<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K
ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission File No. 1-12248
KAISER GROUP INTERNATIONAL, INC.
(formerly ICF Kaiser International, Inc.)
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
54-1437073
(I.R.S. Employer
Identification No.)
9300 Lee Highway, Fairfax, Virginia
(Address of principal executive offices)
22031-1207
(Zip Code)
Registrant's telephone number, including area code: (703) 934-3300
Name of each exchange on which registered:
None
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share
Preferred Stock Purchase Rights
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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 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. [_]
The aggregate market value of Common Stock held by non-affiliates of the
registrant was $4,944,912 million based on the Over-the-Counter Bulletin Board
closing price of $0.25 on April 13, 2000.
On April 13, 2000, there were 23,419,828 shares of Common Stock
outstanding.
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PART I
Item 1. Business
Corporate History
Kaiser Group International, Inc., through its operating subsidiaries, is a
provider of engineering, construction management, and project and program
management services and has performed a mixture of public- and private-sector
engineering and construction work since the inception of its predecessor, Kaiser
Engineers, in 1914. The "Company" or "Kaiser" in this Report refers to Kaiser
Group International, Inc. and/or any of its consolidated subsidiaries.
Incorporated in Delaware in 1987 under the name American Capital and Research
Corporation, it is the successor to ICF Incorporated, a nationwide consulting
firm organized in 1969. In 1988, the Company acquired the Kaiser Engineers
business. Reflecting a return to its historical business focus, the Company's
name was changed on December 27, 1999 from ICF Kaiser International, Inc. to
Kaiser Group International, Inc.
Kaiser also owns a 50% interest in Kaiser-Hill Company, LLC, which serves
as the integrated management contractor at the U.S. Department of Energy's
(DOE's) Rocky Flats Environmental Technology Site. Kaiser-Hill has performed at
DOE's Rocky Flats Environmental Technology Site near Denver, Colorado since 1995
and was recently awarded a new contract to manage the closure of the site within
the next decade. Rocky Flats is a former DOE nuclear weapons-production
facility, and under the new closure contract, Kaiser-Hill is working to
stabilize and safely store more than 14 tons of plutonium at the site, to clean
up areas contaminated with hazardous and radioactive waste, and to restore much
of the 6,000-acre site to the public.
Recent History
The components of Kaiser's business underwent significant change during
1999 as a result of actions aimed at the restoration of the Company's financial
condition that had been damaged by substantial difficulties encountered in its
execution of four large fixed-price contracts to construct nitric acid plants in
1998 and early 1999. As discussed in Item 7. Management's Discussion and
Analysis, the changes included the sale and divestiture of two of its operating
groups, namely, its Environment and Facilities Management Group (EFM) and its
Consulting Group. The Company has also been focused on realigning and
rightsizing its remaining operations, resolving its liquidity issues and
restructuring its debt and equity. Unless otherwise noted, all discussions
contained in this Report reflect only the historical business operations of the
Company's non-divested and continuing operations, namely its Engineering
Operations and the operations of the Kaiser-Hill subsidiary. "Engineering
Operations" referenced hereafter in this Report refer to the Company's business
activities not conducted through the Kaiser-Hill subsidiary.
BUSINESS
Overview of Services and Markets
Kaiser's Engineering Operations are focused on serving clients in two
categories: Infrastructure and Facilities, comprised of transit and
transportation, facilities management, water/wastewater treatment and
microelectronics and clean technology business lines, and Metals, Mining and
Industry, comprised of alumina/aluminum; iron and steel and mining industry
business lines.
Infrastructure and Facilities
Transit and Transportation - Kaiser's transit and transportation services
support the planning, design, engineering, and construction of heavy- and light-
rail transit systems, high-speed rail, peoplemovers, bus systems, highways and
bridges, and airport improvements. Kaiser is developing state-of-the-art
transit systems for 20 cities worldwide and designing major highway projects
throughout the United States and in selected international markets. Domestic
growth is driven by the Federal Transportation Equity Act for the 21st Century.
Passed in July 1998, the bill authorized $217 billion of spending during the
next six years in transit and highway programs. Significant opportunities also
exist internationally as developing countries seek to improve their transit
systems. Current projects include
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transit systems in Seattle, New York, Los Angeles, the Philippines, Portugal and
Turkey; a passenger rail line in Portugal; and multi-million dollar highway and
bridge improvements in California, Florida, Massachusetts, and Oklahoma.
Facilities and Water/Wastewater - Kaiser provides engineering services to
public- and private-sector clients who need to modernize or maintain facilities;
design and build new capacity for the future; or improve existing operational
and environmental conditions. Future growth in this area of activity will be
based in part on the trend toward outsourcing by both private- and public-sector
clients. Kaiser's largest project of this type involves serving, through
Kaiser-Hill Company, LLC, as the integrating management contractor at the DOE
Rocky Flats site, a former nuclear weapons production facility near Denver,
Colorado. In another significant project, Kaiser serves as construction manager
for the $3.4 billion Boston Harbor cleanup project that is currently scheduled
to continue through December 31, 2002.
Microelectronics and Clean Technology - Kaiser also provides design/build
services for the microelectronics, semiconductor, biotechnology, and
telecommunication industries. Kaiser has constructed or remodeled over seven
million square feet of manufacturing, office, and other facilities, including
more than 500,000 square feet of cleanrooms, from class 1 to class 10,000.
Following a contraction over the past several years, this market is expected to
experience growth over the next two years, driven primarily by the automotive
industry and advanced technology manufacturers' needs for increased
manufacturing capacity and capabilities. A major project is the construction
management services for a semiconductor facility expansion for Motorola in
Arizona.
Metals, Mining and Industry
Alumina/Aluminum - Kaiser provides design and construction services for
expansion and modernization of some of the world's largest alumina and aluminum
facilities in locations from Kentucky to the Middle East and Australia.
Kaiser's areas of expertise include bauxite mining and handling; alumina
refining; aluminum reduction; and fabrication and rolling. Domestic
opportunities involve maintaining and retrofitting existing plants and replacing
aging production capacity with newer, more efficient, and environmentally
responsible facilities. Outside of the United States, there will be greater
focus on building new facilities. Current projects include detailed design,
engineering, procurement, and construction management for the expansion of a
$500 million alumina refinery in Western Australia, and a $180 million alumina
refinery in Louisiana.
Iron and Steel - Kaiser supports the iron and steel industry by providing
traditional services such as engineering, design, and project and construction
management for plant expansions, modernizations, and greenfield development.
Kaiser is the sole U.S. domestic designer and builder of coke ovens and coke
oven machinery, and is active in the development of mini-mills as an
alternative, cost-effective method of making steel. For example, Kaiser is
providing turnkey engineering and construction services for the new $262 million
thin-slab casting mini-mill project for Nova Hut, a.s. in Ostrava, Czech
Republic.
Mining and Industry - Kaiser offers a full range of engineering,
procurement and construction management services to this industry sector.
Current contracts include projects in the nickel, coal, silicon, iron ore,
magnesium, mineral sands, natural gas and gold industries. Activities in this
business line are carried out predominantly through the Company's operations in
Australia. Opportunities for growth in this business line are largely dependent
on commodity prices, which drive client investment and, in turn, opportunities
for the Company in connection with expansion and modernization of existing
facilities and construction of new facilities.
Most of the Company's Engineering Operations contract backlog is related to
public- and private-sector engineering and construction projects that span from
several months to several years in duration. The Company's Engineering
Operations ended 1999 with $202.0 million in contract backlog. The Company
expects to work off 49% of this amount in 2000.
Kaiser-Hill Company, LLC is equally owned by Kaiser and CH2M Hill Companies
Ltd.; Kaiser designates a majority of the members of Kaiser-Hill's Board of
Managers. The scope of Kaiser-Hill's contract with the DOE includes all
elements of daily and long-term operations, as well as ultimate closure of the
site, including stabilizing and safely storing more than 14 tons of plutonium,
cleaning up areas contaminated with hazardous and radioactive waste, and
restoring much of the 6,000-acre site for future use by the public.
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Kaiser-Hill's prior contract with the DOE was originally scheduled to
expire on September 2000. On January 24, 2000, Kaiser-Hill was awarded the
follow-on Rocky Flats contract pursuant to which Kaiser-Hill is providing
services that will complete the restoration of the Rocky Flats site and close it
to DOE occupation (the Closure Contract). The Closure Contract became effective
February 1, 2000 and terminated the remaining period of the former contract as
of January 31, 2000. The economic terms of the Closure Contract are
significantly different from the former contract in that Kaiser-Hill, in
addition to continuing to earn revenue from the reimbursement of the actual
costs of its services, will also earn a performance fee based on a combination
of the actual costs of completion and on the actual date of physical completion.
The Closure Contract will reimburse Kaiser-Hill for the costs it incurs to
complete the site closure, currently estimated to range between $3.6 billion and
$4.8 billion and, in addition, will pay Kaiser-Hill an incentive fee ranging
from $150.0 million to $460.0 million, depending on Kaiser-Hill's ability to
control the incurred costs at completion to within the targeted range and its
ability to meet the closure goal anytime between March 31, 2006 - March 31,
2007. If Kaiser-Hill attains physical completion above target cost, the fee
will be reduced by 30% of all contract costs incurred after such date up to a
maximum of $20.0 million.
General Information about Kaiser
Competition and Contract Award Process
The market for Kaiser's services is highly competitive. Kaiser competes
with many other engineering and construction, program and project management
services firms ranging from small firms to large multi-national firms having
substantially greater financial, managerial and marketing resources than Kaiser.
Other competitive factors include quality of services, technical qualifications,
reputation, geographic presence, price, financial stability and the availability
of key professional personnel.
Private-Sector Work. Competition for private-sector work generally is
based on several factors, including quality of work, reputation, price and
marketing approach. Kaiser's objective is to establish and maintain a strong
competitive position in its areas of operations by adhering to its basic
philosophy of delivering high-quality work in a timely fashion within its
clients' budgetary constraints.
Public-Sector Work. Most of Kaiser's contracts with public-sector clients
are awarded through a competitive bidding process that places no limit on the
number or type of bidders. The process usually begins with a government request
for proposals that delineates the size and scope of the proposed contract.
Proposals are evaluated by the government on the basis of technical merit,
including responses to mandatory solicitation provisions, corporate and
personnel qualifications, experience, and cost. Kaiser believes that its
experience and ongoing work strengthen its technical qualifications and thereby
enhance its ability to compete successfully for future government work.
Teaming Arrangements and Joint Ventures. In both the private and public
sectors, Kaiser, acting either as a prime contractor or as a subcontractor, may
join with other firms to form a team or a joint venture that competes for a
single contract or submits a single proposal. Because a team of firms or a
joint venture almost always can offer a stronger set of qualifications than any
firm standing alone, these arrangements often are very important to the success
of a particular competition or proposal. Kaiser maintains a large network of
business relationships with other companies and has drawn repeatedly upon these
relationships to form winning teams.
Contract Structure. Kaiser operates under a number of different types of
contract structures with its private- and public-sector clients, the most common
of which are cost plus and fixed price. Under cost plus contracts, Kaiser's
costs are reimbursed with a fee, either fixed or percentage of cost, and/or an
incentive or award fee offered to provide inducement for effective project
management. A variation of cost plus contracts are time-and-materials contracts
under which Kaiser is paid at a specified fixed hourly rate for direct labor
hours worked. Under fixed price contracts, Kaiser is paid a predetermined
amount for all services provided as detailed in the design and performance
specifications agreed to at the project's inception, and under which Kaiser
retains more performance risk than under cost plus contracts. While these fixed
price contracts can result in higher profit margins, they also can be costly if
Kaiser experiences cost overruns that are not recoverable from the client.
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Customers
Kaiser's domestic clients include the DOE and other federal departments and
agencies; major corporations in the transportation, steel, aluminum, mining, and
manufacturing industries; utilities; and a variety of state and local government
agencies throughout the United States and in other areas of the world. The DOE
accounted for approximately 74% of Kaiser's consolidated gross revenue for the
year ended December 31, 1999, approximately 63% for the year ended December 31,
1998, and approximately 64% for the year ended December 31, 1997.
Kaiser's international clients include both private firms and foreign
government agencies. For the years ended December 31, 1999, 1998, and 1997,
foreign clients accounted for approximately 11.5%, 12.2%, and 17.0% of Kaiser's
consolidated gross revenue, respectively. For information concerning gross
revenue, operating income, and identifiable assets of Kaiser's business by
geographic area during 1999, 1998 and 1997, see Note 5 to the consolidated
financial statements.
Contract Backlog
The aggregate amount of gross contract revenue remaining to be earned
pursuant to signed contracts extending beyond the current date is referred to as
contract backlog. Kaiser believes that contract backlog is not an absolute
predictor of future gross or service revenue for any particular periods as the
status of contract funding, especially in contracts with certain governmental
agencies, can be unilaterally altered. Most of Kaiser's contract backlog
relates to Kaiser-Hill's Rocky Flats Closure Contract.
Potential Liabilities Involving Clients and Third Parties
In performing services for its clients, Kaiser could potentially be liable
for breach of contract, personal injury, property damage, and negligence,
including improper or negligent performance or design, failure to meet
specifications, and breaches of express or implied warranties. The damages
available to a client, should it prevail in its claims, are potentially large
and could include consequential damages.
Under Kaiser-Hill's contract with the DOE, Kaiser-Hill is not responsible
for, and the DOE pays all costs associated with, any liability, including,
without limitation, any claims involving strict or absolute liability and any
civil fine or penalty, expense, or remediation cost, but limited to those of a
civil nature, which may be incurred by, imposed on, or asserted against Kaiser-
Hill arising out of any act or failure to act, condition, or exposure which
occurred before Kaiser-Hill assumed responsibility on July 1, 1995 ("pre-
existing conditions"). To the extent the acts or omissions of Kaiser-Hill
constitute willful misconduct, lack of good faith, or failure to exercise
prudent business judgment on the part of Kaiser-Hill's managerial personnel and
cause or add to any liability, expense, or remediation cost resulting from pre-
existing conditions, Kaiser-Hill is responsible, but only for the incremental
liability, expense, or remediation caused by Kaiser-Hill.
