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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended: June 30, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File Number 1-7477
CRSS INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 74-1677382
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1177 WEST LOOP SOUTH, SUITE 800 77027
HOUSTON, TEXAS (Zip Code)
(Address of principal executive offices)
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Registrant's telephone number, including area code (713) 552-2000
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class Name of each Exchange on which registered
COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE
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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 filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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/
As of August 25, 1994, 12,964,120 common shares were outstanding. The
aggregate market value of the common shares (based upon the closing sales price
on the New York Stock Exchange on August 25, 1994) of CRSS Inc. held by
nonaffiliates was approximately $129,043,000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the CRSS Inc.'s Proxy Statement with respect to its Annual
Meeting of Shareholders to be held October 27, 1994 are incorporated by
reference into Part III.
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TABLE OF CONTENTS
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ITEM
NO. PAGE NO.
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PART I
1. Business.................................................................... 1
2. Properties.................................................................. 14
3. Legal Proceedings........................................................... 14
4. Submission of Matters to a Vote of Security Holders......................... 14
PART II
5. Market for Registrant's Common Equity and Related Shareholder Matters....... 15
6. Selected Financial Data..................................................... 16
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations..................................................... 16
8. Financial Statements and Supplementary Data................................. 23
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure...................................................... 52
PART III
10. Directors and Executive Officers of the Registrant.......................... 52
11. Executive Compensation...................................................... 52
12. Security Ownership of Certain Beneficial Owners and Management.............. 52
13. Certain Relationships and Related Transactions.............................. 52
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Index to Financial Statements and Schedules............................... 53
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PART I
ITEM 1. BUSINESS
GENERAL
CRSS Inc. ("CRSS" or the "Company"), together with its subsidiary CRSS
Capital, Inc. ("CRSS Capital"), provides to its customers a competitive
advantage by developing, owning, and operating energy and process facilities
worldwide.
The Company and its subsidiaries are engaged in the business of managing,
owning and operating energy (power and steam) and process facilities and are
also involved in the construction management and maintenance of projects in
which the Company has an ownership interest. CRSS Capital has become involved in
projects at various developmental stages, sometimes developing projects from the
conceptual stage, other times acquiring an interest in an early phase of
development or investing in completed and operating projects.
Historically, producers of electric power consisted of regulated utilities
and industrial users that produced electricity to satisfy their own needs. In
response to the energy crisis of the 1970s, however, federal legislation
fostered the development of an "independent power market" by encouraging and in
some cases requiring utilities to purchase power from "Qualifying Facilities"
("QFs"), including cogenerators and small power producers, while also exempting
these QFs from most utility regulatory requirements. As a result, a significant
market for electric power produced by independent power generators has developed
in the United States. CRSS Capital was one of the early entrants in that market
and today is one of the larger independent power producers.
Most independent power producers have focused almost exclusively upon the
production of electricity. CRSS, however, offers a much broader array of energy
products to industrial customers which includes, but is not limited to, the sale
of high and low pressure steam, electricity, compressed air, black liquor
processing services, solid and liquid waste disposal services, waste water and
water treatment services and waste heat recovery services. During fiscal year
1994 more than 50 percent of the aggregate gross revenues of the projects in
which the Company is involved have been derived from the sale of products or
services other than electricity.
Process industries, such as the pulp and paper, chemical, petro-chemical,
fibers, food and manufacturing industries, experience high levels of energy
related capital investment associated with their manufacturing operations.
Further, these industries are increasingly subject to legislation and public
pressure to reduce environmental emissions. Energy intensive industries are also
often assessing and proceeding with the unbundling of core process assets from
non-core power and utility assets as one way of rationalizing their business
focus. The Company is working with existing and potential customers to lower
manufacturing costs, shift production to higher margin product lines or simply
provide a third party source of financing at an overall lower cost. The
Company's experiences have shown that cost and reliability improvements can be
significant when older, cash starved, out of favor energy assets are
re-invigorated with active, enthusiastic management and provided with
appropriate amounts of new capital.
Another avenue being pursued by CRSS is power marketing. The impetus for
power marketing comes from the National Energy Policy Act which mandated that
investor-owned utilities, and other owners of transmission facilities, provide
open transmission access at just and reasonable rates to promote the
economically efficient transmission and generation of electricity as an aid to
the public's search for lower cost electric service.
CRSS is creating a competitive edge for its customers through its power
marketing capability in support of new utility generation and industrial energy
supply opportunities. For industry, CRSS delivers electric power procurement
strategies incorporating self-generation, load management, self-service wheeling
and power marketing. Additionally, CRSS is teaming with certain investor-owned
utilities in order to provide full service, broad scope energy supply solutions
to satisfy the needs of any customer.
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The Company believes that it has unique competencies in the pulp and paper
and industrial utility asset markets. CRSS Capital developed and owns two
operational energy production projects in the pulp and paper industry and was
the first entity to project finance energy assets relying solely upon the
economic capacity of a customer's mill. In the industrial utility asset
management arena, CRSS Capital is pursuing opportunities for the acquisition or
joint management of power and utility functions from major industrial
corporations at various manufacturing sites in the United States and around the
world.
Under the Public Utility Regulatory Policies Act of 1978 ("PURPA"),
electrical utilities are required to purchase electricity made available by
"qualifying cogeneration facilities" and "qualifying small power production
facilities" (as those terms are defined under PURPA) at a price equal to the
utility's "avoided cost" (the marginal cost of generating the same amount of
electricity or purchasing it from another available source). Cogeneration is the
sequential production of electricity and thermal energy from the same source of
fuel through an integrated system, which is typically more efficient than more
conventional power projects which produce only electricity. All of the Company's
current plants are qualifying cogeneration facilities or qualifying small power
production facilities.
PURPA is generally implemented by the various states, subject to federal
guidelines established by the Federal Energy Regulatory Commission ("FERC"). The
state regulatory agencies of the various states responsible for implementation
of PURPA have developed different methods for calculating "avoided costs" and
for encouraging the construction of certain cogeneration projects on the basis
of the price of power under the power purchase contract and other factors. Under
certain circumstances, power purchase contracts may be required to be approved
by state commissions.
The Company believes that the cost advantage generally inherent in the
simultaneous production of electricity and thermal energy, coupled with PURPA's
mandate for utilities to buy electricity from cogeneration facilities under
certain circumstances, as well as other regulatory advantages afforded to
qualifying cogeneration and small power production facilities, provide
significant opportunities for unregulated companies to prosper in the power
generation business, a field historically dominated by regulated public
utilities.
The Company anticipates that unregulated electrical energy sales will be
attractive in selected markets on a long-term basis because of projected
increases in power consumption, lack of significant new generating capacity
construction by utilities in those markets and potential future energy pricing
trends. In the Company's view, the more attractive geographic markets for
unregulated power production are currently located in the Western, Southern and
Mid-Atlantic states, since portions of these areas have generally higher
electricity rates as well as an anticipated need for additional capacity.
CRSS Capital has adopted a portfolio approach to the unregulated power and
cogeneration market. As a result, it has developed and acquired interests in
projects with a diversity of partners, geographic areas, fuel types, combustion
technology and power and steam purchasers. This portfolio approach is intended
to permit CRSS Capital to minimize the risk of being tied to any single partner,
geographic area, fuel type, technology or power purchaser.
CRSS Capital arranges project financing on a non-recourse basis for its
energy and process projects. Thus, each project itself, along with its contracts
and cash flows, provide the security required by lenders for that particular
project. CRSS Capital's financial obligation is usually limited to equity
commitments and construction cost overruns, if any.
CRSS Capital's success is dependent upon its ability to compete for future
projects, meet completion schedules, control construction costs, arrange
financing at acceptable costs, sell energy from its operating units at
competitive prices, offer customer responsive terms and conditions, and operate
its facilities on a cost-effective basis.
Through its subsidiary, CRSS Capital, CRSS currently has significant
ownership in seven operational cogeneration and small power plants. The combined
capacity of the seven operating plants is approximately 579 megawatts of
electrical capacity and approximately five million pounds per hour of process
steam capacity. The combined total assets of these seven plants and related
facilities was approximately $750 million
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at June 30, 1994. During fiscal year 1994 aggregate gross revenues for CRSS'
seven operating projects was approximately $200 million.
CRSS Capital is also actively pursuing additional projects in the United
States and overseas that are in various stages of development. There can be no
assurance, however, that any of such projects will be completed.
Since 1985, CRSS Capital has raised approximately $750 million of capital
for its facilities in operation or under construction. Each such plant has been
financed through project financing structures that are substantially
non-recourse to CRSS Capital, CRSS Inc., and to its other projects. To date, the
sole exception to this policy is that the Company has agreed to cross
collateralize its three wood waste fired projects, Northumberland, McBain and
Lincoln, as part of a refinancing. The Company generally relies on the capital
markets to provide 100 percent of the construction and 80 percent to 90 percent
of the term financing for its projects. The Company finances its development
costs and its equity investments in project subsidiaries from internally
generated funds and credit facilities.
In fiscal year 1994, plants operated by CRSS Capital averaged 97.9 percent
"availability". ("Availability" is defined by the North American Electric
Reliability Council as the available hours divided by the period hours. In this
case, to determine the system availability, each facility was weighted based on
rated megawatt output consistent with general utility practices.) CRSS Capital
plants on average have had a safety record significantly better than the average
for the electricity generating industry.
CORPORATE HISTORY
CRSS was founded as an architectural partnership in 1946 and was
incorporated in the state of Delaware on October 16, 1970, as CRS Design
Associates, Inc. CRSS expanded its service capabilities through both internal
development and acquisition of two architectural and two construction firms
between July 1981 and January 1983. In July 1983, CRSS acquired all of the
outstanding common stock of J.E. Sirrine Company, an engineering firm that
provided comprehensive engineering, planning, project management and
construction services.
Through its subsidiary, CRSS Services, Inc. ("CRSS Services"), CRSS
provided comprehensive architectural, engineering and construction and program
management services to industrial, institutional, commercial and public sector
clients. Beginning in 1983, in an effort to diversify and decrease its
dependence on the architectural, engineering and construction industry, CRSS
expanded and diversified its operations to include (i) independent power and
cogeneration, (ii) acid rain/pollution control and (iii) domestic and
international third party insurance and reinsurance.
CRSS Capital was incorporated on December 8, 1983.
In 1986, the Company through its subsidiaries, expanded its insurance
operations beyond self-insurance, to include issuance of third party domestic
and international insurance and reinsurance business in certain niche markets.
On June 30, 1989, the Company issued 2,527 shares of voting and nonvoting
common stock in CRSS Capital, representing a 19 percent interest, to Paribas
North America, Inc. ("Paribas") for a gross purchase price of $8 million. The 19
percent interest owned by Paribas was subsequently reduced to a 15 percent
interest as a result of the purchase by the Company of additional shares of
common stock of CRSS Capital in connection with the funding of the acquisition
of three wood-fired facilities. On October 12, 1989, CRSS Capital acquired from
Energy Factors, Incorporated, the remaining 51 percent interest not previously
owned by CRSS Capital in three 18.5-megawatt wood-fired facilities (the "Viking
Projects") by acquiring the Energy Factors, Incorporated subsidiary, which owned
such interest. The purchase price included $5.5 million in cash plus
reimbursement of equity contributions of approximately $5.1 million. In October
1991, Paribas increased its interest in CRSS Capital to the original 19 percent
interest by purchasing additional shares of CRSS Capital common stock for $1.8
million. On January 31, 1994, the Company (via redemption by CRSS Capital)
repurchased all of the common stock of CRSS Capital owned by Paribas for $17.0
million, resulting in CRSS Capital once again becoming a wholly-owned subsidiary
of CRSS.
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During 1989, CRSS and Industrial Resources, Inc. formed NaTec Resources,
Inc. ("NaTec") to develop, engineer and market integrated systems and products
which control pollutants commonly associated with acid rain. CRSS has a 48
percent ownership interest and a 52 percent voting interest in NaTec.
As a result of the continued growth of the independent power industry and
CRSS Capital in recent years, the Company has redirected its focus toward this
single line of business. In January 1992, the Company completed the sale of its
domestic and international third party insurance and reinsurance business
followed by an announcement in August 1992 of the Company's intent to divest its
interest in NaTec. In July 1994, CRSS sold its design, engineering and
construction services subsidiaries. Accordingly, these businesses have been
reflected as discontinued operations. (See "Discontinued Operations" on page
11.)
POWER AND COGENERATION OPERATIONS
A summary of CRSS' power and cogeneration operations and activities
follows:
Westwood Facility
A limited partnership among CRSS Westwood, Inc. (a wholly-owned subsidiary
of CRSS Capital), Westwood Funding Corporation (a wholly-owned subsidiary of ABB
Combustion Engineering, Inc.), UtilCo Group, Inc. (a wholly-owned subsidiary of
UtilCorp United), and Kenvil Energy Company developed the Westwood Generating
Station, a 30-megawatt power plant operating in Schuylkill County, Pennsylvania.
CRSS Westwood, Inc. owns a 47.5 percent interest in the partnership while
Westwood Funding Corporation, UtilCo Group, Inc. and Kenvil Energy Company own
9.5 percent, 38 percent and 5 percent interests, respectively. The facility
began commercial operation in July 1988 and was completed at a cost of
approximately $82.3 million. The facility utilizes a circulating fluidized bed
boiler to burn anthracite mining refuse to produce electricity. A large quantity
of anthracite mining refuse located on the property and owned by the partnership
sits immediately adjacent to or near the facility. The facility has received
certification from the FERC as a "qualifying small power production facility"
under PURPA.
The Westwood facility was financed primarily through the issuance of
tax-exempt industrial revenue bonds issued by the Schuylkill County Industrial
Development Authority. These bonds have been secured by the facility, the
revenue generating contracts associated with the facility and a non-recourse
letter of credit issued by a commercial bank. The interest rate on the bonds has
not been fixed but rather, fluctuates on a daily basis in response to market
conditions. The Company has infused cash equity of $4.5 million and has
guaranteed to contribute an additional $3.0 million equity contribution if cash
flow is not sufficient to meet debt service requirements. As of June 30, 1994, a
total of $54.7 million in bonds were outstanding.
The partnership has executed a 20-year contract with Metropolitan Edison
Company for the sale of the electricity produced by the facility. The
partnership has also entered into backup power purchase and electricity
transmission agreements with Pennsylvania Power & Light Company ("PP&L").
CRSS Capital provides administrative management and overall management of
operations and maintenance for this project.
Northumberland Facility.
CRSS Capital has developed, constructed and currently operates an
18.5-megawatt wood-fired cogeneration facility in Northumberland, Pennsylvania.
This facility utilizes conventional stoker boiler technology to burn various
types of wood and fiber wastes. CRSS Capital, through wholly-owned subsidiaries,
owns a 100 percent interest in the limited partnership which owns the project.
The project cost approximately $33.5 million and achieved commercial operation
in December, 1989. The project has received certification under PURPA from the
FERC as both a "qualifying small power production facility" and a "qualifying
cogeneration facility".
The Northumberland facility was originally financed on a non-recourse basis
through a commercial bank providing both construction and term debt. During
fiscal year 1989, this debt was refinanced and replaced by a 20-year, fixed
rate, non-recourse borrowing obtained from institutional investors. CRSS Capital
arranged for
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the refinancing of the non-recourse term debt of this project along with the
McBain and Lincoln facilities (discussed below) on terms and conditions which
were more attractive than the original term loans. As of June 30, 1994, the
amount of long-term non-recourse financing was $17.3 million. The Company has
infused cash equity of $12.4 million and has agreed to make an additional $3.5
million equity contribution to fund a debt service reserve account. This reserve
account may be drawn upon as a result of debt service payment shortfalls on the
Northumberland, McBain and/or Lincoln projects.
The partnership has executed a 20-year contract with PP&L for the sale of
electricity produced by the project. The partnership has also executed a 20-year
contract with Furman Foods, Inc. ("Furman") for the sale of steam produced by
the facility and required by Furman for its normal operations.
The partnership has entered into multiple short and long-term fuel supply
contracts with various suppliers for the delivery of wood fuel, composed of wood
fiber and sawdust.
CRSS Capital provides administrative management and overall management of
operations and maintenance for this project.
McBain Facility
CRSS Capital developed, constructed, currently operates, and through
wholly-owned subsidiaries, owns 100 percent of an 18.5-megawatt wood-fired
facility located in McBain, Michigan. The project achieved commercial operation
during December, 1989. The design of this facility is almost identical to the
Northumberland facility in Pennsylvania. The project has been certified by the
FERC as a "qualifying small power production facility".
The McBain facility was originally financed on a non-recourse basis through
the same commercial bank used for the Lincoln facility. The lender provided both
construction and term debt. During fiscal year 1989, this debt was refinanced
and replaced by a 20-year, fixed rate, non-recourse borrowing obtained from
institutional investors. The total project cost was approximately $31.3 million.
As of June 30, 1994, the total amount of long-term non-recourse project
financing on the McBain facility was $22.4 million. The Company has infused cash
equity of $8.4 million and has agreed to contribute an additional sum (as noted
above) to fund a debt service reserve account.
Consumers Power Company ("Consumers Power") has agreed to purchase
electrical power generated by the McBain facility under a long-term power supply
contract for an initial term beginning with commercial operation and ending on
December 31, 2018. The contract provides for price adjustments based on the
results of pricing reviews by the Michigan Public Service Commission ("MPSC").
Under a 1987 Michigan law, these contractual provisions are limited for the
period of financing of those facilities or 17.5 years, whichever is less. As a
result, under current law there can be no state regulatory review of the
capacity rate paid under each contract for the duration of the existing term
loan.
The partnership entered into multiple short and long-term fuel supply
contracts with various suppliers for the delivery of wood fuel, composed of wood
fiber and sawdust.
CRSS Capital provides administrative management and overall management of
operations and maintenance for this project.
Lincoln Facility
CRSS Capital developed, constructed, currently operates, and through
wholly-owned subsidiaries, owns 100 percent of an 18.5-megawatt wood-fired
facility located in Lincoln, Michigan. The project achieved commercial operation
during January, 1990. The design of this facility is almost identical to the
Northumberland facility in Pennsylvania. The project has been certified by the
FERC as a "qualifying small power production facility".
The Lincoln facility was originally financed on a non-recourse basis
through the same commercial bank used for the McBain facility. The lender
provided both construction and term debt. During fiscal year 1989, this debt was
refinanced and replaced by a 20-year, fixed rate, non-recourse borrowing
obtained from
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institutional investors. The total project cost was approximately $30.2 million.
As of June 30, 1994, the total amount of long-term non-recourse project
financing on the Lincoln facility was $23.6 million. The Company has infused
cash equity of $5.5 million and has agreed to contribute an additional sum (as
noted above) to fund a debt service reserve account.
Consumers Power Company has agreed to purchase electrical power generated
by the Lincoln facility under a long-term power supply contract for an initial
term beginning with commercial operation and ending on December 31, 2018. The
contract provides for price adjustments based on the results of pricing reviews
by the MPSC. Under a 1987 Michigan law, these contractual provisions are limited
for the period of financing of those facilities or 17.5 years, whichever is
less. As a result, under current law there can be no state regulatory review of
the capacity rate paid under each contract for the duration of the existing term
loan.
The partnership entered into multiple short and long-term fuel supply
contracts with various suppliers for the delivery of wood fuel, composed of wood
fiber and sawdust.
CRSS Capital provides administrative management and overall management of
operations and maintenance for this project.
Hopewell Facility
A limited partnership owned by a subsidiary of CRSS Capital, American
National Power, (a subsidiary of National Power PLC), and Mission Energy, (a
subsidiary of SCEcorp), owns and is operating a 365-megawatt natural gas-fired
cogeneration facility located in Hopewell, Virginia. CRSS Capital owns a 50
percent interest while American National Power and Mission Energy each own a 25
percent interest in this limited partnership. The Hopewell facility achieved
commercial operation in August, 1990, and was completed at a total cost of
approximately $198 million. The project provides capacity and energy to Virginia
Electric and Power Company ("Virginia Power") under a 25-year Power Purchase and
Operating Agreement ("Power Contract"). The project is compensated for providing
capacity as measured semi-annually in accordance with the Power Contract and for
energy which is escalated in accordance with an index which represents a
substantial pass through of energy costs at the lower of natural gas or #2 fuel
oil. The Power Contract provides for the facility to be economically
dispatchable by Virginia Power on the basis of the variable cost of operation to
the utility.
The financing of the Hopewell facility was arranged on a non-recourse basis
through a commercial bank syndicate providing both construction and term debt. A
17-year interest rate swap which fixed the interest rate charged on the loan,
was also provided by the lender. In July 1991, CRSS Capital funded its equity
contribution of $10 million to the Hopewell limited partnership. As of June 30,
1994, the total amount of long-term non-recourse project financing on the
Hopewell facility was $154.1 million.
Fuel for the facility is being provided by Transco Energy Marketing
Company, (a subsidiary of Transco Energy Company), under a 15-year fuel supply
agreement. Steam from the facility is being sold to the Aqualon Company under
the terms of a 25-year steam sales and purchase agreement. The Aqualon Company
is a wholly-owned subsidiary of Hercules, Inc. The Hopewell facility has
received "qualifying cogeneration facility" status from FERC.
CRSS Capital is providing administrative project management services and
overall management of operations and maintenance.
Naheola Facility
CRSS Capital, through Naheola Cogeneration Limited Partnership is a 50
percent owner with James River Pennington, (a subsidiary of James River
Corporation), of a chemical recovery and cogeneration facility located at the
James River Naheola Mill in Pennington, Alabama. The facility processes black
liquor solids via a chemical recovery unit and provides steam, compressed air
and a portion of the mill's electrical power requirements pursuant to a 20-year
contract with James River Pennington. The partnership is compensated for being
available to provide services and on a per unit basis for quantities of black
liquor processed and energy
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produced and used by the mill. Prices change annually based upon a nationally
published inflation index. The Naheola facility has received "qualifying
cogeneration facility" status from the FERC.
The facility was completed and began operating in March 1993, more than
three months ahead of schedule, at a cost of approximately $290 million. The
facility has the capacity to supply 5.4 million pounds per day of black liquor
processing services, 1.8 million pounds per hour of process steam, and 80
megawatts per hour of electricity to the mill. Fuels used in the production of
energy include: black liquor solids, coal, wood waste, natural gas, fuel oil and
pulp mill sludge.
CRSS Capital arranged financing for construction and start-up of the
facility through a commercial bank syndicate using 17-year taxable industrial
revenue bonds issued by the Industrial Development Board of the City of Butler,
Alabama. An interest rate swap agreement has been entered into by the
partnership fixing the interest rate over the life of the loan. In July 1993,
CRSS Capital funded its equity contribution of $30 million to the Naheola
limited partnership, of which CRSS's portion was $24.3 million. As of June 30,
1994, a total of $229.9 million in bonds were outstanding.
CRSS Capital is providing administrative project management services.
CRSS Capital has an option to put its interest in Naheola at fair value to
James River in the event that the facility becomes subject to regulation as a
public utility, production levels at the Naheola mill fall below certain levels
due to James River shifting production to other mills, or if the Naheola mill is
sold to a competitor of the Company. James River also has an option to purchase
CRSS Capital's interest at fair value.
Appomattox Facility
CRSS Capital, through the Appomattox Cogeneration Limited Partnership, is
the developer and a 50 percent owner with Catamount Energy, (a subsidiary of
Central Vermont Public Service Company), of an entity which is providing 50
megawatts of capacity and energy to Virginia Power. The project structure
developed by CRSS Capital consists of the acquisition of an existing power sales
agreement between Stone Container Corporation and Virginia Power concurrent with
a long-term lease of power generation assets at Stone Container's Hopewell,
Virginia paper mill. The leased assets produce electricity while simultaneously
providing black liquor processing services (via a chemical recovery unit),
steam, and other utility services to Stone Container. The leased assets include
a power boiler, a chemical recovery boiler, a turbine generator, and related
steam and power generation assets. The limited partnership provides these
industrial energy services to Stone Container pursuant to a 12-year contract
which began in October 1992. Fuels used in the production of energy include:
black liquor solids, coal and bark. The Appomattox facility has received
"qualifying cogeneration facility" status from the FERC. The paper mill has been
operational since 1920.
CRSS Capital arranged a nine-year, fixed rate financing for the Appomattox
project through a syndicate of institutional investors. Total project costs were
$70.6 million. As of June 30, 1994, the total amount of long-term, non-recourse
project financing on the Appomattox project was $49.9 million. The Company has
infused cash equity of $7.1 million.
CRSS Capital is providing administrative project management services.
Backlog
Backlog is based on projected undiscounted contractual revenues for the
seven facilities in which CRSS Capital has an ownership interest. Total backlog
at June 30, 1994 was approximately $4.4 billion, of which CRSS Capital's
interest was approximately $2.5 billion. The projected revenues are based on
remaining contract terms of 10 to 24 years. Although backlog may be an
indication of expected future revenues, the assumptions used for inflation, fuel
prices and average utilization rates are all subject to adjustment, and
therefore no assurances can be made as to the timing or amount of the
realization of such revenues.
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Projects Under Development
CRSS Capital continues to be active in the project development marketplace
selectively seeking to expand its independent power, pulp and paper and
industrial utility asset management project portfolio through in-house project
origination efforts and the acquisition of existing production facilities or
facilities that are currently under construction or development. The majority of
CRSS Capital's project development efforts are focused upon projects in the $50
to $500 million capital cost range.
CRSS Capital has been selected by the Bonneville Power Administration
("BPA") as part of the BPA's Resource Contingency Plan for the development of a
480-megawatt natural gas-fired combined cycle facility in Chehalis, Washington.
CRSS Capital is the sole developer and 100 percent owner of this $400 million
project, which would represent CRSS Capital's largest project to date. The
decision to purchase any power under the BPA's Resource Contingency Plan will be
made by the BPA at the conclusion of the Environmental Impact Statement process.
Competition
Competition for developing, financing and owning energy and process
projects is based primarily on project development expertise, financial
strength, and technical capability. CRSS Capital competes with other independent
power producers, including affiliates of utilities, for project opportunities.
CRSS Capital also encounters competition from finance companies in the pursuit
of industrial investment opportunities.
The recent amendments to PUHCA may increase the number of CRSS Capital's
competitors by reducing certain ownership restrictions currently applicable to
certain projects which are not QFs under PURPA. See "Regulation".
REGULATION
The Company is subject to energy and environmental laws and regulations at
the federal, state, and local levels in connection with the development,
ownership, and operation of its energy plants. Federal laws and regulations
govern transactions with utility companies, the types of fuel which may be
utilized by a plant, the type of energy which may be produced by a plant and the
ownership of a plant. State utility regulatory commissions must usually approve
the rates and, in some instances, other terms and conditions under which public
utilities purchase electric power from independent producers. Under some
circumstances the FERC must approve rates in power contracts. In certain
circumstances where specific exemptions are otherwise unavailable, state utility
regulatory commissions may have broad jurisdiction over non-utility and
industrial electric power plants and even over sales of steam and heat.
Energy-producing projects also are subject to federal, state, and local laws and
administrative regulations which govern emissions produced by a plant and the
geographical location, zoning, land use and operation of a plant. Applicable
federal environmental laws typically have state and local enforcement and
implementation provisions. These environmental laws and regulations generally
require that a wide variety of permits and other approvals be obtained before
the commencement of construction or operation of an energy-producing facility
and that the facility then operate in compliance with such permits and
approvals. CRSS believes that it possesses the technology, technical expertise
and administrative capabilities to comply with existing energy and environmental
laws and regulations.
In order to qualify for the benefits provided a QF by PURPA, projects must
satisfy certain ongoing ownership, fuel and size requirements. Similarly, each
Electric Wholesale Generation Facility ("EWG") must satisfy federal
requirements. The FERC certification of qualifications for both QFs and EWGs may
be obtained based upon the factual representations made by a facility's
operators or owners in an application to the FERC. CRSS Capital has received
opinions of counsel to the effect that all of its projects are QFs. If, however,
the projects fail to continue to comply with federal regulations relating to
QFs, they would fail to remain QFs, which could cause the termination of certain
contracts, including power sales contracts. The standards for qualification and
the applicable regulations are subject to amendment. If the regulations were to
be amended, the Company cannot predict what effect any such amendment would have
on the Company or its
8
<PAGE> 11
projects. At the present time the Company has no projects operating or under
construction which are classified as EWGs.
Pursuant to authority granted under PURPA, the FERC has promulgated
regulations that currently exempt QFs and their owners from certain cost of
service and other restrictions imposed by the Federal Power Act ("FPA"), the
Public Utility Holding Company Act ("PUHCA"), and state laws related to the
rates and the financial and organizational regulation of electric utilities.
PURPA, PUHCA, FPA, the Energy Policy Act of 1992 and various state laws and
regulations thereunder are subject to amendment or repeal. State regulatory
bodies may also amend or repeal other laws or regulations materially affecting
the Company's projects. The Company cannot predict the effect that any such
amendment or repeal, if adopted, would have on the qualification of the
projects, or the extent of regulation to which the projects may thereby become
subject to or on the economic viability of the project.
In addition to the regulations described above, the projects must comply
with applicable federal, state, and local laws and regulations relating to land
use and the protection of the environment. The environmental regulations under
which the projects operate are subject to amendment. The Company cannot predict
what effect compliance with such amendments, if adopted, may have on its
business. Compliance with such amendments could require modification of a
project and thereby increase its costs, extend its completion date or otherwise
adversely affect the project's operation.
Because CRSS Capital attempts to design and develop its projects so that
they qualify for the benefits of PURPA, CRSS Capital's business could be
adversely affected by a significant change in PURPA and could otherwise be
materially impacted by decisions of federal, state, and local legislative,
judicial, and regulatory bodies.
Public Utility Regulatory Policies Act
The enactment in 1978 of PURPA and the adoption of regulations thereunder
by the FERC provided incentives for the development of cogeneration facilities
and small power production facilities (those utilizing renewable fuels and
having a capacity of less than 80 megawatts). In 1990, Congress amended PURPA to
lift the 80-megawatt ceiling on facilities using certain renewable fuel
technologies.
PURPA provides two primary benefits to QFs. First, QFs are relieved of
compliance with extensive federal, state, and local regulations that control the
development, financial structure, and operation of an energy-producing plant and
the prices and terms on which energy may be sold by the plant. Second, the
FERC's regulations promulgated under PURPA require that electric utilities
purchase electricity generated by QFs, construction of which commenced on or
after November 9, 1978, at a price based on the purchasing utility's full
"avoided cost", and that the utility sell back-up power to the QF on a
nondiscriminatory basis. The term "avoided cost" is defined as the incremental
costs to an electric utility of electric energy or capacity or both which, but
for the purchase from the qualifying facility or qualifying facilities, such
utility would generate for itself or purchase from another source. The FERC
regulations also permit QFs and utilities to negotiate agreements for utility
purchases of power at rates lower than the utility's avoided costs. Due to
increasing competition for utility contracts, the current practice is for most
power sales contracts to be awarded at below avoided cost. While public
utilities are not explicitly required by PURPA to enter into long-term
contracts, PURPA helped to create a regulatory environment in which it has
become common for long-term contracts to be negotiated.
Public Utility Holding Company Act
Under PUHCA, any corporation, partnership or other legal entity which owns
or controls 10% or more of the outstanding voting securities of a "public
utility company" or a company which is a "holding company" of a public utility
company is subject to registration with the Securities and Exchange Commission
and regulation under PUHCA, unless eligible for an exemption. The FERC, under
PURPA, has declared that QFs and EWGs are not public utility companies under
PUHCA. A holding company of a public utility company that is subject to
registration is required by PUHCA to limit its utility operations to a single
9
<PAGE> 12
integrated utility system and to divest any other operations not functionally
related to the operation of that utility system. Approval by the Securities and
Exchange Commission is required for nearly all important financial and business
dealings of the holding company.
If CRSS Capital were to pursue the acquisition or development of a project
which would not qualify as a QF or an EWG, CRSS Capital would structure its
participation in a manner to qualify for other exemptions from regulation under
PUHCA. Such a structure could, for example, consist of CRSS Capital holding a
non-voting, limited partnership interest in a partnership which owns a project.
PUHCA exemptions are available for foreign utility acquisitions.
Federal Power Act
The FPA grants the FERC exclusive rate-making jurisdiction over wholesale
sales of electricity in interstate commerce, including ongoing as well as
initial rate jurisdiction, which enables the FERC to revoke or modify previously
approved rates. Such rates may be based on a cost-of-service approach or on
rates that are determined through competitive bidding or negotiation. While QFs
under PURPA are exempt from the rate-making and certain other provisions of the
FPA, EWGs and projects not qualifying for QF status would be subject to the FPA
and to the FERC rate-making jurisdiction, which may limit their flexibility in
negotiations with power purchasers. However, since such plants would not be
bound by PURPA's thermal energy use requirement, they might have greater
latitude in site selection and facility size.
State Regulation
State public utility commissions ("PUCs") have broad authority to regulate
both the price and financial performance of providers of public utility
services, including in some cases, authority over the sale of steam and heat.
Since a power sales contract will become a part of a utility's cost structure
(and therefore is generally reflected in its rates), power sales contacts from
independents are potentially under the regulatory purview of PUCs. However, many
PUCs are normally favorably disposed toward independent power contracts (and may
even pre-approve contracts with prices that do not exceed the avoided costs of
the purchasing utility) because such contracts often have been acquired through
a competitive or market-based process. Recognizing the competitive nature of the
acquisition process, most PUCs will permit utilities to "pass through" expenses
associated with an independent power contract to the utility's retail customers.
Independent power producers which are not QFs under PURPA are considered to
be public utilities in many states, and are subject to broad regulation by PUCs,
ranging from the requirement of certificates of public convenience and necessity
to regulation of organizational, accounting, financial, and other corporate
matters. Although the FERC generally has exclusive jurisdiction over the rates
charged by such a producer to its wholesale customers, PUCs have the ability, in
practice, to influence the establishment of such rates by asserting jurisdiction
over the purchasing utility's ability to pass through the resulting cost of
purchased power to its retail customers. In addition, states may assert
jurisdiction over the siting and construction of facilities not qualifying as
QFs (as well as QFs), and over the issuance of securities and the sale or other
transfer of assets by these facilities.
Transmission and Wheeling
Energy-producing plants that sell power to distant customers often require
the transmission of electricity over power lines owned by others ("wheeling").
The prices and related terms and conditions of wheeling generally are regulated
by the FERC. PUCs also have limited jurisdiction over the transmission of power
to distant users. Only one of CRSS Capital's projects (Westwood) requires
wheeling.
Environmental Regulation
The construction and operation of power projects are subject to extensive
federal, state, and local laws and regulations adopted for the protection of the
environment and to regulate land use. The laws and regulations applicable to
CRSS Capital primarily involve the discharge of emissions into water and air and
the use of water, but can also include wetlands preservation, endangered
species, waste disposal, and noise
10
<PAGE> 13
regulation. These laws and regulations in many cases require a lengthy and
complex process of obtaining licenses, permits and approvals from federal, state
and local agencies. If such laws and regulations are changed and CRSS Capital's
facilities are not exempt from implementing such changes, extensive
modifications to project technologies and facilities could be required.
CRSS Capital monitors applicable environmental standards and evaluates the
selection of technologies to ensure that the applicable standards will be met.
Based on current trends, CRSS Capital expects that environmental and land use
regulation will become more stringent. Accordingly, CRSS Capital plans to
continue to place a strong emphasis on the development and use of
"best-available" technology to minimize the impact of its energy generation on
the environment.
Clean Air Act
In late 1990, Congress passed the Clean Air Act Amendments of 1990 (the
"1990 Amendments"). The original Clean Air Act of 1970 set guidelines for
emissions standards for major pollutants (for example, SO2 and NOx) from
newly-built sources in an attempt to reduce emissions from existing
sources -- particularly large older power plants that were exempted from certain
regulations under the original Clean Air Act. All of CRSS Capital's operating
plants perform at levels better than federal performance standards mandated for
such plants under the 1990 Amendments.
The 1990 Amendments create a marketable commodity called an SO2
"allowance". One allowance permits the discharge of one ton of SO2 by a facility
for the year the allowance is granted. All nonexempt power plants over 25
megawatts that emit SO2 (including independent power plants) must obtain
allowances in order to operate after 1999. Existing utilities will be issued
allowances based on their historical fuel consumption and a reduced emission
rate specified in the statute. To the extent any utility has more allowances
than it needs, either because of shutdown or because of "overcontrolling"
emissions, the utility can transfer or sell those allowances to others.
Significantly, the 1990 Amendments exempt from the SO2 allowance provisions
all existing independent power projects which were operating, under construction
or with power sales contracts (or letters of intent therefor) as of November 15,
1990, as well as plants outside the contiguous 48 states. As a result, all of
CRSS Capital's operating plants, plants under construction and certain of its
projects under development are exempt. Other provisions of the 1990 Amendments
will help to reduce the negative impact of the 1990 Amendments on CRSS Capital's
plants that are under development, but not exempt from the allowance provisions,
by providing alternative sources of allowances other than from utilities. The
new SO2 reductions that will be required of existing utility plants may reduce
the net electricity output of some utility plants and may force others to shut
down, increasing the demand for new power capacity.
The 1990 Amendments also require states to impose annual operating permit
fees of at least $25 per ton of regulated pollutants emitted up to $100,000 per
pollutant (4,000 tons). While such permit fees may be substantial, and will be
greater for coal-fired projects than for those burning gas or other fuel, such
fees are not expected to increase CRSS Capital's plant operating costs
significantly.
DISCONTINUED OPERATIONS
CRSS Services, Inc. -- Architectural, Engineering and Construction Services
CRSS Services, a wholly-owned subsidiary of CRSS, provided comprehensive
architectural, engineering, and construction and program management services
through its three primary wholly-owned operating subsidiaries: CRSS Architects,
Inc. ("Architects"), CRSS Constructors, Inc. ("Constructors"), and CRS Sirrine
Engineers, Inc. ("Engineers").
On July 21, 1994, the Company sold its design subsidiary, Architects, to
Hellmuth, Obata & Kassabaum, Inc. ("HOK") of St. Louis, Missouri. Total
consideration amounted to $6.8 million, consisting of $4.8 million in cash and a
$2.0 million sharing of future net cash distributions from the Peace Shield
project. The Peace Shield project is part of the United States' foreign military
sales program to provide AWACS aircraft to Saudi Arabia. CRSS, in joint venture
with Metcalf & Eddy, Inc. serves as overall program manager for the
11
<PAGE> 14
construction of all support facilities for the AWACS aircraft. Completion of the
Peace Shield project is expected in June 1996.
On July 29, 1994, the Company sold its engineering and construction
management operations, consisting primarily of Constructors and certain assets
and liabilities of Engineers, to Jacobs Engineering Group Inc. ("Jacobs"). Total
consideration paid by Jacobs amounted to $33.5 million in cash, representing
$14.0 million over the aggregate book value of the businesses acquired as of
June 30, 1994. The purchase price is subject to adjustment for changes in the
aggregate book value of the businesses acquired between June 30, 1994 and the
closing date of July 29, 1994. As part of the transaction, CRSS retained certain
assets and liabilities (representing net assets of approximately $10.9 million),
the majority of which relate to four power plant engineering, procurement and
construction contracts which are substantially complete or in the later stages
of completion. The Company has agreed to share in the future profit margin
improvement or deterioration for up to three specific projects,
Additionally, the Company has agreed to indemnify HOK and Jacobs against
certain legal claims arising from any acts, errors or omissions prior to July
21, 1994 and July 29, 1994, respectively.
See Note 3 of the Notes to Consolidated and Combined Financial Statements
on page 34 of this Form 10-K for more information related to the discontinuance
of the architectural, engineering, and construction services segment.
NaTec Resources, Inc. -- Acid Rain Pollution Control
In July 1988, CRSS Nahcolite, Inc. ("CRSN"), a wholly-owned subsidiary of
the Company, and Wolf Ridge Corporation, a wholly-owned subsidiary of Industrial
Resources, Inc. ("IRI"), formed NaTec Mines, a limited partnership, to develop,
design and market integrated systems and products to control pollutants commonly
associated with acid rain, to design and construct pilot and commercial plants
for the extraction of minerals from NaTec Mines' sodium leases and to market and
ship sodium, sodium products and sodium technology for industrial and utility
uses. On October 30, 1989, the Company exchanged its outstanding stock in CRSN
(which held the Company's 50 percent interest in NaTec Mines), plus cash of
approximately $6.1 million, for 11.1 million newly issued common shares of IRI.
In conjunction with the transaction, IRI changed its name to NaTec Resources,
Inc. ("NaTec"). As a result of this transaction, the Company owned an equity
interest of approximately 45 percent of the recapitalized NaTec.
NaTec's primary business is related to its dry sorbent injection technology
which utilizes nahcolite, a naturally occurring form of sodium bicarbonate,
which NaTec obtains from a joint venture producer of nahcolite in which NaTec
has a 50 percent interest. The nahcolite, along with patented reagents, is
injected into the flue gas stream at a power plant or industrial facility, where
it reacts with the flue gas, reducing both sulfur dioxide and nitrogen oxide
emissions. NaTec provides consulting services, systems construction, sorbent
supply and processing along with operations and maintenance services. Primary
markets are the utility, independent power production, and industrial markets
which include pulp and paper, municipal solid waste and petroleum refining.
On November 1, 1990, CRSS purchased 100,000 shares of NaTec Series A
Cumulative Convertible Exchangeable Preferred Stock ("Preferred Stock") for
$10.0 million. Quarterly dividends of 12.0 percent per annum are payable at the
option of CRSS in (i) cash, (ii) an equivalent amount of NaTec common stock or
(iii) a promissory note. At the option of the Company, and at any time prior to
redemption, the Preferred Stock may be converted into approximately 1.6 million
shares of NaTec common stock. The Preferred Stock has voting rights based upon
the number of "as if converted" shares of NaTec common stock.
On April 25, 1991, CRSS purchased an additional 700,000 shares of NaTec
common stock for approximately $3.3 million. This purchase, along with the
common shares received during fiscal 1991 as payment for Preferred Stock
dividends, increased CRSS' holding of NaTec common stock to approximately 12.0
million shares or a 47.4 percent equity ownership. When combined with the voting
rights obtained in conjunction with the November 1, 1990 Preferred Stock
purchase, CRSS obtained controlling interest in NaTec with voting rights of 50.6
percent as a result of this additional stock purchase.
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<PAGE> 15
During fiscal year 1992, CRSS purchased 10,000 shares of Series B and
10,000 shares of Series C Cumulative Convertible Exchangeable Preferred Stock
("Series B and Series C") for $2.0 million. Dividends are payable quarterly at a
rate of 11.5 percent per annum. Series B and Series C may be converted at the
option of CRSS into approximately 224,000 shares and 279,000 shares,
respectively. Other terms of the Series B and Series C Preferred Stock are
substantially identical to Series A. With the voting rights obtained in
conjunction with these additional purchases of Preferred Stock combined with
common stock received as payment for Preferred Stock dividends, CRSS effectively
controls approximately 51.5 percent of the voting rights of NaTec at June 30,
1994.
Effective December 31, 1992, CRSS consolidated various amounts receivable
from NaTec into a five-year convertible note. Upon conversion of the remaining
balance of the note, CRSS would effectively control approximately 55.5 percent
of the voting rights of NaTec.
NaTec, through its 50 percent ownership of an affiliate, holds federal
leases in Colorado expiring in 2001 which can be renewed for successive 10-year
periods. The leases cover an area of 8,224 acres located approximately 48 miles
northwest of Rifle, Colorado. The two principal sodium materials contained in
the leases are nahcolite and dansonite. Located on the leases in Colorado is a
nahcolite solution mining and processing facility which went into operation in
April 1991.
In August 1992, the Company announced its intent to divest its acid
rain/pollution control related holdings. In June 1994, the Company signed a
nonbinding letter of intent with a third party to sell its holdings in NaTec.
This letter of intent has subsequently expired. Negotiations are continuing,
however, as there still exists a willingness from both parties to attempt to
consummate a transaction.
The acid rain/pollution control operations were classified as discontinued
operations as of June 30, 1992. See Note 3 of the Notes to Consolidated and
Combined Financial Statements on page 34 of this Form 10-K for more information
related to the discontinuance of the acid rain/pollution control operations.
Global Capital Group, Inc. -- Insurance and Specialty Program Underwriter
In 1981, the Company organized Global Capital Insurance Ltd. ("Global"), a
wholly-owned subsidiary, to reinsure a portion of the Company's own insurance
needs (primarily for professional liability insurance) and thereby reduce its
increasing insurance costs. In 1986, Global and successors began to pursue
opportunities for expansion into certain third party specialty domestic and
international insurance and reinsurance markets. In 1987, the Company organized
a new insurance holding company, Global Capital Group, Inc. ("Global Capital").
In January 1992, CRSS and Global Capital completed the sale of its primary
insurance subsidiary, Global Insurance Company ("GIC"), for $8.9 million to
United Republic Reinsurance Company, a subsidiary of the Lawrence Group, Inc.
The sales agreement provided for a guarantee by Global Capital of the GIC
balance sheet, including loss reserves, by an amount up to $2.75 million. As of
June 30, 1994, CRSS has paid the entire $2.75 million guarantee amount. The
insurance operations were classified as discontinued operations as of June 30,
1991. See Note 3 of the Notes to Consolidated and Combined Financial Statements
on page 34 of this Form 10-K for more information related to the discontinuance
of the insurance operations.
EMPLOYEES
As of June 30, 1994, CRSS and its subsidiaries had 1,862 employees
distributed among the various segments as follows:
<TABLE>
<S> <C>
CRSS Services, Inc........................................................... 1,774
CRSS Capital, Inc............................................................ 37
Corporate.................................................................... 51
-----
Total........................................................................ 1,862
=====
</TABLE>
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<PAGE> 16
Following completion of the sale of the architectural, engineering, and
construction services segment, the Company will have 63 employees engaged in
operations, business development and marketing, and general and administrative
functions.
ITEM 2. PROPERTIES
The Company leases office space at 1177 West Loop South in Houston, Texas.
The noncancelable lease, which terminates September 2003, is subject to annual
escalations for increased operating costs. The base rental rate is also subject
to increase in October 1998.
The Company also owns property at 1111 West Loop South which includes land
and a two-story office building with approximately 52,400 square feet.
See discussions in Item 1, regarding power and cogeneration facilities.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are defendants in a number of lawsuits
involving claims typical of those filed against the architectural, engineering,
and construction professions, alleging primarily professional errors, omissions,
and/or delays. The Company has agreed to indemnify HOK and Jacobs against such
claims arising prior to July 21, 1994 and July 29, 1994, respectively. The
Company and its subsidiaries maintain professional liability insurance and other
self-insured reserves, which insure against risk within the existing policy
limits. Management is of the opinion that the CRSS Inc. Consolidated Financial
Statements, incorporated herein, include adequate provision for uninsured
losses.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal 1994.
Identification of Executive Officers
The following is a list of executive officers of CRSS, their ages,
positions, and offices, as of August 26, 1994, except those executive officers
who are also directors and are listed in Item 10.
<TABLE>
<CAPTION>
NAME INFORMATION OFFICES AND POSITIONS WITH CRSS AND OTHER
- - ---------------------------------- ---------------------------------------------------------
<S> <C>
James T. Stewart (Age 46)......... President. Mr. Stewart joined CRSS in 1983 as Senior Vice
President, Manager of the Power Division. In 1988, Mr.
Stewart was appointed President and Chief Executive
Officer of CRSS Capital, Inc. He became President of CRSS
Inc. effective August 25, 1994.
William J. Gardiner (Age 40)...... Senior Vice President/Chief Financial Officer/Treasurer.
Mr. Gardiner joined CRSS in 1976. In 1982, Mr. Gardiner
was named Assistant Corporate Controller for CRSS and was
promoted to Vice President/Controller -- Architecture
Group in 1985. In 1990, Mr. Gardiner was appointed Senior
Vice President/Chief Financial Officer of CRSS Capital,
Inc. He became Senior Vice President/Chief Financial
Officer/Treasurer of CRSS Inc. in 1992.
</TABLE>
(Table continued on following page)
14
<PAGE> 17
<TABLE>
<CAPTION>
NAME INFORMATION OFFICES AND POSITIONS WITH CRSS AND OTHER
- - ---------------------------------- ---------------------------------------------------------
<S> <C>
Timothy R. Dunne (Age 42)......... Vice President/General Counsel/Secretary. Mr Dunne joined
CRSS Capital, Inc. in 1990 as Assistant General Counsel,
and was promoted to General Counsel of CRSS Capital, Inc.
in 1992. He became Assistant Secretary of CRSS Inc. in
1992 and was appointed Vice President/General
Counsel/Secretary effective August 25, 1994.
Mary V. Gilbert (Age 32).......... Vice President/Controller. Ms. Gilbert joined CRSS
Capital, Inc. in 1989 as Assistant Controller. She was
appointed Vice President/Controller of CRSS Capital, Inc.
in 1992 and became Controller of CRSS Inc. in April 1994.
Ms. Gilbert was elected Vice President effective August
25, 1994.
</TABLE>
Effective August 25, 1994, Craig L. Martin (Senior Vice
President/Operations) and Frank Perrone (Vice President/General
Counsel/Secretary) resigned from their positions as executive officers of the
Company.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
CRSS Inc. common stock is traded on the New York Stock Exchange under the
trading symbol "CRX". The number of holders of record of the Company's common
stock, $1.00 par value, as of August 25, 1994 was 1,235.
<TABLE>
<CAPTION>
PRICE RANGE
DIVIDENDS -------------------------
FISCAL 1994 PER SHARE HIGH LOW
----------- --------- --------- ---------
<S> <C> <C> <C>
First Quarter.......................................... $0.03 $ 10 $8 1/4
Second Quarter......................................... 0.03 10 3/8 8 3/8
Third Quarter.......................................... 0.03 13 1/4 9 3/4
Fourth Quarter......................................... 0.03 12 3/8 9 1/2
---------
$0.12
FISCAL 1993
-----------
First Quarter.......................................... $0.03 $10 3/4 $7
Second Quarter......................................... 0.03 11 1/8 7
Third Quarter.......................................... 0.03 11 8 1/2
Fourth Quarter......................................... 0.03 9 5/8 7 1/2
---------
$0.12
</TABLE>
Cash dividends have been paid on the Company's common stock since
1974 -- annually for fiscal years 1974 through 1976 and on regular quarterly
dates since November 1976.
15
<PAGE> 18
ITEM 6. SELECTED FINANCIAL DATA
The following table presents selected financial information for CRSS Inc.
and its subsidiaries as of and for each of the five years ended June 30, 1994.
Selected financial data should be read in conjunction with the Consolidated
Financial Statements and accompanying notes.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Revenues............................ $ 28,419 $ 37,975 $ 30,519 $ 34,065 $ 17,945
Equity income (loss) in
partnerships...................... 14,327 8,038 5,027 2,360 (41)
Operating income (loss) from
continuing operations............. 14,096 13,610 4,676 5,054 (930)
Earnings (loss) from continuing
operations........................ 3,718 4,318 (1,085) (685) (2,669)
Primarily and fully diluted earnings
(loss) per common share from
continuing operations............. 0.28 0.33 (0.08) (0.05) (0.19)
Equity investment in partnerships... 61,538 24,358 14,476 6,480 4,114
Total assets........................ 210,672 219,733 208,242 218,808 251,183
Non-recourse project financing...... 60,937 63,238 65,368 67,296 68,874
Other long-term obligations......... 7,845 8,055 5,635 5,246 5,292
Cash dividends per share............ 0.12 0.12 0.12 0.12 0.12
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
GENERAL
Electricity sales, steam sales and plant operations expense included in the
Company's Consolidated Statement of Operations consist of the revenues and costs
associated with the three Viking cogeneration facilities. These projects are
wholly-owned by CRSS Capital. Equity income in partnerships includes CRSS
Capital's interest in cogeneration facilities that are less than majority-owned
and are accounted for using the equity method. These partnerships include the
Hopewell, Naheola, Westwood, and Appomattox facilities. Operations and
administrative service fees arise from management services provided by CRSS
Capital to each project in which it maintains an ownership interest. Costs
associated with providing these services are included in general and
administrative expense. Other revenues include fees and other revenues earned in
conjunction with the successful development and financial closing of projects.
In addition to the components discussed previously, costs and expenses include
general and administrative overhead costs as well as expenses related to the
Company's project development efforts.
CONTINUING OPERATIONS
Earnings from continuing operations for fiscal 1994 were $3.7 million, or
$0.28 per share compared to $4.3 million, or $0.33 per share for fiscal 1993.
Loss from continuing operations for fiscal 1992 was $1.1 million, or $0.08 per
share. Fiscal 1993 included the development fee and gain on sale of partnership
interest in conjunction with the October 1992 financial closing of the
Appomattox facility at the Stone Container Corporation pulp and paper mill in
Hopewell, Virginia. Excluding the effects of the Appomattox transaction, the
increase in earnings from continuing operations since fiscal 1992 reflects the
growing contribution attributable to the less than majority-owned partnerships
as further discussed below under the caption "Equity income in partnerships."
Total revenues for fiscal 1994 decreased $9.6 million, or 25 percent
compared to fiscal 1993. Fiscal 1993 total revenues increased $7.5 million, or
24 percent compared to fiscal 1992. The fluctuation in total revenues is due
primarily to revenue related to the completion of project development activities
and sales of partnership interests. Fiscal 1993 included revenue of $8.2 million
earned in conjunction with the financial closing on the Appomattox facility as
noted above. Fiscal 1992 included a gain on sale of partnership interest in the
Clean
16
<PAGE> 19
Power Cogeneration Limited Partnership of $1.2 million. Revenues attributable to
electricity and steam sales were relatively consistent for fiscal 1994, 1993 and
1992.
Plant operations costs for fiscal 1994 increased $1.1 million, or 6 percent
compared to fiscal 1993. Increased operating costs were primarily due to higher
fuel costs as a result of difficulties during the year in procuring adequate
wood supplies. Plant operations costs for fiscal 1993 were consistent with
fiscal 1992.
Fiscal 1994 general and administrative expenses were $5.7 million compared
to $11.6 million for fiscal 1993, representing a decrease of $5.9 million, or 51
percent. General and administrative expenses for fiscal 1993 increased $1.5
million, or 15 percent as compared to fiscal 1992. The fluctuations are
primarily attributable to expenses related to the closing of the Appomattox
transaction included in fiscal 1993. Additionally, fiscal 1994 general and
administrative expenses were reduced by expense reimbursements of approximately
$1.6 million related to another developmental project. The expenses related to
this project were incurred and included in general and administrative expense in
fiscal 1992.
Marketing and project development expenses were $2.6 million, $1.5 million,
and $1.6 million for fiscal 1994, 1993, and 1992, respectively. The increase for
fiscal 1994 reflects the increase in project development efforts as the Company
seeks to expand and diversify its cogeneration projects.
Non-operating income for fiscal 1994 was $0.3 million compared to $3.0
million for fiscal 1993. Non-operating income for fiscal 1993 included a $1.2
million gain from the sale of a guaranteed interest contract in March 1993 in
addition to $1.0 million of interest income from the guaranteed interest
contract through the date of sale. Also contributing to the decrease for fiscal
1994 was lower cash balances available for investment during the year.
Non-operating income for fiscal 1993 increased $0.7 million compared to fiscal
1992. The increase was primarily due to the $1.2 million gain from the sale of
the guaranteed interest contract noted above, partially offset by $0.3 million
lower interest income related to the guaranteed interest contract. The remainder
of the decrease was attributable to lower interest rates during fiscal 1993 on
short-term investments.
Interest expense, which is primarily attributable to the long-term
non-recourse debt used to finance the Viking cogeneration facilities, was $7.4
million, $7.6 million, and $7.8 million for fiscal 1994, 1993, and 1992
respectively. The decreases in interest expense reflect the reductions in the
outstanding principal balances on the non-recourse debt. The Company incurred
interest expense of $0.1 million for short-term borrowings under the revolving
credit facility during fiscal 1994.
Minority interest in earnings of $0.5 million, $1.2 million, and $0.3
million for fiscal 1994, 1993, and 1992, respectively, represents the 19 percent
minority interest in CRSS Capital owned by Paribas North America, Inc.
("Paribas") through January 31, 1994. On that date, the Company (via redemption
by CRSS Capital) repurchased all of the common stock of CRSS Capital owned by
Paribas resulting in CRSS Capital becoming wholly-owned by the Company.
EQUITY INCOME IN PARTNERSHIPS
Equity income in partnerships reflects CRSS Capital's 50 percent interest
in the Hopewell, Naheola, and Appomattox power and cogeneration facilities and
the 47.5 percent interest in the Westwood facility. Summarized combined
financial information on the less than majority-owned power and cogeneration
partnerships at 100 percent for the years ended June 30, 1994, 1993, and 1992
follows (dollars in thousands):
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------------------
1994 1993 1992
-------- -------- -------
<S> <C> <C> <C>
Revenues............................................ $178,740 $113,853 $70,913
Operating income.................................... 75,006 47,435 32,868
Net income.......................................... 28,834 16,167 10,166
</TABLE>
Equity income in partnerships was $14.3 million, $8.0 million, and $5.0
million for fiscal 1994, 1993, and 1992, respectively. The increases over the
three years ended June 30, 1994 are primarily attributable to the addition of
the Appomattox and Naheola facilities in October 1992 and March 1993,
respectively.
17
<PAGE> 20
Equity income in partnerships for fiscal 1994 increased $6.3 million or 78
percent as compared to fiscal 1993. The Company's equity income from Naheola
increased from $1.2 million in fiscal 1993 to $5.8 million in fiscal 1994 due to
fiscal 1994 including a full year of earnings compared to three months of
earnings in fiscal 1993. Collectively, the Hopewell, Westwood and Appomattox
facilities accounted for the remaining $1.7 million increase for fiscal 1994
with increased earnings for all three projects.
Fiscal 1993 equity income in partnerships increased $3.0 million as
compared to fiscal 1992. The increase in fiscal 1993 was due primarily to a $1.7
million increase in income generated by the Hopewell facility due to lower fuel
costs as compared to fiscal 1992. Also contributing to the increase was the $1.2
million generated by the Naheola facility during its first three months of
operations.
