incurred in connection therewith.
The Meyers Termination Agreement also provides for the payment of $337,500
to Mr. Meyers in connection with the termination of his employment, of which
$112,500 was paid on October 31, 1994 (including $16,600 paid by the EMCOR
Group, Inc. Employee Severance Pay/Stay Bonus Plan which expired August 24,
1995) and the balance of $225,000 is payable in 52 equal weekly installments
which commenced November 1994.
OTHER ARRANGEMENTS
Effective as of June 25, 1993, the Company adopted the EMCOR Group, Inc.
Employees' Severance Pay/Stay Bonus Plan (the 'Plan') in order to encourage
designated employees of the parent corporation to continue their employment over
the next two years while the Company restructured its business operations. As
amended, the Plan provided that a Plan participant would be entitled to receive
a pre-determined amount of severance pay if his employment with the Company
terminated for reasons other than death, disability, voluntary resignation or
for cause (as defined) during the two-year period which commenced on June 25,
1993 and ended on June 24, 1995. Certain Plan participants also were entitled to
receive a predetermined stay bonus if they remained continuously employed with
the Company during the period which commenced on June 25, 1993 and ended on
September 30, 1994, and all stay bonuses payable under the Plan have been paid.
Through December 31, 1994, $969,514 had been contributed to the Plan and amounts
payable as stay bonuses aggregating $828,725 were fully funded and paid out on
September 30, 1994.
The Plan terminated automatically on August 24, 1995.
Under the terms of the Plan the following named executive officers of the
Company could have been entitled to receive a severance payment as follows:
Sheldon I. Cammaker--$340,788 and Jeffrey M. Levy--$247,500. See 'Executive
Compensation--Summary Compensation Table' above for the stay bonuses paid to
named executive officers.
9
PROPOSED AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
AUTHORIZING ISSUANCE OF PREFERRED STOCK
The Company's Board of Directors has unanimously approved, and is
submitting to the stockholders with a recommendation for its adoption, an
amendment to the Company's Restated Certificate of Incorporation. The amendment
is set forth in full below. Article FOURTH of the Company's Restated Certificate
of Incorporation currently authorizes 13,700,000 shares of stock, all of which
consist of shares of Common Stock. The amendment authorizes the Company to
issue, in addition to such shares of Common Stock, 1,000,000 shares of Preferred
Stock, in such series and with such designations, powers, preferences, and
rights as may be fixed from time to time by the Board of Directors for each
series. The proposed amendment also simplifies the Restated Certificate of
Incorporation by deleting from Article FOURTH thereof (i) certain provisions
specifying the voting, dividend and liquidation rights of holders of Common
Stock, the substance of which are provided for in the General Corporation Law of
the State of Delaware and are, accordingly, not required to be included in the
Company's Certificate of Incorporation, (ii) certain other provisions regarding
a prohibition on the issuance of non-voting equity securities which were
required to be included therein by Section 1123(a)(6) of the Bankruptcy Code in
order for the Plan of Reorganization to be confirmed by the Bankruptcy Court,
but which management believes are no longer applicable to the Company following
its emergence from Chapter 11, and (iii) provisions which were necessary to
extinguish and cancel the outstanding shares of pre-petition common stock and
preferred stock in accordance with the Plan of Reorganization, but which are no
longer required to be included in the Certificate of Incorporation.
REASONS FOR THE AMENDMENT
The Preferred Stock may be issued in one or more series, without further
stockholder approval, and with such designations, powers, preferences and rights
as the Board may fix, including dividend rates, liquidation, conversion and
voting rights and redemption prices, provided that all shares of Preferred Stock
would rank prior to the Common Stock as to dividends and distribution of assets
upon liquidation.
The Board believes that there should be available for issuance a
substantial number of shares of stock senior to the Common Stock to enable the
Company to take prompt action on future corporate opportunities. For example,
shares of Preferred Stock could be issued as consideration in acquisitions,
offered publicly or privately to raise additional capital or utilized in
connection with employee compensation plans. Creating a class of preferred stock
that ranks prior to the Common Stock as to dividends and distribution of assets
upon liquidation will provide the Company with more flexibility and a broader
array of financing options. The Company does not, however, have any present
plans, understandings, agreements or commitments relating to the issuance of
shares of Preferred Stock.
Although not its primary purpose, the issuance of shares of the new class
of Preferred Stock might have the effect of discouraging or making more
difficult an attempt to gain control of the Company by tender offer or proxy
contest, or to consummate a merger or share exchange of the Company, and to
remove incumbent management, especially if such shares did possess voting or
conversion or mandatory or optional redemption rights that could increase the
cost of a merger or other business combination. A series of Preferred Stock
containing extraordinary rights and liquidation preferences could also be issued
to effect a stockholders rights plan (a type of 'poison pill') that could make
it more difficult, and thereby discourage attempts, to acquire control of the
Company or remove incumbent management. The Company does not, however, have any
present intentions relating to the adoption of such a stockholders rights plan
and does not know of any existing or contemplated takeover attempts.
THE AMENDMENT
The proposed amendment would amend Article FOURTH of the Restated
Certificate of Incorporation of the Company to read in its entirety as follows:
FOURTH. The total number of shares of all classes of stock
which the Corporation shall have the authority to issue is Fourteen
Million Seven Hundred Thousand (14,700,000) shares, consisting of
Thirteen Million Seven Hundred Thousand (13,700,000) shares of Common
Stock of a par value of $.01 per share and One Million (1,000,000)
shares of Preferred Stock, of a par value of $.10 per share, in such
series and with such voting powers, designations, preferences and
10
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as may be fixed
from time to time by resolution or resolutions of the Board of
Directors for each series.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock entitled to vote thereon at the Annual Meeting is required to
adopt the Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ADOPTION OF
THE AMENDMENT.