The Kaiser-Hill contract further provides that Kaiser-Hill will be
reimbursed for the reasonable cost of bonds and insurance allocable to the Rocky
Flats contract and for liabilities and expenses incidental to these liabilities,
including litigation costs, to third parties not compensated by insurance or
otherwise. The exception to this reimbursement provision applies to liabilities
caused by the willful misconduct or lack of good faith of Kaiser-Hill's
managerial personnel or the failure to exercise prudent business judgment by
Kaiser-Hill's managerial personnel.
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Insurance
Kaiser has a comprehensive risk management and insurance program that
provides a structured approach to protecting Kaiser. Included in this program
are coverages for:
. general, automobile, pollution impairment, and professional liability;
. workers' compensation; and
. employers and property liability.
Kaiser believes that the insurance it maintains, including self-insurance,
is in amounts and protects against risks as is customarily maintained by similar
businesses operating in comparable markets. At this time, Kaiser expects to
continue to be able to obtain insurance in amounts generally available to firms
in its industry. There can be no assurance that the insurance coverage and
levels maintained by Kaiser will continue, and if insurance of these types is
not available, it could have a material adverse effect on Kaiser.
Kaiser has pollution insurance coverage on an occurrence basis, in amounts
and on terms that are economically reasonable, against possible liabilities that
may be incurred in connection with its conduct of its environmental business.
An uninsured claim arising out of Kaiser's environmental activities, however, if
successful and of sufficient magnitude, could have a material adverse effect on
Kaiser.
Government Regulation
In the past, Kaiser had a number of cost-reimbursement contracts with the
U.S. government, the costs of which are subject to audit and adjustment by the
applicable U.S. government agency. Most of these contracts were entered into by
Kaiser's former EFM and Consulting Groups, which were divested in 1999.
However, in conjunction with these divestitures, Kaiser indemnified certain
elements of the sales and has retained many of the liabilities associated with
the pre-divestiture performance of these contracts. As a result of pending
audits related to fiscal years 1986 forward, the government has asserted, among
other things, that some costs claimed as reimbursable under government contracts
either were not allowable or not allocated in accordance with federal
procurement regulations. Kaiser is actively working with the government to
resolve these issues. Kaiser has provided for its estimate, in its financial
statements, of the potential effect of issues that have been quantified,
including its estimate of disallowed costs for the periods currently under audit
and for periods not yet audited. Many of the issues, however, have not been
quantified by the government or Kaiser, and others are qualitative in nature,
and their potential financial impact is not quantifiable by the government or
Kaiser at this time. This provision will be reviewed periodically as
discussions with the government progress.
Kaiser may, from time to time, either individually or in conjunction with
other government contractors operating in similar types of businesses, be
involved in U.S. government investigations for alleged violations of procurement
or other federal laws and regulations. Kaiser currently is the subject of a
number of U.S. government investigations and is cooperating with the responsible
government agencies involved. No charges presently are known to have been filed
against Kaiser by these agencies.
Employees
As of March 31, 2000, Kaiser had approximately 3,388 employees, 2,748 in
North America and 640 in numerous international sites. The Company believes
that its relations with its employees are good. Of this total, 2,048 persons
are employed at Kaiser-Hill's Rocky Flats site in Colorado. A total of 1,447 of
the Rocky Flats employees are represented by the United Steelworkers of America,
Local 8031; almost all of the union employees are contracted out to other
companies working at Rocky Flats. The Company believes that its relations with
the union are good.
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Item 2. Properties
Kaiser's activities are carried out through operating subsidiaries in 36
offices throughout the world. Kaiser's headquarters are located at 9300 Lee
Highway, Fairfax, Virginia 22031-1207, and its telephone number is (703) 934-
3300. Kaiser's operations are organized into North American and International
regions. The North American regional headquarters is located in Fairfax,
Virginia, and the International regional headquarters is located at Q.V. 1
Building, George's Terrace, Perth WA 6000 Australia, telephone 61-89-366-5366.
Other domestic offices include Chandler, Arizona; Los Angeles, San Diego,
and Oakland, California; Rocky Flats, Colorado; Washington, DC; Jacksonville,
Lake City, Miami, Orlando, and Tampa, Florida; Marietta, Georgia; Boise, Idaho;
Gramercy, Louisiana; Baltimore, Maryland; Boston, Massachusetts; New York City,
New York; Oklahoma City, Oklahoma; Pittsburgh, Pennsylvania; Richmond,
Virginia; and Seattle, Washington. The Company's other international offices
include Brisbane and Gladstone, Australia; Ostrava and Prague, Czech Republic;
London, England; Hong Kong; Budapest, Hungary; Rio de Janeiro and Sao Paulo,
Brazil; Manila, the Philippines; Lisbon, Portugal; Cairo, Egypt and Istanbul,
Turkey.
Kaiser's operations are conducted in leased facilities or in facilities
provided by the Federal government or other clients. Because Kaiser's
operations generally do not require the maintenance of unique facilities,
suitable office space is available for lease in all of the geographic areas
currently served. Kaiser believes that adequate space to conduct its operations
will be available for the foreseeable future. For information concerning an
investment by Kaiser in Fairfax, Virginia land and buildings where Kaiser's
headquarters are located, see Notes 7 and 12 to the consolidated financial
statements included in this Report.
Item 3. Legal Proceedings
In the course of Kaiser's normal business activities, various claims or
charges have been asserted and litigation commenced against Kaiser arising from
or related to properties, injuries to persons, and breaches of contract, as well
as claims related to acquisitions and dispositions. Claimed amounts may not
bear any reasonable relationship to the merits of the claim or to a final court
award. In the opinion of management, an adequate reserve has been provided for
final judgments, if any, in excess of insurance coverage, that might be rendered
against Kaiser in the event of litigation. See Note 15 to the consolidated
financial statements included in this Report.
Item 4. Submission of Matters to a Vote of Security Holders
The 1999 Annual Meeting of Shareholders of the Company was held on
Thursday, November 4, 1999, at the headquarters of the Company, 9300 Lee
Highway, Fairfax, VA 22031. The matters voted on were (i) the election of three
directors, (ii) the approval of the issuance of shares of preferred stock and
common stock in connection with an exchange offer for outstanding debt (the
"Stock Issuance Proposal"), (iii) the approval of an amendment to the
certificate of incorporation to effect a reverse split of Company's outstanding
common stock in a ratio that would have resulted in 5,000,000 shares of common
stock being outstanding (the "Reverse Split Proposal"), (iv) the approval of
amendments to the Company's certificate of incorporation and bylaws
(collectively, the "Shareholder Democracy Proposal"), (v) the approval of an
amendment to the Company's certificate of incorporation and bylaws to provide
that no new shareholder rights plan (sometimes referred to as a "poison pill")
shall be adopted without the approval of the shareholders (the "Rights Plan
Proposal"), (vi) the approval of amendments to the Company's certificate of
incorporation to eliminate provisions related to the terms of series of
preferred stock that are no longer outstanding (the "Obsolete Preferred Stock
Proposal"), (vii) the approval of amendments to the Company's Stock Incentive
Plan (the "Stock Incentive Plan Proposal"), (viii) the approval of the quasi-
reorganization of the Company's financial statements, pursuant to which the
Company would adjust its capital accounts to eliminate the accumulated deficit
in retained earnings from past unprofitable operations and establish a new
retained earnings account for the accumulation of future earnings (the "Quasi-
Reorganization Proposal") and (ix) the ratification of the appointment of
PricewaterhouseCoopers LLP as the Company's independent public accountants for
the fiscal year ending December 31, 1999. The number of votes cast for, against,
or withheld, as well as the number of abstention and broker non-votes for each
of the above-described matters are set forth below:
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<TABLE>
<CAPTION>
Total Total Total
Votes Votes For Votes Total
Votes For % Withheld (*) Non-Votes
----- --- - ------------ ---------
<S> <C> <C> <C> <C>
1. Election of Directors
Thomas C. Jorling 19,163,638 80.443% 3,227,286 0
James J. Maiwurm 19,400,552 81.437% 2,990,372 0
Hazel R. O'Leary 18,058,476 75.804% 4,332,448 0
</TABLE>
(*) "Votes Withheld" means that the shareholder marked the box on his/her proxy
card labeled "withheld." This vote total includes situations in which the
shareholder wrote in the name of the individual director for whom he/she did not
want to vote.
<TABLE>
<CAPTION>
% of
Total Total Total Total Total
Votes Cast Votes Cast Votes Cast Broker Votes
For For Against Non-Votes Abstain
--- --- ------- --------- -------
<S> <C> <C> <C> <C> <C>
2. Stock Issuance Proposal 14,883,708 86.420% 2,338,814 4,867,348 301,054
3. Reverse Split Proposal 20,722,437 93.540% 1,431,162 0 237,325
4. Shareholder Democracy Proposal 16,374,226 95.204% 824,838 4,867,348 324,512
5. Rights Plan Proposal 16,146,164 94.125% 1,007,801 4,867,348 369,611
6. Obsolete Preferred Stock Proposal 21,005,487 96.001% 874,946 0 510,491
7. Stock Incentive Plan Proposal 14,920,946 87.355% 2,163,878 4,867,348 438,752
8. Quasi-Reorganization Proposal 16,147,432 94.080% 1,016,121 4,867,348 360,023
9. Ratification of Accountants 20,677,851 94.441% 1,217,098 0 495,975
</TABLE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
From September 14, 1993 until March 7, 2000, the Common Stock was traded on
the New York Stock Exchange (NYSE) under the symbols "ICF" and "KSR". On
December 27, 1999, coincident with the Company's name change, the NYSE symbol
was changed to "KSR". On March 8, 2000, the Common Stock ceased to be listed on
the NYSE and began to be traded on the Over-the-Counter Bulletin Board system
under the symbol "KSRG". At April 13, 2000, there were 1,455 shareholders of
record and the closing price of the Common Stock as reported by the Over-the-
Counter Bulletin Board was $0.25. The following table sets forth, for the
periods indicated, the high and low sales prices for the Common Stock as
reported by the NYSE:
<TABLE>
<CAPTION>
Common Stock Price
------------------
1999 1998
---- ----
High Low High Low
--------- --------- ---------- --------
<S> <C> <C> <C> <C>
Year Ended December 31,
First Quarter................................... $1.500 $0.813 $3.000 $2.063
Second Quarter.................................. 0.813 0.250 3.063 2.180
Third Quarter................................... 0.500 0.313 2.313 1.125
Fourth Quarter.................................. 0.813 0.281 1.813 1.188
</TABLE>
The Company's Transfer Agent and Registrar is EquiServe, First Chicago
Trust Division (formerly First Chicago Trust Company of New York), P.O. Box
2536, Jersey City, NJ 07303-2536. The Shareholder Relations telephone number is
(201) 324-0498, and the First Chicago Web site address is http://www.fctc.com.
The Company has never paid cash dividends on its Common Stock and
anticipates that no cash dividends will be paid on its Common Stock for the
foreseeable future and that the Company's earnings will be retained for use in
the business. The Board of Directors determines the Company's Common Stock
dividend policy based on the Company's results of operations, payment of
dividends on preferred stock, financial condition, capital requirements, and
other circumstances. The Company's debt agreements currently do not permit
dividends to be paid on its capital stock. See Note 9 to the consolidated
financial statements.
Item 6. Selected Financial Data
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The selected consolidated financial data of the Company for the years ended
December 31, 1999, 1998, 1997, 1996, and the ten months ended December 31, 1995,
have been derived from the Company's audited consolidated financial statements.
This information should be read in conjunction with the consolidated financial
statements and the related notes thereto appearing elsewhere in this Report and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Certain reclassifications have been made to the prior period
financial statements to conform to the presentation used in the December 31,
1999 consolidated financial statements.
Selected Consolidated Financial Data
(in thousands, except per share data)
<TABLE>
<CAPTION>
Ten
Months
Ended
December
Year Ended December 31, 31,
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Gross revenue................................................ $870,267 $ 999,721 $926,916 $809,643 $532,600
Service revenue.............................................. 295,451 211,762 300,986 308,016 240,996
Operating income (loss)...................................... (22,732) (97,001) 3,069 720 (6,900)
Loss from continuing operations before
income taxes, minority interest, extraordinary item
and cumulative effect of accounting change............. (41,448) (115,741) (12,439) (11,216) (18,197)
Loss before extraordinary item and
cumulative effect of accounting change.................. (5,924) (93,442) (4,987) (7,851) (12,668)
Basic and Diluted Earnings (Loss) Per Share:
Continuing operations before extraordinary item and
cumulative effect of accounting change...................... $ (2.00) $ (4.34) $ (0.62) $ (0.36) $ (0.60)
Discontinued operations, net of tax.......................... 1.78 0.47 0.40 0.62 0.71
Extraordinary item, net of tax............................... (0.03) (0.05) -- -- --
Cumulative effect of accounting change, net of tax........... -- (0.25) -- -- --
-------- --------- -------- -------- --------
Total.................................................. $ (0.25) $ (4.17) $ (0.22) $ 0.26 $ 0.11
======== ========= ======== ======== ========
Weighted average common shares outstanding:
--basic............................................ 23,823 24,092 22,382 22,035 21,132
--diluted.......................................... 23,823 24,092 22,382 22,057 21,606
Balance Sheet Data (end of period):
Total assets................................................. $253,563 $ 428,071 $399,288 $369,462 $370,179
Working capital.............................................. 17,108 3,271 91,121 113,898 84,589
Long-term liabilities........................................ 131,795 147,152 145,590 161,951 125,818
Redeemable preferred stock................................... -- -- -- -- 19,787
Shareholders' equity (deficit)............................... (69,903) (63,118) 27,327 34,892 28,427
</TABLE>
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<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
During 1999, management continued to execute various elements of a
restructuring plan aimed at restoring the Company to profitability following the
difficulties caused primarily by problems in its execution of four large fixed-
price contracts to construct nitric acid plants in 1998 and early 1999. In
summary, the components of the restructuring plan developed by management and
the Board of Directors included the following:
. Divesting operating units and reinvesting the proceeds in the Company to
provide working capital necessary to stabilize the retained business
activities;
. Reducing the Company's overhead cost structure that would remain after the
divestitures of the operating units referenced above; and
. Revising the Company's capital structure in order to eliminate barriers to
securing new business and improve access to new sources of working capital.
