FORM 10-K/A No. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
Commission file number 0-2315
EMCOR GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 11-2125338
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)
101 Merritt Seven Corporate Park
Norwalk, Connecticut 06851-1060
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (203) 849-7800
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $.01 per share
(Title of each class)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filings pursuant to Item
405 Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No
The aggregate market value of the Registrant's voting stock held by
non-affiliates of the Registrant on April 15, 2002 was approximately
$922,174,000.
Number of shares of Common Stock outstanding as of the close of business on
April 15, 2002: 14,857,251 shares.
PART III
Item 10. Directors and Executive Officers of the Registrant
Identification of Directors
Frank T. MacInnis, Age 55. Mr. MacInnis has been Chairman of the Board and
Chief Executive Officer of the Company since April 1994 and was President of the
Company from April 1994 to April 1997. 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., a nationwide
electrical contracting company. From 1986 to April 1990, Mr. MacInnis was Senior
Vice President and Chief Financial Officer of Comstock Group, Inc. In addition,
from 1986 to April 1994 Mr. MacInnis was also President of Spie Group Inc.,
which has or had interests in Comstock Group, Inc., Spie Construction Inc., a
Canadian pipeline construction company, and Spie Horizontal Drilling Inc., a
United States company engaged in underground drilling for pipelines and
communications cable. Mr. MacInnis is also a director of The Williams Companies,
Inc., ITT Industries, Inc. and Geneva Steel Holdings Corp.
Stephen W. Bershad, Age 60. Mr. Bershad has been Chairman of the Board and
Chief Executive Officer for more than the past five years of Axsys Technologies,
Inc., a manufacturer of precision components and systems for high technology
markets. Mr. Bershad has been a Director of the Company since December 15, 1994.
David A.B. Brown, Age 58. Mr. Brown has been 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 has been a Director of the Company since December
15, 1994. Mr. Brown is also a director of BTU International, Inc., Pride
International, Inc., NS Group, Inc. and Technical Communications Corp.
Albert Fried, Jr., Age 72. Mr. Fried has been Managing Member of Albert
Fried & Company, LLC, a broker/dealer and member of the New York Stock Exchange,
since 1955. Mr. Fried has been a Director of the Company since December 15,
1994. Mr. Fried is also a director of Geneva Steel Holdings Corp.
Richard F. Hamm, Jr., Age 42. Mr. Hamm has been Vice President, Corporate
Development & Planning of Carlson Companies, Inc. ("Carlson"), a global travel,
hospitality and marketing services company, since July 2000, and was Vice
President, Corporate Strategic Development & Acquisitions of Carlson from
January 1999 to June 2000. From January 1997 to December 1998 he was Senior Vice
President, Legal and Business Development of Tropicana Products, Inc.
("Tropicana"), a manufacturer of fruit juices, and Vice President and General
Counsel of Tropicana from June 1993 to January 1997. Mr. Hamm has been a
Director of the Company since June 19, 1998. Mr. Hamm is also a director of
Axsys Technologies, Inc.
Kevin C. Toner, Age 38. Mr. Toner has been Principal of Aristeia Capital
LLC, an investment manager, since June 1997 and President of the Isdell 86
Foundation, a not-for-profit organization, since December 1994. He was a private
investor from March 1995 to June 1997 and a Managing Director from December 1991
to February 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. Mr. Toner has been a Director
of the Company since December 15, 1994.
Identification of Executive Officers
Frank T. MacInnis, Age 55; Chairman of the Board and Chief Executive
Officer of the Company since April 1994 and President of the Company from April
1994 to April 1997. 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., a nationwide electrical
contracting company. From 1986 to April 1990, Mr. MacInnis was Senior Vice
President and Chief Financial Officer of Comstock Group, Inc. In addition, from
1986 to April 1994 Mr. MacInnis was also President of Spie Group Inc., which has
or had interests in Comstock Group, Inc., Spie Construction Inc., a Canadian
pipeline construction company, and Spie Horizontal Drilling Inc., a United
States company engaged in underground drilling for pipelines and communications
cable.
Jeffrey M. Levy, Age 49; President of the Company since April 1997 and
Chief Operating Officer of the Company since February 1994, Executive Vice
President of the Company from November 1994 to April 1997 and Senior Vice
President of the Company from December 1993 to November 1994. From May 1992 to
December 1993, Mr. Levy was President and Chief Executive Officer of the
Company's subsidiary EMCOR Mechanical/Electrical Services (East) Inc. From
January 1991 to May 1992 Mr. Levy served as Executive Vice President and Chief
Operating Officer of Lehrer McGovern Bovis, Inc., a construction management and
construction company.