APPROVAL OF 1994 MANAGEMENT STOCK OPTION PLAN
During the Company's Chapter 11 proceedings, all parties concluded that it
would be in the best interests of the Company, its creditors and equity holders
that there be both continuity of key management and a performance incentive for
maintaining such continuity. Accordingly, the Company adopted the 1994
Management Stock Option Plan, as amended (the '1994 Plan'), subject to the
approval of stockholders of the Company at the annual meeting. The 1994 Plan
provides for the granting of incentive stock options and non-qualified stock
options to key employees of the Company and its subsidiaries. An incentive stock
option ('ISO') is a type of employee stock option under which favorable tax
treatment will be afforded to the option holder if certain conditions are met.
The Board of Directors has determined that it would be in the Company's best
interests to be able to encourage key employees of the Company and its
subsidiaries to contribute to the success of the Company by granting such
employees ISOs, as well as non-qualified stock options. The approximate number
of eligible employees is 350.
The 1994 Plan is administered by the Compensation and Personnel Committee
of the Board of Directors (the 'Compensation Committee'), comprised of three or
more directors of the Company, each of whom is disinterested within the meaning
of Rule 16b-3 under the Securities Exchange Act of 1934 (the 'Exchange Act') and
considered an outside director within the meaning of Section 162(m) of Internal
Revenue Code of 1986, as amended (the 'Code') and the regulations promulgated
thereunder. Such key employees as may be determined by the Compensation
Committee from time to time will be eligible to participate in the 1994 Plan.
The aggregate number of shares of Common Stock that may be issued pursuant
to options under the 1994 Plan may not exceed 1,000,000. The maximum number of
shares which may be the subject of options granted to any individual in any
calendar year may not exceed 500,000 shares.
As provided in the Plan of Reorganization, the Compensation Committee
determined the recipients of options to purchase, in the aggregate, a minimum of
500,000 shares of Common Stock under the terms of the 1994 Plan and issued such
options to such recipients in the respective amounts determined by the
Compensation Committee three months plus 20 days after the Effective Date. In
addition, the employment agreement between the Company and Frank T. MacInnis
required that Mr. MacInnis receive options to purchase 200,000 shares of Common
Stock three months and 21 days following the Effective Date.
The exercise price of an ISO and a non-qualified stock option must be at
least equal to the fair market value of the Common Stock on the date of grant;
provided, however, that pursuant to the Plan of Reorganization the exercise
price for the initial grant of options with respect to 500,000 shares was to be
equal to the average market price of Common Stock over the 20 day trading period
immediately preceding the date of issuance of the options. Notwithstanding the
preceding, the exercise price of any such option which is an ISO may not be less
than the fair market value of the Common Stock on the date of grant of the
option.
Options may not be exercised more than ten years after the date of grant.
Options are to be exercisable at such rate and times as may be fixed by the
Compensation Committee on the date of grant; however, the rate at which the
option first becomes exercisable may not be more rapid than 33 1/3% on and after
each of the first, second and third anniversaries of the date of grant. The
aggregate fair market value (determined at the time the option is granted) of
the Common Stock with respect to which ISOs are exercisable for the first time
by a participant during any calendar year (under all stock option plans of the
Company and its subsidiaries) may not exceed $100,000; to the extent that this
limitation is exceeded, such excess options shall be treated as non-qualified
stock options for purposes of the 1994 Plan and the Code.
11
At the time an option is granted, the Compensation Committee may, in its
sole discretion, designate whether the option is to be considered an ISO or
non-qualified stock option. Options with no such designation shall be deemed an
ISO, to the extent that the $100,000 limit described above is met.
Payment of the purchase price for shares acquired upon the exercise of presently exercisable
options may be made by any one or moreoptions exercisable within 60 days of the following methods: in cash, by
check, by delivery to the Company of shares of Common Stock already owned by the
option holder, by a 'cashless' exercise method with a designated broker, or by
such other method as the Compensation Committee may permit from time to time.
However, a holder may not use previously owned shares of Common Stock that were
acquireddate hereof and
granted pursuant to the 1994 Plan, or any otherCompany's stock plan that may be
maintained by the Company or its subsidiaries, to pay the purchase price under
an option unless the holder has beneficially owned such shares for at least six
months.
Options become immediately exercisable in full upon the retirement of the
holder after reaching the age of 65, upon the disability or death of the holder
while in the employ of the Company, or upon the occurrence of such special
circumstances as in the opinion of the Compensation Committee merit special
consideration. However, no options may be exercised earlier than six months
following the later of the date of grant or of the stockholder approval of the
1994 Plan (except that the estate of a deceased holder of an option may exercise
it prior to the expiration of such six-month period).
Options terminate at the end of the three-month period following the
holder's termination of employment. This period is extended to six monthsplans and programs. Also
includes in the case of Mr. MacInnis 27,531 shares, in the deathcase of Mr.
Guzzi 12,500 shares, in the case of Mr. Cammaker 8,959 shares, in the case
of Mr. Chesser 12,255 shares, and in the case of Mr. Matz 8,670 shares to
be issued in respect of restricted stock units.
(3) Includes in the case of Mr. Bershad 50,994 shares, in the case of Mr.
Brown 47,994 shares, in the case of Mr. Bump 32,894 shares, in the case of
Mr. Fried 50,994 shares, in the case of Mr. Hamm 44,994 shares, and in the
case of Mr. Yonker 34,327 shares, that may be acquired upon exercise of
presently exercisable options or options exercisable within 60 days of the
holder, in which case the option is exercisable by the
holder's estate.
Each option contains anti-dilution provisions which will automatically
adjust the number of shares subject to options in the event of a stock dividend,
split-up, conversion, exchange, reclassification or substitution. In addition,
upon the dissolution or liquidation of the Company, or the occurrence of a
merger or consolidation in which the Company is not the surviving corporation,
or in which the Company becomes a subsidiary of another corporation or in which
the voting securities of the Company which are outstanding immediately prior
thereto do not continue to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 50% of
the combined voting securities of the Company or such surviving entity
immediately after such merger or consolidation, or upon the sale of all or
substantially all of the assets of the Company, the 1994 Plandate hereof and the options
granted thereunder shall terminate unless provision is made by the Company in
connection with such transaction for the assumption of options theretofore
granted, or the substitution for such options of new options of the successor
corporation or a parent or subsidiary thereof, with appropriate adjustments aspursuant to the numberCompany's stock options plans and
kinds ofprograms for non-employee directors.