Elements of the restructuring plan were initiated in the third quarter of
1998; however, the majority of the progress was achieved during 1999.
Achievements toward each plan element are described below.
Divesting Operating Units
. Sale of the Environment and Facilities Management Group (EFM): On April 9,
1999, the Company sold the majority of the active contracts and
investments, and transferred a substantial number of employees, of EFM to
The IT Group, Inc. (IT) for a cash purchase price of $82.0 million, less
$8.0 million which was retained by IT for EFM's working capital
requirements. The Company then completed EFM contracts that were not sold
to IT. Net of income tax expense of $24.5 million, the Company recognized a
gain of $12.0 million from the sale.
. Sale of the Consulting Group: On June 30, 1999, the Company sold 90% of its
Consulting Group to CM Equity Partners, L.P. and the Group's management for
$64.0 million in cash and $6.6 million of interest-bearing notes. The
Company retained a 10% ownership interest in the new and independent
consulting company, now known as ICF Consulting Group, Inc. Net of income
tax expense of $11.2 million, the Company recognized a gain of $30.3
million from the sale.
The Company finalized its accounting for the divestitures of its EFM and
Consulting Groups as well as for the sale of certain assets of a small business
unit sold earlier in the year during the fourth quarter and recorded a
reduction to the net gain on the sales of $6.2 million primarily for the income
tax effects of the transactions and for the write-off of certain additional
divested assets (Note 4 and Note 16).
The cash proceeds from the sales of the EFM and Consulting Groups, net of
transaction costs, and from the liquidation of the retained EFM assets, were, in
part, used to pay down all cash borrowings on the Company's revolving line of
credit. The balance was used for working capital purposes and held for use in
the debt restructuring element of the plan.
The combined net financial position, operating results and cash flows of
the EFM and Consulting Groups have been presented in the accompanying
consolidated financial statements as discontinued operations for the entire
year. All prior period operating results and cash flows have also been
reclassified to conform to the current year presentation.
Reducing Overhead and Improving Profitability
The restructuring plan included actions to realign and reduce the Company's
post-divestiture cost structure. Elements of the cost reduction plan included an
approximate 25% personnel reduction in the Company's wholly-owned North American
operations with lesser percentage reductions in its International operations,
eliminating regional overhead layers, downsizing facilities, closing of
marginally profitable office locations, discontinuing certain business
offerings, improving direct labor utilization on projects and enhancing project
controls to minimize risks of future contract losses. Because of certain
centralized aspects of the Company's organizational structure that existed prior
to completing the
Page 11
<PAGE>
divestitures discussed above, the cost reduction elements of this phase of the
plan could not begin until after the divestitures were completed. The results of
the cost reduction plan have been positive - reducing administrative expenses by
more than $20.0 million on an annualized basis when comparing the fourth quarter
of 1999 to that of 1998. Although the majority of the reduction initiatives have
been enacted, the Company remains focused on appropriately controlling overhead
spending.
Revising the Capital Structure
The Company has not yet completed the last element of its plan, the
restructuring of its outstanding debt.
In September 1999, the Company reached an agreement in principle with the
majority of the holders of its $15.0 million in Senior Notes and the holders of
its $125.0 million Senior Subordinated Notes. On October 1, 1999, the Company
commenced an asset sale offer/exchange offer to implement a restructuring of its
$125.0 million Senior Subordinated Notes. On October 9, the Company completed
the first element of the debt restructuring by using proceeds from its recently
completed asset sales to repurchase $14.0 million of its $15.0 million in
outstanding Senior Notes for 88% of their face value. The Company also paid the
accrued interest on the repurchased notes.
By November 3, 1999, the Company had received notice of participation in
the asset sale offer/exchange offer by the holders of approximately 99% of the
principal amount of its $125.0 million Senior Subordinated Notes. On November 4,
1999, the Company obtained the necessary approvals of its common shareholders to
be able to effect the proposed restructuring. The detailed elements of the plan
are described in the Company's Prospectus dated October 1, 1999. In general
terms, the plan contemplated the cash repurchase of at least $35.0 million of
the Senior Subordinated Notes and the exchange of 2,600,000 shares of new
redeemable convertible preferred stock (liquidation preference of $65.0 million)
and up to $25.0 million in new unsecured 15% Senior Notes to be due December 31,
2002 for the balance of the Senior Subordinated Notes.
Consummation of the approved debt restructuring plan was conditioned on the
Company's ability to obtain a new bank revolving credit facility satisfactory to
the Company and an unofficial committee of the Senior Subordinated Noteholders.
The proposals ultimately received from potential lenders did not provide the
Company with a facility that was compatible with the Company's needs. Due to the
fact that the Company could not secure an acceptable credit facility and on
continued financial underperformance of its Engineering Operations, on December
31, 1999, the Company paid the scheduled interest payment on the $126.0 million
in remaining notes and decided to delay implementation of the proposed debt
restructuring and re-open negotiations with its noteholders and potential
lenders.
The Company has continued negotiations with representatives of its Senior
Subordinated Notes and, while it has no assurance, believes it may be able to
implement a modified restructuring of those notes. Such a transaction could
involve an exchange of Senior Subordinated Notes for a combination of new common
stock and newly issued preferred stock. The Company believes that such a
restructuring would substantially improve its financial condition and provide a
basis for ongoing operations and continuation of the Company's turnaround.
However, such a restructuring would result in substantially more dilution of the
equity of existing common stockholders than the restructuring proposed during
the fall of 1999. Such a restructuring may be accomplished through consensual
insolvency proceedings.
While continuing negotiations with representatives of its Senior
Subordinated Noteholders, the Company has been exploring strategic alternatives
for the Company, including the possible sale of certain of its assets or
businesses. That process is still underway. The Company currently expects to be
able to reach a conclusion with respect to its strategic direction and begin to
implement its reorganization prior to the end of the second quarter of 2000.
Page 12
<PAGE>
Results of Operations
The Company's business is comprised primarily of its Engineering Operations
and its 50% interest in the Kaiser-Hill subsidiary. The following discussion
separately addresses the operating results of the two, largely different
operations. In all cases, conforming changes to current period presentation
formats have been made in the historical results presented.
Kaiser-Hill
Kaiser-Hill is a 50% owned joint venture between Kaiser Group
International, Inc. and CH2M Hill, formed solely to perform the U.S. Department
of Energy's (DOE) Rocky Flats Closure Project (the Rocky Flats Contract)
initially awarded in late 1995. The Kaiser-Hill operating results for each of
the years ended December 31 were as follows (in thousands):
<TABLE>
<CAPTION>
Kaiser-Hill 1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Gross Revenue.................... $ 643,044 $ 632,600 $ 588,700
Subcontracts and materials..... (456,188) (478,100) (421,200)
--------- --------- ---------
Service Revenue.................. 186,856 154,500 167,500
Operating Expenses:..............
Direct labor and fringe........ 176,582 138,300 145,500
Depreciation/amortization...... 89 -- --
--------- --------- ---------
Operating Income................. $ 10,185 $ 16,200 $ 22,000
========= ========= =========
</TABLE>
The Rocky Flats Contract is primarily cost-reimbursable in nature, but it
also contains certain minimum and incentive fee elements based on qualitative
and quantitative factors of actual performance levels compared to annually
negotiated and established benchmarks or milestones. Accordingly, fluctuations
in gross revenue earned by Kaiser-Hill during the comparable periods above are
largely reflective of increased levels of reimbursable subcontractor costs,
i.e., pass-throughs, being incurred as the contract progress continued and as
the term of the contract neared its original completion date of June 30, 2000.
Although annual operating results are not directly comparable because of changes
in the underlying performance milestones that are established annually by the
DOE, the service revenue and operating income decreases from 1998 to 1999 are
largely the result of the January 24, 2000 award of the new Rocky Flats Closure
Contract, effective February 1, 2000. The Closure Contract shifted certain
remaining performance elements from the original contract into the new contract.
Since the Company had been recognizing the performance fee of the original
contract using the percentage of completion basis and since performance elements
were shifted out of the original contract into the Closure Contract, the Company
had to revise downward its estimate of its earnings under the original contract.
The downward revision, due to the shift in contract performance elements, caused
the Company to reverse, in the fourth quarter of 1999, previously recognized
revenue of $5.2 million. This adjustment merely reflects a change in the timing
of when Kaiser-Hill will earn performance fee. The service revenue decrease from
1997 to 1998 of $13.0 million is due to a lower incentive fee pool being
available for award in 1998 as compared to 1997. The DOE made the benchmarks to
earning the 1998 incentive fee pools more difficult - indirectly reducing the
amount of incentive fee potentially payable to Kaiser-Hill.
On January 24, 2000, Kaiser-Hill was awarded the follow-on Rocky Flats
Contract pursuant to which Kaiser-Hill will provide services through to closure
of the Rocky Flats site (the Closure Contract). The Closure Contract became
effective February 1, 2000, essentially terminating the remaining period of the
original contract. The economic terms of the Closure Contract are significantly
different from the original contract in that Kaiser-Hill will earn revenue based
on the actual cost of physical completion and will earn a performance fee based
on a combination of the actual cost of completion and the actual date of
physical completion, both as compared to contracted targets. The Closure
Contract fee may range from $150.0 million to $460.0 million based on Kaiser-
Hill's costs falling within the range of targeted completion cost of $3.6
billion to $4.8 billion, respectively, if completed within various dates between
March 31, 2006 - March 31, 2007. Physical completion above the target cost would
result in a reduction to the fee whereby Kaiser-Hill will share 30% in all costs
incurred after such date, subject to a maximum Kaiser-Hill liability of $20.0
million. Until such time as Kaiser-Hill can reasonably predict the likely
outcome of the total fee to be earned by contract completion, the fee will be
accrued at the minimum on a straight-line basis from February 1, 2000 through
December 31, 2007. Estimated changes in the earned fee will be recognized as
contract to date adjustments at such time as the estimate is revised. The
Closure Contract currently provides for Kaiser-Hill to invoice DOE quarterly
based on a $340.0 million target fee
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pool, less a 50% retainage for 2000. Thereafter, the quarterly invoicing will
revert to a formula such that cumulative contract billings would not exceed the
minimum fee of $150.0 million spread over a 7 year timeframe, with retainages.
All invoice payments made by DOE to Kaiser-Hill will be distributed to the joint
venture owners immediately upon receipt, less certain Kaiser-Hill
reimbursements.
Engineering Operations
The Engineering Operations provide design, engineering, procurement, and
construction and project management services to domestic and international
clients in the infrastructure, facilities, metals, mining and industrial
markets. The operating results for each of the years ended December 31 was as
follows (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
---------- --------- ---------
<S> <C> <C> <C>
Gross Revenue............................ $ 227,223 $ 367,121 $ 338,216
Subcontracts and materials............. (123,108) (239,694) (200,131)
Provision for contract losses.......... -- (76,210) (6,900)
Equity income of affiliates............ 4,480 6,045 2,301
--------- -------- --------
Service Revenue.......................... 108,595 57,262 133,486
Operating Expenses:
Direct labor and fringe................ 67,896 79,562 79,971
Selling, general and administrative.... 54,052 65,534 63,851
Depreciation/amortization.............. 5,180 8,288 8,595
Restructuring charges.................. 14,384 17,079 ---
---------- --------- ---------
Operating (Loss)......................... $ (32,917) $(113,201) $ (18,931)
========== ========= =========
</TABLE>
Gross Revenue: Gross revenue represents the amount of goods and services
provided to the customer through primary contract relationships. Often included
as a component of gross revenue, and reimbursed by the customers, are costs of
certain services which the Company subcontracts to and procures from third
parties, including direct project costs and materials. These costs are excluded
from gross revenue to derive the Company's service revenue. Engineering
Operations derive the majority of their economic benefit, however, in the form
of engineering, procurement and construction management services performed
directly - this element is referred to as service revenue and is used as the
basis for managing the Engineering Operations.
The majority of the gross revenue fluctuations noted above are attributable
to the completion or near completion of several large fixed price projects that
also contained large amounts of construction materials and passed through
subcontractor costs. Such costs are included in the Company's gross revenues;
however, they typically have nominal effect on project profitability. More
specifically:
. the large fixed-price Nitric Acid projects were completed in the first
quarter of 1999 and resulted in gross revenue of $14.4 million in 1999
compared to $47.9 million and $55.1 million in 1998 and 1997, respectively.
. the large fixed-price project to construct the Nova Hut steel mini-mill in
the Czech Republic generated gross revenue of $54.2 million in 1999 versus
$77.8 million and $76.7 million in 1998 and 1997, respectively. The large
gross revenue earning phases of the Nova Hut project neared completion as of
December 31, 1999.
. the acquisition on March 19, 1998, of ICT Spectrum Constructors, Inc., a
construction contractor based in Boise, Idaho, specializing in construction
management of fabrication plants and other facilities for semiconductor and
microelectronics customers, resulting in $17.6 million and $87.2 million in
gross revenue in 1999 and 1998, respectively.
The Engineering Operations ended 1999 with approximately $202.0 million in
signed contract backlog.
Service Revenue: Apart from the fluctuations resulting from large project
completions, the Company's engineering operations experienced softness in 1999
compared to prior years in new business development in certain areas, including
all business lines in the Asia-Pacific region and within the iron and steel and
microelectronics business lines in North America. The operating performance
during the fourth quarter was also down from the prior quarter due to the
nearing completion of certain foreign projects during the third quarter of 1999
without equal replacements commencing immediately in the
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<PAGE>
fourth quarter. These developments, in addition to the contract fluctuations
noted above, accounted for service revenue declines of $25.0 million in 1999
compared to 1998 and of $31.8 million compared to 1997 (after adjusting 1998 and
1997 service revenue results for the effects of the large project losses
recognized therein).
Operating gross margins - service revenue less direct labor and fringe
costs -as a percent of service revenue have declined slightly over the past
three years. The different types of services provided by the Engineering
Operation's business units typically attract different average operating
margins. As the business mix changes slightly from year to year, the
consolidating operating margins fluctuate with the relative shifts in underlying
service base composition. Adjusting 1998 and 1997 results for the effects of the
large contract losses recognized in those years, and excluding equity income in
affiliates, the gross margins as a percent of service revenue were 34.8%, 37.5%
and 42.1% during the years 1999, 1998 and 1997, respectively. The decreased 1999
operating gross margin is reflective of the fact that the 13% and 15% annual
reductions in direct labor spending from 1998 and 1997 compared to 1999 did not
parallel the pace of reductions in service revenue.