Sheldon I. Cammaker, Age 62; Executive Vice President and General Counsel
of the Company since September 1987 and Secretary of the Company since May 1997.
Prior to September 1987, Mr. Cammaker was a senior partner of the New York City
law firm of Botein, Hays & Sklar.
Leicle E. Chesser, Age 55; Executive Vice President and Chief Financial
Officer of the Company since May 1994. From April 1990 to May 1994 Mr. Chesser
served as Executive Vice President and Chief Financial Officer of Comstock
Group, Inc., and from 1986 to May 1994 Mr. Chesser was also Executive Vice
President and Chief Financial Officer of Spie Group, Inc.
R. Kevin Matz, Age 43; Vice President and Treasurer of the Company since
April 1996 and Staff Vice President - Financial Services of the Company from
March 1993 to April 1996. From March 1991 to March 1993, Mr. Matz was Treasurer
of Sprague Technologies Inc., a manufacturer of electronic components.
Mark A. Pompa, Age 37; Vice President and Controller of the Company since
September 1994.
Compliance with Section 16(a) of the Securities Exchange Act Of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, 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 of common stock and
other equity securities of the Company with the Securities and Exchange
Commission and to furnish copies of such statements to the Company.
To the Company's knowledge, during the fiscal year 2001 all such reports
relating to share ownership were filed in a timely manner.
Item 11. Executive Compensation
Summary Compensation Table
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 officers of the Company
(collectively, the "named executive officers") during the fiscal years ended
December 31, 2001, 2000, and 1999 for services rendered in all capacities to the
Company and its subsidiaries. For information regarding employment agreements of
the named executive officers, see "'Employment Agreements" and "Continuity
Agreements" below.
Annual Long Term
Compensation Compensation Awards(3)
-------------------------------- -----------------------------
Restricted Number of
Other Annual Stock Securities All Other
Bonus Compensation Award Underlying Compensation
Salary (1) (2) (4) Options/SARs(5) (6)
Name and Principal Position Year ($) ($) ($) ($) (#) ($)
--------------------------- ---- ------ ----- ------------ ---------- --------------- ------------
Frank T. MacInnis............ 2001 775,000 992,602 13,586 367,602 75,600 8,700
Chairman of the Board and 2000 750,000 794,162 25,350 294,163 25,000 8,700
Chief Executive Officer 1999 725,000 900,000 6,375 None 225,000 8,400
Jeffrey M. Levy.............. 2001 510,000 731,699 12,073 91,170 48,200 8,700
President and 2000 485,000 730,911 10,361 0 15,000 8,700
Chief Operating Officer 1999 465,000 600,000 8,053 None 15,000 8,400
Sheldon I. Cammaker.......... 2001 400,000 377,636 18,325 47,045 35,900 8,700
Executive Vice President and 2000 380,000 331,722 14,858 66,169 10,000 8,700
General Counsel and Secretary 1999 372,000 340,000 11,709 None 10,000 8,400
Leicle E. Chesser............ 2001 400,000 447,069 15,764 88,250 35,900 8,700
Executive Vice President and 2000 380,000 333,541 15,374 160,170 10,000 8,700
Chief Financial Officer 1999 365,000 410,000 16,767 None 10,000 8,400
R. Kevin Matz................ 2001 260,000 314,177 16,980 48,019 24,000 8,700
Vice President and Treasurer 2000 230,000 231,505 7,916 34,827 5,000 8,700
1999 210,000 200,000 18,583 None 5,000 8,400
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(1) The amounts reported under "Bonus" for 2001 include the value of units that
correspond to shares of EMCOR Common Stock mandatorily deferred and
credited to each named executive officer's account under the EMCOR Group,
Inc. Executive Stock Bonus Plan (the "Stock Bonus Plan"). Pursuant to the
Stock Bonus Plan, 25% of the annual bonus earned by each named executive
officer is automatically credited to him in the form of units that will
subsequently be converted into EMCOR Common Stock at a 15% discount from
the fair market value of EMCOR Common Stock as of the date the annual bonus
is determined. The units are to be converted into shares of EMCOR Common
Stock and delivered to the executive officer on the earliest of (i) the
first business day of the fourth calendar year following the year in
respect of which the annual bonus was payable, (ii) the executive officer's
termination of employment for any reason or (iii) immediately prior to a
"change of control" (as defined in the Stock Bonus Plan). Dividend
equivalents are credited in the form of additional units (at a 15%
discount) at the same rate as dividends are paid to all stockholders. The
portion of the amount reported under "Bonus" associated with mandatory
deferrals under the Stock Bonus Plan for each named executive officer is as
follows: Frank T. MacInnis - $372,602; Jeffrey M. Levy - $227,949; Sheldon
I. Cammaker - $117,636; Leicle E. Chesser - $147,069; and R. Kevin Matz -
$99,977.
