<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
FOSTER WHEELER CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
NOTICE OF MEETING AND PROXY STATEMENT
FOSTER WHEELER CORPORATION
PERRYVILLE CORPORATE PARK
CLINTON, NEW JERSEY 08809-4000
------------------------------
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 1999
------------------------------
The Annual Meeting of Stockholders of Foster Wheeler Corporation will be
held at the Hunterdon Hills Playhouse, 88 Route 173 West, Hampton, New Jersey,
on Monday, April 26, 1999, at 10:30 a.m. for the following purposes:
1. To elect four Directors.
2. To act upon a proposal to amend the 1995 Stock Option Plan.
3. To ratify the appointment of PricewaterhouseCoopers LLP as the
Corporation's independent accountants for 1999.
4. To transact such other business as may properly come before the
meeting or adjournments thereof.
The Board of Directors has fixed the close of business on March 9, 1999,
as the record date for determination of stockholders entitled to notice of, and
to vote at, the meeting or adjournments thereof.
Admission to the meeting will be by ticket only. If you are a stockholder
of record and plan to attend, please check the appropriate box on the proxy
card. The ticket attached to the proxy card will admit you to the meeting. If
you are a stockholder whose shares are held through an intermediary such as a
bank or broker and you plan to attend, you may request a ticket by writing to
the office of the Secretary, Foster Wheeler Corporation, Perryville Corporate
Park, Clinton, New Jersey 08809-4000, and including proof of ownership, such as
a bank or brokerage firm account statement or a letter from the broker, bank or
nominee holding your stock, confirming beneficial ownership.
By Order of the Board of Directors
LISA FRIES GARDNER
Vice President & Secretary
March 18, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE PROMPTLY RETURN YOUR
SIGNED PROXY IN THE ENCLOSED ENVELOPE. STOCKHOLDERS WHO EXPECT TO ATTEND THE
MEETING IN PERSON SHOULD CHECK THE APPROPRIATE BOX ON THE PROXY CARD.
<PAGE> 3
FOSTER WHEELER CORPORATION
PERRYVILLE CORPORATE PARK
CLINTON, NEW JERSEY 08809-4000
--------------------------------
PROXY STATEMENT
--------------------------------
For the 1999 Annual Meeting of Stockholders
to be held April 26, 1999
--------------------------------
GENERAL INFORMATION
This statement is furnished in connection with the solicitation by the
Board of Directors of Foster Wheeler Corporation (hereinafter the "Corporation"
or "Foster Wheeler") of proxies for use at the 1999 Annual Meeting of
Stockholders of the Corporation, to be held at the time, place and for the
purposes set forth in the accompanying Notice of 1999 Annual Meeting of
Stockholders. This Proxy Statement and the accompanying proxy are being sent to
stockholders on or about March 18, 1999.
Shares represented by valid proxies will be voted in accordance with
instructions contained therein or, in the absence of such instructions, in
accordance with the recommendations of the Board of Directors. A proxy may be
revoked by a stockholder by written notice of such revocation, a duly executed
proxy bearing a later date delivered to the Inspectors of Election at any time
prior to the shares represented by such earlier proxy being voted or if the
stockholder executing the proxy is present at the meeting, voting in person.
Copies of the Corporation's Summary Annual Report to Stockholders and the
Corporation's Annual Report on Form 10-K for the fiscal year ended December 25,
1998, are enclosed with this Proxy Statement.
The Board of Directors has fixed the close of business on March 9, 1999,
as the record date for determination of stockholders entitled to notice of and
to vote at the meeting or adjournments thereof. As of March 1, 1999, the
outstanding voting securities of the Corporation consist of 40,708,296 shares of
Common Stock, $1.00 par value, holders of which are entitled to one vote per
share.
ITEM 1
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation divides the Board of Directors
into three classes, with one class of directors elected each year for a
three-year term. The term of directors in one class expires in 1999. The four
directors in this class have been nominated for election for terms expiring in
2002. With the exception of Mr. John P. Clancey, all nominees were previously
elected by the stockholders. Mr. Clancey was elected as a Director by the Board
effective March 30, 1999. The proxy agents of the Board of Directors intend to
vote for the election of the nominees named below, unless instructed otherwise.
If any eligible nominee becomes unable to accept nomination or election, proxies
will be voted for those remaining, and the Board of Directors will either reduce
the size of the Board, or select substitute nominees after identifying suitable
candidates. The Restated Certificate of Incorporation of the Corporation
provides that the Board of Directors shall consist of not less than 9 nor more
than 20
1
<PAGE> 4
Directors as shall be fixed from time to time by the Board. The number of
Directors, effective March 30, 1999, shall be fixed at 11.
The following table of Director nominees is based upon information
furnished by the nominees as of March 1, 1999:
<TABLE>
<CAPTION>
SHARES OF
YEAR PRINCIPAL OCCUPATION COMMON STOCK
FIRST DURING PAST FIVE YEARS OWNED
NAME AGE ELECTED AND OTHER DIRECTORSHIPS BENEFICIALLY (1)
---- --- ------- ----------------------- -------------
<S> <C> <C> <C> <C>
Louis E. Azzato 68 1978 Retired, formerly Chairman and Chief 114,765
Executive Officer of the Corporation. (80,416)
John P. Clancey 53 1999 President and Chief Executive Officer of 500
Sea-Land Service Inc. (Transportation); (0)
Director--UST Inc.
David J. Farris 63 1996 Retired Chief Operating Officer of Beneficial 18,000
Corporation and Retired President (8,000)
and Chief Executive Officer of Beneficial
Management Corporation (Financial Services);
Director--Household International Inc.
Constance J. Horner 57 1996 Guest scholar at The Brookings Institution since 9,086
1993. Commissioner, U.S. Commission on Civil (8,000)
Rights 1993 - 1998 (Government).
From 1991 to 1993, Assistant to
the President and Director of
Presidential Personnel at the
White House; Director--Ingersoll-Rand
Company, Pfizer, Inc., Prudential
Insurance Company of America.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
ABOVE-NAMED NOMINEES.
Similar information concerning the Directors whose terms of office
continue after the 1999 Annual Meeting is as follows:
<TABLE>
<S> <C> <C> <C> <C>
Eugene D. Atkinson 54 1995 Limited Partner, Goldman, Sachs & Co. and 15,000
(Term ends 2001) Chairman of Goldman Sachs (International). (10,000)
Formerly held several executive positions with
Goldman, Sachs & Co. (Investment Banking).
</TABLE>
- - ----------------------------
(1) The tabulation of the number of shares of Common Stock owned beneficially
includes shares which the named individuals have options to acquire
within 60 days pursuant to the Corporation's 1984 Stock Option Plan and
The Directors' Stock Option Plan. Of the total number of shares owned
beneficially, the number of such shares which are under options
exercisable within 60 days is indicated in parentheses.
2
<PAGE> 5
<TABLE>
<CAPTION>
SHARES OF
YEAR PRINCIPAL OCCUPATION COMMON STOCK
FIRST DURING PAST FIVE YEARS OWNED
NAME AGE ELECTED AND OTHER DIRECTORSHIPS BENEFICIALLY (1)
---- --- ------- ----------------------- -------------
<S> <C> <C> <C> <C>
Martha Clark Goss 49 1994 Vice President and Chief Financial Officer of 15,707
(Term ends 2000) Booz, Allen & Hamilton Inc. (Management (12,000)
Consulting). Prior to July 1995, Senior Vice
President of The Prudential Insurance Company
of America. From 1981 to July 1995, an officer
of various Prudential companies; Director--Dexter
Corporation.
E. James Ferland 56 1993 Chairman of the Board, President and Chief Executive 23,000
(Term ends 2001) Officer of Public Service Enterprise Group Incorporated (14,000)
and Chairman of the Board and Chief Executive Officer
of Public Service Electric and Gas Company (Utilities);
Director--HSB Group Inc., Public Service Enterprise
Group Incorporated.
Joseph J. Melone 67 1988 Chairman Emeritus, The Equitable Companies 21,500
(Term ends 2001) Incorporated. (Insurance and Financial Services). (18,000)
Formerly President and Chief Executive Officer,
The Equitable Companies Incorporated. Director--
The Equitable Companies Incorporated.
David J. Roberts 54 1994 Vice Chairman, since April 1, 1994, and Chief 120,361
(Term ends 2000) Financial Officer of the Corporation, since April 1987. (91,667)
Formerly held several financial positions with the
Corporation and its subsidiaries.