(4) Includes 1,282,633 shares and the per share exercise prices. If options
terminate as a result of any such transaction, the holder will be entitled to
the excess of (i) the fair market value (determined on the basis of the amount
received by stockholders in connection with such transaction) of the shares
subject to the portion of the option not theretofore exercised (whether or not
the option is then exercisable pursuant to its terms or otherwise), over (ii)
the aggregate purchase price that would be payable for such shares upon the
exercise of the option. In the event of any other change in the corporate
structure or outstanding shares of Common Stock, the Compensation Committee may
make such equitable adjustments to the number of shares and the class of shares
available under the 1994 Plan or to any outstanding options as it shall deem
appropriate to prevent dilution or enlargement of rights.
The Company is to obtain such consideration for granting options under the
1994 Plan as the Compensation Committee in its discretion may request.
Each option may be subject to provisions to assure that any exercise or
disposition of Common Stock will not violate the securities laws.
No options may be granted under the 1994 Plan after ten years following the
date of its adoption.
The Board of Directors or the Compensation Committee may at any time
withdraw or amend the 1994 Plan and may, with the consent of the affected holder
of an outstanding option, at any time withdraw or amend the terms and conditions
of outstanding options. Any amendment which would increase the number of shares
issuable pursuant to options or to any individual employee, or change the class
of employees to whom options may be granted shall be subject to the approval of
the stockholders of the Company within one year of such amendment.
12
The Federal income tax consequences to an employee who receives ISOs
generally will, under current law, be as follows:
An employee will not realize any income upon the grant or exercise of
an ISO. If the employee disposes of the shares of Common Stock acquired upon the exercise of
an ISO at least two years afterpresently exercisable options or options exercisable within 60 days of the
date the option ishereof and granted and at least one year after the Common Stock is transferred to him
or her, the employee will realize long-term capital gain in an amount equal
to the excess, if any, of his or her selling price for the shares over the
option exercise price. In such case, the Company will not be entitled to
any tax deduction resulting from the issuance or sale of the shares. If the
employee disposes of the shares of Common Stock acquired upon the exercise
of an ISO prior to the expiration of two years from the date the option is
granted, or one year from the date the Common Stock is transferred to him
or her, any gain realized will be taxable at such time (a) as ordinary
income to the extent of the difference between the option exercise price
and the lesser of the fair market value of the shares on the date the
option is exercised or the amount realized from such disposition, and (b)
as capital gain to the extent of any excess, which gain shall be treated as
short-term or long-term capital gain depending upon the holding period of
the Common Stock. In such case, the Company may claim an income tax
deduction (as compensation) for the amount taxable to the employee as
ordinary income.
In general, the difference between the fair market value of the Common
Stock at the time the ISO is exercised and the option exercise price will
constitute an item of adjustment, for purposes of determining alternative
minimum taxable income, and under certain circumstances may be subject, in
the year in which the option is exercised, to the alternative minimum tax.
If an employee uses shares of Common Stock which he or she owns to
pay, in whole or in part, the exercise price for shares acquired pursuant
to an ISO, (a) the holding period for the newly issued shares of Common
Stock equal in value to the old shares which are surrendered upon the
exercise will include the period during which the old shares were held, (b)
the employee's basis in such newly issued shares will be the same as his or
her basis in the old shares surrendered and (c) no gain or loss will be
recognized by the employee on the old shares surrendered. However, if any
employee uses shares previously acquired pursuant to the exercise of an ISO
to pay all or part of the exercise price under an ISO, such tender will
constitute a disposition of such previously acquired shares for purposes of
the one-year (or two-year) holding period requirement applicable to such
ISO and such tender may be treated as a taxable exchange.
The Federal income tax consequences to an employee who receives
non-qualifiedCompany's stock options generally will, under current law, be as follows:
An employee will not realize any income at the time the option is
granted. Generally, an employee will realize ordinary income, at the time
the option is exercised in an amount equal to the excess of the then fair
market value of the Common Stock acquired over the exercise price. However,
Section 83 of the Code provides that, if a director, officer or principal
stockholder (i.e., an owner of more than 10 percent of the outstandingplans and
programs and 76,842 shares of Common Stock) receives shares pursuant to the exercise of a
non-qualified stock option, he or she is not required to recognize any
income until the date on which such shares can be sold at a profit without
liability under Section 16(b) of the Exchange Act. At such time, the
director, officer or principal stockholder will realize income equal to the
amount by which the then fair market value of the shares acquired pursuant
to the exercise of such option exceeds the price paid for such shares.
Alternatively, a director, officer or principal stockholder who would not
otherwise be taxed at the time the shares are transferred may file a
written election within 30 days of the transfer date with the Internal
Revenue Service, to be taxed as of the date of transfer, on the difference
between the then fair market value of the shares and the price paid for
such shares.
All income realized upon the exercise of a non-qualified stock option
will be taxed as ordinary income. The Company will be entitled to a tax
deduction (as compensation) for the amount taxable to an employee
(including a director, officer and principal stockholder) upon the exercise
of a non-qualified stock option, as described above, in the same year as
those amounts are taxable to the employee.
Shares of Common Stock issued pursuant to the exercise of a
non-qualified stock option generally will constitute a capital asset in the
hands of an employee (including a director, officer or principal
stockholder) and will be eligible for capital gain or loss treatment upon
any subsequent disposition. The holding period of
13
an employee (including a director, officer or principal stockholder) will
commence upon the date he or she recognizes income with respect to the
issuance of such shares, as described above. The employee's basis in the
shares will be equal to the greater of their fair market value as of that
date or the amount paid for such shares. If, however, an employee uses
shares of Common Stock which he or she owns to pay, in whole or in part,
the exercise price for shares acquired pursuant to the exercise of a
non-qualified stock option, (a) the holding period for the newly issued
shares of Common Stock equal in value to the old shares which were
surrendered upon the exercise shall include the period during which the old
shares were held, (b) the employee's basis in such newly issued shares will
be the same as his or her basis in the surrendered shares, (c) no gain or
loss will be realized by the employee on the old shares surrendered, and
(d) the employee will realize ordinary income in an amount equal to the
fair market value of the additional number of shares received over and
above the number of old shares surrendered (the 'Additional Shares') and
the employee's basis in the Additional Shares will be equal to such fair
market value.