The decrease in 1999 equity in income from affiliates from 1998 levels
reflects the culmination of an alumina refinery project in Australia. A year
earlier, it was also this project that accounted for the increase of $3.7
million in 1998 compared to 1997. The project was awarded in late 1997.
Operating Expenses: The restructuring plan implemented in 1999 and late
1998 included actions to realign and reduce the Company's post-divestiture
overhead cost structure such that the remaining levels more appropriately fit
the needs and size of its continuing operations. Elements of the overhead
reduction plan included an approximate 25% personnel reduction in the Company's
wholly-owned North American operations with lesser percentage reductions in
International operations, eliminating regional overhead layers, downsizing
facilities, closing of marginally profitable office locations, discontinuing
certain business offerings, improving direct labor utilization on projects and
enhancing project controls to minimize risks of future contract losses. Because
of certain centralized aspects of the Company's organizational structure that
existed prior to completing the divestitures discussed above, the cost reduction
elements of this phase of the plan could not begin until after the divestitures
were completed. To date, the results from the cost reduction plan have been
positive- administrative expenses have been reduced by more than $20.0 million
on an annualized basis when comparing the fourth quarter of 1999 to that of 1998
and a $11.5 million absolute reduction from 1998 to 1999. Although the majority
of the reduction initiatives have been enacted, the Company remains focused on
controlling overhead spending.
In connection with its plan of reorganization discussed in the Overview,
the Company recorded charges for restructuring costs of $14.4 million and $17.1
million during 1999 and 1998, respectively. Components of the charges included
amounts for severance and related matters, the write-off of goodwill associated
with the discontinuance of operations from a prior acquisition, a write-down of
the impairment of certain long-term investments, professional fees associated
with the debt restructuring (recognized in the fourth quarter), a charge for
business unit divestiture costs and for anticipated sublease losses and office
realignment and closings (see Note 3 to the consolidated financial statements).
These restructuring charges have been presented individually on the Consolidated
Statements of Operations.
Interest: The Company's average annual outstanding debt and the related
average effective interest rates for 1999, 1998, and 1997 were $146.7 million
and 14.7%, $151.7 million and 13.3%, and $140.8 million and 13.0%, respectively.
The rate of interest expense increased significantly in 1999 due to the
incurrence of rollover loan origination fees and points associated with
noncompliance with the terms of the revolving credit facility in early 1999 in
addition to higher base interest rates contained in the such credit facility as
compared to the former facility. Interest expense in 1997 was offset partially
by a one-time, $0.9 million reduction realized from the Company's favorable
resolution and reversal of a previously established liability for potential
interest costs associated with a foreign income tax matter.
Interest income is earned on available cash balances that were generated
primarily from the unused proceeds from the divestitures earlier in 1999 and
prior to those sales, largely only by Kaiser-Hill and foreign operations. All
other cash not required for operations was historically used to pay down
outstanding cash borrowings.
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<PAGE>
Income Tax Expense: The income tax provision for all periods presented
excludes the minority's interest in Kaiser-Hill's operating income because it is
owned partially by another company and is a flow-through entity for income tax
purposes.
In 1999, the Company recognized total income tax expense of $38.4 million
allocable to the following results (in thousands):
<TABLE>
<CAPTION>
Applicable Tax
Statement of Operations Category Income/(Loss) (Expense)/Benefit
-------------------------------- ------------- -----------------
<S> <C> <C>
Loss from continuing operations before income taxes................ $ (41,448) $ (1,110)
Income from discontinued operations................................ 4,210 (1,875)
Gain on the sales of discontinued operations....................... 75,878 (35,795)
Extraordinary loss on the early extinguishment of debt............. (989) 389
</TABLE>
Also in 1999, the Company utilized deferred tax assets and the benefit of
current period losses totaling $33.6 million to offset a similar amount of
income tax liability resulting from the gain on the sales of discontinued
operations. The Company will not recognize an income statement benefit for any
previously unbenefitted or future operating losses or future tax deductions
until such time as management believes it is more likely than not that the
Company's future operations will generate sufficient taxable income to be able
to realize such benefits. As of December 31, 1999, the Company had provided a
valuation allowance against the entire remaining deferred tax asset of $39.9
million.
In 1998, the Company recorded an income tax benefit of $18.6 million on a
loss from continuing operations before income taxes of $115.7 million. The
Company recognized a $23.6 million valuation allowance against the total future
deferred tax benefit of the operating loss and any other future tax deductions
sufficient to ensure that the balance of the net deferred tax asset at December
31, 1998 would be completely utilized by the income tax gains that were
anticipated from sales of the operating divisions anticipated for completion in
1999.
Other 1998 changes in income tax expense versus 1997 include a $1.8 million
foreign income tax expense established for the anticipated repatriation to the
U.S. of Australian earnings, used for domestic working capital needs, and a $0.7
million provision for the permanent book-tax difference expected for the
redemption of $1.8 million in non-recourse loans to officers and former
employees, which were collateralized solely by shares of the Company's common
stock. At the inception of the loans, the collateral value exceeded the loans'
face value.
In 1997, the Company recognized a tax benefit of $9.4 million on pre-tax
loss from continuing operations of $12.4 million. Approximately $1.9 million of
the tax benefit was as a result of completing a study of historic research and
experimental expenditures for certain open tax years, enabling the Company to
recognize a benefit for research tax credits.
Extraordinary Items: In 1999, the Company had two early debt
extinguishments as defined by generally accepted accounting principles.
Effective upon the completion of the sale of the Consulting Group on June 30,
1999, the Company's revolving credit line was terminated. A charge of $0.8
million, net of income tax effects, was recognized for the write off of the
unamortized balance of capitalized costs incurred to originally obtain the
facility.
As part of its efforts to restructure its Notes, the Company repurchased
$14.0 million of the $15.0 million outstanding in Senior Notes for 88% of face
value in October 1999. After adjusting the amount of the repurchase discount by
the write off of the unamortized original issue discount on the notes and the
unamortized balance of capitalized costs incurred to originally issue the notes,
and costs incurred in the purchase the net gain on the repurchase was $0.2
million, net of related income tax effects.
Cumulative Effect of Accounting Change: In April 1998, the Accounting
Standards Executive Committee of the American Institute of Certified Public
Accountants issued Statement of Position 98-5 Reporting on the Costs of Start-Up
Activities (SOP 98-5). The SOP requires costs of organization and start-up
activities to be expensed as incurred. The Company elected early adoption of the
Statement effective April 1, 1998 and, at that time, reported the cumulative
effect of the change as a one-time, non-cash charge of $6.0 million after tax,
or $0.25 per share. The Company's amortization expense in 1998 was reduced by
$1.6 million because the cumulative charge included balances for items that were
previously amortized.
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<PAGE>
Liquidity and Capital Resources
Operating activities: During 1999, the Company funded approximately $22.0
million of the $66.0 million in estimated nitric acid project cost overruns
identified in 1998, the remainder had been funded in 1998. Kaiser-Hill generated
$8.6 million in operating cash flows in 1999; versus $10.1 million in 1998. The
Company's nonrecurring restructuring activities used approximately $16.9 million
in cash for severance payments, lease restructuring costs etc. and professional
fees associated with its total debt restructuring initiatives, debt
extinguishments, and corporate reorganization and realignment activities. The
Company paid net interest expense of $18.7 million in 1999. Lastly, the
Company's Engineering Operations used cash of approximately $18.9 million in
its continuing operations. This usage was reflective, in part, of the fact
that the Company did not complete the majority of the overhead cost reductions
until the third and fourth quarters of 1999 and, in part, of the continued
operating weaknesses and business downturns in the Asia-Pacific region, in the
North American iron and steel and microelectronics business lines.
Excluding the $10.1 million in operating cash flows generated by Kaiser-
Hill in 1998, the Company's remaining $40.0 million used in operations
predominantly funded the nitric acid project overruns. Positive operating cash
flows of $26.2 million in 1997 were generated in part due to increased activity
in large commercial projects that had provisions in the contract terms for
milestone-based payments which were collected prior to actual contract
performance. Differences in the timing of the cash payments made to suppliers on
some of these large projects versus the collection of customer trade receivables
also contributed favorably to the 1997 operating cash flows.
Investing activities: Net of fees associated with completing the 1999
divestiture transactions, proceeds from the sales of the EFM and Consulting
Groups totaled $145.0 million. Proceeds of $2.4 million were received in 1998
from a 1997 installment sale of the Company's ownership interest in a pulverized
coal injection operation. Investments in fixed assets and software development,
including capitalized labor, were made in 1999, 1998 and 1997 totaling $2.1
million,$3.6 million and $4.6 million, respectively.
With the intent of significantly restructuring fixed operating leases for
the Company's corporate headquarters, the Company paid $1.5 million on November
12, 1997, for a 4% ownership interest in a limited liability company (the LLC)
that leases the land and owns the buildings leased primarily by the Company for
its corporate headquarters. The Company is committed to make additional annual
capital contributions to the LLC totaling $600,000 annually during each of the
first three years and $700,000 annually during each of the fourth through ninth
years of the LLC. The ownership in the LLC will increase to 16% in fixed annual
2.4% increments in each of the eleventh through fifteenth years of the
agreement.
Financing activities: Upon the closing of the sale of its EFM Group in
April, 1999, the Company paid off the outstanding balance on its revolving
credit facility of $36.0 million and used an additional $10.0 million to cash
collateralize certain outstanding contract performance guarantee letters of
credit. On June 30, 1999, the Company was required to cash collateralize an
additional $13.0 million so as to cover all $23.0 million of the Company's then
outstanding letters of credit. On October 9, 1999, the Company repurchased $14.0
million of its $15.0 million of Senior Notes at 88% of face value. As of
December 31, 1999 and April 14, 2000, the Company had no revolving credit
facilities and no debt other than its remaining Senior and Senior Subordinated
Notes totaling $126.0 million in principal amount. At December 31, 1999, the
Company had $13.1 million in total outstanding letters of credit, all fully
collateralized by restricted cash balances.
In 1998, the Company realized that it was going to incur significant cost
overruns on the nitric acid projects. Due to the significant risks, difficulties
and uncertainties involved in estimating the total costs to complete these large
fixed price projects, the Company revised and increased the total completed
project cost estimates several times in 1998. Given the completion cost
uncertainties and the inability to finitely determine the impact of the losses
on the Company's liquidity and financing sources, management immediately pursued
options for additional financing sources and flexibilities. In addition to
seeking a replacement working capital facility, the Company's Board of Directors
also began considering and pursuing other strategic alternatives, including, but
not limited to, the sale of portions of the Company.
Page 17
<PAGE>
On December 18, 1998, the Company successfully entered into a new revolving
credit facility (the Revolver) which offered cash borrowings and letters of
credit up to an aggregate of $60 million. After obtaining the Revolver, the
Company again increased the estimate of the total nitric acid projects cost
overruns it expected to incur and need to fund prior to the completion of the
projects, by an additional $19 million. This material adverse change to the
Company's financial condition triggered a technical event of default pursuant to
the Revolver's terms. The lender permitted the Company to borrow and obtain
letters of credit pursuant to all other terms of the Revolver, primarily
conditioned on the Revolver provision that proceeds from asset sales be used to
repay outstanding cash borrowings. That provision combined with the fact that
the Company was actively pursuing the sale of significant operating assets was
sufficient assurance for the lenders to continue to permit the use of the
facility until such time as an asset sale was completed. On April 9, 1999, the
Company completed the sale of its EFM Group (see Note 4 to the Consolidated
Financial Statements) and used $36 million of the sale proceeds to extinguish
outstanding Revolver cash borrowings plus $10 million to cash collateralize
outstanding letters of credit. The Company also received an amendment to the
Revolver (the Amended Revolver) providing for cash borrowing and letters of
credit up to an aggregate of $30 million. The Amended Revolver expired on June
30, 1999 - essentially upon the Company's completion of the sale of its
Consulting Group. Also in connection with the expiration, the Company was
required to use an additional $13.0 million of the asset sale proceeds to
collateralize letters of credit that were outstanding under the expired
facility. As of April 14, 2000, $12.6 million in outstanding letters of credit
remain collateralized and will continue to be so until such time as the Company
can secure a replacement credit facility with sufficient letter of credit
capacity.
The distributions of Kaiser-Hill earnings to the minority interest owner in
1999, 1998 and 1997 totaled $3.3 million, $10.3 million and $13.9 million,
respectively. Kaiser-Hill had a $50 million receivables purchase facility to
support its working capital requirements, containing elements for certain
program fees, specified minimum tangible net worth requirements, and default
provisions for delinquent receivables, which expired, on an extended basis, on
September 30, 1999. On November 2, 1999, Kaiser-Hill subsequently obtained its
own revolving credit facility from Bank of America, N.A. that provides for up to
$35.0 million in total availability, such amount not to subject to exceed the
sum of eligible portions of Kaiser-Hill's eligible billed and unbilled accounts
receivable on the DOE Rocky Flats contract. The facility matures six years from
inception. Both parents of Kaiser-Hill have agreed to cure any events of default
by Kaiser-Hill on the facility. The facility includes provisions for interest
and charges commensurate with market pricing as well as affirmative and negative
financial covenants.
Liquidity and Capital Resource Outlook
The Company currently has no working capital facility and is financing its
Engineering Operations' working capital through the use of the residual cash
proceeds from the sale of its Consulting Group completed in June 1999 as well as
from distributions from its Kaiser-Hill subsidiary. Based on (i) current
expectations for near-term operating results, (ii) its current available cash
position and (iii) recent trends and projections in liquidity and capital needs,
management believes the Company has sufficient short-term liquidity to bridge
current operating needs until the implementation of a modified debt
restructuring, assuming that such a restructuring can be accomplished within the
reasonably near term. As noted above, there is no assurance that a successful
restructuring can be accomplished.
