Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Based on an evaluation of our disclosure controls and procedures (as required by Rules 13a-15(b) of the Securities Exchange Act of 1934), our Chairman, President, and Chief Executive Officer, Anthony J. Guzzi, and our Executive Vice President and Chief Financial Officer, Mark A. Pompa, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) are effective as of the end of the period covered by this report.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). Our internal control over financial reporting is a process designed with the participation of our principal executive officer and principal financial officer or persons performing similar functions to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
Our internal control over financial reporting includes policies and procedures that: (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of assets, (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and Board of Directors, and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
As of December 31, 2023, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has determined that EMCOR’s internal control over financial reporting was effective as of December 31, 2023.
The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report appearing in Item 8 of this Form 10-K, which such report expressed an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2023.
Changes in Internal Control over Financial Reporting
In addition, our management with the participation of our principal executive officer and principal financial officer or persons performing similar functions has determined that no change in our internal control over financial reporting (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) occurred during the fourth quarter of our fiscal year ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
During the quarter ended December 31, 2023, none of the Company’s directors or executive officers adopted or terminated any: (a) contract, instruction, or written plan for the purchase or sale of Company securities intended to satisfy the affirmative defense conditions of Rule 10b5-1 or (b) non 10b5-1 trading arrangement, each as defined in Item 408(a) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item 10 with respect to directors is incorporated herein by reference to the section of our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders entitled “Election of Directors,” which Proxy Statement is to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year to which this Form 10-K relates (the “Proxy Statement”). The information, if any, required by this Item 10 concerning compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by reference to the section of the Proxy Statement entitled “Delinquent Section 16(a) Reports.” The information required by this Item 10 concerning the Audit Committee of our Board of Directors and Audit Committee financial experts is incorporated by reference to the section of the Proxy Statement entitled “Meetings and Committees of the Board of Directors” and “Corporate Governance.” The information required by this Item 10 regarding stockholder recommendations for director candidates is incorporated by reference to the section of the Proxy Statement entitled “Recommendations for Director Candidates.” Information regarding our executive officers is contained in Part I of this Form 10-K following Item 4 under the heading “Executive Officers of the Registrant.” We have adopted a Code of Ethics that applies to our Chief Executive Officer and our Senior Financial Officers, which is listed on the Exhibit Index.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated herein by reference to the sections of the Proxy Statement entitled “Compensation Discussion and Analysis,” “Executive Compensation and Related Information,” “Potential Post Employment Payments,” “Director Compensation,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report.”
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item 12 (other than the information required by Section 201(d) of Regulation S-K, which is set forth below) is incorporated herein by reference to the sections of the Proxy Statement entitled “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Management.”
Securities Authorized for Issuance Under Equity Compensation Plans. The following table summarizes, as of December 31, 2023, certain information regarding equity compensation plans that were approved by stockholders and equity compensation plans that were not approved by stockholders.
Equity Compensation Plan Information
A B C
Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column A)
Equity Compensation Plans Approved by Security Holders 335,131 $ — 692,720 (1)
Equity Compensation Plans Not Approved by Security Holders — — —
Total 335,131 $ — 692,720 (1)
_________
(1) Represents shares of our common stock available for future issuance under our 2010 Incentive Plan, which may be issued pursuant to the award of restricted stock, unrestricted stock and/or awards that are valued in whole or in part by reference to, or are otherwise based on the fair market value of, our common stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information required by this Item 13 is incorporated herein by reference to the sections of the Proxy Statement entitled “Compensation Committee Interlocks and Insider Participation” and “Corporate Governance.”
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item 14 is incorporated herein by reference to the section of the Proxy Statement entitled “Ratification of Appointment of Independent Auditors.”
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) The following consolidated financial statements of EMCOR Group, Inc. and Subsidiaries are filed as part of this report under Part II, Item 8. Financial Statements and Supplementary Data:
Financial Statements:
Consolidated Balance Sheets - December 31, 2023 and 2022
Consolidated Statements of Operations - Years Ended December 31, 2023, 2022, and 2021
Consolidated Statements Comprehensive Income - Years Ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows - Years Ended December 31, 2023, 2022, and 2021
Consolidated Statements of Equity - Years Ended December 31, 2023, 2022, and 2021
Notes to Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
(a)(2) The following financial statement schedule is included in this Form 10-K: Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted because they are not required, are inapplicable, or the information is otherwise shown in the consolidated financial statements or notes thereto.