In addition to the Federal income tax consequences discussed above,
Section 280G of the Code provides that if an officer, stockholder or highly
compensated individual receives a payment which is in the nature of
compensation and which is contingent upon a change in control of the
employer, and such payment equals or exceeds three times his or her 'base
salary' (as hereinafter defined), then any amount received in excess of
base salary shall be considered an 'excess parachute payment.' An
individual's 'base salary' is equal to his or her average annual
compensation over the five-year period (or period of employment, if
shorter) ending with the close of the individual's taxable year immediately
preceding the taxable year in which the change in control occurs. If the
taxpayer establishes, by clear and convincing evidence, that an amount
received is reasonable compensation for past or future services, all or a
portion of such amount may be deemed not to be an excess parachute payment.
If any payments made under the 1994 Plan in connection with a change in
control of the Company constitute excess parachute payments with respect to
any employee, then in addition to any income tax which would otherwise be
owed on such payment, the individual will be subject to an excise tax equal
to 20% of such excess parachute payment and the Company will not be
entitled to any tax deduction to which it otherwise would have been
entitled with respect to such excess parachute payment.
Section 280G provides that payments made pursuant to a contract
entered into within one year of the change in control are presumed to be
parachute payments unless the individual establishes, by clear and
convincing evidence, that such contract was not entered into in
contemplation of a change in control. In addition, the General Explanation
of the Tax Reform Act of 1984 prepared by the Staff of the Joint Committee
on Taxation indicates that the grant of an option within one year of the
change in control or the acceleration of an option because of a change in
control may be considered a parachute payment in an amount equal to the
value of the option or the value of the accelerated portion of the option,
as the case may be. Pursuant to proposed regulations issued by the Treasury
Department under Section 280G, the acceleration of a non-qualified stock
option because of a change in control is considered a parachute payment in
an amount equal to the value of the accelerated portion of the option. Even
if the grant of an option within one year of the change in control or the
acceleration of an option is not a parachute payment for purposes of
Section 280G, the exercise of an option within one year of the change in
control or the exercise of the accelerated portion of an option may result
in a parachute payment, in an amount equal to the excess of the fair-market
value of the shares received upon exercise of the option over the exercise
price. Payments received for the cancellation of an option because of a
change in control may also result in parachute payments.
Under Section 162(m) of the Code, publicly held companies may not
deduct compensation for certain employees to the extent that such
compensation exceeds $1 million per employee for the taxable year. The $1
million limitation applies to the Company's Chief Executive Officer and
four most highly compensated executive officers other than the Chief
Executive Officer. Compensation which is performance based (as defined in
the Code and rules and regulations thereunder), however, is not counted as
subject to the deductibility limitation of Section 162(m) of the Code.
Income pursuant to options under the 1994 Plan is intended to permit full
deduction by the Company, by qualifying such income as performance-based
compensation and, therefore, exempt from the limitations of Section 162(m)
of the Code.
14
The foregoing summary with respect to Federal income taxation does not
purport to be complete and reference is made to the applicable provisions of the
Code.
The following table shows the number of options granted under the 1994 Plan
to each of the named executive officers and groups of persons set forth below,
subject to the approval of the 1994 Plan by stockholders at the Annual Meeting:
NEW PLAN BENEFITS
1994 MANAGEMENT STOCK OPTION PLAN OF EMCOR GROUP, INC.
NAME AND PRINCIPAL POSITION OPTION GRANTS
- ------------------------------------------------------------ --------------
Frank T. MacInnis........................................... 200,000
Chairman of the Board, President and Chief Executive Officer
Sheldon I. Cammaker......................................... 50,000
Executive Vice President and General Counsel
Jeffrey M. Levy............................................. 50,000
Executive Vice President and Chief Operating Officer
Executive Officer Group..................................... 370,000
Non-Executive Officer Employee Group........................ 333,000
No determination has been made regarding additional persons to whom grants
will be made in the future, the number of shares which will be subject to future
options, or the option prices to be paid upon exercise thereof.
The closing price of a share of Common Stock in the over-the-counter market
on October 12, 1995 was $ .
The affirmative vote of a majority of the shares of Common Stock of the
Company present in person or represented by proxy at the meeting and entitled to
vote thereon is required for approval of the 1994 Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF
THE 1994 PLAN.
APPROVAL OF 1995 NON-EMPLOYEE DIRECTORS' NON-QUALIFIED STOCK OPTION PLAN
On March 20, 1995, the Company adopted the 1995 Non-Employee Directors'
Non-Qualified Stock Option Plan (the '1995 Plan'), subject to the approval by
stockholders of the Company at the Annual Meeting.
The 1995 Plan provides for automatic grants of non-qualified stock options
to directors of the Company who are not also employees of the Company or a
subsidiary, in consideration of the services of such directors to the Company.
Pursuant to the 1995 Plan, each non-employee director on March 20, 1995 was
granted an option on that date to purchase 7,500 shares of Common Stock at an
exercise price of $5.125 per share. These grants are subject to the approval of
the 1995 Plan by the stockholders of the Company at the Annual Meeting. Each
person who is elected to serve as a non-employee director after March 20, 1995
(including those persons who were non-employee directors on March 20, 1995) is
to be granted an option during each calendar year (beginning with 1995) to
purchase 3,000 shares of Common Stock on the date on which the Board of
Directors holds its first meeting following the annual meeting of stockholders
held during such calendar year; however, if, beginning with 1996, an annual
stockholders' meeting does not occur within the period ending on the last day of
the 16th month following the month in which the prior year's annual meeting was
held, such option shall be granted on the last day of such 16th month.