Actions remaining critical to the Company's long-term liquidity include
completing a restructuring of its $125.0 million Senior Subordinated Notes prior
to the next interest payment due date of June 30, 2000, securing a sufficient
working capital facility with acceptable terms, obtaining successful outcomes
regarding significant contingent liabilities (see Other Matters), and improving
operating results. Management believes that, if these steps can be achieved, the
Company will have sufficient liquidity generated by improved operating results,
substantially decreased interest expense and borrowings on its new credit
facility to meet its longer-term working capital requirements.
As discussed in the Overview, the Company has been engaged in ongoing
negotiations with representatives of the holders of its $125.0 million Senior
Subordinated Notes and believes it could implement a modified restructuring of
those notes. Such a transaction could involve an exchange of Senior Subordinated
Notes for a combination of common stock and newly issued preferred stock on
terms that would permit the Company to retain available cash and not require a
new bank credit agreement. The Company believes such a restructuring would
substantially improve its financial condition and provide a basis for ongoing
operations and continuation of the Company's turnaround. However, such a
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restructuring would result in substantially more dilution of the equity of
existing common stockholders than the restructuring proposed during the fall of
1999 and may involve a consensual insolvency filing, which could entail
additional delays in implementation.
As also discussed above, while continuing negotiations with representatives
of holders of its Senior Subordinated Notes, the Company has also been exploring
strategic alternatives for the Company. Such alternatives could include
generating funds for debt restructuring or longer-term objectives and operating
needs through divestitures of additional operating assets, replacing the
Company's long-term debt, and negotiating additional equity infusions. This
evaluation of alternatives is still underway. The Company currently expects to
be able to reach a conclusion with respect to its strategic direction and begin
to implement its reorganization prior to the end of the second quarter of 2000.
The Company expects its financial condition to be materially affected by
the implementation of any debt restructuring or strategic alternative. The
consummation of either a debt restructuring or other strategic alternatives
could be completed through a "prepackaged" plan of reorganization under Chapter
11 of the U.S. Bankruptcy Code. If such a plan were selected as the mechanism
for completing the Company's restructuring, the Company expects that it would
have the support of the largest holders of its Senior Subordinated Notes and,
therefore, be able to implement the plan relatively promptly. If the Company
commences such a proceeding, the goals of any such plan would be to (i) minimize
adverse effects on Kaiser's ongoing operations, trade creditors and employees
and (ii) result in a financially strengthened and stable organization for
purposes of ongoing operations.
Other Matters
Bath Contingency: In March 1998, the Company entered into a $187 million
maximum price contract with Bath Iron Works to construct a ship building
facility. In May 1998, the Company subsequently learned that estimated costs to
perform the contract as reflected in actual proposed subcontracts were
approximately $30 million higher than the cost estimates originally used as the
basis for contract negotiation between the Company and the customer. After
learning this, the Company advised the customer that it was not required to
perform the contract in accordance with its terms as a result of a mutual
mistake among them in negotiating that contract. In October 1998, the customer
presented an initial draft of a claim against the Company requesting payment for
estimated damages and entitlements pursuant to the terminated contract. The
customer has also subsequently asserted a claim based on alleged differing site
conditions that allegedly should have been identified by the Company. In March
2000, Bath filed a combined claim against the Company in U.S. District Court in
the District of Maine requesting payment for $38 million. The Company continues
to object to Bath's allegations and is vigorously defending its position.
Although no resolution has been reached, management has recorded a provision in
the financial statements for the Company's proposed settlement of the non-
insured portion of the loss.
Acquisition Contingency: The Kaiser common shares exchanged for the stock
of ICT Spectrum in the March, 1998 acquisition carry the guarantee that the fair
market value of each share of stock will reach $5.36 by March 1, 2001. In the
event that the fair market value does not attain the guaranteed level, the
Company is obligated to make up the shortfall either through the payment of cash
or by issuing additional shares of common stock with a total value equal to the
shortfall, depending upon the Company's preference. Pursuant to the terms of the
Agreement, however, the total number of contingently issuable shares of common
stock cannot exceed an additional 1.5 million.
In December, 1999, the Company and certain former Company employees and
shareholders of ICT Spectrum agreed to amend the applicable agreements in a
manner that had the result of reducing the amount of the taxable gain created by
former shareholder-employees' involuntary departures from the Company. As
permitted per the agreement, the shareholders agreed to allow the Company to
retain some of the vested shares as payment of the income tax withholding in
lieu of cash. In total, the Company retained 255,669 shares and recorded the
transaction as a $1.37 million reduction to goodwill and paid-in-capital.
Given that the quoted fair market value of the Company's common stock at
December 31, 1999 was $0.37 per share, and that the Company's current debt
instruments restrict the amount of cash that can be used for acquisitions, the
assumed issuance of an additional 1.5 million shares (now adjusted downward by
the 255,669 retained shares to 1,244,331), would not completely extinguish the
remaining purchase price contingency. In this event, the Company will need to
fund the contingency in cash and
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<PAGE>
would need to obtain an amendment to current debt instruments or replace them in
order to complete a cash fill-up. Any future distribution of cash or common
stock would be recorded as a charge to the Company's paid-in-capital.
Until the earlier of the contingent purchase price resolution or March 1,
2001, any additional shares assumed to be issued because of shortfalls in fair
market value will be included in the Company's diluted earnings per share
calculations, unless they are antidilutive. The exchanged shares also contain
restrictions preventing their sale prior to March 1, 2001.
On March 29, 1999, one ex-ICT Spectrum shareholder, individually and on
behalf of all others similarly situated, filed a class action lawsuit in the
U.S. District Court for the District of Idaho alleging false and misleading
statements made in a private offering memorandum, and otherwise, in connection
with the Company's acquisition of ICT Spectrum in 1998. The Company subsequently
filed a motion to dismiss the case. On March 14, 2000, the court ordered the
defendant to address certain claim deficiencies. Upon receipt of the claim
amendments, the court is expected to complete the ruling relative to the
Company's motion.
Litigation, Claims and Assessments Contingencies: In the course of the
Company's normal business activities, various claims or charges have been
asserted and litigation commenced against the Company arising from or related to
properties, injuries to persons, and breaches of contract, as well as claims
related to acquisitions and dispositions. Claimed amounts may not bear any
reasonable relationship to the merits of the claim or to a final court award. In
the opinion of management, adequate reserves have been provided for final
judgments, if any, in excess of insurance coverage, that might be rendered
against the Company in such litigation. The continued adequacy of reserves is
reviewed periodically as progress on such matters ensues.
The Company may from time to time, either individually or in conjunction
with other government contractors operating in similar types of businesses, be
involved in U.S. government investigations for alleged violations of procurement
or other federal laws and regulations. The Company currently is the subject of a
number of U.S. government investigations and is cooperating with the responsible
government agencies involved. No charges presently are known to have been filed
against the Company by these agencies. The Company has provided for its estimate
of the potential effect of these investigations, and the continued adequacy of
reserves is reviewed periodically as progress on such matters ensues.
Prior to the divestitures of its EFM and Consulting Groups, the Company had
a substantial number of cost-reimbursement contracts with the U.S. government,
the costs of which are subject to audit by the U.S. government. As a result of
pending audits related to fiscal years 1986 forward, the government has
asserted, among other things, that certain costs claimed as reimbursable under
government contracts either were not allowable or not allocated in accordance
with federal procurement regulations. The Company is actively working with the
government to resolve these issues. The Company has provided for its estimate of
the potential effect of issues that have been quantified, including its estimate
of disallowed costs for the periods currently under audit and for periods not
yet audited. Neither the government nor the Company, however, has quantified
many of the issues, and others are qualitative in nature, and their potential
financial impact is not quantifiable by the government or the Company at this
time. The adequacy of provisions for reserves is reviewed periodically as
progress with the government on such matters ensues.
Contract warranties and performance guaranty contingencies: In the course
of the Company's normal business activities, many of its contracts contain
provisions for warranties and performance guarantees. As progress on contracts
ensues, the Company regularly updates the estimates of the costs to perform such
contingencies and reserves a proportionate amount of the total related contract
value until such time as the contingency is resolved.
Year-2000 Readiness: The Company, to date, has not experienced any
material systems failures related to the Year 2000 (Y2K) rollover. Our
remediation plan for the Y2K issue is discussed in detail in the Company's 1998
Annual Report to Shareholders and in 1999 Forms 10-Q. The Company will continue
to monitor and address any issues that may arise from internal systems or those
of third parties. The Company's cumulative costs since inception of the Y2K
initiative were $6.4 million through December 31, 1999. These costs were largely
comprised of the costs to replace financial accounting and
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other software applications. Apart from the system replacement costs, other
costs related to Y2K have not had a material adverse effect on the Company's
results of operation or financial condition.
Market Risk
The Company does not believe that it has significant exposures to market
risk. The majority of its foreign contracts are denominated and executed in the
applicable local currency. The interest rate risk associated with the majority
of the Company's borrowing activities is fixed, however, a 10% increase or
decrease in the average annual prime rate would result in an increase or
decrease of .72% multiplied by the weighted-average amount of fluctuating rate
borrowings outstanding during a period.
Forward-Looking Statements
From time to time, certain disclosures in reports and statements released
by the Company, or statements made by its officers or directors, will be forward
- -looking in nature. These forward-looking statements may contain information
related to the Company's intent, belief, or expectation with respect to contract
awards and performance, potential acquisitions and joint ventures, and cost-
cutting measures. In addition, these forward-looking statements contain a number
of factual assumptions made by the Company regarding, among other things, future
economic, competitive, and market conditions. Because the accurate prediction of
any future facts or conditions may be difficult and involve the assessment of
events beyond the Company's control, actual results may differ materially from
those expressed or implied in such forward-looking statements.
The Company is availing itself of the safe harbor provisions provided in
the Private Securities Litigation Reform Act of 1995 by cautioning readers that
forward-looking statements, including those that use words such as the Company
"believes," "anticipates," "expects," "estimates," and "believes", are
subject to certain risks and uncertainties which could cause actual results of
operations to differ materially from expectations. These forward-looking
statements will be contained in the Company's federal securities laws filings or
in written or oral statements made by the Company's officers and directors to
press, potential investors, securities analysts, and others. Any such written or
oral forward-looking statements should be considered in context with the risk
factors discussed below:
. The Company must significantly revise its capital structure, in the form of a
debt to equity conversion or a combination of other equity investments, joint
ventures or asset sales. The inability of the Company to accomplish one or a
combination of transactions described above would have a material adverse
effect on the business.
. The Company requires access to a revolving credit line to fund short-term
borrowing needs and provide letter of credit capacity required in connection
with certain projects. Kaiser may not be able to generate collateral to
support a borrowing base of sufficient size to obtain such credit or may not
be able to improve operating results enough to be able to obtain such credit.
. The Company may not be able to obtain satisfactory contract performance
guarantee mechanisms, such as performance bonds.
. The Company's financial performance is significantly tied to Kaiser-Hill
Company, LLC, which is subject to uncertainties that may adversely affect its
and the Company's operating results.
. The Company may not be able to maintain the existing volume or size of
contracts and may not be able to realize increased contract performance
levels.
. The Company is involved in a number of fixed-price contracts under which the
Company can benefit from cost savings or performance efficiencies. The
Company's revenue and profit recognition policies are based on making a
series of assumptions including aspects relative to contract pricing and
performance capabilities. The Company's contract to construct the Nova Hut
steel min-mill in the Czech Republic includes such aspects. In the event that
such assumptions cannot be met or change as contract progress ensues, the
Company may have to make downward adjustments to revenue and profit already
recognized in the financial statements. Possible results of changes in such
assumptions could include the inability to realize all contract performance
fees or other incentives already recognized as revenue in the financial
statements, and may result in other unrecoverable cost overruns.
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<PAGE>
. The Company may not be awarded new contracts for which it is competing in
its established markets or these awards may be delayed. In addition, the
Company may not be able to win contracts in new markets it chooses to
target. General economic conditions in the international arena, especially
Asia and Latin America, could negatively impact the Company's current
international business and its ability to expand in international markets.
. The Company may not be able to make acquisitions and/or enter into joint
ventures, and if made, acquisitions and joint ventures may take more time
to contribute favorably to the Company's financial results than was
formerly assumed. The Company is highly leveraged and is subject to
restrictive covenants that limit its ability to fund potential acquisitions
and joint ventures beyond certain levels established in its debts
agreements.
. A portion of the Company's business is generated either directly or
indirectly as a result of federal and state laws, regulations, and
programs; a reduction in the number or scope of these laws, regulations or
programs could materially affect the Company's business.
. The Company's ability to attract and retain business is closely related to
its ability to attract and retain key management and operating personnel.
The market for professionals of the types employed by the Company is quite
competitive. The Company may not be able to attract and retain personnel
necessary for successful operations.
. The Company has several significant contingent liabilities arising out of
prior operations and contracts, its 1998 acquisition of ICT Spectrum
Constructors, Inc. and the dispositions of its Environment and Facilities
Management and Consulting Groups. Adverse resolution of one or more of
those contingencies could adversely affect the Company's financial
performance and condition.
. Certain of the Company's environmental work poses risks of large civil and
criminal liabilities for violations of environmental laws and regulations,
and liabilities to customers and to third parties for damages arising from
the Company's performing environmental services to its clients. A large
fine or penalty imposed on the Company could negatively impact contract
performance fees under certain existing contracts or otherwise negatively
affect the Company's financial results.
. The Company generally grants uncollateralized credit to its customers and
is therefore subject to risks of financial instability on the part of its
customers. In certain cases, the Company secures project specific insurance
policies related to various insurable risks such as certain non-payment due
to insolvency of the customer. Negative changes in the financial condition
of its customers could expose the Company to adverse financial
consequences.
Item 7.a Quantitative and Qualitative Information about Market Risk
See "Market Risk" in Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Item 8. Financial Statements and Supplementary Data
The Financial Statements and Supplementary Data appear on pages F-1
through F-29 and S-1 hereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
None
PART III
Item 10. Directors and Executive Officers of the Registrant
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The Board of Directors currently consists of the following eight directors.
All directors' terms expire at the Annual Meeting in 2000.