(2) The personal benefits provided to the named executive officers did not
exceed the disclosure threshold established by the Securities and Exchange
Commission pursuant to applicable rules. Figures represent amounts
reimbursed for the payment of taxes upon certain fringe benefits.
(3) The column specified by Item 402 (b) of Regulation S-K 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 2001, 2000 and 1999.
(4) The amounts reported under "Restricted Stock Award" for 2001 represent the
value of units that correspond to shares of EMCOR Common Stock voluntarily
deferred and credited to a named executive officer's account under the
Stock Bonus Plan. Pursuant to the Stock Bonus Plan, each named executive
officer is permitted at his election to cause all or part of his annual
bonus not mandatorily deferred under the Stock Bonus Plan to be credited to
him in the form of units that will subsequently be converted into EMCOR
Common Stock at a 15% discount from the fair market value of EMCOR Common
Stock as of the date the annual bonus is determined. Any voluntary deferral
election under the Stock Bonus Plan generally must be made at least six
months prior to the end of the calendar year in respect of which the bonus
will be payable. These units are to be converted into shares of EMCOR
Common Stock and delivered to the executive officer on the earliest of (i)
the date elected by the executive officer but in no event earlier than the
first business day of the fourth calendar year following the year in
respect of which the annual bonus was payable, (ii) the executive officer's
termination of employment, or (iii) immediately prior to a "change of
control." Dividend equivalents are credited in the form of additional units
(at a 15% discount) at the same rate as dividends are paid to all
stockholders.
(5) The awards set forth in this column are of stock options only. The Company
did not award stock appreciation rights.
(6) The amounts reported in this column include matching contributions of
$3,600 made by the Company under the 401(k) part of the Company's
Retirement and Savings Plan, a defined contribution profit sharing plan,
during 2001 for the account of each of the named executive officers. The
amounts reported for 2001 also include contributions of $5,100 to be paid
during 2002 in respect of 2001 by the Company pursuant to the retirement
account part of the Company's Retirement and Savings Plan for the account
of each of the named executive officers.
Stock Options and Stock Appreciation Rights Table
Option Grants in Last Fiscal Year
The following table sets forth certain information concerning certain
grants to the named executive officers of stock options during the last fiscal
year. As indicated under the Summary Compensation Table above, the Company did
not grant stock appreciation rights ("SARs") of any kind.
Individual Grants Grant Date Value
----------------- ----------------
Number of % of Total
Securities Options
Underlying Granted to Exercise or Grant Date
Options Employees in Base Price Expiration Present
Granted(1) Fiscal Year ($/Sh)(2) Date Value($)(3)
---------- ------------ ----------- ---------- -----------
Frank T. MacInnis............... 25,000 10% $25.44 January 2, 2011 $221,353
50,600 19% $41.70 December 13, 2011 $734,369
Jeffrey M. Levy................. 15,000 6% $25.44 January 2, 2011 $132,812
33,200 13% $41.70 December 13, 2011 $481,839
Sheldon I. Cammaker............. 10,000 4% $25.44 January 2, 2011 $ 88,541
25,900 10% $41.70 December 13, 2011 $375,893
Leicle E. Chesser............... 10,000 4% $25.44 January 2, 2011 $ 88,541
25,900 10% $41.70 December 13, 2011 $375,893
R. Kevin Matz................... 5,000 2% $25.44 January 2, 2011 $ 44,271
19,000 7% $41.70 December 13, 2011 $275,751
(1) The options referred to in this table have a ten-year term. The options
with an expiration date of January 2, 2011 became exercisable on January 2,
2002 and the options with an expiration date of December 13, 2011 became
exercisable on December 14, 2001
(2) The stock option exercise price for a share of Common Stock is the fair
market value of a share of Common Stock on the date of grant. No SARs,
performance units or other instruments were granted in tandem with the
stock options reported herein.
(3) Present value was calculated using the Black-Scholes option-pricing model
which involves an extrapolation of future price levels based solely on past
performance. The present value as of the date of grant, calculated using
the Black-Scholes method, is based on assumptions about future interest
rates, dividend yield, stock price volatility and exercise dates. In
calculating the present value as of the date of grant of the options
reported in the table, the Company assumed an interest rate of 4.25% per
annum, an annual dividend yield of zero, volatility of 30.6% and an
exercise date at the end of the contractual term in 2011. There is no
assurance that these assumptions will prove to be true in the future. The
actual value, if any, that may be realized by each individual will depend
on the future market price of the Common Stock and cannot be forecasted
accurately by application of an option-pricing model.