(a)(3) The exhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index.
(b) Exhibit Index
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EXHIBIT INDEX
Exhibit
No. Description Incorporated By Reference to or
Filed Herewith, as Indicated Below
3(a-1) Restated Certificate of Incorporation of EMCOR filed December 15, 1994 Exhibit 3(a-5) to EMCOR’s Registration Statement on Form 10 as originally filed March 17, 1995 (“Form 10”)
3(a-2) Amendment dated November 28, 1995 to the Restated Certificate of Incorporation of EMCOR Exhibit 3(a-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1995 (“1995 Form 10-K”)
3(a-3) Amendment dated February 12, 1998 to the Restated Certificate of Incorporation of EMCOR Exhibit 3(a-3) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1997 (“1997 Form 10-K”)
3(a-4) Amendment dated January 27, 2006 to the Restated Certificate of Incorporation of EMCOR Exhibit 3(a-4) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2005 (“2005 Form 10-K”)
3(a-5) Amendment dated September 18, 2007 to the Restated Certificate of Incorporation of EMCOR Exhibit A to EMCOR’s Proxy Statement dated August 17, 2007 for Special Meeting of Stockholders held September 18, 2007
3(a-6)
Certificate of Amendment of Restated Certificate of Incorporation of EMCOR
E xhibit 3.1 to EMCOR ’ s Rep ort on F orm 8-K (Date of Report June 8, 2023)
3(b) Second Amended and Restated By-Laws of EMCOR Exhibit 3.1 to EMCOR’s Report on Form 8-K (Date of Report October 25, 2022)
4(a) Seventh Amended and Restated Credit Agreement dated as of December 20, 2023 by and among EMCOR and certain subsidiaries and Bank of Montreal, as Agent and the lenders listed on the signature pages thereof
Filed herewith
4(b)
Description of Registrant’s Securities Exhibit 4(e) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”)
10(a) Form of Severance Agreement (“Severance Agreement”) between EMCOR and each of R. Kevin Matz and Mark A. Pompa Exhibit 10.1 to EMCOR's Report on Form 8-K (Date of Report April 25, 2005)
10(b) Form of Amendment to Severance Agreement between EMCOR and each of R. Kevin Matz and Mark A. Pompa Exhibit 10(c) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (“March 2007 Form 10-Q”)
10(c) Letter Agreement dated October 12, 2004 between Anthony Guzzi and EMCOR (the “Guzzi Letter Agreement”) Exhibit 10.1 to EMCOR’s Report on Form 8-K (Date of Report October 12, 2004)
10(d) Form of Confidentiality Agreement between Anthony Guzzi and EMCOR Exhibit C to the Guzzi Letter Agreement
10(e) Form of Indemnification Agreement between EMCOR and each of its officers and directors Exhibit F to the Guzzi Letter Agreement
10(f-1) Severance Agreement (“Guzzi Severance Agreement”) dated October 25, 2004 between Anthony Guzzi and EMCOR Exhibit D to the Guzzi Letter Agreement
10(f-2) Amendment to Guzzi Severance Agreement Exhibit 10(g-2) to the March 2007 Form 10-Q
10(g-1) Continuity Agreement dated as of June 22, 1998 between R. Kevin Matz and EMCOR (“Matz Continuity Agreement”) Exhibit 10(f) to EMCOR's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 ("June 1998 Form 10-Q")
10(g-2) Amendment dated as of May 4, 1999 to Matz Continuity Agreement Exhibit 10(m) to EMCOR's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 ("June 1999 Form 10-Q")
10(g-3) Amendment dated as of January 1, 2002 to Matz Continuity Agreement Exhibit 10(o-3) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 (“March 2002 Form 10-Q”)
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EXHIBIT INDEX
Exhibit
No. Description Incorporated By Reference to or
Filed Herewith, as Indicated Below
10(g-4) Amendment dated as of March 1, 2007 to Matz Continuity Agreement Exhibit 10(n-4) to the March 2007 Form 10-Q