The following represents a proforma condensed combining balance sheet and
statement of operations of the Company assuming the less than majority-owned
partnerships are combined with the Company (dollars in thousands):
PROFORMA CONDENSED COMBINING BALANCE SHEET
AS OF JUNE 30, 1994
<TABLE>
<CAPTION>
UNCONSOLIDATED COMBINED
CRSS INC. PROJECTS CRSS INC.
--------- -------------- ---------
<S> <C> <C> <C>
Assets
Current assets.................................. $ 51,019 $ 75,185 $ 126,204
Restricted cash................................. -- 47,392 47,392
Property, plant and equipment, net.............. 78,043 488,694 566,737
Power purchase agreement, net................... -- 60,030 60,030
Equity investment in partnerships............... 61,538 -- --
Other noncurrent assets......................... 20,072 845 20,917
--------- ----------- ---------
$ 210,672 $672,146 $ 821,280
========= =========== =========
Liabilities and Shareholders' Equity
Current liabilities............................. $ 13,552 $ 53,107 $ 66,659
Non-recourse project financing.................. 60,937 460,989 521,926
Other long-term obligations..................... 7,845 34,661 42,506
Deferred income taxes........................... 40,452 -- 40,452
Minority interest in partnerships............... -- -- 61,851
Shareholders' equity............................ 87,886 123,389 87,886
--------- ----------- ---------
$ 210,672 $672,146 $ 821,280
========= =========== =========
</TABLE>
PROFORMA CONDENSED COMBINING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
UNCONSOLIDATED COMBINED
CRSS INC. PROJECTS CRSS INC.
--------- -------------- ---------
<S> <C> <C> <C>
Revenues........................................ $ 28,419 $178,740 $ 207,159
Costs and expenses.............................. 28,650 103,734 132,384
Equity income in partnerships................... 14,327 -- --
--------- ----------- ---------
Operating income from continuing operations..... 14,096 75,006 74,775
Other income (expense), net..................... (7,568) (46,172) (53,740)
Minority interest in earnings of partnerships... -- -- (14,507)
--------- ----------- ---------
Earnings from continuing operations before
income tax.................................... 6,528 28,834 6,528
Income tax expense.............................. 2,810 -- 2,810
--------- ----------- ---------
Earnings from continuing operations............. $ 3,718 $ 28,834 $ 3,718
========= =========== =========
</TABLE>
18
<PAGE> 21
DISCONTINUED OPERATIONS
Discontinued operations consists of (i) the design, engineering, and
construction management segment, (ii) the acid rain/pollution control segment,
and (iii) the insurance segment. Loss from discontinued operations was $2.2
million, or $0.17 per share, $0.6 million, or $0.04 per share, and $16.9
million, or $1.27 per share for fiscal 1994, 1993, and 1992, respectively.
Design, Engineering, and Construction Management -- CRSS Services
CRSS Services, a wholly-owned subsidiary of CRSS provided comprehensive
architectural, engineering, and construction and program management services
through its three primary wholly-owned subsidiaries: CRSS Architects, Inc.
("Architects"), CRSS Constructors, Inc. ("Constructors"), and CRS Sirrine
Engineers, Inc. ("Engineers").
On July 21, 1994, the Company sold its design subsidiary, Architects, to
Hellmuth, Obata & Kassabaum, Inc. ("HOK") of St. Louis, Missouri. Total
consideration amounted to $6.8 million, consisting of $4.8 million in cash and a
$2.0 million sharing of future net cash distributions from the Peace Shield
project. The Peace Shield project is part of the United States' foreign military
sales program to provide AWACS aircraft to Saudi Arabia. CRSS, in joint venture
with Metcalf & Eddy, Inc., serves as overall program manager for the
construction of all support facilities for the AWACS aircraft. Completion of the
Peace Shield project is expected in June 1996.
On July 29, 1994, the Company sold its engineering and construction
management operations, consisting primarily of Constructors and certain assets
and liabilities of Engineers, to Jacobs Engineering Group Inc. ("Jacobs"). Total
consideration paid by Jacobs amounted to $33.5 million in cash, representing
$14.0 million over the aggregate book value of the businesses acquired. The
purchase price is subject to adjustment for changes in the aggregate book value
of the businesses acquired between June 30, 1994 and the closing date of July
29, 1994. As part of the transaction, CRSS retained certain assets and
liabilities (representing net assets of approximately $10.9 million), the
majority of which relate to four power plant engineering, procurement, and
construction contracts which are substantially complete or in the later stages
of completion. The Company agreed to share in the future profit margin
improvement or deterioration for up to three specific projects.
Additionally, the Company has agreed to indemnify HOK and Jacobs against
certain legal claims arising from any acts, errors or omissions prior to July
21, 1994 and July 29, 1994, respectively.
Gross revenues generated by the discontinued design, engineering and
construction management subsidiary, CRSS Services, were $550.4 million, $506.5
million and $424.2 million in 1994, 1993, and 1992, respectively. Operating
revenues generated by CRSS Services were $189.3 million, $212.1 million and
$212.3 million for the years ended June 30, 1994, 1993 and 1992, respectively.
Income (loss) from operations of the design, engineering, and construction
management segment for fiscal 1994, 1993, and 1992 was $0.5 million, $(0.6)
million, and $0, respectively. The estimated loss on disposal of this segment
recognized in fiscal 1994 totalled $2.7 million, or $0.21 per share and consists
of (i) a $6.7 million write-off of excess office space, related leasehold
improvements and furniture, (ii) cost of professional liability insurance and a
reserve for future potential legal claims related to the indemnification
provided HOK and Jacobs ($5.3 million), (iii) $1.0 million of transaction
closing costs, (iv) $0.6 million of employee severance and other related costs,
and (v) other costs and expenses estimated to be incurred during the phase-out
of CRSS Services ($3.0 million). These estimated disposal costs and expenses
were partially offset by the $14.0 million premium over the aggregate book value
of the businesses acquired by Jacobs.
Acid Rain/Pollution Control Segment
In August 1992, the Company announced its intent to divest its acid
rain/pollution control related investment holdings. These holdings, which
consisted of (i) a 47.5 percent interest in the common stock of NaTec Resources,
Inc. ("NaTec") and a $12.0 million investment in NaTec Cumulative Convertible
Exchangeable Preferred Stock ("Preferred Stock"), and (ii) a 661,000 share
investment in Dravo Corporation ("Dravo"), were classified as discontinued
operations as of June 30, 1992.
19
<PAGE> 22
In September 1992, the Company sold its investment in Dravo stock for $4.5
million. In June 1994, the Company signed a nonbinding letter of intent with a
third party to sell its holdings in NaTec. The letter of intent has expired.
Negotiations are continuing, however, as there still exists a willingness from
both parties to attempt to consummate a transaction.
CRSS' interest in NaTec's fiscal 1992 loss from operations was $1.9
million, or $0.14 per share. The estimated loss on disposal of the NaTec and
Dravo stock holdings recognized in fiscal 1992 of $15.0 million, or $1.12 per
share consisted of charges related to the disposition of the NaTec stock
holdings and corresponding discontinuance of funding to NaTec, and a reduction
in the carrying value of the Dravo stock to market value.
During November 1992, NaTec sold a 50 percent interest in a newly created
subsidiary, White River Nahcolite Minerals, ("White River") to North American
Chemical Company ("NACC") for $10.0 million. White River supplies nahcolite to
both parties. The $10.0 million purchase price is estimated to have an adjusted
value of $7.6 million which reflects (i) the discount to present value of the
$8.0 million note portion of the purchase price, (ii) preferential distributions
to be made by White River to NACC, and (iii) additional capital expenditures to
be made by NaTec to increase the effective annual production levels at the
facility to 106,000 tons. During fiscal year 1994, NACC ceased payment on the
remaining balance of the note ($3.5 million) alleging that the nahcolite
production facility has not yet demonstrated an effective annual production
capacity of 106,000 tons per year. Pursuant to the joint venture agreement,
NaTec was required to make all expenditures necessary for the facility to
achieve the effective annual production capacity of the White River nahcolite
production facility to that level by April 15, 1994. In the event the effective
annual production capacity of 106,000 tons per year had not been achieved on
that date as reasonably agreed between NaTec and NACC, the purchase price
payable by NACC for its interest in White River could have been reduced
proportionately based on the percentage of such capacity that is obtained. Any
such reduction would have been applied pro rata to reduce each subsequent
installment of the purchase price. NaTec could have, however, continued efforts
to demonstrate such effective annual production capacity of 106,000 tons, which
would thereby have acted to defer the computation of the purchase price
adjustment and defer the remaining payments by NACC on the note until such
effective annual production capacity was attained. Management of NaTec believes
that NACC's failure to make its May 31, 1994 payment on the note was wrongful in
view of the facts that production data from the plant demonstrates an effective
annual capacity at or near 106,000 tons and that, as the manager of the joint
venture owning the nahcolite production facility, NACC has prevented the
production facility from achieving its full capacity by its refusal to utilize
additional recovery equipment already located at the facility and to implement
certain process modifications in a timely manner. Accordingly, NaTec has filed a
lawsuit against NACC.
Limited revenues are anticipated for the immediate future as sales of
NaTec's technology and sorbent continue to lag as a result of the timing of the
requirement for utilities and other industries to implement measures to control
the emission of pollutants associated with acid rain formation as legislated by
the Clean Air Act of 1990. Due to the current dispute with NACC and the
associated deferral of collections on the note receivable, in addition to the
potential negative impact on capital resources due to resolving such dispute,
NaTec is uncertain that a sufficient level of internally generated funding will
be available in the foreseeable future to continue its operations.
Insurance Segment
In January 1992, CRSS and Global Capital Group, Inc. ("Global Capital")
completed the sale of its primary insurance subsidiary Global Insurance Company
("GIC"), for $8.9 million to United Republic Reinsurance Company ("United
Republic"), a subsidiary of the Lawrence Insurance Group, Inc. The insurance
segment was classified as discontinued operations as of June 30, 1991.
The agreement with United Republic for the sale of GIC provided for a
guarantee by CRSS of the GIC balance sheet, including loss reserves of up to
$2.75 million. As of June 30, 1994, CRSS has paid the entire $2.75 million
guarantee amount to United Republic.
20
<PAGE> 23
CHANGE IN ACCOUNTING PRINCIPLES
Accounting for Postretirement/Postemployment Benefits
In December 1990, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 106 on "Employers'
Accounting for Postretirement Benefits other than Pensions". In November 1992,
the FASB issued SFAS No. 112 on "Employers' Accounting for Postemployment
Benefits". Both of these standards require a change in the accounting for such
benefits from the current "pay-as-you-go" (cash) basis to an accrual method. The
Company adopted SFAS No. 106 and 112 as of the beginning of fiscal 1993.
The Company maintained a postretirement medical plan for employees who were
hired prior to January 1, 1987. In addition, the Company provided life insurance
and dental coverage for certain of its retirees. SFAS No. 106 requires the
accrual of the cost of providing such postretirement benefits, during the active
service period of the employee. The Company elected to immediately recognize the
cumulative effect of the change in accounting for postretirement benefits of
$1.4 million ($0.9 million, or $0.07 per share, net of income tax benefit) which
represents the accumulated postretirement benefit obligation existing at July 1,
1992. Prior to fiscal 1993, the Company recognized expense in the year the
benefits were provided.
The Company also provided certain medical benefits for former employees and
certain dependents. SFAS No. 112 requires the accrual of postemployment benefits
provided to former or inactive employees, their beneficiaries, and covered
dependents. For the Company, this is limited primarily to the cost of health
care continuation benefits to long-term disability participants. The cumulative
effect of the change in accounting for postemployment benefits recognized in
fiscal 1993 was $1.2 million ($0.8 million, or $0.06 per share, net of income
tax benefit).
The annual charge to expense for providing postretirement and
postemployment benefits under the new standards are not materially different
from the annual expense under the "pay-as-you-go" basis, which is not
significant to the Company. The postretirement and postemployment benefit plans
were terminated subsequent to June 30, 1994.
Accounting for Income Taxes
In February 1992, the FASB issued SFAS No. 109 on "Accounting for Income
Taxes". SFAS No. 109 requires a change from the "deferred method" of accounting
for income taxes to use of the "liability method". Under the "liability method"
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to the differences between the financial statement
carrying value of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured by using enacted tax
rates, that are applicable to the future years in which deferred tax assets or
liabilities are expected to be realized or settled. Under SFAS No. 109, the
effect of a change in tax rates on deferred tax assets and liabilities is
recognized in net income in the period in which the tax rate change was enacted.
The Company adopted SFAS No. 109 as of the beginning of fiscal 1993. The
cumulative effect of this change in accounting for income taxes was $7.5
million, or $0.57 per share.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 1994, totalled $37.5 million, which included
cash and cash equivalents of $2.2 million. As of June 30, 1993, working capital
was $70.9 million, which included $28.2 million in cash and cash equivalents.
The decrease in working capital and cash and cash equivalents from June 30, 1993
was due primarily to (i) a $30.0 million equity contribution to the Naheola
Cogeneration Limited Partnership (of which CRSS' portion was $24.3 million),
(ii) the repurchase of all of the common stock of CRSS Capital owned by Paribas
for $17.0 million, (iii) payments on long-term obligations of $2.1 million, and
(iv) dividends paid on common stock of $1.5 million. Partially offsetting the
decrease in cash and cash equivalents was (i) $20.0 million provided by the
operations of the discontinued design, engineering, and construction management
segment, (ii) partnership distributions of $7.2 million received by CRSS
Capital, and (iii) proceeds from the exercise of stock options of $1.0 million.
21
<PAGE> 24
As noted above, subsequent to June 30, 1994, the Company received $38.3
million from the sale of the design, engineering and construction management
segment. Net proceeds from the sale will be used for the funding and development
of current and future power and cogeneration projects.
CRSS Capital made the $30.0 million equity contribution to the Naheola
Cogeneration Limited Partnership, of which CRSS' portion was $24.3 million in
July 1993. The contribution was funded from available cash.
On January 31, 1994, the Company (via redemption by CRSS Capital)
repurchased all of the common stock of CRSS Capital owned by Paribas for $17.0
million. The purchase price was funded from available cash in addition to
borrowings of $13.0 million obtained under the revolving credit facility
maintained by the Company, as further discussed below.
Partnership distributions received by CRSS Capital were $7.1 million, $5.2
million, and $7.0 million during fiscal 1994, 1993, and 1992, respectively.
The Company's non-recourse project financing represents long-term
non-recourse debt related to the Viking projects. The notes provide for interest
payments at 11.5 percent per annum due in quarterly installments of principal
and interest through the year 2009. Minimum principal maturities on non-recourse
project financing for the next five years are approximately $2.3 million in
1995, $2.5 million in 1996, $2.7 million in 1997, $2.9 million in 1998, and $3.1
million in 1999.
At June 30, 1994 cash totaling $0.3 million has been reserved for plant
maintenance on the Viking projects in accordance with the terms of the
non-recourse project financing.
The Company maintains an unsecured $50.0 million revolving credit facility
with four banks. The amount of facility available for borrowings is reduced by
the amount of all outstanding letters of credit issued thereunder which
currently total $34.3 million. The credit facility, which is available through
December 30, 1994 may be used for general corporate purposes subject to certain
restrictive covenants including, among others, liquidity ratio, tangible net
worth, debt and cash flow ratios, and limitations on capital investments. The
Company had short-term borrowings under the revolving credit facility of $74.3
million during fiscal 1994 which were used for general working capital purposes
and for the repurchase of all of the common stock of CRSS Capital owned by
Paribas. All short-term borrowings were repaid during the year with no balances
outstanding under the revolving credit facility as of June 30, 1994.
Management believes that existing cash, cash flow from operations and
existing credit facilities will be sufficient to meet the current ongoing
requirements of the operations of the Company. In addition, the above sources
can be supplemented with other external sources of funds to meet additional cash
requirements if necessary.
IMPACT OF INFLATION AND CHANGING PRICES
Inflation and changing prices have not significantly affected the Company's
operating results or the markets in which the Company performs services.
22
<PAGE> 25
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
CRSS INC.:
Consolidated Balance Sheet.......................................... 24
Consolidated Statement of Operations................................ 25
Consolidated Statement of Shareholders' Equity...................... 26
Consolidated Statement of Cash Flows................................ 27
EQUITY INVESTMENT PARTNERSHIPS OF CRSS INC.:
Combined Balance Sheet.............................................. 28
Combined Statement of Operations.................................... 29
Combined Statement of Partners' Capital............................. 29
Combined Statement of Cash Flows.................................... 30
Notes to Consolidated and Combined Financial Statements............. 31
Reports of Independent Auditors..................................... 50
Report of Management................................................ 51
Schedule V -- Property, Plant and Equipment......................... 48
Schedule VI -- Accumulated Depreciation and Amortization of
Property, Plant and Equipment.................................... 49
</TABLE>
All other Schedules are omitted because they are not applicable, not
required or the information is included in the Financial Statements or notes
thereto.
23
<PAGE> 26
CRSS INC.
CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1994 AND 1993
(DOLLARS IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
JUNE 30,
-----------------------
1994 1993
-------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents.......................................... $ 2,229 $ 28,220
Accounts receivable................................................ 4,664 4,648
Deferred income taxes.............................................. 1,959 3,289
Other current assets............................................... 5,546 3,714
Net current assets from discontinued operations.................... 36,621 48,391
-------- --------
Total current assets....................................... 51,019 88,262
Property, plant and equipment, net................................... 78,043 80,600
Net noncurrent assets from discontinued operations................... 7,326 18,648
Other assets:
Equity investment in partnerships.................................. 61,538 24,358
Other noncurrent assets............................................ 12,746 7,865
-------- --------
74,284 32,223
-------- --------
$210,672 $219,733
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................... $ 946 $ 1,562
Current portion of long-term obligations........................... 3,096 2,965
Other current liabilities.......................................... 9,510 12,836
-------- --------
Total current liabilities.......................................... 13,552 17,363
Non-recourse project financing....................................... 60,937 63,238
Other long-term obligations.......................................... 7,845 8,055
Deferred income taxes................................................ 40,452 37,599
Minority interest in common stock of subsidiary subject to put....... -- 7,084
Shareholders' equity:
Preferred stock, no par value, 2,000,000 shares authorized but
unissued........................................................... -- --
Common stock, $1.00 par value, 50,000,000 shares authorized; issued
1994 -- 16,492,000 and 1993 -- 16,289,000.......................... 16,492 16,289
Additional paid-in capital........................................... 69,253 68,054
Retained earnings.................................................... 29,184 29,244
-------- --------
114,929 113,587
Treasury stock, at cost, 1994 -- 3,574,000 shares 1993 -- 3,559,000
shares............................................................. (26,946) (26,822)
Other................................................................ (97) (371)
-------- --------
87,886 86,394
-------- --------
$210,672 $219,733
======== ========
</TABLE>
See Notes to Consolidated and Combined Financial Statements.
24
<PAGE> 27
CRSS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------
1994 1993 1992
------- ------- --------
<S> <C> <C> <C>
Revenues:
Electricity and steam sales................................ $24,822 $25,739 $ 25,791
Operations and administrative service fees................. 3,493 3,858 3,306
Other revenues............................................. 104 8,378 1,422
------- ------- --------
28,419 37,975 30,519
Costs and expenses:
Plant operations........................................... 20,357 19,264 19,152
General and administrative................................. 5,698 11,642 10,140
Marketing and project development.......................... 2,595 1,497 1,578
------- ------- --------
28,650 32,403 30,870
Equity income in partnerships................................ 14,327 8,038 5,027
------- ------- --------
Operating income from continuing operations.................. 14,096 13,610 4,676
Other income (expense):
Non-operating income....................................... 270 3,014 2,294
Interest expense........................................... (7,383) (7,626) (7,827)
Minority interest in earnings.............................. (455) (1,218) (257)
------- ------- --------
(7,568) (5,830) (5,790)
------- ------- --------
Earnings (loss) from continuing operations before income
tax........................................................ 6,528 7,780 (1,114)
Income tax (expense) benefit................................. (2,810) (3,462) 29
------- ------- --------
Earnings (loss) from continuing operations................... 3,718 4,318 (1,085)
Earnings (loss) from discontinued operations, net of income
tax expense of $758 in 1994 and $770 in 1992, and income
tax benefit of $1,738 in 1993.............................. 456 (567) (1,876)
Estimated loss on disposal of discontinued operations, net of
income tax benefit of $776 in 1994......................... (2,700) -- (15,031)
------- ------- --------
Earnings (loss) before cumulative effect of changes in
accounting principles...................................... 1,474 3,751 (17,992)
Cumulative effect of changes in accounting principles, net of
income tax benefit of $882 in 1993......................... -- (9,178) --
------- ------- --------
Net earnings (loss).......................................... $ 1,474 $(5,427) $(17,992)
======= ======= ========
Primary and fully diluted earnings (loss) per common share:
Earnings (loss) from continuing operations................. $ 0.28 $ 0.33 $ (0.08)
Cumulative effect of changes in accounting principles...... -- $ (0.70) --
Net earnings (loss)........................................ $ 0.11 $ (0.41) $ (1.35)
======= ======= ========
Weighted average common shares outstanding................... 13,051 13,138 13,369
======= ======= ========
Dividends per common share................................... $ 0.12 $ 0.12 $ 0.12
======= ======= ========
</TABLE>
See Notes to Consolidated and Combined Financial Statements.
25
<PAGE> 28
CRSS INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMMON PAID-IN RETAINED TREASURY
STOCK CAPITAL EARNINGS STOCK OTHER
------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Balance at June 30, 1991................ $16,256 $68,251 $ 55,758 $(23,753) $(3,509)
Cash dividend -- $0.12 per share........ -- -- (1,560) -- --
Issuance of stock under incentive
compensation plans (56,129 shares).... -- 190 -- 410 (479)
Incentive stock awards vested and
forfeited during the year (4,722
shares)............................... -- (32) -- (25) 516
Stock options exercised (15,500
shares)............................... 15 59 -- -- --
Purchase of treasury shares (224,364
shares)............................... -- -- -- (2,066) --
Realized loss on equity investments..... -- -- -- -- 2,879
Other................................... -- (549) -- -- 31
Net loss................................ -- -- (17,992) -- --
------- ------- -------- -------- -------
Balance at June 30, 1992................ 16,271 67,919 36,206 (25,434) (562)
Cash dividend -- $0.12 per share........ -- -- (1,535) -- --
Issuance of stock under incentive
compensation plans (8,943 shares)..... -- 5 -- 67 (8)
Incentive stock awards vested and
forfeited during the year (12,206
shares)............................... -- (20) -- (99) 461
Stock options exercised (18,000
shares)............................... 18 72 -- -- --
Purchase of treasury shares
(190,100 shares)...................... -- -- -- (1,356) --
Other................................... -- 78 -- -- (262)
Net loss................................ -- -- (5,427) -- --
------- ------- -------- -------- -------
Balance at June 30, 1993................ 16,289 68,054 29,244 (26,822) (371)
Cash dividend -- $0.12 per share........ -- -- (1,534) -- --
Issuance of stock under incentive
compensation plans (1,650 shares)..... -- 3 -- 12 (15)
Incentive stock awards vested and
forfeited during the year (2,268
shares)............................... -- (1) -- (24) 105
Stock options exercised (202,300
shares)............................... 203 1,153 -- -- --
Other................................... -- 44 -- (112) 184
Net earnings............................ -- -- 1,474 -- --
------- ------- -------- -------- -------
Balance at June 30, 1994................ $16,492 $69,253 $ 29,184 $(26,946) $ (97)
======= ======= ======== ======== =======
</TABLE>
See Notes to Consolidated and Combined Financial Statements.
26
<PAGE> 29
CRSS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------------------
1994 1993 1992
-------- ------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Earnings (loss) from continuing operations.................. $ 3,718 $ 4,318 $ (1,085)
Adjustments to reconcile net income to net cash provided by
operating activities:
Deferred income taxes..................................... 4,182 4,063 4,017
Depreciation and amortization............................. 3,290 3,373 3,432
Equity income in partnerships............................. (14,327) (8,038) (5,027)
(Increase) decrease in receivables........................ (16) (1,979) 1,751
Increase (decrease) in accounts payable and other current
liabilities............................................ (3,699) 7,180 3,154
Distributions from partnerships........................... 7,147 5,218 7,029
Payments (to) from discontinued operations................ 20,007 (7,154) (1,883)
Gain on sale of guaranteed investment contract............ -- (1,161) --
Other operating activities................................ (2,056) 4,301 3,331
-------- ------- --------
Net cash provided by operating activities................. 18,246 10,121 14,719
Cash flows from investing activities:
Additions to property and equipment....................... (737) (407) (850)
Additions to long-term investments and receivables........ -- -- (1,035)
Proceeds from long-term investments and receivables....... -- 13,777 --
Increase in investments in affiliates..................... (30,000) (7,062) (10,000)
Proceeds from sale of Dravo stock......................... -- 4,515 --
Purchase of NaTec preferred stock......................... -- -- (2,000)
Payments and distributions from discontinued operations... 600 -- 6,379
Other investing activities................................ (147) (283) 730
-------- ------- --------
Net cash provided by (used in) investing activities....... (30,284) 10,540 (6,776)
Cash flows from financing activities:
Payments on long-term obligations......................... (2,129) (2,777) (1,578)
Additions to long-term obligations........................ -- -- 850
Proceeds from short-term borrowings....................... 74,300 -- --
Payments on short-term borrowings......................... (74,300) -- --
Proceeds from exercise of stock options................... 1,010 90 74
Redemption of stock by CRSS Capital....................... (17,000) -- --
Contributions from minority interest...................... 5,700 -- --
Purchase of treasury shares............................... -- (1,356) (2,066)
Dividends paid on common stock............................ (1,534) (1,535) (1,560)
-------- ------- --------
Net cash used in financing activities..................... (13,953) (5,578) (4,280)
-------- ------- --------
Net increase (decrease) in cash and cash equivalents........ (25,991) 15,083 3,663
Cash and cash equivalents at beginning of period............ 28,220 13,137 9,474
-------- ------- --------
Cash and cash equivalents at end of period.................. $ 2,229 $28,220 $ 13,137
======== ======= ========
</TABLE>
See Notes to Consolidated and Combined Financial Statements.
27
<PAGE> 30
EQUITY INVESTMENT PARTNERSHIPS OF CRSS INC.
COMBINED BALANCE SHEET
AS OF JUNE 30, 1994 AND 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30,
---------------------
1994 1993
-------- --------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents............................................ $ 51,304 $ 11,144
Accounts receivable.................................................. 18,272 20,031
Accounts receivable from affiliates.................................. 2,735 2,569
Prepaid expenses and other assets.................................... 2,874 1,339
-------- --------
Total current assets.............................................. 75,185 35,083
Restricted cash........................................................ 47,392 35,973
Property, plant and equipment:
Land................................................................. 4,984 4,930
Plant and equipment.................................................. 539,591 519,804
-------- --------
544,575 524,734
Less accumulated depreciation........................................ (56,050) (33,932)
-------- --------
488,525 490,802
Power purchase agreement, net of accumulated amortization of $9,770 at
June 30, 1994 and $3,950 at June 30, 1993............................ 60,030 65,850
Other noncurrent assets................................................ 1,014 1,084
-------- --------
$672,146 $628,792
======== ========
Liabilities and Partners' Capital
Current liabilities:
Accounts payable..................................................... $ 72 $ 1,839
Accounts and notes payables to affiliates............................ 5,699 5,489
Current portion of non-recourse project financing.................... 27,626 14,749
Operations and maintenance reserves.................................. 4,508 5,285
Other current liabilities............................................ 15,202 6,558
-------- --------
Total current liabilities......................................... 53,107 33,920
Non-recourse project financing......................................... 460,989 491,245
Other long-term obligations............................................ 34,661 24,696
Partners' capital...................................................... 123,389 78,931
-------- --------
$672,146 $628,792
======== ========
Supplemental information:
Partners' capital...................................................... $123,389 $ 78,931
Attributable to other partners......................................... (61,851) (54,573)
-------- --------
CRSS' equity investment in partnerships................................ $ 61,538 $ 24,358
======== ========
</TABLE>
See Notes to Consolidated and Combined Financial Statements.
28
<PAGE> 31
EQUITY INVESTMENT PARTNERSHIPS OF CRSS INC.
COMBINED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
----------------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Electricity and steam sales................................ $178,740 $113,853 $ 70,913
Costs and expenses:
Plant operations......................................... 98,136 62,784 34,506
General and administrative............................... 5,598 3,634 3,539
-------- -------- --------
103,734 66,418 38,045
Operating income........................................... 75,006 47,435 32,868
Interest expense........................................... (46,172) (31,268) (22,702)
-------- -------- --------
Net earnings............................................... $ 28,834 $ 16,167 $ 10,166
======== ======== ========
Supplemental information:
Net earnings............................................. $ 28,834 $ 16,167 $ 10,166
Attributable to other partners........................... (14,507) (8,129) (5,139)
-------- -------- --------
CRSS' equity income in partnerships...................... $ 14,327 $ 8,038 $ 5,027
======== ======== ========
</TABLE>
See Notes to Consolidated and Combined Financial Statements.
EQUITY INVESTMENT PARTNERSHIPS OF CRSS INC.
COMBINED STATEMENT OF PARTNERS' CAPITAL
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TOTAL
OTHER PARTNERS'
CRSS PARTNERS CAPITAL
------- -------- ---------
<S> <C> <C> <C>
Balance at June 30, 1991..................................... $ 6,478 $ 36,488 $ 42,966
Allocated earnings........................................... 5,027 5,139 10,166
Contributions from partners.................................. 10,000 10,000 20,000
Distributions to partners.................................... (7,029) (7,029) (14,058)
------- -------- ---------
Balance at June 30, 1992..................................... 14,476 44,598 59,074
Allocated earnings........................................... 8,038 8,129 16,167
Contributions from partners.................................. 7,062 7,063 14,125
Distributions to partners.................................... (5,218) (5,217) (10,435)
------- -------- ---------
Balance at June 30, 1993..................................... 24,358 54,573 78,931
Allocated earnings........................................... 14,327 14,507 28,834
Contributions from partners.................................. 30,000 -- 30,000
Distributions to partners.................................... (7,147) (7,229) (14,376)
------- -------- ---------
Balance at June 30, 1994..................................... $61,538 $ 61,851 $ 123,389
======= ======== =========
</TABLE>
See Notes to Consolidated and Combined Financial Statements.
29
<PAGE> 32
EQUITY INVESTMENT PARTNERSHIPS OF CRSS INC.
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Earnings..................................................... $ 28,834 $ 16,167 $ 10,166
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization.............................. 28,046 16,353 8,830
Loss on replacement of equipment........................... 210 52 --
(Increase) decrease in receivables......................... 1,593 (15,084) 803
(Increase) decrease in prepaid expenses and other assets... (1,535) 1,086 (2,108)
Increase (decrease) in accounts payable and other
current liabilities..................................... 6,310 (1,660) 6,984
-------- -------- --------
Net cash provided by operating activities.................. 63,458 16,914 24,675
Cash flows from investing activities:
Additions to property and equipment........................ (20,089) (79,702) (118,441)
Purchase of power purchase agreement....................... -- (69,800) --
Increase in restricted cash................................ (11,419) (26,435) (2,208)
-------- -------- --------
Net cash used in investing activities...................... (31,508) (175,937) (120,649)
Cash flows from financing activities:
Partnership distributions.................................. (14,376) (10,435) (14,058)
Contributions from partners................................ 30,000 14,125 20,000
Payments on non-recourse project financing................. (44,749) (11,687) (29,614)
Proceeds from non-recourse project financing............... 27,370 135,800 120,200
Increase in other long-term obligations.................... 9,965 22,802 --
-------- -------- --------
Net cash provided by financing activities.................. 8,210 150,605 96,528
Net increase (decrease) in cash and cash equivalents......... 40,160 (8,418) 554
Cash and cash equivalents at beginning of period............. 11,144 19,562 19,008
-------- -------- --------
Cash and cash equivalents at end of period................... $ 51,304 $ 11,144 $ 19,562
======== ======== ========
</TABLE>
See Notes to Consolidated and Combined Financial Statements.
30
<PAGE> 33
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Consolidated Financial Statements include the accounts of CRSS Inc.
("CRSS") and its wholly-owned subsidiary, CRSS Capital, Inc. ("CRSS Capital"),
collectively referred to herein as the "Company". The accounts of CRSS Services,
Inc. ("CRSS Services"), a wholly-owned subsidiary of CRSS, have been reflected
as discontinued operations as further discussed in Note 3.
All significant intercompany transactions and balances are eliminated.
Certain amounts in the June 30, 1993 and 1992 Consolidated Financial Statements
have been reclassified to conform to current year presentation.
Through CRSS Capital, the Company has three wholly-owned power and
cogeneration limited partnerships: Viking Energy of McBain, Viking Energy of
Lincoln, and Viking Energy of Northumberland, collectively referred to herein as
"the Vikings". These projects are included in the Consolidated Financial
Statements of the Company.
The Combined Financial Statements include the accounts of the four less
than majority-owned power and cogeneration limited partnerships in which CRSS
Capital has equity interests ranging from 47.5 percent to 50 percent: Hopewell
Cogeneration Limited Partnership ("Hopewell"), Naheola Cogeneration Limited
Partnership ("Naheola"), Appomattox Cogeneration Limited Partnership
("Appomattox"), and Westwood Energy Properties Limited Partnership ("Westwood"),
collectively referred to herein as the "Partnerships".
Revenue Recognition
Revenues from the sale of electricity and steam are reported based upon
output delivered and capacity provided at rates specified under long-term power
supply contracts.
Cash Equivalents
The Company considers all highly liquid investments with original
maturities generally of three months or less to be cash equivalents. Cash
equivalents at June 30, 1994 and 1993 consist primarily of interest bearing
deposits with domestic and foreign banks, stated at cost which approximates
market value.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and include all
expenditures necessary to prepare a facility for operation, including interest
incurred during the construction period. Depreciation on property and equipment
is computed utilizing the straight-line method over the estimated useful lives
of the related assets. Depreciation on plants is computed utilizing the
straight-line method over 30 years or the length of their associated revenue
contract, whichever is greater.
Power Purchase Agreement
Power purchase agreement includes the costs of acquiring the Appomattox
power purchase agreement and the related project development costs. These costs
are being amortized on a straight-line basis over the 12-year term of the
agreement.
Operations and Maintenance Reserves
Repair and maintenance expenses for expected outage costs are accrued
ratably over the estimated period before the outage to match the expense with
the use of the facility.
31
<PAGE> 34
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Earnings Per Share
Earnings per common share have been computed by dividing net earnings by
the weighted average number of common and common equivalent shares outstanding
during the respective periods. Common equivalent shares include the effect of
dilutive stock options as determined using the treasury stock method. The
Company has a shareholders' rights plan designed to ensure that all of the
Company's shareholders receive fair and equal treatment in the event of any
proposal to acquire control of the Company. Under the plan, there is one right
for each share of the Company's common stock entitling the holder to purchase
additional shares of the Company's common stock. The rights become exercisable
only after any person or group acquires 20 percent of more of the Company's
outstanding stock, or announces a tender offer that would result in any person
or group becoming the beneficial owner of 30 percent or more of the Company's
outstanding stock. These rights, which may have a potentially dilutive effect,
have been excluded from the weighted average shares computation as preconditions
to the exercisability of such rights have not been satisfied.
Major Customers and Concentration of Credit Risk
Each facility that CRSS Capital has an interest in has one primary utility
or industrial customer under long-term contracts. A cogeneration facility may
also have a single industrial customer to which they provide steam under a
long-term contract. Although this concentration of customers could be similarly
affected by changes in economic, regulatory or other factors, management of the
Company does not believe that these customers represent a significant credit
risk as of June 30, 1994.
Changes in Accounting Principles
Accounting for Postretirement/Postemployment Benefits
In December 1990, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 106 on "Employers'
Accounting for Postretirement Benefits other than Pensions". In November 1992,
the FASB issued SFAS No. 112 on "Employers' Accounting for Postemployment
Benefits". Both of these standards require a change in the accounting for such
benefits from the current "pay-as-you-go" (cash) basis to an accrual method. The
Company adopted SFAS No. 106 and 112 as of the beginning of fiscal 1993.
The Company maintained a postretirement medical plan for employees who were
hired prior to July 1, 1987. In addition, the Company provided life insurance
and dental coverage for certain of its retirees. SFAS No. 106 requires the
accrual of the cost of providing such postretirement benefits, during the active
service period of the employee. The Company elected to immediately recognize the
cumulative effect of the change in accounting for postretirement benefits of
$1,359,000 ($897,000, or $0.07 per share, net of income tax benefit) which
represents the accumulated postretirement benefit obligation existing at July 1,
1992. Prior to 1993, the Company recognized expense in the year the benefits
were provided. The postretirement medical plan was terminated subsequent to June
30, 1994.
The Company also provided certain medical benefits for former employees and
certain dependents. SFAS No. 112 requires the accrual of postemployment benefits
provided to former or inactive employees, their beneficiaries, and covered
dependents. For the Company, this is limited primarily to the cost of health
care continuation benefits to long-term disability participants. The cumulative
effect of the change in accounting for postemployment benefits recognized in
fiscal 1993 is $1,233,000 ($813,000, or $0.06 per share, net of income tax
benefit). The postemployment benefit plan was terminated subsequent to June 30,
1994.
32
<PAGE> 35
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Accounting for Income Taxes
In February 1992, the FASB issued SFAS No. 109 on "Accounting for Income
Taxes". SFAS No. 109 requires a change from the "deferred method" of accounting
for income taxes to use of the "liability method". Under the "liability method"
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to the differences between the financial statement
carrying value of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured by using enacted tax
rates, that are applicable to the future years in which deferred tax assets or
liabilities are expected to be realized or settled. Under SFAS No. 109, the
effect of a change in tax rates on deferred tax assets and liabilities is
recognized in net earnings in the period in which the tax rate change was
enacted.
The Company adopted SFAS No. 109 effective the first quarter of fiscal
1993. The cumulative effect of this change in accounting for income taxes was
$7,468,000,or $0.57 per share. Fiscal 1992 financial statements were not
restated to apply the provisions of SFAS No. 109. The remaining disclosure
information required by SFAS No. 109 is included in Note 4.
No income taxes have been recorded by the Partnerships as the individual
partnerships have been organized as such for income tax purposes. Accordingly,
tax liabilities are liabilities of the individual partners and accordingly
reflected in the Consolidated Financial Statements.
NOTE 2: EQUITY INVESTMENT IN PARTNERSHIPS
Equity investment in partnerships consists of CRSS Capital's unconsolidated
equity interests in Hopewell, Westwood, Appomattox, and Naheola.
CRSS Capital has a 50 percent interest in the Hopewell facility. This
facility, which commenced commercial operations in August 1990, is a
combined-cycle cogeneration facility located in Hopewell, Virginia.
Westwood, in which CRSS Capital has a 47.5 percent interest, commenced
commercial operations in July 1988. The facility consists of an electric power
production plant located in Schuylkill County, Pennsylvania.
In October 1992, CRSS Capital completed project development activities and
term financing for the $70,600,000 Appomattox facility at the Stone Container
Corporation ("Stone") pulp and paper mill in Hopewell, Virginia. CRSS Capital
owns a 50 percent partnership interest in this operational project. Assets
necessary for the generation of electricity from the facility are leased from
Stone, which also provides the facility with all operations and maintenance
services and fuel required for operation of the leased assets. Amounts paid to
Stone for the leased assets, fuel, and services are recovered by revenues from
Stone for steam, compressed air, and black liquor solids processing services.
Construction of the Naheola facility at James River Corporation's Naheola
Mill in Pennington, Alabama was completed at a cost of approximately
$290,000,000 and commercial operations began during March 1993. CRSS Capital is
a 50 percent owner in this facility with James River Pennington ("James River").
In July 1993, CRSS Capital made a $30,000,000 equity contribution to the
partnership, of which CRSS's portion was $24,300,000.
Partnership distributions received by CRSS Capital were $7,147,000,
$5,218,000 and $7,029,000 in 1994, 1993 and 1992, respectively.
33
<PAGE> 36
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 3: DISCONTINUED OPERATIONS
Design, Engineering and Construction Management Segment
As of June 30, 1994, the design, engineering and construction management
segment has been reflected as discontinued operations in conjunction with the
Company's plan to dispose of this business through the sale of CRSS Services'
three primary wholly-owned operating subsidiaries: CRSS Architects, Inc.
("Architects"), CRSS Constructors, Inc. ("Constructors"), and CRS Sirrine
Engineers, Inc. ("Engineers").
On July 21, 1994, the Company sold Architects, its design subsidiary, to
Hellmuth, Obata & Kassabaum, Inc. ("HOK") of St. Louis, Missouri. Total
consideration amounted to $6,800,000, consisting of $4,800,000 in cash and a
$2,000,000 sharing of future net cash distributions from the Peace Shield
project. The Peace Shield project is part of the United States' foreign military
sales program to provide AWACS aircraft to Saudi Arabia. CRSS, in joint venture
with Metcalf & Eddy, Inc., serves as overall program manager for the
construction of all support facilities for the AWACS aircraft. Completion of the
Peace Shield project is expected in June 1996.
On July 29, 1994, the Company sold its engineering and construction
management operations, consisting primarily of Constructors and certain assets
and liabilities of Engineers, to Jacobs Engineering Group Inc. ("Jacobs"). Total
consideration paid by Jacobs amounted to $33,500,000 in cash, representing
$14,000,000 over the aggregate book value of the businesses acquired. The
purchase price is subject to adjustment for changes in the aggregate book value
of the businesses acquired between June 30, 1994 and the closing date of July
29, 1994. As part of the transaction, CRSS retained certain assets and
liabilities (representing net assets of approximately $10,900,000), the majority
of which relate to four power plant engineering, procurement, and construction
contracts which are substantially complete or in the later stages of completion.
Additionally, the Company has agreed to share in the future profit margin
improvement or deterioration for up to three specific projects.
The Company has agreed to indemnify HOK and Jacobs against certain legal
claims arising from any acts, errors, or omissions prior to July 21, 1994 and
July 29, 1994, respectively.
Gross revenues generated by the discontinued design, engineering, and
construction management subsidiary, CRSS Services, were $550,389,000,
$506,477,000, and $424,205,000 in 1994, 1993 and 1992, respectively. Operating
revenues generated by CRSS Services were $189,261,000, $212,072,000, and
$212,325,000 for the years ended June 30, 1994, 1993, and 1992, respectively.
Acid Rain/Pollution Control Segment
In August 1992, the Company announced its intent to divest its acid
rain/pollution control related investment holdings. These holdings, which
consisted of (i) a 47.5 percent interest in the common stock of NaTec Resources,
Inc. ("NaTec") and a $12,000,000 investment in NaTec Cumulative Convertible
Exchangeable Preferred Stock ("Preferred Stock"), and (ii) a 661,000 share
investment in Dravo Corporation ("Dravo"), were classified as discontinued
operations as of June 30, 1992.
In September 1992, the Company sold its investment in Dravo stock for
$4,515,000. In June 1994, the Company signed a non-binding letter of intent with
a third party to sell its holdings in NaTec. The letter of intent has
subsequently expired. Negotiations are continuing, however, as there still
exists a willingness from both parties to attempt to consummate a transaction.
Effective December 31,1992, the Company consolidated various amounts
receivable from NaTec into a five-year convertible note bearing interest equal
to prime plus 2.0 percent. The remaining balance of the note as of June 30, 1994
is $4,123,000, which is convertible at the option of the Company into 2,443,025
additional shares of NaTec common stock. Repayment of the remaining balance of
the note is made via quarterly
34
<PAGE> 37
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
principal amounts ranging from $150,000 to $318,550, plus accrued interest.
Additionally, as of June 30, 1994, the Company has accrued dividends from NaTec
of $1,788,000 related to the preferred stock holdings.
Gross revenues generated by the discontinued acid rain/pollution control
segment were $1,224,000, $4,015,000, and $2,991,000 for the years ended June 30,
1994, 1993 and 1992, respectively.
During November 1992, NaTec sold a 50 percent interest in a newly created
subsidiary, White River Nahcolite Minerals, ("White River") to North American
Chemical Company ("NACC") for $10,000,000. White River supplies nahcolite to
both parties. The $10,000,000 purchase price is estimated to have an adjusted
value of $7,600,000 which reflects (i) the discount to present value of the
$8,000,000 note portion of the purchase price, (ii) preferential distributions
to be made by White River to NACC, and (iii) additional capital expenditures to
be made by NaTec to increase the effective annual production levels at the
facility to 106,000 tons. During fiscal year 1994, NACC ceased payment on the
remaining balance of the note ($3,500,000) alleging that the nahcolite
production facility has not yet demonstrated an effective annual production
capacity of 106,000 tons per year. Pursuant to the joint venture agreement,
NaTec was required to make all expenditures necessary for the facility to
achieve the effective annual production capacity of the White River nahcolite
production facility to that level by April 15, 1994. In the event the effective
annual production capacity of 106,000 tons per year had not been achieved on
that date as reasonably agreed between NaTec and NACC, the purchase price
payable by NACC for its interest in White River could have been reduced
proportionately based on the percentage of such capacity that is obtained. Any
such reduction would have been applied pro rata to reduce each subsequent
installment of the purchase price. NaTec could have, however, continued efforts
to demonstrate such effective annual production capacity of 106,000 tons, which
would thereby have acted to defer the computation of the purchase price
adjustment and defer the remaining payments by NACC on the note until such
effective annual production capacity was attained. NaTec believes that NACC's
failure to make its May 31, 1994 payment on the note was wrongful in view of the
facts that production data from the plant demonstrates an effective annual
capacity at or near 106,000 tons and that, as the manager of the joint venture
owning the nahcolite production facility, NACC has prevented the production
facility from achieving its full capacity by its refusal to utilize additional
recovery equipment already located at the facility and to implement certain
process modifications in a timely manner. The failure of NACC to make the May
1994 payment and the uncertainty of the timing of the resolution of such dispute
and corresponding future collections on the note have limited NaTec's already
strained capital resources.
Insurance Segment
In January 1992, CRSS and Global Capital Group, Inc. ("Global Capital")
sold its primary insurance subsidiary, Global Insurance Company ("GIC"), for
$8,900,000 to United Republic Reinsurance Company, a subsidiary of the Lawrence
Group, Inc. The $8,900,000 of sales proceeds were distributed to CRSS by Global
Capital in the form of a $6,400,000 dividend and in settlement of payables to
CRSS of $2,500,000. The insurance segment was classified as discontinued
operations as of June 30, 1991.
35
<PAGE> 38
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Combined Segments
Income (loss) from operations of the discontinued operations by segment
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------
1994 1993 1992
---- ----- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Design, Engineering, and Construction Management.......... $456 $(567) $ 3
Acid Rain/Pollution Control............................... -- -- (1,879)
---- ----- -------
$456 $(567) $(1,876)
==== ===== =======
</TABLE>
The estimated loss on disposal of the discontinued design, engineering, and
construction management segment recorded in fiscal 1994 totalled $2,700,000, or
$0.21 per share. The estimated loss on disposal consists of (i) a $6,735,000
writeoff of excess office space, related leasehold improvements and furniture,
(ii) cost of professional liability insurance and a reserve for future potential
legal claims related to the indemnification provided to HOK and Jacobs
($5,250,000), (iii) $1,035,000 of transaction closing costs (broker commissions,
legal and accounting fees, etc.), (iv) $644,000 of severance costs and
transaction closing bonuses, and (v) other costs and expenses estimated to be
incurred during the phase-out of CRSS Services ($3,036,000). These estimated
disposal costs and expenses were partially offset by the $14,000,000 premium
over the aggregate book value of the businesses acquired by Jacobs.
The estimated loss on disposal of the discontinued acid rain/pollution
control holdings recorded in fiscal 1992 totalled $15,031,000 or $1.12 per
share. The estimated loss on disposal consisted of charges related to the
disposition of the NaTec stock holdings and corresponding discontinuance of
funding to NaTec, and a reduction in the carrying value of the Dravo stock to
market value. The reduction in the carrying value of the Dravo stock was a
result of the reclassification from long-term to short-term marketable equity
security.
The net assets of the discontinued operations by segment are as follows:
<TABLE>
<CAPTION>
JUNE 30,
-------------------
1994 1993
------- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Net Current Assets:
Design, Engineering, and Construction Management........... $24,190 $44,517
Acid Rain/Pollution Control................................ 12,431 3,874
------- -------
$36,621 $48,391
======= =======
Net Noncurrent Assets:
Design, Engineering, and Construction Management........... $ 7,326 $ 8,901
Acid Rain/Pollution Control................................ -- 9,747
------- -------
$ 7,326 $18,648
======= =======
</TABLE>
Net assets of the design, engineering, and construction management segment
at June 30, 1994 consists primarily of cash, accounts receivable, property,
plant and equipment, and deferred taxes, net of accounts payable, unbilled fees
and accrued discontinuance costs. The remaining net assets at June 30, 1994 of
the discontinued acid rain/pollution control segment consist primarily of
NaTec's investment in White River.
NOTE 4: INCOME TAXES
As discussed in Note 1, the Company elected early adoption of SFAS No. 109,
which required a change from the "deferred method" of accounting for income
taxes to use of the "liability method". The Company reported the cumulative
effect of the change in the method of accounting for income taxes of $7,468,000,
or
36
<PAGE> 39
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
$0.57 per share effective to the first quarter of fiscal 1993. Also pursuant to
SFAS No. 109, the Company was required to restate certain assets and the related
deferred tax liability associated with a prior purchase business combination.
This restatement resulted in an increase of property, plant and equipment and
accumulated depreciation of $3,250,000 and $271,000, respectively.
The components of income taxes on consolidated earnings from continuing
operations for the three years ended June 30 are:
<TABLE>
<CAPTION>
1994 1993 1992
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal........................................... $(1,047) $(1,012) $(4,046)
State............................................. (325) 411 --
Deferred:
Federal........................................... 4,678 3,684 4,017
State............................................. (496) 379 --
------- ------- -------
$ 2,810 $ 3,462 $ (29)
======= ======= =======
</TABLE>
Cash payments (refunds) for income taxes amounted to $1,785,000 in 1994,
($2,584,000) in 1993, and ($3,238,000) in 1992.
The following is a reconciliation of the provision for income taxes from
continuing operations computed utilizing the statutory U.S. Federal income tax
rate to the effective tax rate:
<TABLE>
<CAPTION>
1994 1993 1992
---------------- ---------------- ----------------
AMOUNT % AMOUNT % AMOUNT %
------ ------ ------ ------ ------ ------
(DOLLARS IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C>
Tax Computed at U.S. statutory rate.... $2,252 34.5 $2,648 34.0 $(379) 34.0
Increase (decrease) in taxes resulting
from:
State income tax..................... (105) (1.7) 522 6.7 -- --
Nondeductible expenses............... 147 2.3 67 0.8 19 (1.7)
Minority interest.................... 157 2.4 414 5.3 87 (7.8)
Other................................ 359 5.5 (189) (2.4) 244 (21.9)
------ ----- ------ ---- ----- -----
Tax computed at effective tax rate..... $2,810 43.0 $3,462 44.4 $ (29) 2.6
====== ==== ====== ==== ====== =====
</TABLE>
37
<PAGE> 40
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Total deferred tax assets and deferred tax liabilities at June 30, 1994
were $15,515,000 and $54,007,000, respectively and $13,595,000 and $47,905,000
at June 30, 1993. The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax liabilities at
June 30, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
1994 1993
-------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Current deferred tax assets
Accruals and allowances...................................... $ 1,911 $ 2,763
Other, net................................................... 48 526
-------- --------
Total net current deferred tax asset................. 1,959 3,289
Noncurrent deferred tax assets (liabilities)
Accruals and allowances...................................... 2,036 1,840
Deferred state taxes......................................... 2,219 2,391
Excess tax depreciation...................................... (25,372) (24,875)
Investment in partnerships................................... (17,781) (12,328)
Alternative minimum tax credit carryforward.................. 2,910 4,016
State deferred tax liabilities............................... (6,431) (6,927)
Net operating loss carryforward.............................. 6,390 1,993
Other........................................................ (4,423) (3,709)
-------- --------
Total net noncurrent deferred tax liability.......... (40,452) (37,599)
-------- --------
Net deferred tax liability................................... $(38,493) $(34,310)
======== ========
</TABLE>
Prior to the adoption of SFAS No. 109, the principal items giving rise to
timing differences that resulted in deferred income taxes from continuing
operations were as follows:
<TABLE>
<CAPTION>
1992
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Power and cogeneration facilities................................. $ 7,132
Alternative minimum tax credit carryforward....................... (2,044)
Charitable contribution limitation................................ (432)
Other............................................................. (639)
--------
$ 4,017
========
</TABLE>
Regular net operating loss carryforwards for federal income tax purposes at
June 30, 1994 are $22,915,000 which are available to offset future federal
taxable income through 2008. In addition, the Company has $4,500,000 in capital
loss carryforwards which are available to offset future capital gains through
1998.
38
<PAGE> 41
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 5: PROPERTY, PLANT AND EQUIPMENT
The Company's property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
JUNE 30,
---------------------
1994 1993
-------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Power and cogeneration facilities.............................. $ 87,329 $ 86,882
Machinery and equipment........................................ 1,815 1,552
Buildings and leasehold improvements........................... 4,350 4,327
Furniture and fixtures......................................... 1,137 1,138
Land........................................................... 951 951
-------- --------
95,582 94,850
Less accumulated depreciation.................................. (17,539) (14,250)
-------- --------
$ 78,043 $ 80,600
======== ========
</TABLE>
Power and cogeneration facilities represent operating cogeneration plants
and related assets associated with the Vikings. Property, plant and equipment of
the Partnerships are reflected on the Combined Balance Sheet.
NOTE 6: RELATED PARTY TRANSACTIONS
CRSS Capital provides management, administrative, and development services
for some of the Partnerships. Revenues, including reimbursable expenses, earned
by CRSS Capital related to these services were $3,493,000, $3,858,000, and
$3,306,000 for fiscal 1994, 1993, and 1992, respectively. Accounts receivable
due CRSS Capital from the Partnerships were $86,000 and $120,000 at June 30,
1994 and 1993, respectively.
CRSS Capital holds a note receivable from Westwood for $500,000 payable on
demand with interest at prime. Total interest accrued at June 30, 1994 and 1993
was $253,000 and $222,000, respectively.
In addition to the administrative, operations, and maintenance services
provided by CRSS Capital as noted above, the Partnerships are also provided
various services by their other partners and their affiliates. Total expenses
incurred by the Partnerships related to the services provided by their partners
were $41,989,000, $34,391,000, and $19,312,000 for the years ended June 30,
1994, 1993, and 1992, respectively.
Appomattox and Naheola provide steam, compressed air, black liquor
processing services, and electrical power to the respective Stone and James
River mills. Revenues recognized for such services were $97,319,000 and
$39,698,000 for the years ended June 30, 1994 and 1993, respectively.
NOTE 7: OTHER CURRENT LIABILITIES
Other current liabilities of the Company consist of the following:
<TABLE>
<CAPTION>
JUNE 30,
--------------------
1994 1993
------ -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Accrued incentive compensation.................................. $2,351 $ 4,279
Liability for cancelled stock appreciation rights............... 897 1,129
Operations and maintenance reserve.............................. 742 443
Accrued 401-K contributions..................................... 684 693
Other........................................................... 4,836 6,292
------ -------
$9,510 $12,836
====== =======
</TABLE>
39
<PAGE> 42
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 8: NON-RECOURSE PROJECT FINANCING AND CREDIT FACILITIES
The Company's non-recourse project financing represents long-term
non-recourse debt related to the Viking projects. The Viking cogeneration
facilities are pledged as collateral on the notes which provide for interest at
11.15 percent due in quarterly installments of principal and interest through
the year 2009. Minimum principal maturities on non-recourse project financing
for the next five years are $2,301,000 in 1995, $2,474,000 in 1996, $2,672,000
in 1997, $2,876,000 in 1998, and $3,093,000 in 1999.
Credit Facilities
The Company maintains an unsecured $50,000,000 revolving credit facility
with four banks. The amount of facility available for borrowings is reduced by
the amount of all outstanding letters of credit issued thereunder which
currently total $34,335,000. The loan bears interest, at the Company's option,
at the prevailing prime interest rate or adjusted London InterBank Offered Rate.
The credit facility, which is available through December 30, 1994, may be used
for general corporate purposes subject to certain restrictive covenants
including, among others, liquidity ratio, tangible net worth, debt and cash flow
ratios, and limitations on capital investments. Borrowings under the facility
bear interest at prime, or, at the Company's option, the London Interbank
Offered Rate plus 1.50 percent. A commitment fee of 0.37 percent per annum is
payable quarterly on each lending institution's commitment on the revolving
credit facility. The Company had no outstanding borrowings under the revolving
credit facility at June 30, 1994 or 1993.
Interest paid related to all Company obligations was $7,513,000,
$7,589,000, and $7,763,000 in fiscal 1994, 1993, and 1992, respectively. These
payments relate primarily to the non-recourse project financing for the Viking
projects.
Partnerships
Hopewell is being financed by a consortium of banks through a combination
of Base, Eurodollar, and CD rate loans ("Loans") and through the sale of
commercial paper. The commercial paper program is backed by an irrevocable
letter of credit not to exceed the balance of the outstanding debt. Hopewell
pays fees on the Loans at rates from 0.25 percent to 1.375 percent and pays fees
on the letter of credit at escalating rates from 0.625 percent to 1.125 percent.
Under the terms of a swap agreement, Hopewell pays a fixed interest rate of
10.56 percent on a notional amount which was $7,200,000 higher than the original
amount borrowed, resulting in an effective interest rate in excess of the stated
rate. This notional amount decreases ratable over the term of the financing,
which expires June 30, 2005.
Financing for Naheola is being provided by Taxable Industrial Revenue Bonds
issued by the Industrial Development Board of the City of Butler, Alabama. Under
the terms of a swap agreement with a consortium of banks, Naheola has agreed to
pay the difference between the average Eurodollar rate and a fixed rate each
quarter over the term of the financing, which expires March 31, 2006. The fixed
rate escalates over the term of the agreement from 8.86 percent to 9.48 percent.