Option Exercises and Holdings
The following table sets forth certain information concerning unexercised
options to purchase Common Stock of the Company held at the end of fiscal year
2001 by the named executive officers. None of the named executive officers
exercised any options during fiscal year 2001. No named executive officer holds
any SARs.
Aggregated Option Exercises In Last Fiscal Year And
Fiscal Year-End Option Value
Value of Unexercised
Number of Unexercised In-the-Money
Shares Value Options at Options at
Acquired on Realized FY-End (#) FY-End ($)(1)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------ -------- ------------------------- -------------------------
Frank T. MacInnis.............. None --- 525,600/25,000 $15,428,470/$499,000
Jeffrey M. Levy................ None --- 128,200/15,000 $3,373,090/$299,400
Sheldon I. Cammaker............ None --- 105,900/10,000 $2,933,830/$199,600
Leicle E. Chesser.............. None --- 105,900/10,000 $2,933,830/$199,600
R. Kevin Matz.................. None --- 59,000/5,000 $1,168,110/$99,800
------------------
(1) For purposes of this column, value is calculated based on the aggregate
amount of the excess of $45.40 (the closing price of the Common Stock as
reported on the New York Stock Exchange on December 31, 2001) over the
relevant exercise price for a share of Common Stock with respect to the
options.
Employment Agreements
The Company has employment agreements made as of January 1, 2002 with Frank
T. MacInnis providing for his employment as Chief Executive Officer of the
Company through December 31, 2004 and with Jeffrey M. Levy providing for his
employment as President and Chief Operating Officer of the Company through
December 31, 2004. Each such employment agreement provides that the term of
employment will automatically be extended for successive one-year periods unless
the Company or the officer gives written notice not to extend at least six
months prior to the end of the initial term or any extended term of the
employment agreement. However, following the date of a Change of Control (as
defined their employment agreements), the term of Mr. MacInnis' and Mr. Levy's
respective employment shall be for a period of three years from such date. Under
Mr. MacInnis' employment agreement, the Company is also to use its best efforts
to ensure Mr. MacInnis' election as Chairman of the Board of Directors of the
Company.
Pursuant to the terms of their respective employment agreements, Mr.
MacInnis is to receive an annual base salary of $800,000 for 2002 and Mr. Levy
is to receive an annual base salary of $525,000 for 2002. Their annual base
salaries are to increase on the first day of each succeeding calendar year
during the employment periods by the percentage increase in the consumer price
index for the preceding year for the area in which the principal office of the
Company is located or an amount specified by the Board of Directors, whichever
is greater. In addition, Mr. MacInnis and Mr. Levy are each entitled to receive
an annual bonus, which is to be determined with reference to a target bonus and
based upon factors agreed upon annually by the respective officer and the
Compensation and Personnel Committee of the Board of Directors (the
"Compensation Committee"); provided that Mr. MacInnis' annual target bonus may
not be less than $800,000 and Mr. Levy's annual target bonus may not be less
than $600,000. Pursuant to the terms of their respective employment agreements,
Mr. MacInnis and Mr. Levy are to receive an option on the first business day of
each of 2002, 2003 and 2004 to purchase a number of shares of Common Stock of
the Company determined by dividing in Mr. MacInnis' case 125% of his base
salary, and in Mr. Levy's case 100% of his base salary, for such year by the
value of an option to purchase a share of Company Common Stock on such date
which value is to be determined by the Black-Scholes methodology. Accordingly,
on January 2, 2002 Mr. MacInnis was granted an option to purchase 56,800 shares
at $46.35 per share, and Mr. Levy was granted an option to purchase 30,000
shares at $46.35 per share. Each option is to have a ten-year term, is to have
an exercise price equal to the fair market value of a share of Common Stock on
the grant date, and is to be exercisable as follows: one-fourth on or after the
grant date, one-fourth on or after the first anniversary of the grant date,
one-fourth on or after the second anniversary of the grant date and one-fourth
on or after the last business day of the calendar year immediately preceding the
third anniversary of the grant date.
In addition, in connection with their respective employment agreements,
Messrs. MacInnis and Levy were granted on December 14, 2001 options to purchase
50,600 and 33,200 shares of Common Stock, respectively, at a per share exercise
price of $41.70, the fair market value of a share of Common Stock on the grant
date. Each of these options is vested in full and expires December 14, 2011.