John E. Stuart 55 1997 Former Chairman and Chief Executive Officer of IKON 9,000
(Term ends 2000) Office Solutions (Office Products). From August 1993 (6,000)
to December 1996, Chairman, President and Chief
Executive Officer of Alco Standard Corporation.
Richard J. Swift 54 1993 Chairman, President and Chief Executive Officer 289,782
(Term ends 2001) of the Corporation since April 1994. Formerly held (234,167)
several executive positions with the Corporation
and its subsidiaries. Director--Public Service
Enterprise Group Incorporated, Ingersoll-Rand Company.
</TABLE>
- - ----------------------------
(1) The tabulation of the number of shares of Common Stock owned beneficially
includes shares which the named individuals have options to acquire within
60 days pursuant to the Corporation's 1984 Stock Option Plan, the
Corporation's 1995 Stock Option Plan and/or The Directors' Stock Option
Plan. Of the total number of shares owned beneficially, the number of such
shares which are under options exercisable within 60 days is indicated in
parentheses. Virtually all shares are owned with sole voting and sole
investment powers. 106,688 shares owned by the Officers of the Corporation
have restrictions on the sale of such shares.
3
<PAGE> 6
Following is stock ownership information as of March 1, 1999 for Messrs.
N. William Atwater, Henry E. Bartoli and John C. Blythe, Officers of the
Corporation who are listed in the compensation tables that follow, but are not
included in the Director tabulations above:
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
OWNED
NAME TITLE BENEFICIALLY (1)
---- ----- ----------------
<S> <C> <C>
N. William Atwater Executive Vice President 101,715
(97,500)
Henry E. Bartoli Senior Vice President - 83,489
Energy Equipment Group (72,500)
John C. Blythe Senior Vice President - 14,510
Engineering & Construction Group (10,800)
All current Directors, Director nominees and Officers of the Corporation 1,070,530
as a group (20 persons) as of March 1, 1999. (860,103)
</TABLE>
- - ----------------------------
(1) The tabulation of the number of shares of Common Stock owned beneficially
includes shares which the named individuals have options to acquire
within 60 days pursuant to the Corporation's 1984 Stock Option Plan and
the Corporation's 1995 Stock Option Plan. Of the total number of shares
owned beneficially, the number of such shares which are under options
exercisable within 60 days is indicated in parentheses. 106,688 shares
owned by the Officers of the Corporation have restrictions on the sale of
such shares.
No individual Director, Director nominee or Officer of the Corporation
owns 1% or more of the Corporation's Common Stock. The 20 member group owns less
than 1% of the Corporation's Common Stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 1, 1999, the following organization is known by Foster Wheeler
to be the beneficial owner of more than five percent of the outstanding Common
Stock of the Corporation.
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES OF STOCK
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
-------------- ------------------- ------------------ ----------------
<S> <C> <C> <C>
Common The Regents of The University of California 3,483,550 (1) 8.6%
1111 Broadway, 14th Floor
Oakland, CA 94607
</TABLE>
- - -----------------
(1) As reported on a Schedule 13G dated January 22, 1999.
4
<PAGE> 7
COMMITTEES OF THE BOARD
The Board of Directors of the Corporation has established standing
committees to consider various matters and to make recommendations to the full
Board as to proposed courses of action for the Board. Among the standing
committees that have been established are the Audit Committee, the Committee on
Nominees for Directors and Officers, the Compensation Committee, the Finance
Committee and the Retirement Plan Committee.
The members of the Audit Committee are Mr. John E. Stuart, Chairman; Mr.
David J. Farris; Ms. Constance J. Horner and Mr. Joseph J. Melone. During the
last fiscal year, this Committee held four meetings. The functions of this
Committee are to review Management's recommendations for the engagement or
discharge of independent accountants; to review the audit plans prepared by the
independent accountants and internal auditors, and to monitor the progress of
the plans; to review compliance with Corporate policies; to annually review the
status of any significant litigation; to review the results of the audit, the
Corporation's financial statements and the Corporation's system of internal
accounting control, with the independent accountants; to review fees of the
independent accountants; and to report the Committee's findings to the full
Board of Directors.
The members of the Committee on Nominees for Directors and Officers are
Mr. Joseph J. Melone, Chairman; Mr. Eugene D. Atkinson; Mr. Louis E. Azzato; Mr.
E. James Ferland and Mr. Richard J. Swift. During the last fiscal year, this
Committee held four meetings. The functions of this Committee are to recommend
to the Board the nominees for election as Directors and Officers, and to
consider performance of incumbent Directors and Officers to determine whether to
nominate them for re-election. The Committee will consider Director nominees
recommended by stockholders. Such recommendations should be made by letter,
including a description of the proposed nominee's qualifications, biographical
information and willingness to serve, and sent to the attention of the
Secretary, Foster Wheeler Corporation, Perryville Corporate Park, Clinton, New
Jersey 08809-4000 by November 20, 1999 for the 2000 Annual Meeting of
Stockholders.
The Compensation Committee consists of Mr. Joseph J. Melone, Chairman; Mr.
Eugene D. Atkinson; Mr. David J. Farris; Ms. Martha Clark Goss and Mr. John E.
Stuart. During the last fiscal year, this Committee held three meetings. The
functions of this Committee are to recommend to the Board compensation
arrangements for Directors and Officers, and to approve specific benefits under
such arrangements.
Following are the members of the Finance Committee: Mr. E. James Ferland,
Chairman; Mr. Eugene D. Atkinson; Mr. David J. Farris; Ms. Martha Clark Goss;
Ms. Constance J. Horner and Mr. David J. Roberts. Four meetings of this
Committee were held during the last fiscal year. This Committee reviews the
consolidated financial results of the Corporation; establishes payment schedules
for dividends; and reviews matters that may have an impact on the Corporation's
financial statements, including cash flows.
The members of the Retirement Plan Committee are: Ms. Martha Clark Goss,
Chairman; Messrs. Eugene D. Atkinson; Louis E. Azzato; E. James Ferland; Ms.
Constance J. Horner and Mr. David J. Roberts. Messrs. Robert D. Iseman and James
E. Schessler are Ex Officio members. During the last fiscal year, five meetings
of the Retirement Plan Committee were held. The Committee's authority is to
recommend the allocation of pension fund assets to the Board of Directors;
recommend qualified investment managers and/or trustees for pension fund assets
to the Board of Directors; monitor the results of the investment managers and/or
trustees and meet during the year to discuss their performance; set investment
manager guidelines and objectives and recommend appropriate action to the Board
if guidelines and objectives are not being met.
5
<PAGE> 8
COMPENSATION OF DIRECTORS
Thirteen meetings of the Board of Directors were held during the last
fiscal year. Each director attended 93% or more of the total number of meetings
of the Board and the Board Committees on which he or she served. Directors who
are employees of the Corporation received no additional compensation for their
services as directors. Nonemployee directors receive an annual retainer of
$26,000 and $1,200 for each Board meeting attended. In addition, each
nonemployee director receives $1,200 for each meeting of a Committee of the
Board attended; the Committee Chairman receives $2,000 for each such meeting.
Nonemployee directors are permitted to defer all or part of their retainer or
Board and Committee fees until their retirement or other termination of status
as a director. Deferred amounts accrue interest at an annual rate equal to the
rate charged by First Union National Bank for prime commercial loans of 90-day
maturity.
The Corporation's stockholders, at the 1990 Annual Meeting, approved The
Directors' Stock Option Plan ("Directors' Plan") and at the April 28, 1997
Annual Meeting, the stockholders approved amending the Directors' Plan. Pursuant
to the Directors' Plan, each director who is not an employee of the Corporation
or one of its subsidiaries receives, following the Annual Meeting each year, a
nonqualified option to purchase 3,000 shares of the Corporation's Common Stock.
Such options have ten-year terms and become exercisable beginning one year after
the date of grant at an option exercise price equal to the fair market value of
the shares on the date of grant.