Financing for Appomattox was provided by a consortium of lenders through
$56,500,000 of 9.02 percent senior secured notes due in 2001. In lieu of
maintaining a debt service reserve account, Appomattox established an
irrevocable letter of credit for $4,617,000.
Westwood was financed utilizing tax-exempt Resource Recovery Revenue Bonds
("the Bonds") through the Schuylkill County Industrial Revenue Authority, and
through taxable notes payable to the general partners. The Bonds are secured by
an irrevocable, direct-pay letter of credit in the amount of $57,691,000, issued
by a consortium of banks, which is secured by a deed of trust on the Westwood
facility. Westwood is charged an annual letter of credit commitment fee of 1.3
percent of the outstanding letter of credit amount in addition to an annual
fronting fee of 0.35 percent of the outstanding letter of credit participation
amount. The Bonds pay a variable rate of interest, which represents the 30-day
yield evaluations at par of tax-exempt
40
<PAGE> 43
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
securities of issues of commercial paper rated by Moody's Investors Service or
Standard and Poor's Corporation in its highest commercial paper rating category.
The rate is determined daily by the remarketing agent. Redemption of the Bonds
is required upon failure to renew or replace the letter of credit, upon a change
in the determination of taxability of the Bonds, and through mandatory sinking
fund and optional redemptions. The Bonds have required semi-annual redemptions
through November 2009.
Assets for each partnership are pledged as collateral on their respective
loans or Bonds.
Combined future minimum principal maturities and sinking fund requirements
on the financing of the Partnerships for the next five years are $27,627,000,
$29,617,000, $32,636,000, $35,797,000, and $39,034,000.
Cash paid for interest by the Partnerships, including capitalized interest,
was $41,454,000, $35,837,000, and $30,896,000 for the years ended June 30, 1994,
1993, and 1992. Interest capitalized during the years ended June 30, 1993 and
1992 was $5,833,000 and $7,790,000, respectively. No interest was capitalized
during the year ended June 30, 1994.
NOTE 9: RESTRICTED CASH AND OTHER LONG-TERM OBLIGATIONS OF THE PARTNERSHIPS
Each of the Partnerships has restricted cash as required by either their
respective financing arrangements or under their respective partnership
operating agreements.
In accordance with Hopewell's financing agreement, restricted cash balances
are maintained to be used for repair and maintenance costs. Restricted cash
balances for Hopewell were $4,820,000 and $3,368,000 at June 30, 1994 and 1993,
respectively. Westwood had restricted cash of $580,000 at June 30, 1994 and 1993
for bond redemption purposes. Under its letter of credit agreement, Westwood is
also required to keep a debt service reserve in case of default of the Bonds.
This $7,330,000 reserve at June 30, 1994 and 1993 has been invested in tax-free
municipal bonds in accordance with the agreement.
Stone provided a reserve for Appomattox which may be accessed in the event
Stone fails to fulfill its contractual obligations to the partnership.
Additionally, Appomattox maintains a reserve to fund future maintenance on the
leased assets. Amounts included in restricted cash and other long-term
obligations related to these reserves were $26,549,000 and $23,075,000 at June
30, 1994 and 1993, respectively.
Naheola maintains an operator reserve. The amount included in restricted
cash and other long-term obligations at June 30, 1994 and 1993 was $8,112,000
and $1,621,000, respectively.
NOTE 10: MINORITY INTEREST
On January 31, 1994, the Company (via redemption by CRSS Capital)
repurchased all of the common stock of CRSS Capital owned by Paribas North
America, Inc., the 19 percent minority interest owner for $17,000,000. The
acquisition was accounted for using the purchase method of accounting.
41
<PAGE> 44
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The following unaudited proforma consolidated financial information for the
years ended June 30, 1994 and 1993, which gives effect to the acquisition as if
it had occurred on July 1, 1992, reflects adjustments made to the financial
statements for (i) amortization of goodwill ($3,898,000) over a 20 year period,
(ii) interest expense on additional borrowings of $13,000,000 at a rate of 4.875
percent per annum (LIBOR plus 1.125 percent), (iii) additional 19 percent of net
earnings of CRSS Capital, and (iv) related income tax adjustments.
<TABLE>
<CAPTION>
YEAR ENDED JUNE
30,
------------------
1994 1993
------- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Revenues.......................................................... $28,419 $37,975
Earnings from continuing operations before income tax............. 6,500 8,169
Earnings from continuing operations............................... 3,815 4,948
Earnings per common share from continuing operations.............. 0.29 0.38
</TABLE>
NOTE 11: LEASE COMMITMENTS
The Company leases its office facilities and certain furniture under
operating lease agreements. Certain leases contain renewal options and
escalation clauses. As a result of the divestiture of the design and
construction services business as further discussed in Note 3, a significant
portion of the Company's leased office space has become excess to the Company's
current and anticipated future requirements. The Company is currently subleasing
a portion of this excess space and intends to continue efforts to sublease the
remaining available space in the near future. The Company accrued approximately
$3,179,000 in 1994 for future rental obligations net of estimated future
sublease income related to this excess office space, which is reflected in
discontinued operations. Total rental expense for operating leases included in
continuing operations was approximately $603,000 per year in 1994, 1993, and
1992.
The following is a schedule of future noncancelable minimum lease payments
under leases with an initial or remaining term of more than one year. Minimum
lease payments have not been reduced by sublease rental income anticipated in
the future.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, (DOLLARS IN THOUSANDS)
------------------- ----------------------
<S> <C>
1995.............................................................. $ 2,116
1996.............................................................. 2,011
1997.............................................................. 1,913
1998.............................................................. 1,913
1999.............................................................. 2,585
2000 and thereafter............................................... 10,457
----------
$ 20,995
==========
</TABLE>
NOTE 12: LONG-TERM INCENTIVE COMPENSATION, STOCK OPTION AND STOCK AWARD PLANS
1990 Long-term Incentive Plan
On October 26, 1989, the shareholders approved the 1990 Long-term Incentive
Plan ("1990 Plan") administered solely by the Long-term Incentive Plan Committee
of the Board of Directors ("Committee"). Under the 1990 Plan, 1,338,524 shares
are reserved for distribution which were the unissued common shares authorized
under the Company's 1984, 1981, 1980, and 1974 stock award, option, and bonus
plans. No additional awards may be granted under these prior plans. As of June
30, 1994, approximately 182,000 shares were available for distribution under the
1990 Plan. In July 1994, the Committee authorized an additional 500,000 shares
for use in the 1990 Plan, subject to shareholder approval.
42
<PAGE> 45
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The Company issues non-qualified stock options and restricted stock awards
under the 1990 Plan to officers and key employees of the Company and its
subsidiaries. Options are priced at market value on the date of grant and are
generally exercisable beginning within one year from date of grant. Options may
not be exercised after ten years from the vesting date. Restricted stock awards
vest 20 percent on the date of the grant with the remaining shares vesting
within four years. The cost of the awards are charged to expense over the
vesting period. Restricted stock awards granted under the 1990 Plan amounted to
1,650, 1,000 and 45,850 shares in 1994, 1993, and 1992.
The 1990 Plan also permits grants of performance units to key employees of
the Company's subsidiaries. These performance units consist of phantom stock
option units and phantom stock units which have redemption values determined by
the respective subsidiary's growth in earnings calculated in accordance with
pre-defined criteria. Redemption payments for the units may be in the form of
cash, common shares of CRSS Inc., or other property or any combination thereof
as determined by the Committee.
In July 1993, the Performance Grant Program related to CRSS Capital was
terminated and its phantom stock option units and phantom stock units were
manditorily redeemed. In conjunction with such termination $1.2 million was paid
in August 1993 to respective participants. The remaining obligation of $1.4
million is payable by December 30, 1994. Compensation expense associated with
the performance units was $2,110,000 and $490,000 in 1993 and 1992,
respectively. There was no compensation expense associated with the performance
units in 1994.
1984 Non-qualified Stock Option Plan and the 1981 Incentive Stock Option Plan
Prior to the 1990 Plan, the Company had two stock option plans, the 1984
Non-Qualified Stock Option Plan and the 1981 Incentive Stock Option Plan.
Depending on the terms of the options, options are exercisable upon date of
grant or date of vesting; however, options granted prior to December 31, 1986
must be exercised in order of grant while options granted after December 31,
1986 may be exercised in any order. Options subject to a vesting schedule are
exercisable 20 percent a year with the first 20 percent vesting immediately upon
date of grant. Options under both plans expire ten years from date of grant or
date of vesting.
The Committee may, at its discretion, grant stock appreciation rights
("SARs"). Upon exercise of such rights, the optionee surrenders the exercisable
portion of the option in exchange for payment of the difference between the
aggregate option price and the aggregate fair market value on the date of
surrender. Payment may be in the form of cash and/or common stock valued at its
fair market value on the date of surrender. SARs utilize the same shares
reserved for issuance of options, and the exercise of an SAR or option
automatically cancels the related option or SAR. SARs become exercisable and
expire on the same dates as the related options. In January 1991, all
outstanding SARs (319,000), but not the related options, were cancelled.
43
<PAGE> 46
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The following is a summary of the activity with respect to all option plans
for the three years ended June 30, 1994:
<TABLE>
<CAPTION>
SHARES OPTION PRICE
--------- ----------------
<S> <C> <C>
Outstanding at June 30, 1991............................ 1,174,530 $ 4.34 to 17.63
Granted............................................... 220,500 $ 8.80 to 12.15
Exercised............................................. (15,500) $ 4.34 to 6.19
Cancelled............................................. (13,260) $12.43 to 15.00
---------
Outstanding at June 30, 1992............................ 1,366,270 $ 4.34 to 17.63
Granted............................................... 54,500 $ 8.15
Exercised............................................. (18,000) $ 4.75 to 6.19
Cancelled............................................. (46,240) $ 9.05 to 17.63
---------
Outstanding at June 30, 1993............................ 1,356,530 $ 4.34 to 17.63
Granted............................................... 237,496 $ 9.00
Exercised............................................. (202,300) $ 5.00 to 6.25
Cancelled............................................. (14,670) $ 6.19 to 15.00
---------
Outstanding at June 30, 1994............................ 1,377,056 $ 4.34 to 17.63
========
Exercisable at June 30, 1994............................ 1,040,910
========
</TABLE>
1980 Incentive Stock Bonus Plan and 1974 Incentive Stock Award Plan
Prior to the 1990 Plan, the Company had two stock award plans, the 1980
Incentive Stock Bonus Plan and the 1974 Incentive Stock Award Plan ("1974
Plan"). The cost of the bonus shares and awards are charged to expense over the
vesting periods. Generally, 20 percent of the shares covered by an award vest at
the end of the first year following the date of the award and at the end of each
succeeding year, provided the employee remains in the service of the Company on
the vesting date. As of July 1, 1987, all awards were fully vested under the
Company's 1980 Incentive Stock Bonus Plan.
Compensation expense associated with the vesting of stock awards granted
under the 1990 Plan and the 1974 Plan was $102,000, $223,000, and $626,000 in
1994, 1993, and 1992, respectively.
The vesting and exercise periods for all outstanding options (approximately
359,000 as of June 30, 1994) and stock awards (approximately 27,000 as of June
30, 1994) was extended by the Committee for those employees that will be
employed by HOK and Jacobs. The extension is through the period of their
employment with HOK or Jacobs, plus, for exercise purposes, for three months
after termination of employment, but in no event beyond August 1, 1995.
Additionally, the Company has a right of first refusal for any sales prior to
August 1, 1995, of any stock obtained through the exercise of such options or
the vesting of such awards.
NOTE 13: COMMITMENTS AND CONTINGENCIES
The Company had outstanding letters of credit of approximately $41,715,000
at June 30, 1994, which included $24,505,000 related to the discontinued design,
engineering, and construction management services business, and $2,578,000
related to the discontinued acid rain pollution control business. Of the amount
related to the discontinued design, engineering, and construction management
services business, $23,200,000 relates to a letter of credit issued in support
of certain payment and performance obligations related to a single power plant
project retained by CRSS.
44
<PAGE> 47
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The remaining letters of credit are primarily issued in support of:
performance and payment obligations, and advance payments, including amounts
normally withheld as retainage. Management is of the opinion that capital
resources are adequate to fulfill these letters of credit.
The three Viking projects owned by CRSS Capital have entered into contracts
of varying lengths with all of its suppliers. These contracts are for set prices
that vary by contract and specify minimum and maximum aggregate amounts of wood
to be purchased per year. Substantially all wood is purchased under these
contracts. Each of these contracts allows the project to cancel these
commitments in the event of default by the supplier or project equipment
failure.
CRSS Capital has an option to put its interest in Naheola at fair value to
James River in the event that the facility becomes subject to regulation as a
public utility, production levels at the Naheola mill fall below certain levels
due to James River shifting production to other mills, or if the Naheola mill is
sold to a competitor of the Company. James River also has an option to purchase
CRSS Capital's interest at fair value.
45
<PAGE> 48
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 14: QUARTERLY OPERATING RESULTS (UNAUDITED)
Quarterly operating results of the Company are as follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1994
------------------------------------------
QUARTER
------------------------------------------
1 2 3 4(A)
-------- ------- ------ ------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues..................................... $ 7,413 $ 7,521 $7,067 $6,418
Operating income from continuing
operations................................. 3,589 2,969 3,671 3,867
Earnings from continuing operations.......... 965 465 1,056 1,232
Earnings (loss) from discontinued
operations................................. 65 719 244 (3,272)
Net earnings (loss).......................... 1,030 1,184 1,300 (2,040)
Primary and fully diluted earnings (loss) per
common share:
Earnings from continuing operations........ $ 0.07 $ 0.04 $ 0.08 $ 0.09
Net earnings (loss)........................ $ 0.08 $ 0.09 $ 0.10 $(0.16)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1993
------------------------------------------
QUARTER
------------------------------------------
1(B) 2 3 4(C)
-------- ------- ------ ------
<S> <C> <C> <C> <C>
Revenues..................................... $ 7,563 $16,549 $7,028 $6,835
Operating income from continuing
operations................................. 1,070 8,754 1,720 2,066
Earnings (loss) from continuing operations... (207) 3,625 679 221
Earnings (loss) from discontinued
operations................................. (1,158) (844) 238 1,197
Cumulative effect of changes in accounting
principles................................. (9,178) -- -- --
Net earnings (loss).......................... (10,543) 2,781 917 1,418
Primary and fully diluted earnings (loss) per
common share:
Earnings (loss) from continuing
operations.............................. $ (0.02) $ 0.28 $ 0.05 $ 0.02
Net earnings (loss)........................ $ (0.79) $ 0.21 $ 0.07 $ 0.11
</TABLE>
- - ---------------
(a) During the fourth quarter of fiscal 1994, the Company announced its intent
to divest its design and construction services subsidiaries. The Company
recorded certain charges to earnings during the fourth quarter related to
the discontinuance of this segment, as further discussed in Note 3 to the
Consolidated and Combined Financial Statements. The Consolidated Financial
Statements and related quarterly information have been restated to reflect
the design and construction services segment as discontinued operations.
(b) The Company adopted SFAS No. 106, 109, and 112 effective July 1, 1992. The
first quarter of fiscal 1993 reflects the $9,178,000 cumulative effect of
the changes in accounting principles, net of income tax benefits, as of the
beginning of the fiscal year.
(c) Earnings from discontinued operations for the fourth quarter of fiscal 1993
includes a $3,500,000 increase in profitability of a major program
management services project offset by an increase in the provision for
contract claims.
46
<PAGE> 49
CRSS INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Quarterly operating results of the Partnerships follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1994
-------------------------------------------
QUARTER
-------------------------------------------
1 2 3 4
------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues.................................... $45,137 $43,210 $46,328 $44,065
Net earnings................................ 5,910 9,325 6,485 7,114
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1993 (A)
-------------------------------------------
QUARTER
-------------------------------------------
1 2 3 4
------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues.................................... $15,749 $24,011 $31,722 $42,371
Net earnings................................ 1,713 4,375 4,743 5,336
</TABLE>
- - ---------------
(a) The year ended June 30, 1993 reflects the operations of Appomattox beginning
in October 1992 and the operations of Naheola beginning in March 1993, as
further discussed in Note 2 to the Consolidated and Combined Financial
Statements.
47
<PAGE> 50
SCHEDULE V
CRSS INC.
PROPERTY, PLANT AND EQUIPMENT
THREE YEARS ENDED JUNE 30, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITIONS AT OTHER AT END
CLASSIFICATION PERIOD COST RETIREMENTS CHANGES OF PERIOD
- - ------------------------------------------ ------------ ------------ ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Year ended June 30, 1994:
Land.................................... $ 951 $ -- $ -- $ -- $ 951
Power and cogeneration facilities....... 86,882 447 -- -- 87,329
Buildings and leasehold improvements.... 4,327 23 -- -- 4,350
Furniture and fixtures.................. 1,138 -- 1 -- 1,137
Machinery and equipment................. 1,552 267 4 -- 1,815
--------- ------ ------- ------ --------
$ 94,850 $737 $ 5 $ 0 $ 95,582
========= ====== ======= ====== ========
Year ended June 30, 1993:
Land.................................... $ 951 $ -- $ -- $ -- $ 951
Power and cogeneration facilities....... 83,870 178 416 3,250 (a) 86,882
Buildings and leasehold improvements.... 4,327 -- -- -- 4,327
Furniture and fixtures.................. 1,113 25 -- -- 1,138
Machinery and equipment................. 1,358 204 10 -- 1,552
--------- ------ ------- ------ --------
$ 91,619 $407 $ 426 $3,250 $ 94,850
========= ====== ======= ====== ========
Year ended June 30, 1992:
Land.................................... $ 951 $ -- $ -- $ -- $ 951
Power and cogeneration facilities....... 83,395 492 17 -- 83,870
Buildings and leasehold improvements.... 4,327 -- -- -- 4,327
Furniture and fixtures.................. 1,096 17 -- -- 1,113
Machinery and equipment................. 1,029 341 12 -- 1,358
--------- ------ -------- ------ --------
$ 90,798 $850 $ 29 $ 0 $ 91,619
========= ====== ======== ====== ========
</TABLE>
- - ---------------
The annual provisions for depreciation have been computed on a straight-line
basis over useful lives from 3 to 40 years.
(a) Other addition is due to a restatement of a prior business combination
pursuant to the adoption of SFAS No. 109, as further discussed in Note 4.
48
<PAGE> 51
SCHEDULE VI
CRSS INC.
ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
THREE YEARS ENDED JUNE 30, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END
DESCRIPTION OF PERIOD EXPENSES RETIREMENTS CHANGES OF PERIOD
----------- ---------- ---------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Year ended June 30, 1994:
Power and cogeneration facilities....... $ 10,165 $2,882 $ -- $ -- $ 13,047
Buildings and leasehold improvements.... 2,032 251 -- -- 2,283
Furniture and fixtures.................. 877 82 -- -- 959
Machinery and equipment................. 1,176 75 1 -- 1,250
-------- -------- -------- ------ ---------
$ 14,250 $3,290 $ 1 $ 0 $ 17,539
======== ======== ======== ====== =========
Year ended June 30, 1993:
Power and cogeneration facilities....... $ 7,029 $2,868 $ 3 $ 271(a) $ 10,165
Buildings and leasehold improvements.... 1,882 150 -- -- 2,032
Furniture and fixtures.................. 793 84 -- -- 877
Machinery and equipment................. 912 271 7 -- 1,176
-------- -------- -------- ------ ---------
$ 10,616 $3,373 $ 10 $ 271 $ 14,250
======== ======== ======== ====== =========
Year ended June 30, 1992:
Power and cogeneration facilities....... $ 4,312 $2,717 $ -- $ -- $ 7,029
Buildings and leasehold improvements.... 1,634 248 -- -- 1,882
Furniture and fixtures.................. 680 113 -- -- 793
Machinery and equipment................. 564 354 6 -- 912
-------- -------- -------- ------ ---------
$ 7,190 $3,432 $ 6 $ 0 $ 10,616
======== ======== ======== ====== =========
</TABLE>
- - ---------------
(a) Other addition is due to a restatement of a prior business combination
pursuant to the adoption of SFAS No. 109, as further discussed in Note 4.
49
<PAGE> 52
REPORTS OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders of CRSS Inc.
We have audited the accompanying consolidated balance sheets of CRSS Inc.
and subsidiaries ("the Company") as of June 30, 1994 and 1993, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the three years in the period ended June 30, 1994. Our audits also
included the financial statement schedules listed in the Index at Item 14(a).
These financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
CRSS Inc. and subsidiaries at June 30, 1994 and 1993, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended June 30, 1994, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
As discussed in Note 1 to the Consolidated and Combined Financial
Statements, in fiscal year 1993 the Company changed its method of accounting for
income taxes.
ERNST & YOUNG LLP
August 12, 1994
The Board of Directors and Shareholders of CRSS Inc.
We have audited the accompanying combined balance sheets as of June 30,
1994 and 1993, of the Equity Investment Partnerships of CRSS Inc. listed in Note
1 ("the Partnerships"), and the related combined statements of operations,
partners' capital, and cash flows for each of the three years in the period
ended June 30, 1994. These financial statements are the responsibility of the
Partnerships' management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of the Equity
Investment Partnerships of CRSS Inc. listed in Note 1 at June 30, 1994 and 1993,
and the combined results of their operations and their cash flows for each of
the three years in the period ended June 30, 1994, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
August 12, 1994
50
<PAGE> 53
REPORT OF MANAGEMENT
The management of CRSS Inc. and its subsidiaries has prepared the
accompanying Consolidated and Combined Financial Statements and related
footnotes. The statements and footnotes were prepared in accordance with
generally accepted accounting principles applied on a consistent basis and
accordingly, include certain estimates which reflect management's judgement and
interpretation of currently available information.
Management of the Company has established and maintains an effective system
of internal control designed to provide reasonable assurance as to the integrity
and reliability of the financial statements as well as the safeguarding of
company assets. The Company also maintains an internal auditing program that
independently assesses the effectiveness of the internal controls and recommends
possible improvements to both management and the Audit Committee of the Company.
This system includes the selection and training of qualified personnel, an
organizational structure providing appropriate delegation of authority and
division of responsibility, the establishment of accounting and business
policies for the Company, and the conduct of internal audits. However, inherent
in any system of internal controls are limitations based on the cost of the
system versus the benefits derived.
The Audit Committee of the Board of Directors, composed solely of outside
directors, meets with the independent auditors and internal auditors to evaluate
the effectiveness of the work performed by them in discharging their respective
responsibilities and to assure their independent and free access to the
Committee.
The Company's financial statements have been audited by Ernst and Young,
independent certified public accountants. Management has made available to Ernst
and Young all the Company's financial records and related data, as well as the
minutes of shareholders' and directors' meetings.
51
<PAGE> 54
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to the Company's directors will be contained under
the caption "Election of Directors" in CRSS Inc.'s Proxy Statement with respect
to the Company's Annual Meeting of Shareholders, to be held October 27, 1994,
and is hereby incorporated by reference thereto.
Information with respect to the Company's executive officers appears under
the unnumbered item in Part I of this Form 10-K Annual Report, which is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item will be contained under the caption
"Executive Compensation and Other Information" of CRSS Inc.'s Proxy Statement
with respect to the Company's Annual Meeting of Shareholders, to be held October
27, 1994, and is hereby incorporated by reference thereto.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by this item will be contained under the caption
"Security Ownership of Certain Beneficial Owners and Management" of CRSS Inc.'s
Proxy Statement with respect to the Company's Annual Meeting of Shareholders, to
be held October 27, 1994, and is hereby incorporated by reference thereto.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this item will be contained under the caption
"Certain Transactions" of CRSS Inc.'s Proxy Statement with respect to the
Company's Annual Meeting of Shareholders, to be held October 27, 1994, and is
hereby incorporated by reference thereto.
52
<PAGE> 55
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report or
incorporated by reference:
1. and 2. Financial Statements and Financial Statement Schedules
See Index to the Financial Statements in Item 8, which information is
herein incorporated by reference.
3. Exhibits:
<TABLE>
<S> <C>
3.1 -- Certificate of Incorporation of CRS Design Associates, Inc. filed
October 16, 1970 (incorporated by reference as Exhibit 3.1 to the
Company's Fiscal Year 1989 Annual Report of Form 10-K).
3.2 -- Certificate of Amendment of Certificate of Incorporation of CRS
Design Associates, Inc. filed December 26, 1978 (incorporated by
reference as Exhibit 3.2 to the Company's Fiscal Year 1989 Annual
Report on Form 10-K).
3.3 -- Certificate of Amendment of Certificate of Incorporation of The CRS
Group, Inc. filed October 30, 1981 (incorporated by reference as
Exhibit 3.3 to the Company's Fiscal Year 1989 Annual Report on Form
10-K).
3.4 -- Certificate of Amendment of Certificate of Incorporation of The CRS
Group, Inc. filed November 7, 1983 (incorporated by reference as
Exhibit 3.4 to the Company's Fiscal Year 1989 Annual Report on Form
10-K).
3.5 -- Certificate of Amendment of Certificate of Incorporation of CRS
Sirrine, Inc. filed November 27, 1984 (incorporated by reference as
Exhibit 3.5 to the Company's Fiscal Year 1989 Annual Report on Form
10-K).
3.6 -- Certificate of Amendment of Certificate of Incorporation of CRS
Sirrine, Inc. filed December 8, 1986 (incorporated by reference as
Exhibit 3.6 to the Company's Fiscal Year 1989 Annual Report on Form
10-K).
3.7 -- Certificate of Amendment of Certificate of Incorporation of CRSS Inc.
filed October 30, 1989 (incorporated by reference as Exhibit 4.7 to
the Company's registration statement Form S-3 filed November 17,
1989).
3.8 -- By-Laws of the Company (incorporated by reference as Exhibit 3.8 to
the Company's Fiscal Year 1989 Annual Report on Form 10-K).
3.9 -- Amendments to By-Laws of the Company filed October 30, 1989
(incorporated by reference as Exhibit 4.9 to the Company's
Registration Statement Form S-3 filed November 17, 1989).
4.1 -- Specimen Certificate of Common Stock of the Company (incorporated by
reference as Exhibit 4.1 to the Company's Fiscal Year 1990 Annual
Report on Form 10-K).
4.2 -- Rights Agreement dated as of November 29, 1988 between CRS Sirrine,
Inc. and Morgan Shareholder Services Trust Company, as Agent
(incorporated by reference to Exhibit 1 to the Company's Form 8-A).
4.3 -- Amendment dated January 27, 1994 to the Rights Agreement dated as of
November 28, 1988 between CRS Sirrine, Inc. and Morgan Shareholder
Services Trust Company, as Agent (incorporated by reference to
Exhibit 3 to the Company's Form 8-A/A).
</TABLE>
53
<PAGE> 56
<TABLE>
<S> <C>
4.4 -- Indenture dated as of November 29, 1988 between CRS Sirrine, Inc. and
Morgan Guaranty Trust Company of New York, as Trustee (incorporated
by reference to Exhibit 2 to the Company's Form 8-A).
10.1 -- CRS Sirrine, Inc. Incentive Stock Option Plan Amended and Restated
July, 1986 (incorporated by reference to Exhibit 10.1 to the
Company's Fiscal Year 1989 Annual Report on Form 10-K).
10.2 -- Amendments to CRS Sirrine, Inc. Incentive Stock Option Plan Amended
and Restated July, 1986 (incorporated by reference to Exhibit 10.2 to
the Company's Fiscal Year 1989 Annual Report on Form 10-K).
10.3 -- 1984 Non-Qualified Stock Option Plan of CRS Sirrine, Inc. Amended and
Restated July, 1986 (incorporated by reference to Exhibit 10.3 to the
Company's Fiscal Year 1989 Annual Report on Form 10-K).
10.4 -- Amendments to 1984 Non-Qualified Stock Option Plan of CRS Sirrine,
Inc. Amended and Restated July, 1986 (incorporated by reference to
Exhibit 10.4 to the Company's Fiscal Year 1989 Annual Report on Form
10-K).
10.5 -- CRS Sirrine, Inc. 1974 Incentive Stock Award Plan Amended and
Restated July, 1981 and 1984 (incorporated by reference to Exhibit
10.5 to the Company's Fiscal Year 1989 Annual Report on Form 10-K).
10.6 -- CRS Sirrine, Inc. 1990 Long-Term Incentive Plan (incorporated by
reference to Exhibit 10.6 to the Company's Fiscal Year 1989 Annual
Report on Form 10-K).
10.7 -- CRS Sirrine, Inc. Thrift Plan Trust Agreement between CRS Sirrine,
Inc., Metro Southwest Construction, Inc., Western Empire
Constructors, Inc., CRSS, Inc., J. E. Sirrine Company, Sirrine
Services, Inc., Globe Engineering Corporation and Fidelity Management
Trust Company dated as of August 1, 1984 (incorporated by reference
to Exhibit 10.8 to the Company's Fiscal Year 1989 Annual Report on
Form 10-K).
10.8 -- CRS Sirrine, Inc. 401(k) Savings and Investment Plan effective July
1, 1988 (incorporated by reference to Exhibit 10.9 to the Company's
Fiscal Year 1989 Annual Report on Form 10-K).
10.9 -- Indemnity Agreements dated as of July 1, 1986 between CRS Sirrine,
Inc. and Mike A. Myers, John Naisbitt, Joe C. Denman, Jr., William L.
Carpenter, C. Herbert Paseur, Thomas A. Bullock, Bruce W. Wilkinson
and Richard L. Daerr, Jr. (incorporated by reference to Exhibit 10.10
to the Company's Fiscal Year 1989 Annual Report on Form 10-K).
*10.10 -- Amended and Restated Employment Agreement dated as of June 30, 1988
by and between CRS Sirrine, Inc. and Bruce W. Wilkinson.
*10.11 -- Amendment No. 1 dated as of July 1, 1989 to Amended and Restated
Employment Agreement dated as of June 30, 1988 by and between CRS
Sirrine, Inc. and Bruce W. Wilkinson.
*10.12 -- Amendment No. 2 dated as of October 24, 1990 to Amended and Restated
Employment Agreement dated as of June 30, 1988 by and between CRSS
Inc. and Bruce W. Wilkinson
10.13 -- Employment Agreement dated as of July 1, 1989 by and between CRSS
Capital, Inc. and James T. Stewart (incorporated by reference as
Exhibit 10.16 to the Company's Fiscal Year 1992 Annual Report on Form
10-K).
</TABLE>
54
<PAGE> 57
<TABLE>
<S> <C>
10.14 -- Amendment to Employment Agreement dated as of July 1, 1989 by and
between CRSS Capital, Inc. and James T. Stewart (incorporated by
reference as Exhibit 10.17 to the Company's Fiscal Year 1992 Annual
Report on Form 10-K).
*10.15 -- Contract for Design, Procurement and Construction Management Services
between the United States Air Force and CRS/Sirrine and Metcalf &
Eddy, Joint Venture dated as of March 30, 1988.
10.16 -- Amendments to Contract for Design, Procurement and Construction
Management Services between the United States Air Force and
CRS/Sirrine and Metcalf & Eddy, Joint Venture dated through August
25, 1989 (incorporated by reference to Exhibit 10.18 to the Company's
Fiscal Year 1989 Annual Report on Form 10-K).
10.17 -- Amendments to Contract for Design, Procurement and Construction
Management Services between the United States Air Force and
CRS/Sirrine and Metcalf & Eddy, Joint Venture dated August 26, 1989
through September 10, 1990 (incorporated by reference to Exhibit
10.16 to the Company's Fiscal Year 1990 Annual Report on Form 10-K).
10.18 -- Amendments to Contract for Design, Procurement and Construction
Management Services between the United States Air Force and
CRS/Sirrine and Metcalf & Eddy, Joint Venture dated November 27, 1990
through August 30, 1991 (incorporated by reference to Exhibit 10.19
to the Company's Fiscal Year 1991 Annual Report on Form 10-K).
10.19 -- Amendments to Contract for Design, Procurement and Construction
Management Services between the United States Air Force and
CRS/Sirrine and Metcalf & Eddy, Joint Venture dated September 20,
1991 through June 22, 1992 (incorporated by reference as Exhibit
10.25 to the Company's Fiscal Year 1992 Annual Report on Form 10-K).
10.20 -- Amendments to Contract for Design, Procurement and Construction
Management Services between the United States Air Force and
CRS/Sirrine and Metcalf & Eddy, Joint Venture dated August 26, 1992
through August 3, 1993 (incorporated by reference as Exhibit 10.27 to
the Company's Fiscal Year 1993 Annual Report on Form 10-K).
*10.21 -- Amendments to Contract for Design, Procurement and Construction
Management Services between the United States Air Force and
CRS/Sirrine and Metcalf & Eddy, Joint Venture dated September 22,
1993 through June 28, 1994.
*10.22 -- Supplemental Executive Retirement Plan of CRS Sirrine, Inc. effective
as of November 1, 1987.
*10.23 -- Supplemental Executive Retirement Plan Amendment as of June 1988.
10.24 -- Agreement of Limited Partnership of Westwood Energy Properties
Limited Partnership dated as of September 1, 1985 by and among
Westwood Funding Corporation, CRSS Westwood, Inc. and Kenvil Energy
Company (incorporated by reference to Exhibit 10.21 to the Company's
Fiscal Year 1989 Annual Report on Form 10-K).
10.25 -- First Amendment to Agreement of Limited Partnership of Westwood
Energy Properties Limited Partnership dated as of June 26, 1987 by
and among Westwood Funding Corporation, CRSS Westwood, Inc., Kenvil
Energy Company and Utilco Group Inc. (incorporated by reference to
Exhibit 10.22 to the Company's Fiscal Year 1989 Annual Report on Form
10-K).
</TABLE>
55
<PAGE> 58
<TABLE>
<S> <C>
10.26 -- Viking Energy of Northumberland Limited Partnership Agreement amended
and restated as of November 15, 1988 by and among Viking Energy of
Northumberland, Inc., CRSS Northumberland, Inc. and EFV
Northumberland, Inc. (incorporated by reference as Exhibit 10.21 to
the Company's Fiscal Year 1990 Annual Report on Form 10-K).
10.27 -- Viking Energy of McBain Limited Partnership Agreement amended and
restated as of November 15, 1988 by and among Viking Energy of
McBain, Inc., CRSS McBain, Inc. and EFV McBain, Inc. (incorporated by
reference as Exhibit 10.22 to the Company's Fiscal Year 1990 Annual
Report on Form 10-K).
10.28 -- Viking Energy of Lincoln Limited Partnership Agreement amended and
restated as of November 15, 1988 by and among Viking Energy of
Lincoln, Inc., CRSS Lincoln, Inc. and EFV Lincoln, Inc. (incorporated
by reference to Exhibit 10.25 to the Company's Fiscal Year 1989
Annual Report on Form 10-K).
10.29 -- Credit Agreement dated as of February 1, 1993 among CRSS Inc. and
NationsBank of Texas, N.A. as agent, ABN AMRO Bank N.V., and Texas
Commerce Bank National Association (incorporated by reference to
Exhibit 10.1 to the Company's March 31, 1993 Quarterly Report on Form
10-Q).
10.30 -- Amendment dated as of March 10, 1993 to Credit Agreement dates as of
February 1, 1993 among CRSS Inc. and NationsBank of Texas, N.A. as
agent, ABN AMRO Bank N.V., Texas Commerce Bank National Association,
and First Interstate Bank of Texas, N.A. (incorporated by reference
to Exhibit 10.2 to the Company's March 31, 1993 Quarterly Report on
Form 10-Q).
10.31 -- Amended and Restated Credit Agreement dated as of January 18, 1994
among CRSS Inc. and NationsBank of Texas, N.A. as agent, ABN AMRO
Bank N.V., Texas Commerce Bank National Association, and First
Interstate Bank of Texas, N.A. (incorporated by reference to Exhibit
10.1 to the Company's December 31, 1993 Quarterly Report on Form
10-Q).
*10.32 -- First Amendment dated July 29, 1994 to Amended and Restated Credit
Agreement dated as of January 18, 1994 among CRSS Inc. and
NationsBank of Texas, N.A. as agent, ABN AMRO Bank N.V., Texas
Commerce Bank National Association, and First Interstate Bank of
Texas, N.A
10.33 -- Hopewell Cogeneration Limited Partnership Agreement amended and
restated as of May 12, 1989 by and among Hopewell Cogeneration, Inc.,
CRSS Hopewell Cogeneration, Inc., Prince George Energy Company and
Transco Energy Ventures Company (incorporated by reference as Exhibit
10.25 to the Company's Fiscal Year 1990 Annual Report on Form 10-K).
10.34 -- Exchange Agreement between CRS Sirrine, Inc. and Industrial
Resources, Inc. dated as of July 24, 1989 (incorporated by reference
to Exhibit 2.1 to the Company's Fiscal Year 1989 Annual Report on
Form 10-K).
10.35 -- Agreement of Limited Partnership of NaTec, Ltd. between CRSS
Nahcolite, Inc. and Wolf Ridge Corporation dated as of July 8, 1988
(incorporated by reference to Exhibit 2.2 to the Company's Fiscal
Year 1989 Annual Report on Form 10-K).
10.36 -- Stock Purchase Agreement among Paribas North America, Inc., CRS
Sirrine, Inc., and CRSS Capital, Inc. dated June 30, 1989
(incorporated by reference to Exhibit 2.3 to the Company's Fiscal
Year 1989 Annual Report on Form 10-K).
</TABLE>
56
<PAGE> 59
<TABLE>
<S> <C>
10.37 -- Stock Redemption Agreement By and Between CRSS Capital, Inc. and
Paribas North America, Inc. dated as of January 31, 1994
(incorporated by reference to Exhibit 10.1 to the Company's Form 8-K
dated January 31, 1994).
10.38 -- Naheola Cogeneration Limited Partnership Agreement amended and
restated as of March 14, 1991 by and among Naheola Cogeneration,
Inc., James River-Pennington and Capital Naheola Limited Partnership
(incorporated by reference as Exhibit 10.33 to the Company's Fiscal
Year 1991 Annual Report on Form 10K).
10.39 -- Second Amended and Restated Limited Partnership Agreement of
Appomattox Cogeneration Limited Partnership dated as of October 22,
1992 by and among Appomattox Cogeneration, Inc., Capital Appomattox,
Inc. and Appomattox Vermont Corporation (incorporated by reference as
Exhibit 10.41 to the Company's Fiscal Year 1993 Annual Report on Form
10-K).
10.40 -- Series A Cumulative Convertible Exchangeable Preferred Stock Purchase
Agreement dated as of October 24, 1990, by and among CRSS Inc. and
NaTec Resources, Inc. (incorporated by reference as Exhibit 10.34 to
the Company's Fiscal Year 1991 Annual Report on Form 10-K).
10.41 -- First Amendment as of September 3, 1991 to Series A Cumulative
Convertible Exchangeable Preferred Stock Purchase Agreement dated as
of October 24, 1990, by and among CRSS Inc. and NaTec Resources, Inc.
(incorporated by reference as Exhibit 10.35 to the Company's Fiscal
Year 1991 Annual Report on Form 10-K).
10.42 -- Second Amendment to Series A Cumulative Convertible Exchangeable
Preferred Stock Purchase Agreement dated as of October 24, 1990, by
and among CRSS Inc. and NaTec Resources, Inc (incorporated by
reference as Exhibit 10.42 to the Company's Fiscal Year 1992 Annual
Report on Form 10-K).
10.43 -- Third Amendment to Series A Cumulative Convertible Exchangeable
Preferred Stock Purchase Agreement dated as of October 24, 1990, by
and among CRSS Inc. and NaTec Resources, Inc. (incorporated by
reference as Exhibit 10.46 to the Company's Fiscal Year 1993 Annual
Report on Form 10-K).
10.44 -- Fourth Amendment to Series A Cumulative Convertible Exchangeable
Preferred Stock Purchase Agreement dated as of October 24, 1990, by
and among CRSS Inc. and NaTec Resources, Inc. (incorporated by
reference as Exhibit 10.47 to the Company's Fiscal Year 1993 Annual
Report on Form 10-K).
10.45 -- Cumulative Convertible Exchangeable Preferred Stock Purchase
Agreement dated as of July 22, 1991, by and among CRSS Inc. and NaTec
Resources, Inc. (incorporated by reference as Exhibit 10.36 to the
Company's Fiscal Year 1991 Annual Report on Form 10-K).
10.46 -- First Amendment to Cumulative Convertible Exchangeable Preferred
Stock Purchase Agreement dated as of July 22, 1991, by and among CRSS
Inc. and NaTec Resources, Inc (incorporated by reference as Exhibit
10.44 to the Company's Fiscal Year 1992 Annual Report on Form 10-K).
10.47 -- Second Amendment to Cumulative Convertible Exchangeable Preferred
Stock Purchase Agreement dated as of July 22, 1991, by and among CRSS
Inc. and NaTec Resources, Inc. (incorporated by reference as Exhibit
10.50 to the Company's Fiscal Year 1993 Annual Report on Form 10-K).
</TABLE>
57
<PAGE> 60
<TABLE>
<S> <C>
10.48 -- Third Amendment to Cumulative Convertible Exchangeable Preferred
Stock Purchase Agreement dated as of July 22, 1991, by and among CRSS
Inc. and NaTec Resources, Inc. (incorporated by reference as Exhibit
10.51 to the Company's Fiscal Year 1993 Annual Report on Form 10-K).
10.49 -- Cumulative Convertible Exchangeable Preferred Stock Purchase
Agreement dated as of September 1, 1991, by and among CRSS Inc. and
NaTec Resources Inc. (incorporated by reference as Exhibit 10.37 to
the Company's Fiscal Year 1991 Annual Report on Form 10-K).
10.50 -- First Amendment to Cumulative Convertible Exchangeable Preferred
Stock Purchase Agreement dated as of September 1, 1991, by and among
CRSS Inc. and NaTec Resources Inc (incorporated by reference as
Exhibit 10.46 to the Company's Fiscal Year 1992 Annual Report on Form
10-K).
10.51 -- Second Amendment to Cumulative Convertible Exchangeable Preferred
Stock Purchase Agreement dated as of September 1, 1991, by and among
CRSS Inc. and NaTec Resources Inc. (incorporated by reference as
Exhibit 10.55 to the Company's Fiscal Year 1993 Annual Report on Form
10-K).
10.52 -- Third Amendment to Cumulative Convertible Exchangeable Preferred
Stock Purchase Agreement dated as of September 1, 1991, by and among
CRSS Inc. and NaTec Resources Inc (incorporated by reference as
Exhibit 10.55 to the Company's Fiscal Year 1993 Annual Report on Form
10-K).
10.53 -- Stock Purchase Agreement dated as of August 28, 1991, by and among
CRSS Inc., and Global Capital Group, Inc. and Lawrence Insurance
Group, Inc., and United Republic Reinsurance Company (incorporated by
reference as Exhibit (c)(i) to the Company's Current Report on Form
8-K dated January 29, 1992).
10.54 -- Amendment to Stock Purchase Agreement dated as of August 28, 1991, by
and among CRSS Inc., and Global Capital Group, Inc. and Lawrence
Insurance Group, Inc., and United Republic Reinsurance Company
(incorporated by reference as Exhibit (c)(ii) to the Company's
Current Report on Form 8-K dated January 29, 1992).
10.55 -- Purchase Agreement by and among Hellmuth, Obata and Kassabaum, Inc.
and CRSS Inc., and CRSS Services, Inc., dated July 21, 1994
(incorporated by reference as Exhibit 10.1 to the Company's Form 8-K
dated July 21, 1994).
10.56 -- Purchase Agreement by and between Jacobs Engineering Group Inc. and
CRSS Inc., dated July 29, 1994 (incorporated by reference as Exhibit
10.1 to the Company's Form 8-K dated July 21, 1994).
*21.1 -- List of significant subsidiaries of the registrant.
*27.1 -- Financial data schedules.
</TABLE>
- - ---------------
* Filed with this report.
(b) Reports on Form 8-K Filed in the Fourth Quarter of Fiscal Year 1994:
None
58
<PAGE> 61
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, CRSS Inc. has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CRSS Inc.
(Registrant)
Date: September 2, 1994
By /s/ BRUCE W. WILKINSON
------------------------------
(Bruce W. Wilkinson)
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 and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ BRUCE W. WILKINSON Chairman of the Board, Chief September 2, 1994
- - -------------------------------------------- Executive Officer and
(Bruce W. Wilkinson) Director (Principal
Executive Officer)
/s/ THOMAS A. BULLOCK Director September 2, 1994
- - --------------------------------------------
(Thomas A. Bullock)
/s/ JOE C. DENMAN, JR. Director September 2, 1994
- - --------------------------------------------
(Joe C. Denman, Jr.)
/s/ MIKE A. MYERS Director September 2, 1994
- - --------------------------------------------
(Mike A. Myers)
/s/ C. HERBERT PASEUR Director September 2, 1994
- - --------------------------------------------
(C. Herbert Paseur)
/s/ JOHN M. SEIDL Director September 2, 1994
- - --------------------------------------------
(John M. Seidl)
/s/ BEN R. STUART Director September 2, 1994
- - --------------------------------------------
(Ben R. Stuart)
/s/ LARRY E. TEMPLE Director September 2, 1994
- - --------------------------------------------
(Larry E. Temple)
/s/ WILLIAM J. GARDINER Senior Vice President/Chief September 2, 1994
-------------------------------------------- Financial Officer and
(William J. Gardiner) Treasurer (Principal
Financial and Accounting
Officer)
</TABLE>
<PAGE> 1
Exhibit 10.10
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of June 30, 1988
(the "Agreement"), by and between CRS SIRRINE, INC. , a Delaware corporation
(the "Company"), and BRUCE W. WILKINSON (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is President and Chief Executive Officer of the
Company; and
WHEREAS, the Board of Directors of the Company recognizes the valuable
and important contribution that the Executive has made to the growth and
success of the Company and desires to assure the Executive of his continued
employment by the Company in an executive capacity following the Operative Date
(as hereinafter defined) or in the event of a Change in Control (as hereinafter
defined), and to compensate the Executive therefor; and
WHEREAS, the Executive desires to commit himself to serve the Company
following the Operative Date or a Change in Control on the terms herein
provided; and
WHEREAS, the Company and the Executive entered into
<PAGE> 2
an Employment Agreement, dated as of February 25, 1988, as amended by
an Amendment, dated as of February 25, 1988 (the "Employment Agreement"), and
the Company and the Executive now desire to amend and restate the Employment
Agreement in its entirety as set forth herein;
NOW, THEREFORE, in consideration of the Executive's continued service
to the Company in accordance with the Company's policies, procedures and
practices prior to the earlier to occur of the Operative Date or a Change in
Control and the mutual covenants and agreements herein contained, the Company
and the Executive hereby agree as follows:
The Employment Agreement is hereby amended and restated in its entirety
to be and read as hereinafter set forth, to be effective as of the date hereof
(the "Effective Date") and the provisions of Articles I through VI hereof to be
operative and the Executive to be subject to the obligations and entitled to
the benefits thereof only on and after the Operative Date or a Change in
Control (provided that the Executive is then in the employ of the Company), it
being understood that prior to the Operative Date or a Change in Control, the
Executive's employment with the Company may be terminated by the Company at any
time at the convenience of the Board of Directors of the Company in conformity
with past practices of the Board and without any obligation or
2
<PAGE> 3
liability to the Executive under this Agreement, in which event this
Agreement shall thereupon terminate and be of no further force or effect.
"Term" as used in this Agreement shall mean the period commencing on
June 30, 1988 and expiring on June 30, 1991 (unless sooner terminated or
extended as hereinafter set forth); provided, however, that
(a) upon the occurrence of a Change in Control, the term of
this Agreement shall be extended automatically until the third
anniversary of the date on which the Change in Control occurs (unless
the term of the Agreement has expired prior to such third anniversary
in accordance with the provisions of paragraph (c) of this definition);
(b) commencing on June 30, 1988 and each June 30th
thereafter, the term of this Agreement shall be extended automatically
for one additional year unless (i) the term of the Agreement has
previously expired in accordance with the provisions of paragraph (c)
of this definition, or (ii) not later than the May 1st immediately
preceding such June 30th, the Company shall have delivered to the
Executive or the Executive shall have delivered to the Company written
notice that the term of this Agreement will not be extended; and
3
<PAGE> 4
(c) the term of this Agreement shall expire upon the
earlier to occur of (i) the Company's termination of the Executive's
employment pursuant to the provisions of the preceding paragraph prior
to the Operative Date or a Change in Control, or (ii) the Company's
termination of the Executive's employment for Cause, or the Executive's
resignation for other than Good Reason, in either case following the
Operative Date or a Change in Control.
The Company shall notify the Executive in writing of the occurrence of the
Operative Date or a Change in Control within two weeks thereafter.
ARTICLE I
BASIC TERMS
Section 1.1. Defined Terms. The defined terms in Schedule A hereto are
incorporated herein by reference as if fully set forth herein.
Section 1.2. Term. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue to serve the Company, on
the terms and conditions set forth herein, for the Term of this Agreement.
Section 1.3. Position and Duties. On and after the Operative Date or a
Change in Control, as the case may be, the Executive shall serve as President
and Chief
4
<PAGE> 5
Executive Officer of the Company, reporting only to the Board, and shall have
the powers, duties and responsibilities of Chief Executive Officer of the
Company, and shall have such other powers, duties and responsibilities as may
from time to time be assigned to him by the Board, provided that such duties
are consistent with the Executive's present duties and with his position as
Chief Executive Officer of the Company. Notwithstanding the foregoing, if
immediately prior to the Operative Date or a Change in Control, as the case may
be, the Executive shall occupy a different executive position with the Company
having supervision and control over, and responsibility for, different or
additional operations of the Company with different or additional powers,
duties and responsibilities, then, following the Operative Date or the Change
in Control, as the case may be, the Executive shall serve in such executive
position and shall have supervision and control over, and responsibility for,
such operations of the Company and shall have such other powers, duties and
responsibilities as may from time to time be assigned to him by the Board,
provided that such duties are consistent with the Executive's duties and his
executive position immediately prior to the Operative Date or the Change in
Control, as the case may be. The Executive shall devote such time and effort to
the business and affairs of
5
<PAGE> 6
the Company as is normally required at such time under generally accepted
practices for executives with his position, responsibilities, powers and duties.
Section 1.4. Compensation and Benefits. Effective on and after the
Operative Date or a Change in Control, as the case may be, the Executive shall
be entitled to the following compensation and benefits throughout the Term,
except as otherwise provided in this Agreement:
(a) Base Salary;
(b) prompt reimbursement for all reasonable expenses
incurred by the Executive (in accordance with the Company's policy for
senior executives) in performing services hereunder and receipt of those
fringe benefits and perquisites that are determined by the Company to
be commensurate with the Executive's position;
(c) continuing participation (consistent with past
practices but providing proportional participation in any awards
covering periods extending beyond the Term) in the CRS Sirrine, Inc.
Senior Management Incentive Award Plan and Discretionary Bonus Plan,
CRS Sirrine, Inc. Employee Bonus Plan, and any other Company incentive
compensation plans and arrangements in effect immediately prior to the
Operative Date or the Change in
6
<PAGE> 7
Control, as the case may be (or plans or arrangements providing the
Executive with substantially equivalent benefits);
(d) continuing participation in, and continuation of the
Executive's rights under, the CRS Sirrine, Inc. Senior Management
Deferred Compensation Plan, the CRS Sirrine, Inc. Employee Incentive
Stock Option Plan, the CRS Sirrine, Inc. Employee Non-Qualified Stock
Option Plan, and the CRS Sirrine, Inc. Supplemental Executive
Retirement Plan, in each case as in effect immediately prior to the
Operative Date or the Change in Control, as the case may be (or plans
or arrangements providing the Executive with substantially equivalent
benefits); and
(e) continuing participation, consistent with past
practices, in all other employee benefit plans and programs of the
Company (including, without limitation, life, long-term disability and
accident insurance, and medical, dental, hospitalization, health,
cafeteria and other welfare plans) that are available to employees
generally or to key management employees, and that are in effect
immediately prior to the Operative Date or the Change in Control, as
the case may be (or plans or arrangements providing the Executive with
substantially equivalent benefits).
7
<PAGE> 8
Amounts paid to the Executive under subsections (b) through (e) of
this Section 1.4 shall be in addition to the compensation required
by subsection (a) of this Section 1.4.
Section 1.5. Termination.
(a) Death. The Executive's employment hereunder shall terminate
upon his death.
(b) Disability. The Executive's employment hereunder shall
terminate effective upon the Date of Termination on account of his
Disability.
(c) Retirement. The Executive's employment hereunder shall
terminate effective upon the Date of Termination on account of his
Retirement.
(d) Cause. The Company may terminate the Executive's employment
hereunder for Cause effective as of the Date of Termination on account of
such termination for Cause.
(e) Resignation by the Executive. The Executive's employment
hereunder shall terminate effective upon the Date of Termination on
account of the Executive's resignation, whether or not for Good Reason.
Resignation for Good Reason shall not be deemed a voluntary termination
for the purposes of any plan, program, or arrangement that excludes
(or denies or reduces benefits for) employees who voluntarily
8
<PAGE> 9
terminate their employment.
(f) Expiration of Term. If not earlier terminated, the Executive's
employment hereunder shall terminate upon the expiration of the Term.
Section 1.6. Compensation Upon Termination.
(a) Death. If the Executive's employment is terminated by reason
of his death, the Company shall have, by reason of the Executive's death,
no further obligations to the Executive, his spouse, his beneficiaries,
his heirs, or his estate under this Agreement, and the rights of the
Executive and his spouse, beneficiaries, heirs, and estate after the Date
of Termination shall be determined in accordance with the Company's
employee benefit plans and insurance and other programs then in effect.
(b) Disability. If the Executive's employment is terminated by
reason of his Disability, the Company shall have, by reason of his
termination on account of Disability, no further obligations to the
Executive under this Agreement, and the rights of the Executive shall
be determined in accordance with the Company's employee benefit plans
and programs then in effect, including without limitation any short-term
disability plan and long-term disability plan.
9
<PAGE> 10
(c) Retirement; Resignation for other than Good Reason; Termination
for Cause. If the Executive's employment is terminated by Retirement, or
if the Executive resigns from his employment other than for Good Reason,
or if the Executive's employment is terminated for Cause, the Company
shall pay the Executive his full Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given, and the Company shall have, by reason of such Retirement,
resignation, or termination, no further obligations to the Executive under
this Agreement. The Executive's rights after the Date of Termination shall
be determined in accordance with the Company's employee benefit plans then
in effect.
(d) Termination without Cause Other than a Qualifying Termination;
Resignation for Good Reason Other than a Oualifying Termination. (i) If at
any time after the Operative Date but prior to a Change in Control or if
at any time following three years after a Change in Control the Company
terminates the Executive's employment other than for Cause, or the
Executive terminates employment with the Company for Good Reason within
six months after such Good Reason arises or prior to the expiration of
the Term of this Agreement,
10
<PAGE> 11
whichever occurs first, then in either such event:
(A) the Company shall continue to pay the Executive his
full Base Salary for the duration of the Term of this Agreement, but in
no event for a period of less than 12 months following the Date of
Termination;
(B) the Company shall maintain in full force and effect for
the Executive's continued benefit, for the duration of the Term of this
Agreement, but in no event for a period of less than 12 months
following the Date of Termination, all employee benefit plans,
programs, and arrangements in which the Executive was entitled to
participate immediately prior to the Date of Termination, and coverage,
credits, benefit accrual, and vesting, as applicable, shall continue in
respect of the Executive under such plans, programs, and arrangements.
However, to the extent that the foregoing is not possible or
permissible under the general terms and provisions of any such plan,
program, or arrangement, the Company shall arrange, for the duration of
the Term of this Agreement,
11
<PAGE> 12
but in no event for a period of less than 12 months following
the Date of Termination, to provide the Executive with benefits
substantially similar and economically equivalent to those that the
Executive is entitled to receive under such plans, programs, and
arrangements. For this purpose, economic equivalence shall be
determined by an independent actuarial or benefits consultant retained
by the Company.
(ii) The Executive shall not be required to mitigate the amount of
any payment or benefit provided for under this subsection (d) by seeking other
employment or otherwise, provided, however, that:
(A) to the extent that the Executive shall receive
compensation and benefits after the first anniversary of the Date of
Termination from full-time employment, including self-employment, the
payments to be made by the Company under paragraph (i)(A) of this
subsection (d) and the benefits to be provided by the Company under
paragraph (i)(B) of this subsection (d) shall be correspondingly
12
<PAGE> 13
reduced to reflect compensation and benefits from such employment;
and to the extent the Executive receives payments under a
disability insurance policy, whether such policy is owned by the
Company or by the Executive, the payments to be made by the Company
under paragraph (i)(A) of this subsection (d) shall be correspondingly
reduced to reflect such disability insurance payments; and
(B) such reductions shall, in the event of any question, be
determined jointly by the firm of certified public accountants
regularly employed by the Company and a firm of certified public
accountants selected by the Executive, in each case upon the advice of
actuaries to the extent the firms of certified public accountants
consider such advice necessary, and, in the event such accounting firms
are unable to agree on a resolution of the reduction issue, such
reductions shall be determined by an independent firm of certified
public accountants selected jointly by both accounting firms, and in
the absence of such designation, such reductions shall be
13
<PAGE> 14
determined by an independent firm of certified public accountants
selected as provided in the Commercial Arbitration Rules of
the American Arbitration Association for the appointment of a neutral
arbitrator. Each accounting firm shall simultaneously furnish to the
Company and the Executive a written report of the reductions, including
a specific explanation of how the reductions were determined. All
expenses incurred in determining such reductions (including without
limitation any fees or amounts payable to the American Arbitration
Association), whether incurred by the accounting firms, by the Company,
or by the Executive, shall be paid directly by the Company.
(e) Qualifying Termination. (i) If within three years after a
Change in Control, the Company terminates the Executive's employment other than
for Cause, or the Executive terminates employment with the Company for Good
Reason within the earlier to occur of six months after such Good Reason arises
or three years after the Change in Control, then a "Qualifying Termination"
shall have
14
<PAGE> 15
occurred, provided, however, that a Qualifying Termination shall not
occur if the Executive's employment with the Company terminates by reason of
the Executive's Retirement, Disability or death. A Qualifying Termination may
occur even though the Executive retires from employment with the Company other
than by reason of Retirement or Disability.