Under the terms of their employment agreements, Messrs. MacInnis and Levy
each has been provided with certain benefits customarily accorded to the
Company's executive officers. These benefits include $870 per month for the
leasing of an automobile and the cost of a lease capital reduction payment;
maintenance and insurance on their respective automobiles; reimbursement for
initiation fees and monthly dues for membership in a club suitable for
entertaining clients of the Company; life insurance in an amount equal to twice
their current annual salary times the number of full or partial calendar years
that remain prior to expiration of their respective employment agreements; all
legal expenses incurred in connection with their employment agreements; and the
cost of any increased tax liability to them caused by receipt of these fringe
benefits.
If, during the term of his employment agreement, Mr. MacInnis' employment
is terminated by the Company other than for Cause (as defined in his employment
agreement) or he terminates his employment for Good Reason (as defined in his
employment agreement), he 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 term of employment for the period from the date of termination
through December 31, 2004 or (B) two times his base salary at its then current
annual rate and (ii) the greater of (A) his target bonus for the calendar year
in which the termination takes place multiplied by the number of full or partial
calendar years remaining from the date of termination through December 31, 2004
and (B) two times his target bonus for the calendar year in which the
termination takes place; however, in the event of a termination following a
Change of Control (as defined in his employment agreement), the factor of two in
clauses (i)(B) and (ii)(B) above will be increased to three. If, during the term
of his employment agreement, Mr. Levy's employment is terminated by the Company
other than for Cause (as defined in his employment agreement) or he terminates
his employment for Good Reason (as defined in his employment agreement), he will
be entitled to a cash payment equal to the sum of (i) two times his base salary
at its then current annual rate and (ii) two times his target bonus for the
calendar year in which the termination occurs; however, in the event of a
termination following a Change of Control (as defined in his employment
agreement) the factor of two in clauses (i) and (ii) above will be increased to
three. In addition, Messrs. MacInnis and Levy each will be entitled to receive
all unpaid amounts in respect of his bonus for any calendar year ending before
the date of termination and an amount equal to his target bonus for the calendar
year in which the termination takes place multiplied by a fraction the numerator
of which is the number of days in such calendar year that he was an employee of
the Company and the denominator of which is 365.
The Company has employment agreements made as of January 1, 2002 with
Sheldon I. Cammaker providing for his employment as Executive Vice President and
General Counsel of the Company through December 31, 2004, with Leicle E. Chesser
providing for his employment as Executive Vice President and Chief Financial
Officer of the Company through December 31, 2004, and with R. Kevin Matz
providing for his employment as Vice President and Treasurer of the Company
through December 31, 2004. Each such employment agreement provides that the term
of employment will automatically be extended for successive one-year periods
unless the Company or the officer gives written notice not to extend at least
six months prior to the end of the initial term or any extended term of the
employment agreement. However, following the date of a Change of Control (as
defined in their employment agreements), the terms of their respective
employment shall be for a period of three years from such date.
Pursuant to the terms of their respective employment agreements, Mr.
Cammaker is to receive an annual base salary of $410,000 for 2002, Mr. Chesser
is to receive an annual base salary of $410,000 for 2002, and Mr. Matz is to
receive an annual base salary of $300,000 for 2002. Their annual base salaries
are to increase on the first day of each succeeding calendar year during the
employment periods by the percentage increase in the consumer price index for
the preceding year for the area in which the principal office of the Company is
located or an amount specified by the Board of Directors, whichever is greater.
In addition, each of them is entitled to receive an annual cash bonus determined
by the Compensation Committee, and under the terms of their respective
employment agreements, Messrs. Cammaker, Chesser and Matz are each to receive an
option on the first business day of 2002, 2003, and 2004 to purchase a number of
shares of Common Stock of the Company determined by dividing 75% of their
respective base salaries for such year by the value of an option to purchase a
share of Common Stock of the Company on such date, which value shall be
determined by the Black-Scholes methodology. Accordingly on January 2, 2002
Messrs. Cammaker and Chesser were each granted an option to purchase 17,500
shares at $46.35 per share and Mr. Matz was granted an option to purchase 12,800
shares at $46.35 per share. Each option is to have a ten-year term, is to have
an exercise price equal to the fair market value of a share of Common Stock on
the grant date, and is to be exercisable as follows: one-fourth on or after the
grant date, one-fourth on or after the first anniversary of the grant date,
one-fourth on or after the second anniversary of the grant date and one-fourth
on or after the last business day of the calendar year immediately preceding the
third anniversary of the grant date.