Jarrod M. Cohen
James O. Edwards
Thomas C. Jorling
James J. Maiwurm
Hazel R. O'Leary
Keith M. Price
James T. Rhodes
Michael E. Tennenbaum
Jarrod M. Cohen, 34, is the Managing Director of J.M. Cohen and Company
since January 1999. He was the Managing Director, head of Proprietary Investing,
and head of Risk Management for Cowen and Company from April 1996 to December
1998. Previously, from September 1989 until April 1996, Mr. Cohen was the
Portfolio Manager for the Cowen Opportunity Fund and Co-head of Cowen Small Cap
Approach. An agreement between Mr. Cohen and the Company is described on page
31of this Report. Mr. Cohen has been a Director of the Company since May 1,
1998.
James O. Edwards, 56, was Chairman of the Board and Chief Executive Officer
of Kaiser Group International, Inc. or its predecessors from 1985 to 1998. In
1974, he joined ICF Incorporated, the predecessor of Kaiser Group International,
Inc., and was its Chairman and Chief Executive Officer from 1985 until the 1987
establishment of ICF Kaiser International, Inc. Mr. Edwards graduated from
Northwestern University (B.S.I.E.) and Harvard University (M.B.A., High
Distinction, George F. Baker Scholar).
Thomas C. Jorling, 59, has been Vice President, Environmental Affairs, of
International Paper Company since 1994. Mr. Jorling was the Commissioner of the
New York State Department of Environmental Conservation from 1987 to 1994. Prior
to that, Mr. Jorling was a professor of environmental studies and director of
the center for environmental studies at Williams College in Massachusetts. In
addition, Mr. Jorling served from 1977 to 1979 as Assistant Administrator for
Water and Hazardous Material at the U.S. Environmental Protection Agency. Mr.
Jorling has been a Director of the Company since 1995. Mr. Jorling graduated
from the University of Notre Dame (B.S.), Washington State University (M.S.),
and Boston College (LL.B.).
James J. Maiwurm, 51, Chairman of the Board, President and Chief Executive
Officer. Mr. Maiwurm has been President and Chief Executive Officer of Kaiser
since April 19, 1999. Mr. Maiwurm was elected to, and as Chairman of, the Board
of Directors of the Company in June 1999. Mr. Maiwurm serves as chairman of the
board of managers of Kaiser-Hill Company, LLC, which performs the performance
based integrating management services at the Department of Energy's Rocky Flats
Environmental Technology site near Denver, Colorado. From August 1998 until
elected as Kaiser's President and Chief Executive Officer, Mr. Maiwurm was a
partner of Squire Sanders & Dempsey L.L.P., Washington, D.C., and from 1990 to
1998 was a partner of Crowell & Moring LLP, Washington, D.C. Both law firms
serve as counsel to Kaiser. Mr. Maiwurm is a member of the Board of trustees of
Davis Memorial Goodwill Industries, Washington, D.C., a non-profit entity, and
is a member of the board of directors of Workflow Management, Inc., and
integrated graphic arts company providing documents, envelopes and commercial
printing to businesses in North America, the stock of which is traded on the
Nasdaq National Market System.
Hazel R. O'Leary, 62, has been chief operating officer of Blaylock
Partners, L.P., an investment banking firm, since February 2000. Prior to that
Mrs. O'Leary had been Chairman of the firm of O'Leary Associates, Inc. from the
time she left her position as Secretary of the Department of Energy (DOE) in
January 1997. President Clinton selected Mrs. O'Leary to be the Secretary of
Energy in December 1992, and she assumed her duties in January 1993. During her
four-year tenure as Secretary, Mrs. O'Leary effectively downsized DOE's number
of employees by 27 percent and its budget by $10 billion over five years and
focused all of DOE's activities around five areas: science and technology,
national security, energy research, environmental quality, and economic
productivity. Immediately before her appointment as Secretary of Energy, Mrs.
O'Leary was president of the wholly owned natural gas subsidiary of Northern
States Power (NSP), a $2 billion diversified utility holding company
headquartered in Minneapolis; she had been executive vice president of the
holding company from 1989 to 1992. Mrs. O'Leary has over 25 years of experience
in sustainable energy policy and large project development. She
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<PAGE>
has been a Director of the Company since March 1997. She also currently serves
on the Board of Directors of AES Company, the global power company, UAL, which
is the parent of United Airlines, and on the non-profit Boards of The Arms
Control Association, Morehouse College (Atlanta), and The Keystone Center. Mrs.
O'Leary graduated from Fisk University (B.A.) and Rutgers University Law School
(J.D.).
Keith M. Price, 63, has been a Director of the Company since May 1997. He
has been a consultant to various U.S. and international engineering and
construction companies since 1994. From 1991 to 1994, he was first Managing
Director of Transportation Systems and Engineering and then Managing Director of
Operations for Transmanche-Link, a joint venture of ten major European
contractors that held a contract to design, manufacture, and construct the
tunnel transportation for the Chunnel, an $11 billion project that links England
to France. Prior to his positions with Transmanche-Link, Mr. Price had a 27-year
career with Morrison-Knudsen where he held a number of senior management
positions and was a director. Mr. Price graduated from Pepperdine University
(M.B.A.).
James T. Rhodes, 58, has been the Chairman and Chief Executive Officer of
the Institute of Nuclear Power Operations (INPO) since March 1998. INPO is a
nonprofit corporation established by the nuclear utility industry in 1979 to
promote the highest levels of safety and reliability in the operation of nuclear
electric generating plants. Dr. Rhodes retired as President and Chief Executive
Officer of Virginia Power in August 1997. He joined Virginia Power in 1971 as a
nuclear physicist and held increasingly responsible positions throughout that
company. In 1985 he became senior vice president-power operations and in 1988,
senior vice president-finance; in 1989 he was elected President and CEO. Prior
to joining Virginia Power, Dr. Rhodes worked as a project engineer in the U.S.
Army Nuclear Power Program from 1964 to 1968. Prior to his retirement from
Virginia Power, Dr. Rhodes was a director of the Edison Electric Institute,
NationsBank, N.A., the Nuclear Energy Institute, the Southeastern Electric
Exchange, and Virginia Power. Dr. Rhodes has been a Director of Kaiser Group
International, Inc. since February 1998. Dr. Rhodes graduated from North
Carolina State University (B.S.), Catholic University (M.S.), and Purdue
University (Ph.D., Atomic Energy Commission Fellow ).
Michael E. Tennenbaum, 64, has been the Managing Member of Tennenbaum &
Co., LLC since June 1996. Mr. Tennenbaum also is currently the Chief Executive
of Tennenbaum Securities, LLC, and he has held this position since May 1997.
Previously, from February 1993 until June 1996, Mr. Tennenbaum was a Senior
Managing Director of Bear, Stearns & Co., Inc. In addition, Mr. Tennenbaum was
previously a member of the Board of Directors of Bear, Stearns & Co., Inc. and
also held the position of Vice Chairman, Investment Banking. Mr. Tennenbaum's
responsibilities at Bear, Stearns & Co., Inc. included managing the firm's Risk
Arbitrage, Investment Research, and Options Departments. Mr. Tennenbaum has
served on the Boards of Directors of Arden Group, Inc.; Bear, Stearns & Co.,
Inc.; Jenny Craig, Inc.; Sun Gro Horticulture, Inc.; and Tosco Corporation. Mr.
Tennenbaum graduated from the Georgia Institute of Technology (B.S.I.E.) and
Harvard University (M.B.A., with Distinction). Mr. Tennenbaum has been a
Director of the Company since May 1, 1998.
Executive Officers
S. Robert Cochran, 46, has been Executive Vice President and President,
North America since April 1999. Mr. Cochran serves on the board of managers of
Kaiser-Hill Company, LLC, which performs the performance based integrating
management services at the Department of Energy's Rocky Flats Environmental
Technology Site near Denver, Colorado. Prior to that, he was Senior Vice
President of Hazwaste Industries, Inc. & Earth Technology Incorporated, focusing
primarily on business development in the hazardous and radioactive site cleanup
area. He was Senior Vice President and partner with Interface Incorporated;
served as Vice President of PEI/IT; was senior project and geotechnical group
manager with JRB/SAIC; and for Versar, Inc., worked as a senior project
geologist. He is a registered professional geologist.
Richard A. Leupen, 46, has been Executive Vice President and President,
International since April 1999. Prior thereto, he was President of the Engineers
& Constructors Group of Kaiser Group since August, 1998 and held senior
management positions in that Group since 1995. Prior to joining the Company, Mr.
Leupen held management positions with Protech Pty. Ltd., Weda Bay Minerals Ltd
(Calgary), Strand Mining Pty Ltd (Singapore), and Strand Management Pty Limited
as well as serving as director of a number of Kaiser subsidiaries and
affiliates. Mr. Leupen graduated from the University of South Wales in Australia
(B.S.).
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<PAGE>
Timothy P. O'Connor, 35, has been Executive Vice President and Chief
Financial Officer of Kaiser Group International, Inc. since 1998. He had been
Treasurer of the Company since May 1997 and has been employed by Kaiser in
various financial positions since 1995. Mr. O'Connor serves on the board of
managers of Kaiser-Hill Company, LLC, which performs the performance based
integrating management services at the Department of Energy's Rocky Flats
Environmental Technology site near Denver, Colorado. From 1990 until 1995, Mr.
O'Connor was employed by Lockheed Martin Corporation of Bethesda, Maryland,
where he held a number of financial positions. Prior to that, Mr. O'Connor
worked for General Electric Company and Lazard Freres and Co. of New York. Mr.
O'Connor, who is a Certified Cash Manager, graduated from the University of
Delaware (B.S.).
Section 16(a) Beneficial Ownership Reporting Compliance
The U.S. Securities and Exchange Commission (SEC) requires the Company to
tell its shareholders when certain persons fail to report their transactions in
the Company's equity securities to the SEC on a timely basis. During the fiscal
year ended December 31, 1999, Mr. Edwards failed to timely file a report on Form
4 regarding the grant of restricted stock. Such filing has since been made.
Based upon a review of SEC Forms 3, 4, and 5, and based on representations that
no Forms 3, 4, and 5 other than those already filed were required to be filed,
the Company believes that all Section 16(a) filing requirements applicable to
its officers, directors, and beneficial owners of more than 10% of its equity
securities other than the delinquencies disclosed in this paragraph were timely
met.
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Item 11. Executive Compensation
The following table shows the compensation received by each person who
served as the Company's Chief Executive Officer ("CEO") during fiscal 1999, the
four other most highly compensated executive officers of the Company who were
serving as of December 31, 1999 and two other most highly compensated executive
officers who were no longer serving the Company as of December 31, 1999 (the
"Named Executive Officers") for the three years ended December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term Compensation
----------------------
Annual Awards
------ ------
Compensation
------------
(e)
---
(a) (b) Securities (f)
------- ---------- ---
Name, Principal (c) (b) Underlying All Other
--------------- --- --- ---------- ---------
Position, and Salary Bonus Options Compensation
------------- ------ ----- ------- ------------
Fiscal Period ($) ($)(a) (#)(a) (c)
------------- --- ------ ------ ---
<S> <C> <C> <C> <C>
James J. Maiwurm, Current Chairman,
President and CEO(d)
Fiscal 1999.................... $252,406 $250,296 0 $ 2,548
Keith M. Price, Former President and
CEO(e)
Fiscal 1999...................... $213,186 $ 50,000 0 $705,751
Fiscal 1998...................... $141,347 $ 50,000 200,000 options $ 52,068
S. Robert Cochran, Executive Vice
President(f)
Fiscal 1999 ..................... $245,583 $151,973 0 $ 13,264
Fiscal 1998...................... $200,013 $ 25,000 50,000 options $ 13,384
Fiscal 1997...................... $182,307 $ 15,000 9,900 options $ 13,138
Richard Leupen, Executive Vice
President(g)
Fiscal 1999...................... $291,266 $204,887 0 $ 99,246
Fiscal 1998...................... $207,357 $146,000 200,000 options $ 57,514
Fiscal 1997...................... $168,064 $ 80,000 9,900 options $ 25,151
Timothy P. O'Connor, Executive Vice
President, CFO(h)
Fiscal 1999...................... $238,848 $344,298 0 $ 12,641
Fiscal 1998...................... $200,013 $ 58,000 60,000 options $ 9,995
Fiscal 1997...................... $118,890 $ 7,500 6,000 options $ 7,567
Marijo L. Ahlgrimm, Senior Vice
President and Controller(i)
Fiscal 1999...................... $163,229 $ 88,322 0 $ 9,016
Fiscal 1998...................... $115,003 $ 0 0 $ 2,212
Fiscal 1997...................... $ 6,635 $ 0 6,000 options $ 0
</TABLE>
- ----------------
(a) Cash bonuses are reported for the year of service, for which the cash bonus
was earned, even if pre-paid or paid in a subsequent year. Restricted stock
and options are reported for the year of service for which the stock and/or
options were earned, even if the grant date falls in a subsequent fiscal
year. No dividends are paid on any shares of restricted stock.
(b) Any amounts shown in the "Other Annual Compensation" column do not include
any perquisites or other personal benefits because the aggregate amount of
such compensation for each of the Named Executive Officers did not exceed
the lesser of (i) $50,000 or (ii) 10% of the combined salary and bonus for
the Named Executive Officer for the stated fiscal period.
(c) The Company's 1999 contributions to the Named Executive Officers pursuant
to the Company's Retirement Plan will not be made until September 2000 and
hence is not included herein.
(d) On June 1, 1999, Mr. Maiwurm entered into an employment agreement with the
Company. For a full description of the terms of the agreement, refer to the
discussion under "Certain Relationships and Related Transactions-Executive
Officers" on page 34 of this Report.