Effective October 15, 1998, for a term of one year, the Corporation has
obtained insurance policies through National Union Fire Insurance Company of
Pittsburgh, Pennsylvania and Continental Casualty Corporation in respect of
indemnification of Directors and Officers. The scope of these policies is
similar to coverage under prior policies held by the Corporation. The annual
premium for this coverage is $323,000.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Plan (the "Plan") for executives of the
Corporation was originally designed in 1987 by an independent consultant. It was
reviewed, modified, and in 1988 approved and adopted by the Compensation
Committee (the "Committee") and the Board of Directors. Since then it has been
regularly reviewed and modified by the Committee and the Board. The Plan is
intended to meet two primary objectives: to attract and retain highly-qualified
executives to manage the Corporation's business and to reward those executives
if their performance and the Corporation's results so warrant. The Committee,
subject to review by the Board, is responsible for the implementation and
administration of all aspects of the Plan. Any payments made under this Plan are
ultimately at the discretion of the Board. The Committee has considered the
effects of certain provisions of the federal income tax laws relative to the
deductibility of compensation to executive officers exceeding $1 million. The
Committee has determined that there is no material impact on the Corporation at
this time as a result of these provisions.
BASE SALARY
The first component of each executive's compensation is base salary. As
part of its consideration relative to salary, the Committee reviews data for
executives in similar positions in comparable companies as provided by an
independent consultant and by the Corporation's staff, and in consultation with
the Chief Executive Officer establishes a salary range for each executive.
Comparable companies are those of similar size as well as those providing
similar services and products to similar markets and customers. The Chief
Executive Officer then proposes to the Committee a specific salary, within that
range, for each executive. The Committee considers that proposal, and then
recommends a salary for
6
<PAGE> 9
each executive to the Board for its consideration and approval. The Committee
similarly recommends a salary within the appropriate range for the Chief
Executive Officer, but without the participation of the Chief Executive Officer.
In determining such salaries, the performance of each such executive, his or her
experience and the performance of the business unit for which he or she is
responsible, as well as performance of the Corporation as a whole, are all taken
into account. The Corporation does not have a policy to predetermine specific
compensation relative to the compensation paid by other companies. Actual
salaries of the Chief Executive Officer and other officers were neither the
highest nor lowest of salaries paid to officers of comparable companies.
ANNUAL INCENTIVE
The second component of each executive's compensation is an annual
incentive payment. At the beginning of each year, corporate and business-unit
earnings targets are formulated by the Chief Executive Officer, then reviewed by
the Committee and, as proposed or modified, are recommended to the Board for its
consideration and approval. The actual incentive payment is solely determined by
measurement of actual performance of the Corporation and each business unit
against the established targets. This payment can range from zero to 93.75
percent of annual salary in the case of the Chief Executive Officer and from
zero to 60 percent of annual salary in the case of other officers depending upon
the extent to which earnings targets are deficient, achieved, or exceeded.
LONG-TERM INCENTIVES
The Plan also provides for long-term incentives comprised of long-term
performance units and stock options. Under the Plan, each executive is assigned
long-term performance units which are valued and payable at the end of a
three-year period. The value of a long-term unit is performance-based and is
determined by the growth in earnings and return on equity during the three-year
period. The number of performance units were determined in a manner such that
certain growth in earnings and returns on equity would result in an incentive
payment to the executives which together with salary and annual incentives would
provide competitive total compensation. The actual payout is determined by the
achievement of considerable earnings growth combined with a reasonable return on
equity over a three-year cycle.
The Plan also provides for long-term incentives to executives in the form
of annual grants of stock options. Such options are granted at the per-share
market price of the Corporation's stock on the date of the award, vest in
installments over a three-year period and only become valuable if the market
price of the Corporation's stock increases.
As outlined above, pursuant to the Plan, the 1998 base salary for Mr.
Swift was determined by the Committee within a range of salaries paid to chief
executive officers of comparable companies, based on data provided by an
independent consultant and by the Corporation's staff, and then recommended to
the Board for its consideration and approval. There was no annual or long-term
incentive cash payout for 1998. Mr. Swift received a restricted stock award as
set forth in the Summary Compensation Table. In accordance with the Plan, the
Committee recommended, and the Board approved, a stock option grant to Mr. Swift
of 50,000 shares at the market price on January 2, 1998 which vests in
installments over a three-year period.
COMPENSATION COMMITTEE:
Joseph J. Melone, Chairman
Eugene D. Atkinson Martha Clark Goss
David J. Farris John E. Stuart
7
<PAGE> 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following Directors served on the Compensation Committee during the
last fiscal year: Messrs. Joseph J. Melone, Chairman; Eugene D. Atkinson; David
J. Farris; E. James Ferland (January 1 - April 27, 1998); Ms. Martha Clark Goss;
Messrs. Frank E. Perkins (January 1 - April 27, 1998) and Charles Y. C. Tse
(January 1 - January 27, 1998). Mr. Swift serves as a director of Public Service
Enterprise Group Incorporated. Mr. Ferland is Chairman, President, Chief
Executive Officer and a director of that company.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following line graph compares the five-year cumulative total
stockholder return of (i) Foster Wheeler Corporation Common Stock, (ii) the S&P
500 Index, and (iii) a line-of-business index consisting of the Dow Jones Heavy
Construction Industry Group and McDermott International, Inc. (the "Industry
Group").
In the preparation of the line graph, the following assumptions have been
used: (i) $100 was invested on December 31, 1993 in Foster Wheeler Common Stock,
the S&P 500 Index, and the Industry Group, (ii) dividends were reinvested and
(iii) the investment is weighted on the basis of market capitalization.
[LINE GRAPH OMITTED]
<TABLE>
<CAPTION>
YEARS ENDING
DEC. 93 DEC. 94 DEC. 95 DEC. 96 DEC. 97 DEC. 98
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Foster Wheeler 100 90.58 132.25 120.17 88.18 44.75
S&P 500 Index 100 101.32 139.40 174.81 224.34 294.89
Industry Group (1) 100 99.66 136.64 127.69 107.45 105.70
</TABLE>
(1) In June 1998, Zurn Industries, a participant in the Dow Jones Heavy
Construction Industry Index, merged into U.S. Industries and consequently
was eliminated from the Index.
8
<PAGE> 11
SUMMARY COMPENSATION TABLE
The following is a tabulation of compensation paid or set aside by the
Corporation and its subsidiaries during each of the Corporation's last three
fiscal years for the Chief Executive Officer ("CEO") and the four most
highly-compensated executive officers of the Corporation, other than the CEO,
who were serving as executive officers at the end of the last fiscal year.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
------------------------ --------------------------------------
Awards Payouts
----------------------- ---------
Name and Principal Year Salary ($) Bonus ($) Restricted Securities Long Term All Other
Position Stock Underlying Incentive Compensation
Awards (1) Options/ Payouts ($) ($) (2)
SARs (#)
==============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Richard J. Swift 1998 $725,000 $ 0 $421,283 50,000 $ 0 $ 4,800
Chairman, President 1997 $630,000 $ 0 $ 0 50,000 $ 0 $ 4,750
& CEO 1996 $605,000 $320,650 $ 0 50,000 $465,215 $ 4,500
- - ------------------------------------------------------------------------------------------------------------------------------
David J. Roberts 1998 $389,000 $ 0 $255,002 25,000 $ 0 $ 4,800
Vice Chairman & Chief 1997 $374,000 $ 0 $ 0 25,000 $ 0 $ 4,750
Financial Officer 1996 $362,500 $153,700 $ 0 25,000 $307,230 $ 4,500
- - ------------------------------------------------------------------------------------------------------------------------------
N. William Atwater 1998 $388,000 $ 0 $ 0 25,000 $175,000 $ 4,800
Executive Vice 1997 $373,000 $ 0 $ 0 25,000 $ 0 $ 4,750
President 1996 $362,000 $184,656 $ 0 25,000 $275,250 $ 4,500
- - ------------------------------------------------------------------------------------------------------------------------------
Henry E. Bartoli 1998 $330,000 $ 0 $ 85,000 25,000 $133,807 $ 4,800
Senior Vice President 1997 $310,000 $ 0 $ 0 25,000 $ 0 $ 4,750
1996 $291,500 $103,144 $ 0 25,000 $299,854 $ 4,500
- - ------------------------------------------------------------------------------------------------------------------------------
John C. Blythe 1998 $287,500(3) $192,000(4) $ 48,000 17,500 $ 0 $181,592(5)
Senior Vice President
- - ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- - ---------------------------
(1) Represents the dollar value of the restricted Foster Wheeler Corporation
common stock on January 26, 1999 (the award date). Either all or a portion
of the long-term incentive payouts were paid in the form of restricted
stock.
(2) Corporation match on employee 401(k) contribution.
(3) Mr. Blythe became an executive officer of the Corporation effective as of
July 1, 1998. His 1998 salary includes payments which Mr. Blythe received
from Foster Wheeler Limited (U.K.) in his position as President and Chief
Executive Officer of that company from January 1, 1998 to June 30, 1998.