In addition, in connection with their respective employment agreements,
Messrs. Cammaker, Chesser and Matz were granted options to purchase 25,900,
25,900 and 19,000 shares of Common Stock, respectively, at a per share exercise
price of $41.70 per share, the fair market value of a share of Common Stock on
the grant date. Each of these options is fully exercisable and expires December
14, 2011.
Under the terms of their employment agreements, Messrs. Cammaker, Chesser
and Matz each have been provided with certain benefits customarily accorded to
the Company's executive officers, including in Messrs. Cammaker's and Chesser's
case $870 per month, and, in Mr. Matz' case $700 per month, for leasing of an
automobile and the cost of a lease capital reduction payment; maintenance and
insurance on their respective automobiles, reimbursement for initiation fees and
monthly dues for membership in a club suitable for entertaining clients of the
Company; life insurance in an amount equal to twice their current annual salary
times the number of full or partial calendar years that remain prior to the
expiration of their respective employment agreements; all legal expenses
incurred in connection with their employment agreements; and the cost of any
increased tax liability to them caused by receipt of these fringe benefits.
If Messrs. Cammaker's, Chesser's or Matz' employment is terminated during
the term of his respective employment agreement by the Company other than for
Cause (as defined in his employment agreement), or if he terminates his
employment for Good Reason (as defined in his employment agreement), he will be
entitled to receive a cash payment generally equal to the sum of (i) two times
his base salary at its then current annual rate and (ii) two times the highest
bonus paid to him during his employment by the Company ("Deemed Bonus").
However, in the event of a termination following a Change of Control (as defined
in his employment agreement), the factor of two in clauses (i) and (ii) above
will be increased to three. In addition, Messrs. Cammaker, Chesser and Matz each
will be entitled to receive all unpaid amounts in respect of his bonus for any
calendar year ending before the date of termination and an amount equal to his
Deemed Bonus multiplied by a fraction the numerator of which is the number of
days in the calendar year in which the termination takes place that he was an
employee of the Company and the denominator of which is 365.
Continuity Agreements
Each of Messrs. MacInnis, Levy, Cammaker, Chesser and Matz (each referred
to herein as an "Executive") is a party to a Continuity Agreement with the
Company. The purpose of the Continuity Agreements is to retain the services of
these Executives and to assure their continued productivity without disturbance
in circumstances arising from the possibility or occurrence of a Change of
Control of the Company. For purposes of the agreements a "Change of Control"
means, in general, the occurrence of (i) the acquisition by a person or group of
persons of 25% or more of the voting securities of the Company, (ii) the
approval by the Company's stockholders of a merger, business combination or sale
of the Company's assets, the result of which is that less than 65% of the voting
securities of the resulting corporation is owned by the holders of the Company's
Common Stock prior to such transaction or (iii) the failure of Incumbent
Directors (as defined in the Continuity Agreements) to constitute at least a
majority of the Board of Directors of the Company during any two year period.
Generally, no benefits are provided under the Continuity Agreements for any
type of termination before a Change of Control, for termination after a Change
of Control due to death, disability, any termination for Cause (as that term is
defined in the Continuity Agreement) or for voluntary termination (other than
for Good Reason) (as that term is defined in the Continuity Agreements).
Upon a Change of Control each Continuity Agreement generally provides to
the Executive a severance benefit if the Company terminates the Executive's
employment without Cause or the Executive terminates his employment for Good
Reason within two years following a Change of Control equal to the sum of three
times (i) his base salary at the time of the Change of Control, (ii) the higher
of (x) his bonus in respect of the year prior to the Change of Control or (y)
the average of his bonuses for the three years prior to the Change of Control
and (iii) the value of perquisites provided in respect of the year prior to the
Change of Control. Other severance benefits include outplacement assistance and
a continuance of insurance benefits for three years. The severance benefits
under the Executive's Continuity Agreements are reduced by any severance
benefits payable under the Executive's employment agreement.
If all or any portion of the payments or benefits referred to in the
preceding paragraphs under "Employment Agreements" and "Continuity Agreements"
either alone or together with other payments and benefits which Messrs.
MacInnis, Levy, Cammaker, Chesser or Matz receives or is then entitled to
receive from the Company would constitute a "parachute payment" within the
meaning of Section 280G of the Internal Revenue Code (the "Code"), then such
officer shall be entitled to such additional payments as may be necessary to
ensure that the net after tax benefit of all such payments shall be equal to his
respective net after tax benefit as if no excise tax had been imposed under
Section 4999 of the Code.