(ii) In the event of a Qualifying Termination the Company shall pay
to the Executive a cash amount equal to the sum of:
(A) 2.5 multiplied by the Base Amount, plus
(B) the Reimbursement Amount, where the Base Amount shall
be an amount equal to the greater of:
(1) the sum of
(a) the Executive's Base Salary, plus
(b) the Aggregate Bonus earned by the
Executive for the twelve-month period ending
immediately prior to the Change in Control; or
(2) the sum of
(a) the Executive's Base
15
<PAGE> 16
Salary, plus
(b) the Aggregate Bonus earned by the
Executive, for the twelve-month period ending
immediately prior to the occurrence of the
Qualifying Termination.
(iii) The Company shall make the payment to the Executive pursuant
to this subsection (e) in a lump sum within 30 days of the Qualifying
Termination; provided that if before the Change in Control the Executive elects
in writing to have such payment made in installments, the Company shall make
the payment in either 24 or 36 consecutive monthly installments, as elected by
the Executive. The monthly installments shall begin on the first day of the
first month that commences after the Qualifying Termination occurs. If the
Company makes installment payments to the Executive in accordance with this
subsection (e), interest shall accrue on the unpaid balance of the
installments, commencing on the date of the Qualifying Termination. The
interest shall accrue and be compounded monthly. The interest rate shall be
equal to 120 percent of the publicly announced
16
<PAGE> 17
prime rate of Texas Commerce Bank prevailing on the first business day
of each month, effective for the ensuing month, but not in excess of any
legally permitted rate. The interest rate shall be adjusted at the beginning of
each month. The amount of each installment shall be equal to (A) the unpaid
balance of the payment prescribed by paragraph (ii) of this subsection (e),
plus the interest that has accrued thereon as of the close of the preceding
month, divided by (B) the number of monthly installments that have not yet been
paid pursuant to this paragraph (iii) of this subsection (e).
(iv) The Executive also may elect, before the Change in Control, to
have only a portion of the payment prescribed by paragraph (ii) of this
subsection (e) paid in installments, and if he makes such an election, the
amount of the lump-sum payment and the amount of each installment (as each
would otherwise be determined in accordance with the preceding provisions of
this subsection (e) if the payment were made entirely in a lump sum or entirely
in installments, respectively) shall each be reduced pro tanto.
17
<PAGE> 18
(v) The Executive may revoke or modify any election made under
paragraph (iii) or (iv) of this subsection (e) before the Change in Control.
(vi) If the Executive incurs a Qualifying Termination, the Company
shall provide the Executive, at the Company's expense, for a period beginning
on the date of the Qualifying Termination, the same medical insurance and life
insurance coverage as was in effect immediately prior to the Change in Control
(or, if greater, as in effect immediately prior to the occurrence of the
Qualifying Termination); such coverage shall end upon the earlier of (A) the
expiration of 36 months after the Qualifying Termination, or (B)(1) with
respect to medical insurance coverage, the date on which the Executive first
becomes eligible for comparable medical insurance coverage provided by a firm
that employs him following the Qualifying Termination, or (2) with respect to
life insurance coverage, the date on which the Executive first becomes eligible
for comparable life insurance coverage provided by such firm.
(vii) If the Executive incurs a Qualifying Termination, the
Executive shall receive 36 months
18
<PAGE> 19
of additional service credit, for the purpose of receiving benefits and
for vesting, retirement eligibility, benefit accrual, and all other purposes,
under all employee benefit plans sponsored by the Company (including, but not
limited to, health, life insurance, pension, savings, stock, stock option, and
stock ownership plans, but excluding the Company's short-term and long-term
disability plans and its Supplemental Executive Retirement Plan) in which he
participated immediately prior to the Change in Control.
(viii) The Executive shall not be required to mitigate the amount
of any payment or benefit provided for in this subsection (e) either by seeking
other employment or otherwise. The amount of any payment or benefit provided
for in this subsection (e) shall not be reduced by any remuneration or benefit
that the Executive may earn or receive from employment with another employer or
otherwise following his Qualifying Termination, except, with respect to
insurance, as specifically provided in paragraph (vi)(B)(1) and (2) of this
subsection (e).
Section 1.7. Reimbursement of Executive by the
19
<PAGE> 20
Company for Certain Taxes.
(a) Excess Parachute Payments. If the payments and benefits
provided for the Executive under this Agreement and, whether or not the
Executive's employment is terminated, any other payments and benefits that
the Executive may have a right to receive from the Company and/or any
other person or entity, would result in "excess parachute payments"
(as defined in Section 280G of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")), and the Executive would be
required to pay an excise tax pursuant to Section 4999 (or any successor
section) of the Code in respect of such excess parachute payments, the
Company shall pay the Executive an additional amount (the "Reimbursement
Amount") such that, after the payment by the Executive of such excise tax,
and all federal, state and local taxes and any and all excise taxes that
may be imposed on the receipt by the Executive of such Reimbursement
Amount, the Executive would retain the amount of such excess parachute
payments (subject to payment of applicable federal, state and local income
taxes thereon) as if such excise tax had not been payable thereon. In
calculating the Reimbursement Amount, it is to be assumed that the highest
marginal combined
20
<PAGE> 21
federal, state and local income tax rates payable by the Executive are
applicable to the income for which the calculation is being made. The
Reimbursement Amount shall, in the event of any question, be determined
jointly by the firm of certified public accountants regularly employed by
the Company and a firm of certified public accountants selected by the
Executive, in each case upon the advice of actuaries to the extent the firms
of certified public accountants consider such advice necessary, and, in the
event such accounting firms are unable to agree on a resolution of the
Reimbursement Amount payable, such Reimbursement Amount shall be determined
by an independent firm of certified public accountants designated jointly by
both accounting firms, and in the absence of such designation, such
Reimbursement Amount shall be determined by an independent firm of certified
public accountants selected as provided in the Commercial Arbitration Rules
of the American Arbitration Association for the appointment of a neutral
arbitrator. Each accounting firm shall simultaneously furnish to the Company
and the Executive a written report of the Reimbursement Amount it
calculated, including a specific explanation of how the Reimbursement Amount
was determined. All expenses
21
<PAGE> 22
incurred in determining such Reimbursement Amount (including without
limitation any fees or amounts payable to the American Arbitration
Association), whether incurred by the accounting firms, by the Company or by
the Executive, shall be paid directly by the Company. In determining the
Reimbursement Amount, the accounting firms shall take into account any and
all compensation and benefits to which the Executive may be entitled, to the
extent that such compensation and benefits are to be taken into account
under applicable law in making such a determination, and shall take into
account and apply, to the extent permissible under applicable law, the
provisions of Section 280G of the Code relating to reasonable compensation
for personal services.
(b) Subsequent Adjustments. If at a later date it is determined
(pursuant to final regulations or published rulings of the Internal Revenue
Service or assessment by the Internal Revenue Service or final judgment of a
court of competent jurisdiction or otherwise) that the amount of excise
taxes payable by the Executive is greater than the amount initially so
determined, then the Company (or its successor) shall pay the Executive an
amount equal to the sum of (x) such
22
<PAGE> 23
additional excise taxes, (y) any interest, fines and penalties resulting
from such underpayment, plus (z) an amount necessary to reimburse the
Executive for any income, excise or other taxes and any interest, fines and
penalties payable by the Executive with respect to the amounts specified in
(x) and (y) above and the reimbursement provided by (z), to the end that
there shall be no out-of-pocket cost to the Executive as a result of any
such underpayment and consequential interest, fines or penalties or income,
excise or other taxes.
ARTICLE II
NONDUPLICATION
Section 2.1. Effect on Severance Policy. If the Executive becomes
entitled to receive benefits under subsections (d) and (e) of Section 1.6 of
this Agreement, the Executive shall not be entitled to any benefits under any
Company severance or salary continuation policy. For this purpose, the
Company's Supplemental Executive Retirement Plan shall not be deemed to be a
"severance or salary continuation policy".
Section 2.2. General Nonduplication. Nothing in this Agreement shall
require the Company to make any payment
23
<PAGE> 24
or to provide any benefit or service credit that the Company is otherwise
required to provide and does in fact provide under any other contract,
agreement, policy, plan or arrangement.
ARTICLE III
TAX MATTERS
Section 3.1. Withholding. The Company may withhold from any amounts
payable to the Executive hereunder all federal, state, city or other taxes that
the Company may reasonably determine are required to be withheld pursuant to
any applicable law or regulation.
ARTICLE IV
OTHER OBLIGATIONS OF EXECUTIVE
Section 4.1. Confidentiality. Except as may be required by order of a
court or governmental authority, the Executive shall not, without the written
consent of the Company, disclose, or authorize or permit anyone under his
direction to disclose, to any other person, firm, or corporation not properly
entitled thereto, any confidential information relative to the business,
products, services, sales, or financial condition of the Company. For purposes
of the preceding sentence, persons properly entitled to such
24
<PAGE> 25
information shall be the Board and such officers, employees, and agents of the
Company to whom such information is furnished in the normal course of
business under established policies of the Company.
Section 4.2. Non-Competition. Until the first to occur of: (a) the
Executive's Retirement; (b) the Executive's termination without Cause; (c) the
resignation of the Executive for Good Reason; (d) a breach by the Company of
any provision of this Agreement; (e) the first anniversary of a voluntary
termination of employment by the Executive (other than a resignation for Good
Reason or a termination without Cause, whether or not a Qualifying
Termination); (f) the later of the first anniversary following a termination
for Cause or the date on which the Term would have expired but for such
termination for Cause; or (g) the expiration of the Term of this Agreement
(other than due to termination for Cause or resignation for Good Reason), the
Executive shall not, within a radius of 100 miles of Houston, Texas, engage in
any business that is directly competitive with the Company.
ARTICLE V
COLLATERAL MATTERS
Section 5.1. Nature of Payments. All payments to
25
<PAGE> 26
the Executive under this Agreement shall be considered either payments
in consideration of his continued service to the Company or severance payments
in consideration of his past services thereto.
Section 5.2. Legal Expenses. The Company shall pay directly all legal
fees and expenses (a) that the Executive may incur as a result of the Company's
contesting the validity, the enforceability or the Executive's interpretation
of, or determinations under, this Agreement, (b) that the Executive may incur
in order to enforce the provisions or defend the validity of this Agreement, or
(c) that the Executive may incur in arbitrating disputes or controversies
arising under or in connection with this Agreement (including without
limitation any fees or amounts payable to the American Arbitration
Association).
Section 5.3. Interest. If the Company fails to make, or cause to be
made, any payment provided for herein within 30 days of the date on which the
payment is due, the Company shall make such payment together with interest
thereon. The interest shall accrue and be compounded monthly. The interest rate
shall be equal to 120 percent of the publicly announced prime rate of Texas
Commerce Bank prevailing on the first business day of each month, effective for
the ensuing month, but not in excess of any legally
26
<PAGE> 27
permitted rate. The interest rate shall be adjusted at the beginning of
each month.
Section 5.4. Authority. The execution of this Agreement has been
authorized by the Board.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1. Term of Agreement. Articles I through VI of this Agreement
shall become operative and the Executive shall become subject to the
obligations and entitled to the benefits of Articles I through VI of this
Agreement on and after the first to occur of the Operative Date or a Change in
Control. The Term of this Agreement shall be as described in the definition of
"Term" in the provisions of this Agreement preceding Article I. However,
notwithstanding any provision in Articles I through VI of this Agreement to the
contrary, this Agreement shall not terminate or cease to have effect before
both the Company and the Executive have fulfilled all of their obligations
hereunder.
SECTION 6.2. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
27
<PAGE> 28
Section 6.3. Successors to the Company. This Agreement shall inure to
the benefit of and shall be binding upon and enforceable by and against the
Company and any successor thereto, including, without limitation, any
corporation or corporations acquiring directly or indirectly all or
substantially all of the business or assets of the Company, whether by merger,
consolidation, sale or otherwise, but shall not otherwise be assignable by the
Company and, without limitation of the foregoing, the Company shall require any
successor (whether direct or indirect, by merger, consolidation, sale or
otherwise) to all or substantially all of the business or assets of the
Company, by agreement in form and substance satisfactory to the Executive, to
assume expressly, absolutely and unconditionally, and to agree to perform, this
Agreement in the same manner and to the same extent as the Company would have
been required to perform it if no such succession had taken place; provided,
however, that in the event of a disposition by the Company of all or
substantially all of the business and assets of the architectural, engineering
and construction businesses of the Company (herein called "Services"), the
Executive may elect that this Agreement not be assigned to and assumed by the
successor to Services, in which event this Agreement shall not be assigned to
and assumed by the successor to Services
28
<PAGE> 29
but shall continue to be binding upon and enforceable against the
Company. As used in this Agreement, "Company" shall mean the Company as
heretofore defined and any successor to all or substantially all of its
business or assets that executes and delivers the agreement provided for in
this Section 6.3 or that becomes bound by this Agreement either pursuant to
this Agreement or by operation of law.
Section 6.4. Noncorporate Entities. If any provision of this Agreement
refers to the board of directors of an entity that has no board of directors,
the reference to board of directors shall be deemed to refer to the body,
committee or person that has duties and responsibilities with respect to the
entity that most closely approximate those of a board of directors of a
corporation.
Section 6.5. Successor to the Executive. This Agreement shall inure to
the benefit of and shall be binding upon and enforceable by and against the
Executive and his personal and legal representatives, executors,
administrators, heirs, distributees, legatees and, subject to Section 6.6
hereof, his designees ("Successors"). If the Executive dies while amounts are
or may be payable to him under this Agreement, references hereunder to the
"Executive" shall, where appropriate, be deemed to refer to his Successors;
provided that nothing in this Section 6.5 shall
29
<PAGE> 30
supersede the terms of any plan or arrangement (other than this Agreement)
that is affected by this Agreement.
Section 6.6. Nonalienability. No right of or amount payable to the
Executive under this Agreement shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, hypothecation, encumbrance,
charge, execution, attachment, levy or similar process or to setoff against
any obligations or to assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately preceding
sentence shall be void. However, this Section 6.6 shall not prohibit the
Executive from designating one or more persons, on a form reasonably
satisfactory to the Company, to receive amounts payable to him under this
Agreement in the event that he dies before receiving them.
Section 6.7. Notices. All notices or elections provided for in this
Agreement shall be in writing. Notices to the Company or elections by the
Executive shall be deemed given when personally delivered against written
receipt or sent by certified or registered mail or overnight delivery service,
return receipt or written receipt requested, as the case may be, to CRS
Sirrine, Inc., Suite 900, 1177 West Loop South, Houston, Texas 77027,
Attention: Corporate Secretary. Notices to the Executive shall be deemed given
when
30
<PAGE> 31
personally delivered against written receipt or sent by certified or
registered mail or overnight delivery service, return receipt or written
receipt requested, as the case may be, to the last address for the Executive
shown on the records of the Company. Either the Company or the Executive may,
by notice to the other, designate an address other than the foregoing for the
receipt of subsequent notices.
Section 6.8. Arbitration.
(a) Binding Arbitration. Except as otherwise provided in this
Agreement, any dispute, claim or controversy arising out of or in relation to
this Agreement or the interpretation or breach thereof shall be arbitrated in
accordance with this Section 6.8 and pursuant to the Federal Arbitration Act
(9 U.S.C # 1 et seq.) (the "Act") to the extent not inconsistent herewith. Any
determination of the arbitrators shall be binding and conclusive upon the
parties hereto. Judgment upon the award of the arbitrators may be entered in
any court having jurisdiction thereof or application may be made to such court
for a judicial confirmation of the award and an order of enforcement, as the
case may be.
(b) Arbitration Panel. The arbitration panel shall consist of three
arbitrators, one of whom shall be appointed by each of the Company and the
Executive. The two
31
<PAGE> 32
arbitrators thus appointed shall choose the third arbitrator; provided,
however, that if the two arbitrators are unable to agree on the appointment of
the third arbitrator, such arbitrator shall be designated as provided in the
Commercial Arbitration Rules of the American Arbitration Association for the
appointment of a neutral arbitrator. If any arbitrator resigns or is unable to
continue serving as such, the successor to such arbitrator shall be appointed
by the party who appointed such arbitrator or by the remaining arbitrators if
they had appointed such arbitrator, or as provided in the Commercial
Arbitration Rules of the American Arbitration Association for the appointment
of a neutral arbitrator, as the case may be. A stenographic record of the
arbitration proceedings shall be made and in the event a successor arbitrator
must be appointed he may rely on such record and no rehearing shall be
required.
(c) Venue. The place of arbitration shall be Houston, Texas.
(d) Limitations. Notwithstanding the foregoing, it is hereby agreed
that no arbitration panel shall have any power to add to, alter or modify the
terms and conditions of this Agreement or to decide any issue which does not
arise from the interpretation or application of the provisions of this
Agreement.
32
<PAGE> 33
(e) Continuation of Compensation During Arbitration.
Notwithstanding the pendency of any such dispute or controversy, the Company
shall continue to provide to the Executive his full compensation, in accordance
with this Agreement as in effect when the notice of dispute is given, until
such time as the dispute is resolved or the Agreement is earlier terminated as
provided herein. Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, however, that the Executive shall be entitled to
specific performance of his right to be paid during the pendency of any dispute
or controversy arising under or in connection with this Agreement.
Section 6.9. Amendment. No amendment to this Agreement shall be
effective unless in writing and signed by both the Company and the Executive.
Section 6.10. Waivers. No waiver of any provision of this Agreement
shall be valid unless approved in writing by the party giving such waiver. No
waiver of a breach under any provision of this Agreement shall be deemed to be
a waiver of such provision or any other provision of this Agreement or any
subsequent breach. No failure on the part of either the Company or the
Executive to exercise, and no delay in exercising, any right or remedy
conferred by law or this Agreement shall operate as a waiver of such right or
33
<PAGE> 34
remedy, and no exercise or waiver, in whole or in part, of any right or
remedy conferred by law or herein shall operate as a waiver of any other right
or remedy.
Section 6.11. Severability. If any provision of this Agreement shall be
held unlawful or otherwise invalid or unenforceable in whole or in part, such
unlawfulness, invalidity or unenforceability shall not affect any other
provision of this Agreement or part thereof, each of which shall remain in full
force and effect. If the making of any payment or the provision of any other
benefit required under this Agreement shall be held unlawful or otherwise
invalid or unenforceable, such unlawfulness, invalidity or unenforceability
shall not prevent any other payment or benefit from being made or provided
under this Agreement, and if the making of any payment in full or the provision
of any other benefit required under this Agreement in full would be unlawful or
otherwise invalid or unenforceable, then such unlawfulness, invalidity or
unenforceability shall not prevent such payment or benefit from being made or
provided in part, to the extent that it would not be unlawful, invalid or
unenforceable, and the maximum payment or benefit that would not be unlawful,
invalid or unenforceable shall be made or provided under this Agreement.
Section 6.12. Agents. The Company may make
34
<PAGE> 35
arrangements to cause any agent or other party, including an affiliate
of the Company, to make any payment or to provide any benefit that the Company
is required to make or to provide hereunder; provided, that no such arrangement
shall relieve or discharge the Company of its obligations hereunder except to
the extent that such payments or benefits are actually made or provided.
Section 6.13. Captions. The captions to the respective articles and
sections of this Agreement are intended for convenience of reference only and
have no substantive significance.
Section 6.14. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original but all
of which together shall constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ATTESTED BY: CRS SIRRINE, INC.
/s/ Frank Perrone /s/ Richard Daerr
__________________________________ By: _______________________________
Secretary
(Seal)
/s/ Bruce W. Wilkinson
By: _______________________________
Bruce W. Wilkinson
EXECUTIVE
35
<PAGE> 36
SCHEDULE A
DEFINITIONS
As used in this Amended and Restated Employment Agreement, dated as of
June 30, 1988, between the Company and Bruce W. Wilkinson (the "Agreement"), of
which this Schedule A forms a part, references to sections below shall be
references to sections in the Agreement, capitalized terms not otherwise
defined below shall have the meanings ascribed thereto in the Agreement,
including this Schedule A, and the following terms shall have the meanings set
forth below:
"Aggregate Bonus" shall mean the total of the incentive compensation
and bonuses earned by the Executive for a particular year (including, but not
limited to, the sum of his bonuses, incentive compensation, and other awards
under the CRS Sirrine, Inc. Senior Management Incentive Award Plan, as amended
from time to time, or any successor thereto, the CRS Sirrine, Inc.
Discretionary Bonus Plan, as amended from time to time, or any successor
thereto, and any other bonuses or incentive compensation).
"Base Salary" shall mean a base salary at the annual rate of at least
$280,000.00 for the 1988 fiscal year and thereafter at an annual rate of not
less than $280,000.00, or at such greater rate as the Compensation
A-1
<PAGE> 37
Committee of the Board with the approval of the Board shall from time
to time determine, payable in substantially equal monthly installments.
"Board" or "Board of Directors" shall mean the Board of Directors of
the Company.
"Change in Control" shall be deemed to occur when and only when any of
the following events first occurs:
(a) any person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 25 percent or
more of the combined voting power of the Company's then outstanding
voting securities; or
(b) three or more directors, whose election or nomination
for election is not approved by a majority of the Incumbent Board (as
hereinafter defined), are elected within any single 24-month period to
serve on the Board of Directors of the Company; or
(c) members of the Incumbent Board cease to constitute a
majority of the Board of Directors without the approval of the
remaining members of the Incumbent Board; or
(d) any merger (other than a merger in which the Company is
the survivor and there is no accompanying Change in Control under
paragraphs (a), (b) or (c)
A-2
<PAGE> 38
above), consolidation, liquidation or dissolution of the Company or
the sale of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur pursuant to paragraph (a) above (i) solely because 25 percent or more
of the combined voting power of the Company's outstanding securities is
acquired by one or more employee benefit plans maintained by the Company or by
any other employer the majority interest in which is held, directly or
indirectly, by the Company; and (ii) with respect to any disposition by the
Company of all or substantially all of the business and assets of Services if
the Executive elects prior to such disposition pursuant to Section 6.3 that
this Agreement not be assigned to and assumed by the successor to Services. For
purposes of this definition of Change in Control, the terms "person" and
"beneficial owner" shall have the meanings set forth in Sections 3(a) and 13(d)
of the Securities Exchange Act of 1934, as amended, and in the regulations
promulgated thereunder, as in effect on June 30, 1988; and the term "Incumbent
Board" shall mean (i) the members of the Board of Directors of the Company on
June 30, 1988, to the extent that they continue to serve as members of the
Board of Directors, and (ii) any individual who becomes a member of the Board
of
A-3
<PAGE> 39
Directors after June 30, 1988, if his election or nomination for election as
a director was approved by a vote of at least three-quarters of the then
Incumbent Board.
"Date of Termination" shall mean:
(a) if the Executive's employment is terminated by his
death, the date of his death;
(b) if the Executive's employment is terminated for
Disability, thirty (30) days after Notice of Termination is given;
(c) if the Executive's employment is terminated by
Retirement, the date specified in the Notice of Termination;
(d) if the Executive's employment is terminated for Cause,
the date specified in the Notice of Termination;
(e) if the Executive's employment is terminated for any
other reason, the date on which a Notice of Termination is given; and
(f) if the Executive terminates his employment by
resignation, whether or not for Good Reason, the date on which a Notice
of Termination is given;
provided that, in each such case, if within thirty (30) days after any Notice
of Termination is given the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of
A-4
<PAGE> 40
Termination (if any) shall be the date determined either by mutual written
agreement of the parties, by arbitration as provided in Section 6.8 of the
Agreement, or by a final judgment, order, or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal having
been perfected), and provided that, during the pendency of any such dispute,
the Company shall continue to provide to the Executive his full compensation in
accordance with this Agreement as in effect when the notice of dispute is given
until the resolution of the dispute or the expiration of the Term, whichever
occurs earlier.
"Disability" shall mean an illness or injury that prevents the
Executive from performing his duties with the Company (as they existed
immediately before the illness or injury) on a full-time basis for twelve (12)
consecutive months.
"Notice of Termination" shall mean a notice that shall indicate the
specific termination provision relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so indicated.
"Operative Date" shall mean the date on which the Board of Directors of
the Company is not comprised of individual Directors at least seventy-five
percent (75%) of
A-5
<PAGE> 41
whom were members of the Board on June 30, 1988.
"Retirement" shall mean the Executive's termination of employment upon
or after attaining age 65.
Termination "for Cause" shall mean termination of employment of the
Executive by the Company hereunder if and only if the Executive (a) engages in
unlawful acts that violate laws of the United States or of any state thereof
and that are intended to result in the substantial personal enrichment of the
Executive at the Company's expense, or (b) engages (except by reason of
incapacity due to illness or injury) in a material willful violation of his
responsibilities to the Company that results in a material injury to the
Company. Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to him a Notice of Termination, consisting of a copy of a resolution duly
adopted by the affirmative vote of not less than three quarters of the entire
membership of the Board of Directors at a duly held meeting of the Board of
Directors (with reasonable notice to the Executive and an opportunity for the
Executive, together with counsel, to be heard before the Board of Directors),
finding that the Executive has engaged in the conduct set forth above in this
definition of termination for Cause and specifying the particulars thereof
A-6
<PAGE> 42
in detail. The Board of Directors may not delegate or assign its duties
respecting the resolution required in a Notice of Termination.
Termination or resignation "for Good Reason" shall mean termination of
employment of the Executive by the Executive hereunder if and only if one or
more of the following occurs after the Operative Date or a Change in Control,
as the case may be:
(a) a change in the Executive's status or position(s) with
the Company that, in the Executive's reasonable judgment, represents a
demotion from the Executive's status or position(s) in effect
immediately prior to the Operative Date or the Change in Control,
as the case may be;
(b) the assignment to the Executive of any duties or
responsibilities that, in the Executive's reasonable judgment, are
inconsistent with the Executive's status or position(s) in effect
immediately prior to the Operative Date or the Change in Control, as
the case may be;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of the
Executive's employment for Cause or as a result of the Executive's
Retirement, Disability or
A-7
<PAGE> 43
death;
(d) a reduction by the Company in the Executive's total
compensation (which shall be deemed, for this purpose, to be equal to
the Base Salary that he earned for the year preceding the Operative
Date or the Change in Control, as the case may be, plus the Aggregate
Bonus that he would have earned for the current year under the same
criteria that were in effect for such preceding year);
(e) a material increase in the Executive's responsibilities
or duties without a commensurate increase in total compensation;
(f) the failure by the Company to continue in effect any
Plan (as defined below) in which the Executive is participating
immediately prior to the Operative Date or the Change in Control, as
the case may be (or plans or arrangements providing the Executive with
substantially equivalent benefits), other than as a result of the
normal expiration of any such Plan in accordance with its terms as in
effect immediately prior to the Operative Date or the Change in
Control, as the case may be;
(g) any action or inaction by the Company that would
adversely affect the Executive's continued
A-8
<PAGE> 44
participation in any Plan on at least as favorable a basis as
was the case immediately prior to the Operative Date or the Change in
Control, as the case may be, or that would materially reduce the
Executive's benefits in the future under the Plan or deprive him of any
material benefits that he enjoyed immediately prior to the Operative
Date or the Change in Control, as the case may be, except to the
extent that such action or inaction by the Company is required by the
terms of the Plan as in effect immediately prior to the Operative Date
or the Change in Control, as the case may be, or is necessary to comply
with applicable law or to preserve the qualification of the Plan under
section 401(a) of the Code, and except to the extent that the Company
provides the Executive with substantially equivalent benefits;
(h) the Company's failure to provide and credit the
Executive with the number of days of paid vacation, holiday or leave to
which he is then entitled in accordance with the Company's normal
vacation, holiday or leave policy in effect immediately prior to the
Operative Date or the Change in Control, as the case may be;
(i) the imposition of any requirement that the Executive be
based anywhere other than within 25 miles
A-9
<PAGE> 45
of where his principal office was located immediately prior to the
Operative Date or the Change in Control, as the case may be;
(j) a material increase in the frequency or duration of the
Executive's business travel;
(k) the Company's failure to obtain the express assumption
of this Agreement by any successor to the Company as provided by
Section 6.3 hereof;
(l) any attempt by the Company to terminate the Executive's
employment that is not effected pursuant to a Notice of Termination and
otherwise constituting a termination other than for Cause or that does
not afford the Executive the procedural protections prescribed under
the definition of Termination for Cause in this Schedule A; or
(m) any violation by the Company of any agreement
(including this Agreement) between it and the Executive.
Notwithstanding the foregoing, no action by the Company shall give rise
to a Good Reason if it results from the Executive's termination for
Cause, Retirement, or death, and no action by the Company specified in
paragraphs (a) through (d) above shall give rise to a Good Reason if it
results from the Executive's Disability. A Good Reason shall not be
deemed to be waived by reason of the Executive's continued employment
A-10
<PAGE> 46
as long as the termination of the Executive's employment occurs
within the earliest of (i) six months after the Good Reason arises,
(ii) three years after the Change in Control, or (iii) the end of the
Term of the Agreement. For purposes of this definition of termination
for Good Reason, "Plan" means any compensation plan, such as an
incentive, stock option, or restricted stock plan, or any employee
benefit plan, such as a thrift, pension, profit-sharing, stock bonus,
long-term performance award, medical, disability, accident, or life
insurance plan, or a relocation plan or policy, or any other plan,
program or policy of the Company that is intended to benefit employees.
A-11
<PAGE> 1
Exhibit 10.11
AMENDMENT NO. 1 dated as of July 1, 1989 ("Amendment No. 1"), by and
between CRS SIRRINE, INC., a Delaware corporation (the "Company"), and BRUCE W.
WILKINSON (the "Executive"), parties to the Agreement of June 30, 1988.
W I T N E S S E T H
WHEREAS, the Company and the Executive are parties to an Amended and
Restated Employment Agreement, dated as of June 30, 1988 (the "Agreement"); and
WHEREAS, the Board of Directors of the Company recognizes the valuable
and important contribution that the Executive has made to the growth and
success of the Company and desires to assure itself of the continued services
of the Executive in an executive capacity by activating Articles I through VI
of the Agreement;
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. The definition of "Operative Date" is hereby amended to read as
follows:
"Operative Date" shall mean July 1, 1989."
2. The definition of "Term" is hereby amended to read as follows:
" Term" as used in this Agreement shall mean the period
commencing on June 30, 1988 and expiring on June 30, 1991 (unless
sooner terminated or extended as hereinafter set forth); provided,
however, that
(a) upon the occurrence of a Change in Control, the
term of this Agreement shall be extended automatically until
the third anniversary of the date on which the Change in
Control occurs (unless the term of the Agreement has expired
prior to such third anniversary in accordance with the
provisions of paragraph (c) of this definition);
(b) commencing on June 30, 1989 and each June 30th
thereafter, the term of this Agreement shall be extended
automatically for one additional year unless (i) the term of
the Agreement has previously expired in accordance with the
provisions of paragraph (c) of this definition, or (ii) not
later than the May 1st immediately preceding such June 30th,
the Company shall have delivered to the Executive or the
Executive shall have delivered to the Company written notice
that the term of this Agreement will not be extended; and
<PAGE> 2
(c) the term of this Agreement shall expire upon
the Company's termination of the Executive's employment for
Cause, or the Executive's resignation for other than Good
Reason.
The Company shall notify the Executive in writing of the
occurrence of a Change in Control within two weeks thereafter."
3. The Agreement is to be interpreted and construed so that the
phrase "employee benefit plans, programs and arrangements" in Section 1.6(d)(i)
(B) shall be deemed to include the Executive's participation in the CRS
Sirrine, Inc. Senior Management Incentive Award Plan and Discretionary Bonus
Plan, the CRS Sirrine, Inc. Employee Bonus Plan, the CRS Sirrine, Inc. Employee
Incentive Stock Option Plan, the CRS Sirrine, Inc. Employee Non-Qualified Stock
Option Plan and the CRS Sirrine, Inc. Supplemental Executive Retirement Plan
and any other Company incentive compensation plans and arrangements in effect
immediately prior to the Operative Date or the Change of Control, as the case
may be (or other plans or arrangements providing the Executive with
substantially equivalent benefits).
4. Except as herein amended or modified, the terms and provisions
of the Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 1 as of the date first above written.
ATTESTED BY: CRS SIRRINE, INC.
/s/ Frank Perrone By: /s/ Richard Daerr
____________________________ _____________________________
Secretary Title:
(Seal) /s/ Bruce Wilkinson
_____________________________
Executive
<PAGE> 1
Exhibit 10.12
AMENDMENT NO. 2 dated as of October 24, 1990 ("Amendment No. 2"), by
and between CRSS INC., a Delaware corporation (the "Company"), and BRUCE W.
WILKINSON (the "Executive"), parties to the Agreement of June 30, 1988, as
amended.
W I T N E S S E T H
WHEREAS, the Company and the Executive are parties to an Amended and
Restated Employment Agreement, dated as of June 30, 1988 (the "Agreement"), as
amended; and
WHEREAS, the Board of Directors of the Company recognizes the valuable
and important contribution that the Executive has made to the growth and
success of the Company and desires to assure itself of the continued services
of the Executive in an executive capacity;
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Section 1.3 to be replaced with the following:
Section 1.3. Position and Duties. On and after the Operative
Date, the Executive shall serve as Chief Executive Officer of the
Company, reporting only to the Board, and shall have the powers, duties
and responsibilities of Chief Executive Officer of the Company, and
shall have such other powers, duties and responsibilities as may from
time to time be assigned to him by the Board, provided that such duties
are consistent with the Executive's present duties and with his
position as Chief Executive Officer of the Company. The Executive shall
devote such time and effort to the business and affairs of the Company
as is normally required at such time under generally accepted practices
for executives with his position, responsibilities, powers and duties.
2. Except as herein amended or modified, the terms and provisions
of the Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 2 as of the date first above written.
ATTESTED BY: CRSS INC.
/s/ Frank Perrone /s/ Richard Daerr
______________________________ By:_____________________________
Secretary Title: President
/s/ Bruce W. Wilkinson
(Seal) ________________________________
Executive
<PAGE> 1
EXHIBIT 10.15
PAGE 1 OF 43
30 MAR 1988
SOLICITATION/CONTRACT
BIDDER/OFFEROR TO COMPLETE BLOCKS 11, 13, 15, 21, 22, & 27.
PJH/YPS J U
1. THIS CONTRACT IS A RATED ORDER UNDER DPAS (15 CFR 350) RATING
DO C2/C9(e)
2. CONTRACT NO. 3. AWARD/EFFECTIVE DATE 4. SOLICITATION NUMBER
F41608-84-C-A100-PZ0050 84 MAY 16
5. SOLICITATION TYPE 6. SOLICITATION ISSUE DATE
/ / SEALED BIDS / / NEGOTIATED
(CFB) (RFP)
7. ISSUED BY CODE FD2050
DEPARTMENT OF THE AIR FORCE
DIRECTORATE OF CONTRACTING & MFG
SAN ANTONIO AIR LOGISTICS CENTER
KELLEY AFB, TEXAS 78241-5000
BUYER: KNICKERBOCKER, S./PMR/(512) 925-3091
NO COLLECT CALLS
8. THIS ACQUISITION IS
/ / UNRESTRICTED / / LABOR SURPLUS AREA CONCERNS
/ / SET ASIDE: % FOR / / COMBINED SMALL BUSINESS &
LABOR SURPLUS AREA CONCERNS
/ / SMALL BUSINESS /X/ OTHER RESTRICTED
SIC : SIZE STANDARD:
9. SOLICITATION: N/A
10. ITEMS TO BE PURCHASED (BRIEF DESCRIPTION).
/X/ SUPPLIES /X/ SERVICES CONSTRUCTION MGMT SERVICES
11. IF OFFER IS ACCEPTED BY THE GOVERNMENT WITHIN ______ CALENDAR DAYS
(60 CALENDAR DAYS UNLESS OFFEROR INSERTS A DIFFERENT PERIOD)
FROM THE DATE SET FORTH IN BLK 9 ABOVE, THE CONTRACTOR AGREES TO
HOLD HIS OFFERED PRICES FIRM FOR THE ITEMS SOLICITED HEREIN AND
TO ACCEPT ANY RESULTING CONTRACT SUBJECT TO THE TERMS AND CONDITIONS
STATED HEREIN:
12. ADMINISTERED BY CODE
PAS #: NONE SCD: C
13. CONTRACTOR OFFEROR CODE 9Z237 FACILITY CODE
CRS/SIRRINE METCALF & EDDY
1177 WEST LOOP SOUTH, 6TH FL
HOUSTON TX 77027
DUNS NO 054447164
/ / CHECK IF REMITTANCE IS DIFFERENT AND PUT SUCH ADDRESS IN ORDER
TELEPHONE NO
14. PAYMENT WILL BE MADE BY CODE S4403A
WRIGHT-PATTERSON AIR FORCE BASE
2750 ABW/ACFIM
WRIGHT-PATTERSON AFB, OH 45433
SUBMIT INVOICES TO ADDRESS SHOWN IN BLOCK : 7
15. PROMPT PAY DISCOUNT
None
16. AUTHORITY FOR USING OTHER THAN 10 U.S.C. 2304 41 U.S.C. 253
FULL AND OPEN COMPETITION /X/ (C) ( 4 ) / / (C) ( )
17. 18. 19. 20. 21. 22.
ITEM NO. SCHEDULE OF SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT
SEE SCHEDULE
FMS REQUIREMENT
________________________________
APPROVED: 24 MAR 1988
/S/ JAMES C. BARONE
-------------------------
JAMES C. BARONE
Asst DCS/Contracting
and Manufacturing
Air Force Logistics Command
________________________________
23. ACCOUNTING AND APPROPRIATION DATA
SEE SECTION G
24. TOTAL AWARD AMOUNT (FOR GOVT. USE ONLY)
$815,733,237.00
25. CONTRACTOR IS REQUIRED TO SIGN THIS DOCUMENT AND RETURN COPIES TO
/X/ ISSUING OFFICE. CONTRACTOR AGREES TO FURNISH AND DELIVER ALL ITEMS SET
FORTH OR OTHERWISE IDENTIFIED ABOVE AND ON ANY CONTINUATION SHEETS SUBJECT
TO THE TERMS AND CONDITIONS SPECIFIED HEREIN.
26. AWARD OF CONTRACT: YOUR OFFER ON SOLICITATION NUMBER
/ / SHOWN IN BLOCK 4 INCLUDING ANY ADDITIONS OR CHANGES WHICH
ARE SET FORTH HEREIN, IS ACCEPTED AS TO ITEMS:
27. SIGNATURE OF OFFEROR/CONTRACTOR
/s/ TRUITT B. GARRISON
28. UNITED STATES OF AMERICA (SIGNATURE OF CONTRACTING OFFICER)
/s/
NAME AND TITLE OF SIGNER (TYPE OR PRINT) DATE SIGNED
08 MAR 1988
NAME OF CONTRACTING OFFICER DATE SIGNED
08 MAR 1988
* DOD SIMPLIFICATION TEST (APR 85)
<PAGE> 2
PAGE 2 of 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
PART I - THE SCHEDULE
SECTION B
SUPPLIES OR SERVICE AND PRICES/COSTS
The Contractor shall furnish to the Government, under the Peace Shield Program,
Supplies and Services called for hereunder in meeting the overall Program
Management responsibilities to deliver facilities to the United States Air
Force. The Supplies and Services shall be furnished in accordance with
Appendix "A", Statement of Work entitled "Peace Shield Program Services For
Peace Shield Facilities Construction Program", dated 88 JAN 22.
---------
- - --------------------------------------------------------------------------------
ITEM SUPPLIES/SERVICES AMOUNT
- - --------------------------------------------------------------------------------
0001 PEACE SHIELD PROGRAM MANAGEMENT SERVICES
----------------------------------------
Provide all personnel, supplies, and facilities
to accomplish the Peace Shield Program Management
Services.
0001AA Provide Management Services to accomplish $140,000,000.00
Peace Shield Program Services. ---------------
ACRN: AA (Firm Fixed Price) ($120,000,000.00)
ACRN: AE (Firm Fixed Price) ($20,000,000.00)
0001AB UNPRICED OPTION $ * TBN
-------
Provide Management Services
to accomplish final Design for
the Central Maintenance Facility.
ACRN: AA (Firm Fixed Price)
0001AC UNPRICED OPTION $ * TBN
-------
Provide Management Services to accomplish
Construction Management of the Central
Maintenance Facility.
ACRN: AA (Firm Fixed Price)
0001AD Provide Management Services $ * TBN
to accomplish concept design -------
for the BOC at Jeddah AB.
ACRN: AA (Firm Fixed Price)
0001AE UNPRICED OPTION $ * TBN
-------
Provide Management Services
to accomplish final design
for the BOC at Jeddah AB.
ACRN: AA (Firm Fixed Price)
0001AF UNPRICED OPTION $ * TBN
-------
Provide Management Services
to accomplish construction
management for the BOC at
Jeddah AB.
ACRN: AA (Firm Fixed Price)
* TBN: TO BE NEGOTIATED
<PAGE> 3
PAGE 3 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
0001AG UNPRICED OPTION $ * TBN
-------
Provide management services
to accomplish Final design
and logistics services of FF&E.
ACRN: AA (Firm Fixed Price)
0002 DESIGN
------
Furnish the following design services for
the Peace Shield Program.
0002AA Site adapt the design of the Riyadh Command $ 3,646,040.00
Operations Center (COC) for Sector Command --------------
Center/Sector Operation Centers (SCC/SOC's)
at King Abdulaziz AB (KAAB), Al Kharj AB (AKAB),
King Faisal AB (KFAB), King Khalid AB (KKAB)
and King Fahad AB (KFDAB). This site adapt includes
relocation of Decontamination Cell and Gas Turbine
Generator System for each SCC/SOC.
ACRN: AA (Firm Fixed Price) ($703,040.00)
ACRN: AE (Firm Fixed Price) ($2,943,000.00)
0002AB Provide Concept and Final Design for $13,283,463.00
seventeen (17) Long Range Radar Sites (LRR's) --------------
with co-located Ground Entry Stations (GES) at
four (4) of the LRR's and for a single GES.
ACRN: AE (Firm Fixed Price)
0002AC Provide SCC/SOC Concept and Final Design $ 5,058,277.00
incorporating C3 Criteria and Infrastructure --------------
and surface structure design modifications.
ACRN: AA (Firm Fixed Price) ($1,012,132.00)
ACRN: AE (Firm Fixed Price) ($4,046,145.00)
0002AD Provide Field Site Investigations to support $ 780,081.00
Design of SCC/SOC's, and Topographical Surveys --------------
for LRR's and GES.
ACRN: AE (Firm Fixed Price)
0002AE Provide Field Investigations and Excavation $ 132,727.00
Design Services for the relocated Al Kharj --------------
SCC/SOC.
ACRN: AE (Firm Fixed Price)
0002AF Acquire Facility Design Criteria $ 1,624,065.00
--------------
ACRN: AA (Firm Fixed Price) ($493,385.00)
ACRN: AE (Firm Fixed Price) ($1,130,680.00)
0002AG Provide revised Concept and Final Design for $ 449,549.00
Conformal Fuel Tank (CFT) Facilities at KAAB, --------------
KFDAB and KKAB.
ACRN: AD (Firm Fixed Price)
0002AH UNPRICED OPTION $ * TBN
-------
Provide Final Design for (CMF)
Central Maintenance Facility at AKAB.
The Estimated Cost to the Government for this
Contract Line Item is $_____________.
The Fixed Fee for this Contract Line Item
is $_____________.
ACRN: AA (Cost Plus Fixed Fee)
<PAGE> 4
PAGE 4 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
0002AJ UNPRICED OPTION $ * TBN
-------
Provide Final Design for (BOC)
Base Operation Center at Jeddah AB
The Estimated Cost to the Government for this
Contract Line Item is $_____________.
The Fixed Fee for this Contract Line Item
is $_____________.
ACRN: AA (Cost Plus Fixed Fee)
0002AK Provide Final Design for Riyadh CDC $ 1,966,751.00
incorporating C3 Criteria. --------------
ACRN: AA (Firm Fixed Price)
0002AL RESERVED
0002AM Provide Concept Design for Central Maintenance $ 255,257.00
Facility (CMF) at Al Kharj. --------------
The Estimated Cost to the Government for this
Contract Line Item is $239,703.00.
-----------
The Fixed Fee for this Contract Line Item
is $5,554.00.
---------
ACRN: AE (Cost Plus Fixed Fee)
0002AN UNPRICED OPTION $ * TBN
-------
Provide Concept Design for Base Operations
Center (BOC) at Jeddah AB.
The Estimated Cost to the Government for this
Contract Line Item is $____________.
The Fixed Fee for this Contract Line Item
is $_____________.
ACRN: AE (Cost Plus Fixed Fee)
0002AP Develop Concept Design to incorporate $ 260,710.00
C3 Criteria into CDC at Riyadh. --------------
ACRN: AA (Firm Fixed Price)
0002AQ RESERVED
0002AR Provide Concept Design for the $ 812,793.00
Communications Site Facilities. --------------
The Estimated Cost to the Government for this
Contract Line Item is $771,879.00.
-----------
The Fixed Fee for this Contract Line Item
is $40,914.00.
----------
ACRN: AE (Cost Plus Fixed Fee)
0003 EXCAVATION
----------
Complete excavation for the five SCC/SOC's by $11,223,241.00
subcontract. --------------
The Estimated Cost to the Government for this
Contract Line Item is $10,715,716.00.
--------------
The Fixed Fee for this Contract Line Item
is $507,525.00.
-----------
ACRN: AA ($4,545,263.00)
ACRN: AE ($6,677,978.00)
<PAGE> 5
PAGE 5 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
0003AA Complete excavation for SCC/SOC at KAAB.
ACRN: AA (Cost Plus Fixed Fee)
0003BA Complete excavation for SCC/SOC at KKAB.
ACRN: AE (Cost Plus Fixed Fee)
0003BB Complete excavation for SCC/SOC/BOC at AKAB.
ACRN: AE (Cost Plus Fixed Fee)
0003BC Complete excavation for SCC/SOC at KFDAB.
ACRN: AE (Cost Plus Fixed Fee)
0003BD Complete excavation for SCC/SOC at KFAB.
ACRN: AE (Cost Plus Fixed Fee)
0004 CONSTRUCTION
------------
Complete constuction as follows by subcontract
for the Peace Shield Program. $367,877,565.00
---------------
The Estimated Cost to the Government for this
Contract Line Item is $351,245,194.00
---------------
The Fixed Fee for this Contract Line Item
is $16,632,371.00
--------------
ACRN: AA ($39,504,563.00)
ACRN: AB ($21,688,456.00)
ACRN: AC ($9,865,542.00)
ACRN: AE ($296,819,004.00)
ACRN: AD (-0-)
0004AA Construct SCC/SDC at KAAB.
ACRN: AA (Cost Plus Fixed Fee)
0004AE Modify COC at Riyadh.
ACRN: AA (Cost Plus Fixed Fee)
0004AC Construct Audio-Visual Publications
Facility (AV/PUBS) at Riyadh Air Base.
ACRN: AB (Cost Plus Fixed Fee)
0004AD Modify existing Water Distribution System at KAAB.
ACRN: AB (Cost Plus Fixed Fee)
ACRN: AC (Cost Plus Fixed Fee)
0004AE Modify existing Water Distribution System at KFDAB.
ACRN: AB (Cost Plus Fixed Fee)
ACRN: AC (Cost Plus Fixed Fee)
0004AF Modify existing Water Distribution System at KKAB.
ACRN: AB (Cost Plus Fixed Fee)
ACRN: AC (Cost Plus Fixed Fee)
<PAGE> 6
PAGE 6 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
0004AG Construct CFT at KAAB.
ACRN: AC (Cost Plus Fixed Fee)
ACRN: AD (Cost Plus Fixed Fee)
0004AH Construct CFT at KFDAB.
ACRN: AC (Cost Plus Fixed Fee)
ACRN: AD (Cost Plus Fixed Fee)
0004AJ Construct CFT at KKAB.
ACRN: AC (Cost Plus Fixed Fee)
ACRN: AD (Cost Plus Fixed Fee)
0004AK RESERVED
0004AL Improvements to Riyadh Air Base Peace Shield
Project Office.
ACRN: AA (Cost Plus Fixed Fee)
0004AM Construct SCC/SOC at KKAB.
ACRN: AE (Cost Plus Fixed Fee)
0004AN UNPRICED OPTION $ = TBN
---------
Construct BOC at Jeddah Air Base.
The Estimated Cost to the Government for this
Contract Line Item is $ .
---------
The Fixed Fee for this Contract Line Item
is $ .
----------
ACRN: AE (Cost Plus Fixed Fee)
0004AP UNPRICED OPTION $ = TBN
---------
Construct CMF.
The Estimated Cost to the Government for this
Contract Line Item is $ .
---------
The Fixed Fee for this Contract Line Item
is $ .
----------
ACRN: AE (Cost Plus Fixed Fee)
0004AQ Construct LRR (E-8).
ACRN: AE (Cost Plus Fixed Fee)
0004AR Construct LRR (N-69).
ACRN: AE (Cost Plus Fixed Fee)
0004AS Construct LRR/GES (N-68).
ACRN: AE (Cost Plus Fixed Fee)
0004AT Construct LRR/GES (S-7).
ACRN: AE (Cost Plus Fixed Fee)
0004AU Construct LRR (C-61).
ACRN: AE (Cost Plus Fixed Fee)
0004AV Construct LRR/GES (E-15A).
ACRN: AE (Cost Plus Fixed Fee)
<PAGE> 7
PAGE 7 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
0004AW Construct SCC/SOC/BOC at AKAB.
ACRN: AE (Cost Plus Fixed Fee)
0004AX Construct SCC/SOC at KFDAB.
ACRN: AE (Cost Plus Fixed Fee)
0004AY Construct LRR (S13).
ACRN: AE (Cost Plus Fixed Fee)
0004AZ Construct LRR/GES (S25).
ACRN: AE (Cost Plus Fixed Fee)
0004BA Construct LRR (W18).
ACRN: AE (Cost Plus Fixed Fee)
0004BB Construct LRR (N-39).
ACRN: AE (Cost Plus Fixed Fee)
0004BC CONSTRUCT LRR (W-20)
ACRN: AE (Cost Plus Fixed Fee)
0004BD CONSTRUCT LRR (C-20)
ACRN: AE (Cost Plus Fixed Fee)
LRR OPTION SITES
The below listed radar sites are
included herein as priced options
only. Contractor shall not
expend funds or commence work in
conjunction therewith unless
authorized by the contracting
officer in accordance with the
procedures set forth in special
provision H-926 of the contract.
0004BE PRICE OPTION $15,917,054.00
--------------
Construct LRR (N-4).
The Estimated Cost to the Government for this
Contract Line Item is $15,195,608.00.
--------------
The Fixed Fee for this Contract Line Item
is $721,446.00.
-----------
ACRN: AE (Cost Plus Fixed Fee)
0004BF PRICED OPTION $16,454,474.00
--------------
Construct LRR (N-17).
The Estimated Cost to the Government for this
Contract Line Item is $15,708,670.00.
--------------
The Fixed Fee for this Contract Line Item
is $745,804.00.
-----------
ACRN: AE (Cost Plus Fixed Fee)
0004BG CONSTRUCT LRR (E-1)
ACRN: AE (Cost Plus Fixed Fee)
<PAGE> 8
PAGE 8 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
0004BH Construct SCC/SDC at KFAB.
ACRN: AE (Cost Plus Fixed Fee)
0004BJ CONSTRUCT LRR (W-1).
ACRN: AE (Cost Plus Fixed Fee)
0004BK CONSTRUCT LRR (C-1).
ACRN: AE (Cost Plus Fixed Fee)
0004BL CONSTRUCT GES (W-27)
ACRN: AE (Cost Plus Fixed Fee)
0004BM Peace Sun II/Peace Hawk VII cleanup pursuant to
Special Provision H-950
ACRN: AB (Reimbursable)
AC (Reimbursable)
AD (Reimbursable)
0005 CONSTRUCTION MATERIALS/EQUIPMENT
--------------------------------
Provide materials/equipment in accordance
with the Statement of Work $241,956,878.00
---------------
The Estimated Cost to the Government for this
Contract Line Item is $231,015,372.00
---------------
The Fixed Fee for this Contract Line Item is $ 10,941,506.00
---------------
ACRN: AA ($18,119,249.00)
ACRN: AC ($15,750.00)
ACRN: AE ($223,821,879.00)
0005AA Provide blast doors for five SCC/SOCs.
ACRN: AA (Cost Plus Fixed Fee)
ACRN: AE (Cost Plus Fixed Fee)
0005AB Provide Power Generation Systems for five SCC/SOC's.
ACRN: AA (Cost Plus Fixed Fee)
ACRN: AE (Cost Plus Fixed Fee)
0005AC Provide Air Handling Units for five SCC/SOC's.
ACRN: AA (Cost Plus Fixed Fee)
ACRN: AE (Cost Plus Fixed Fee)
0005AD Provide Chillers for five SCC/SOC's.
ACRN: AA (Cost Plus Fixed Fee)
ACRN: AE (Cost Plus Fixed Fee)
0005AE Provide Central Control & Monitoring System
(CCMS) for five SCC/SOC's.
ACRN: AA (Cost Plus Fixed Fee)
ACRN: AE (Cost Plus Fixed Fee)
0005AF Provide Elevators for five SCC/SOC's.
ACRN: AA (Cost Plus Fixed Fee)
ACRN: AE (Cost Plus Fixed Fee)
<PAGE> 9
PAGE 9 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
0005AG Provide Intake, Exhaust and Return Air Fans
for five SCC/SOC's.
ACRN: AA (Cost Plus Fixed Fee)
ACRN: AE (Cost Plus Fixed Fee)
0005AH Provide Water Treatment Units for five SCC/SOC's.
ACRN: AA (Cost Plus Fixed Fee)
ACRN: AE (Cost Plus Fixed Fee)
0005AJ Provide Air Filters, Filter Assemblies
for five SCC/SOC's.
ACRN: AA (Cost Plus Fixed Fee)
ACRN: AE (Cost Plus Fixed Fee)
0005AK RESERVED
0005AL Provide Power Generation Systems for
seventeen LRR sites and one GES site.
ACRN: AE (Cost Plus Fixed Fee)
0005AM Provide Transformers for seventeen LRR
sites and one GES site.
ACRN: AE (Cost Plus Fixed Fee)
0005AN Provide Uninterruptible Power Supply (UPS) Systems
for seventeen LRR sites and one GES site.
ACRN: AE (Cost Plus Fixed Fee)
0005AP Provide Chillers for seventeen LRR sites.
ACRN: AE (Cost Plus Fixed Fee)
0005AQ Provide Loop Switches for seventeen LRR sites.
ACRN: AE (Cost Plus Fixed Fee)
0005AR Provide Central Control & Monitoring System
(CCMS) for seventeen LRR sites and one GES site.
ACRN: AE (Cost Plus Fixed Fee)
0005AS Provide Purchased Services/Materials
to support the USAF Jet Engine Test
Facilities Design Verification Team
ACRN: AC (Cost Reimbursable)
0005AT Modify Central Control Monitoring System (CCMS)
for COC
ACRN: AA (Cost Plus Fixed Fee)
0005AU Provide Elevator for COC
ACRN: AA (Cost Plus Fixed Fee)
0005AV Provide Blast Doors for COC
ACRN: AA (Cost Plus Fixed Fee)
0005AW Provide CBR Filters for COC
ACRN: AE (Cost Plus Fixed Fee)
<PAGE> 10
PAGE 10 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
0006 CONSTRUCTION MATERIAL/EQUIPMENT HANDLING SERVICES
-------------------------------------------------
Provide services, supplies, facilities and
equipment required for shipping, packing,
transportation to Saudi Arabia, receiving, and
warehousing of construction materials and
equipment including items in assigned subcontracts. $1,547,814.00
-------------
The Estimated Cost to the Government for this
Contract Line Item is $1,477,820.00.
-------------
The Fixed Fee for this Contract Line Item
is $69,994.00
----------
ACRN: AA (Cost Plus Fixed Fee) ($113,945.00)
ACRN: AE (Cost Plus Fixed Fee) ($1,434,038.00)
0007 GEOTECHNICAL INVESTIGATIONS
---------------------------
0007AA Conduct Geotechnical Investigations to support
design of LRRs. GES and CMF. $494,189.00
-----------
The Estimated Cost to the Government for this
Contract Line Item is $471,841,000.
------------
The Fixed Fee for this Contract Line Item
is $22,348.00
----------
ACRN: AA (Cost Plus Fixed Fee) ($469,530.00)
ACRN: AE (Cost Plus Fixed Fee) ($24,688.00)
0007AB RESERVED
ESTIMATED
0008 REIMBURSABLE ITEMS $2,000,000.00
------------------ -------------
ACRN: AA ($1,000,000.00)
ACRN: AE ($1,000,000.00)
0008AA Reimbursement of Social Insurance payments imposed
upon the Contractor by the Government of Saudi
Arabia shall be payable pursuant to Special
Provision H-908 of this Contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AB Reimbursement of Custom Duties, Taxes and Charges
for doing business paid by the Contractor under
this contract shall be payable pursuant to Special
Provision H-903 of this contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AC Reimbursement of Saudi Arabian Labor Law claims
shall be payable pursuant to Special Provision
H-907 of this Contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AD Reimbursement of Cost resulting from Saudi Arabian
Sovereign Acts shall be payable pursuant to Special
Provision H-941 of this contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
<PAGE> 11
PAGE 11 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
0008AE Reimbursement of Cost resulting from delays in
issuance of visas, licenses, permits or area
clearances shall be payable pursuant to Special
Provision H-909 of this Contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AF Reimbursement of Cost for loss of damage to property
owned by the Contractor, or his Subcontractor or
their employees shall be payable to Special
Provision H-911 of this contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AG Reimbursement of Cost to retain Contractor
personnel in Saudi Arabia or to return such
personnel and their dependents to the United States
and secure replacements due to War, Armed Conflicts,
Insurrection, Civil or Military Strife shall be
negotiated and payable pursuant to Special Provision
H-913 of this Contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AH Reimbursement of Cost resulting from Material
Processing delays for failure of this Saudi Arabian
Government to expedite off-loading from ships or
expedite custom clearance shall be payable pursuant
to Special Provision H-920 of this contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AJ Reimbursement of War Risk Insurance paid by the
Contractor under this Contract shall be payable
pursuant to Special Provision H-914 of this Contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AK Reimbursement of Workmen's Compensation Insurance
required by the Defense Base Act FAR Clause
52.228-3 of Section I, shall be payable pursuant to
Special Provision H-928 of this contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AL Reimbursement of Cost for Contract employees
terminated upon direction of the PCO, other than
for cause, shall be payable pursuant to Special
Provision H-905 of this contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AM Reimbursement of Cost for Medical Evacuation shall
be payable pursuant to Special Provision H-939 of
this contract.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0008AN Reimbursement of Cost for USAF,
and 3D International support in
accordance with Special Provision
H-951.