(4) The bonus paid to Mr. Blythe includes a bonus earned in his position as
President and Chief Executive Officer of Foster Wheeler Limited (U.K.) and
a guaranteed bonus in connection with his relocation from the United
Kingdom.
(5) In 1998, the Corporation reimbursed Mr. Blythe for expenses associated
with relocation from the United Kingdom in the amount of $72,386 plus
$63,206 for the payment of taxes by Mr. Blythe in connection with such
reimbursement. In October 1998, the Corporation made a four year
interest-free loan to Mr. Blythe in the amount of $144,600 to assist him
with unreimbursed relocation expenses. The interest on the same loan using
the current market interest rate would be approximately $46,000.
9
<PAGE> 12
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
As part of the long-term incentive portion of the Corporation's Executive
Compensation Plan, "performance units", which may pay out in cash upon
completion of a three-year cycle, are awarded annually to Corporate Officers.
The following table sets forth awards in 1998 to the named individuals, along
with the assumed values of the awards at the end of the three-year Plan cycle.
The ultimate value of the award will be based upon the Corporation's earnings
growth rate and return on equity. For a discussion of award criteria see the
Long-Term Incentives section of the Compensation Committee Report on Executive
Compensation which appears earlier in this Proxy Statement.
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
Estimated Future Payouts Under
Non-Stock Price-Based Plans
------------------------------------------------------
Performance or
Other Period
Number of Until
Shares, Units or Maturation or Threshold Target Maximum
Name Other Rights (#) Payout ($) ($) ($)
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
R. J. Swift 335 3 Years 0 $335,000 $670,000
- - ----------------------------------------------------------------------------------------------------------------------
D. J. Roberts 200 3 Years 0 $200,000 $400,000
- - ----------------------------------------------------------------------------------------------------------------------
N. W. Atwater 150 3 Years 0 $150,000 $300,000
- - ----------------------------------------------------------------------------------------------------------------------
H. E. Bartoli 150 3 Years 0 $150,000 $300,000
- - ----------------------------------------------------------------------------------------------------------------------
J. C. Blythe 150 3 Years 0 $150,000 $300,000
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Following is a table dealing with stock option grants which were made to
the named individuals during the last completed fiscal year. The options were
granted pursuant to the terms of the Corporation's Executive Compensation Plan
and the 1995 Stock Option Plan, which provides that ten-year term options are to
be awarded at market value on the date of the award. One-third of an option
becomes exercisable after one year, two-thirds after two years and the entire
option is exercisable after three years.
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------
Number of
Securities % of Total
Underlying Options Granted Grant Date
Options to Employees in Exercise or Base Expiration Present Value
Name Granted (#) Fiscal Year Price ($/Share) Date $ (1)
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
R. J. Swift 50,000 12.82% $27.625 1/2/08 $397,500
- - --------------------------------------------------------------------------------------------------------------------
D. J. Roberts 25,000 6.41% $27.625 1/2/08 $198,750
- - --------------------------------------------------------------------------------------------------------------------
N. W. Atwater 25,000 6.41% $27.625 1/2/08 $198,750
- - --------------------------------------------------------------------------------------------------------------------
H. E. Bartoli 25,000 6.41% $27.625 1/2/08 $198,750
- - --------------------------------------------------------------------------------------------------------------------
J. C. Blythe 17,500 4.49% $27.625 1/2/08 $139,125
- - --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on the Black-Scholes option pricing model, using the following
assumptions: 1) the average of the high and low of the price of Foster
Wheeler Common Stock on the day the options were issued was $27.625; 2)
the option exercise price is $27.625 per share, the average of the high
and low of the price of the stock on the date of option issue; 3) the
dividend yield of the stock was 3.04% (This was based upon the actual
dividend yield as of January 2, 1998); 4) the expected term of the options
is 5 years; 5) the risk free rate of return on the issuance date for the
expected term of the option was 5.63% (the Treasury Bond Rate for 5 years
as of January 2, 1998); and 6) the volatility of the stock was calculated
empirically to be .3298, using Foster Wheeler stock pricing data for the
90 trading days immediately preceding the date of issuance of the options.
10
<PAGE> 13
PENSION PLAN TABLE
The following table illustrates annual retirement benefits under the
Corporation's regular and supplementary pension plans but not including the
401(k) Plan for executive officers based on the average annual compensation and
service shown.
<TABLE>
<CAPTION>
Years of Pension Credited Service After April 1, 1976
- - ---------------------------------------------------------------------------------------------------------
Average Annual
Compensation in Five
Highest Years of the
Last Ten Years
Preceding Retirement 15 20 25 30
--------------------- -- -- -- --
<S> <C> <C> <C> <C>
$ 300,000 $ 90,000 $120,000 $150,000 $180,000
$ 400,000 $120,000 $160,000 $200,000 $240,000
$ 500,000 $150,000 $200,000 $250,000 $300,000
$ 600,000 $180,000 $240,000 $300,000 $360,000
$ 700,000 $210,000 $280,000 $350,000 $420,000
$ 800,000 $240,000 $320,000 $400,000 $480,000
$ 900,000 $270,000 $360,000 $450,000 $540,000
$1,000,000 $300,000 $400,000 $500,000 $600,000
$1,100,000 $330,000 $440,000 $550,000 $660,000
$1,200,000 $360,000 $480,000 $600,000 $720,000
$1,300,000 $390,000 $520,000 $650,000 $780,000
$1,400,000 $420,000 $560,000 $700,000 $840,000
</TABLE>
For service after April 1, 1976, the retirement benefit is based on
average annual compensation (which would include amounts in the "Salary,"
"Bonus" and "Long-Term Incentive Payouts" columns in the Summary Compensation
Table which appears earlier in this Proxy Statement) during the five highest
years in the last ten years of employment. The Corporation's pension is solely
noncontributory. The benefits in the foregoing table are computed as a straight
life annuity payable at normal retirement age and are subject to deduction for
(a) the annuity equivalent of the Corporation provided accumulated contributions
under the Corporation's 401(k) Plan, and (b) one-half of the Supplemental
Employee Retirement Plan ("SERP") participant's age 65 social security benefit
determined as of his date of retirement. The (i) credited years of service after
April 1, 1976, assuming retirement at the normal retirement age of 65, (limited
to a maximum of 30 years) and (ii) the amount of annual "frozen benefits" earned
prior to the current plan (which would be additive to benefits under the current
plan) for those individuals named in the Summary Compensation Table are as
follows: R. J. Swift: 31 1/2 years - $399 D. J. Roberts: 21 years - $427; N. W.
Atwater: 23 1/2 years - $10,259; H. E. Bartoli: 18 1/2 years - $0; J. C. Blythe
is not a participant in the current pension plan - $0.
11
<PAGE> 14
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth, for the named individuals, the number of
shares of Foster Wheeler Common Stock acquired upon option exercise during 1998,
the value realized (spread between the market price on the date of exercise and
the option price) as a result of such option exercises, and the number and value
of unexercised options (both exercisable and unexercisable) as of December 25,
1998.
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------
Value of Unexercised
Number of Securities In-the-Money Options
Underlying at FY-End ($)
Unexercised Options
at FY-End (#)
--------------------- ----------------------
Shares Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
R. J. Swift 0 0 184,167/100,000 $0/$0
- - --------------------------------------------------------------------------------------------------------------------
D. J. Roberts 0 0 66,667/ 50,000 $0/$0
- - --------------------------------------------------------------------------------------------------------------------
N. W. Atwater 0 0 72,500/ 50,000 $0/$0
- - --------------------------------------------------------------------------------------------------------------------
H. E. Bartoli 0 0 47,500/ 50,000 $0/$0
- - --------------------------------------------------------------------------------------------------------------------
J. C. Blythe 0 0 5,800/ 17,500 $0/$0
- - --------------------------------------------------------------------------------------------------------------------
</TABLE>
CHANGE OF CONTROL ARRANGEMENTS
On September 26, 1995, the Board of Directors authorized the Corporation
to enter into change of control employment agreements (the "Agreements") with
its top ten Officers, including the Officers listed in the preceding tables (the
"Executives"). The Agreements provide that if, within three years of a "change
of control", as defined in the Agreements, the Corporation terminates an
Executive's employment other than for "cause" (defined as failure to perform the
Executive's duties or engaging in illegal or gross misconduct) or disability or
if the Executive terminates employment for "good reason," (defined as diminution
of duties or responsibilities, the Corporation's failure to compensate the
Executive, a change in workplace, the Corporation's purported termination of the
Agreement or failure to comply with the Agreement), the Executive will be
entitled to receive a lump sum cash payment of the following amounts: (a) the
Executive's base salary through the date of termination, plus (b) a
proportionate annual bonus, plus (c) three times the sum of the Executive's base
salary, the highest annual bonus and the highest long-term bonus for any of the
most recent three cycles completed before the change of control, plus (d) unpaid
deferred compensation and vacation pay. The Agreements also provide for a
five-year continuation of certain employee welfare benefits and a lump sum
payment equal to the actuarial value of the service credit under the
Corporation's qualified and supplemental retirement plans the Executive would
have received if the Executive had remained employed for three years after the
date of the Executive's termination. The Corporation will also provide the
Executive with outplacement services. Finally, the Executive may tender
restricted stock (whether vested or not) in exchange for cash. However, if any
payments to the Executive, whether under the Agreement or otherwise, would be
subject to the "golden parachute" excise tax under Section 4999 of the Internal
Revenue Code of 1986, as amended, the Corporation will make an additional
payment to put the Executive in the same after-tax position as if no excise tax
had been imposed. Any legal fees and expenses arising in connection with any
dispute under the Agreements, will be paid by the Corporation.