10(h-1) Continuity Agreement dated as of June 22, 1998 between Mark A. Pompa and EMCOR (“Pompa Continuity Agreement”) Exhibit 10(g) to the June 1998 Form 10-Q
10(h-2) Amendment dated as of May 4, 1999 to Pompa Continuity Agreement Exhibit 10(n) to the June 1999 Form 10-Q
10(h-3) Amendment dated as of January 1, 2002 to Pompa Continuity Agreement Exhibit 10(p-3) to the March 2002 Form 10-Q
10(h-4) Amendment dated as of March 1, 2007 to Pompa Continuity Agreement Exhibit 10(o-4) to the March 2007 Form 10-Q
10(i-1) Change of Control Agreement dated as of October 25, 2004 between Anthony Guzzi (“Guzzi”) and EMCOR (“Guzzi Continuity Agreement”) Exhibit E to the Guzzi Letter Agreement
10(i-2) Amendment dated as of March 1, 2007 to Guzzi Continuity Agreement Exhibit 10(p-2) to the March 2007 Form 10-Q
10(i-3) Amendment to Continuity Agreements and Severance Agreements with Anthony J. Guzzi, R. Kevin Matz and Mark A. Pompa Exhibit 10(Q) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2008 (“2008 Form 10-K”)
10(j) Amendment dated as of March 29, 2010 to Severance Agreement with Anthony J. Guzzi, R. Kevin Matz and Mark A. Pompa Exhibit 10.1 to Form 8-K (Date of Report March 29, 2010) (“March 2010 Form 8-K”)
10(k-1) Severance Agreement dated as of October 26, 2016 between EMCOR and Maxine L. Mauricio Exhibit 10(l-1) to EMCOR's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 ("September 2016 Form 10-Q")
10(k-2) Continuity Agreement dated as of October 26, 2016 between EMCOR and Maxine L. Mauricio (“Mauricio Continuity Agreement”) Exhibit 10(l-2) to the September 2016 Form 10-Q
10(k-3) Amendment dated April 10, 2017 to Mauricio Continuity Agreement Exhibit 10(l-3) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017
10(l-1) EMCOR Group, Inc. Long-Term Incentive Plan (“LTIP”) Exhibit 10 to Form 8-K (Date of Report December 15, 2005)
10(l-2) First Amendment to LTIP and updated Schedule A to LTIP Exhibit 10(S-2) to 2008 Form 10-K
10(l-3) Second Amendment to LTIP Exhibit 10.2 to March 2010 Form 8-K
10(l-4) Third Amendment to LTIP Exhibit 10(q-4) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 (“March 2012 Form 10-Q”)
10(l-5) Fourth Amendment to LTIP Exhibit 10(l-5) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013
10(l-6) Form of Certificate Representing Stock Units issued under LTIP Exhibit 10(T-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2007 (“2007 Form 10-K”)
10(l-7) Fifth Amendment to LTIP Exhibit 10(l-7) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2015 (“2015 Form 10-K”)
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EXHIBIT INDEX
Exhibit
No. Description Incorporated By Reference to or
Filed Herewith, as Indicated Below
10(l-8) Sixth Amendment to LTIP Exhibit 10(l-8) to 2015 Form 10-K
10(l-9) Seventh Amendment to LTIP Exhibit 10(l-9) to EMCOR's Annual Report on Form 10-K for the year ended December 31, 2021
10(l-10)
Eighth Amendment to LTIP
Filed herewith
10(m) Key Executive Incentive Bonus Plan, as amended and restated Exhibit B to EMCOR’s Proxy Statement for its Annual Meeting held June 13, 2013
10(n) Amended and Restated 2010 Incentive Plan Exhibit 10.1 to Form 8-K (Date of Report June 11, 2020)
10(o) EMCOR Group, Inc. Employee Stock Purchase Plan Exhibit C to EMCOR’s Proxy Statement for its Annual Meeting held June 18, 2008
10(p) Director Award Program Adopted May 13, 2011, as amended and restated December 14, 2011 Exhibit 10(n)(n) to EMCOR's Annual Report on Form 10-K for the year ended December 31, 2011
10(q) Form of Non-LTIP Stock Unit Certificate Exhibit 10(p)(p) to the March 31, 2012 Form 10-Q
10(r) Form of Director Restricted Stock Unit Agreement Exhibit 10(k)(k) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 (“June 2012 Form 10-Q”)
10(s) Director Award Program, as Amended and Restated December 16, 2014 Exhibit 10(z) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2014