Director Compensation
Each director who is not an officer of the Company ("non-employee
director") is entitled to receive an annual cash retainer of $30,000 and $1,000
for each meeting of the Board of Directors 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 of Directors receives
an additional $2,000 per annum. In addition, pursuant to the 1995 Non-Employee
Directors' Non-Qualified Stock Option Plan, each non-employee director on July
12, 2001 was granted an option to purchase 3,000 shares of Common Stock at an
exercise price of $42.30 per share. These options are fully exercisable as of
the date of grant and have a term of ten years. A director who also serves as an
officer of the Company does not receive compensation for services rendered as a
director.
Under the 1997 Non-Employee Directors' Non-Qualified Stock Option Plan and
the 1997 Stock Plan for Directors, each non-employee director, in lieu of all or
part of his annual cash retainer, may elect to receive in accordance with such
plans (a) options to purchase shares of Common Stock and/or (b) deferred stock
units in respect of which shares of Common Stock will be issued following the
non-employee director's termination of service as a director of the Company. For
2001 each non-employee Director elected to receive his annual retainer in
options, and, accordingly, each was granted options to purchase 5,325 shares of
Common Stock at $25.44 per share. These options vest during the course of the
calendar year in which they are granted and have a five-year term.
Compensation Committee Interlocks and Insider Participation
During 2001 the Compensation and Personnel Committee of the Board of
Directors of the Company (the "Compensation Committee") was responsible for
matters concerning executive compensation.
Messrs. Bershad and Fried, each of whom is a non-employee director, served
as members of the Compensation Committee during 2001. Mr. Georges de Buffevent,
a director who passed away in December 2001, was also a member of the
Compensation Committee during 2001.
No member of the Compensation Committee was at any time during 2001 a
present or former officer of the Company or any of its subsidiaries or had any
relationship requiring disclosure by the Company under any paragraph of Item 404
of Regulation S-K except for Mr. Fried with respect to the brokerage commissions
described below under "Certain Relationships and Related Transactions." In
addition, no executive officer of the Company has served as a director or member
of the compensation committee (or other committee performing an equivalent
function) of another entity, one of whose executive officers served as a
director of, or member of the Compensation Committee of the Company.
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
The following table sets forth as of April 15, 2002 certain information
regarding beneficial ownership of the Company's Common Stock by each person or
group known by the Company to be a beneficial owner of more than five percent of
the outstanding shares of Common Stock. Except 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.
Number of Shares Percent
Name and Address of Beneficial Owner Beneficially Owned Owned
--------------------- ------------------ -----
Artisan Investment Corporation.............. 816,339(1) 5.5%
1000 North Water Street, #1770
Milwaukee, Wisconsin 53202
FMR Corp.................................... 756,500(2) 5.1%
82 Devonshire Street
Boston, Massachusetts 02109
-----------------------
(1) As reported in Amendment 3 to Schedule 13G dated February 13, 2002 filed
with the Securities and Exchange Commission ("SEC") by Artisan Investment
Corporation ("Artisan") and its affiliates Artisan Partners Limited
Partnership, Andrew A. Ziegler and Carlene M. Ziegler. Artisan and its
affiliates have shared voting power and shared dispositive power of these
shares.
(2) As reported in Amendment 2 to Schedule 13G dated February 14, 2002 filed
with the SEC by FMR Corp. ("FMR"), Fidelity Management & Research Company
("Fidelity"), Edward C. Johnson, 3rd and Abigail P. Johnson. Fidelity, a
wholly owned subsidiary of FMR and a registered investment advisor, is the
beneficial owner of 665,400 shares as a result of acting as investment
advisor to various investment companies ("Funds") and Fidelity Management
Trust Company ("FMT"), a wholly owned subsidiary of FMR and a bank, is the
beneficial owner of 91,100 shares as a result of serving as investment
manager of institutional accounts. Mr. Johnson, FMR, through its control of
Fidelity, and the Funds each has sole power to dispose of the 665,400
shares, and Mr. Johnson and FMR, through its control of FMT, each has sole
dispositive power over and sole power to vote, or direct the voting of,
91,100 shares.
The following table sets forth as of April 15, 2002 certain information
regarding the beneficial ownership of the Company's Common Stock by each of the
Company's directors, its chief executive officer, each of the other four most
highly compensated executive officers of the Company and all its directors and
executive officers as a group for the fiscal year ended December 31, 2001.