(e) Mr. Price was appointed President and CEO of the Company as of August 5,
1998. On April 27, 1999, Mr. Price and the Company mutually agreed to
terminate his employment effective April 30, 1999. As a result of these
agreements, the information for fiscal 1999 and 1998, represents all
Page 26
<PAGE>
compensation paid to or earned by Mr. Price during the periods commencing
on his hire date through the period covering his termination. For a fuller
description of the terms of these agreements, refer to the discussion under
"Certain Relationships and Related Transactions--Current Directors" on
page 32 of this Report. The amount in column (d) represents a signing bonus
paid to Mr. Price in connection with his agreeing to serve as President and
CEO of the Company. The amounts in column (f) of the table for Mr. Price
comprise the following:
<TABLE>
<S> <C> <C>
Fiscal 1999 $677,450 Severance
$ 2,400 Company match under the Company's Section 401(k) Plan
$ 793 Spouse travel
$ 25,108 Relocation expenses
Fiscal 1998 $ 1,757 Company match under the Company's Section 401(k) Plan
$ 3,770 Spouse travel
$ 943 Car allowance
$ 45,598 Relocation expenses
</TABLE>
(f) On June 1, 1999, Mr. Cochran entered into an employment agreement with the
Company. For a full description of the terms of the agreement, refer to
the discussion under "Certain Relationships and Related Transactions-
Executive Officers" on page 34 of this Report. The amounts shown in column
(f) of the table for Mr. Cochran comprise the following:
<TABLE>
<S> <C> <C>
Fiscal 1999 $ 3,200 Company match under the Company's Section 401(k) Plan
$10,164 Company Retirement Plan Contribution for 1998 made in September 1999
Fiscal 1998 $ 3,200 Company match under the Company's Section 401(k) Plan
$10,184 Company Retirement Plan Contribution for 1997 made in September 1998
Fiscal 1997 $ 3,646 Company match under the Company's Section 401(k) Plan
$ 9,492 Company Retirement Plan Contribution for 1997 made in September 1997
</TABLE>
(g) On June 1, 1999, Mr. Leupen entered into an amended employment agreement
with the Company. For a full description of the terms of related
agreements, refer to the discussion under "Certain Relationships and
Related Transactions- Executive Officers" on page 34 of this Report. The
amounts shown in column (f) of the table for Mr. Leupen comprise the
following:
<TABLE>
<S> <C> <C>
Fiscal 1999 $ 2,508 Company match under the Company's Section 401(k) Plan
$37,090 Company Retirement Plan contribution for 1998 made in September 1999
$22,063 Relocation expenses
$12,461 Car Allowance
$25,124 Spouse travel
Fiscal 1998 $ 1,385 Company match under the Company's Section 401(k) Plan
$ 7,897 Company Retirement Plan contribution for 1997 made in September 1998
$31,452 Relocation expenses
$11,191 Car Allowance
$ 5,589 Spouse travel
Fiscal 1997 $10,247 Company Retirement Plan contribution for 1997
$14,904 Car Allowance
</TABLE>
(h) On June 1, 1999, Mr. O'Connor entered into an employment agreement with the
Company. For a full description of the terms of the agreement, refer to
the discussion under "Certain Relationships and Related Transactions-
Executive Officers" on page 35 of this Report. The amounts shown in column
(f) of the table for Mr. O'Connor comprise the following:
<TABLE>
<S> <C> <C>
Fiscal 1999 $ 2,577 Company match under the Company's Section 401(k) Plan
$10,064 Company Retirement Plan Contribution for 1998 made in September 1999
Fiscal 1998 $ 2,500 Company match under the Company's Section 401(k) Plan
$ 7,495 Company Retirement Plan Contribution for 1997 made in September 1998
Fiscal 1997 $ 2,378 Company match under the Company's Section 401(k) Plan
$ 5,189 Company Retirement Plan Contribution for 1997 made in September 1997
</TABLE>
Page 27
<PAGE>
(i) The amounts shown in column (f) of the table for Ms. Ahlgrimm comprise the
following:
<TABLE>
<S> <C> <C>
Fiscal 1999 $2,552 Company match under the Company's Section 401(k) Plan
$6,464 Company Retirement Plan Contribution for 1998 made in September 1999
Fiscal 1998 $2,212 Company match under the Company's Section 401(k) Plan
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
There were no option grants to any of the Named Executive Officers during
the year ended December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
The following table shows certain information concerning the value as of
December 31, 1999 of unexercised options held by each of the Named Executive
Officers identified in the Summary Compensation Table on page 26 of this Report.
None of such Named Executive Officers exercised stock options during the fiscal
year ended December 31, 1999.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Value of Unexercised
Number of Securities --------------------
-------------------- In-the-Money Options
Shares Value Underlying Unexercised
------ ----- ---------------------- --------------------
Acquired on Realized Options at 12/31/99 (#) at 12/31/99 ($)
----------- -------- ----------------------- ---------------
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable*
---- ------------ --------- ------------------------- --------------------------
<S> <C> <C> <C> <C>
James J. Maiwurm........ 0 0 0/0 $0/$0
Keith M. Price.......... 0 0 200,000/0 $0/$0
Richard Leupen.......... 0 0 167,425/42,475 $0/$0
S. Robert Cochran....... 0 0 17,425/42,475 $0/$0
Timothy P. O'Connor..... 0 0 62,250/3,750 $0/$0
Marijo L. Ahlgrimm...... 0 0 3,000/3,000 $0/$0
James O. Edwards........ 0 0 30,000/10,000 $0/$0
Sudhakar Kesavan........ 0 0 49,950/14,150 $0/$0
</TABLE>
- --------------
* The exercise price of all options is the average closing price of the
Company's Common Stock on each of the 20 trading days prior to the date of
grant, with the 20th day being the trading date immediately preceding the date
of grant. The closing price of the Company's Common Stock on December 31, 1999,
was $0.375 per share.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
In connection with their employment with the Company during the year ended
December 31, 1999, six of the executive officers, who are named in the Summary
Compensation Table have or had employment contracts. In connection with the
termination of their employment with the Company, three of these executive
officers received severance packages. These arrangements are described under
"Certain Relationships and Related Transactions--Current Directors" and "--
Former Directors/Executive Officers" on pages 31 - 35 of this Report.
Compensation and Human Resources Committee Interlocks and Insider Participation
The members of the Compensation & Human Resources Committee are Hazel
O'Leary (Chairperson), Thomas C. Jorling, and James T. Rhodes, none of whom are
employed by the Company. For the year ended December 31, 1999, there were no
director relationships that require disclosure under this section.
Page 28
<PAGE>
Compensation of Non-employee Directors Effective March 1, 1997
Directors who are not employees of the Company ("Non-employee Directors")
are paid $1,000 for attendance at each meeting of the Board of Directors; they
are paid $1,000 for attendance at each meeting of a committee of the Board of
Directors of which the Director is a member. In addition, each Non-employee
Director receives an annual retainer of $20,000, payable in advance in quarterly
installments, and is reimbursed for his or her expenses incurred in connection
with his or her Board service. Directors of the Company who are employees of the
Company are not compensated separately for their service as Directors.
On February 28, 1997, the Board of Directors adopted the Kaiser Group
International, Inc. Non-employee Directors Compensation and Phantom Stock Plan,
which provides for the cash compensation discussed in the preceding paragraph.
In addition, in lieu of option grants under the Non-employee Directors Stock
Option Plan adopted in 1991, each Non-employee Director of the Company is
granted a Phantom Stock Award ("PSA") equal to $20,000 worth of Common Stock
on the date of grant; the date of grant is the date of the annual board meeting
which occurs immediately following the conclusion of the Annual Meeting of
Shareholders. Three years after the PSA grant, the Company will pay each Non-
employee Director in cash the value of the shares to which the PSA relates. The
number of shares of Common Stock to which the PSA relates will be determined
using the average closing prices of the Common Stock for the 20 trading days
immediately prior to the date of grant. The same method will be used to
determine the value of the phantom stock as of the date of the cash payout.
In lieu of receiving cash compensation pursuant to the terms of the Kaiser
Group International, Inc. Non-employee Directors Compensation and Phantom Stock
Plan described above, on January 1, 1999, Mr. Coelho was being paid an annual
fee of $120,000. This amounts was being paid to Mr. Coelho as consideration for
his services as Chairman of the Board of Directors. Mr. Coelho resigned his
position as Chairman on June 7, 1999 and from the Board of Directors in
September 1999.
In 1999, the Non-employee Directors were awarded the following Phantom
Stock Units under the Kaiser Group International, Inc. Non-employee Directors
Compensation and Phantom Stock Plan:
<TABLE>
<CAPTION>
Per Share Price
---------------
Total Value of (20-trading day Total Number of
-------------- --------------- ---------------
Common Stock average at Phantom Stock Date of
------------ ---------- ------------- -------
Non-employee Director on Date of Grant November 3, 1999) Units Granted Cash Payout
--------------------- ---------------- ----------------- ------------- -----------
<S> <C> <C> <C> <C>
Jarrod M. Cohen................ $20,000 $0.36 55,556 November 4, 2002
James T. Rhodes................ $20,000 $0.36 55,556 November 4, 2002
James O. Edwards............... $20,000 $0.36 55,556 November 4, 2002
Keith M. Price................. $20,000 $0.36 55,556 November 4, 2002
Michael E. Tennenbaum.......... $20,000 $0.36 55,556 November 4, 2002
Thomas C. Jorling.............. $20,000 $0.36 55,556 November 4, 2002
Hazel R. O'Leary .............. $20,000 $0.36 55,556 November 4, 2002
</TABLE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of the April 14, 2000,
regarding each person known by the Company to beneficially own 5% or more of the
outstanding Common Stock of the Company. A person is deemed to be a beneficial
owner of the Company's Common Stock if that person has voting or investment
power (or voting and investment powers) over any shares of Common Stock or has
the right to acquire such shares pursuant to exercisable options or warrants
within 60 days from April 14, 2000.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial
--------------------
Name and Address of Beneficial Owners Ownership of Shares of Percent of
------------------------------------- ---------------------- ----------
of More Than 5% of the Common Stock of the Common Stock
---------------------- ------------------- ------------
Common Stock of the Company Company(a) of the Company
--------------------------- ---------- --------------
<S> <C> <C>
Tennenbaum & Co., LLC;........................ 2,600,000(a) 11%
Michael E. Tennenbaum
11100 Santa Monica Boulevard
Los Angeles, CA 90025
</TABLE>
- ----------------
Page 29
<PAGE>
(a) The information with respect to the shares of common stock beneficially
owned by Tennenbaum & Co., LLC and Michael E. Tennenbaum is based on a
Report on Schedule 13D, Amendment No. 2 dated May 7, 1999, which was filed
with the SEC. Mr. Tennenbaum is a director of Kaiser.
The following table sets forth information regarding the beneficial
ownership of shares of common stock of Kaiser by each director, and by executive
officers named in the Summary Compensation Table on page 26 of this Report, and
by all directors and current executive officers as a group. The information set
forth below is current as of April 14, 1999, except that information with
respect to ownership of shares of Common Stock in the Company's Employee Stock
Ownership Plan, Section 401(k) Plan, and Retirement Plan is current as of
December 31, 1999. The information is based on the Company's review of public
reports filed by each director/executive officer.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
-------------------- ----------
Certain Beneficial Owners Beneficial Ownership Common Stock
------------------------- -------------------- ------------
of Shares of Common Stock of Shares of Common of the Company
------------------------- ------------------- --------------
of the Company Stock of the Company(a) (*Less than 1%)
-------------- ----------------------- ---------------
<S> <C> <C>
(i) Directors
Jarrod M. Cohen..................................... 692,576(d) 2.7%
James O. Edwards.................................... 495,517(e) 1.7%
Thomas C. Jorling................................... 78,283(b) *
Hazel R. O'Leary.................................... 74,483(c) *
Keith M. Price...................................... 272,283(f) *
James T. Rhodes..................................... 62,574(g) *
Michael E. Tennenbaum............................... 2,662,574(h) 11%
James J. Maiwurm.................................... 0(k) *
(ii) Named Executive Officers
S. Robert Cochran................................... 60,900(i) *
Executive Vice President
Richard A. Leupen................................... 209,900(j) *
Executive Vice President
Timothy P. O'Connor................................. 66,000(l) *
Executive Vice President
Marijo L. Ahlgrimm.................................. 6,000(m) *
Senior Vice President
(iii) All Directors and Current Executive Officers as a Group
(12 Persons) 4,681,090(n) 15.4%
</TABLE>
- -------
(a) For the purposes of this table, a person or group is deemed to have
"beneficial ownership" of any shares of common stock which such person has
the right to acquire within 60 days after the date as of which the
information is presented. However, for purposes of computing the percentage
of outstanding shares of common stock held by each person or group of
persons named above, any security which such person or group of persons has
the right to acquire from Kaiser within 60 days from the date as of which
the information is presented is not deemed to be outstanding for the
purposes of computing the percentage ownership of any other person.
(b) Mr. Jorling's share ownership includes 6,000 shares that may be acquired
within 60 days of April 14, 2000 upon the exercise of stock options. Mr.
Jorling has 72,283 Phantom Stock Units.
(c) Mrs. O'Leary has 72,283 Phantom Stock Units. Mrs. O'Leary also owns
directly 2,200 other shares.
(d) The information with respect to the shares of common stock beneficially
owned by Jarrod M. Cohen is based on information from Mr. Jarrod Cohen, and
is current as of April 10, 2000. Mr. Cohen has informed Kaiser that he
directly owns a total of 59,000 shares. Additionally, Mr. Cohen has sole
voting and investment power as to 637,020 shares beneficially owned by J.M.
Cohen & Company. Mr. Jarrod Cohen has 55,556 Phantom Stock Units.
(e) Mr. Edwards' share ownership includes 2,769 shares allocated to his ESOP
account, 2,406 shares allocated to his Section 401(k) Plan account, 72,338
shares allocated to his Retirement Plan account, and 30,000 shares that may
be acquired within 60 days of April 14, 2000 upon the exercise of stock
options. Mr. Edwards owns 20,000 restricted shares and has 55,556 Phantom
Stock Units. Mr. Edwards also owns directly 297,698 shares, 4,750 of which
are held in Mr. Edwards' IRA account.
Page 30
<PAGE>
Additionally, 4,750 shares are indirectly owned and are held in Mr. Edwards
spouse's IRA account. Mr. Edwards also owns 10,000 options which are not
exercisable until January 24, 2001.
(f) Mr. Price's share ownership includes 200,000 shares that may be acquired
within 60 days of April 14, 2000 upon the exercise of stock options. Mr.
Price has 72,283 Phantom Stock Units.
(g) Mr. Rhodes has 62,574 Phantom Stock Units.
(h) The information with respect to the shares of common stock beneficially
owned by Tennenbaum & Co., LLC and Michael E. Tennenbaum is based on a
Report on Schedule 13D, Amendment No. 2 dated May 7, 1999, which was filed
with the SEC. Mr. Tennenbaum is a director of Kaiser. Mr. Tennenbaum is the
Managing Member of and may be deemed to control Tennenbaum & Co. LLC, which
owns 2,600,000 shares of common stock included in this table. Mr. Tennenbaum
also has 62,574 Phantom Stock Units.