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
<PAGE> 12
PAGE 12 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
000BAP RESERVED
000BAQ Reimbursements of cost for Legal
services to be provided by outside
Counsel shall be payable pursuant to
Special Provision H-952 of this Contract
ACRN: AA (Cost Reimbursable)
ACRN: AE (Cost Reimbursable)
0009 UNPRICED OPTION
---------------
Contractor Phase-Out/Demobilization $ * TBN
-------
The Contract price does not include an amount
for Contractor phase-out/demobilization/disposition
of Government property. A price proposal for this
effort will be submitted by the Contractor for each
facility ninety (90) days prior to facility completion.
ACRN: AA (Firm Fixed Price)
ACRN: AE (Firm Fixed Price)
0010 SAUDI RIYAL TO U.S. DOLLAR ADJUSTMENTS $450,000.00
-------------------------------------- -----------
The Contractor shall submit the exchange rate
credit or debit adjustments to the contract price
on a quarterly basis pursuant to Section H.
Paragraph H-940 of this Contract. Adjustments in
price, increases or decreases will be made by
Standard Form 30.
ACRN: AA (Cost Reimbursable) ($450,000.00)
ACRN: AE (Cost Reimbursable)
ACRN: AB (Cost Reimbursable)
ACRN: AC (Cost Reimbursable)
ACRN: AD (Cost Reimbursable)
0011 DATA
----
In accordance with attached Exhibit "A". $ **NSP
-------
DD Form 1423 (for all requirements).
**NSP - Not Separately Priced. Priced in
CLINs 0001 and 0002.
0012 ENGINEERING DURING CONSTRUCTION
-------------------------------
Furnish Engineering During Construction services $21,913,837.00
--------------
The Estimated Cost to the Government for this
Contract Line Item is $20,922,874.00.
--------------
The Fixed Fee for this Contract Line Item
is $990,963.00
-----------
ACRN: AA ($2,152,555.00)
ACRN: AB ($250,000.00)
ACRN: AC ($140,575.00)
ACRN: AD (-0-)
ACRN: AE ($19,370,707.00)
0012AA Engineering During Construction services provided
in Saudi Arabia and the U.S. by Peace Shield
Design subcontractor.
ACRN: AE (Cost Plus Fixed Fee)
ACRN: AA (Cost Plus Fixed Fee)
<PAGE> 13
PAGE 13 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZZ0050
0012AB Engineering During Construction services provided by
the Contractor for the A/V Publications Facility at
Riyadh AB and Water Distribution Improvements at
KAAB, KFDAB and KKAB and support of Peace Sun II/Peace
Hawk VII clean-up pursuant to Special Provision H-950.
ACRN: AB (Cost Plus Fixed Fee)
ACRN: AC (Cost Plus Fixed Fee)
ACRN: AD (Cost Plus Fixed Fee)
0012AC Additional Field/Site Investigations
required for design efforts.
ACRN: AA (Cost Plus Fixed Fee)
0012AD JV Technical Services as required
ACRN: AA (Cost Plus Fixed Fee)
AE (Cost Plus Fixed Fee)
0012AE FF&E Concept Design
ACRN: AA (Cost Plus Fixed Fee)
0012AF ICWB/IWG SUPPORT
ACRN: AA (Cost Plus Fixed Fee)
TOTAL AMOUNT OBLIGATED $815,733,237.00
THE FOLLOWING CONTRACT LINE ITEMS ARE FIRM FIXED PRICE:
0001, 0002AA thru 0002AG, 0002AK, 0002AP & 0009
-----------------------------------------------
THE FOLLOWING CONTRACT LINE ITEMS ARE COST PLUS FIXED FEE:
0002AH, 0002AJ, 0002AM, 0002AN, 0002AR, 0003, 0004 (EXCEPT
0004BM) 0005 (EXCEPT 0005AS), 0006, 0007 AND 0012.
--------------------------------------------------
THE FOLLOWING ITEMS ARE COST REIMBURSABLE:
0004BM, 0005AS, 0008 & 0010
---------------------------
B-1. CLAUSES AND PROVISIONS
(a) Clauses and provisions from the Federal Acquisition Regulation
(FAR) and the DOD FAR Supplement are incorporated in this document
by reference and in full text. Those incorporated by reference have
the same force and effect as if they were given in full text.
(b) Clauses and provisions in this document will be numbered in
sequence, but will not necessarily appear in consecutive order.
(c) By signature on this contractual document, Contractor certifies
that their Section K, Annual Representations and Certifications
previously submitted or returned herewith are current and applicable.
They are hereby incorporated by reference.
PART I - THE SCHEDULE
SECTION C
DESCRIPTION/SPECIFICATIONS/WORK STATEMENT
C-1. SPECIFICATIONS, STANDARDS AND DRAWINGS
Specifications, standards or drawings (as applicable) are furnished/
listed below:
ITEM NR SPECIFICATIONS, STANDARDS AND/OR ATTACHMENTS
------- --------------------------------------------
Appendix "A", Statement of Work, Peace Shield Program
Services, dated 25 February 88. Appendix "C", Statement
or Work, Peace Sun/Peace Hawk Close out,
dated 08 Oct 87.
(AFLCO484)
<PAGE> 14
PAGE 14 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
PART I - THE SCHEDULE
SECTION D
PACKAGING AND MARKING
D-900. Preservation, Packaging, and Packing shall be in accordance with good
commercial practice for overseas shipment.
PART I - THE SCHEDULE
SECTION E
INSPECTION AND ACCEPTANCE
E-1. INSPECTION OF SUPPLIES--FIXED-PRICE (JUL 1985) FAR 52.246-2
(IAW FAR 46.302)
E-4. INSPECTION OF SUPPLIES--COST-REIMBURSEMENT (APR 1984) FAR 52.246-3
(IAW FAR 46.303)
E-5. INSPECTION OF SERVICES--FIXED-PRICE (APR 1984) FAR 52.246-4
(IAW FAR 46.304)
E-6. INSPECTION OF SERVICES--COST-REIMBURSEMENT (APR 1984) FAR 52.246-5
(IAW FAR 46.305)
E-18. INSPECTION OF CONSTRUCTION (JUL 1986) FAR 52.246-12
(IAW FAR 46.312)
E-22. RESPONSIBILITY FOR SUPPLIES (APR 1984) FAR 52.246-16
(IAW FAR 46.316)
E-35. DD FORM 1423 DATA INSPECTION AND ACCEPTANCE
The Inspection and Acceptance for Data items are as shown on DD Form
1423 attached hereto.
(IAW FAR 46.401(b) and 46.503)
E-900. INSPECTION SHALL BE AT PLACE OF PERFORMANCE OR DELIVERY
(a) Inspection of CLINS 0001 through 0007, 0009 and 0012 shall be at
place of performance or delivery.
(b) Partial acceptance of effort under Clins 0001, 0002AA through
0002AG, 0002AK, 0002AP and 0009 will be accomplished by the PCD (after
review and comments by AFLC/DER) by means of DD Forms 250's (Material
Inspection and Receiving Report) prepared in accordance with
DFAR 52.246-7000.
(c) Interim acceptance of effort for items, services and supplies
tendered under CLINS 0002AH, 0002AJ, 0002AM, 0002AN, 0002AR, 0003,
0004, 0005, 0006, 0007, 0008 and 0012 will be done by SF 1034, Public
Voucher for Purchases and Services other than Personal.
(d) The Administration Contracting Officer (ACO) is the person
designated to accept INCO effort.
(e) Final Inspection and Acceptance of CLIN's 0003, 0004, and 0005 will
be accomplished upon completion of each facility constructed.
PART I - THE SCHEDULE
SECTION F
DELIVERIES OR PERFORMANCE
F-20. LIQUIDATED DAMAGES--CONSTRUCTION (APR 1984) FAR 52.212-5
For the purposes of this clause the blank(s) are completed as follows:
(a) the sum of $ for each day of delay.
-------
(IAW FAR 12.204(b))
F-21. Alternate I (APR 1984) 52.212-5
<PAGE> 15
PAGE 15 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
F-22. TIME EXTENSIONS (APR 1984) FAR 52.212-6
(IAW FAR 12.204(c) and 52.212-5 Alternate I)
NOTE: F-20, F-21 and F-22 shall be used in construction subcontracts
(CLINS 0003/0004) pursuant to Section I, Paragraphs G and K, and do not
apply to the prime contract.
F-26. STOP-WORK ORDER (APR 1984) FAR 52.212-13 (applies to CLINS 0001, 0002AA
through 0002AG, 0002AK, 0002AP and 0009)
(IAW FAR 12.505(b))
F-27. ALTERNATE I (APR 1984) FAR 52.212-13 (applies to CLINS 0002AH, 0002AJ,
0002AM, 0002AN, 0002AR, 0003, 0004, 0005, 0006, 0007, 0008 and 0012)
(IAW FAR 12.505(b))
F-29. GOVERNMENT DELAY OF WORK (APR 1984) FAR 52.212-15 (applies to CLIN
0001)
(IAW FAR 12.505(d))
F-36. F.O.B. DESTINATION (APR 1984) FAR 52.247-34 (applies to CLINS 0001 and
0005)
(IAW FAR 47.303-6(c))
F-40. DD FORM 1423 DATA REQUIREMENTS
All data requirements (including Delivery and Ship To/Mark) for
applicable Data Items on DD Form 1423 are shown thereon. The F.O.B.
point for data items shall be the same as the acceptance point on DD
Form 1423.
(IAW AFR 310-1)
F-45. PERIOD OF CONTRACT
This contract shall be in effect from the effective date of the
contract thru 31 Oct 1990.
-----------
(IAW FAR 12.101(a))
F-66. DIVERSION OF SHIPMENT UNDER F.O.B. DESTINATION CONTRACTS (APR 1984)
FAR 52.247-54
(IAW FAR 47.305-11(b)(2))
F-900. TIME OF DELIVERY/PERFORMANCE
a. Delivery of the Facilities and Services identified in Schedule B of
the Contract for CLINS 0002, 0003, 0004 and 0005 shall be accomplished
and delivered in accordance with Facility Completion Dates (FCD)
reflected in the Master Milestone Schedule dated 1987 April 27, ("as
subsequently modified and approved by PCD") which is incorporated and
made a part of hereof by reference.
b. CLIN 0001 - MANAGEMENT SERVICES
-------------------
CLIN 0001AA will be completed 77.5 months after award of Letter
Contract. ----
(c) CLIN 0006 will be completed 77.5 months after award of Letter
Contract. ----
(d) CLIN 0007 will be completed 77.5 months after award of Letter
Contract. ----
(e) CLIN 0011 will be completed in accordance with DD Form 1423
attached.
(f) CLIN 0012 will be completed 77.5 months after award of Letter
Contract. ----
F-901. DELIVERY DOCUMENTS
------------------
Delivery documents for CLINS 0001, 0002, and 0009 will be submitted
monthly on a properly executed DD 250, Material Inspection and
Receiving Report, unless the contract provides otherwise.
F-902. PLACE OF PERFORMANCE
--------------------
The place of performance of Items called for hereunder shall be King
Abdulaziz Air Base, King Fahad Air Base, Riyadh, King Khalid Air Base,
King Faisal Air Base, Al Kharj AB, Jeddah AB, seventeen (17) each
various Long Range Radar Sites and one (1) each separate Ground entry
Station in Saudi Arabia, Contractor's Office in Houston, Texas,
Wright-Patterson Air Force Base, OH, various subcontractor facilities,
shipping points and deployment facilities where work is performed.
<PAGE> 16
PAGE 16 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
F-903. SHIPPING INSTRUCTIONS
---------------------
Shipments destined for Saudi Arabia shall be marked as follows:
Peace Shield
CRS Sirrine/Metcalf & Eddy (Joint Venture)
c/o (Cognizant RSAF Organization, locations,
etc, as applicable)
Contract Nr. F41608-84-C-A100
PART I - THE SCHEDULE
SECTION G
CONTRACT ADMINISTRATION DATA
G-1. ACCOUNTING AND APPROPRIATIONS DATA
AA: 97-11X8242.SR02 4FX 6302 CDJASR 584 DJC000 S503000
AB: 97-11X8242.SR02 4FX 6302 CYAMSR 592 YAM000 S503000
AC: 97-11X8242.SR02 4FX 6302 CYBMSR 592 YBP000 S503000
AD: 97-11X8242.SR02 4FX 6302 CSFASR 592 SFH000 S503000
AE: 97-11X8242.SR02 4FX 6302 CDLASR 592 DLC000 S503000
G-110. CONTRACTOR REPORTING REQUIREMENTS (APR 1984) AFLC FAR SUP 52.212-9000
Any report required by 15 CFR 350.13(d)(2) of the Defense Priorities
and Allocation System Regulation relating to an actual or anticipated
--
delayed shipment, reason for delay, and/or new projected shipment date
are to be sent concurrently by the Contractor to both the Procuring
Contracting Officer (PCO) and the Administrative Contracting Officer
(ACO) within the specified five working days.
(IAW AFLC FAR SUP 12.304(90))
G-900. PAYMENT (Applicable to CLINS 0001, and 0002AA through 0002AG, 0002AK,
-------
0002AP).
A) It is hereby understood and agreed between the parties that
the Contractor shall perform under this contract, subject to
the following terms and conditions:
(1) Payment will be made to the Contractor in accordance with
Paragraph (B) hereof, entitled "Billing Schedule."
(2) Payment: CRS Sirrine/Metcalf & Eddy (Joint Venture)
shall submit monthly invoices in the amounts and on dates
prescribed in Paragraph (B) hereof as payment for all
services and supplies ordered under the contract, and
rendered at SA-ALC/PMR, Kelly AFB, Texas. (Info copy to
AFLC/DER)
The term "monthly invoices" applies to the calendar
month.
(3) Payment of each monthly invoice shall be received by CRS
Sirrine/Metcalf & Eddy (Joint Venture) no later than
twenty (20) U.S. Government workdays following
presentations of the invoice. If it is determined that
the Contractor is deficient in his performance as
required in the Schedule of the contract, and is so
notified by PCO (or designee) in writing and the
contractor does not correct such deficiency by the date
of submission of the DD Form 250 for the deficient line
item, the Procuring Contracting Officer (PCO) may direct
the assessment of a withhold, (a and b below) from each
of the ensuing billings until the deficiency is
corrected. Notification to the Contractor of the
deficiency/unsatisfactory performance will be reflected
on the DD Form(s) 250, submitted by the Contractor in
accordance with procedures established in Section E of
the Contract or by written notice for those items not
requiring submission of a DD Form 250. Deficient
performance annotation on the DD Form 250, when
warranted, will be accomplished by the PCO or designee at
the time of signing for acceptance.
(a) All items of contract supplies or services
(including data) up to fifteen percent (15%) of
total monthly payment. For purposes of this
contract, deficiency is defined as a failure of the
Contractor to provide required Contract Management
supplies or services when that failure significantly
and materially affects contract performance.
(b) Reduction under FAR 52.246-4 - Equitable amount as
determined by the PCO.
<PAGE> 17
PAGE 17 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
(c) When advised by the Contracting Officer of the
assessment of Oa withholding pursuant to the
provisions of this subsection, the Contractor shall
reduce the amount billed on the ensuing monthly
invoices by the amount of the withhold. When the
deficiencies have been corrected, the Contractor
will submit a supplemental DD Form 250 with
certification attesting to the correction and a
supplemental invoice for the amount withheld. This
clause in no way negates the Government's rights
under FAR Clause 52.249-8 entitled "Default (Fixed
Price Supply and Service)".
BILLING SCHEDULE
----------------
MONTH (CLIN 0001)
----- -----------
(d) Reimbursement for actual cost under CLIN 0008 will
be made to the Contractor.
(e) A withhold or contract value reduction will not be
assessed if the Contractor reasonably establishes
that the cause of such deficiency is excusable under
the provision of paragraph (c) of FAR Clause
52.249-8.
B) Billing Schedules.
(1) The following amounts will be invoiced by the Contractor
on a monthly basis.
BILLING SCHEDULE
<TABLE>
<CAPTION>
MONTH CLIN 0001 CLIN 0002 MONTH TOTAL
- - ----- --------- --------- -----------
<S> <C> <C> <C>
TOTAL INVOICED THROUGH
FEBRUARY 88 $ 50,041,635.00 $23,243,441.00 $ 73,285,076.00
MARCH 88 8,597,499.00 2,797,314.00 11,394,813.00
APRIL 88 3,000,000.00 499,138.00 3,499,138.00
MAY 88 3,300,000.00 440,000.00 3,740,000.00
JUNE 88 3,600,000.00 64,932.00 3,664,932.00
JULY 88 3,700,000.00 3,700,000.00
AUGUST 88 3,900,000.00 3,900,000.00
SEPTEMBER 88 3,800,000.00 3,800,000.00
OCTOBER 88 3,800,000.00 3,800,000.00
NOVEMBER 88 3,800,000.00 3,800,000.00
DECEMBER 88 3,900,000.00 3,900,000.00
JANUARY 89 3,900,000.00 3,900,000.00
FEBRUARY 89 3,800,000.00 3,800,000.00
MARCH 89 3,700,000.00 3,700,000.00
APRIL 89 3,600,000.00 3,600,000.00
MAY 89 3,300,000.00 3,300,000.00
JUNE 89 3,100,000.00 3,100,000.00
JULY 89 3,100,000.00 3,100,000.00
AUGUST 89 3,000,000.00 3,000,000.00
SEPTEMBER 89 2,700,000.00 2,700,000.00
OCTOBER 89 2,400,000.00 2,400,000.00
NOVEMBER 89 2,100,000.00 2,100,000.00
DECEMBER 89 1,700,000.00 1,700,000.00
JANUARY 90 1,700,000.00 1,700,000.00
FEBRUARY 90 1,400,000.00 1,400,000.00
MARCH 90 1,400,000.00 1,400,000.00
APRIL 90 1,400,000.00 1,400,000.00
MAY 90 1,200,000.00 1,200,000.00
JUNE 90 1,100,000.00 1,100,000.00
JULY 90 1,100,000.00 1,100,000.00
AUGUST 90 800,000.00 800,000.00
SEPTEMBER 90 700,000.00 700,000.00
OCTOBER 90 700,000.00 700,000.00
NOVEMBER 90 660,866.00 660,866.00
--------------- -------------- ---------------
$140,000,000.00 $27,044,825.00 $167,044,825.00
</TABLE>
<PAGE> 18
PAGE 18 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
G-901. OBLIGATED FUNDS (PR F8 DER 4008 0002 THROUGH REV 10)
ACRN: AA $190,791,094.00
ACRN: AB $ 21,938,456.00
ACRN: AC $ 10,021,867.00
ACRN: AD $ 449,549.00
ACRN: AE $592,532,271.00
G-902. COMMITTED FUNDS
To Be Obligated by PCO as required.
ACRN: AA $ 15,358,906.00
ACRN: AB $ 2,395,576.00
ACRN: AC $ 8,287,453.00
ACRN: AD $ -0-
ACRN: AE $ 18,813,442.00
G-903. FUNDS COMMITTED TO PCO AND ACO FOR OBLIGATION AS REQUIRED BY
MODIFICATION.
ACRN: AA $ 4,000,000.00
ACRN: AB $ 6,040,968.00
ACRN: AC $ 3,158,680.00
ACRN: AD $ 27,451.00
ACRN: AE $ 9,312,000.00
G-904. RECAPITULATION OF FUNDS
Funds Obligate in G-901 $815,733,237.00
Funds Committed in G-902 $ 44,855,377.00
Funds Committed in G-903 $ 22,539,099.00
---------------
TOTAL $883,127,713.00
G-905. ALLOTMENT OF FUNDS
The Government reserves the right to increase or decrease the funds
committed herein on a unilateral basis by modification hereto.
Administrative Contracting Officer (ACO) authorized changes to this
contract shall be issued on Standard Form 30; or, if desired, some
other form may be used and made an attachment to the Standard Form 30.
G-906. PAYMENT ROUTING PROCEDURES
(1) Fixed Price Items:
Invoices will be submitted to the PCO at SA-ALC/PMR for approval.
The PCO will forward the Invoice to the paying office.
(2) Cost Reimbursable Items:
Public Vouchers for Cost items will be routed through DCAA Houston
for audit provisional approval and in turn to the PCO for
approval. The PCO will forward the public vouchers to the paying
office.
<PAGE> 19
PAGE 19 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
TABLE OF CONTENTS
SECTION H
SPECIAL PROVISIONS
CLAUSE CLAUSE TITLE PAGE
H-000 PRIOR INSTRUMENT SUPERSEDED 20
H-4 NOTIFICATION OF DEBARMENT/SUSPENSION STATUS 21
H-39 CAS NONCOMPLIANCE 21
H-56 INCORPORATION OF SUBCONTRACTING PLAN 21
H-89 LIMITATION OF GOVERNMENT'S OBLIGATION 21
ALLOTMENT OF FUNDS
H-160 SECRETARIAL APPROVAL OF CONTRACT 21
H-184 LAW COVERING CONTRACTS 21
H-185 MODEL FMS CONTRACT CLAUSE 22
H-901 RESERVED 22
H-902 OVERTIME 22
H-903 SPECIAL PROVISIONS RELATING TO THE CLAUSE 22
ENTITLED "TAXES, DUTIES, AND CHARGES FOR
DOING BUSINESS"
H-904 LIMITATION OF CONTRACTOR LIABILITY 23
H-905 CONTRACTOR PERSONNEL 23
H-906 BANK LETTER OF GUARANTY 24
H-907 SAUDI ARABIAN LABOR AND SOCIAL INSURANCE LAWS 24
H-908 SAUDI ARABIAN SOCIAL INSURANCE PAYMENTS 24
H-909 VISAS, LICENSES, AND PERMITS 24
H-910 RESERVED 25
H-911 CONTRACTOR-OWNED/PERSONAL PROPERTY 25
H-912 EXCHANGE, IMPORTATION OR EXPORTATION OF CURRENCY 25
H-913 SPECIAL PROVISIONS RELATIVE TO WAR, ARMED 26
CONFLICT, INSURRECTION, CIVIL OR MILITARY
STRIFE OR SIMILAR CONDITIONS
H-914 WAR RISK INSURANCE PAYMENTS 26
H-915 CLASSIFIED INFORMATION OF THE SAUDI ARABIAN GOVERNMENT 26
H-916 RADIO COMMUNICATION 26
H-917 ENGLISH LANGUAGE REQUIREMENTS 26
H-918 WORKING ARRANGEMENTS 26
H-919 AIR TRAVEL/FREIGHT 27
H-920 MATERIAL PROCESSING DELAYS 27
H-921 PRE-CONTRACT COSTS 27
H-922 AGENT'S FEES/COMMISSION CLAUSE 27
H-923 ASSOCIATE CONTRACTOR AGREEMENT 27
H-924 SHIPPING DELAYS 27
<PAGE> 20
PAGE 20 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-925 DESIGN, EXCAVATION & CONSTRUCTION SUB-CONTRACTORS 28
H-926 OPTIONS FOR ADDITIONAL SERVICES AND FACILITIES 28
H-927 RESERVED 29
H-928 WORKMANS COMPENSATION INSURANCE PAYMENTS 29
H-929 DIRECTED MANNING 29
H-930 GOVERNMENT FURNISHED PROPERTY 29
H-931 CHANGE ORDER REQUIREMENTS 30
H-932 SAUDI ARABIAN SUPPORT 30
H-933 RIGHTS OF ENTRY 30
H-934 GOVERNMENT PROPERTY INVENTORY LISTING 30
H-935 NEW MATERIALS 31
H-936 SAFETY PRECAUTIONS FOR AMMUNITION AND EXPLOSIVES 31
H-937 INSPECTION CONTRACTOR 31
H-938 APO SERVICES 31
H-939 MEDICAL EVACUATION 32
H-940 U.S. DOLLARS TO SAUDI RIYALS 32
H-941 CONTINGENT FACTOR (SAUDI ARABIAN SOVEREIGN ACTS) 33
H-942 CONSTRUCTION COMPLETION SCHEDULES 33
H-943 CONSTRUCTION WARRANTY 34
H-944 PROGRAM COORDINATION 34
H-945 ASSIGNMENT 34
H-946 RESERVATION OF RIGHTS - COST ACCOUNTING STANDARDS 35
H-947 CHANGE ORDER RESERVE 35
H-948 CHANGE ORDER TIME RESERVE 35
H-949 AFFILIATION 35
H-950 PEACE SUN/PEACE HAWK CLEAN-UP PROJECTS 36
H-951 OVER AND ABOVE REIMBURSEMENT 36
H-952 USE OF OUTSIDE COUNSEL 36
PART I - THE SCHEDULE
SECTION H
SPECIAL CONTRACT REQUIREMENTS
PRIOR INSTRUMENT SUPERSEDED (JUL 1985) AFLC FAR SUP 52.216-9011
This is the definitive contract contemplated by LETTER CONTRACT dated 1984 MAY
16 and and designated Contract No. F41608-84-C-A100, INCLUDING MODIFICATIONS
P00001 THROUGH P00048 AND THE IMPACTS OF THE STOP WORK ORDER FOR THE PERIOD 05
FEBRUARY 1986 THROUGH 06 AUGUST 1986 and supersedes said LETTER CONTRACT,
P00049 IS EXCLUDED AND WILL BE ADDED TO THE CONTRACT BY SUBSEQUENT
MODIFICATION. Any costs incurred or payments made thereunder will be considered
to have been made under this definitive contract.
(IAW AFLC FAR SUP 16.603-90)
<PAGE> 21
PAGE 21 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-4. NOTIFICATION OF DEBARMENT/SUSPENSION STATUS (APR. 1987) AF FAR SUP
52.209-9001
The Contractor shall provide immediate notice to the Contracting
Officer in the event of being suspended, debarred or declared ineligible
by any Department or other Federal Agency, or upon receipt of a notice
of proposed debarment from a DOD Agency, during the performance of this
contract.
(IAW AF FAR SUP 9.490)
H-39. CAS NONCOMPLIANCE
Award of this contract does not constitute a determination that the
Contractor's disclosed and applied accounting practices used in pricing
this contract are in compliance with the Cost Accounting Standards
(CAS). The Government retains its right to adjust the contract price
under the CAS clauses of this contract if a subsequent final
determination of noncompliance is made by the Contracting Officer.
(IAW FAR 30.202-1(b))
H-56. INCORPORATION OF SUBCONTRACTING PLAN
The subcontracting plan contained in contractor's revised proposal
dated 5 FEB 88 is incorporated herein by reference.
(IAW FAR 19.705-5(a)(5))
H-89. LIMITATION OF GOVERNMENT'S OBLIGATION - ALLOTMENT OF FUNDS (NOV 1984)
AFLC FAR SUP 52.290-9002
(a) To the extent the Schedule sets forth an amount to cover the
estimated cost to the Government for specified items, the Government
shall not be obligated to pay the Contractor any amount in excess of
the amount set forth in the Schedule and the Contractor shall not be
obligated to continue performance by virtue of which the Government's
obligation hereunder would exceed the amount set forth in the Schedule,
unless and until the Contracting Officer shall have notified the
Contractor in writing that such amount has been increased and shall
have specified in such notice a revised amount which shall constitute
the estimated cost of performance of this contract. When and to the
extent that the amount set forth in the Schedule has been increased,
any expenses incurred by the Contractor in excess of such amount prior
to the increase shall be allowable to the same extent as if such
expenses had been incurred after such increase in such amount.
(b) The Contractor shall notify the Government in writing at the
earliest practicable time, whenever he believes that the cost he
expects to incur within the succeeding thirty (30) days will exceed 85%
of the amount stated in the Schedule. The Contractor will also notify
the Government in writing at any other time if he expects the costs he
will incur for items chargeable to such amount will be substantially
greater or less than such amount.
(c) The Government reserves the right to increase or decrease the funds
allotted herein for item(s) 0008AA THROUGH 0008AQ on a unilateral basis
by modification to the contract or orders, as applicable. In no event
shall the Contracting Officer decrease the funds below the amount
incurred by the Contractor at the time of the notice of decrease.
(IAW AFLC FAR SUP 90.103(c))
H-160. SECRETARIAL APPROVAL OF CONTRACT (APR 1984) AF FAR SUP 52.204-1
The agency official designated to approve this contract as required
by the clause entitled "Approval of Contract" is the Secretary or a
duly authorized representative.
(IAW AF FAR SUP 4.103)
H-184. LAW COVERING CONTRACTS (JUL 1985) AFLC FAR SUP 52.225-9005
The provisions of this contract shall be governed by and construed in
accordance with the laws of the United States of America.
(IAW AFLC FAR SUP 25.9001)
<PAGE> 22
PAGE 22 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-185. MODEL FMS CONTRACT CLAUSE (JUL 1985) AFLC FAR SUP 52.225-9010
-------------------------------------------------------------
The United States Government (USG) is purchasing articles and/or
services under this contract for the purpose of selling them to a foreign
country or international organization under the Arms Export Control Act of
1976, as amended (AECA). This contract is concluded pursuant to Section 22(a)
of the AECA (22 U.S.C. Paragraph 2762(a)) based on the agreement of the
Government of Saudi Arabia (SA) in a Foreign Military Sales (FMS) Letter of
Offer and Acceptance (LOA) to pay the full amount of the contract and to make
funds available to the United States Government as required to meet payments
and other costs arising under the contract. Accordingly, no funds authorized
and appropriated for the functions of the Department of the Air Force are
available for payment under this contract. As a contract of the United States
Government, however, this contract is subject to the Contract Disputes Act of
1978 (41 U.S.C. Paragraphs 601-613), and all claims by or against the
contractor under this contract shall be resolved in accordance with that Act.
Any judgment against the United States on a claim of the Contractor, or any
monetary award to the Contractor by a board of contract appeals, shall be paid
in accordance with 31 U.S.C. 1304)
(IAW AFLC FAR SUP 25.7300-90(d))
H-901.
H-902. OVERTIME (DIRECTED MANNING ONLY)
--------------------------------
(A) Work involving overtime will only apply to Directed Manpower in
CLIN 0001 (as defined in Statement of Work Section 3, paragraph
3.11.1 & 3.11.2 and Special Provision H-929 hereof).
(B) Any overtime directed in writing by the PCO or ACO will result in an
equitable adjustment to the Contract price under the "Changes"
clause. The Contractor will prepare and submit claims for such
adjustments to the PCO on a monthly basis and will be definitized
by use of Standard Form 30. Such claims shall be based on actual
direct labor cost for each individual and applicable overhead and
profit.
(C) Overtime rates for personnel in Saudi Arabia will be time and
one-half for everything over 8 hours per day or in excess of
48 hours in a single work week.
H-903. SPECIAL PROVISIONS RELATING TO THE CLAUSE ENTITLED TAXES, DUTIES, AND
---------------------------------------------------------------------
CHARGES FOR DOING BUSINESS
--------------------------
(A) It is understood that the imposition of local taxes and similar
charges with respect to the Peace Shield Program would serve to
increase the contract price, therefore;
(1) All property, material, equipment, and supplies brought into
Saudi Arabia by the Contractor and Subcontractors to carry out
the Peace Shield Program shall be exempt in Saudi Arabia from
import and export duties, taxes, licenses, excises, impost,
bonds, deposits, and any other identifiable charges. Property,
materials, equipment, and supplies belonging to the Contractor
or its Subcontractors that are not consumed in connection with
the program or do not become a part of the completed work shall
remain the property of the Contractor or its Subcontractors and
may at any time be removed from, or disposed of, in Saudi
Arabia free of any restrictions or any claims which may arise
by virtue of such removal or disposal, provided that the duty
thereon shall be paid in the event of their sale or disposal
in Saudi Arabia
(2) The Contractor/Subcontractor and their personnel shall be
accorded exemption from Saudi Arabia income taxes. This
provision does not exempt the Contractor/Subcontractor from
paying Saudi Social Insurance.
(B) In the event that taxes, duties, or similar charges are imposed in
contravention of the above, such charges may served to increase the
estimated cost under this contract and will be reimbursed limited
to those cost incurred, excluding profit. For purposes of this
paragraph, reimbursement shall be limited to those costs incurred,
including applicable overhead and G & A expense, but excluding
profit.
(C) The above defines the Contractor's liabilities as it relates to any
charges that may be imposed by the Saudi Arabian Government upon all
property, material, equipment and supplies brought into Saudi
Arabia by the Contractor/Subcontractor and is not intended to
define title to property.
<PAGE> 23
PAGE 23 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-904. LIMITATION OF CONTRACTOR LIABILITY
----------------------------------
The Government of Saudi Arabia agrees, with respect to the Contractor:
(1) To waive any or all claims which it has or may have against the
Contractor, its agents, officers or employees, for damage, loss,
or destruction of property, or for injury to or death of persons,
arising out of the Contractor's participation in the Peace Shield
Program, in the absence of wrongful act, negligence or misconduct
on the part of the Contractor, its agents or employees.
(2) To indemnify and hold harmless the Contractor, its agents and
employees, against all claims arising directly or indirectly by
reason of injury to or death of persons, or loss of or damage to
property, out of the Contractor's participation in the Peace
Shield Program, in the absence of wrongful act, negligence or
misconduct on the part of the Contractor, its agents or employees.
(3) To accept full responsibility for the security and safekeeping of
SAG real and personal property located on SAG military bases or
installations. The Contractor, its agents, officers, or employees
shall not be liable for any damage arising out of a breach or
failure of the Saudi Arabian Government security procedures,
however caused.
(4) The term "agents" as used in this paragraph includes
Subcontractors.
(5) It is understood that these safeguard clauses pertain only to
activities in Saudi Arabia.
H-905. CONTRACTOR PERSONNEL
--------------------
(A) The Contractor shall be responsible for selecting personnel who are
qualified to perform the required services, for supervising
techniques used in their work and for keeping them informed of all
improvements, changes and methods of operations.
(B) The Contractor shall be permitted to utilize any percentage mix of
United States/Third Country National/Saudi personnel in the
performance of tasks under the Peace Shield Program, priority
being given to Saudis for work in Saudi Arabia where
qualifications are equal.
(C) The Contractor's personnel shall respect the laws, customs, and
regulations of Saudi Arabia, including the laws prohibiting access
to certain areas of the country to non-Muslims or non-Saudis. The
Contractor and its personnel while in Saudi Arabia shall be
subject to the criminal and civil jurisdiction of the Saudi
Arabian Government.
(D) The PCO may direct the Contractor in writing to remove, and the
Contractor shall remove, any employee from an assignment to
perform services under this contract.
(E) Where the reason for the removal request is for cause, replacement
will be at no change in contract price. For purposes of this
clause, "removal for cause" is defined as,
(1) Failure to respect the laws, customs and regulations of Saudi
Arabia
(2) Reasons of security.
(3) Failure to perform job duties
(4) Conduct bringing discredit upon the Contractor and/or the
United States Government.
(F) In the event an employee is terminated upon direction of the PCO,
other than for cause, an equitable adjustment for such early
termination and replacement of such personnel shall be made to the
contract.
(G) Personnel will be required to carry Peace Shield Program
identification when on duty.
<PAGE> 24
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-906. BANK LETTER OF GUARANTY
-----------------------
Within fifteen (15) Calendar days after the date of the award of any
Excavation of Construction Sub-Contract, the Contractor shall require
the Sub-Contractor to furnish to the Contractor a Bank Letter of
Guaranty for the performance of the work, in the amount of ten percent
(10%) of the Sub-Contract Price. The Letter of Guaranty shall be dated
as of the Sub-Contract date or no more than fifteen (15) Calendar
days thereafter. The Bank Letter of Guaranty shall state that it will
continue in effect for thirteen (13) months after the date the work is
accepted by the ACO in an amount equal to five (5%) percent of the
original Sub-Contract Price. The Letter of Guaranty shall also state
that the bank agrees and consents that the Sub-Contract may be modified
by change order or Supplemental Agreement without affecting the
validity of the Letter Guaranty. If all work on the Sub-Contract has
not been accepted and performance of the work will extend beyond the
expiration date of the Letter of Guaranty, the Contractor shall secure
an extension of the expiration date thereof or shall provide a new Bank
Letter of Guaranty covering the time required for completion of the
Work as estimated by the Contractor. Any such extension or new Bank
Letter of Guaranty shall be provided to the Contractor at least ten
(10) days prior to the expiration date of the Guaranty.
Written documentation including receipt of the required Bank Letter of
Guaranty for subcontractors shall be provided to the Contracting Officer
or his authorized representative within fifteen (15) days after
award of such subcontract.
H-907. SAUDI ARABIAN LABOR AND SOCIAL INSURANCE LAWS
---------------------------------------------
(A) Any claim brought against the Contractor or Subcontractor under
Saudi Arabian Labor or Social Insurance Laws, and adjudged to be
valid by Saudi Arabian courts, ministries, agencies, or officials
having jurisdiction shall be reimbursed to the Contractor at cost
to include the cost of defending against such claims. Claims
brought by individual employees and adjudged valid by Saudi
Arabian courts, ministries, agencies, or officials having
jurisdiction will be reimbursed as aforesaid only when the
Contractor or Subcontractor has submitted prima facia evidence to
the PCO establishing that, as regards the subject of the claim,
the practices of the Contractor or Subcontractor, with respect to
the individual employee were (i) not a result of the contractor's
own fault or negligence (ii) consistent with its standard policy
(provided that such policies and procedures are not in conflict
with Saudi Labor Laws) with respect to the performance of the
particular services being rendered by that class or type of
employee, and in accordance with Saudi law or (iii) were otherwise
authorized by the terms of this contract.
(B) Upon receipt of a notice of any such claim, the Contractor shall
immediately notify the Procurement Contracting Officer (PCO). The
Contractor will submit invoices to the PCO within 45 days after
receipt of a decision by the competent authority, requiring
payment under Saudi Arabian Labor or Social Insurance Laws.
(C) In the event there are any changes in the Saudi Arabian Labor and
Social Insurance laws that affect the contract firm fixed price,
there will be an equitable adjustment to price in accordance with
the appropriate "Changes" clause.
H-908. SAUDI ARABIAN SOCIAL INSURANCE PAYMENTS
---------------------------------------
Saudi Arabian Social Insurance Payments shall be reimbursed at cost
incurred excluding profit. For purposes of this paragraph,
reimbursement shall be limited to those costs incurred, including
applicable overhead and G & A expense, but excluding profit.
H-909. VISAS, LICENSES, AND PERMITS
----------------------------
(A) To ensure the effective and timely performance of the Peace Shield
Program, the Government of Saudi Arabia, the Royal Saudi Air Force
and the United States Air Force will cooperate within the
framework of the laws of Saudi Arabia to ensure timely issuance of
work visas, multiple entry visas, exit visas, work permits,
vehicle operator permits, residence permits, in-country travel
permits, and any other appropriate licenses or permits as may be
required by the Contractor, its Subcontractors, or their personnel
and
<PAGE> 25
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
dependents. The Contractor/Subcontractors shall be responsible
for the sponsorship of their employees and their dependents, and
shall be allowed to process said permits directly with the
appropriate Saudi Arabian Government agency. Specifically, and
without in any way limiting the scope of the foregoing, Contractor
personnel shall be afforded unrestricted movement in Saudi Arabia
while performing their duties under this contract, with the
exception of those areas prohibited to non-Muslims or non-Saudis,
and, in any case of an emergency, medical or otherwise, an exit
permit shall be issued without delay.
(B) The RSAF shall furnish in a timely manner the required security
clearances and passes for Contractor/Subcontractor personnel for
restricted areas at locations where the Contractor is performing
work under this contract to ensure contractor/subcontractor
capability to meet contract schedules.
(C) In the event entry visas, licenses, permits for area clearances
are not provided within reasonable time after applications are
submitted in strict compliance with SAG decrees/procedures, and
such delay causes an increase in the cost of, or time required for
the performance of any part of the work under this contract, an
equitable adjustment shall be made in the contract price or
schedule, or both.
H-910. RESERVED
--------
H-911. CONTRACTOR-OWNED/PERSONAL PROPERTY
----------------------------------
(A) In the event the Contractor or its personnel without reasonable
cause are prevented from shipping their property (including
personal belongings) out of Saudi Arabia (and the PCO is unable to
secure a release) within 30 days after notification such property
is available for shipment, where shipping is otherwise reasonably
available, the Contractor shall be reimbursed for the replacement
value of such property upon submission of a certified itemized
inventory list. The Contractor/Subcontractor will certify with the
approval of U.S.G. Property Administrator approved by the ACO,
property to be shipped out of Saudi Arabia does not belong to the
RSAF. In the event reimbursement is made pursuant to this
paragraph such property shall become RSAF property. For purposes
of this paragraph, reimbursement shall be limited to those costs
incurred, including applicable overhead and G & A expense, but
excluding profit.
(B) The Contractor shall be reimbursed at replacement value, for loss,
or damage to property owned by the Contractor or its employees and
located in Saudi Arabia where such loss or damage is sustained due
to, or arising out of, acts of war, armed conflict, insurrection,
riots, civil strife, confiscation, nationalization, or deprivation
of dominion and control by the Saudi Arabian Government.
(C) The Contractor shall identify to the PCO and clearly mark as
appropriate all Contractor/Subcontractor-owned property which is
brought into Saudi Arabia for use in performance of this contract,
title to which shall remain with the Contractor/Subcontractor.
Identification as it relates to the aforementioned excludes
personal property belonging to employees of the Contractor or its
Subcontractor(s). The Contractor and/or its Subcontractor(s) will
maintain an inventory of personal property brought in and/or
bought in Saudi Arabia in accordance with Contractor procedures.
(D) The Contractor/Subcontractor shall maintain an inventory control
and accounting system adequate to record the usage and disposition
of all Contractor/Subcontractor-owned property (excludes personal
property belonging to employees) which has entered Saudi Arabia
duty-free under this contract.
H-912. EXCHANGE, IMPORTATION OR EXPORTATION OF CURRENCY
------------------------------------------------
The Contractor/Subcontractor and their employees shall respect the
laws and regulations of Saudi Arabia regarding the exchange
importation and exportation of currency. However, the Government of
Saudi Arabia shall allow:
(A) The Contractor and his personnel and their dependents to freely
exchange dollars for riyals and riyals for dollars, during the
period of this contract, at the prevailing rate of exchange;
(B) Contractor personnel and their dependents to freely import and
export dollars for their personal use.
<PAGE> 26
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-913. SPECIAL PROVISIONS RELATIVE TO WAR, ARMED CONFLICT, INSURRECTION, CIVIL
-----------------------------------------------------------------------
OR MILITARY STRIFE OR SIMILAR CONDITIONS
----------------------------------------
(A) In the event the competent authority of the United States Government
determines that, due to war, armed conflict, insurrection, civil or
military strife, or similar condition, the safety of Contractor
personnel is threatened, any additional costs incurred by the
Contractor to retain such personnel in Saudi Arabia or to return
such personnel and their dependents to the United States and secure
replacements as applicable, shall be reimbursed to the Contractor
at a price to be negotiated. Whether to retain or replace such
personnel under the foregoing circumstances shall be within the
sole discretion of the United States Government.
(B) Notwithstanding the above, the activities and responsibilities of
the Contractor under this Peace Shield Program may be suspended at
any time by the PCO or designee upon determination by the Head of
the United States Diplomatic Mission to Saudi Arabia, that due to
war, armed conflict, insurrection, military or civil unrest or any
other condition, the best interest of the United States so require.
Any special or additional costs resulting from such suspension shall
be subject to an equitable adjustment under the "Changes" clause.
(C) Under no circumstances will Contractor personnel participate nor be
required to participate in armed conflict or immediate preparations
therefor.
H-914. WAR RISK INSURANCE PAYMENTS
---------------------------
Premium Payments for War Risk Insurance will be reimbursed to the
Contractor at cost incurred excluding profit. For purposes of this
paragraph, reimbursement shall be limited to those costs incurred,
including applicable overhead and G & A expense, but excluding profit.
H-915. CLASSIFIED INFORMATION OF THE SAUDI ARABIAN GOVERNMENT
------------------------------------------------------
The Contractor and Subcontractor and their employees shall not divulge
to any foreign government or to any unauthorized person whatsoever, any
classified information of the Saudi Arabia Government or Agencies
thereof, which may become known during the performance of the Peace
Shield Program. For the purpose of this clause "Foreign Government" is
defined as any Government other than the Saudi Arabia Government or the
United States Government.
H-916. RADIO COMMUNICATION
-------------------
The Contractor and Subcontractor shall be permitted to operate a radio
communications system within Saudi Arabia for communication between
offices and job sites after appropriate approval and on frequencies to
be assigned by the Government of Saudi Arabia. Contractor will obtain
any required licenses.
H-917. ENGLISH LANGUAGE REQUIREMENT
----------------------------
All publications, technical data, and operating materials will be
furnished in the English language only.
H-918. WORKING ARRANGEMENTS (Applicable to Directed INCO Manning Only)
--------------------
(A) Work Week - The Contractor's normal work week shall be a minimum 40
hours. The normal workday in Riyadh is defined as a continuous
8-hour day shift plus a lunch period. Work schedules at all work
sites shall be adjusted to accommodate RSAF personnel during
Ramadan and Hadj each year.
(B) Contractor in-country personnel will observe a maximum of eight
holidays of Saudi Arabia during Ramadan and Hadj periods and also
1 January, 4 July, the fourth Thursday in November and 25 December.
When any of the foregoing U.S. holidays fall on a normal
non-workday, the holiday will be observed either on the preceding
or succeeding workday. The maximum of eight SAG holidays may be
exceeded if additional holidays are declared by the SAG. Payment
for holidays will be in accordance with Saudi Labor Laws and
contractor personnel policies (provided such policies are not in
conflict with Saudi Labor Laws). If the RSAF works on any holiday
the Contractor will also work, if directed, and holiday pay will
be reimbursed to the Contractor in accordance with Special
Provision H-902 and H-929 (A)(2) & (3)
<PAGE> 27
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-919. AIR TRAVEL/FREIGHT
------------------
Saudia Airlines will be used to transport all Contractor/Sub-contractor
personnel and Air Freight on routes served by Saudia whenever possible.
Every effort will be made to coincide or adjust travel and cargo
shipments with Saudia schedules. This applies to all personnel
directed/arranged travel and air freight into or departing the Kingdom
which is under the control of the Contractor or subcontractor. The
only exceptions to the above policy are instances of bona fide
emergency personnel travel when space on Saudia is not available.
H-920. MATERIAL PROCESSING DELAYS
--------------------------
It is understood that delays in processing material for this contract
may result in cost increases and significant delays to the entire
Program. In order to minimize such delays, the Saudi Arabian
Government shall take appropriate actions to expedite off loading from
ships and to expedite Customs clearance for all materials associated
with the Program. Unreasonable delays that result in an increased cost
or delay in schedule will be subject to an equitable adjustment to the
price or schedule, or both, provided evidence of the delay is furnished
and prompt written notification of the delay is given to the PCO.
H-921. PRE-CONTRACT COSTS
------------------
The Memorandum of Understanding between the U.S. Government and the
Contractor, dated 15 Dec 1982, concerning recognition of pre-contract
costs is hereby incorporated by reference and will become a part of
CLIN 0001AA for disbursement purposes.
H-922. AGENT'S FEES/COMMISSION CLAUSE
------------------------------
The Contractor certifies that the contract price (including any
subcontracts awarded hereunder) does not include any direct or indirect
costs of sales commissions agent fees for contractor sales
representatives for the solicitation or promotion or otherwise to
secure the conclusion of the sale of any of the supplies or services
called for by this contract to the Government of Saudi Arabia.
H-923. ASSOCIATE CONTRACTOR AGREEMENT
------------------------------
(A) The Contractor assumes the responsibilities for the PEACE SHIELD
Program Facilities as described in this contract. In performance of
those responsibilities the Contractor agrees to coordinate its
activities with the associate Contractor, the Boeing Aerospace Company,
to assure a timely exchange of data.
(B) The Contractor will freely exchange technical information and
data, including proprietary data, with each associate Contractor who
shall require such technical information and data in the performance of
their efforts. Associate Contractor requests for data may be submitted
to the contracting officer for review and approval at the option of the
Contractor. At Government conducted meetings, the contractor shall
provide appropriate PEACE SHIELD Program technical information as a
participant in such meetings in conjunction with Government personnel
and other associate Contractors. In the event of a disagreement as to
what constitutes an exchange of information the matter shall be brought
to the attention of the appropriate Contracting Officer for resolution.
(C) The Contractor shall execute a written associate Contractor
agreement with the Boeing Aerospace Company. Copies of the agreement
and all amendments thereto shall be provided to the Contracting Officer.
H-924. SHIPPING DELAYS (APPLICABLE CLIN 0005)
--------------------------------------
Since shipping delays may result in significant delays to this Program,
the Contractor shall make every reasonable effort to expedite the
delivery of materials and equipment to the site. To this end, the
Contractor shall employ the most expeditious means of transporting such
materials and equipment, exclusive of premium transportation. Air
shipments or premium transportation costs require prior written
approval of the PCO.
H-925. DESIGN, EXCAVATION & CONSTRUCTION SUB-CONTRACTORS
-------------------------------------------------
(A) The Contractor shall obtain Design, Geotechnical, Topographic
Survey, Construction Materials and Equipment, Excavation &
Construction service by awarding firm-fixed price Sub-Contracts.
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
(B) The Subcontractor(s) shall not be Parent Companies (or affiliates
or subsidiaries thereof) of the Joint Venture nor subsidiaries or
affiliates of the Joint Venture Organization. Further, the
excavation and the construction sub-contract awards will not be
made to the subcontractors (or their parent companies,
subsidiaries or affiliates) who designed the SCC/SOC's, other
facilities, excavations, site adaptations or internal
modifications.
(C) The Contractor shall flow required FAR clauses down in
Subcontracts. In addition the Substance of the Firm Fixed Priced
Construction clauses (as identified in Seciton I paragraphs G & K
of this contract) will be included in construction sub-contracts
awarded after the date of this modification. Subcontracts awarded
prior to this modification shall remain under the DAR.
(D) Contractor shall include an appropriate Liquidated Damages, clause
in construction subcontracts (CLINs 0003, 0004, and 0005) to
assure compliance with delivery requirements. Liquidated Damages
collected or withheld will be identified on invoices submitted to
the Government under the Cost Reimbursement invoicing provisions
of CLINs 0003, 0004, and 0005 as a reduction to the invoice amount.
H-926. OPTIONS FOR ADDITIONAL SERVICES AND FACILITIES
----------------------------------------------
(A) The Contractor grants to the Government an options to purchase the
following:
CLIN 0001AB, Central Maintenance Facility (CMF) Final Design
Mangement Services.
CLIN 0001AC, Central Maintenance Facility Construction Management
Services 70 months after award date of Letter Contract.
CLIN 0001AD, Base Operations Center (BOC) concept design
Management Services.
CLIN 0001AE, Base Operations Center (BOC) final design for BOC at
Jeddah AB.
CLIN 0001AF, Provide Management Services to accomplish
Construction Management at Jeddah AB.
CLIN 0001AG, Provide Management Services to accomplish final
design and Logistics Service of FF & E.
CLIN 0002AH, CMF Final Design 70 months after award date of Letter
Contract.
CLIN 0002AJ, BOC, Jeddah Final Design 70 months after award date
of Letter Contract.
CLIN 0002AN, Provide Concept Design for Base Operations Center
(BOC), Jeddah 70 months after award date of Letter Contract.
CLIN 0004AN, Construct BOC at Jeddah 70 months after award date of
Letter Contract.
CLIN 0004AP, CMF Construciton 70 months after award date of Letter
Contract.
CLIN 0009, Phase OUT/DEMOB, Option to be exercised 60 days prior
to Acheivement of substantial completion of each facility.
(B) Upon request of the Contracting Officer, the Contractor shall
submit a proposal for the purpose of negotiating an equitable
adjustment to the contract terms affected. In the event an
equitable adjustment is not negotiated the Contractor hereby
agrees that his Proposal for Fixed Price CLINs may be used as a
Not-to-Exceed price in a Government unpriced notice to proceed.
In the event the contractor has not been notified by the
Contracting Officer sixty days prior to times specified above, a
request will be submitted to the Contracting Officer for a revised
estimated option exercise date (if any).
<PAGE> 29
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
(C) The Contractor grants to the government the right to purchase
construction of the following facilities. Contractor shall
proceed with all preparatory work to point of printing of tender
documents. Scheduled award dates and latest date for exercise of
the option is as shown below for each facility.
SCHEDULED
CLIN DESCRIPTION OPTION DATE AWARD DATE
---- ----------- ----------- ----------
0004BE Construct LRR (N-4) 88 JUL 19 88 NOV 15
0004BF Construct LRR (N-17) 88 MAY 16 88 SEP 15
Contractor shall not incur any cost under these CLINS without
authorization of the PCO.
H-927. RESERVED
--------
H-928. WORKMANS COMPENSATION INSURANCE PAYMENTS
----------------------------------------
The Contractor shall be reimbursed for all costs incurred for Workmen's
Compensation Insurance Overseas required by FAR clause 52.228-3. For
purposes of this paragraph, reimbursement shall be limited to those
costs incurred, including applicable overhead and G & A expense, but
excluding profit.
H-929. DIRECTED MANNING
----------------
(A) It is agreed and understood that the full-time position manning
for functions set forth below will be as follows:
(1) Contractor's staff at Wright-Patterson Air Force Base, Ohio:
(a) One (1) Secretary thru month 77.5
(b) One (1) Graphics Technician thru month 77.5
(c) One (1) Senior Management Person thru month 77.5
(d) One (1) Accounting Analyst/Accounting Technician thru
month 77.5
(2) Personnel required in Saudi Arabia to support Inspection
Contractor and USAF Staff at Riyadh:
(a) One (1) Graphics Technician thru month 77.5
(b) One (1) Lead Driver thru month 77.5
(c) One (1) Driver thru month 77.5
(d) Two (2) Drivers thru month 71
(e) Two (2) Drivers thru month 65
(3) Personnel required in Saudi Arabia to support RSAF Staff at
Riyadh:
One (1) Secretary thru month 77.5
(B) The above months refer to months after Award Date of the Letter
Contract.
H-930. GOVERNMENT FURNISHED PROPERTY:
------------------------------
Property and/or Equipment acquired by the Contractor for use under
Contract F41608-80-C-A510 for Program Management Assistance Services
(PMAS) shall, upon completion thereof be transferred to, and become
accountable under this contract in accordance with Government Furnished
Property clause of this contract.
<PAGE> 30
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-931. CHANGES (Applicable to CLINS 0002AH, 0002AJ, 0002AM, 0002AN, 0002AR,
-------
0003, 0004, 0005, 0006, 0007 and 0012).
(A) The Contractor shall be responsible for recognizing the necessity
of change requirements resulting from field conditions, technical
and engineering considerations, construction problems encountered,
availability of materials or equipment, and other factors
affecting the execution of the work under the terms of this
contract. The Contractor shall evaluate all such situations and
subject to the limitations and obligations of paragraph's B & C
below initiate and complete the actions necessary to resolve the
problem.
(B) The Contractor is authorized to process any individual change (on
CLINS 0002AH, 0002AJ, 0002AM, 0002AN, 0002AR, 0003, 0004, 0005,
0006, 0007 and 0012 only) up to $25,000.00 per action. The
Contractor will invoice for these changes under the Cost
reimbursement provision as applicable under CLINS 0002AH, 0002AJ,
0002AM, 0002AN, 0002AR, 0003, 0004, 0005, 0006, 0007 and 0012.
Each change initiated by the contractor pursuant to the authority
bestowed herein shall be fully documented and supported to extent
and in the manner specified in the Provision herein entitled
"Subcontracts". Copy of each action will be provided the ACO,
PCO, and on-site USAF Resident Engineer. The foregoing authority
does not include the following:
(1) Modifications or changes to the Terms, Conditions and/or
Requirements of the prime contract existing between the
Contractor and the Government.
(2) Actions which are out of scope (regardless of monetary
amount).
(3) Actions which would affect final completion schedule as
reflected in Section F paragraph F-900 of this contract.
(4) Actions which affect the functional characteristics of the
facility and which would result in non-compliance with Design
Criteria or intended use.
(5) RSAF Requested Change.
(C) The Contractor will maintain an accounting record in the Project
Accounting System for each change.
H-932. SAUDI ARABIAN SUPPORT
---------------------
The Saudi Arabian Government will at no cost to the Contractor or
Sub-contractor:
(A) Provide appropriate Contractor personnel access to all Peace
Shield locations as required during performance of duties.
(B) Provide use of SAG medical facilities for USG and Contractor
personnel when a medical emergency arises and transportation to
another facility would be impractical.
H-933. RIGHTS OF ENTRY
---------------
The Saudi Arabian Government shall allow the Contractor and all its
Subcontractors all rights of entry to Construction Sites. These areas
will be used by the Contractor only for work required under the terms
of this contract. Contractor shall avoid any destruction or damage to
these areas except that resulting from normal usage, unless approved by
the ACO.
H-934. GOVERNMENT PROPERTY INVENTORY LISTING
The Equipment List entitled "Government Property Inventory Listing",
dated 1988 Jan 19, is incorporated by reference. Copies may be
requested from SA-ALC/PMR.
<PAGE> 31
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-935. NEW MATERIAL:
-------------
Notwithstanding Contract Clauses entitled "New Material" and "Used or
Reconditioned Material, Residual Inventory, and Former Government
Surplus Property," hereof, the following shall apply:
(a) Use of Surplus Material is not authorized.
(b) Related material shall be new and manufactured of material
traceable to the original manufacturing source to definitely
confirm that it complies with all requirements of the Contract.
Material shall not be surplus property or reworked, replated,
refinished or used material of any kind.