The aggregate number of shares of Common Stock that may be issued pursuant
to options under the 1995 Plan may not exceed 200,000.
The exercise price of an option granted under the 1995 Plan is equal to the
fair market value of the Common Stock on the date of grant. Such options are
fully exercisable as of the date of grant; however, no option may be exercised
prior to stockholder approval of the 1995 Plan nor more than ten years after the
date of grant. Payment of the purchase price for shares acquired upon the
exercise of options may be made by the same methods as are specified in the 1994
Plan (other than such method as may be permitted in the discretion of the
Compensation Committee).
15
The 1995 Plan contains the same anti-dilution and other adjustment and
cash-out provisions as the 1994 Plan in certain events.
No options may be granted under the 1995 Plan after ten years following the
date of its adoption.
The Board of Directors may at any time withdraw or amend the 1995 Plan and
may, with the consent of the affected holder of an outstanding option, at any
time withdraw or amend the terms and conditions of outstanding options. Any
amendment which would increase the number of shares issuable pursuant to
options, change the class of persons who are eligible to be granted options or
materially increase the benefits to participants in the 1995 Plan shall be
subject to the approval of the stockholders of the Company. In addition, no
amendment may be made more than once every six months to any provision of the
1995 Plan that specifies the directors to whom options may be granted, the
timing of option grants, the number or purchase price of shares of Common Stock
that can be purchased under options or the time when options may be exercised,
except any amendment that is necessary to comport with changes in the Internal
Revenue Code or the Employee Retirement Income Security Act of 1974, as amended.
The Federal income tax consequences for options granted under the 1995 Plan
are the same as those described earlier for non-qualified stock options awarded
under the 1994 Plan.
The following table shows the number of options granted under the 1995 Plan
to the group of persons set forth below, subject to the approval of the 1995
Plan by stockholders at the Annual Meeting:
NEW PLAN BENEFITS
1995 NON-EMPLOYEE DIRECTORS'
NON-QUALIFIED STOCK OPTION PLAN OF EMCOR GROUP, INC.
NAME AND PRINCIPAL POSITION OPTION GRANTS
- ------------------------------------------------------------ --------------
Non-Executive Director Group................................ 45,000
The closing price of a share of Common Stock of the Company in the
over-the-counter market on October 12, 1995 was $ .
The affirmative vote of a majority of the shares of Common Stock of the
Company present in person or represented by proxy at the meeting and entitled to
vote thereon is required for approval of the 1995 Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF
THE 1995 PLAN.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
During 1994, the Board of Directors of the Company was responsible for
matters concerning executive compensation. Mr. MacInnis has served as Chairman
of the Board, President and Chief Executive Officer since April 18, 1994, and
Mr. Kosnik served as the Chairman of the Board, Chief Executive Officer and
President of the Company from January 1, 1994 to April 18, 1994.
Messrs. Cunningham, Fried and Hopkins, all of whom are non-employee
directors, constitute the Compensation and Personnel Committee of the Board of
Directors. Mr. Fried is Managing Partner of Albert Fried & Company, which agreed
to loan to the Company and certain of its subsidiaries up to $7.0 million as one
of several lenders providing working capital facilities of up to an aggregate of
$45.0 million. See 'Certain Relationships and Related Transactions.'
DIRECTOR COMPENSATION
Each director who is not an officer of the Company ('non-employee
director') receives an annual retainer of $30,000 and $1,000 for each meeting of
the Board he attends, other than telephonic meetings of the Board in which case
each non-employee director who participates receives $500. Each non-employee
director also receives $500 for each meeting of a committee of the Board of
Directors attended by the director, and each non-employee director who chairs a
committee of the Board receives an additional $2,000 per annum. In addition,
pursuant to the 1995 Non-Employee Directors' Non-Qualified Stock Option Plan
discussed above, each
16
non-employee director on March 20, 1995 was granted an option on that date,
subject to approval by the stockholders of the Company of the 1995 Plan at the
Annual Meeting, to purchase 7,500 shares of Common Stock at an exercise price of
$5.125 per share. Each person who is elected to serve as a non-employee director
after March 20, 1995 (including those persons who were non-employee directors on
March 20, 1995) will be granted an option during each calendar year (beginning
with 1995) to purchase 3,000 shares of Common Stock. Directors who also serve as
officers of the Company do not receive compensation for services rendered as
directors.
COMPENSATION COMMITTEE REPORT
The Compensation and Personnel Committee of the Board of Directors (the
'Compensation Committee') reviews and determines, based on proposals made by the
Chief Executive Officer, the compensation of the Company's Chief Operating
Officer, Chief Financial Officer and General Counsel as well as the compensation
of other officers and employees of the Company and each subsidiary whose annual
compensation is $200,000 or more. It also reviews and approves any employment,
severance or similar agreements for those individuals. The Compensation
Committee is charged with fixing on an annual basis, the compensation of the
Chairman of the Board, President and the Chief Executive Officer, subject to the
approval of the Board, and reviewing and recommending to the Board any
employment, severance or similar agreement for him. The Compensation Committee
also administers the Company's 1994 Management Stock Option Plan and is charged
with recommending to the Board for its approval any incentive, benefit, award or
bonus plans or programs. The entire Board determines the amount, if any, of the
Company's contributions pursuant to its 401(k) Plan. While other compensation
decisions generally are not submitted to the Board, the Board has the ultimate
power and authority with respect to compensation matters. The Compensation
Committee consists of directors, none of whom served prior to the Company's
emergence from Chapter 11 on December 14, 1994. Accordingly, the members of the
Compensation Committee did not review salaries paid to executive officers for
1994 or review employment agreements entered into during that year. The
Compensation Committee did approve bonuses paid in 1995 to executive officers of
the Company in respect of 1994.
The Compensation Committee seeks to compensate executive officers at levels
competitive with other companies comparable in size in the same industry and to
provide short-term rewards and long-term incentives for superior individual and
corporate performance. In making compensation decisions, the Compensation
Committee periodically reviews information about the compensation paid or
payable to officers of comparably sized public companies (there being no public
companies of comparable size to the Company that are in businesses similar to
those of the Company), the compensation recommendations of Mr. MacInnis, the
Chairman of the Board, President and Chief Executive Officer of the Company, and
reports from outside consultants. The Compensation Committee does not have
target amounts ofrestricted stock
ownership for its executive officers.