12
<PAGE> 15
In addition to the Agreements, there are other contracts and arrangements
whereunder the Executives listed in the foregoing tables will receive payments
from the Corporation in the event of a change of control. Under the Executive
Compensation Plan, which is discussed in detail in the Compensation Committee
Report on Executive Compensation set forth in this Proxy Statement, individual
participant accruals are paid to the participants within ten days after a change
of control. This Plan also provides that transfer restrictions on Corporation
Common Stock received by an Executive, at the Executive's option in lieu of a
cash incentive payment, lift upon a change of control. "Units" (limited stock
appreciation rights) which may have been granted under the 1984 Stock Option
Plan of Foster Wheeler Corporation become exercisable upon a change in control.
Under the 1995 Stock Option Plan of Foster Wheeler Corporation, the Executive
has the right to surrender his or her option to the Corporation and receive, in
cash, the difference between the fair market value of the shares covered by the
option and the exercise price of the option. The Management Incentive Life
Program ("Incentive Program") and the Supplemental Employee Retirement Plan
("SERP") are annuity contracts between the Corporation and employees that
contain change of control provisions. If a participant in the Incentive Program
is terminated within three years after a change of control, the participant may
continue in the program until the latter of (i) three years from such
termination date or (ii) attainment of age 56. A participant in the SERP
receives the equivalent actuarial value of his or her benefit immediately upon a
change of control.
ITEM 2
PROPOSAL TO AMEND THE CORPORATION'S 1995 STOCK OPTION PLAN TO
INCREASE THE TOTAL NUMBER OF SHARES ON WHICH OPTIONS MAY BE GRANTED
The Corporation's Board of Directors adopted the Corporation's 1995 Stock
Option Plan (the "Plan") on January 31, 1995. The Plan became effective when it
was approved by the Corporation's stockholders at the annual meeting on April
25, 1995.
The Board of Directors believes that the Plan has been worthwhile in
attracting and retaining desirable key executive employees, and promoting their
ownership interests in the Corporation, and wants to continue this program. As
of March 1, 1999, options to purchase 1,349,584 shares of the Corporation's
common stock ("Common Stock") were outstanding or approved to be granted under
the Plan, at exercise prices of $13.50 to $42.1875 per share, and 2,500 shares
have been issued pursuant to options exercised under the Plan since its
inception. This leaves only 147,916 shares of Common Stock available for future
awards of options under the Plan, which will not enable the Corporation to
continue to grant options under the Plan to key employees at levels that the
Corporation has determined appropriate. Accordingly, on January 26, 1999, the
Board of Directors, acting on the recommendation of its Compensation Committee
(the "Committee"), unanimously adopted an amendment to the Plan, subject to the
approval of the stockholders, to increase the number of shares of Common Stock
on which options may be granted under the Plan by 1,800,000 shares. If approved
by the stockholders, the aggregate number of shares of Common Stock on which
options may be granted under the Plan will be increased from the 1,500,000
shares originally authorized to an aggregate of 3,300,000 shares.
If this proposal is adopted, the second sentence of Section 2 of the Plan
would be amended to read, in its entirety, as follows:
"The total amount of the Common Stock on which options may be granted is
3,300,000 shares."
13
<PAGE> 16
The affirmative vote of a majority of the votes cast at the Stockholders
Meeting by the holders of shares entitled to vote is required to approve this
proposal to amend the Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" ITEM 2
TO AMEND THE 1995 STOCK OPTION PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON
STOCK ON WHICH OPTIONS MAY BE GRANTED UNDER THE PLAN BY 1,800,000 SHARES, FROM
1,500,000 TO 3,300,000 SHARES.
A copy of the Plan, as so amended, will be made available to any
stockholder of the Corporation requesting a copy in writing. You should read the
amended Plan for a full statement of its legal terms and conditions. The
following is a description of several features of the Plan.
The Committee administers and interprets the Plan. Currently, the members
of the Committee are Messrs. Joseph J. Melone, Chairman; Eugene D. Atkinson; Ms.
Martha Clark Goss; Messrs. David J. Farris and John E. Stuart, each of whom is a
director of the Corporation, but not an employee of the Corporation.
Consequently, the members of the Committee are not eligible to receive options
under the Plan. If the Committee ceases or becomes unable to act, the Board of
Directors will exercise all functions of the Committee under the Plan.
Currently, approximately 92 employees, including all executive officers of
the Corporation (10 in number, of whom 2 are also directors), are eligible to
receive options under the Plan. As of March 1, 1999, outstanding options under
the Plan are held by, or approved to be granted to, the following named
individuals and groups:
<TABLE>
<CAPTION>
STOCK OPTIONS
NAME AND POSITION (NUMBER OF SHARES)
<S> <C>
R. J. Swift, Chairman, President & CEO 200,000 shares
D. J. Roberts, Vice Chairman & CFO 100,000 shares
N. W. Atwater, Executive Vice President 75,000 shares
H. E. Bartoli, Senior Vice President - Energy Equipment Group 100,000 shares
J. C. Blythe, Senior Vice President - Engineering & Construction Group 46,500 shares
All current executive officers as a group (including the above 800,584 shares
individuals)
All other current management employees 549,000 shares
as a group
</TABLE>
The individuals to whom options will be granted in the future, and the
amounts of individual grants, have not been determined, but it is anticipated
that, among others, all present executive officers of the Corporation, including
the individuals named in the Compensation Table, will receive options under the
Plan.
The Committee determines the eligible individuals to whom options are
granted under the Plan and the terms of individual options, in accordance with
the Plan. Options intended to qualify as "incentive stock options" ("ISOs"),
pursuant to Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and "non-qualified" stock options ("NQOs"), under Section 83 of the
Code, can be issued under the Plan. Options covering more than 250,000 shares of
Common Stock may not be granted to a single executive in any calendar year.
14
<PAGE> 17
Options granted under the Plan are only exercisable beginning one year
after the date of grant, have an option price equal to 100% of the fair market
value of the Common Stock on the date of grant, and must be exercised within 10
years from the date of grant. Options granted under the Plan cannot be
transferred, other than by will or the laws of descent and distribution
following the death of an optionholder. Optionholders may pay for shares of
Common Stock purchased upon the exercise of their options under the Plan in U.S.
dollars or in shares of Common Stock already owned by the optionholder. For
purposes of the grant and exercise of options under the Plan, the fair market
value of a share of Common Stock as of a given date is the mean of the high and
low sale prices of the Common Stock on The New York Stock Exchange on such date.
NQOs terminate at the stated option expiration date in the event of retirement,
disability, death or termination for the convenience of the Corporation, and not
later than three months after termination of employment for any other reason.
ISOs must be exercised not later than three months after termination of
employment, or in the event of death not later than the stated expiration date.
If there is a "change of control" of the Corporation (as defined in the
Plan), all outstanding options become fully vested and exercisable and, during
the 60-day period from and after the "change of control," optionholders have the
right under the Plan, unless specified otherwise when their options are granted,
to surrender all or part of their outstanding options to the Corporation and
receive, in cash, the difference between the "change of control price" (as
defined in the Plan) of the shares covered by the option surrendered and the
option exercise price of such shares, subject to certain limitations in the
Plan.