H-396. SAFETY PRECAUTIONS FOR AMMUNITION AND EXPLOSIVES (1970 SEP):
------------------------------------------------------------
The Safety Requirements of AF FAR SUP 52.228-7007 and DOD 4145.26M "DOD
Contractor's Safety Manual for Ammunition, Explosives, and Related
Dangerous Material" is applicable and will be included in all
construction subcontracts which contemplate the use of explosives
(blasting requirements) in the performance of the constructions. The
above clause will be administered in such a manner as to assure safety
without unnecessary application of the requirements of manual to
contractor operations. Insofar as the requirements of the manual
conflict with Saudi Arabian Government regulations on the use of
explosives, the Saudi Arabian Government regulations shall prevail. All
other requirements of the clause relating to reports, withdrawal of
USG personnel from unsafe areas, etc shall remain in effect.
H-937. INSPECTION CONTRACTOR
---------------------
(A) The services of a separate Contractor (hereafter known as the
"Inspection and Engineering Services Contractor" (I&ES) will be
utilized to assist the Government in the performance of its duties
under this contract. The Contractor shall provide access to
records, reports, test results, pertaining to construction to
include, but not limited to:
1. Daily Logs
2. Quality Control Logs
3. Safety Plans
4. Schedules
5. Subcontractors
6. Results of Materials Testing
7. Working Drawings
8. Changes/Change Orders - Documentation/Impact Analyis
(B) The Government or its designee (I&ES) shall conduct its
examinations of above items or conduct tests so as not to interfere
with or delay the work of the Contractor. The I&ES is not
authorized to direct, modify, alter or change the work of the
Contractor or his subcontractors.
(C) The I&ES shall not have access to any data considered proprietary
to the Contractor or his subcontractors.
(D) The I&ES (including parent and subsidiary companies) shall not be
permitted to become a design subcontractor to the Prime Contractor
or his subcontractors.
H-938. APO SERVICE:
------------
(A) U.S. citizen personnel of the Contractor are authorized APO
service in Saudi Arabia to the extent that such services are
available and subject to all published directives and regulations
issued by the postal unit(s) providing such service. APO service
for the Contractor encompasses the following:
(1) Contractor Personnel are authorized full service first class
mail up to 12 ounces per piece.
(2) Video Tapes are prohibited when addressed to Box "R"
regardless of weight.
(3) The term Box "R" is a mandatory part of the Address and
Return Address.
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
(B) The Contractor shall ensure that his personnel:
(1) Comply with the USG and APO postal regulations.
(2) Do not utilize the postal service to import or export from
Saudi Arabia any material prohibited by the United States
Military Training Mission (USMTM) regulations or directives
or Host-Nation customs and laws.
(3) Utilize the service for only personal purposes and not for
and business unconnected with the stated purpose of the
contract itself. Service will not be used for importation of
items or raw materials destined for resale and individuals
will not act as an agent for persons or organizations not
authorized to use the service. It is further understood and
agreed that, if in the opinion of the Contracting Officer,
any of the personnel of the Contractor violate the
restrictions stated above, employee or employees shall have
their APO privileges revoked and, if so determined by the
Contracting Officer, be dismissed from any employment
connected with the Contract.
H-939. MEDICAL EVACUATION
------------------
In the event hospitalization of the contractors personnel or their
dependents is required outside Saudi Arabia, the contractor shall be
reimbursed for airline transportation costs for the medical evacuation
of the patient (and one adult if the patient is a dependent).
Reimbursement will be contingent upon certification from competent
medical authority that (i) medical evacuation was required and (ii)
justification for destination. For purposes of this paragraph,
reimbursement shall be limited to those costs incurred, including
applicable overhead and G & A expense, but excluding profit.
H-940. U.S. DOLLARS TO SAUDI RIYALS (APPLICABLE TO CLIN 0001 ONLY)
------------------------------------------------------------
The financial procedures in this program are based on the principle
that neither the United States Government nor any of its foreign
contractor or subcontractors, shall realize financial benefit or incur
financial loss by reason of fluctuation in the official rate of
currency exchange or currency reevaluation. For the purpose of this
program, a currency reevaluation is a change in the official rate of
exchange between the US Dollar and the Saudi Riyal which occurs as a
direct result of sovereign decree and which affects the USG or any of
its contractors or subcontractors in connection with any expenditure in
Saudi Riyals associated with this program. If a currency reevaluation
or a fluctuation in the exchange rate results in a financial gain or
loss to the contractors, the contract price will be adjusted to
eliminate such gain or loss. Such adjustment in contract price shall be
subject to normal price negotiation between the PCO and the contractor.
Adjustments will be made in accordance with the following procedure:
(a) Price impact resulting from changes in the real value of U.S.
Dollars to Saudi Riyals after 1988 MAR 01 will be recognized.
-----------
(b) The total price set forth in the contract is subject to both
increases and decreases as a result of fluctuations in the
monetary exchange rate between the United States and the Saudi
Arabian Riyal. The basis for measurement of these changes is set
forth below.
(c) The total price of this contract is based on an exchange rate of
3.75 SR per U.S. Dollar.
----
(d) The actual USD/SR exchange rate used will be the rate reflected
on bank exchange receipts received at Riyadh as of the 15th of each
month (or nearest date thereto) averaged for the three months in the
quarter.
(e) The exchange rate adjustment amount will be determined at the end
of each quarter by the following procedure:
(1) For each appropriate quarter, the Contractor and the PCO will
determine the average quarterly actual value of the exchange rate
as specified in para. (d) above.
(2) The average quarterly actual value of the exchange rate will
be divided into the Saudi Riyal expenditures for the appropriate
quarter as listed in (g) below.
<PAGE> 33
PAGE 33 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
(3) The resultant adjusted expenditures in U.S. Dollars will be
reduced by the amount of U.S. Dollar expenditures for the same
quarter listed in (g) below.
(4) The resultant difference whether increase or decrease is the
base cost impact for changes in the monetary exchange rate for
the quarter.
(f) Example of Quarterly price adjustment:
Projected SR Expenditures Projected US
for quarter - Dollar Expenditures = COST IMPACT
------------------------- for quarter
Actual Quarterly Average
exchange rate
(g) Projected INCO expenditures:
Quarter Projected U.S. SR Amount Based
Ending Dollar Expenditures On 3.75 Rate
------- ------------------- ---------------
31 Mar 88 $ 2,293,333.00 8,600,000.00
30 Jun 88 $ 2,960,000.00 11,100,000.00
30 Sep 88 $ 3,200,000.00 12,000,000.00
31 Dec 88 $ 3,226,667.00 12,100,000.00
31 Mar 89 $ 3,093,333.00 11,600,000.00
30 Jun 89 $ 2,640,000.00 9,900,000.00
30 Sep 89 $ 2,240,000.00 8,400,000.00
31 Dec 89 $ 1,546,667.00 5,800,000.00
31 Mar 90 $ 1,146,667.00 4,300,000.00
30 Jun 90 $ 986,000.00 3,700,000.00
30 Sep 90 $ 613,333.00 2,300,000.00
31 Oct 90 $ 186,667.00 700,000.00
-------------- -------------
TOTALS $24,133,334.00 90,500,000.00SR
The above expenditures are only for the purpose of establishing
currency adjustments and are subject to adjustment for
subsequently negotiated changes.
(h) Upon determination of the quarterly adjustment as set forth in
para (e) above, the contractor shall submit an adjustment proposal to
the PCO within 60 days following the subject quarter and the PCO will
diligently pursue issuance of a contract modification within 30 days
of the receipt of the proposal incorporating the necessary changes
to the total contract price.
(i) The Government has the right to audit the contractor's
supporting detail for each quarterly adjustment proposal.
(j) Failure to agree on a negotiated amount shall be considered a
dispute within the meaning of the "Disputes" clause of this
contract.
H-941. CONTINGENT FACTOR (Saudi Arabian Sovereign Acts)
------------------------------------------------
Saudi Arabian laws enacted after effective date of Letter
Contract F41608-84-C-A100 will be reviewed for contractual and
financial impact. Any impact will be subject to normal price
negotiations between the United States Government and the Contractor.
Adjustments will be limited to actual costs excluding profit. For
purposes of this paragraph, reimbursement shall be limited to those
costs incurred, including applicable overhead and G & A expense, but
excluding profit.
H-942. CONSTRUCTION COMPLETION SCHEDULES (INCLUDES EXCAVATION)
-------------------------------------------------------
Notwithstanding the language in DFARS 52.236-7015 as pertains to the
"Guarantees or Correctness" of the completion schedules, it is
expressly understood that completion schedules reflected in Section F,
Paragraph F-900 of the contract are binding on the Contractor.
<PAGE> 34
PAGE 34 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-943. CONSTRUCTION WARRANTY (Includes Real Property Installed
-------------------------------------------------------
Electrical/Mechanical Equipment Warranty)
-----------------------------------------
(A) All buildings and equipment (RPIE) including utility lines,
roadways, fencing, paved areas, etc., constructed under this
contract will be warranted for one (1) year. Real Property
Installed Equipment (RPIE) - electrical motors, air conditioning
units, etc.) will be warranted for one (1) year or in accordance
with manufacturers warranties whichever is longer.
(B) The warranty period will commence upon final acceptance of the
facility by the Administrative Contracting Officer (ACO).
(C) Warranties for equipment which exceed the one (1) year
administered by the Contractor will be passed to and administered by
the ACO. In the event that less than one (1) year remains between
ACO acceptance of one or more facilities and the contract end date,
the Contractor shall include the cost of Warrantee Administration
for that portion of the Warrantee that extends beyond the contract
end date for each facility in the cost for CLIN 0009 contract
Phaseout/Demobilization. The USAF reserves the right to assume full
responsibility for Warrantee Administration after the contract
completion at it's sole Option thereby releasing the Joint Venture
from responsibility for Warrantee Administration after the then
existing contract end date.
(D) In the event it becomes necessary to exercise the provisions of
the Construction Warranty Clause and the construction subcontractor
does not rectify the deficiency, the Contractor shall take the
necessary action to correct the deficiency utilizing those funds
provided under Special Provision Clause H-906 of the Contract.
H-944. PROGRAM COORDINATION
--------------------
a. Program Reviews. The Contractor shall provide a representative to
attend and participate in monthly USAF Program Reviews at designated
U.S. location (estimated: Houston (1/2), and WPAFB (1/2).
b. Interface Control Working Group. The Contractor shall participate
with other Peace Shield Contractors in quarterly Interface Control
Working Group (ICWG) meetings held at the ESD's System Contractor's
Office (Distance not to exceed Houston to Seattle). ICWG meetings
will begin in CY 1987. The purpose of these meetings is to develop,
control, and coordinate changes to maintain compatibility and
interoperability of all components of the Pease Shield Program.
Contractor attendance shall be by request of the Contracting Officer or
AFLC/DER. Incident to Contractor participation, the Contractor shall
disclose to the USAF and other Peace Shield Contractors information
and data requested during the meeting which are relevant and necessary
to insure a complete and successful program integration effort. All
information and data disclosed shall be in writing.
c. Government Representatives attending ICWG meetings do not have the
authority to direct or control the contractor in any manner which will
result in a change to the SOW and Terms and Conditions of this contract.
In the event the contractor considers any action during these meetings
to constitute a change to this contract, the contractor shall notify the
Contracting Officer and AFLC/DER in accordance with the Terms and
Conditions of this Contract.
H-945. ASSIGNMENT
----------
(a) The Joint Venture may, at its discretion, elect to assign to the
Facility Construction Contractors all or any part of the work relating
to and associated with the planning, scheduling, coordination, and
accomplishment of the installation, check-out and operability of
certain items of long lead and standardized equipment at SCC/SOC and
LRR sites.
(b) It is understood that should the Contractor elect to exercise any
such assignment, the terms thereof shall specify that the Equipment
manufacturers and the Facility Construction Contractors subject to such
assignment shall accomplish the work required to complete the facilities
for delivery to the Government pursuant and subject to all applicable
terms and conditions of this contract.
<PAGE> 35
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
(c) Notwithstanding any such assignment, the Joint Venture shall
remain fully and solely responsible in accordance with the terms and
conditions of this contract for all obligations and liabilities of the
seller with respect to total contract performance, and the Government
shall continue to deal with and look to the Joint Venture exclusively.
It is understood and agreed between the parties hereto that the
assignments contemplated hereby shall be limited to only that part of
the work associated with installation and integration of selected items
of equipment into the respective facilities and the Joint Venture shall
be responsible for acquisition storage and issue of the equipment to
the Facility Construction Contractor(s). It is further understood and
agreed that any assignments executed by the Joint Venture under this
contract shall not create any new rights or obligations not already the
subject of this contract, nor create any entitlements to increases in
the contract price solely as a result thereof.
H-946. RESERVATION OF RIGHTS - COST ACCOUNTING STANDARDS:
The parties hereto agree that with respect to the Metcalf & Eddy
costs comprising a part of the total Joint Venture proposal, in the
establishment of prices hereunder, the negotiations did not address any
alleged contract "potential noncompliance" or "actual noncompliance"
with cost accounting standards.
The parties reserve the right to any and all adjustments to the
contract prices established hereunder as contemplated by the General
Provisions clause of this Contract entitled "Cost Accounting Standards"
and the parties acknowledge this reservation of rights and that the
prices contained in this contract were not established in such manner
as to encompass such adjustments for, or negate any effect on any
noncompliance.
H-947. CHANGE ORDER RESERVE
--------------------
The Estimated Cost for each Line Item in CLINS 0003, 0004 and 0005
contains additional amount to cover Change Orders for work under those
CLINs regardless of the source of the change. In the event the
Estimated Cost is exceeded, the Government may increase the Estimated
Cost as provided for in the applicable Changes Clause. In the event of
such an increase in the Estimated Cost, the Contractor shall not be
entitled to an increase in the Fixed Fee regardless of the cause for
the increase in the Estimated Costs.
H-948. CHANGE ORDER TIME RESERVE
-------------------------
The Completion Dates contained in Schedule F contain additional
time which shall be available to both the Contractor and the Government
on an equal basis to cover change orders for CLINS 0003 AND 0004. This
Change Order Time Reserve shall be used as required to extend the
Subcontractor Period of Performance. Utilization of the Change Order
Time Reserve shall be subject to the review of the Contracting Officer.
When available Change Order Time Reserve is consumed, the Government
shall, when justified by the circumstances, extend the Completion Dates
in Schedule F under the provisions of the applicable Changes Clause. In
the event of such time extensions, the Contractor shall be entitled to
an equitable adjustment in time and/or cost of performance under CLINs
0001, 0002 and 0012 in accordance with the Changes Clause applicable to
those Contract Line Items.
H-949. AFFILIATION
(a) Business concerns are affiliates of each other when either
directly or indirectly one concern controls or has the power to control
the other, or a third party controls or has the power to control both.
(b) Each offeror shall submit with his offer an affidavit containing
information as follows:
(1) whether the offeror has any affiliates,
(2) the names and addresses of all persons and concerns exercising
control or ownership of the offeror, its subsidiaries and any or
all of his affiliates, and whether as common officers, directors,
stockholders holding controlling interest, or otherwise.
(c) The information required in (b) above shall be kept current
throughout the life of any resulting contract by submitting revised
affidavits as necessary to the Contracting Officer within 30 days of
any change.
<PAGE> 36
PAGE 36 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
H-950. PEACE SUN/PEACE HAWK CLOSE-OUT
A. The Contractor shall accomplish Peace Sun/Peace Hawk clean-up
tasks as defined in Appendix "C".
B. The Contractor shall travel to Saudi Arabia to conduct an on-site
evaluation of existing conditions and develop a preliminary design
that responds to each requirement. The Contractor shall employ a
qualified Subcontractor to develop the required designs. The USAF
will provide record drawings for those portions of each facility
affected by this requirement. The USAF will arrange for the
Contractor's team to visit each facility or project site for a
period up to three days per facility within a two week period.
C. Upon USAF on-site approval of preliminary designs in Saudi Arabia,
the Contractor shall develop final designs, construction cost
estimate and schedules, which shall be submitted to the PCO
within 15 working days of the Contractor Team's return from
Saudi Arabia.
D. Upon completion of the final designs, the USAF shall review and
approve the final designs. Upon approval, the Contractor shall
proceed with the construction in accordance with the approved
designs.
E. The cost of work performed under this clause shall be covered
as follows:
TASK CLIN
---------------------------- ------
All JV cost to include 0012AB
Incountry and CONUS trips,
preliminary and final design
reviews, cost estimate and
schedule development
Subcontractor Incountry 0004BM
and CONUS trips, preliminary
and final design, fabrication,
installation and construction
subcontracts
F. The Contractor's liability for design work under this clause shall
be limited to ensuring that all design is accomplished to satisfy
Appendix "C" in accordance with FAR 52.236-23, Responsibility of
the Architect-Engineer Contractor (Apr 84). The Contractor's
liability for construction work under this clause shall be limited
to accomplishing the construction in conformance with approved
designs. No further liability is expressed or implied.
G. Other Warranty, design and constructions provisions of this
Contract and the Peace Shield Statement of Work shall not apply
to the work covered by this clause.
H-951. OVER AND ABOVE REIMBURSEMENT
----------------------------
(A) This provision is established to provide USAF/3DI support during
the construction of the Peace Shield Program that is not already
provided for under CLIN 0001 of the contract.
(B) Authorization for purchase shall be provided in writing by the
PCO or ACO.
(C) The Contractor shall be reimbursed under CLIN 0008AN for actual
costs incurred.
H-952. USE OF OUTSIDE COUNSEL
Due to the uncertainties in predicting the need for legal services,
the Contractor will be reimbursed for the actual cost of outside
counsel without profit under CLIN 0008AQ. Outside counsel will be
utilized to handle all legal matters arising in Saudi Arabia. In
addition, outside counsel will be employed to handle claims, disputes
and other matters arising out of purchase orders or Subcontractors
administered by the Contractor regardless of location of the work
or the subcontractor's home office. Legal fees associated with
personnel related claims arising in Saudi Arabia which result in
the use of outside counsel for defense shall be reimbursed. The
Contractor shall exercise normal care to avoid unnecessary legal
expense. The Contractor shall immediately advise the PCO of any
incident or activity which could result in the incurrence of
outside legal fees in excess of $25,000.00.
<PAGE> 37
PAGE 37 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
PART II - CONTRACT CLAUSES
SECTION I
CONTRACT CLAUSES
FAR 52.252-2 CLAUSES INCORPORATED BY REFERENCE APR 1984
This contract incorporates the following clauses by reference, with
the same force and effect as if they were given in full text. Upon
request, the Contracting Officer will make their full text available.
I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSES
NO FAR PARA CLAUSE TITLE DATE
A. THE FOLLOWING CLAUSES ARE APPLICABLE TO ALL CLINS IN THIS CONTRACT:
I-11. 52.202-1 DEFINITIONS APR 1984
I-18. 52.203-1 OFFICIALS NOT TO BENEFIT APR 1984
I-19. 52.203-3 GRATUITIES APR 1984
I-20. 52.203-5 COVENANT AGAINST CONTINGENT FEES APR 1984
I-21. 52.203-6 RESTRICTIONS ON SUBCONTRACTOR SALES TO THE JUL 1985
GOVERNMENT
I-22. 52.203-7 ANTI-KICKBACK PROCEDURES FEB 1987
I-26. 52.204-1 APPROVAL OF CONTRACT APR 1984
(This clause is applicable at various dollar
levels for specific activities. If this contract
requires approval at a level above the
Contracting Officer in accordance with agency
procedures, such approval will be shown on
the cover page of the contract at the time of
contract issuance.)
I-27. 52.204-2 SECURITY REQUIREMENTS APR 1984
I-102. 52.212-8 DEFENSE PRIORITY AND ALLOCATION REQUIREMENTS MAY 1986
I-127. 52.215-1 EXAMINATION OF RECORDS BY COMPTROLLER GENERAL APR 1984
I-128. 52.215-2 AUDIT-NEGOTIATION APR 1984
I-133. 52.215-22 PRICE REDUCTION FOR DEFECTIVE COST OR PRICING APR 1984
DATA
I-135. 52.215-24 SUBCONTRACTOR COST OR PRICING DATA APR 1985
(Applicable to any negotiated order over $100,000,
when cost or pricing data is required)
I-141. 52.215-30 FACILITIES CAPITAL COST OF MONEY APR 1984
I-144. 52.215-33 ORDER OF PRECEDENCE JAN 1986
+I-214. 52.219-8 UTILIZATION OF SMALL BUSINESS CONCERNS AND JUN 1985
SMALL DISADVANTAGED BUSINESS CONCERNS
+I-215. 52.219-9 SMALL BUSINESS AND SMALL DISADVANTAGED APR 1984
BUSINESS SUBCONTRACTING PLAN
+I-220. 52.219-13 UTILIZATION OF WOMEN-OWNED SMALL BUSINESSES AUG 1986
+I-228. 52.220-3 UTILIZATION OF LABOR SURPLUS AREA CONCERNS APR 1984
+I-229. 52.220-4 LABOR SURPLUS AREA SUBCONTRACTING PROGRAM APR 1984
I-245. 52.222-1 NOTICE TO THE GOVERNMENT OF LABOR DISPUTES APR 1984
+I-247. 52.222-3 CONVICT LABOR APR 1984
+I-248. 52.222-4 CONTRACT WORK HOURS AND SAFETY STANDARDS ACT-- MAR 1986
OVERTIME COMPENSATION
++I-264. 52.222-26 EQUAL OPPORTUNITY APR 1984
+I-267. 52.222-28 EQUAL OPPORTUNITY PREAWARD CLEARANCE APR 1984
OF SUBCONTRACTS
I-268. 52.222-29 NOTIFICATION OF VISA DENIAL APR 1984
++I-274. 52.222-35 AFFIRMATIVE ACTION FOR SPECIAL DISABLED AND APR 1984
VIETNAM ERA VETERANS
++I-276. 52.222-36 AFFIRMATIVE ACTION FOR HANDICAPPED WORKERS APR 1984
+I-292. 52.223-2 CLEAN AIR AND WATER APR 1984
I-312. 52.225-11 CERTAIN COMMUNIST AREAS APR 1984
I-315. 52.227-1 AUTHORIZATION AND CONSENT APR 1984
I-317. 52.227-2 NOTICE AND ASSISTANCE REGARDING PATENT AND APR 1984
COPYRIGHT INFRINGEMENTS
<PAGE> 38
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CONTRACT NUMBER F41608-84-C-A100-PZ0050
<TABLE>
<S> <C> <C> <C>
I-335. 52.228-3 WORKERS' COMPENSATION INSURANCE (DEFENSE BASE ACT) APR 1984
(Applies to any employee when:
1. Hired in the United States by any Contractor
2. Resident of the United States
3. Citizen of the United States)
I-336. 52.228-4 WORKERS' COMPENSATION AND WAR-HAZARD INSURANCE APR 1984
OVERSEAS
I-364. 52.230-3 COST ACCOUNTING STANDARDS AUG 1986
I-365. 52.230-4 ADMINISTRATION OF COST ACCOUNTING STANDARDS APR 1984
I-403. 52.232-17 INTEREST APR 1984
I-409. 52.232-23 ASSIGNMENT OF CLAIMS JAN 1986
I-417. 52.233-1 DISPUTES APR 1984
I-418. 52.233-1 Alternate I APR 1984
I-419. 52.233-3 PROTEST AFTER AWARD JUN 1985
I-662. 52.247-63 PREFERENCE FOR U.S.-FLAG AIR CARRIERS APR 1984
(Applicable when use of Saudia Airline per H-919
is not practicable)
I-732. 52.252-4 ALTERATIONS IN CONTRACT APR 1984
Portions of this contract are altered as follows:
FAR Clause 52.243-1 is amended to extend the period
---------------------------------------------------
which any claim for adjustment must be asserted from
----------------------------------------------------
30 to 60 days (AF FAR SUP 52.243-1)
-----------------------------------
(IAW FAR 52.107(d))
I-733. 52.252-6 AUTHORIZED DEVIATIONS IN CLAUSES APR 1984
(a) The use in this solicitation or contract of any
Federal Acquisition Regulation (48 CFR Chapter 1)
clause with an authorized deviation is indicated
by the addition of "(DEVIATION)" after the date of
the clause.
(b) The use in this solicitation or contract of any
DOD Federal Acquisition Regulation Supplement (48 CFR
Chapter 2) clause with an authorized deviation is
indicated by the addition of "(DEVIATION)" after the
name of the regulation.
B. SERVICE FFP, FOR CLINS 0001 AND 0009
I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSES
N0 FAR PARA CLAUSE TITLE DATE
- - -I-306. 52.225-3 BUY AMERICAN ACT-SUPPLIES APR 1984
- - -I-309. 52.225-7 BALANCE OF PAYMENTS PROGRAM APR 1984
- - -I-353. 52.229-4 FEDERAL, STATE, AND LOCAL TAXES APR 1984
(NONCOMPETITIVE CONTRACT)
I-355. 52.229-6 TAXES--FOREIGN FIXED-PRICE CONTRACTS APR 1984
I-391. 52.232-8 DISCOUNTS FOR PROMPT PAYMENT JUL 1985
I-394. 52.232-11 EXTRAS APR 1984
- - -I-478. 52.237-2 PROTECTION OF GOVERNMENT BUILDINGS, EQUIPMENT, APR 1984
AND VEGETATION
I-546. 52.243-1 CHANGES--FIXED-PRICE APR 1984
I-568. 52.244-1 SUBCONTRACTS (FIXED-PRICE CONTRACTS) JAN 1986
I-573. 52.244-5 COMPETITION IN SUBCONTRACTING APR 1984
I-580. 52.245-2 GOVERNMENT PROPERTY (FIXED-RATE CONTRACTS) APR 1984
I-630. 52.246-25 LIMITATION OF LIABILITY--SERVICES APR 1984
I-684. 52.249-2 TERMINATION FOR CONVENIENCE OF THE GOVERNMENT APR 1984
(FIXED-PRICE)
C. ARCHITECT - ENGINEERING FFP & CPFF, FOR CLIN 0002
(CLIN 0012 AS APPLICABLE)
I-11. 52.202-1 DEFINITIONS APR 1984
I-12. 52.202-1 Alternate I APR 1984
I-27. 52.204-2 SECURITY REQUIREMENTS APR 1984
I-29. 52.204-2 Alternate II APR 1984
I-103. 52.212-12 SUSPENSION OF WORK APR 1984
I-353. 52.229-4 FEDERAL, STATE, AND LOCAL TAXES APR 1984
(NONCOMPETITIVE CONTRACT)w
I-355. 52.229-6 TAXES--FOREIGN FIXED-PRICE CONTRACTS APR 1984
I-391. 52.232-8 DISCOUNTS FOR PROMPT PAYMENT JUL 1985
</TABLE>
<PAGE> 39
PAGE 39 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
I-470. 52.236-23 RESPONSIBILITY OF THE ARCHITECT-ENGINEER APR 1984
CONTRACTOR
I-471. 52.236-24 WORK OVERSIGHT IN ARCHITECT-ENGINEER CONTRACTS APR 1984
*I-472. 52.236-25 REQUIREMENTS FOR REGISTRATION OF DESIGNERS APR 1984
*I-478. 52.237-2 PROTECTION OF GOVERNMENT BUILDINGS, EQUIPMENT, APR 1984
AND VEGETATION
I-546. 52.243-1 CHANGES--FIXED-PRICE APR 1984
I-549. 52.243-1 Alternate III APR 1984
1-572. 52.244-4 SUBCONTRACTORS AND OUTSIDE ASSOCIATES APR 1984
AND CONSULTANTS
I-698. 52.249-7 TERMINATION (FIXED-RATE ARCHITECT-ENGINEER) APR 1984
D. CONSTRUCTION CPFF FOR CLINS 0003, 0004, 002AH, 002AJ, 002AN, 002AM
AND OO2AR.
I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPER 1) CLAUSES
NO FAR PARA CLAUSE TITLE DATE
I-11. 52.202-1 DEFINITIONS APR 1984
I-12. 52.202-1 Alternate I APR 1984
I-27. 52.204-2 SECURITY REQUIREMENTS APR 1984
I-29. 52.204-2 Alternate II APR 1984
I-153. 52.216-7 ALLOWABLE COST AND PAYMENT APR 1984
I-156. 52.216-9 FIXED FEE-CONSTRUCTION APR 1984
I-293. 52.223-3 HAZARDOUS MATERIAL IDENTIFICATION AND MATERIAL APR 1984
SAFETY DATA
I-324C. 52.227-8 REPORTING OF ROYALTIES (FOREIGN) APR 1984
I-406. 52.232-20 LIMITATION OF COST APR 1984
I-419. 52.233-3 PROTEST AFTER AWARD JUN 1985
I-420. 52.233-3 Alternate I JUN 1985
I-456. 52.236-13 ACCIDENT PREVENTION APR 1984
I-463. 52.236-18 WORK OVERSIGN IN COST-REIMBURSEMENT APR 1984
CONSTRUCTION CONTRACTS
I-464. 52.236-19 ORGANIZATION AND DIRECTION OF THE WORK APR 1984
I-465. 52.236-20 SPECIAL REQUIREMENTS APR 1984
I-466. 52.236-21 SPECIFICATIONS AND DRAWINGS FOR CONSTRUCTION APR 1984
I-529. 52.242-1 NOTICE OF INTENT TO DISALLOW COSTS APR 1984
I-552. 52.243-2 CHANGES--COSTS-REIMBURSEMENT APR 1984
I-555. 52.243-2 Alternate III APR 1984
I-561. 52.243-6 CHANGE ORDER ACCOUNTING APR 1984
I-562. 52.243-7 NOTICE OF CHANGES APR 1984
For the purposes of this clause the blank(s) are completed as follows:
(b) 30
--
(c) 30
--
I-570. 52.244-2 SUBCONTRACTS (COST-REIMBURSEMENT AND LETTER JUL 1985
CONTRACTS)
I-570C. 52.244-2 Alternate I APR 1985
I-573. 52.244-5 COMPETITION IN SUBCONTRACTING APR 1984
I-692. 52.249-6 TERMINATION (COST-REIMBURSEMENT) MAY 1986
I-693. 52.249-6 Alternate I APR 1984
I-710. 52.249-14 EXCUSABLE DELAYS APR 1984
E. SUPPLIES CPFF, FOR CLIN 0005
I-83. 52.210-5 NEW MATERIAL APR 1984
I-84. 52.210-7 USED OR RECONDITIONED MATERIAL, RESIDUAL APR 1984
INVENTORY, AND FORMER GOVERNMENT SURPLUS
PROPERTY
I-135. 52.215-24 SUBCONTRACTOR COST OR PRICING DATA APR 1985
I-153. 52.216-7 ALLOWABLE COST AND PAYMENT APR 1984
<PAGE> 40
PAGE 40 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
I-155. 52.216-8 FIXED FEE APR 1984
+I-263. 52.222-20 WALSH-HEALEY PUBLIC CONTRACTS ACT APR 1984
I-392. 52.232-9 LIMITATION ON WITHHOLDING OF PAYMENTS APR 1984
I-406. 52.232-20 LIMITATION OF COST APR 1984
I-419. 52.233-3 PROTEST AFTER AWARD JUN 1985
I-420. 52.233-3 Alternate I JUN 1985
I-529. 52.242-1 NOTICE OF INTENT TO DISALLOW COSTS APR 1984
I-552. 52.243-2 CHANGES--COST-REIMBURSEMENT APR 1984
I-555. 52.243-2 Alternate III APR 1984
I-570. 52.244-2 SUBCONTRACTS (COST-REIMBURSEMENT AND JUL 1985
LETTER CONTRACTS)
I-570C. 52.244-2 Alternate I APR 1985
I-573. 52.244-5 COMPETITION IN SUBCONTRACTING APR 1984
I-585. 52.245-5 GOVERNMENT PROPERTY (COST-REIMBURSEMENT, JAN 1986
TIME-AND-MATERIAL, OR LABOR-HOUR CONTRACTS)
I-636. 52.247-1 COMMERCIAL BILL OF LADING NOTATIONS APR 1984
I-692. 52.249-6 TERMINATION (COST-REIMBURSEMENT) MAY 1986
I-710. 52.249-14 EXCUSABLE DELAYS APR 1984
F. SERVICES CPFF, FOR CLINS 0006, 0007 AND 0012 (CLINS 0008 AS
APPLICABLE)
I-153. 52.216-7 ALLOWABLE COST AND PAYMENT APR 1984
I-246. 52.222-2 PAYMENT FOR OVERTIME PREMIUMS APR 1984
For the purposes of this clause the blank(s) are completed as follows:
$243,415.00
-----------
I-339. 52.228-7 INSURANCE--LIABILITY TO THIRD PERSONS APR 1984
I-406. 52.232-20 LIMITATION OF COST APR 1984
I-419. 52.233-3 PROTEST AFTER AWARD JUN 1985
I-420. 52.233-3 Alternate I JUN 1985
*I-478. 52.237-2 PROTECTION OF GOVERNMENT BUILDINGS, EQUIPMENT, APR 1984
AND VEGETATION
I-529. 52.242-1 NOTICE OF INTENT TO DISALLOW COSTS APR 1984
I-570. 52.244-2 SUBCONTRACTS (COST-REIMBURSEMENT AND LETTER JUL 1985
CONTRACTS)
I-570C. 52.244-2 Alternate I APR 1985
I-573. 52.244-5 COMPETITION IN SUBCONTRACTING APR 1984
I-630. 52.246-25 LIMITATION OF LIABILITY--SERVICES APR 1984
I-692. 52.249-6 TERMINATION (COST-REIMBURSEMENT) MAY 1986
I-710. 52.249-14 EXCUSABLE DELAYS APR 1984
G. THE SUBSTANCE OF FOLLOWING FAR CLAUSES WILL BE INCLUDED AS REQUIRED
IN THE FFP CONSTRUCTION SUBCONTRACT. (REFERENCE PARAGRAPHS E-18, F-20,
F-21, F-22, AND H-925(C) OF THIS CONTRACT):
I-100. 52.212-3 COMMENCEMENT, PROSECUTION, AND COMPLETION APR 1984
OF WORK
I-103. 52.212-12 SUSPENSION OF WORK APR 1984
I-312. 52.225-11 CERTAIN COMMUNIST AREAS APR 1984
I-446. 52.236-3 SITE INVESTIGATION AND CONDITIONS AFFECTING APR 1984
THE WORK APR 1984
I-447. 52.236-4 PHYSICAL DATA APR 1984
I-448. 52.236-5 MATERIAL AND WORKMANSHIP APR 1984
I-449. 52.236-6 SUPERINTENDENCE BY THE CONTRACTOR APR 1984
I-450. 52.236-7 PERMITS AND RESPONSIBILITIES APR 1984
I-451. 52.236-8 OTHER CONTRACTS APR 1984
*I-452. 52.236-9 PROTECTION OF EXISTING VEGETATION, APR 1984
STRUCTURES, EQUIPMENT, UTILITIES, AND
IMPROVEMENTS
*I-453. 52.236-10 OPERATIONS AND STORAGE AREAS APR 1984
I-454. 52.236-11 USE AND POSSESSION PRIOR TO COMPLETION APR 1984
I-455. 52.236-12 CLEANING UP APR 1984
I-456. 52.236-13 ACCIDENT PREVENTION APR 1984
I-466. 52.236-21 SPECIFICATIONS AND DRAWINGS FOR CONSTRUCTION APR 1984
I-467. 52.236-21 Alternate I APR 1984
I-568. 52.244-1 SUBCONTRACTS (FIXED-PRICE CONTRACTS) JAN 1986
I-624. 52.246-21 WARRANTY OF CONSTRUCTION APR 1984
<PAGE> 41
PAGE 41 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
II. DOD FEDERAL ACQUISITION REGULATION SUPPLEMENT (48 CFR CHAPTER 2)
CLAUSES
The following clauses are incorporated herein from the DOD FAR
Supplement by reference, with the same force and effect as if they
were given in full text. Upon request, the Contracting Officer will
make their full text available.
H. THE FOLLOWING CLAUSES ARE APPLICABLE TO ALL CLINS IN THIS
CONTRACT:
I-22. 52.203-7 ANTI-KICKBACK PROCEDURES FEB 1987
IA-23. 52.203-7002 STATUTORY COMPENSATION PROHIBITIONS APR 1987
AND REPORTING REQUIREMENTS RELATING
TO CERTAIN FROMER DOD EMPLOYEES
IA-152. 52.215-7000 AGGREGATE PRICING ADJUSTMENT APR 1985
IA-182. 52.217-7270 IDENTIFICATION OF SOURCES OF SUPPLY OCT 1985
*IA-298. 52.225-7017 LIMITATION ON SALES COMMISSIONS AND OCT 1980
FEES FOR FOREIGN GOVERNMENTS
For the purposes of this clause the blank(s) are completed as
follows:
SAUDI ARABIA
------------
IA-300. 52.225-7019 EXCLUSIONARY POLICIES AND PRACTICES OF JAN 1977
FOREIGN GOVERNMENTS
IA-332. 52.227-7013 RIGHTS IN TECHNICAL DATA AND COMPUTER MAY 1987
SOFTWARE
IA-338. 52.227-7018 RESTRICTIVE MARKINGS ON TECHNICAL DATA MAY 1987
IA-342. 52.227-7023 DRAWINGS AND OTHER DATA TO BECOME MAR 1979
PROPERTY OF GOVERNMENT
IA-346. 52.227.7029 IDENTIFICATION OF TECHNICAL DATA MAR 1975
IA-347. 52.227-7030 TECHNICAL DATA -- WITHHOLDING OF JUL 1976
PAYMENT
IA-348. 52.227-7031 DATA REQUIREMENTS APR 1972
IA-349. 52.227-7032 RIGHTS IN TECHNICAL DATA AND COMPUTER JUN 1975
SOFTWARE (FOREIGN)
IA-353. 52.227-7037 VALIDATION OF RESTRICTIVE MARKINGS ON MAY 1987
TECHNICAL DATA
IA-363. 52.228-7003 CAPTURE AND DETENTION JUN 1968
IA-399. 52.231-7000 SUPPLEMENTAL COST PRINCIPLES APR 1984
IA-425. 52.233-7000 CERTIFICATION OF REQUESTS FOR FEB 1980
ADJUSTMENT OR RELIEF EXCEEDING $100,000
IA-636. 52.242-7003 CERTIFICATION OF INDIRECT COSTS APR 1986
(a) The Contractor shall certify any proposal to
establish or modify billing rates or to establish
final indirect cost rates in the form set forth in
paragraph (b) of this clause. The certificate shall
be signed on behalf of the Contractor by an individual
of the Contractor's organization at a level no lower
than a vice president or chief financial officer of
the business segment of the Contractor that submits
the proposal. The Contractor understands that if the
Contractor fails to submit a certificate as required
herein, payments on account of indirect cost shall be
at rates unilaterally established by the Government.
(b) Certificate of Indirect Costs. The certificate of
indirect costs shall read as follows:
CERTIFICATE OF INDIRECT COSTS
This is to certify that to the best of my
knowledge and belief:
1. I have reviewed the indirect cost proposal
submitted herewith;
2. All costs included in this proposal
(identify, date) to establish billing or final
indirect cost rates for (identify period covered
by rate) are allowable in accordance with the
requirements of contracts to which they apply and
with the cost principles of the Department of
Defense applicable to those contracts;
3. This proposal does not include any costs
which are unallowable under applicable cost
principles of the Department of Defense, such as
(without limitation): advertising and public
relations costs, contributions and donations,
entertainment costs, fines and penalties,
lobbying costs, defense of fraud proceedings, and
good will; and
<PAGE> 42
PAGE 42 OF 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
4. All costs included in this proposal are properly allocable
to Defense contracts on the basis of a beneficial or causal
relationship between the expenses incurred and the contracts
to which they are allocated in accordance with applicable
acquisition regulations.
I declare under penalty of perjury that the foregoing is true
and correct.
Firm: _______________________________________________________
Signature: __________________________________________________
Name of Corporate Official: _________________________________
Title: ______________________________________________________
Date of Execution: __________________________________________
I. IN ADDITION TO THOSE CLAUSES LISTED IN PARAGRAPH A OF THIS PART, THE
FOLLOWING CLAUSES ARE APPLICABLE TO CLINS 0001/0002 AND 0009:
IA-410. 52.232-7000 INVOICES OCT 1982
IA-679. 52.246-7000 MATERIAL INSPECTION AND RECEIVING REPORT DEC 1969
J. IN ADDITION TO THOSE CLAUSES LISTED IN PARAGRAPH A OF THIS PART, THE
FOLLOWING CLAUSES ARE APPLICABLE TO CLINS 0003/0004:
IA-364. 52.228-7005 INSURANCE JAN 1965
IA-461. 52.236-7000 COMPOSITION OF CONTRACTOR JAN 1965
IA-474. 52.236-7011 AIRFIELD SAFETY PRECAUTIONS APR 1968
IA-478. 52.236-7015 ESTIMATED COST, PERFORMANCE PERIOD JAN 1965
IA-479. 52.236-7016 DIRECT PAYMENTS JAN 1965
K. IN ADDITION TO THOSE CLAUSES LISTED IN PARAGRAPH G OF THIS PART, THE
FOLLOWING ALSO APPLY:
IA-350. 52.227-7033 RIGHTS IN SHOP DRAWINGS APR 1966
IA-461. 52.236-7000 COMPOSITION OF CONTRACTOR JAN 1965
IA-462. 52.236-7001 MODIFICATION OF PROPOSALS - PRICE BREAKDOWN APR 1968
IA-468. 52.236-7007 IDENTIFICATION OF EMPLOYEES JAN 1965
IA-469. 52.236-7008 SUPERINTENDENCE OF SUBCONTRACTORS JAN 1965
IA-474. 52.236-7011 AIRFIELD SAFETY PRECAUTIONS APR 1968
LEGEND:
-------
* FOR THE PURPOSE OF THIS CONTRACT, ALL REFERENCES TO "GOVERNMENT"
SHALL BE DEEMED TO MEAN "SAUDI ARABIAN GOVERNMENT".
+ APPLICABLE ONLY TO WORK PERFORMED WITHIN CONTINENTAL UNITED STATES.
# WHERE THE CLAUSE INDICATES ACTION ON THE PART OF THE SAUDI ARABIAN
GOVERNMENT, THE WORDS "THROUGH THE PCO" ARE HEREBY ADDED.
- APPLICABLE ONLY TO SUPPLIES PURCHASED IN CONTINENTAL UNITED STATES.
++ NOT APPLICABLE TO WORK PERFORMED OUTSIDE THE UNITED STATES BY
EMPLOYEES WHO WERE NOT RECRUITED WITHIN THE UNITED STATES.
<PAGE> 43
Page 43 of 43
CONTRACT NUMBER F41608-84-C-A100-PZ0050
PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS
SECTION J
LIST OF ATTACHMENTS
(All listed attachments are at the end of this document)
<TABLE>
<CAPTION>
FORM NR TITLE DATE NR OF PAGES
- - ------- ----- ---- -----------
<S> <C> <C> <C>
Appendix "A" Statement of Work 88 FEB 25 44
Peace Shield
Program Services (PS)
Appendix "C" Statement of Work, Peace 87 OCT 08 3
Sun/Peace Hawk Close Out
DD Form 1423 Exhibit "A". Contract Data 88 JAN 22 11
Requirements List
List of approved computer 88 FEB 19 20
Hardware/Software
</TABLE>
<PAGE> 1
EXHIBIT 10.21
PAGE OF PAGES
1 OF 4
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE
U
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE
F41608-84-C-A100-P00128 22 SEP 93
4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (IF APPLICABLE)
N/A PEACE SHIELD
6. ISSUED BY CODE: FD2050
DEPARTMENT OF THE AIR FORCE
AIRCRAFT DIRECTORATE
SAN ANTONIO AIR LOGISTICS CENTER
485 QUENTIN ROOSEVELT RD
KELLY AFB, TEXAS 78241-6420
BUYER: B. Rowland/LAKFC/(210) 925-3091
7. ADMINISTERED BY (if other than Item 6) CODE: FD3515
DCMCI-GAR-AA
Deputy for Contract Administration (AFCMC)
LGS Unit 61305
APO AE 09803-1305
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
CRS/Sirrine + Metcalf & Eddy
(Joint Venture)
1177 West Loop South, 4th Floor FMS
Houston, TX 77027-9006
CEC: 00491077E
CODE: 9Z237 FACILITY CODE:
(X) 9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO.
X F41608-84-C-A100
10B. DATED (SEE ITERM 13)
84 May 16
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
[ ] The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ] is extended, [ ] is not
extended. Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following
methods: (a) By completing items 8 and 15, and returning ____ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy of the
offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
SEE BLOCK 14 BELOW
13. THIS ITEM APPLIES ONLY TO MODIFICATION OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF
FAR 43.103(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
X General Provision I-181 of Modification P00123, "Contract Definition"
(FAR 52.216-25, Apr 1984)
D. OTHER (Specify type of modification and authority)
E. IMPORTANT: Contractor ( ) is not, ( X ) is required to sign this document
and return 2 copies to the issuing office
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)
See Following Pages
Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or Print)
TRUITT B. GARRISON
Program Director
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED
/s/ TRUITT B. GARRISON 20 SEP. '93
----------------------------------------
(Signature of person authorized to sign)
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)
SAMMY J. YOUNG, MAJ, USAF
Contracting Officer, Aircraft Directorate
16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
/s/ SAMMY J. YOUNG, MAJ, USAF 22 SEP 93
----------------------------------------
(Signature of person authorized to sign)
NSN 7640-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE PRESCRIBED BY GSA
<PAGE> 2
MODIFICATION NO. F41608-84-C-A100-P00128 Page 2 of 4
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Cont'd)
a. This Supplemental Agreement is issued to definitize Modification
F41608-84-C-A100-P00123, dated 30 Mar 1993, which was for the upgrade and
maintenance of the pilot track for Long Range Radar (LRR) N-4 Site Access Road
Segment B.
b. As a result of negotiations, the following CLIN is hereby definitized
and represents the complete negotiated agreement between the parties.
CLIN DESCRIPTION AMOUNT
---- ----------- ------
0004 Upgrade and Maintenance Pilot Track $2,862,623
LRR N-4 Site Access Road - Segment B
ACRN: AE (Cost Plus Fixed Fee)
The Estimated Cost to the Government for this CLIN
is $2,732,814
The Fixed Fee for this CLIN is $129,809
NOTE: The USAF accepts and agrees to the interim subcontract milestones
negotiated by the contractor with the Long Range Radar (LRR) Site N-4 Facility
Construction Contractor (FCC) which were changed to include the upgrade and
maintenance of the LRR N-4 site access road, Segment B effort. In addition, the
USAF understands neither the substantial completion or the facility completion
milestone for the N-4 construction subcontract have been changed and the Joint
Occupancy dates have been adjusted to reflect the USAF requested dates.
Further, the Facility Completion Date (FCD) for LRR N-4 remains 30 Jun 96. The
USAF acknowledges the contractor's right under Special Provision H-948 to
request an extension to LRR N-4 FCD for the addition of the pilot track upgrade
and maintenance, N-4 site access road, segment B effort should the
circumstances warrant.
c. As a result of definitizing UCA P00123, obligated funds are increased
under subject modification as follows:
CLIN ACRN From Increase To
---- ---- ---- -------- --
0004 AE $1,537,296 $1,325,327 $2,862,623
d. The amounts set forth in the schedule for CLIN 0004 as of subject
Modification P00128 do not include the obligations made under Modification
P00123. Therefore, the CLIN 0004 amounts in the schedule are increased as
follows:
(1) The estimated Cost for CLIN 0004 is increased by $2,732,814 as
follows:
FROM: $696,146,905 TO: $698,879,719
(2) The Fixed Fee for CLIN 0004 is increased by $129,809 as follows:
FROM: $27,657,584 TO: $27,787,393
(3) The amount for CLIN 0004 is increased by $2,862,623 as follows:
FROM: $723,804,489 TO: $726,667,112
(4) The ACRN AE amount set forth for CLIN 0004 is increased by
$2,862,623 as follows:
FROM: $577,047,703 TO: $579,910,326
<PAGE> 3
MODIFICATION NO. F41608-84-C-A100-P00128
Page 3 of 4
e. Based upon the foregoing CLIN 0004 is recapitulated in the schedule
as follows:
CLIN DESCRIPTION AMOUNT
---- ----------- ------
0004 Construction $726,667,112
Complete Construction as follows
by Subcontract for the Peace Shield Program
The Estimated Cost to the Government for this
CLIN is $698,879,719
The Fixed Fee for this CLIN is $27,787,393
ACRN AA $108,336,840.00
ACRN AB 24,027,164.00
ACRN AC 14,365,542.00
ACRN AD 27,240.00
ACRN AE 579,910,326
f. The face amount of the contract is increased by $1,325,327 as follows:
FROM: $1,402,818,334 TO: $1,404,143,661
g. Accounting and Appropriation Data:
ACRN AE: 97-11X8242.SR02 4FX 6302 CDLASR 592 DLC000 S503000
(Increase: $1,325,327)
h. As a result of the foregoing, paragraphs G-901, G-902, G-903 and G-904
are changed as follows:
G-901 Funds Obligated
AMOUNT
ACRN FROM P00128 TO
---- ---- ------ --
AA $306,687,832 $ -0- $306,687,832
AB 27,943,358 -0- 27,943,358
AC 16,521,867 -0- 16,521,867
AD 477,000 -0- 477,000
AE 1,051,188,277 1,325,327 1,052,513,604
------------- --------- -------------
$1,402,818,334 $1,325,327 $1,404,143,661
G-902 Committed Funds
AMOUNT
ACRN FROM P00128 TO
---- ---- ------ --
AA $ -0- $ -0- $ -0-
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 4,802,305 (1,537,296) 3,265,009
--------- ----------- ---------
$4,802,305 $(1,537,296) $3,265,009
<PAGE> 4
MODIFICATION NO. F41608-84-C-A100-P00128 Page 4 of 4
G-903 Funds Committed to PCO and ACO
<TABLE>
<CAPTION>
AMOUNT
ACRN FROM P00128 TO
----------- -------- -----------
<S> <C> <C> <C>
AA $ 3,661,426 $ -0- $ 3,661,426
AB 2,431,642 -0- 2,431,642
AC 4,946,133 -0- 4,946,133
AD -0- -0- -0-
AE 21,423,973 211,969 21,635,942
----------- -------- -----------
$32,463,174 $211,969 $32,675,143
</TABLE>
G-904 Recapitulalion of Funds
<TABLE>
<CAPTION>
AMOUNT
FROM P00128 TO
-------------- ----------- -------------
<S> <C> <C> <C>
Obligated in G-901 $1,402,818,334 $ 1,325,327 $1,404,143,661
Committed in G-902 4,802,305 (1,537,296) 3,265,009
Committed in G-903 32,463,174 211,969 32,675,143
-------------- ----------- --------------
TOTAL $1,440,083,813 $ -0- $1,440,083,813
</TABLE>
i. All other terms and conditions remain unchanged.
<PAGE> 5
EXHIBIT 10.21
PAGE OF PAGES
1 OF 7
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE
U
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE
F41608-84-C-A100-P00129 29 SEP 93
4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (IF APPLICABLE)
N/A PEACE SHIELD
6. ISSUED BY CODE: FD2050
DEPARTMENT OF THE AIR FORCE
AIRCRAFT DIRECTORATE
SAN ANTONIO AIR LOGISTICS CENTER
485 QUENTIN ROOSEVELT RD
KELLY AFB, TEXAS 78241-6420
BUYER: B. Rowland/LAKFC/(210) 925-3091
7. ADMINISTERED BY (if other than Item 6) CODE: FD3515
DCMCI-GAR-AA
Deputy for Contract Administration (AFCMC)
LGS Unit 61305
APO AE 09803-1305
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
CRS/Sirrine + Metcalf & Eddy
(Joint Venture)
1177 West Loop South, 4th Floor FMS
Houston, TX 77027-9006
CEC: 00491077E
CODE: 9Z237 FACILITY CODE:
(X) 9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO.
X F41608-84-C-A100
10B. DATED (SEE ITERM 13)
84 May 16
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
[ ] The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ] is extended, [ ] is not
extended. Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following
methods: (a) By completing items 8 and 15, and returning ____ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy of the
offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
SEE BLOCK 14 BELOW
13. THIS ITEM APPLIES ONLY TO MODIFICATION OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF
FAR 43.103(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
X Far 52.243-2 "Changes -- Cost Reimbursement", APR 1984 and 52.243-1
"Changes--Fixed Price" Apr 1984
D. OTHER (Specify type of modification and authority)
E. IMPORTANT: Contractor ( ) is not, ( X ) is required to sign this document
and return 2 copies to the issuing office
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)
See Following Pages
Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or Print)
TRUITT B. GARRISON
Program Director
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED
/s/ TRUITT B. GARRISON 20 SEP. '93
----------------------------------------
(Signature of person authorized to sign)
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)
SAMMY J. YOUNG, MAJ, USAF
Contracting Officer, Aircraft Directorate
16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
/s/ SAMMY J. YOUNG, MAJ, USAF 29 SEP 93
----------------------------------------
(Signature of person authorized to sign)
NSN 7640-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE PRESCRIBED BY GSA
<PAGE> 6
MODIFICATION NO. F41608-84-C-A100-P00129 Page 2 of 7
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Cont'd)
a. This Supplemental Agreement incorporates negotiated agreements adding
fcc amounts to CLINs 0004 and 0005 for changes beyond the intent of Special
Provision H-947 "Change Order Reserve".
(1) The following changes under CLIN 0004 are agreed to have been beyond
the intent of Special Provision H-947:
Al Kharj Temporary Power Plant
Mod 0016
Mod 0015
Al Kharj Temporary Power Plant O&M
(Excluding rebuild core of unit #1)
CSF Temporary Power Connection at AKAB
Mod 0012
LRR W-1 Desal Line
PCO 0023
Desert Shield/Desert Storm Emergency Work at COC
Mod 0032
SCC/SOC and LRR Temporary Power
KKAB SCC/SOC Mod 0030
AKAB SCC/SOC Mod 0033
LRR N-68 Mod 0017
LRR N-69 MOD 0027
LRR N-39 MOD 0024
LRR W-1 PCO 0038
LRR W-1 RSAF Caused Changes
Mod 0007 Temp Office Facilities
KFAB SCC/SOC Fire Alarm Radio Link and Fire Department Connections
at KAAB, KKAB and KFDAB
KFAB Mod 0011
KAAB PCO 0058
KAAB PCO 0052
KFDAB Mod 0048
Site Access Road Upgrading
LRR C-20 Mod 0024
LRR C-20 Mod 0025
GES W-27 Mod 0016
GES W-27 Mod 0017
COC Non-Warranty Repair Costs/Chiller Compressors
Mod 0027
Mod 0041
PCO 0067
<PAGE> 7
MODIFICATION NO. F41608-84-C-A100-P00129 Page 3 of 7
Modify Existing Water Supply Line at COC
Mod 0033
LRR Commercial Power Connections
LRR C-1 Mod 0015
LRR E-8 Mod 0025
LRR S-25 Mod 0024
LRR W-20 PO SP-2619
LRR W-18 PO SP-2504
LRR W-18 Mod 0018
LRR N-68 Mod 0015
LRR N-69 Mod 0016
LRR W-18 Al Baha Access Road Paving/Storm Drainage Runoff
Mod 0029
Procure Mobile Office at COC
Mod 048
(2) The following change under CLIN 0004 is agreed to be within the
intent of H-947:
CSF Erosion Control
PCO 0044
(3) In consideration of (1) and (2) above the Fixed Fee for CLIN 0004 is
increased by $690,674.00 as follows:
FROM: $27,787,393.00 TO: $28,478,067.00
(4) The following changes under CLIN 0004 are agreed to have been beyond
the intent of Special Provision H-947:
Al Kharj Rebuild Core of Unit #1
SCC/SOC Non-Operational O&M
KAAB PCO 0040
KKAB PCO 0034
KFDAB PCO 0040
AKAB PCO 0033
KFAB PCO 0035
COC Non-Operational O&M
COC Spare Parts
Mod 0051
COC Pump Replacement
Mod 0038
COC UPS Battery Replacement
Mod 0034
LRR W-1 SCECO Interface Bldg
PCO 0029
3MT2 Relocation & Prime Power Installation
PCO 0014
<PAGE> 8
MODIFICATION NO. F41608-84-C-A100-P00129 Page 4 of 7
CSF RSAF/SAG Construction Delays
Power for 3HFI - Mod 0019
Design Changes to RSADF Sites - PCO 0003
LRR W-1 RSAF Caused Changes & Delays
RSAF Caused Delays
Slope Stabilization at LRR Sites
LRR W-18 - Mod 0005/Mod 0023
LRR E-1 - Mod 0007
(5) The following changes under CLIN 0004 are agreed to have been
within the intent of Special Provision H-947:
CSF RSAF/SAG Construction Delays
3HFI Access Road Paving - Mod 0001
LRR W-1 RSAF Caused Changes & Delays
ADF Equipment Relocation - Mod 0009
CSF Nitrogen Tubes - PCO 0042
(6) In consideration of (4) and (5) above the fixed fee for CLIN 0004
is increased by $313,500.00 as follows:
FROM: $28,478,067.00 TO: $28,791,567.00
(7) The ACRN AE amount cited in the description of CLIN 0004 is
increased by $1,004,174.00 as follows:
FROM: $579,910,326.00 TO:$580,914,500.00
(P00128)
(8) The total amount for amount for CLIN 0004 in the Schedule is
increased by $1,004,174.00 as follows:
FROM: $726,667,112.00 TO: $727,671,286.00
(P00128)
(9) The following changes under CLIN 0005 are agreed to have been
beyond the intent of H-947:
24 Hour Power for LRR Sites
Mod 0003
Addition of ACC/SOC Podiums
CMF/TA Additional F&E for Training Classrooms
(10) In consideration of (5) above the Fixed Fee for CLIN 0005 is
increased by $241,080.00 as follows:
FROM: $11,906,863.00 TO: $12,147,943.00
(P00117)
<PAGE> 9
MODIFICATION NO. F41608-84-C-A100-P00129 Page 5 of 7
(11) The amount for CLIN 0005 is increased by $241,080.00 as follows:
FROM: $305,706,002.00 TO: $305,947,082.00
(P00117)
(12) The ACRN AE amount cited in the description of CLIN 0005 is
increased by $241,080.00 as follows:
FROM: $274,338,340.00 TO: $274,579,420.00
(P00117)
b. This Supplemental Agreement is an agreement and accord resolving all
Joint Venture claims for additional fee under CLINs 0004 and 0005 of this
contract with the exclusion of the following:
(1) Changes to the contract scope of work which are issued by the
Government after 2 Sep 93.