The key components of executive officer compensation are base salary,
bonuses, stock options and awards pursuant to incentive-based plans. The
Compensation Committee attempts to combine these components in such a way as to
attract, motivate and retain key executives critical to the long-term success of
the Company. A discussion of the various components of the executives'
compensation for 1994 follows.
BASE SALARY
Each executive officer received a base salary determined largely by
reference to the salaries of executive officers holding comparable positions in
companies of comparable size.
BONUSES
Each executive officer was eligible for an annual bonus based upon both his
individual performance and the Company's performance. Bonuses were awarded to
executive officers in respect of 1994 which took into account their performance,
the amounts paid to them pursuant to the term of the Employees' Severance
Pay/Stay Bonus Plan described above and contractual obligations.
17units.
STOCK OPTIONS
The Company's 1994 Management Stock Option Plan is intended to provide
executives with the promise of longer term rewards which appreciate in value
with the favorable future performance of the Company.
OTHER COMPENSATION
The executive officers also participate in the Money Purchase Plan and the
401(k) Plan as well as the medical, life and disability insurance plans of the
Company.
CHIEF EXECUTIVE OFFICER COMPENSATION
The minimum compensation of Mr. MacInnis, Chairman of the Board, President
and Chief Executive Officer of the Company, is provided for in his employment
agreement described above. Proposals for additional compensation to him are
based on the policies described above. As part of its evaluation, the Committee
considered a report by Mr. MacInnis on his activities, the Company's performance
and the compensation earned by other chief executive officers of companies of
comparable size.
By the Compensation and Personnel Committee: Malcolm T. Hopkins, Chairperson,
Thomas D. Cunningham and Albert Fried, Jr.
PERFORMANCE GRAPH
Proxy disclosure rules promulgated by the Securities and Exchange
Commission require inclusion of a graph presentation comparing cumulative
five-year stockholder returns on an indexed basis with the S&P 500 Index and
either a nationally recognized industry standard or an index of peer companies
selected by the Company. Since the common stock of the Company outstanding prior
to its reorganization was extinguished pursuant to its Plan of Reorganization,
and Common Stock of the Company as reorganized has been traded only since the
Effective Date, such five-year presentation is not possible. Under such
circumstances, the Company is required instead to present such information for
the period since such shares were issued. The following performance graph
compares the Company's total stockholder return on its Common Stock as compared
to the S&P 500 Index and a peer group index consisting of The Turner Corporation
and Perini Corporation since January 3, 1995. Prior to that date, prices for the
Company's Common Stock were not readily available. The following performance
graph assumes $100 was invested on January 3, 1995 in Common Stock of the
Company and in each of the indices and assumes reinvestment of all dividends.
None of the Company's peers in its mechanical and electrical contracting
business is publicly traded. Accordingly, the two companies in the peer group
selected by the Company are general contractors that serve similar marketplaces
and are impacted by similar market conditions to the Company.
[PERFORMANCE GRAPH]
S&P Peer
EMCOR 500 Group
------ ------ ------
Jan. 3, 1995 100.00 100.00 100.00
Jan. 31, 1995 111.11 102.43 105.03
Feb. 28, 1995 138.89 106.12 106.60
March 31, 1995 112.50 109.02 101.17
April 30, 1995 141.67 112.07 112.49
May 31, 1995 180.56 116.14 115.84
June 30, 1995 175.00 118.61 115.25
July 31, 1995 170.83 122.38 126.39
Aug. 31, 1995 170.83 122.45 123.54
18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Albert Fried, Jr. and Kevin C. Toner are directors of the Company and both
have a material interest in working capital agreements, which provide the
Company and certain of its subsidiaries with working capital facilities of up to
an aggregate of $45.0 million. Albert Fried, Jr. is Managing Partner of Albert
Fried & Company, which agreed to loan up to $7.0 million as one of the lenders
under the working capital agreements. Kevin C. Toner agreed to loan up to $1.0
million as one of the lenders under the working capital agreements. In addition,
UBS Mortgage Finance Inc., an affiliate of UBS Securities Inc., Mr. Toner's
former employer, agreed to loan up to $2.0 million as one of the lenders under
the working capital agreements. All the loans bear interest on the principal
amount thereof at the rate of 15% per annum and mature on June 14, 1996. The
loans are secured by, among other things, substantially all of the assets of the
Company (other than its subsidiaries Jamaica Water Supply Company and Sea Cliff
Water Company).
The Company has entered into an indemnification agreement with each of its
directors and Messrs. Sheldon I. Cammaker, Leicle Chesser, Joseph A. Gallo,
Jeffrey M. Levy, and Mark A. Pompa, each of whom is an executive officer of the
Company.
Each indemnification agreement provides for indemnification to the fullest
extent permitted by law. The indemnification agreements cover all amounts paid
in connection with any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether civil, criminal,
administrative, investigative or otherwise (a 'proceeding'), related to the fact
that such director or officer is or was a director, officer, employee, agent or
fiduciary of the Company or is or was serving at the request of the Company in
any capacity with another entity, or by reason of anything done or not done by
such director or officer in any such capacity.
Indemnification would not, however, be available if a person or body
appointed by the Company's Board of Directors who is not a party to the
proceeding for which indemnification is sought and who may be or consist of one
or more members of the Board (or, under certain circumstances discussed below,
independent legal counsel) determines that such indemnification is not permitted
under applicable law and such determination is not successfully challenged
before a court. A director's or officer's rights under an indemnification
agreement are not exclusive of any other indemnity rights; however, the
indemnification agreements prevent double payment.