The Plan will continue in effect until all options under the Plan have
been exercised or expire. ISOs, however, may not be granted after January 31,
2005. Although the Board of Directors may at any time suspend, discontinue or
abandon the Plan, or from time to time revise or amend it, no action of the
Board of Directors may increase the number of shares subject to the Plan or
decrease the price at which options may be granted (except in the event of
certain corporate changes described in the following sentence) without approval
of the stockholders, or amend an outstanding option without the optionholder's
consent. The Committee will, in its discretion, make appropriate adjustments in
the number and class of shares available under the Plan, the option price
provided for by the Plan, and the number, class and price of shares covered by
outstanding options in the event of changes in the Common Stock resulting from a
stock dividend, split or combination, reclassification, recapitalization,
merger, consolidation, reorganization or liquidation.
The closing price of the Common Stock on The New York Stock Exchange on
March 1, 1999, was $12.25.
The following is a brief summary of certain significant United States
Federal income tax consequences, under the Code, as in effect on the date of
this summary, applicable to the Corporation and Plan participants, in connection
with the grant and exercise of options under the Plan. This summary is not
intended to be exhaustive, and, among other things, does not describe state,
local or foreign tax consequences, or the effect of gift, estate or inheritance
taxes. References to the "Corporation" in this summary of tax consequences shall
mean the Corporation or the subsidiary of the Corporation that employs the Plan
participant, as the case may be.
The grant of stock options under the Plan will not result in taxable
income to Plan participants or an income tax deduction for the Corporation.
However, the transfer of Common Stock to optionholders upon exercise of their
options may or may not give rise to taxable income to such participants and tax
deductions for the Corporation, depending upon whether the options are ISOs or
NQOs.
15
<PAGE> 18
The exercise of a NQO generally results in immediate recognition of
taxable ordinary income by the NQO holder and a corresponding tax deduction for
the Corporation in the amount by which the fair market value of the shares of
Common Stock purchased, on the date of such exercise, exceeds the aggregate
option price. Any appreciation or depreciation in the fair market value of such
shares after the date of such exercise will generally result in a capital gain
or loss of the NQO holder at the time he or she disposes of such shares.
In general, the exercise of an ISO is exempt from income tax (although not
from the alternative minimum tax) and does not result in a tax deduction for the
Corporation at any time unless the ISO holder disposes of the Common Stock
purchased thereby within two years of the date such ISO was granted or one year
of the date of such exercise (a "disqualifying disposition"). If these holding
period requirements under the Code are satisfied, and if the ISO holder has been
an employee of the Corporation at all times from the date of grant of the ISO to
the day three months before such exercise (or twelve months in the case of
termination of employment due to disability), then such ISO holder will
recognize any gain or loss upon disposition of such shares as capital gain or
loss. However, if the ISO holder makes a disqualifying disposition of any such
shares, he or she will generally be obligated to report as taxable ordinary
income for the year in which such disposition occurred the excess, with certain
adjustments, of the fair market value of the underlying stock on the date the
ISO was exercised over the option price paid. The Corporation would be entitled
to a tax deduction in the same amount so reported by the ISO holder. Any
additional gain realized by such ISO holder on such a disqualifying disposition
of such shares would be capital gain. If the total amount realized in a
disqualifying disposition is less than the exercise price of the ISO, the
difference would be a capital loss for the ISO holder.
Upon surrender of a NQO or ISO for cash, in the event of a "change of
control" of the Corporation, the amount of cash that the optionholder receives
is immediately taxable to him or her as ordinary income and deductible by the
Corporation.
Under Section 162(m) of the Code, the Corporation may be limited as to
Federal income tax deductions to the extent that total annual compensation in
excess of $1 million is paid to the Chief Executive Officer of the Corporation
or any one of the other four highest paid executive officers who are employed by
the Corporation on the last day of the Corporation's taxable year. However,
certain "performance-based compensation" the material terms of which are
disclosed to and approved by the Corporation's shareholders is not subject to
this deduction limitation. The Corporation has structured the Plan with the
intention that compensation resulting from options granted under the Plan will
be qualified performance-based compensation and deductible without regard to the
limitations otherwise imposed by Section 162(m) of the Code.
Under certain circumstances, accelerated vesting or exercise of options
granted to Plan participants under the Plan in connection with a "change of
control" of the Corporation might be deemed an "excess parachute payment" for
purposes of the golden parachute payment provisions of Section 280G of the Code.
To the extent it is so considered, the Plan participant would be subject to an
excise tax equal to 20% of the amount of the excess parachute payment, and the
Corporation would be denied a tax deduction for the excess parachute payment.
16
<PAGE> 19
ITEM 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, in accordance with the recommendation of its Audit
Committee, has appointed PricewaterhouseCoopers LLP to audit the consolidated
financial statements of the Corporation for the fiscal year ending December 24,
1999, subject to ratification by the stockholders. PricewaterhouseCoopers LLP
has been acting as independent accountants for the Corporation and its
subsidiaries since 1977. A representative of PricewaterhouseCoopers LLP will
attend the Annual Meeting and will be available to respond to appropriate
questions and to make a statement if he so desires.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF INDEPENDENT ACCOUNTANTS.
VOTING PROCEDURE
In 1992, the Corporation adopted a confidential voting policy in
connection with Annual Meetings of Stockholders. In essence, the policy provides
for independent vote tabulations and inspectors, and that, with exceptions,
stockholder votes not be disclosed to the Corporation.
Under Securities and Exchange Commission Rules, boxes and a designated
blank space are provided on the proxy card for stockholders to mark if they wish
either to vote "for," "against" or "abstain" on the proposal, or to withhold
authority to vote for one or more of the nominees for Director. New York law and
the Corporation's Amended By-Laws require the presence of a quorum for the
Annual Meeting, which is defined as a majority of the shares entitled to vote at
the Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
Assuming a quorum has been reached, a determination must be made as to the
results of the vote on each matter submitted for stockholder approval: Item 1 -
The election of Directors, Item 2 - The amendment of the 1995 Stock Option Plan,
and Item 3 - The ratification of the appointment of independent accountants. A
plurality of the votes cast is required for the election of directors.
Abstentions and broker non-votes will have no effect on the outcome of the
election of directors. The affirmative vote of a majority of the votes cast at
the meeting on each matter by the holders of shares entitled to vote thereon is
required to approve the amendment of the 1995 Stock Option Plan and the
ratification of the Corporation's independent accountants. Abstentions and
broker non-votes are not counted in determining the number of votes cast in
connection with these two items.
None of the items being voted upon is such as to afford a right of
appraisal or similar right to stockholders who fail to vote or dissent as to any
action taken with respect thereto.
2000 ANNUAL MEETING
The 2000 Annual Meeting of Stockholders is scheduled to be held on April
24, 2000. The location has not yet been determined. Stockholder proposals must
be received by the Secretary of the Corporation on or before November 20, 1999,
to be included in the proxy material for the 2000 Annual Meeting of
Stockholders.
17
<PAGE> 20
OTHER MATTERS
The expense of preparing, printing and mailing this Proxy Statement and
the accompanying material will be borne by the Corporation. Solicitation of
individual stockholders may be made by mail, personal interviews, telephone,
facsimile, or other telecommunications by Officers and regular employees of the
Corporation who will receive no additional compensation therefor. In addition,
the Corporation has engaged Georgeson & Company Inc. to solicit proxies from
brokers and nominees at a cost of $5,700 plus out-of-pocket expenses. The
Corporation will reimburse brokers and other nominees for their expenses in
forwarding solicitation material to beneficial owners.
The Board of Directors of Foster Wheeler knows of no other business to be
presented at the meeting, but if matters other than those referred to above do
properly come before the meeting, it is intended that the persons named in the
proxy will vote with respect thereto in accord with their best judgment.
By Order of the Board of Directors
LISA FRIES GARDNER
Vice President and Secretary
March 18, 1999
18
<PAGE> 21
1995 STOCK OPTION PLAN OF FOSTER WHEELER CORPORATION
1. PURPOSE
The 1995 Stock Option Plan (the "Plan") is intended to increase incentive
and encourage stock ownership on the part of certain key executive employees of
FOSTER WHEELER CORPORATION (the "Company") or of other corporations which are or
become subsidiaries of the Company (the "Subsidiaries"). It is also the purpose
of the Plan to increase the proprietary interest of such employees in the
success of the Company and Subsidiaries, and to encourage them to remain in the
employ of the Company or of the Subsidiaries. Options intended to qualify as
"incentive stock options" ("ISO") pursuant to Section 422 of the Internal
Revenue Code of 1986, as amended, (the "Code") and "non-qualified" options under
Section 83 of the Code can be issued under the Plan.