(2) Non-warranty Work at various sites including, but not limited to,
the following:
KAAB PCO 0056
KKAB PCO 0050
KFDAB PCO 0068
KFAB PCO 0055
E-8 Mod 0024
E-15 Mod 0024
CSF PCO 0043
(3) CLINs 0004 and 0005 issues identifiable to LRRs N-4 and N-17.
c. The Joint Venture has been directed to retain all F&E spares and LRR F&E
for N-4 and N-17 in the Riaydh warehouse beyond the 31 May 93 date agreed to
during Management Extension II Negotiations (P00120) to 31 May 94. This is a
change to SubCLIN 0001AR and an equitable adjustment is incorporated into the
Schedule, Terms and Conditions of the Contract as follows:
(1) The amount for SubCLIN 0001AR is increased by $1,565.00 as follows:
FROM: $45,181,195.00 TO: $45,182,760.00
(P00120)
(2) The ACRN AE amount for SubCLIN 0001AR is increased by $1,565.00 as
follows:
FROM: $45,181,195.00 TO: $45,182,760.00
(P00120)
(3) The Billing Schedule for CLIN 0001 set forth in G-900(b),
"Payments", is modified and recapitulated as set forth below:
FROM AMOUNT
MONTH (P00122) P00129 TOTAL
----- -------- ------ -----
Billed Thru 01 Mar 93 $214,896,926 $214,896,926
01 Apr 93 1,327,267 1,327,267
01 May 93 1,122,000 1,122,000
01 Jun 93 1,122,000 1,122,000
01 Jul 93 1,035,000 1,035,000
01 Aug 93 1,019,000 1,019,000
<PAGE> 10
MODIFICATION NO. F41608-84-C-A100-P00129 Page 6 of 7
01 Sep 93 985,000 985,000
01 Oct 93 985,000 985,000
01 Nov 93 968,000 $1,565 969,565
01 Dec 93 950,000 950,000
------------
224,411,758
AMOUNT AMOUNT
MONTH P00122 P00129 TOTAL
----- ------ ------ -----
01 Jan 94 950,000 950,000
01 Feb 94 933,000 933,000
01 Mar 94 933,000 933,000
01 Apr 94 933,000 933,000
01 May 94 837,000 837,000
01 Jun 94 827,000 827,000
01 Jul 94 775,000 775,000
01 Aug 94 722,000 722,000
01 Sep 94 722,000 722,000
01 Oct 94 620,000 620,000
01 Nov 94 620,000 620,000
01 Dec 94 620,000 620,000
01 Jan 95 620,000 620,000
01 Feb 95 616,000 616,000
01 Mar 95 616,000 616,000
01 Apr 95 603,000 603,000
01 May 95 603,000 603,000
01 Jun 95 603,000 603,000
01 Jul 95 603,000 603,000
01 Aug 95 602,000 602,000
01 Sep 95 602,000 602,000
01 Oct 95 603,000 603,000
01 Nov 95 603,000 603,000
01 Dec 95 603,000 603,000
01 Jan 96 586,000 586,000
01 Feb 96 567,000 567,000
01 Mar 96 567,000 567,000
01 Apr 96 550,000 550,000
01 May 96 532,000 532,000
01 Jun 96 498,000 498,000
01 Jul 96 498,000 498,000
------------ ------ ------------
$244,977,193 $1,565 $244,978,758
d. The face amount of the contract is increased by $1,246,819.00 as
follows:
FROM: $1,404,143,661.00 TO: $1,405,390,480.00
(P00128)
<PAGE> 11
MODIFICATION NO. F41608-84-C-A100-P00129 Page 7 of 7
c. Accounting and Appropriation Data:
ACRN AE: 97-11X8242.SR02 4FX 6302 CDLASR 592 DLC000 S503000
(Increase: $1,246,819.00)
d. As a result of the foregoing, paragraphs G-901, G-902, G-903 and G-904
are changed as follows:
G-901 Funds Obligated
<TABLE>
<CAPTION>
AMOUNT
ACRN FROM P00129 TO
---- -------------- ----------- --------------
<S> <C> <C> <C>
AA $306,684,832 $ -0- $306,687,832
AB 27,943,358 -0- 27,943,358
AC 16,521,867 -0- 16,521,867
AD 477,000 -0- 477,000
AE 1,052,513,604 1,246,819 1,053,760,423
-------------- ----------- --------------
$1,404,143,661 $(1,246,819) $1,405,390,480
</TABLE>
G-902 Committed Funds
<TABLE>
<CAPTION>
AMOUNT
ACRN FROM P00129 TO
---- ---------- ---------- ----------
<S> <C> <C> <C>
AA $ -0- $ -0- $ -0-
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 3,265,009 -0- 3,265,009
---------- ---------- ----------
$3,265,009 $ -0- $3,265,009
</TABLE>
G-903 Funds Committed to PCO and ACO
<TABLE>
<CAPTION>
AMOUNT
ACRN FROM P00129 TO
---- ----------- ------------ -----------
<S> <C> <C> <C>
AA $3,661,426 $ -0- $3,661,426
AB 2,431,642 -0 2,431,642
AC 4,946,133 -0- 4,946,133
AD -0- -0- -0-
AE 21,635,942 ( 1,246,819) 20,389,123
----------- ------------ -----------
$32,675,143 ($1,246,819) $31,428,324
</TABLE>
G-904 Recapitulation of Funds
<TABLE>
<CAPTION>
AMOUNT
FROM P00129 TO
-------------- ----------- --------------
<S> <C> <C> <C>
Obligated in G-901 $1,404,143,661 $1,246,819 $1,405,390,480
Committed in G-902 3,265,009 -0- 3,265,009
Committed in G-903 32,675,143 (1,246,819) 31,428,324
-------------- ------------ --------------
TOTAL $1,440,083,813 $ -0- $1,440,083,813
</TABLE>
e. All other terms and conditions remain unchanged.
<PAGE> 12
EXHIBIT 10.21
PAGE OF PAGES
1 OF 4
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE
U
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE
F41608-84-C-A100-P00130 30 SEP 93
4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (IF APPLICABLE)
N/A PEACE SHIELD
6. ISSUED BY CODE FD2050
DEPARTMENT OF THE AIR FORCE
AIRCRAFT DIRECTORATE
SAN ANTONIO AIR LOGISTICS CENTER
485 QUENTIN ROOSEVELT RD
KELLY AFB, TEXAS 78241-6420
BUYER: B. Rowland/LAKFC/(210) 925-3091
7. ADMINISTERED BY (if other than Item 6) CODE: FD3515
DCMCI-GAR-AA
Deputy for Contract Administration (AFCMC)
LGS Unit 61305
APO AE 09803-1305
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
CRS/Sirrine + Metcalf & Eddy
(Joint Venture)
1177 West Loop South, 4th Floor FMS
Houston, TX 77027-9006
CEC: 00491077E
CODE: 9Z237 FACILITY CODE:
(X) 9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO.
X F41608-84-C-A100
10B. DATED (SEE ITERM 13)
84 May 16
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
[ ] The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ] is extended, [ ] is not
extended. Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following
methods: (a) By completing items 8 and 15, and returning ____ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy of the
offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
SEE BLOCK 14 BELOW
13. THIS ITEM APPLIES ONLY TO MODIFICATION OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF
FAR 43.103(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
D. OTHER (Specify type of modification and authority)
X Unilateral Modification Pursuant to Clauses G-905 and H-947
E. IMPORTANT: Contractor ( X ) is not, ( ) is required to sign this document
and return __ copies to the issuing office
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)
See Following Pages
Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or Print)
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED
----------------------------------------
(Signature of person authorized to sign)
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)
SAMMY J. YOUNG, MAJ, USAF
Contracting Officer, Aircraft Directorate
16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
/s/ SAMMY J. YOUNG, MAJ, USAF 30 SEP 93
----------------------------------------
(Signature of person authorized to sign)
NSN 7640-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE PRESCRIBED BY GSA
<PAGE> 13
MODIFICATION NO. F41608-84-C-A100-P00130 Page 2 of 4
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Cont'd)
a. This modification is issued to accomplish the following:
(1) Obligate $22.00 to CLIN 0003 to cover the funding shortfall, based
on the contractor's letter CTOF-PS-4041, 24 Feb 93.
(2) Deobligate a total of $944,375 from CLIN 0002 based on the
contractor's letter CTOF-PS-4113, 4 June 93, and HQ AFMC/CERS letter, 30 Jun
93.
(3) Decommit $620,130 from ACRN AE under G-903 IAW AF Form 9 No
F6CER40060003, Rev 27, dated 15 Jun 93.
b. Funds are obligated to CLIN 0003 as described below:
(1) The amount for CLIN 0003 is increased by $22 as follows:
FROM: $10,202,852 TO: $11,202,874
(2) The estimated cost for CLIN 0003 is increased by $22 as follows:
FROM: $10,695,093 TO: $10,695,115
(3) The ACRN AE amount cited in the description of CLIN 0003 is
increased by $22 as follows:
FROM: $6,657,589 TO: $6,657,611
c. Funds are Obligated/(Deobligated) to CLIN 0002 by SubCLIN as described
below:
<TABLE>
<CAPTION>
ACRN ACRN
SUBCLIN DESCRIPTION FROM AA AE TO
- - ------- ----------- ---- ---- ---- --
<S> <C> <C> <C> <C> <C>
0002AL CSF Final Design $3,096,675 $(248,735) $2,847,940
0002AM CMF/TA Concept Design 362,607 $ 32,782 395,389
0002AN BOC Concept Design 299,153 (103,484) 195,669
0002AR CSF Concept Design 771,879 (329,842) 442,037
0002AS SCC/SOC Phase V Finishes 539,772 (167,978) 371,794
0002AS SCC/SOC Phase VI Finishes 1,642,005 151,888 1,793,893
0002AT Outside Cable Plant 25,646 785 26,431
0002AW CMF/TA Telephone System 146,658 (36) 146,622
0002AX LRR N-17 Final Design 661,814 (18,594) 643,220
0002BB LRR N-17 Concept Design 49,770 (11,161) 38,609
0002BD CSF Expanded Scope 250,000 (250,000)
--------- ---------
</TABLE> ($107,259) $(837,116)
<PAGE> 14
MODIFICATION NO. F41608-84-C-A100-P00130 Page 3 of 4
d. As a result of paragraphs a.(1), a.(2) and a.(3), G-903 is changed as
follows:
CLIN CLIN REV
ACRN FROM OOO3 0002 27 TO
---- ---- ---- ---- -- --
AA $3,661,426 $107,259 $3,768,685
AE 20,389,123 $(22) 837,116 $(620,130) $20,606,087
e. The face amount of the contract is decreased by $944,353 as follows:
FROM: $1,405,390,480 TO: $1,404,446,127
f. As a result of the foregoing, paragraphs G-901, G-903 and G-904 are
changed as follows:
G-901 Funds Obligated
AMOUNT
ACRN FROM P00130 TO
---- ---- ------ --
AA $306,687,832 ($107,259) $306,580,573
AB 27,943,358 -0- 27,943,358
AC 16,521,867 -0- 16,521,867
AD 477,000 -0- 477,000
AE 1,053,760,423 (837,094) 1,052,923,329
------------- --------- -------------
$1,405,390,480 ($944,353) $1,404,446,127
G-902 Committed Funds
AMOUNT
ACRN FROM P00130 TO
---- ---- ------ --
AA $ -0- $ -0- $ -0-
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 3,265,009 -0- 3,265,009
--------- --- ---------
$3,265,009 $ -0- $3,265,009
G-903 Funds Committed to PCO and ACO
AMOUNT
ACRN FROM P00130 TO
---- ---- ------ --
AA $3,661,426 $107,259 $3,768,685
AB 2,431,642 -0- 2,431,642
AC 4,946,133 -0- 4,946,133
AD -0- -0- -0-
AE 20,389,123 216,964 20,606,087
---------- ------- ----------
$31,428,324 $324,223 $31,752,547
<PAGE> 15
MODIFICATION NO. F41608-84-C-A100-P00130 Page 4 of 4
G-904 Recapitulation of Funds
AMOUNT
FROM P00130 TO
---- ------ --
Obligated in G-901 $1,405,390,480 ($944,353) $1,404,446,127
Committed in G-902 3,265,009 -0- 3,265,009
Committed in G-903 31,428,324 324,223 31,752,547
-------------- ---------- --------------
TOTAL $1,440,083,813 ($620,130) $1,439,463,683
g. All other terms and conditions remain unchanged.
<PAGE> 16
EXHIBIT 10.21
PAGE OF PAGES
1 OF 4
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE
U
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE
F41608-84-C-A100-P00128 17 MAR 94
4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (IF APPLICABLE)
N/A PEACE SHIELD
6. ISSUED BY CODE: FA 8302
DEPARTMENT OF THE AIR FORCE
AIRCRAFT DIRECTORATE
SAN ANTONIO AIR LOGISTICS CENTER
485 QUENTIN ROOSEVELT RD
KELLY AFB, TEXAS 78241-6420
BUYER: B. Rowland/LAKFC/(210) 925-3091
7. ADMINISTERED BY (if other than Item 6) CODE: FD3515
DCMCI-GAR-AA
Deputy for Contract Administration (AFCMC)
LGS Unit 61305
APO AE 09803-1305
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
CRS/Sirrine + Metcalf & Eddy
(Joint Venture)
1177 West Loop South, 4th Floor FMS
Houston, TX 77027-9006
CEC: 00491077E
CODE: 9Z237 FACILITY CODE:
(X) 9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO.
X F41608-84-C-A100
10B. DATED (SEE ITERM 13)
84 May 16
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
[ ] The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ] is extended, [ ] is not
extended. Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following
methods: (a) By completing items 8 and 15, and returning ____ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy of the
offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
SEE BLOCK 14 BELOW
13. THIS ITEM APPLIES ONLY TO MODIFICATION OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF
FAR 43.103(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
X General Provision I-181 of Modification P00126, "Contract Definition"
(FAR 52.216-25, Apr 1984)
D. OTHER (Specify type of modification and authority)
E. IMPORTANT: Contractor ( ) is not, ( X ) is required to sign this document
and return 2 copies to the issuing office
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)
See Following Pages
Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or Print)
TRUITT B. GARRISON
Program Director
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED
/s/ TRUITT B. GARRISON 15 MAR. '94
----------------------------------------
(Signature of person authorized to sign)
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)
TERRY A. KULP
Contracting Officer, Aircraft Directorate
16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
/s/ TERRY A. KULP 17 MAR 94
----------------------------------------
(Signature of person authorized to sign)
15 MAR 94
NSN 7540-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE PRESCRIBED BY GSA
<PAGE> 17
MODIFICATION NO. F41608-84-C-A100-P00131 Page 2 of 4
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Cont'd)
a. This Supplemental Agreement is issued to definitize Modification
F41608-84-C-A100-P00126, dated 11 Jun 93, which exercised Unpriced Option for
SubCLIN 0005BG.
b. As a result of negotiations, the following SubCLIN is hereby
definitized and represents the complete negotiated agreement between parties.
SubCLIN DESCRIPTION AMOUNT
------- ----------- ------
0005BG Provide for the revisions to the LRR N-4 CCMS $6,787,443
and N-17 CCMS based upon the redesign and as
required to support the revised implementation
schedule for installation.
ACRN: AE (Cost Plus Fixed Fee)
The Estimated Cost to the Government for this
CLIN is $6,485,775 - $6,351,328
The Fixed Fee for this CLIN is $301,688
c. As a result of definitizing UCA P00126, obligated funds are increased
under subject modification as follows:
SubCLIN ACRN FROM INCREASE TO
------- ---- ---- -------- --
0005BG AE $3,265,009 $3,522,434 $6,787,443
d. The amounts set forth in the schedule for CLIN 0005 as of subject
modification P00131 do not include the obligation made under modification
P00126. Therefore, the CLIN 0005 amounts in the schedule are increased as
follows:
(1) The Estimated Cost for CLIN 0005 is increased by $6,485,755 as
follows:
FROM: $295,799,139(P00133) TO: $302,284,894
(2) The Fixed Fee for CLIN 0005 is increased by $301,688 as follows:
FROM: $12,147,943(P00129) TO: $12,449,631
(3) The amount for CLIN 0005 is increased by $6,787,443 as follows:
FROM: $307,947,082(P00133) TO: $314,734,525
(4) The ACRN AE amount set forth in CLIN 0005 is increased by
$6,787,443 as follows:
FROM: $276,579,420(P00133) TO: $283,366,863
<PAGE> 18
MODIFICATION NO. F41608-84-C-A100-P00131 Page 3 of 4
e. Based upon the foregoing, CLIN 0005 is recapitulated in the schedule
as follows:
0005 Construction Materials/Equipment $314,734,525
Provide materials/equipment in accordance
with the Statement of Work.
The Estimated Cost to the Government for this CLIN is $302,284,894
The Fixed Fee for this CLIN is $12,449,631
ACRN: AA: ($31,351,912)
ACRN: AC: ($15,750)
ACRN: AE: ($283,366,863)
f. The face amount of the contract is increased by $3,522,434 as follows:
FROM: $1,399,959,348 TO: $1,403,481,782
g. Accounting and Appropriation Data:
ACRN AE: 97-11X8242.SR02 4FX 6302 CDLASR 592 DLC000 S503000
(Increase: $3,522,434)
h. As a result of the foregoing, paragraphs G-901, G-902, G-903 and G-904
are changed as follows:
G-901 Funds Obligated
FROM AMOUNT
ACRN P00133 P00131 TO
---- ------ ------ --
AA $306,580,573 $ -0- $306,580,573
AB 27,943,358 -0- 27,943,358
AC 16,521,867 -0- 16,521,867
AD 477,000 -0- 477,000
AE 1,048,436,550 3,522,434 1,051,958,984
------------- --------- -------------
$1,399,959,348 $ 3,522,434 $1,403,481,782
G-902 Committed Funds
FROM AMOUNT
ACRN P00133 P00131 TO
---- ------ ------ --
AA $ -0- $ -0- $ -0-
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 3,265,009 ($3,265,009) -0-
--------- ---------- ---
$3,265,009 ($3,265,009) -0-
<PAGE> 19
MODIFICATION NO. F41608-84-C-A100-P00131 Page 4 of 4
G-903 Funds Committed to PCO and ACO
FROM AMOUNT
ACRN P00133 P00131 TO
---- ------ ------ --
AA $3,768,685 $ -0- $3,768,685
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 25,092,866 (257,425) 24,835,441
---------- --------- ----------
$28,861,551 ($257,425) $28,604,126
G-904 Recapitulation of Funds
FROM AMOUNT
P00133 P00131 TO
------ ------ --
Obligated in G-901 $1,399,959,348 $3,522,434 $1,403,481,782
Committed in G-902 3,265,009 (3,265,009) -0-
Committed in G-903 28,861,551 (257,425) 28,604,126
-------------- --------- ----------
TOTAL $1,432,085,908 $ -0- $1,432,085,908
i. All other terms and conditions remain unchanged.
<PAGE> 20
EXHIBIT 10.21
PAGE OF PAGES
1 OF 4
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE
U
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE
F41608-84-C-A100-P00132 4 JAN 94
4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (IF APPLICABLE)
N/A PEACE SHIELD
6. ISSUED BY CODE: FA 8302
DEPARTMENT OF THE AIR FORCE
AIRCRAFT DIRECTORATE
SAN ANTONIO AIR LOGISTICS CENTER
485 QUENTIN ROOSEVELT RD
KELLY AFB, TEXAS 78241-6420
CONTRACT SPECIALIST: K. Senkow/LAKFC/(210) 925-3091
7. ADMINISTERED BY (if other than Item 6) CODE: FD3515
DCMCI-GAR-AA
Deputy for Contract Administration (AFCMC)
LGS Unit 61305
APO AE 09803-1305
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
CRS/Sirrine + Metcalf & Eddy
(Joint Venture)
1177 West Loop South, 4th Floor FMS
Houston, TX 77027-9006
CEC: 00491077E
CODE: 9Z237 FACILITY CODE:
(X) 9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO.
X F41608-84-C-A100
10B. DATED (SEE ITERM 13)
84 May 16
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
[ ] The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ] is extended, [ ] is not
extended. Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following
methods: (a) By completing items 8 and 15, and returning ____ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy of the
offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
SEE BLOCK 14 BELOW
13. THIS ITEM APPLIES ONLY TO MODIFICATION OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF
FAR 43.103(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
X 10 USC 2304(c)(4)
D. OTHER (Specify type of modification and authority)
E. IMPORTANT: Contractor ( ) is not, ( X ) is required to sign this document
and return 2 copies to the issuing office
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)
See Following Pages
Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or Print)
TRUITT B. GARRISON
Program Director
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED
/s/ TRUITT B. GARRISON 20 SEP. '93
----------------------------------------
(Signature of person authorized to sign)
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)
TERRY A. KULP
Contracting Officer, Aircraft Directorate
16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
4 JAN 94
/s/ TERRY A. KULP
----------------------------------------
(Signature of person authorized to sign)
NSN 7540-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE PRESCRIBED BY GSA
<PAGE> 21
Amendment of Solicitation/Modification of Contract F41608-84-C-A100-P00132
Page 2 of 4
14. Description of Amendment/Modification (Cont'd)
a. This modification is issued to accomplish the upgrade of SA-ALC/LAKFC
computer under SubCLIN 0001AR.
b. The amount of SubCLIN 0001AR is increased by $1,276 as follows:
FROM: $45,182,760 TO: $45,184,036
c. ACRN AE funds under SubCLIN 0001AR are increased by $1,276 as follows:
FROM: $45,182,760 TO: $45,184,036
d. The face amount of the contract is increased by $1,276 as follows:
FROM: $1,404,127 TO: $1,404,447,403
e. Accounting and Appropriation Data:
ACRN AE: 97-11X8242.SR02 4FX 6302 CDLASR 592 DLC000 S503000
(Increase: $1,276)
f. As a result of the foregoing, paragraphs G-901, G-903 and G-904 are
changed as follows:
G-901 Funds Obligated
<TABLE>
<CAPTION> FROM AMOUNT
ACRN P00130 P00132 TO
---- -------------- ------ --------------
<S> <C> <C> <C>
AA $ 306,580,573 $ -0- $ 306,580,573
AB 27,943,358 -0- 27,943,358
AC 16,521,867 -0- 16,521,867
AD 477,000 -0- 477,000
AE 1,052,923,329 1,276 1,052,924,605
-------------- ------ --------------
$1,404,446,127 $1,276 $1,404,447,403
</TABLE>
<PAGE> 22
Amendment of Solicitation/Modification of Contract F41608-84-C-A100-P00132
Page 3 of 4
G-902 Committed Funds
FROM AMOUNT
ACRN P00130 P00132 TO
---- ------ ------ --
AA $ -0- $ -0- $ -0-
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 3,265,009 -0- 3,265,009
--------- ------ ---------
$3,265,009 $ -0- $3,265,009
G-903 Funds Committed to PC and ACO
FROM AMOUNT
ACRN P00130 P00132 TO
---- ------ ------ --
AA $ 3,768,685 $ -0- $3,768,685
AB 2,431,642 -0- 2,431,642
AC 4,946,133 -0- 4,946,133
AD -0- -0- -0-
AE 20,606,087 (1,276) 20,604,811
---------- ------ ----------
$31,752,547 ($1,276) $31,751,271
G-904 Recapitulation of Funds
FROM AMOUNT
P00130 P00132 TO
------ ------ --
Obligated in G-901 $1,404,446,127 $1,276 $1,404,447,403
Committed in G-902 3,265,009 -0- 3,265,009
Committed in G-903 31,752,547 (1,276) 31,751,271
---------- ------ --------------
Total $1,439,463,683 $ -0- $1,439,463,683
g. The Billing Schedule for CLIN 0001 set forth in G-900(b), "Payments"
is modified and recapitulated as set forth below:
From Amount
Month (P00129) (P00132) Total
----- -------- -------- -----
Billed thru Dec 93 $224,411,758 $224,411,758
Jan 94 950,000 $1,276 951,276
Feb 94 933,000 933,000
Mar 94 933,000 933,000
<PAGE> 23
Amendment of Solicitation Modification of Contract
F41608-84-C-A100-P00132 Page 4 of 4
From Amount
Month (P00129) (P00132) Total
----- -------- -------- -----
Apr 94 933,000 933,000
May 94 837,000 837,000
Jun 94 827,000 827,000
Jul 94 775,000 775,000
Aug 94 722,000 722,000
Sep 94 722,000 722,000
Oct 94 620,000 620,000
Nov 94 620,000 620,000
Dec 94 620,000 620,000
Jan 95 620,000 620,000
Feb 95 616,000 616,000
Mar 95 616,000 616,000
Apr 95 603,000 603,000
May 95 603,000 603,000
Jun 95 603,000 603,000
Jul 95 603,000 603,000
Aug 95 602,000 602,000
Sep 95 602,000 602,000
Oct 95 603,000 603,000
Nov 95 603,000 603,000
Dec 95 603,000 603,000
Jan 96 586,000 586,000
Feb 96 567,000 567,000
Mar 96 567,000 567,000
Apr 96 550,000 550,000
May 96 532,000 532,000
Jun 96 498,000 498,000
Jul 96 498,000 498,000
------------ ------ ------------
Total $244,978,758 $1,276 $244,980,034
h. All other terms and conditions remain the same.
<PAGE> 24
EXHIBIT 10.21
PAGE OF PAGES
1 OF 5
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE
U
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE
F41608-84-C-A100-P00133
4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (IF APPLICABLE)
F6CER40060003 Rev 28
6. ISSUED BY CODE: FA8302
DEPARTMENT OF THE AIR FORCE
AIRCRAFT DIRECTORATE
SAN ANTONIO AIR LOGISTICS CENTER
485 QUENTIN ROOSEVELT RD
KELLY AFB, TEXAS 78241-6420
BUYER: B. Nieto/LAKFC/(210) 925-3091
7. ADMINISTERED BY (if other than Item 6) CODE: FD3515
DCMCI-GAR-AA
Deputy for Contract Administration (AFCMC)
LGS Unit 61305
APO AE 09803-1305
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
CRS/Sirrine + Metcalf & Eddy
(Joint Venture)
1177 West Loop South, 4th Floor FMS
Houston, TX 77027-9006
CEC: 00491077E
CODE: 9Z237 FACILITY CODE:
(X) 9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO.
X F41608-84-C-A100
10B. DATED (SEE ITERM 13)
84 May 16
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
[ ] The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ] is extended, [ ] is not
extended. Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following
methods: (a) By completing items 8 and 15, and returning ____ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy of the
offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
SEE BLOCK 14 BELOW
13. THIS ITEM APPLIES ONLY TO MODIFICATION OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF
FAR 43.103(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
X 10 USC 2304(C)(4)
D. OTHER (Specify type of modification and authority)
E. IMPORTANT: Contractor ( ) is not, ( X ) is required to sign this document
and return 2 copies to the issuing office
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)
See Following Pages
Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or Print)
TRUITT B. GARRISON
Program Director
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED
/s/ TRUITT B. GARRISON 15 MAR. '94
----------------------------------------
(Signature of person authorized to sign)
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)
TERRY A. KULP
Contracting Officer, Aircraft Directorate
16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
/s/ TERRY A. KULP 16 MAR '94
----------------------------------------
(Signature of person authorized to sign)
NSN 7540-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE PRESCRIBED BY GSA
<PAGE> 25
Amendment of Solicitation/Modification of Contract F41608-84-C-A100-P00133
Page 2 of 5
14. Description of Amendment/Modification (Cont'd)
a. This modification is issued to accomplish the following:
(1) Deobligate $378,126 from SubCLIN 0001AR for disposition of
contractor acquired/government furnished property based on the contractor's
letter CTOF-PS-4245, 01 Feb 94.
(2) Obligate $626 to SubCLIN 0001AR for replacement of FAX Machine at
Kelly AFB.
(3) Deobligate $120,199 from SubCLIN 0002AM to revise estimated cost to
complete based on contractor's letter CTOF-PS-4232, 17 Jan 94 and HQ AFMC/CERS
letter, 24 Jan 94.
(4) Obligate $9,644 to CLIN 0002AQ to cover funding shortfall based on
contractor's letter CTOF-PS-4225, 7 Jan 94 and HQ AFMC/CERS letter, 24 Jan 94.
(5) Obligate $2,000,000 to CLIN 005 to cover funding shortfall based on
contractor's letter CTOF-PS-4224, 7 Jan 94 and HQ AFMC/CERS letter 24 Jan 94.
(6) Deobligate $6,000,000 from CLIN 0006 to revise estimated cost to
complete based on contractor's letter CTOF-PS-4226, 10 Jan 94 and HQ AFMC/CERS,
24 Jan 94.
(7) Decommit $4,946,133 from ACRN AC and $2,431,642 from ACRN AB under
G-903 IAW Purchase Request No F6CER40060003, Rev 28, dated 28 Dec 93.
b. The amount of SubCLIN 0001AR, ACRN AE is decreased by $377,500 as
follows:
FROM: $45,184,036 TO: $44,806,536
c. The estimated cost for SubCLIN 0002AM is decreased by $120,199 as
follows:
FROM: $395,389 TO: $275,190
d. ACRN AE under SubCLIN 0002AM is decreased by $120,199 as follows:
FROM: $418,918 TO: $298,719
e. The estimated cost for SubCLIN 0002AQ is increased by $9,644 as follows:
FROM: $243,249 TO: $252,893
f. ACRN AE under SubCLIN 0002AQ is increased by $9,644 as follows:
FROM: $252,642 TO: $262,286
<PAGE> 26
Page 3 of 5
Amendment of Solicitation/Modification of Contract F41608-84-C-A100-P00133
g. The estimated cost for CLIN 0005 is increased by $2,000,000 as follows:
FROM: $293,799,139 TO: $295,799,139
h. ACRN AE under CLIN 0005 is increased by $2,000,000 as follows:
FROM: $274,579,420 TO: $276,579,420
i. The estimated cost for CLIN 0006 is decreased by $6,000,000 as follows:
FROM: $16.530.515 TO: $10,530,515
j. ACRN AE under CLIN 0006 is decreased by $6,000,000 as follows:
FROM: $12,171,697 TO: $6,171,697
k. As a result of paragraphs a.(1), a.(2), a.(3), a.(4), a.(5), a.(6),
a.(7), G-903 is changed as follows:
<TABLE>
<CAPTION>
CLIN CLIN CLIN CLIN Rev
ACRN FROM 0001 0002 0005 0006 28 TO
- - ---- ---- ---- ---- ---- ---- -- --
<S> <C> <C> <C> <C> <C> <C> <C>
AB $2,431,642 ($2,431,642) -0-
AC $4,946,133 ($4,946,133) -0-
AE $20,604,811 $377,500 $110,555 ($2,000,000) $6,000,000 $25,092,866
</TABLE>
l. The face amount of the contract is decreased by $4,488,055 as follows:
FROM: $1,404,447,403 TO: $1,399,959,348
m. Accounting and Appropriation Data:
ACRN AE: 97-11X8242.SR02 4FX 6302 CDLASR 592 DLC000 S503000
(Decrease: $4,488,055)
n. As a result of the foregoing, paragraphs G-9901, G-903 and G-904 are
changed as follows:
G-901 Funds Obligated
<TABLE>
<CAPTION>
FROM AMOUNT
ACRN P00132 P00133 TO
---- ------ ------ --
<C> <S> <S> <S>
AA $306,580,573 $ -0- $306,580,573
AB 27,943,358 -0- 27,943,358
AC 16,521,867 -0- 16,521,867
AD 477,000 -0- 477,000
AE 1,052,924,605 ($4,488,055) 1,048,436,550
------------- ----------- -------------
$1,404,447,403 ($4,488,055) $1,399,959,348
</TABLE>
<PAGE> 27
Amendment of Solicitation/Modification of Page 4 of 5
Contract F41608-84-C-A100-P00133
G-902 Committed Funds
FROM AMOUNT
ACRN P00132 P00133 TO
---- ------ ------ --
AA $ -0- $ -0- $ -0-
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 3,265,009 -0- 3,265,009
----------- -------- ----------
$3,265,009 $ -0- $3,265,009
G-903 Funds Committed to PC and ACO
FROM AMOUNT
ACRN P00132 P00133 TO
---- ------ ------ --
AA $ 3,768,685 $ -0- $ 3,768,685
AB 2,431,642 (2,431,642) -0-
AC 4,946,133 (4,946,133) -0-
AD -0- -0- -0-
AE 20,604,811 4,488,055 25,092,866
----------- ----------- -----------
$31,751,271 ($2,889,720) $28,861,551
G-904 Recapitulation of Funds
FROM AMOUNT
P00132 P00133 TO
------ ------ --
Obligated in G-901 $1,404,447,403 ($4,488,055) $1,399,959,348
Committed in G-902 3,265,009 -0- 3,265,009
Committed in G-903 31,751,271 (2,889,720) 28,861,551
-------------- ----------- --------------
Total $1,439,463,683 ($7,377,775) $1,432,085,908
<PAGE> 28
Amendment of Solicitation/Modification of Page 5 of 5
Contract F41608-84-C-A100-P00133
o. The Billing Schedule for CLIN0001 set forth in G-900(b), "Payments" is
modified and recapitulated as set forth below:
From Amount
Month (P00132) (P00133) Total
----- -------- -------- -----
Billed thru Mar 94 $227,229,034 $227,229,034
Apr 94 933,000 ($377,500) 555,500
May 94 837,000 837,000
Jun 94 827,000 827,000
Jul 94 775,000 775,000
Aug 94 722,000 722,000
Sep 94 722,000 722,000
Oct 94 620,000 620,000
Nov 94 620,000 620,000
Dec 94 620,000 620,000
Jan 95 620,000 620,000
Feb 95 616,000 616,000
Mar 95 616,000 616,000
Apr 95 603,000 603,000
May 95 603,000 603,000
Jun 95 603,000 603,000
Jul 95 603,000 603,000
Aug 95 602,000 602,000
Sep 95 602,000 602,000
Oct 95 603,000 603,000
Nov 95 603,000 603,000
Dec 95 603,000 603,000
Jan 96 586,000 586,000
Feb 96 567,000 567,000
Mar 96 567,000 567,000
Apr 96 550,000 550,000
May 96 532,000 532,000
Jun 96 498,000 498,000
Jul 96 498,000 498,000
------------ --------- ------------
Total $244,980,034 ($377,500) $244,602,534
p. All other terms and conditions remain the same.
<PAGE> 29
EXHIBIT 10.21
PAGE OF PAGES
1 OF 3
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE
U
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE
F41608-84-C-A100-P00134 26 APR 94
4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (IF APPLICABLE)
F6CER40060003 Rev 29
6. ISSUED BY CODE FA8302
DEPARTMENT OF THE AIR FORCE
AIRCRAFT DIRECTORATE
SAN ANTONIO AIR LOGISTICS CENTER
485 QUENTIN ROOSEVELT RD
KELLY AFB, TEXAS 78241-6420
BUYER: B. Rowland/LAKFC/(210) 925-3091
7. ADMINISTERED BY (if other than Item 6) CODE: FD3515
DCMCI-GAR-AA
Deputy for Contract Administration (AFCMC)
LGS Unit 61305
APO AE 09803-1305
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
CRS/Sirrine + Metcalf & Eddy
(Joint Venture)
1177 West Loop South, 4th Floor FMS
Houston, TX 77027-9006
CEC: 00491077E
CODE: 9Z237 FACILITY CODE:
(X) 9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO.
X F41608-84-C-A100
10B. DATED (SEE ITERM 13)
84 May 16
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
[ ] The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ] is extended, [ ] is not
extended. Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following
methods: (a) By completing items 8 and 15, and returning ____ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy of the
offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
SEE BLOCK 14 BELOW
13. THIS ITEM APPLIES ONLY TO MODIFICATION OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF
FAR 43.103(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
D. OTHER (Specify type of modification and authority)
X Unilateral Modification Pursuant to Clause G-905
E. IMPORTANT: Contractor ( ) is not, ( X ) is required to sign this document
and return 2 copies to the issuing office
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)
See Following Pages.
Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or Print)
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED
----------------------------------------
(Signature of person authorized to sign)
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)
TERRY A. KULP
Contracting Officer, Aircraft Directorate
16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
By TERRY A. KULP
----------------------------------------
(Signature of person authorized to sign)
26 APR 94
NSN 7540-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE PRESCRIBED BY GSA
<PAGE> 30
Amendment of Solicitation/Modification of Page 2 of 3
Contract F41608-84-C-A100-P00134
14. Description of Amendment/Modification (Cont'd)
a. This modification is issued to accomplish the following:
(1) Decommit $5,500,000 from ACRN AE under G-903 IAW AFMC Form 36
Purchase Request Number F6CER40060003, Rev 29, dated 14 April 1994.
(2) Committed funds under G-903 are changed as follows:
ACRN FROM REV 29 TO
AE $25,092,866 ($5,500,000) $19,592,866.
b. As a result of the foregoing, paragraphs G-901, G-903 and G-904 are
changed as follows:
G-901 Funds Obligated
FROM AMOUNT
ACRN P00133 P00134 TO
---- ------ ------ --
AA $306,580,573 $ -0- $306,580,573
AB 27,943,358 -0- 27,943,358
AC 16,521,867 -0- 16,521,867
AD 477,000 -0- 477,000
AE 1,048,436,550 -0- 1,048,436,550
-------------- ------ --------------
$1,399,959,348 $ -0- $1,399,959,348
G-902 Committed Funds
FROM AMOUNT
ACRN P00133 P00134 TO
---- ------ ------ --
AA $ -0- $ -0- $ -0-
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 3,265,009 -0- 3,265,009
---------- ------ ----------
$3,265,009 $ -0- $3,265,009
<PAGE> 31
Amendment of Solicitation/Modification of Contract F41608-84-C-A100-P00134
Page 3 of 3
G-903 Funds Committed to PCO and ACO
FROM AMOUNT
ACRN P00133 P00134 TO
---- ------ ------ --
AA $ 3,768,685 $ -0- $ 3,768,685
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 25,092,866 (5,500,000) $19,592,866
---------- ----------- ----------
$28,861,551 ($5,500,000) $23,361,551
G-904 Recapitulation of Funds
FROM AMOUNT
P00133 P00134 TO
------ ------ --
Obligated in G-901 $1,399,959,348 $ -0- $1,399,959,348
Committed in G-902 3,265,009 -0- 3,265,009
Committed in G-903 28,861,551 (5,500,000) 23,361,551
---------- ----------- ----------
Total $1,432,085,908 ($5,500,000) $1,426,585,908
c. All other terms and conditions remain the same.
<PAGE> 32
EXHIBIT 10.21
PAGE OF PAGES
1 OF 3
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE
U
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE
F41608-84-C-A100-P00135 27 APR 94
4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (IF APPLICABLE)
N/A PEACE SHIELD
6. ISSUED BY CODE: FA8302
DEPARTMENT OF THE AIR FORCE
AIRCRAFT DIRECTORATE
SAN ANTONIO AIR LOGISTICS CENTER
485 QUENTIN ROOSEVELT RD
KELLY AFB, TEXAS 78241-6420
BUYER: B. Rowland/LAKFC/(210) 925-3091
7. ADMINISTERED BY (if other than Item 6) CODE: FD3515
DCMCI-GAR-AA
Deputy for Contract Administration (AFCMC)
LGS Unit 61305
APO AE 09803-1305
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
CRS/Sirrine + Metcalf & Eddy
(Joint Venture)
1177 West Loop South, 4th Floor FMS
Houston, TX 77027-9006
CEC: 00491077E
CODE: 9Z237 FACILITY CODE:
(X) 9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO.
X F41608-84-C-A100
10B. DATED (SEE ITERM 13)
84 May 16
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
[ ] The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ] is extended, [ ] is not
extended. Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following
methods: (a) By completing items 8 and 15, and returning ____ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy of the
offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
No Change (See Paragraph 14.a)
13. THIS ITEM APPLIES ONLY TO MODIFICATION OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF
FAR 43.103(b).
X
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
D. OTHER (Specify type of modification and authority)
E. IMPORTANT: Contractor ( ) is not, ( ) is required to sign this document
and return __ copies to the issuing office
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)
See Following Pages
Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or Print)
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED
----------------------------------------
(Signature of person authorized to sign)
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)
SAMMY J. YOUNG, MAJ, USAF
Contracting Officer, Aircraft Directorate
16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
BY SAMMY J. YOUNG, MAJ, USAF 11 MAY 94
----------------------------------------
(Signature of person authorized to sign)
NSN 7540-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE PRESCRIBED BY GSA
<PAGE> 33
MODIFICATION NO. F41608-84-C-A100-P00135 Page 2 of 3
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Cont'd)
a. This modification is issued to administratively revise P00134 by
deleting para 14.U in its entirety and replacing it with the following:
"b. As a result of the foregoing, paragraphs G-903 and G-904 are
changed as follows:
G-901 Funds Obligated
<TABLE>
<CAPTION>
FROM AMOUNT
ACRN P00131 P00134 TO
---- -------------- ------ --------------
<S> <C> <C> <C> <C>
AA $ 306,580,573 $ -0- $ 306,580,573
AB 27,943,358 -0- 27,943,358
AC 16,521,867 -0- 16,521,867
AD 477,000 -0- 477,000
AE 1,051,958,984 -0- 1,051,958,984
-------------- ----- --------------
$1,403,481,782 $ -0- $1,403,481,782
</TABLE>
G-902 Committed Funds
<TABLE>
<CAPTION>
FROM AMOUNT
ACRN P00131 P00134 TO
---- -------------- ------ --------------
<S> <C> <C> <C> <C>
AA $ -0- $ -0- $ -0-
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE -0- -0- -0-
-------------- ----- --------------
$ -0- $ -0- $ -0-
</TABLE>
G-903 Funds Committed to PCO and ACO
<TABLE>
<CAPTION>
FROM AMOUNT
ACRN P00131 P00134 TO
---- -------------- ------ --------------
<S> <C> <C> <C> <C>
AA $ 3,768,685 $ -0- $ 3,768,685
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 28,835,441 ($5,500,000) 19,335,441
-------------- ------------ --------------
$ 28,604,126 ($5,500,000) $ 23,104,126
</TABLE>
<PAGE> 34
MODIFICATION NO. F41608-84-C-A100-P00135 Page 3 of 3
G-904 Funds Obligated
<TABLE>
<CAPTION>
FROM AMOUNT
P00131 P00134 TO
-------------- --------- --------------
<S> <C> <C> <C>
Obligated in G-901 $1,403,481,782 $ -0- $1,403,481,782
Committed in G-902 -0- -0- -0-
Committed in G-903 28,604,126 ($5,500,000) 23,104,126
-------------- ----------- --------------
TOTAL $1,432,085,908 ($5,500,000) $1,426,585,908
</TABLE>
b. All other terms and conditions remain unchanged.
<PAGE> 35
EXHIBIT 10.21
PAGE OF PAGES
1 OF 4
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE
J
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE
F41608-84-C-A100-P00136 28 JUNE 94
4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (IF APPLICABLE)
N/A PEACE SHIELD
6. ISSUED BY CODE: FA8302
DEPARTMENT OF THE AIR FORCE
AIRCRAFT DIRECTORATE
SAN ANTONIO AIR LOGISTICS CENTER
485 QUENTIN ROOSEVELT RD
KELLY AFB, TEXAS 78241-6420
CONTRACT SPECIALIST: K. Senkow/LAKFC/(210) 925-3091
7. ADMINISTERED BY (if other than Item 6) CODE: FD3515
DCMCI-GAR-AA
Deputy for Contract Administration (AFCMC)
LGS Unit 61305
APO AE 09803-1305
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
CRS/Sirrine + Metcalf & Eddy
(Joint Venture)
1177 West Loop South, 4th Floor FMS
Houston, TX 77027-9006
CEC: 00491077E
CODE: 9Z237 FACILITY CODE:
(X) 9A. AMENDMENT OF SOLICITATION NO.
9B. DATED (SEE ITEM 11)
10A. MODIFICATION OF CONTRACT/ORDER NO.
X F41608-84-C-A100
10B. DATED (SEE ITERM 13)
84 May 16
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
[ ] The above numbered solicitation is amended as set forth in Item 14. The
hour and date specified for receipt of Offers [ ] is extended, [ ] is not
extended. Offers must acknowledge receipt of this amendment prior to the hour
and date specified in the solicitation or as amended, by one of the following
methods: (a) By completing items 8 and 15, and returning ____ copies of the
amendment; (b) By acknowledging receipt of this amendment on each copy of the
offer submitted; or (c) By separate letter or telegram which includes a
reference to the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS
PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
by virtue of this amendment you desire to change an offer already submitted,
such change may be made by telegram or letter, provided each telegram or letter
makes reference to the solicitation and this amendment, and is received prior
to the opening hour and date specified.
12. ACCOUNTING AND APPROPRIATION DATA (if required)
SEE BLOCK 14 BELOW
13. THIS ITEM APPLIES ONLY TO MODIFICATION OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE
ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation
date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF
FAR 43.103(b).
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
X 10USC2304(c)(4)
D. OTHER (Specify type of modification and authority)
E. IMPORTANT: Contractor ( ) is not, ( X ) is required to sign this document
and return 2 copies to the issuing office
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings,
including solicitation/contract subject matter where feasible.)
See Following Pages
Except as provided herein, all terms and conditions of the document referenced
in Item 9A or 10A, as heretofore changed, remains unchanged and in full force
and effect.
15A. NAME AND TITLE OF SIGNER (Type or Print)
TRUITT B. GARRISON
Program Director
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED
/s/ TRUITT B. GARRISON 20 JUNE '94
----------------------------------------
(Signature of person authorized to sign)
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or Print)
TERRY A. KULP
Contracting Officer, Fighter/Trainer Directorate
16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
/s/ TERRY A. KULP 28 JUN '94
----------------------------------------
(Signature of person authorized to sign)
NSN 7540-01-152-8070 30-105 STANDARD FORM 30 (REV 10-83)
PREVIOUS EDITION UNUSABLE PRESCRIBED BY GSA
FAR (48 CFR) 53243
<PAGE> 36
MODIFICATION NO. F41608-84-C-A100-P00136 Page 2 of 4
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Cont'd)
a. This modification is issued to accomplish the RSAF HQ Secretary
position under SubCLIN 0001AR (14 Dec 93 through 30 Jun 96).
b. The amount of SubCLIN 0001AR is increased by $117,896 as follows:
FROM: $44,806,536 TO: $44,924,432
c. ACRN AE funds under SubCLIN 0001AR are increased by $117,896 as
follows:
FROM: $44,806,536 TO: $44,924,432
d. The face amount of the contract is increased by $117,896 as follows:
FROM: $1,403,481,782 TO: $1,403,599,678
e. Accounting and Appropriation Data:
ACRN AE: 97-11X8242.SR02 4FX 6302 CDLASR 592 DLC000 S503000
(Increase: $117,896)
f. As a result of the foregoing, paragraphs G-901, G-902, G-903 and G-904
are changed as follows:
G-901 Funds Obligated
FROM AMOUNT
ACRN P00135 P00136 TO
---- ------ ------ --
AA $306,580,573 $ -0- $306,580,573
AB 27,943,358 -0- 27,943,358
AC 16,521,867 -0- 16,521,867
AD 477,000 -0- 477,000
AE 1,051,958,984 117,896 1,052,076,880
-------------- -------- --------------
$1,403,481,782 $117,896 $1,403,599,678
<PAGE> 37
MODIFICATION NO. F41608-84-C-A100-P00136 Page 3 of 4
G-902 Committed Funds
FROM AMOUNT
ACRN P00135 P00136 TO
---- ------ ------ --
AA $ -0- $ -0- $ -0-
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE -0- -0- -0-
--- --- ---
$ -0- $ -0- $ -0-
G-903 Funds Committed to PCO and ACO
FROM AMOUNT
ACRN P00135 P00136 TO
---- ------ ------ --
AA $3,768,685 $ -0- $3,768,685
AB -0- -0- -0-
AC -0- -0- -0-
AD -0- -0- -0-
AE 19,335,441 ($117,896) 19,217,545
---------- --------- ----------
$23,104,126 ($117,896) $22,986,230
G-904 Recapitulation of Funds
FROM AMOUNT
P00135 P00136 TO
------ ------ --
Obligated in G-901 $1,403,481,782 $117,896 $1,403,599,678
Committed in G-902 -0- -0- -0-
Committed in G-903 23,104,126 (117,896) 22,986,230
-------------- -------- ----------
TOTAL $1,426,585,908 $ -0- $1,426,585,908
g. The billing schedule for CLIN 0001 set forth in G-900(b), "Payments"
is modified and recapitulated as set forth below:
FROM AMOUNT
Month (P00133) (P00136) Total
----- -------- -------- -----
Billed thru Jun 94 229,448,534 229,448,534
Jul 94 775,000 26,600 801,600
Aug 94 722,000 3,800 725,800
Sep 94 722,000 3,800 725,800
Oct 94 620,000 3,800 623,800
Nov 94 620,000 3,800 623,800
Dec 94 620,000 3,800 623,800
<PAGE> 38
MODIFICATION NO. F41608-84-C-A100-P00136 Page 4 of 4
Jan 95 620,000 3,800 623,800
Feb 95 616,000 3,800 619,800
Mar 95 616,000 3,800 619,800
Apr 95 603,000 3,800 606,800
May 95 603,000 3,800 606,800
Jun 95 603,000 3,800 606,800
Jul 95 603,000 3,800 606,800
Aug 95 602,000 3,800 605,800
Sep 95 602,000 3,800 605,800
Oct 95 603,000 3,800 606,800
Nov 95 603,000 3,800 606,800
Dec 95 603,000 3,800 606,800
Jan 96 586,000 3,800 589,800
Feb 96 567,000 3,800 570,800
Mar 96 567,000 3,800 570,800
Apr 96 550,000 3,800 553,800
May 96 532,000 3,800 535,800
Jun 96 498,000 3,800 501,800
Jul 96 498,000 3,896 501,896
------------ -------- ------------
Total $244,602,534 $117,896 $244,720,430
h. All other terms and conditions remain unchanged.
<PAGE> 39
ENCLOSURE 1
SUMMARY
PEACE SHIELD
PROPOSAL FOR RSAF HQ SECRETARY
<TABLE>
<CAPTION>
DESCRIPTION AMOUNT 57%
- - ----------- ------ ---
<S> <C> <C>
LABOR $36,787 20,969
OVERHEAD $40,650 23,170
OFFICE EXPENSES $5,401 3,078 }
} 15,861
PERSONNEL EXPENSES $22,426 12,783 }
-------- ------
SUBTOTAL $105,264 60,000
PROFIT @ 12% $12,632 7,201
COFC $0
--------
TOTAL $117,896 67,201
========
</TABLE>
<PAGE> 1
EXHIBIT 10.22
CRS SIRRINE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I
Purpose
1.1 Purpose of Plan. The purpose of the CRS Sirrine, Inc.
Supplemental Executive Retirement Plan (the ("Plan") is to advance the
interests of CRS Sirrine, Inc. (the "Company") and its subsidiaries and
affiliates (hereinafter sometimes collectively or individually referred to as
the "Employer") and of its shareholders by assisting the Employer in attracting
and retaining in its employ highly qualified individuals for the successful
conduct of its business. The Employer hopes to accomplish these objectives by
providing for supplemental retirement benefits and death benefits for its key
employees selected to participate in the Plan.
1.2 ERISA Status. The Plan is intended to qualify for the
exemptions under Title I of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") provided for plans that are unfunded and maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees.
<PAGE> 2
- 2 -
ARTICLE II
Definitions
"Administrative Committee" means the committee appointed by the
President and designated to administer the Plan as provided in Section 7.1
below.
"Average Compensation" means the total Compensation for the five most
recent Plan Years during any part of which a Participant was employed by the
Employer divided by five; provided that if the number of Plan Years during
which the Participant was employed by the Employer is less than five, the
number five in the preceding provisions of this definition shall be replaced by
such lesser number; and provided further that, if a Change of Control occurs,
no Participant's Average Compensation shall ever be less than the amount it
would have been if determined on the date immediately preceding the date on
which the Change of Control occurred. For purposes of the preceding sentence, a
Participant's Compensation for any Plan Year during which he was employed by
the Employer for less than the entire Plan Year shall be converted to an
equivalent annual amount for the full Plan Year.
"Beneficiary" means the person designated by each Participant to
receive the payments with respect to the Participant pursuant to Section 4.4 in
the event of the Participant's death prior to receiving complete payment of his
Supplemental Retirement Benefit or Supplemental Disability Benefit. If the
Participant is married at the time of his death, a designation of any person
other than his or her spouse
<PAGE> 3
- 3 -
as a Beneficiary shall not be given effect unless the Participant's
spouse has consented in writing, on a form prescribed by the Administrative
Committee for this purpose, to such designation. In order to be effective, any
designation of a Beneficiary must be filed with the Administrative Committee,
on the form prescribed by the Administrative Committee for this purpose, before
the Participant's death. A Participant may revoke or change his or her
designation of a Beneficiary by filing a new designation in the manner provided
in the preceding two sentences. In the absence of an effective designation of a
Beneficiary, or if the designated Beneficiary is not in being at the time of
the Participant's death, "Beneficiary" means the Participant's spouse or, if
there is no spouse, the Participant's estate.
"Board" means the Board of Directors of the Company.
A "Change of Control" shall be deemed to occur when and only when the
first of the following events occurs, except as provided below:
(a) any person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 25 percent or
more of the combined voting power of the Company's then outstanding
voting securities, and a majority of the Incumbent Board does not
approve
<PAGE> 4
- 4 -
the acquisition before the acquisition occurs; or
(b) three or more directors, whose election or nomination for
election is not approved by a majority of the Incumbent Board, are
elected within any single 12-month period to serve on the Board; or
(c) members of the Incumbent Board cease to constitute a
majority of the Board.
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur pursuant to subsection (a), above, solely because 25 percent or more
of the combined voting power of the Company's outstanding securities is
acquired by one or more employee benefit plans maintained by the Company or by
any other employer the majority interest in which is held, directly or
indirectly, by the Company. For purposes of this definition, the terms "person"
and "beneficial owner" shall have the meanings set forth in sections 3(a) and
13(d) of the Securities Exchange Act of 1934, as amended, and in the
regulations promulgated thereunder; and the term "Incumbent Board" shall mean
(i) the members of the Board on January 1, 1988, to the extent that they
continue to serve as members of the Board, and (ii) any individual who becomes
a member of the Board after January 1, 1988, if his election
<PAGE> 5
- 5 -
or nomination for election as a director was approved by a vote of at
least three quarters of the then Incumbent Board.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Company" means CRS Sirrine, Inc.
"Compensation" means the Participant's base salary plus cash bonuses
and other cash incentives of any kind for services rendered to the Employer,
including amounts that the Participant could have received in cash instead of
electing either (i) to defer such amounts under the CRS Sirrine, Inc. Senior
Management Deferred Compensation Plan or any similar or successor plans or (ii)
to have such amounts contributed on his or her behalf by the Company on or
after August 1, 1984 to the CRS Sirrine, Inc. Flexible Benefits Plan or any
similar or successor plans.
"Compensation Committee" means the Compensation Committee of the Board.
"Disability" means the total and permanent disability of a
Participant within the meaning of the Company's long-term disability policy or
as otherwise determined by the Administrative Committee on the basis of proper
medical evidence.
"Effective Date" means November 1, 1987, which is the effective date of
the Plan.
"Employer" means the Company and its subsidiaries and affiliates
(collectively or individually).
<PAGE> 6
- 6 -
"Equivalent Value" means the present value of a series of future
payments using as a discount factor the rate of interest used by the Pension
Benefit Guaranty Corporation to value immediate annuities for defined benefit
plans terminating as of the date Equivalent Value is being determined or, in
the event that such rate of interest cannot be ascertained, such other
reasonable rate of interest as the Administrative Committee may determine.
"Participant" means an employee who has commenced participation in the
Plan pursuant to Article III and who has not ceased to be a Participant in
accordance with Section 3.6.
"Plan" means the CRS Sirrine, Inc. Supplemental Executive Retirement
Plan, as set forth herein and as amended from time to time.
"Plan Year" means the fiscal year of the Company.
"President" means the president of the Company.
"Retirement" means the termination of a Participant's employment with
the Employer on or after the date on which the Participant attains age 55,
other than a termination by reason of death or Disability or a termination by
the Employer for cause, which includes, among other things, termination for
conduct that the Administrative Committee determines to have had an adverse
effect on the Employer; provided that on or after the date on which a Change of
Control occurs, a termination by the Employer of a Participant's employment
shall be deemed to be for cause, for purposes of the Plan, only if the
Participant's employment is terminated for conduct
<PAGE> 7
- 7 -
involving willful insubordination or involving willful misconduct or moral
turpitude that has an adverse effect on the Employer. The Compensation
Committee, in its sole discretion, may determine that a termination of
employment that does not satisfy the preceding sentence shall nevertheless be
deemed to be a Retirement for purposes of the Plan.
"Supplemental Death Benefit" means the benefit described in Sections
4.4 and 4.5.
"Supplemental Disability Benefit" means the benefit described in
Section 4.3.
"Supplemental Retirement Benefit" means the benefit described in
Section 4.1.
"Year of Service" means a 12-month period during which an employee was
employed on a full-time basis by the Employer.
ARTICLE III
Participation
3.1 Participation by Certain Executives. An employee shall be a
Participant if he or she is a senior officer of the Company or the chief
executive officer of a subsidiary or division of the Company and
(a) the employee has completed five Years of Service with
the Employer, and
(b) the President finds, in his sole discretion, that the
employee occupies a management position that includes duties the
performance of which is essential for the successful operation of the
Employer and recommends that the employee be a Participant, and
<PAGE> 8
- 8 -
(c) the Compensation Committee, in its sole discretion,
selects the employee as a Participant based on the recommendation of
the President, and
(d) the Board, in its sole discretion, approves the selection
made by the Compensation Committee.