The indemnification agreements provide for the prompt advancement of
expenses incurred in connection with any proceeding and obligate the director or
officer to reimburse the Company for amounts so advanced if it is subsequently
determined that the director or officer is not entitled to indemnification. The
indemnification agreements further provide that the director or officer is
entitled to indemnification for, and advancement of, expenses incurred in any
proceeding seeking to collect from the Company an indemnity claim or advancement
of expenses under the indemnification agreements, the Company's By-Laws or
otherwise, or in seeking to recover under a directors' and officers' liability
insurance policy, whether or not the director or officer is successful.
After a change in control (as defined) of the Company not approved by the
Company's board of directors, all determinations to be made by or on behalf of
the Company regarding a director's or officer's right to indemnification and to
the advancement of expenses are required to be made by independent legal counsel
to be selected by the director or officer and approved by the Company. In the
event of a potential change in control (as defined) of the Company, the director
or officer may require the Company to establish a trust for such director's or
officer's benefit and to fund such trust in an amount sufficient to cover
reasonably anticipated costs in connection with any claims.
RATIFICATION OF APPOINTMENT OF ARTHUR ANDERSEN LLP
AS INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has appointed Arthur Andersen
LLP, certified public accountants, as independent auditors for 1995.
Deloitte & Touche LLP acted as independent auditors of the Company for
1994.
Representatives of Deloitte & Touche LLP and of Arthur Andersen LLP will be
present at the annual meeting to respond to appropriate questions, and will have
an opportunity to make a statement if they desire to do so.
On September 19, 1995 the Audit Committee of the Board of Directors of the
Company appointed Arthur Andersen LLP as independent accountants for its fiscal
year ending December 31, 1995 to replace Deloitte & Touche LLP effective with
such appointment.
19
Deloitte & Touche LLP's report, dated March 17, 1995, on the financial
statements of the Company for its two most recent fiscal years ended December
31, 1994 did not contain an adverse opinion, disclaimer of opinion, or
qualification as to uncertainty, audit scope, or accounting principles.
However, in its report dated July 8, 1994 on the financial statements of
the Company for its fiscal year ended December 31, 1993, Deloitte & Touche LLP
did not express an opinion on the Company's 1993 consolidated financial
statements due to the then material uncertainties related to the Company's
ability to continue as a going concern because the Company had experienced
significant losses from operations for each of the years ended December 31, 1993
and 1992, and then had negative working capital and a deficit in shareholders'
equity and because of the then possible material effects of uncertainties
related to the net realizable value of assets of discontinued operations, claims
filed against the Company, and the possible consequences of the Company's
Chapter 11 proceedings. The Company's emergence from bankruptcy on December 14,
1994 resulted in a significant reduction in the Company's indebtedness, its
obtaining of a new credit agreement and the valuing of the Company at a new
reorganization value resulting in positive shareholders' equity permitting
Deloitte & Touche LLP in its report dated March 17, 1995 to express an opinion
on the 1993 consolidated financial statements as well as the 1994 consolidated
financial statements.
During the Company's two most recent fiscal years ended December 31, 1994
and the interim period subsequent to December 31, 1994, there have not been any
disagreements with Deloitte & Touche LLP on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of Deloitte & Touche
LLP, would have caused that firm to make reference to the subject matter of such
disagreements in connection with its reports.
During the Company's two most recent fiscal years ended December 31, 1994
and the interim period subsequent to December 31, 1994, there have not been any
reportable events of the type described in paragraphs (A) through (D) of Item
304(a)(1)(v) of Regulation S-K under the Securities Act of 1933, as amended, and
the Exchange Act.
During the Company's two most recent fiscal years ended December 31, 1994
and through September 19, 1995, neither the Company, nor anyone on its behalf,
has consulted with Arthur Andersen LLP regarding the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on the Company's financial statements.
The affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the meeting and entitled to vote thereon is
required for approval of the appointment of auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS
FOR 1995.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports of
change in ownership (Forms 3, 4 and 5) of Common Stock and other equity
securities of the Company with the Securities and Exchange Commission ('SEC').
Officers, directors and greater than 10% beneficial holders are required by SEC
regulation to furnish the Company with copies of all such forms they file.
The obligation to file reports with respect to the Company's equity
securities commenced upon the effective date of a registration statement on Form
10 filed by the Company pursuant to the Exchange Act. Because of uncertainty
regarding that date, each of the directors of the Company and each of the
executive officers--Messrs. MacInnis, Cammaker, Chesser, Gallo, Levy and
Pompa--filed their initial report (Form 3) shortly after that effective date
instead of on the effective date as required by the regulations pursuant to
Section 16(a). To the Company's knowledge all other reports relating to share
ownership were timely filed.
20
STOCKHOLDERS' PROPOSALSMATTERS
STOCKHOLDER PROPOSALS. Stockholders' proposals must behave been received
by the Company at its headquarters in Norwalk, Connecticut on or before June 21, 1996December
28, 2005 in order to be considered for inclusion in next year's Proxy Statement.Statement
for the Annual Meeting of Stockholders.
The Company's bylaws set forth advance notice provisions and procedures
to be followed by stockholders who wish to bring business before an annual
meeting of stockholders or who wish to nominate candidates for election to the
Board of Directors. A stockholder may propose business to be included in the
agenda of an annual meeting only if written notice of such stockholder's intent
is given to the Secretary of the Company, not earlier than 90 days nor later
than 60 days in advance of the anniversary of the date of the immediately
preceding annual meeting, or if the date of the annual meeting occurs more than
30 days before or 60 days after the anniversary of such immediately preceding
annual meeting, not later than the close of business on the later of (a) the
sixtieth day prior to such annual meeting and (b) the tenth day following the
date on which a public announcement of the date of such meeting is first made.
Each such notice must set forth certain background and other information
specified in the bylaws, including a description of the proposed business and
the reasons for conducting such business at the annual meeting.
A stockholder may nominate candidates for election to the Board of
Directors at an annual meeting only if written notice of such stockholder's
intent to make such nomination is given to the Secretary of the Company not
earlier than 90 days nor later than 60 days in advance of the anniversary of the
date of the immediately preceding annual meeting, or if the date of the annual
meeting occurs more than 30 days before or 60 days after the anniversary of such
immediately preceding annual meeting not later than the close of business on the
later of (a) the sixtieth day prior to such annual meeting and (b) the tenth day
following the date on which a public announcement of the date of such meeting is
first made. Each such notice must set forth certain background and other
information specified in the bylaws.