2. STOCK
The stock subject to the options shall be shares of the Company's
authorized but unissued or reacquired common stock (the "Common Stock"). The
total amount of the Common Stock on which options may be granted is 1,500,000
shares.
In the event that any outstanding option under the Plan expires or is
terminated, shares of Common Stock allocable to the unexercised portion of such
option may again become subject to an option under the Plan.
3. ADMINISTRATION
The Plan shall be administered by the Compensation Committee of the Board
of Directors (the "Committee").
Granting options and all matters relating to the Plan and options granted
pursuant thereto are hereby delegated to the Committee except such as are
expressly herein reserved to the Board of Directors or to Stockholders of the
Company. Any determination reduced to writing and signed by a majority of the
Committee shall be fully effective as if made by a majority vote at a meeting
thereof duly called and held. The Committee may make such other rules and
regulations for the conduct of its business as it shall deem advisable. The
interpretation and construction by the Committee of provisions of the Plan or of
options granted pursuant thereto shall be final and conclusive. No member of the
Committee or of the Board of Directors shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
pursuant thereto.
If no Committee be appointed by the Board of Directors, or if the
Committee shall cease or be unable to act, all functions of the Committee shall
be exercised by the Board of Directors.
4. ELIGIBILITY
The persons eligible to receive options shall be key executive employees
(including Officers and such Directors as are employees) of the Company or
Subsidiaries, as the Committee shall determine from time to time. An optionee
may hold more than one option. The maximum number of shares with respect to
which options may be granted to any executive during a calendar year is 250,000.
<PAGE> 22
5. GENERAL TERMS AND CONDITIONS OF OPTIONS
Stock options granted pursuant to the Plan shall be evidenced by
agreements (which need not be identical) in such form as the Committee from time
to time shall determine, which agreements shall contain the following terms and
conditions:
(a) Exercise of Options
An option may not be exercised within one year from the date of
grant of such option, or if in the opinion of counsel for the Company
exercise of this option or delivery of shares pursuant thereto might
result in a violation of any law or regulation of an agency of government
or have an adverse effect on the listing status or qualification of the
Company shares on any securities exchange.
(b) Option Price
The option shall state the option price which shall be 100% of the
fair market value of the shares of Common Stock on the date of the
granting of the option. The mean of the high and low sale prices of the
Common Stock on the New York Stock Exchange on the day an option is
granted may be taken by the Committee as the fair market value.
(c) Medium and Time of Payment
The option price shall be paid upon exercise (i) in U.S. dollars, or
(ii) in shares of Common Stock of the Company owned of record by the
employee. Such stock shall be valued at the mean of the high and low sale
prices of such stock on the New York Stock Exchange on the day of
exercise.
(d) Term of Options
No option shall be exercisable after ten years from the date
granted.
(e) Continuation of Employment
So long as the optionee shall continue to be an employee of the
Company or a Subsidiary, the option shall not be affected by (i) any
change of duties or position, or (ii) any temporary leave of absence
approved by each employing corporation and by the Committee. Nothing in
this Plan or in any option agreement hereunder shall confer upon any
employee any right to continue in the employ of the Company or such
Subsidiary or interfere in any way with the right of the Company or such
Subsidiary to terminate his employment at any time, with or without cause.
For the purposes of this section of the Plan, a member of the Board
of Directors of the Company, so long as he remains on the Board, shall not
be deemed to have terminated his employment by reason of his retirement as
an employee of the Company. Upon termination as a member of the Board, or
death, the Board member, a legatee or legatees, or his personal
representative or distributees shall have the same time period to exercise
an option as provided for a retired or deceased employee.
(f) Assignability
No option shall be assignable or transferable by the optionee except
by will or by the laws of descent and distribution. During the lifetime of
an optionee, the option shall be exercisable only by him or a court
appointed guardian.
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<PAGE> 23
(g) Rights as a Stockholder
An optionee shall have no rights as a Stockholder with respect to
any shares covered by his option until the date of the issuance of a stock
certificate to him for such shares.
(h) Change of Control
Notwithstanding any other provision of the Plan, during the 60-day
period from and after a Change of Control (the "Exercise Period"), unless
the Committee shall determine otherwise at the time of grant, an optionee
shall have the right, whether or not the option is fully exercisable and
in lieu of the payment of the exercise price for the shares of Common
Stock being purchased under the option and by giving notice to the
Company, to elect (within the Exercise Period) to surrender all or part of
the option to the Company and to receive cash, within 30 days of such
notice, in an amount equal to the amount by which the Change of Control
Price per share of Common Stock on the date of such election shall exceed
the exercise price per share of Common Stock under the option (the
"Spread") multiplied by the number of shares of Common Stock subject to
the option as to which the right granted under this Section 5(h) shall
have been exercised; provided, however, that if the Change of Control is
within six months of the date of grant of a particular option held by an
optionee who is an officer or director of the Company and is subject to
Section 16(b) of the Exchange Act, no such election shall be made by such
optionee with respect to such option prior to six months from the date of
grant. However, if the end of such 60-day period from and after a Change
of Control is within six months of the date of grant of an option held by
an optionee who is an officer or director of the Company and is subject to
Section 16(b) of the Exchange Act, such option shall be canceled in
exchange for a cash payment to the optionee, effected on the day which is
six months and one day after the date of grant of such option, equal to
the Spread multiplied by the number of shares of Common Stock subject to
the option.
Notwithstanding any other provision of the Plan to the contrary, in
the event of a Change of Control, any options outstanding as of the date
such Change of Control is determined to have occurred and not then
exercisable and vested shall become fully exercisable and vested to the
full extent of the original grant.
A "change of control" shall mean: (a) The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of voting securities of the
Company where such acquisition causes such person to own 20% or more of
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not be
deemed to result in a Change of Control: (i) any acquisition directly from
the Company, (ii) any acquisition by the Company, (iii) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, or (iv) any
acquisition by any corporation pursuant to a transaction that complies
with clauses (i), (ii) and (iii) of subsection (c) below; and provided,
further, that if any Person's beneficial ownership of the Outstanding
Company Voting Securities reaches or exceeds 20% as a result of a
transaction described in clause (i) or (ii) above, and such Person
subsequently acquires beneficial ownership of additional voting securities
of the Company, such subsequent acquisition shall be treated as an
acquisition that causes such Person to own 20% or more of the Outstanding
Company Voting Securities; or
3
<PAGE> 24
(b) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(c) The approval by shareholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company ("Business Combination")
or, if consummation of such Business Combination is subject, at the time
of such approval by shareholders, to the consent of any government or
governmental agency, the obtaining of such consent (either explicitly or
implicitly by consummation); excluding, however, such a Business
Combination pursuant to which (i) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively,
the then outstanding shares of common stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that as a result of such transaction owns the Company or all
or substantially all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Voting Securities, (ii) no Person (excluding any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the corporation resulting from
such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
For purposes of the Plan, "Change of Control Price" means the higher
of (i) the highest reported sales price, regular way, of a share of Common
Stock in any transaction reported on the New York Stock Exchange Composite
Tape or other national exchange on which such shares are listed during the
60-day period prior to and including the date of a Change of Control, or
(ii) if the Change of Control is the result of a tender or exchange offer
or a Business Combination, the highest price per share of Common Stock
paid in such tender or exchange offer or Business Combination; provided,
however, that (x) in the case of an option which (A) is held by an
optionee who is an officer or director of the Company and is subject to
Section 16(b) of the Exchange Act and (B) was granted within 240 days of
the Change of Control, the Change of Control Price for such option shall
be the fair market value of the Common Stock on the date such option is
exercised or deemed exercised and (y) in the case of an ISO option, the
Change of Control Price shall be in all cases the fair market value of the
Common Stock on the date such option is exercised. To the extent that the
consideration paid in any such transaction described above consists in
whole or in part of securities or other non-cash consideration, the value
of such securities or other non-cash consideration shall be determined in
the sole discretion of the Board.
4
<PAGE> 25
6. ADDITIONAL TERMS AND CONDITIONS OF ISO OPTIONS
In addition to the terms and conditions set forth in Article 5, the
following provisions shall be included in all ISO options:
(a) Term
All ISO options granted pursuant to the Plan must be granted prior
to January 31, 2005.
(b) Termination of Employment
In the event that the employment of an optionee shall be terminated
(otherwise than by reason of the optionee's death), the option may be
exercised at any time after one year from the date of grant, but within
three months after such termination, and not later than the expiration
date of the option.