10(t) EMCOR Group, Inc. Voluntary Deferral Plan Exhibit 10(E)(E) to EMCOR's Annual Report on Form 10-K for the year ended December 31, 2012 (“2012 Form 10-K”)
10(u) First Amendment to EMCOR Group, Inc. Voluntary Deferral Plan Exhibit 10(e)(e) to EMCOR's Annual Report on Form 10-K for the year ended December 31, 2013
10(v) Form of Executive Restricted Stock Unit Agreement Exhibit 10(F)(F) to 2012 Form 10-K
14 Code of Ethics of EMCOR for Chief Executive Officer and Senior Financial Officers Exhibit 14 to EMCOR's Annual Report on Form 10-K for the year ended December 31, 2003
21 List of Significant Subsidiaries Filed herewith
23.1 Consent of Ernst & Young LLP Filed herewith
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Anthony J. Guzzi, the Chairman, President, and Chief Executive Officer
Filed herewith
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Mark A. Pompa, the Executive Vice President and Chief Financial Officer Filed herewith
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chairman, President, and Chief Executive Officer
Furnished
32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Executive Vice President and Chief Financial Officer Furnished
95.1 Information concerning mine safety violations or other regulatory matters Filed herewith
97 Policy Relating to Recovery of Erroneously Awarded Compensation
F iled here with
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EXHIBIT INDEX
Exhibit
No. Description Incorporated By Reference to or
Filed Herewith, as Indicated Below
101 The following materials from EMCOR Group, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Equity and (vi) the Notes to Consolidated Financial Statements.
Filed
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) Filed
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, upon request of the Securities and Exchange Commission, the Registrant hereby undertakes to furnish a copy of any unfiled instrument which defines the rights of holders of long-term debt of the Registrant’s subsidiaries.
ITEM 16. FORM 10-K SUMMARY
None.
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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.
Date: February 28, 2024
EMCOR GROUP, INC.
(Registrant)
B Y :
/s/ ANTHONY J. GUZZI
Anthony J. Guzzi
Chairman, President, and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 28, 2024.
/ S / A NTHONY J. G UZZI
Chairman, President, and Chief Executive Officer
Anthony J. Guzzi
(Principal Executive Officer)
/S/ M ARK A . P OMPA
Executive Vice President and Chief Financial Officer
Mark A. Pompa (Principal Financial Officer)
/S/ J ASON R. N ALBANDIAN
Senior Vice President and Chief Accounting Officer
Jason R. Nalbandian (Principal Accounting Officer)
/ S / J OHN W . A LTMEYER
Director
John W. Altmeyer
/ S / R ONALD L. J OHNSON
Director
Ronald L. Johnson
/ S / C AROL P. L OWE
Director
Carol P. Lowe
/ S / M. K EVIN M C E VOY
Director
M. Kevin McEvoy
/ S / W ILLIAM P. R EID
Director
William P. Reid
/s/ S TEVEN B. S CHWARZWAELDER
Director
Steven B. Schwarzwaelder
/ S / R OBIN W ALKER- L EE
Director
Robin Walker-Lee
/s/ R EBECCA A. W EYENBERG
Director
Rebecca A. Weyenberg
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
Description Balance at
Beginning
of Year
Costs and
Expenses Deductions (1)
Balance at
End of Year
Allowance for credit losses
Year Ended December 31, 2023
$ 22,382 7,859 ( 7,739 ) $ 22,502
Year Ended December 31, 2022
$ 23,534 5,166 ( 6,318 ) $ 22,382
Year Ended December 31, 2021
$ 18,031 8,041 ( 2,538 ) $ 23,534
_________________
(1) Deductions primarily represent uncollectible balances of accounts receivable written off, net of recoveries.
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