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
Name of Beneficial Owner Beneficial Ownership(1) Percent
Frank T. MacInnis........................ 606,789(2) 3.9%
Stephen W. Bershad....................... 70,879(3) *
David A. B. Brown........................ 28,949(3) *
Albert Fried, Jr......................... 77,386(3) *
Richard F. Hamm, Jr...................... 36,554(3) *
Kevin C. Toner........................... 45,379(3) *
Jeffrey M. Levy.......................... 166,779(2) *
Sheldon I. Cammaker...................... 130,672(2) *
Leicle E. Chesser........................ 136,799(2) *
R. Kevin Matz............................ 74,671(2) *
All directors and executive officers as a group 1,434,645(4) 8.8%
--------------------
* Represents less than 1%.
(1) The information contained in the table reflects "beneficial ownership" as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended.
All percentages set forth in this table have been rounded.
(2) Includes in the case of Mr. MacInnis 564,800 shares, in the case of Mr.
Levy 150,700 shares, in the case of each of Messrs. Cammaker and Chesser
120,275 shares, and in the case of Mr. Matz 67,200 shares, that may be
acquired upon the exercise of presently exercisable options or options
exercisable within 60 days of the date hereof granted pursuant to the
Company's stock option plans and programs. Also includes in the case of Mr.
MacInnis 38,989 shares, in the case of Mr. Levy 14,979 shares, in the case
of Mr. Cammaker 10,397 shares, in the case of Mr. Chesser 16,524 shares,
and in the case of Mr. Matz 7,471 shares, to be issued in respect of stock
units granted under the Company's Executive Stock Bonus Plan referred to
below (the "Stock Bonus Plan").
(3) Includes in the case of Mr. Bershad 55,879 shares, in the case of Mr. Brown
27,949 shares, in the case of Mr. Fried 42,379 shares, in the case of Mr.
Hamm 36,554 shares, and in the case of Mr. Toner 45,379 shares, that may be
acquired upon exercise of presently exercisable options or options
exercisable within 60 days of the date hereof granted to each non-employee
director pursuant to the Company's 1995 Non-Employee Directors'
Non-Qualified Stock Option Plan and its 1997 Non-Employee Directors'
Non-Qualified Stock Option Plan.
(4) Includes 1,286,165 shares that may be acquired upon the exercise of
presently exercisable options or options exercisable within 60 days of the
date hereof granted pursuant to the Company's stock options plans and
programs and 93,273 shares to be issued in respect of stock units granted
under the Stock Bonus Plan.
Item 13. Certain Relationships and Related Transactions
In the latter part of December 2001 and in January 2002 the Company
retained Albert Fried & Company, LLC ("AFC"), a broker dealer and member of the
New York Stock Exchange, to act as its broker in connection with sale of common
stock of a customer that the Company had accepted from the customer in
satisfaction of the customer's indebtedness. To effectuate the sale, the Company
paid AFC aggregate brokerage commissions of $181,441. The commission rate that
AFC charged the Company was substantially less than the commission rates for the
transactions quoted to the Company by other major brokerage firms. Mr. Albert
Fried, Jr., a director of the Company, is a principal owner and the managing
member of AFC.
During 2001 certain of the Company's subsidiaries in the normal course of
their respective businesses acted as a subcontractor to ComNet, Inc. ("ComNet"),
a corporation of which Mr. Frank T. MacInnis, Chairman of the Board of Directors
and Chief Executive Officer of the Company, is the sole stockholder. The amounts
charged ComNet by the Company's subsidiaries for such work, which amounted to an
aggregate of approximately $176,000, were based on competitive rates.
Nevertheless, Mr. MacInnis and the Board of Directors of the Company have
concluded that ComNet and the Company shall no longer engage in business with
one another.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
EMCOR GROUP, INC.
(Registrant)
Date: April 26, 2002 By: /s/ FRANK T. MACINNIS
---------------------
Frank T. MacInnis
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on April 26, 2002 by the following persons on
behalf of the Registrant and in the capacities indicated.
/s/ FRANK T. MACINNIS Chairman of the Board of Directors and
----------------------------------- Chief Executive Officer
Frank T. MacInnis
/s/ STEPHEN W. BERSHAD Director
-----------------------------------
Stephen W. Bershad
/s/ DAVID A.B. BROWN Director
-----------------------------------
David A.B. Brown
/s/ ALBERT FRIED, JR. Director
-----------------------------------
Albert Fried, Jr.
/s/ RICHARD F. HAMM, JR. Director
-----------------------------------
Richard F. Hamm, Jr.
/s/ KEVIN C. TONER Director
-----------------------------------
Kevin C. Toner
/s/ LEICLE E. CHESSER Executive Vice President and
-----------------------------------
Leicle E. Chesser Chief Financial Officer
/s/ MARK A. POMPA Vice President and Controller
-----------------------------------
Mark A. Pompa