If an optionee shall die while employed by the Company or a
Subsidiary, or within three months after the termination of his
employment, the option may be exercised by a legatee or legatees of the
optionee under his last will, or by his personal representatives or
distributees, at any time one year after the date of grant, but before the
expiration date of the option.
(c) Limitations of Option Grants
The aggregate annual fair market value of option stock with respect
to which ISO's may become exercisable for the first time in a calendar
year per employee, determined at the time of grant, shall not exceed
$100,000.
7. ADDITIONAL TERMS AND CONDITIONS OF NON-QUALIFIED OPTIONS
In addition to the terms and conditions set forth in Article 5, the
following provisions shall be included in all non-qualified stock options.
(a) Termination of Employment
If an optionee retires under a pension plan of the Company or a
Subsidiary, becomes disabled and is unable to continue to work, or is
terminated for the convenience of the Company, the option may be exercised
at any time after one year from the date of grant, but prior to the
expiration date of the option.
If an optionee dies while employed by the Company or a Subsidiary,
or dies while retired, disabled or terminated as set forth in the
preceding paragraph, the option may be exercised by a legatee or legatees
of the optionee under his last will, or by his personal representatives or
distributees, at any time one year after the date of grant, but prior to
the expiration date of the option.
In the event that the employment of an optionee shall be terminated,
other than for the reasons set forth above, the option may be exercised at
any time one year after the date of grant, but within three months after
such termination, but not later than the expiration date of the option.
5
<PAGE> 26
8. TERM OF PLAN
Subject to Articles 10 and 6 (a), the Plan shall remain in effect until
all options granted under the Plan have been exercised or expire.
9. RECAPITALIZATION
In the event of changes in the Common Stock by reason of stock dividends,
split-ups or combination of shares, reclassifications, recapitalizations,
mergers, consolidations, reorganizations or liquidations, appropriate
adjustments shall be made by the Committee in (a) the number and class of shares
available under the Plan in the aggregate, (b) the option price provided for by
the Plan, (c) the number and class of shares to which optionees will thenceforth
be entitled upon exercise of their options, and (d) the price which optionees
shall be required to pay upon such exercise.
Whether any adjustment or modification is required as a result of the
occurrence of any of the events heretofore specified, and the amount thereof,
shall be determined by the Committee, which determination shall be final,
binding and conclusive.
10. AMENDMENT OF THE PLAN
The Board of Directors of the Company may from time to time suspend,
discontinue or abandon the Plan or revise or amend it in any respect whatsoever
except that (a) without approval of the Stockholders of the Company, the number
of shares subject to the Plan shall not be increased and the price at which
options may be granted shall not be decreased, other than appropriate
adjustments necessary to reflect stock dividends, split-ups, or combinations of
shares, reclassifications, recapitalizations, mergers, consolidations,
reorganizations or liquidations, and (b) an outstanding option shall not be
amended in any respect without the consent of the optionee to whom granted.
11. ADOPTION OF PLAN
The Plan shall become effective when adopted by the Board of Directors,
which was done on January 31, 1995, and approved by the Stockholders of the
Company at a duly held Stockholders' meeting by favorable vote of holders of
shares representing a majority of the votes entitled to be cast on matters
submitted to Stockholders. Adoption of the Plan by the Board of Directors and
approval of the Plan by Stockholders shall not affect the stock option plans of
the Company previously adopted by the Stockholders or options outstanding under
such plans.
6
<PAGE> 27
PROXY
FOSTER WHEELER CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - MONDAY, APRIL 26, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Foster Wheeler Corporation hereby appoints
Richard J. Swift, Thomas R. O'Brien and Lisa Fries Gardner, each with full power
of substitution, to represent and to vote as designated on the reverse side, all
of the shares of common stock of Foster Wheeler Corporation held of record in
the name of the undersigned as of March 9, 1999, at the Annual Meeting of
Stockholders to be held at the Hunterdon Hills Playhouse, 88 Route 173 West,
Hampton, New Jersey at 10:30 a.m. on Monday, April 26, 1999 or any adjournments
thereof.
Please Vote on the reverse side hereof, Sign, Date and promptly return
this Proxy Card using the enclosed envelope.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no directions are given, this Proxy
will be voted for Items 1, 2 and 3.
(Continued, and to be signed and dated, on the other side)
- - --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
DIRECTIONS TO THE HUNTERDON HILLS PLAYHOUSE
88 ROUTE 173 WEST, HAMPTON, NJ 08827
1-800-447-7313
FROM I-78 WEST: Take Exit 12. Coming off of ramp make a left onto Route 173. Go
through traffic light and travel approximately 1/2 mile. Hunterdon Hills
Playhouse is on your right.
FROM I-287 NORTH TO SOUTH: Follow Route 287 South to Exit 21B (Clinton) which
will be Route 78 West. Follow the directions from I-78 West above.
FROM I-287 SOUTH TO NORTH: Take Route 287 North and follow signs for I-78 West,
then follow directions from I-78 West above.
FROM LIVINGSTON - FLORHAM PARK AREA: Take Route 24 West to the end (staying
left) and follow signs to I-287 South-Somerville, then follow directions from
Route I-287 North to South.
FROM NEWARK AIRPORT: Follow signs to I-78 West. Take I-78 West for approximately
45 miles to Exit 12 and follow the directions from I-78 West above.
FROM THE HOLLAND TUNNEL: From the Holland Tunnel stay to the extreme right and
take the New Jersey Turnpike extension to Exit 14. Take I-78 West and follow the
directions from I-78 West above.
FROM THE LINCOLN TUNNEL: From the Lincoln Tunnel take the New Jersey Turnpike
(I-95) South to Exit 14. Take I-78 West and follow the directions from I-78 West
above.
FROM GARDEN STATE PARKWAY NORTH OR SOUTH: Take the Garden State Parkway to Exit
142. Follow signs for I-78 West, then follow directions from I-78 West above.
FROM ALLENTOWN AND EASTON, PA: Take Route 22 East and go over the Phillipsburg
Bridge, stay on Route 22 through Phillipsburg bearing right on Route 22 to I-78
East. Stay on I-78 East to Exit 12. Make a left turn at the end of the ramp, go
to the traffic light and turn left. Make a left turn at the first light onto
Route 173 and go approximately 1/2 mile. The Hunterdon Hills Playhouse is on
your right.
THIS TICKET IS NOT TRANSFERABLE
<PAGE> 28
PLEASE MARK
YOUR VOTES AS [ X ]
INDICATED IN
THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 AND 3.
ITEM 1 Election of Four Directors
Nominees are: Louis E. Azzato, John P. Clancey, David J. Farris and Constance J.
Horner
FOR WITHHOLD
AUTHORITY
[ ] [ ]
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.
ITEM 2 To amend the 1995 Stock Option Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
ITEM 3 To ratify appointment of independent accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I WILL ATTEND THE ANNUAL MEETING. [ ]
Discontinue mailing of duplicate Annual Report. [ ]
Signature(s) should be exactly as name(s) appear on this proxy. Joint owners
should each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Dated:____________________________________, 1999
_________________________________________________
Signature
_________________________________________________
Signature
- - --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
ADMISSION TICKET
ANNUAL MEETING OF STOCKHOLDERS
OF
FOSTER WHEELER CORPORATION
MONDAY, APRIL 26, 1999
10:30 A.M.
HUNTERDON HILLS PLAYHOUSE
88 ROUTE 173 WEST
HAMPTON, NEW JERSEY
================================================================================
INSTRUCTIONS
1. REVIEW AND COMPLETE THE PROXY CARD ABOVE; BE SURE TO SIGN AND DATE THE
CARD.
2. DETACH AND RETURN THE SIGNED PROXY CARD IN THE ENCLOSED RETURN ENVELOPE.
3. IF YOU PLAN TO ATTEND THE MEETING, PLEASE RETAIN THIS ADMISSION TICKET AND
MARK THE APPROPRIATE BOX ON THE PROXY CARD. DIRECTIONS TO THE MEETING SITE
ARE SHOWN ON THE REVERSE SIDE. THIS TICKET ADMITS THE STOCKHOLDER(S) WHOSE
NAME(S) APPEARS ON IT.
================================================================================
YOU ARE URGED TO DATE AND SIGN THE ABOVE PROXY AND RETURN IT
PROMPTLY TO ENSURE A PROPER REPRESENTATION AT THIS MEETING.