3.2 Limitation on the Number of Participants. Except as may be
otherwise authorized by the Compensation Committee and approved by the Board, no
more than 15 employees of the Employer shall be Participants.
3.3 Designation by Compensation Committee. Notwithstanding the
limitations in Sections 3.1 and 3.2, the Compensation Committee may, in its
sole discretion, but only with the approval of the Board, designate for
participation any individual who it determines occupies a management position
that includes duties the performance of which is essential for the successful
operation of the Employer.
3.4 Effective Date of Participation. An individual who becomes a
Participant pursuant to Section 3.1 or 3.3 shall become a Participant as of the
date designated by the Compensation Committee and the Board when they vote to
approve the individual's participation or designate the individual for
participation, as applicable. Those individuals who are Participants as of the
inception of the Plan shall become Participants as of the Effective Date.
3.5 No Right to Participate. Under no circumstances shall the
President, the Compensation Committee, or the Board be obligated to recommend,
approve, or designate any person to participate in the Plan, nor shall any
person have a cause of
<PAGE> 9
- 9 -
action against the Company, the President, the Compensation Committee, or the
Board based on the failure or refusal of the President, the Compensation
Committee, or the Board to recommend, approve, or designate him or her for
participation in the Plan.
3.6 Termination of Participation. A Participant's participation in
the Plan shall not be terminated involuntarily except upon termination of his
employment with the Employer for reasons other than death, Disability, or
Retirement. In addition, a Participant's participation in the Plan shall
terminate once his or her benefits under the Plan have been fully distributed.
ARTICLE IV
Supplemental Benefits
4.1 Supplemental Retirement Benefits. Each Participant shall
receive a Supplemental Retirement Benefit under the Plan commencing as of the
first day of the month next following his or her Retirement. The Supplemental
Retirement Benefit shall be paid monthly for 120 consecutive months. The amount
of each monthly Supplemental Retirement Benefit payment shall be one-twelfth
(1/12) of the Participant's Average Compensation multiplied by the Applicable
Percentage, as defined in Section 4.2.
4.2 Applicable Percentage. For a Participant whose Retirement
occurs on or after the date on which the Participant attains age 65, the
Applicable Percentage shall be 20 percent
<PAGE> 10
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(20%). For a Participant whose Retirement occurs before the date on
which the Participant attains age 65, the Applicable Percentage shall be
reduced by one-twelfth (1/12) of one percent (1%) for each full month, up to
120 months, by which the Participant's Retirement precedes the date on which
the Participant will attain age 65. Thus, for a Participant whose Retirement
occurs on the date on which the Participant attains age 55, the Applicable
Percentage shall be 10 percent (10%).
4.3 Supplemental Disability Benefits. A Participant whose
employment with the Company terminates by reason of Disability shall receive a
Supplemental Disability Benefit under the Plan commencing as of the first day
of the month coinciding with or next following the later of the date on which
the Administrative Committee determines that the Participant has incurred a
Disability or the date on which the Participant's employment with the Employer
terminates. The Supplemental Disability Benefit shall be paid monthly for 120
consecutive months. The amount of each monthly Supplemental Disability Benefit
payment shall be one-sixtieth (1/60) of the Participant's Average Compensation.
4.4 Death of Participant.
(a) Prior to Termination of Employment. If a Participant dies prior
to termination of his or her employment with the Employer, the Participant's
Beneficiary shall receive, commencing as of the first day of the month
coinciding with or next following the date of the Participant's death, a
Supplemental Death Benefit under the Plan consisting of 120
<PAGE> 11
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consecutive monthly payments. The amount of each monthly Supplemental Death
Benefit payment shall be one-sixtieth (1/60) of the Participant's Average
Compensation.
(b) After Retirement or Disability. If a Participant dies before
receiving all 120 payments of a Supplemental Retirement Benefit or
Supplemental Disability Benefit that the Participant was, on the date of his or
her death, entitled to receive pursuant to Section 4.1 or 4.3, the balance of
the 120 payments shall be made, on a monthly basis, to the Participant's
Beneficiary.
(c) Special Rule Where Beneficiary is Estate. If the Beneficiary
entitled to receive any payments pursuant to Section 4.4(a) or 4.4(b) is the
Participant's estate, the Equivalent Value of such payments shall be paid to
the estate in a lump sum as soon as administratively practicable,.
4.5 Death of Beneficiary. If a Beneficiary dies after becoming
entitled to receive payments pursuant to Section 4.4(a) or 4.4(b), the
Equivalent Value of the remaining payments that would have been payable to the
Beneficiary had he or she survived shall be paid in a lump sum to the estate of
the Beneficiary as soon as administratively practicable.
ARTICLE V
Method of Payment
5.1 Nature and Source of Payments. The Company's obligation to make
payments under the Plan is a contractual obligation only. The Company's
obligation is unfunded and
<PAGE> 12
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unsecured, and all benefits hereunder shall be paid by the Company out of
its general assets. Nothing herein, and no action taken pursuant to the
provisions hereof, shall be deemed to create a trust of any kind, or a
fiduciary relationship, between the Company and any Participant, Beneficiary,
or other person. No special or separate fund shall be established nor shall any
other segregation of assets be made to assure the payment of benefits under the
Plan. No Participant or Beneficiary shall have any interest in or lien
against any particular asset of the Company by virtue of the existence of the
Plan. Each Participant's and Beneficiary's rights hereunder shall be limited to
those of a general and unsecured creditor of the Company, and all assets used
to pay benefits pursuant to the Plan shall be subject to the claims of the
general creditors of the Company.
5.2 Equivalent Value Payments. The Administrative Committee may, in
its sole discretion, elect at any time to pay the Equivalent Value of future
payments pursuant to Section 4.1, 4.3, 4.4(a), or 4.4(b) in a single lump-sum
cash payment.
5.3 Payment of Benefits to Others. If the Administrative Committee
finds that any person entitled to receive a distribution hereunder is unable to
care for his affairs by reason of illness or other disability, any amount to be
distributed to such person hereunder (unless prior claim thereto shall have
been made by a duly qualified guardian or other legal representative) may, in
the discretion of the Administrative Committee, be paid to the spouse, child,
parent,
<PAGE> 13
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brother or sister of such person or to any other person deemed by the
Administrative Committee to be maintaining or responsible for the maintenance
of such person. Any such payment shall be a payment for the account of the
person entitled to receive such distribution, and shall constitute a complete
discharge of any liability therefor under the Plan.
5.4 Delivery of Benefit Payments. All payments under the Plan shall
be delivered in person or mailed to the last address of the Participant (or to
that of any other person entitled to such payments under the terms of the Plan)
furnished pursuant to Section 5.6 hereof. If the Administrative Committee
cannot, by making a reasonably diligent attempt by mail, locate a Participant
entitled to such payment within two years after the first day as of which such
payment becomes payable, such Participant shall be conclusively presumed to
have been dead on the first payment date and the payment shall be made to the
Participant's Beneficiary. If the Administrative Committee cannot, by making a
reasonably diligent attempt by mail, locate a Beneficiary entitled to payment
under the terms of the Plan within two years after the first day as of which
such payment becomes payable, such Beneficiary shall be conclusively presumed
to have predeceased the Participant. In no event shall any delay as a result of
the inability of the Administrative Committee, by a reasonably diligent attempt
by mail, to locate a Participant or Beneficiary give rise to any claim for
interest with respect to any amount payable pursuant to the Plan.
<PAGE> 14
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5.5 Overpayments. In the event that the Administrative Committee
determines that the benefits actually paid with respect to a Participant or
Beneficiary exceed the benefits that were properly payable pursuant to the
Plan, the Administrative Committee may, in addition to exercising any other
legal remedies available, reduce or suspend future benefits in any manner that
the Administrative Committee in its sole discretion deems equitable.
5.6 Current Address. Each Participant shall be responsible for
furnishing the Administrative Committee with his or her correct current address
and that of his Beneficiary. Each Beneficiary shall be responsible for
furnishing the Administrative Committee with his or her correct current
address.
5.7 Release. If in the opinion of the Administrative Committee
any present, former or future spouse of a Participant shall by reason of the
law of any jurisdiction appear to have any interest in the benefits that might
be or become payable under the Plan to that Participant, the Administrative
Committee may, as a condition precedent to the making of a benefit payment
hereunder, require such written release or releases, or such other proof in
lieu thereof, as in its discretion it shall determine to be necessary,
desirable or appropriate either to protect the rights of any such present,
former or future spouse or to prevent or avoid any conflict or multiplicity of
claims with respect to the payment of any benefits under the Plan.
<PAGE> 15
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ARTICLE VI
Suspension and Termination of Benefits
6.1 Suspension of Benefits During Reemployment. If a Participant to
whom benefits (other than Supplemental Disability Benefits) are payable under
the Plan is reemployed by the Employer on more than a half-time basis, payments
to the Participant shall be suspended (but shall not be forfeited) until the
Participant thereafter ceases to be employed by the Employer. After the period
of suspension, the payments to or in respect of the Participant shall resume
and shall continue until the total benefit payable pursuant to the Plan has
been paid. The monthly amount of payments that are resumed after the period of
suspension shall be the same as the monthly amount of payments made prior to
the Participant's reemployment, based on his or her Average Compensation and
Applicable Percentage as determined prior to his or her reemployment.
6.2 Forfeiture of Benefits. If a Participant who voluntarily
terminated his or her employment with the Employer becomes substantively
employed by a competitor before the Participant attains age 65, any monthly
payment that would otherwise be payable to the Participant pursuant to the Plan
during such period of employment with the competitor shall be forfeited
permanently. For purposes of this Section 6.2, "substantively employed" shall
mean employed in a position determined by the Administrative Committee, in its
sole discretion, to be a managerial or comparable position in which the
Participant's annual rate of compensation is at least 50
<PAGE> 16
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percent of the Participant's Compensation (on an annual basis) for the
Plan Year immediately preceding the year of the Participant's termination of
employment with the Employer. For purposes of this Section 6.2, the term
"competitor" shall mean any person or entity that the Administrative Committee
determines, in its sole discretion, engages in a business that is directly or
indirectly in competition with the Employer.
6.3 Termination of Supplemental Disability Benefits. If a
Participant who is receiving Supplemental Disability Benefits becomes employed
in a position that the Administrative Committee determines, in its sole
discretion, is inconsistent with the purpose intended to be served by providing
such benefits under the Plan, such benefits shall cease permanently. If such a
Participant is reemployed by the Employer on more than a half-time basis and
such reemployment is subsequently terminated by reason of Disability or death,
the Participant (or, if applicable, the Participant's Beneficiary) shall then
be entitled to those benefits for which he or she would qualify under the terms
of the Plan on the basis of such subsequent Disability or death. If a
Participant described in the first sentence of this Section 6.3 is reemployed
by the Employer on more than a half-time basis and such reemployment is
subsequently terminated by reason of Retirement, the Participant shall then be
entitled to further monthly payments in the monthly amount for which he or she
would qualify under the terms of the Plan on the basis of such subsequent
Retirement; provided that the number of such further monthly
<PAGE> 17
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payments shall be 120 less the number of Supplemental Disability Benefit
payments that the Participant had previously received. A Participant
whose employment with the Employer terminated by reason of Disability after
attaining age 55 and whose Supplemental Disability Benefits cease pursuant to
the first sentence of this Section 6.3 by reason of his employment by an
employer other than the Employer shall receive, in lieu of the balance of his
or her Supplemental Disability Benefit payments, further monthly payments
commencing upon such reemployment. The number of such further monthly payments
shall be 120 less the number of Supplemental Disability Benefit payments the
Participant had previously received, and the monthly amount of such further
payments shall be the, monthly amount that would have been payable as a
Supplemental Retirement Benefit if the Participant's termination of employ-
ment with the Employer had occurred by reason of Retirement instead of
Disability. Any such payments shall be subject to the provisions of Section
6.2; provided that, for purposes of Section 6.2, the Participant shall be
deemed to have voluntarily terminated his or her employment with the Employer
if the Administrative Committee determines that he or she did not seek (or was
offered but did not accept) reemployment with the Employer.
6.4 Waiver by Administrative Committee. The Administrative
Committee may, in its sole discretion, waive the application of Section 6.1,
6.2 or 6.3.
<PAGE> 18
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ARTICLE VII
Administrative Committee
7.1 Appointment and Membership. The President shall appoint an
Administrative Committee consisting of four (or another number, not less than
three, determined by the President) persons. The members of the
Administrative Committee shall serve until resignation, death or removal by the
President. Any member of the Administrative Committee may resign at any time by
mailing written notice of such resignation to the President. Any member of the
Administrative Committee may be removed by the President with or without cause.
Vacancies in the Administrative Committee arising by resignation, death,
removal or otherwise shall be filled by such persons as may be appointed by the
President.
7.2 Powers and Duties. In addition to any powers and duties
specified in other provisions hereof and any implied powers and duties that may
be needed to carry out the provisions of the Plan, the Administrative Committee
shall have the following specific powers and duties:
(a) To interpret the Plan and to decide any and all matters
hereunder, including the right to remedy possible ambiguities,
inconsistencies or omissions;
(b) To adopt and enforce from time to time such rules and
regulations, and to prescribe such forms and take such other actions,
not inconsistent with the declared purposes of the Plan, as it may deem
necessary to enable it to administer the Plan and to carry out the
provisions hereof;
<PAGE> 19
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(c) To determine the amount and method of payment of
benefits that shall be payable to any Participant or Beneficiary in
accordance with the provisions of the Plan;
(d) To appoint other persons to carry out such
responsibilities under the Plan as it may determine; and
(e) To employ one or more persons to render advice with
respect to any of its responsibilities under the Plan.
7.3 Actions of Administrative Committee. The Administrative
Committee shall establish appropriate procedures to conduct its operations and
to carry out its rights and duties under the Plan. These procedures shall cover
meetings, quorums and voting, and may cover written consents in lieu of
meetings and other matters.
7.4 Actions Involving Administrative Committee Participant. A
member of the Administrative Committee who is also a Participant in the Plan
shall have no right to vote with respect to any action that pertains
particularly to any matter personal to him or her as a Participant in the Plan.
In the event that a sufficient number of the remaining members of the
Administrative Committee are unable to agree as to the action to be taken with
respect to such member as a Participant in the Plan, the President shall
appoint an impartial person to arbitrate the matter between such remaining
members and to reach a decision upon the matter on the basis of the terms and
conditions of the Plan.
7.5 Authority and Liability of the Administrative Committee. All
decisions and directions made or given by the
<PAGE> 20
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Administrative Committee in the exercise of its powers and duties
hereunder prior to the date on which a Change of Control occurs shall be final
and binding upon all parties concerned. Except as otherwise provided by law, no
member of the Administrative Committee shall be liable to the Company or to
any Participant or Beneficiary by reason of the exercise in good faith of any
power or discretion vested in such member by the terms of the Plan.
7.6 Benefit Claims Procedure. A claim for a benefit under the Plan
by any person shall be filed with the Administrative Committee in the manner and
governed by procedures set forth in the CRS Sirrine, Inc. Thrift Plan (401(k)
plan), as amended from time to time, or other procedures established by the
Administrative Committee.
7.7 Compensation and Expenses. The members of the Administrative
Committee shall serve without compensation for their services, but all expenses
of the Administrative Committee and all other expenses incurred in
administering th Plan shall be paid by the Employer.
7.8 Indemnification. The Company shall indemnify the President,
members of the Compensation Committee, and members of the Administrative
Committee against the reasonable expenses, including attorneys' fees, actually
and necessarily incurred by them in connection with the defense of any action,
suit or proceeding, or in connection with any appeal thereto, to which they or
any of them may be a party by reason of any action taken or failure to act
under or in connection with the
<PAGE> 21
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Plan and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by
the Company) and against all amounts paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such action, suit or proceeding that such
indemnified person is liable for fraud, deliberate dishonesty or willful
misconduct in the performance of his or her duties; provided that within 60
days after the institution of any such action, suit or proceeding an
indemnified person has offered in writing to allow the Company, at its own
expense, to handle and defend any such action, suit or proceeding.
ARTICLE VIII
Amendment and Termination
8.1 Power to Amend and Terminate Reserved. The Board shall have the
right to amend or modify the terms of the Plan at any time, retroactively or
prospectively, and may terminate the Plan at any time, provided that, with
respect to any person who was a Participant on the date immediately preceding
the date on which the amendment, modification, or termination was made or
adopted (the "Adoption Date"), no amendment, modification or termination of the
Plan shall in any way reduce, adversely affect, or impair the Participant's (or
his Beneficiary's) rights to any past, present, future, or potential benefits
(whether or not already earned by the Participant and whether payable
commencing on, after, or before
<PAGE> 22
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the Adoption Date) pursuant to the terms and conditions of the Plan as
in effect on the date immediately preceding the Adoption Date.
ARTICLE IX
Miscellaneous
9.1 Change of Control. In the event of a Change of Control, all of
the obligations of the Company under the Plan, including the obligations
imposed by this Section 9.1, shall continue to be enforceable against the
Company and any successor to all or substantially all of the Company's business
or assets. Notwithstanding any provision of Article IV to the contrary:
(a) Any Participant, Beneficiary or estate to which, as of
the date on which a Change of Control occurs, a benefit is payable
pursuant to Article IV shall receive in a single lump-sum cash payment
the Equivalent Value of all benefit payments that such Participant,
Beneficiary or estate is entitled to receive, at that time or in the
future, under the Plan. Such lump-sum payment shall be made within 30
days after the date on which the Change of Control occurs.
(b) Any Participant, Beneficiary or estate to which, as of
the date on which a Change of Control occurs, a benefit is not payable
pursuant to Article IV, but to which a benefit becomes payable pursuant
to Article IV after the date on which a Change of Control occurs, shall
<PAGE> 23
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receive in a single lump-sum cash payment the Equivalent Value of all
benefit payments that such Participant, Beneficiary or estate is
entitled to receive, at that time or in the future, under the Plan.
Such lump-sum payment shall be made within 30 days after the date on
which the Participant, Beneficiary or estate first becomes entitled to
receive benefits pursuant to Article IV.
(c) Any Participant who, on or after the date on which a
Change of Control occurs, incurs an involuntary termination of
employment (except for a termination of employment for conduct
involving willful insubordination or involving willful misconduct or
moral turpitude that has an adverse effect on the Employer) or
terminates employment for Good Reason shall receive, in a single
lump-sum cash payment made within 30 days after the date on which the
involuntary termination of employment or termination for Good Reason
occurs, the Equivalent Value of a Supplemental Retirement Benefit that
is determined based on an Applicable Percentage of 20 percent.
For purposes of Section 9.1(c), Equivalent Value shall be determined as
if the Participant were entitled to a series of payments under the Plan
commencing on the date on which his termination of employment occurred. For
purposes of Section 9.1(c), a Participant shall be deemed to have "Good Reason"
for terminating employment with the Company only if one or more of the
following occurs to the Participant after a Change of Control: demotion (in the
Participant's reasonable judgment);
<PAGE> 24
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layoff; reduction by the Company of the Participant's Compensation; assignment
to the Participant of duties that, in the Participant's reasonable judgment,
are inconsistent with his position; a material increase in the
Participant's duties without a commensurate increase in his Compensation;
imposition of a requirement that the Participant be based anywhere other than
within 25 miles of the Company's principal office; or any violation by the
Company of any agreement between it and the Participant; provided that no
action by the Company shall give rise to Good Reason if it results from the
Participant's Retirement, death, or termination for cause (as defined in the
proviso in the definition of "Retirement", above), and no action by the Company
specified in the first four items of this sentence shall give rise to Good
Reason if it results from the Participant's Disability. Good Reason shall not
be deemed to be waived by reason of the Participant's continued employment as
long as the Participant's employment terminates within six (6) months after the
Good Reason arises or within thirty (30) months after the Change of Control,
whichever occurs later.
9.2 Plan Does Not Affect the Rights of Employee. Nothing contained
in this Plan shall be deemed to give any Participant the right to be retained
in the employment of the Employer, to interfere with the rights of the Employer
to discharge any Participant at any time, or to interfere with a Participant's
right to terminate his employment at any time.
<PAGE> 25
- 25 -
9.3 Nonalienation and Nonassignment. Except as provided in Section
9.4, no amounts payable or to become payable under the Plan to a Participant or
Beneficiary shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and if any Participant or
Beneficiary shall attempt to or shall anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge the same prior to distribution as herein
provided, or if by bankruptcy or other events his or her benefits would devolve
upon anyone other than the Participant or Beneficiary or his or her spouse or
beneficiary or estate, then the Administrative Committee, in its sole
discretion, may cause the interest of the Participant or Beneficiary in any
such amounts to be terminated and to be held or applied to or for the benefit
of such person or persons and in such manner as the Administrative Committee
may deem proper.
9.4 Tax Withholding. The Employer shall have the right to deduct
from any payments to a Participant or Beneficiary under the Plan or from
other amounts payable to a Participant or Beneficiary any taxes required by law
to be withheld with respect to any amounts payable under the Plan. The
Participant and/or his or her Beneficiary (including his or her estate) shall
bear all taxes on amounts paid under the Plan to the extent that taxes are not
withheld, irrespective of whether withholding is required.
9.5 Setoffs. To the fullest extent permitted by law, any amounts
owed by a Participant or Beneficiary to the
<PAGE> 26
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Employer may be deducted by the Employer from such Participant's Supplemental
Retirement Benefit or Supplemental Disability Benefit or from such
Beneficiary's Supplemental Death Benefit at the time and to the extent that
such benefit is otherwise payable hereunder.
9.6 Limitation on Benefit. No payment shall be made with respect to
any Participant pursuant to the Plan to the extent that the payment, when added
to all payments to be made with respect to the Participant during any calendar
year under the Plan and any defined benefit plan maintained by the Employer,
exceeds 50% of the Participant's Average Compensation.
9.7 Construction. Unless the context clearly indicates to the
contrary, the masculine gender shall include the feminine and neuter, and the
singular shall include the plural and vice versa.
9.8 Applicable Law. The terms and provisions of the Plan shall be
construed in accordance with the laws of the State of Texas, except to the
extent preempted by ERISA or other federal law.
9.9 Successors. The Plan shall be binding upon the Employer and its
successors and assigns, in accordance with its terms.
9.10 Severability. If any provision of the Plan shall be held
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts
<PAGE> 27
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of the Plan, and the Plan shall be construed and enforced as if such illegal
or invalid provision had never been inserted herein.
9.11 Required Information. Any person eligible to receive benefits
hereunder shall furnish to the Administrative Committee any information or
proof requested by the Administrative Committee and reasonably required for
the proper administration of the Plan. Failure on the part of any person to
comply with any such request within a reasonable period of time shall be
sufficient ground for delay in the payment of any benefits that may be due
under the Plan until such information or proof is received by the
Administrative Committee. If any person claiming benefits under the Plan makes
a false statement that is material to such person's claim for benefits, the
Administrative Committee may, in addition to exercising any other legal
remedies available, offset against future payments any amount paid to such
person to which such person was not entitled under the provisions of the Plan.
In witness whereof, the Company has caused this instrument to be
executed by its duly authorized officer and its corporate seal to be affixed
hereto as of the 28th day of January, 1988.
ATTEST: CRS SIRRINE, INC.
/s/ Frank Perrone By: /s/ RICHARD L. DAERR
____________________________ ________________________________
Richard L. Daerr
(Corporate Seal) Title: Executive Vice President
<PAGE> 1
Exhibit 10.23
CRS SIRRINE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
THIS INSTRUMENT made as of June 30, 1988 by CRS Sirrine, Inc. (the
"Company").
W I T N E S S E T H :
WHEREAS, the Company maintains the CRS Sirrine, Inc. Supplemental
Executive Retirement Plan, effective November 1, 1987 (the "Plan"); and
WHEREAS, the Company reserved the right in Article VIII to amend the
Plan at any time by action of its Board of Directors; and
WHEREAS, the Board of Directors adopted resolutions on June 30, 1988 to
amend the Plan's provisions regarding a Change of Control (as hereinafter
defined) and certain related provisions;
NOW, THEREFORE, the Plan is hereby amended, effective as of June 30,
1988, as follows:
1. The definition of "Change of Control" in Article II of the Plan
is hereby amended to read as follows:
"A 'Change of Control' shall be deemed to occur when and only
when any of the following events first occurs:
(a) any person becomes the beneficial owner,
directly or indirectly, of securities of the Company
representing 25 percent or more of the combined voting power of
the Company's then outstanding voting securities; or
(b) three or more directors, whose election or
nomination for election is not approved by a majority of the
Incumbent Board (as hereinafter defined), are elected within
any single 24-month period to serve on the Board; or
<PAGE> 2
(c) members of the Incumbent Board cease to
constitute a majority of the Board without the approval of the
remaining members of the Incumbent Board; or
(d) any merger (other than a merger in which the
Company is the survivor and there is no accompanying Change of
Control under subsection (a), (b) or (c) of this definition),
consolidation, liquidation or dissolution of the Company or the
sale of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change of Control shall not be
deemed to occur pursuant to subsection (a) above (i) solely
because 25 percent or more of the combined voting power of the
Company's outstanding securities is acquired by one or more
employee benefit plans maintained by the Company or by any
other employer the majority interest in which is held, directly
or indirectly, by the Company; (ii) with respect to a
Participant who elects by written notice to the Company before
any disposition by the Company of all or substantially all of
the business and assets of the architectural, engineering and
construction businesses of the Company (herein called
"Services") that such disposition shall not constitute a Change
of Control for the purposes of the Plan; or (iii) on account of
a disposition by the Company of all or substantially all of the
assets and business of Services in respect of any Participant
whose duties and responsibilities are principally in relation
to business and operations of the Company other than Services,
as conclusively determined in its absolute discretion by the
Administrative Committee. For purposes of this definition, the
terms 'person' and 'beneficial owner' shall have the meanings
set forth in sections 3(a) and 13(d) of the Securities Exchange
Act of 1934, as amended, and in the regulations promulgated
thereunder, as in effect on June 30, 1988; and the term
'Incumbent Board' shall mean (i) the members of the Board on
June 30, 1988, to the extent that they continue to serve as
members of the Board, and (ii) any individual who
2
<PAGE> 3
becomes a member of the Board after June 30, 1988, if his election
or nomination for election as a director was approved by a
vote of at least three-quarters of the then Incumbent Board."
2. The proviso clause in the first sentence of the definition of
"Retirement" in Article II of the Plan, which begins "provided that on or after
the date on which a Change of Control occurs", is hereby amended in its
entirety to read as follows:
"; provided that on or after the date on which a Change of Control
occurs, a termination by the Employer of a Participant's employment
shall be deemed to be for cause, for purposes of the Plan,
only if the Participant's employment is terminated because (A) he has
engaged in unlawful acts that violate laws of the United States or of
any state thereof and that were intended to result in the substantial
personal enrichment of the Participant at the Company's expense, or (B)
he has engaged (except by reason of incapacity due to illness or
injury) in a material willful violation of his responsibilities to the
Company that results in a material injury to the Company."
3. Section 9.1(c) of the Plan is hereby amended to read as follows:
"(c) Any Participant (i) whose employment is terminated by the
Company within three years after a Change of Control except for cause
(as defined in the proviso in the definition of Retirement above) or
(ii) with respect to whom (A) Good Reason arises within three years
after a Change of Control and (B) the Participant terminates his
employment with the Company within the earlier of (i) six months after
the Good Reason arises or (ii) three years after the Change of Control,
shall receive, in a single lump-sum cash payment made within 30 days
after the date on which his employment terminates, the Equivalent Value
of a Supplemental Retirement Benefit that is determined based on an
Applicable Percentage of 20 percent.
3
<PAGE> 4
For purposes of Section 9.1(c), Equivalent Value shall be
determined as if the Participant were entitled to a series of
payments under the Plan commencing on the date on which his
termination of employment occurred. For purposes of
Section 9.1(c), a Participant shall be deemed to have 'Good
Reason' for terminating employment with the Company only if one
or more of the following occurs after a Change of Control:
(i) a change in the Participant's status or
position(s) with the Company that, in the Participant's
reasonable judgment, represents a demotion from the
Participant's status or position(s) in effect immediately prior
to the Change of Control;
(ii) the assignment to the Participant of any
duties or responsibilities that, in the Participant's
reasonable judgment, are inconsistent with the Participant's
status or position(s) in effect immediately prior to the Change
of Control;
(iii) layoff or involuntary termination of the
Participant's employment, except in connection with the
termination of the Participant's employment for cause (as
defined in the proviso in the definition of 'Retirement,'
above) or as a result of the Participant's Retirement,
Disability or death;
(iv) a reduction by the Company in the
Participant's total compensation (which shall be deemed, for
this purpose, to be equal to the base salary that he earned for
the year preceding the Change of Control plus the aggregate
bonus that he would have earned for the current year under the
same criteria that were in effect for such preceding year);
(v) a material increase in the Participant's
responsibilities or duties without a commensurate increase in
total compensation;
(vi) the failure by the Company to continue in
effect any Benefit Plan (as defined below) in which the
Participant is
4
<PAGE> 5
participating immediately prior to the Change of Control
(or plans or arrangements providing the Participant
with substantially equivalent benefits) other than as a result
of the normal expiration of any such Benefit Plan in accordance
with its terms as in effect immediately prior to the Change of
Control;
(vii) any action or inaction by the Company that
would adversely affect the Participant's continued
participation in any Benefit Plan on at least as favorable a
basis as was the case immediately prior to the Change of
Control, or that would materially reduce the Participant's
benefits in the future under the Benefit Plan or deprive him of
any material benefits that he enjoyed immediately prior to the
Change of Control, except to the extent that such action or
inaction by the Company is required by the terms of the Benefit
Plan as in effect immediately prior to the Change of Control,
or is necessary to comply with applicable law or to preserve
the qualification of the Benefit Plan under section 401(a) of
the Code, and except to the extent that the Company provides
the Participant with substantially equivalent benefits;
(viii) the Company's failure to provide and credit
the Participant with the number of days of paid vacation,
holiday or leave to which he is then entitled in accordance
with the Company's normal vacation, holiday or leave policy in
effect immediately prior to the Change of Control;
(ix) the imposition of any requirement that the
Participant be based anywhere other than within 25 miles of
where his principal office was located immediately prior to the
Change of Control;
(x) a material increase in the frequency or
duration of the Participant's business travel; or
(xi) any violation by the Company of any provision
of this Plan.
5
<PAGE> 6
Notwithstanding the foregoing, no action by the Company shall
give rise to a Good Reason if it results from the Participant's
termination for cause (as defined in the proviso in the definition of
'Retirement,' above), Retirement, or death, and no action by the
Company specified in subparts (i) through (iv) above shall give rise to
a Good Reason if it results from the Participant's Disability. A Good
Reason shall not be deemed to be waived by reason of the Participant's
continued employment as long as the termination of the Participant's
employment occurs within six months after the Good Reason arises or
three years after the Change of Control, whichever occurs earlier. For
purposes of this definition of termination for Good Reason, 'Benefit
Plan' means any compensation plan, such as an incentive, stock option,
or restricted stock plan, or any employee benefit plan, such as a
thrift, pension, profit-sharing, stock bonus, long-term performance
award, medical, disability, accident, or life insurance plan, or a
relocation plan or policy, or any other plan, program or policy of the
Company that is intended to benefit employees."
4. The Plan is hereby amended to add the following paragraph (d) to
Section 9.1:
"(d) In the event of a Change of Control arising from a merger
or sale of the stock or all or substantially all of the assets of
Services and at such time (i) if the Participant's duties and
responsibilities are principally in relation to the business of
Services and (ii) such Participant is offered employment by Services or
its successor or an affiliate thereof on terms at least as favorable as
such Participant enjoyed immediately prior to such Change of Control
(both (i) and (ii) as conclusively determined in its absolute
discretion by the Administrative Committee), then whether or not such
Participant accepts such offer of employment, such Participant shall
not be entitled to any benefits under the Plan on account of such
Change of Control and such Participant's participation in the Plan
shall terminate effective with such Change of Control.
6
<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed by its duly authorized officers and its corporate seal to be affixed
hereto as of the date first above written.
CRS SIRRINE, INC.
/s/ Richard Daerr
By ______________________________
Its Executive Vice President
Attest:
/s/ Frank Perrone
_______________________________
(Corporate Seal)
7
<PAGE> 1
EXHIBIT 10.32
FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
("AMENDMENT") is entered into as of July 29, 1994, among CRSS INC., a Delaware
Corporation ("BORROWER"), NationsBank of Texas, N.A., a national banking
association ("NATIONSBANK"), Texas Commerce Bank National Association, a
national banking association, and First Interstate Bank of Texas, N.A., a
national banking association (collectively, the "LENDERS"), and NationsBank as
agent for itself and the other Lenders ("AGENT"). Terms not defined in this
Amendment have the meaning given such terms in the Credit Agreement (defined
below).
RECITALS
A. Borrower, Lenders, Agent, and ABN AMRO Bank N.V. executed an
Amended and Restated Credit Agreement dated as of January 18, 1994 (the "CREDIT
AGREEMENT").
B. On July 14, 1994, Agent, Lenders, and ABN AMRO Bank, N.V. gave
their written consent to (a) the sale by CRSS Services, Inc. of 100% of the
stock of its direct subsidiary, CRSS Architects, Inc., and (b) the sale of the
"Peace Shield Project."
C. Borrower is currently negotiating, and anticipates the
successful completion of those negotiations, to sell (a) substantially all of
the assets of CRSS Services, Inc. and CRS Sirrine Engineers, Inc., including
the sale of the stock of CRSS Constructors, Inc., to Jacobs Engineering and (b)
all of Borrower's interest in NaTec Resources, Inc.
D. In connection with these anticipated sales, Borrower has
requested various modifications to the Credit Agreement and Lenders are willing
to agree to such modifications subject to the terms and conditions set forth in
this Amendment.
NOW, THEREFORE, in consideration of the premises set out in this
Amendment and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agree as follows:
1. Applicable Margin. The definition of "Applicable Margin" in
Section 1.1 of the Credit Agreement is amended to read as follows:
"Applicable Margin means 0.00% in the case of Base Rate
Borrowings and 1.50% in the case of LIBOR Rate Borrowings."
<PAGE> 2
2. Applicable Percentage. The definition of "Applicable
Percentage" in Section 1.1 of the Credit Agreement is deleted
in its entirety.
3. Guarantors. The definition of "Guarantor" in Section 1.1 of
the Credit Agreement is amended to read as follows:
"GUARANTOR means each Subsidiary listed as a Guarantor on
Schedule 7.12 and any other Subsidiary which Borrower
designates as a Guarantor and which executes a Guaranty."
4. Existing LCs. The following definition is added to Section
1.1 of the Credit Agreement:
"Existing LCs means the LCs listed on Schedule 3."
5. Permitted Debt. The following definition is added to Section
1.1 of the Credit Agreement:
"Permitted Debt means the Obligation and the Debt listed on
Schedule 8.4."
6. Restricted Subsidiary. The following definition is added to
Section 1.1 of the Credit Agreement:
"Restricted Subsidiary means each entity listed as a
Restricted Subsidiary on Schedule 7.12 and any Subsidiary
which is not a Guarantor."
7. Pro Rata Part. The definitions of "Pro Rata" and "Pro Rata
Part" in Section 1.1 of the Credit Agreement are amended to
read as follows:
"Pro Rata and Pro Rata Part mean, when determined for any
Lender (a) if any Principal Debt is outstanding, the
proportion that the Principal Debt owed to it bears to the
aggregate Principal Debt owed to all Lenders, (b) if no
Principal Debt is outstanding, but any LC is outstanding, the
proportion that such Lender's LC Exposure bears to the
aggregate Lenders' LC Exposure, (c) if both Principal Debt and
any LC are outstanding, the proportion that (i) the sum of the
Principal Debt owed to such Lender plus such Lender's LC
Exposure, bears to (ii) the sum of the aggregate Principal
Debt owed to all Lenders and the aggregate LC Exposure of all
Lenders, and (d) if no Principal Debt or LCs are outstanding,
the proportion that such Lender's Committed Sum bears to the
Total Commitment."
2
<PAGE> 3
8. Termination Date. The definition of "Termination Date" in
Section 1.1 of the Credit Agreement is amended to read as
follows:
"Termination Date means the earlier of (a) December 30, 1994,
and (b) the effective date that Lenders' commitments to lend
under this Agreement are otherwise cancelled or terminated in
accordance with this Agreement."
9. LC Subfacility. The second sentence of Section 2.3(a) of the
Credit Agreement is amended to read as follows:
"When determined, the Commitment Usage may not exceed the
Total Commitment."
10. Credit Facility. Section 2.1 of the Credit Agreement shall be
deleted in its entirety and replaced with the following:
"2.1 Credit Facility. Subject to the provisions in the
Loan Papers, each Lender severally and not jointly agrees to
lend to Borrower its Commitment Percentage of one or more
Borrowings, which Borrower may borrow, repay, and reborrow
under this Agreement. Borrowings are subject to the following
conditions:
(a) Each Borrowing must occur on a Business Day
and no later than the Business Day immediately preceding the
Termination Date;
(b) Each Borrowing must be in an amount not less
than (i) $500,000 or a greater integral multiple of $100,000
(if a Base Rate Borrowing), or (ii) $2,000,000 or a greater
integral multiple of $500,000 (if a LIBOR Rate Borrowing);
(c) When determined, the Commitment Usage (i) may
not exceed the Total Commitment, and (ii) for any Lender may
not exceed such Lender's Committed Sum; and
(d) Each Borrowing may only be used to fund draws
under Existing LCs. Notwithstanding the foregoing to the
contrary, $5,000,000 of the Total Commitment in effect from
time-to-time, may be used for general corporate purposes."
11. Reduction of Commitment. Section 2.4 of the Credit Agreement
shall be deleted in its entirety and replaced with the
following:
3
<PAGE> 4
"2.4 Reduction or Termination. Without premium or penalty,
and upon giving at least three Business Days' prior written
and irrevocable notice to Agent, Borrower may terminate all or
part of the unused portion of the Total Commitment. Each
partial termination must be in an amount of not less than
$5,000,000 or a greater integral multiple of $1,000,000, and
shall be Pro Rata among all Lenders. Once terminated, the
Committed Sum may not be increased. The Total Commitment
shall be automatically reduced (without further action by any
such Person) (a) upon the cancellation (without having been
drawn upon and funded by a Borrowing) or expiration (unless
Lenders consent to renewal) of any Existing LC, by the amount
of such Existing LC, and (b) upon any repayment or prepayment
of Principal Debt funded under a Borrowing used to fund draws
under Existing LCs, by the amount of such repayment or
prepayment."
12. Interest Options. The last sentence of Section 3.3 of the
Credit Agreement is amended to read as follows:
"Each change in the Base Rate or Maximum Rate is effective,
without notice to Borrower or any other Person, upon the
effective date of change."
13. Extension of Termination Date. Section 3.19 of the Credit
Agreement is deleted in its entirety.
14. LC Fees.
(a) clause (b)(i) of Section 4.3 of the Credit Agreement
is amended to read as follows:
"(b)(i) 1.375%, multiplied by"
(b) The last sentence of Section 4.3 of the Credit
Agreement is amended to read as follows:
"Of the aggregate fee payment per LC issued on or after
July 29, 1994, Agent shall retain for its own account the
greater of $350 or the first 1/8% of the fee, and shall
promptly distribute to each Lender its Commitment Percentage
of the remainder."
15. Facility Fee. Sections 4.4 and 4.5 of the Credit Agreement
are deleted in their entirety and replaced with the following:
4
<PAGE> 5
"4.4 Facility Fee. Borrower shall pay to Agent (who shall
promptly distribute to each Lender its Commitment Percentage
thereof) a commitment fee, payable in arrears on September 30,
1994, December 30, 1994, and on the Termination Date, equal to
0.37% per annum and calculated on an amount equal to the
then-existing Total Commitment."
16. Subsidiaries. Section 7.12 of the Credit Agreement is deleted
in its entirety and replaced by the following:
"7.12. Subsidiaries. Borrower may create new Subsidiaries
(whether as a result of acquisition, creation, or otherwise)
and shall designate each new Subsidiary as either a Guarantor
or a Restricted Subsidiary. Borrower shall notify Agent (in
writing) of its creation and designation of each new
Subsidiary. Borrower shall cause each of its Subsidiaries
that becomes a Guarantor to execute and deliver a Guaranty
within ten (10) days after becoming a Guarantor."
17. Contingent Collateral. A new Section 7.15 is added to the
Credit Agreement as follows:
"7.15 Contingent Collateral. If the Principal Debt ever
exceeds $15,000,000, Borrower shall immediately pledge the
stock of CRSS Capital, Inc. to Agent for the benefit of
Lenders upon such terms as shall be satisfactory to Lenders."
18. Debt. Section 8.4 of the Credit Agreement is amended to read
as follows:
"8.4 Debt. Borrower may not permit any Company to create,
incur, or suffer to exist any Debt (other than the Permitted
Debt) arising on or after July 29, 1994."
19. Investments.
(a) Section 8.8(e) of the Credit Agreement is amended to
read as follows:
"(e) investments by Borrower or any Company in, and
advances by Borrower or any Company to, any
Guarantor."
(b) Section 8.8(h) of the Credit Agreement is amended to
read as follows:
5
<PAGE> 6
"(h) other investments (including investments in, and
advances to, non-wholly-owned Affiliates of Borrower)
existing as of July 29, 1994, and described in
Borrower's Form 10-Q for its fiscal quarter ended
March 31, 1994;"
(c) Sections 8.8(j) and 8.8(k) of the Credit Agreement
are deleted in their entirety and replaced with the
following:
"(j) the proposed Naheola equity purchase previously
described by Borrower to Lenders, so long as the
consummation of such purchase does not violate any
other provision of this Agreement."
(d) Section 8.8(l) of the Credit Agreement is re-numbered
to become Section 8.8(k) and is amended to read as
follows:
"(k) as long as no Default or Potential Default exists, other
investments (including investments in Restricted Subsidiaries)
made after July 29, 1994, aggregating no more than $5,000,000
(provided, however, that such amount shall be reduced by
amounts paid in connection with treasury stock purchases)."
20. Dividends and Distributions. The following sentence is added
to the beginning of Section 8.9 of the Credit Agreement:
"Notwithstanding any contrary provision in any Loan Paper,
neither Borrower nor any Company may declare any Distribution
to any Restricted Subsidiary."
21. Cash Flow Coverage. The text of Section 9.1 of the Credit
Agreement is deleted in its entirety and replaced with the
word "[Reserved]".
22. Schedules. Schedule 1 to the Credit Agreement is amended to
reflect, among other changes, the deletion of ABN AMRO Bank,
N.V. as a Lender under the Credit Agreement and is replaced
with the new Schedule 1 attached to this Amendment.
Schedules 2, 6.2, and 6.3 to the Credit Agreement are replaced
with the new Schedules attached to this Amendment.
Schedules 3 and 7.12 attached to this Amendment shall become
Schedules to the Credit Agreement.
23. Conditions. This Amendment shall not be effective until
(a) it has been duly executed and delivered by Borrower,
Agent, each Lender;
(b) Borrower has delivered to Agent a new Note for each
Lender, substantially in the form of Exhibit A to the
Credit Agreement, in the
6
<PAGE> 7
amount of such Lender's new Committed Sum (as shown on Schedule 1
hereto);
(c) any Subsidiary designated as a Guarantor which has
not previously executed a Guaranty, has executed and
delivered a Guaranty to Agent; and
(d) Borrower has delivered to Agent such other documents
as Agent may reasonably request.
24. Partial Release of Guaranty. Lenders hereby release the
following Companies from any liability under that certain Guaranty dated as of
January 18, 1994 (the "GUARANTY"), delivered to Agent and Lenders pursuant to
the Credit Agreement: CRSS Architects, Inc. and CRSS Constructors, Inc. The
Guarantors not released by this Amendment covenant and agree that the Guaranty
continues to be binding upon them and inures to the benefit of Agent and
Lenders and their respective successors and assigns.
25. Representations and Warranties. Borrower hereby represents
and warrants to Lender that the execution and delivery of this Amendment has
been authorized by all requisite corporate action on the part of Borrower and
will not violate its organizational documents. Borrower further represents and
warrants to Lender that (a) the representations and warranties in each Loan
Paper (as affected by this Amendment) to which it is a party are true and
correct in all material respects on and as of the date hereof as though made on
and as of the date hereof (except to the extent that (i) such representations
and warranties speak to a specific date or (ii) the facts on which such
representations and warranties are based have been changed by transactions
contemplated by the Credit Agreement), and (b) Borrower is in full compliance
with all covenants and agreements contained in each Loan Paper (as affected by
this Amendment) to which it is a party.
26. Miscellaneous. This Amendment is a Loan Paper, and,
therefore, this Amendment is subject to the applicable provisions of Section 13
of the Credit Agreement, all of which are incorporated herein by reference the
same as if set forth herein verbatim. Except as affected by this Amendment,
the Loan Papers are unchanged and continue in full force and effect. This
Amendment shall be binding upon and inure to the benefit of each of the
undersigned and their respective successors and permitted assigns.
[Remainder of page intentionally left blank.
Signatures on immediately following pages]
7
<PAGE> 8
EXECUTED AS OF THE DATE FIRST WRITTEN ABOVE.
NATIONSBANK OF TEXAS, N.A., CRSS INC.
as Agent and a Lender
By: /s/ BOYD P. GENTRY /s/ WILLIAM J. GARDINER
______________________________ By:_____________________________
Boyd P. Gentry, William J. Gardiner
Senior Vice President Senior Vice President
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
By: /s/ CURT KARGES
______________________________
Curt Karges,
Senior Vice President
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ RANDALL L. WALKER
______________________________
Randall L. Walker
Vice President
CONSENTED AND AGREED TO:
CRSS SERVICES, INC.
CRS SIRRINE ENGINEERS, INC. CRSS CAPITAL, INC.
By: /s/ WILLIAM J. GARDINER /s/ WILLIAM J. GARDINER
______________________________ By:_____________________________
William J. Gardiner William J. Gardiner
Vice President Senior Vice President
of each of the above Companies
CRSS CONSTRUCTORS INTERNATIONAL, INC.
By: /s/ JOHN ST. WRBA
__________________________________
John St. Wrba
Vice President and Treasurer
8
<PAGE> 9
SCHEDULE 1
(As of July 29, 1994)
PARTIES; ADDRESSES; COMMITTED SUMS; WIRING INFORMATION
Borrower and other Companies
CRSS Inc.
1177 West Loop South, Suite 800
Houston, Texas 22427
Attn: Charles Vetters
FAX: 713/623-8051
Each other Company
c/o CRSS Inc.
Agent
NationsBank of Texas, N.A.
700 Louisiana
P.O. Box 2518
Houston, Texas 77252-2518
Attn: Boyd P. Gentry
Senior Vice President
FAX: 713/247-6719
copy to:
Johnson & Wortley, P.C.
1001 Fannin Street, Suite 1200
Houston, Texas 77002
Attn: F. Walter Bistline, Jr.
FAX: 713/752-3788
<PAGE> 10
Wiring Information
CRSS INC.
Location of account: Texas Commerce Bank National Association
ABA #: 113000609
Account No.: 0010-013-0310
NATIONSBANK OF TEXAS, N.A.
Location of account: NationsBank of Texas, N.A. (Dallas, Texas)
ABA #: 111000025
Attention: Commercial Loans FTA Acct. #0180019828 (ref. CRSS)
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Location of account: Texas Commerce Bank National Association
(Houston, Texas)
ABA #: 113000609
Account No.: Loan Operations Clearing Account #13681
FIRST INTERSTATE BANK OF TEXAS, N.A.
Location of account: First Interstate Bank of Texas, N.A.
(Houston, Texas)
ABA #: 113001064
Credit to Commercial Loan No. 18519606
Attention: Debbie Van Ness
Reference: CRSS Inc.
<PAGE> 11
<TABLE>
<CAPTION>
Lenders Committed Sums
- - ------- --------------
<S> <C>
NationsBank of Texas, N.A. $14,450,176.74
700 Louisiana
P.O. Box 2518
Houston, Texas 77252-2518
Attn: Boyd P. Gentry
Senior Vice President
FAX: 713/247-6719
Texas Commerce Bank National Association $13,036,572.50
712 Main Street, 5th Floor
Houston, Texas 77002
Attn: Curt Karges
Senior Vice President
FAX: 713/236-6004
First Interstate Bank of Texas, N.A. $11,780,035.39
1000 Louisiana, 3rd Floor
Houston, Texas 77002
Attn: Randall L. Walker,
Vice President
FAX: 713/250-7029
______________
$39,266,784.63
</TABLE>
<PAGE> 12
SCHEDULE 2
MATERIAL COMPANIES
CRSS Inc.
CRSS Services, Inc.
CRS Sirrine Engineers, Inc.
CRSS Capital, Inc.
<PAGE> 13
SCHEDULE 3
EXISTING LCS
<TABLE>
<CAPTION>
BENEFICIARY/
L/C# $AMOUNT EXPIRY AUTORENEW DESCRIPTION
<S> <C> <C> <C> <C>
A) CRSS Inc.
related:
128459 $ 500,000.00 30-Jun-95 Yes National Union Fire
136473 23,220,000.00 1-Nov-94 No Hydra-Co/Lakewood
------------------------
SUBTOTAL $23,720,000.00
------------------------
B) CRSS Capital,
Inc. related:
128457 $ 498,000.00 1-Jul-95 Yes Fuji Bank/Westwood
128462 4,000,000.00 22-Jan-95 Yes State Street/Viking
133358 1,150,000.00 15-Nov-94 Yes Bonneville Power
140634 1,150,000.00 7-Jul-95 Yes Bonneville Power
------------------------
SUBTOTAL $ 6,798,000.00
------------------------
C) CRSS Engineers,
Inc. related:
132090 $ 1,000,000.00 1-Sep-94 Yes Applied Materials
129063 61,813.19 24-Nov-94 No Jubail & Yanbu
129064 54,937.84 19-Nov-94 No Jubail & Yanbu
------------------------
SUBTOTAL $ 1,116,751.03
------------------------
D) NATEC related:
128464 $ 150,750.00 31-Mar-95 Yes Colorado National
128465 8,680.00 31-May-95 Yes Colorado Mined
128466 1,656,012.00 31-Aug-95 Yes Colorado Mined
128468 816,611.60 31-Mar-95 Yes White River Electric
------------------------
SUBTOTAL $ 2,632,033.60
------------------------
TOTAL $34,266,784.63
========================
</TABLE>
<PAGE> 14
SCHEDULE 6.2
JURISDICTIONS OF INCORPORATION AND BUSINESS
<TABLE>
<CAPTION>
INCORPORATED
COMPANY OR ORGANIZED IN: DOES BUSINESS IN:
- - ------- ---------------- -----------------
<S> <C> <C>
CRSS Inc. Delaware Alabama
Arizona
California
Colorado
Connecticut
Delaware
Florida
Georgia
Illinois
Indiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Oregon
Pennsylvania
South Carolina
Tennessee
Texas (*, **)
Virginia
Washington
Wisconsin
Wyoming
Washington, D.C.
Puerto Rico
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
INCORPORATED
COMPANY OR ORGANIZED IN: DOES BUSINESS IN:
- - ------- ---------------- -----------------
<S> <C> <C>
CRS Sirrine Engineers, Inc.*** South Carolina Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Florida
Georgia
Idaho
Indiana
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
New Jersey
New Mexico
North Carolina
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina (*, **)
Tennessee
Texas
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Puerto Rico
Ontario
British Columbia
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
INCORPORATED
COMPANY OR ORGANIZED IN: DOES BUSINESS IN:
- - ------- ---------------- -----------------
<S> <C> <C>
CRSS Constructors, Inc.*** Delaware Alabama
Arizona
Arkansas
California
Colorado (*)
Delaware
Florida
Georgia
Illinois
Indiana
Iowa
Kansas
Maine
Maryland
Massachusetts
Michigan
Minnesota
Missouri
Montana
Nebraska
Nevada
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
Tennessee
Texas (**)
Utah
Virginia
Washington
Wisconsin
Wyoming
Washington, D.C.
CRSS Services, Inc.*** Delaware Delaware
North Carolina
South Carolina (*, **)
Texas
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
INCORPORATED
COMPANY OR ORGANIZED IN: DOES BUSINESS IN:
- - ------- ---------------- -----------------
<S> <C> <C>
CRSS Capital, Inc. Delaware Delaware
South Carolina
Texas (*, **)
CRSS Constructors International, Inc. Delaware Texas (*, **)
</TABLE>
* Indicates state in which principal place of business is located.
** Indicates state in which chief executive office is located.
*** Sale negotiations pending.
<PAGE> 18
SCHEDULE 6.3
CORPORATE STRUCTURE
<TABLE>
<CAPTION>
PARENT SUBSIDIARY % OWNERSHIP
------ ---------- -----------
<S> <C> <C>
CRSS Inc. CRSS Capital, Inc. 100%
CRSS Services, Inc. 100%
CRSS Services, Inc. CRS Sirrine Engineers, Inc. 100%
CRSS Architects, Inc. 100%
CRSS Constructors International, Inc. 100%
CRSS Constructors International, Inc. CRSS Constructors, Inc. 100%
CRSS Capital, Inc. See schematic drawing on second page following.
</TABLE>
See also schematic drawings on next two pages.
<PAGE> 19
CRSS INC. CORPORATE STRUCTURE
CRSS INC.
100% 100%
CRSS SERVICES, INC. * CRSS CAPITAL, INC.
100%
CRS SIRRINE ENGINEERS, INC. *
100%
CRSS CONSTRUCTORS INTERNATIONAL, INC.
100%
CRSS CONSTRUCTORS, INC. *
* Sale negotiations pending.
<PAGE> 20
CRSS CAPITAL, INC. CORPORATE STRUCTURE
This page describes, in a graphic format, the flow chart of the
Corporate Structure of CRSS Capital, Inc.
<PAGE> 21
SCHEDULE 7.12
GUARANTORS
CRSS Services, Inc.
CRS Sirrine Engineers, Inc.
CRSS Capital, Inc.
RESTRICTED SUBSIDIARIES
Viking Energy Corporation
E.F. Viking, Inc.
CRSS Northumberland, Inc.
Viking Energy of Northumberland Limited Partnership
Viking Energy of Northumberland, Inc.
Viking Energy of Northumberland Limited Partnership
EFV Northumberland, Inc.
Viking Energy of Northumberland Limited Partnership
Viking Energy Capital Corporation, Inc.
CRSS McBain, Inc.
Viking Energy of McBain Limited Partnership
Viking Energy of McBain, Inc.
Viking Energy of McBain Limited Partnership
EFV McBain, Inc.
Viking Energy of McBain Limited Partnership
Viking Energy Capital Corporation, Inc.
CRSS Lincoln, Inc.
Viking Energy of Lincoln Limited Partnership
Viking Energy of Lincoln, Inc.
Viking Energy of Lincoln Limited Partnership
EFV Lincoln, Inc.
Viking Energy of Lincoln Limited Partnership
Viking Energy Capital Corporation, Inc.
CRSS Hopewell Operations, Inc.
CRSS Viking Operations, Inc.
Chehalls Power, Inc.
CRSS Capital Cogeneration, Inc.
CRSS Capital Funding Corp., Inc.
CRSS Power Marketing, Inc.
CRSS Energy, Inc.
Naheola Power, Inc.
Capital Naheola Limited Partnership
CRSS Naheola, Inc.
Capital Naheola Limited Partnership
Naheola Cogeneration Limited Partnership
Capital Naheola Cogenerators, Inc.
Naheola Cogeneration Limited Partnership
Naheola Cogeneration, Inc.
Naheola Cogeneration Limited Partnership
CRSS Hopewell Cogeneration, Inc.
Hopewell Cogeneration Limited Partnership
<PAGE> 22
Hopewell Cogeneration, Inc.
Hopewell Cogeneration Limited Partnership
Capital Appomattox, Inc.
Appomattox Cogeneration Limited Partnership
Appomattox Cogeneration, Inc.
Appomattox Cogeneration Limited Partnership
CRSS Westwood, Inc.
Westwood Energy Properties Limited Partnership
<PAGE> 23
SCHEDULE 8.4
PERMITTED DEBT
1. Debt arising from endorsing negotiable instruments for
collection in the ordinary course of business.
2. Capital Leases.
3. Current liabilities incurred in the ordinary course of
business.
4. Purchase money Debt.
5. Trade payables that are for goods furnished or services
rendered in the ordinary course of business and that are
payable in accordance with customary trade terms.
6. LC No. 127LCS8217 issued by Bank of Tokyo Trust in the amount
of $5,025,000.
7. LC No. SLCDC 3896 issued by Bank of Montreal in the amount of
$2,308,444.
8. Debt which is non-recourse to Borrower, Guarantors, or any of
their respective assets.
<PAGE> 1
EXHIBIT 21.1
CRSS Inc.
Significant Subsidiaries
June 30, 1994
<TABLE>
<CAPTION>
Unnamed Subsidiaries
State of Jurisdiction Line of --------------------
Name of Incorporation Business Domestic Foreign
- - ---- ---------------- -------- -------- -------
<S> <C> <C> <C> <C>
CRSS Services, Inc. Delaware Administration 4 0
CRS Sirrine Engineers, Inc. South Carolina Engineering 1 0
CRSS Architects, Inc. California Architecture 1 0
CRSS Constructors International, Inc. Delaware Construction
Services 1 1
CRSS Constructors, Inc. Delaware Construction
Services 3 0
CRSS Capital, Inc. Delaware Power and
Cogeneration 27 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-END> JUN-30-1994
<CASH> 2,229
<SECURITIES> 0
<RECEIVABLES> 4,664
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 51,019
<PP&E> 95,582
<DEPRECIATION> 17,539
<TOTAL-ASSETS> 210,672
<CURRENT-LIABILITIES> 13,552
<BONDS> 60,937
<COMMON> 16,492
0
0
<OTHER-SE> 71,394
<TOTAL-LIABILITY-AND-EQUITY> 210,672
<SALES> 24,822
<TOTAL-REVENUES> 28,419
<CGS> 0
<TOTAL-COSTS> 20,357
<OTHER-EXPENSES> 8,293
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,383
<INCOME-PRETAX> 6,528
<INCOME-TAX> 2,810
<INCOME-CONTINUING> 3,718
<DISCONTINUED> (2,244)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,474
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