The time limits described above also apply in determining whether
notice is timely for purposes of Rule 14a-4(c)(1) under the Securities Exchange
Act of 1934 relating to exercise of discretionary voting authority, and are
separate from and in addition to the Securities and Exchange Commission's
requirements that a stockholder must meet to have a proposal included in the
Company's proxy statement.
OTHER INFORMATION
The cost of soliciting proxies will be borne by the Company. The
Company expects to solicit proxies primarily by mail. Proxies also may be
solicited personally and by telephone by certain officers and regular employees
of the Company. D.F. King & Co., Inc. has been retained for solicitation of all
brokers and nominees at $for a fee of $7,500, plus customary out-of-pocket expenses.
The Company may reimburse brokers and other nominees for their expenses in
communicating with the persons for whom they hold stock of the Company.Common Stock.
The Board of Directors is aware of no other matters that are to be
presented to the stockholders for formal action at the annual meeting.Special Meeting. If,
however, any other matters properly come before the meeting or any adjournments
thereof, it is the intention of the persons named in the enclosed proxy to vote
in accordance with their judgment inon such matters.
BY ORDER OF THE BOARD OF DIRECTORS
JOSEPH W. BARNETT
Secretary
October , 1995
21SHELDON I. CAMMAKER
SECRETARY
December 29, 2005
APPENDIX A
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
EMCOR GROUP, INC.
ANNUALIt is hereby certified that:
1. The name of the corporation (hereinafter referred to as the
"Corporation") is EMCOR Group, Inc.
2. The Restated Certificate of Incorporation of the Corporation is
hereby amended by deleting Article FOURTH thereof and by substituting in lieu of
said Article the following new Article:
"FOURTH. The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is Eighty One Million
(81,000,000) shares, consisting of Eighty Million (80,000,000) shares
of Common Stock, of a par value of $.01 per share, and One Million
(1,000,000) shares of Preferred Stock, of a par value of $.10 per
share, in such series and with such voting powers, designations,
preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof, as may
be fixed from time to time by resolution or resolutions of the Board of
Directors for each series."
3. The amendment of the Restated Certificate of Incorporation herein
certified has been duly adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware.
Executed on _____________, 2006
----------------------------------
Frank T. MacInnis
Chairman of the Board of Directors
EMCOR GROUP, INC.
SPECIAL MEETING OF STOCKHOLDERS
NOVEMBER 17, 1995JANUARY 27, 2006
The undersigned hereby appoints Frank T. MacInnis, Sheldon I. Cammaker
and Leicle E. Chesser, and each of them with full power to act without the other
and with full power of substitution, as proxies to represent and to vote, as
directed herein, all shares the undersigned is entitled to vote at the annualspecial
meeting of the stockholders of EMCOR Group, Inc. to be held at 101the offices of
the Company, 301 Merritt Seven, Corporate Park, Norwalk, Connecticut 06851-106006851, on Friday, November 17, 1995January 27, 2006
at 10:00 a.m.A.M. (local time), and all adjournments thereof, as follows:
PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE AND RETURN IT
PROMPTLY USING THE ENCLOSED POSTAGE PREPAID ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
UNLESS OTHERWISE MARKED, THE PROXIES ARE APPOINTED WITH AUTHORITY TO
VOTE "FOR" ALL NOMINEES FOR ELECTION, "FOR"APPROVAL OF THE PROPOSALAMENDMENT TO AMEND THE RESTATED CERTIFICATE OF
INCORPORATION, "FOR" THE APPROVALAS AMENDED, OF THE 1994 MANAGEMENT
STOCK OPTION PLAN, "FOR" THE APPROVAL OF THE 1995 NON-EMPLOYEE
DIRECTORS' NON-QUALIFIED STOCK OPTION PLAN AND "FOR"
THE APPOINTMENT OF INDEPENDENT AUDITORS.EMCOR GROUP, INC.
(Continued and to be signed on the reverse side.)
EMCOR GROUP, INC.
P.O. BOX 1107911343
NEW YORK, N.Y. 10203-007910203-0343
To change your address, please mark this box. |_|
To include any comments, please mark this box. |_|
o DETACH PROXY CARD HERE o
|_| SIGN, DATE AND RETURN THE |X|
PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE. VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES INVOTE"FOR" ITEM 1 AND "FOR" ITEMS 2, 3, 4 AND 5.
1.
Election of Directors:
FOR all nominees listed below / / WITHHOLD AUTHORITY to vote for all
nominees listed below / / EXCEPTIONS / /
Nominees: F. MacInnis, S. Bershad, D. Brown, T. Cunningham, A. Fried,
M. Hopkins, K. Toner
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "EXCEPTIONS" box and write that nominee's name in the space provided below.)
Exceptions
---------------------------------------------
2.AGAINST ABSTAIN
1. Approval of Amendment ofto the Restated |_| |_| |_|
Certificate of Incorporation.
FOR AGAINST ABSTAIN
/ / / / / /
3. ApprovalIncorporation, as
amended, of 1994 Management Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
4. Approval of 1995 Non-Employee Directors' Non-Qualified Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
5. Appointment of Independent Auditors.
FOR AGAINST ABSTAIN
/ / / / / /
Address Change and/or Comments Mark Here / /EMCOR Group, Inc.
____
|
|
|
In their discretion to vote upon other matters that
may properly come before the meeting. Please sign
exactly as your name appears to the left.
When signing as attorney, executor, administrator,
trustee or guardian, please give your full title.
If shares are held jointly, each holder should
sign.
Dated:_________________________ , 1995
______________________________
Signature
______________________________
Signature
Votes must be indicated (x) in Black or
Blue ink. /X/
Sign,| Date and Return the Proxy Card Promptly Using the Enclosed Envelope.Share Owner sign here Co-Owner sign here
|
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