(i) Mr. Cochran's share ownership includes 17,425 shares that may be acquired
within 60 days of April 14, 2000 upon the exercise of stock options. Mr.
Cochran has 10,000 options which are not exercisable until January 6, 2001;
2,475 options exercisable on January 24, 2001; 10,000 options exercisable on
January 6, 2002; 10,000 options exercisable on January 6, 2003; and 10,000
options exercisable on January 6, 2004. Mr. Cochran also owns directly 1,000
shares.
(j) Mr. Leupen's share ownership includes 167,425 shares that may be acquired
within 60 days of April 14, 2000 upon the exercise of stock options. Mr.
Leupen also has 2,475 options which are not exercisable until January 24,
2001; 10,000 options exercisable on February 27, 2001; 10,000 options
exercisable on February 27, 2002; 10,000 options exercisable on February 27,
2003; and 10,000 options exercisable on February 27, 2004.
(k) Mr. Maiwurm has no share ownership in the Company.
(l) Mr. O'Connor's share ownership includes 62,250 shares that may be acquired
within 60 days of April 14, 2000 upon the exercise of stock options. Mr.
O'Connor also owns 3,750 options which are not exercisable until January 01,
2001.
(m) Ms. Ahlgrimm's share ownership includes 3,000 shares that may be acquired
within 60 days of April 14, 2000 upon the exercise of stock options. Ms.
Ahlgrimm also owns 3,000 options which are exercisable in 50% installments
on December 8, 2000 and 2001, respectively.
(n) This total includes 453,109 Phantom Stock Units, 2,769 shares allocated to
ESOP accounts, 2,406 shares in Section 401(k) Plan accounts, 72,338 shares
allocated to individuals under the Retirement Plan or held in directed
investment accounts under the Retirement Plan, 486,100 shares that may be
acquired within 60 days of April 14, 2000 upon the exercise of stock
options, 40,763 restricted shares, 101,700 Unexercisable options, and
3,521,905 shares.
Item 13. Certain Relationships and Related Transactions
Current Directors
Jarrod M. Cohen. On March 13, 1998, the Company and Mr. Jarrod M.
Cohen (for himself, Cowen and Company, Cowen Incorporated, and Joseph M. Cohen,
collectively, the "Cohen Parties") signed an agreement pursuant to which the
Company agreed, upon receipt of Mr. Cohen's written request at any time between
July 1 and December 31, 1998, to enlarge the class of directors whose terms
expire at the 2000 Annual Meeting of Shareholders and elect Mr. Cohen to fill
the resulting vacancy. The Cohen Parties agreed (i) to withdraw any previous
consents and agreed not to consent to be a nominee for election to the Board of
Directors at the Company's 1998 Annual Meeting of Shareholders, (ii) to vote in
favor of the Company-proposed nominees for election at the 1998 Annual Meeting
of Shareholders, and (iii) to be present, in person or by Report, or otherwise
be deemed to be present (to the extent permitted by law) at meetings for which
they were given notice for the purpose of determining the presence of a quorum
at such meetings. In addition, the Cohen Parties agreed (a) not to subject any
of the Company's voting securities to a voting trust or voting agreement; (b)
not to solicit proxies or become a participant in a solicitation in opposition
to any recommendation of the Board of Directors of the Company; (c) not to join
with others or otherwise act in concert with others for the purpose of
acquiring, holding, voting, or disposing of voting securities of the Company;
(d) not to become, alone or in conjunction with others, an acquiring person as
defined in the Company's Shareholders Rights Plan; and (e) not to dispose of any
voting securities of the Company to any person who, to the knowledge of the
Cohen Parties, as a result of acquiring such voting securities would become an
acquiring person as defined in the Company's Shareholder Rights Plan. The
provisions of (a) through (e) above apply during the period from March 13, 1998
to the date Mr. Cohen or any other designee of the Cohen Parties ceases to be a
member of the Board of Directors. It was agreed that if the Cohen Parties
obtained the express written consent of a
Page 31
<PAGE>
majority of the directors of the Company who are not designated by the Cohen
Parties, then the provisions of (a) through (e) above would not apply.
James O. Edwards. Effective May 1, 1997, the Company entered into an
employment agreement with Mr. Edwards for his services as Chairman and Chief
Executive Officer of the Company through December 31, 1999. In addition to
delineating Mr. Edwards' areas of responsibility and reporting line, the
agreement provided for a base annual salary of $400,000 beginning on April 1,
1997 (with $25,000 increases in each of the next two years); annual bonus
compensation to be determined by the Compensation & Human Resources Committee of
the Company's Board of Directors; severance payments as provided under the
Company's Senior Executive Officers Severance Plan; eligibility under the
Company's employee benefit plans; and a one-year non-competition period
following voluntary or "for cause" employment termination. The agreement also
provided for the grant on December 31, 1998, of 200,000 shares of Restricted
Stock under the Company's Stock Incentive Plan; 100,000 of these shares to vest
on December 31, 1999, with the balance vesting on December 31, 2000. Vesting
terms in the event of termination of Mr. Edwards' employment or his death also
are outlined in the agreement. As part of his employment agreement with the
Company, Mr. Edwards' outstanding indebtedness to the Company on May 1, 1997,
was restructured.
On November 6, 1998, Mr. Edwards entered into an agreement with the Company,
pursuant to which the parties mutually agreed to terminate Mr. Edwards'
employment agreement. In consideration of Mr. Edwards agreeing to terminate his
employment agreement, the Company agreed to compensate him with cash in the
aggregate amount of $850,000, all of which has been paid. The Company further
agreed (i) to provide Mr. Edwards and his dependents with continued health,
welfare, and life insurance benefits through April 30, 1999, (ii) to accelerate
the vesting of 30,000 options previously granted pursuant to the Company's Stock
Incentive Plan, (iii) consistent with the terms of his employment agreement, to
award 200,000 shares of restricted Common Stock, which shares vest upon the
earlier of November 6, 1999, or the merger, consolidation, sale of stock, or
sale of substantially all of the assets of, the Company, and (iv) to forgive
approximately $1,396,139 of indebtedness previously owed by Mr. Edwards to the
Company. In addition, Mr. Edwards agreed to provide certain consulting services
to the Company through January 31, 1999, for which he was compensated with
approximately $98,559 of cash payments. The Company will pay on Mr. Edwards'
behalf the amount of $10,000 for legal fees incurred by him in connection with
the negotiation of this Agreement. In exchange for the benefits received by Mr.
Edwards which are described in this paragraph, Mr. Edwards agreed to terminate
his employment agreement and execute a full general release as to the Company
and its affiliated parties.
Keith M. Price. On April 27, 1999, Mr. Price entered into an agreement with
Kaiser, pursuant to which the parties mutually agreed to terminate Mr. Price's
employment agreement effective as of April 30, 1999. The terms of that
employment agreement are described in the following two paragraphs. Consistent
with the terms of his employment agreement and inconsideration of Mr. Price's
agreeing to terminate his employment agreement, Kaiser paid him an aggregate
amount of $677,450 in cash. Kaiser further agreed (I) to provide Mr. Price and
his dependents with continued health, welfare and life insurance benefits
through April 30, 1999, (ii) to accelerate the vesting of certain options
previously granted to Mr. Price pursuant to Kaiser's Stock Incentive Plan, (iii)
to reimburse Mr. Price for certain costs and expenses in connection with Mr.
Price's move from Washington, D.C. to Boise, Idaho, and (iv) to continue to
provide directors and officers liability insurance coverage to Mr. Price for Mr.
Price's tenure at Kaiser. In addition, Mr. Price agreed to provide certain
consulting services to Kaiser through September 30, 2000, for which he will be
compensated monthly at a rate of $200 per hour with a $10,000 per month minimum.
Kaiser also agreed to reimburse Mr. Price for legal fees incurred by Mr. Price
in connection with the negotiation of this agreement up to a maximum of $1,000.
In exchange for the benefits received by Mr. Price which are described in this
paragraph, Mr. Price agreed to terminate his employment agreement and execute a
full general release as to Kaiser and its affiliated parties, and further agreed
not to compete with Kaiser for a period commencing on April 30, 1999 and running
through September 30, 2000.
Effective August 5, 1998, the Company entered into an employment agreement
with Mr. Price for his services as President and Chief Operating Officer of the
Company through August 5, 1999. In addition to delineating Mr. Price's areas of
responsibility and reporting line, the agreement provided for a base annual
salary of $375,000; a signing bonus of $100,000, $50,000 of which was paid upon
commencement of employment and $50,000 on January 1, 1999; annual bonus
compensation of not less than 50% of base annual salary; severance payments
equal to the balance of base annual compensation for the one year contract term;
eligibility under the Company's employee benefit plans, and a one-year, non-
Page 32
<PAGE>
competition period following termination of employment for any reason other than
employment through the term of the contract. The agreement also provided for the
grant of three-year options to purchase 150,000 shares of the Company's common
stock, 50% of the options to vest on February 5, 1999 and 50% on August 4, 1999.
Effective November 4, 1998, Mr. Price was promoted to Chief Executive Officer
and the Company agreed to extend the term of Mr. Price's contract to two years
commencing August 5, 1998 and to grant Mr. Price three year options to purchase
an additional 50,000 share of the Company's common stock, 50% of the options to
vest on May 4, 1999 and 50% to vest on November 4, 1999, subject to his
continued employment through such dates.
Michael E. Tennenbaum. On March 13, 1998, the Company and Mr. Michael E.
Tennenbaum signed an agreement pursuant to which the Company agreed to nominate,
recommend, and solicit proxies for Mr. Tennenbaum's election as a Director of
the Company at the May 1, 1998, Annual Meeting of Shareholders for a three-year
term expiring at the 2001 Annual Meeting of Shareholders, and until his
successor is duly elected. The Company and Mr. Tennenbaum agreed that during the
period from March 13, 1998, to the earlier of (i) March 13, 2003, and (ii) the
day after the date Mr. Tennenbaum, Tennenbaum & Co., LLC, and their affiliates
cease to be the beneficial owners of any of the Company's voting securities (the
"Restricted Securities"), Mr. Tennenbaum and Tennenbaum & Co., LLC (the
"Tennenbaum Parties") shall not acquire, directly or indirectly, any voting
securities of the Company if, following such acquisition, the Tennenbaum Parties
and their affiliates would, directly or indirectly, be the beneficial owners of
more than 19.5% of the total combined voting power of all issued and outstanding
securities of the Company. The agreement states that the limitation set forth in
the immediately preceding sentence shall not be violated if the Tennenbaum
Parties and their affiliates become entitled to exercise voting power in excess
of 19.5% as a result of any event or circumstance other than the acquisition by
the Tennenbaum Parties or their affiliates of beneficial ownership of additional
voting securities of the Company. The Company agreed not to take any action,
including without limitation, any amendment to its Shareholders Rights Plan that
would prevent the Tennenbaum Parties from acquiring additional securities within
the limitations set forth above. The Tennenbaum Parties agreed that they (a)
would not subject any Restricted Securities to any voting trust or voting
agreement; (b) would not recruit or engage in organizing persons not nominated
by the Board of Directors to oppose the Board of Directors nominated candidates
in an election; (c) would not financially support a Report contest for Board of
Directors candidates to oppose the candidates nominated by the Board of
Directors; (d) would not provide any material, non-public information gained in
Mr. Tennenbaum's position as a Director to opposing Board candidates, except as
required by law, and then only after giving notice to the Company; (e) would not
join a partnership, limited partnership, syndicate, or other group or otherwise
act in concert with others for the purpose of acquiring, holding, voting, or
disposing of voting securities of the Company; and (f) would be present, in
person or by Report, or otherwise be deemed to be present (to the extent
permitted by law), at meetings for which they were given notice for the purpose
of determining the presence of a quorum as such meetings. The provisions of (a)
through (f) above apply during the period during which Mr. Tennenbaum (or
another affiliate of the Tennenbaum Parties) is a member of the Board of
Directors, and for a period of 90 days thereafter. It was agreed that if the
Tennenbaum Parties obtained the express written consent of a majority of the
directors of the Company who are not designated by the Tennenbaum Parties, then
the 19.5% ownership limitation and the provisions of (a) through (f) above would
not apply. Finally, the Company agreed to reimburse the Tennenbaum Parties for
reasonable and necessary documented out-of-pocket expenses incurred by them in
connection with their proposals to the Board of Directors of the Company and the
potential solicitation of proxies for the election of directors of the Company,
which reimbursement was made in the amount of $16,307.
Current Executive Officers
James J. Maiwurm. The Company entered into an employment agreement with Mr.
Maiwurm for his services as President and Chief Executive Officer of Kaiser
Group International, Inc. for the period June 1, 1999 through June 30, 2001. In
addition to delineating Mr. Maiwurm's areas of responsibility, the agreement
provides for a base annual salary of $375,000 through June 30, 2000, thereafter
subject to increase as determined by the Compensation & Human Resources
Committee. The agreement also provides for retention bonuses of $90,000 and
$90,000, payable upon the execution of the employment agreement and on May 1,
2000, respectively, as well as incentive bonus arrangements for amounts not to
exceed $387,500 (representing a bonus opportunity equal to 50% of the
executive's initial annual base salary that is contingent on satisfaction of
operational objectives and a special bonus opportunity of $200,000 that was
contingent on satisfaction of the Company's recapitalization objectives) payable
at the
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<PAGE>
time and contingent upon the extent to which the corporation achieves specified
objectives. Either party may terminate the agreement upon thirty (30) days'
prior written notice. In the event that the agreement is terminated without
"cause" by the Company or by Mr. Maiwurm with "good reason" (as such terms
are defined in the agreement), Mr. Maiwurm is entitled to receive a severance
payment equal to two times his annual base salary in effect at the time of such
termination. Additionally, in the event that Mr. Maiwurm terminates the
agreement without "good reason" within twelve months after a "Change in
Control", Mr. Maiwurm is entitled to receive severance payment equal to one time
his annual base salary.
S. Robert Cochran. The Company entered into an employment agreement with
Mr. Cochran for his services as President, North America, of Kaiser Group
International, Inc. for the period June 1, 1999 through June 30, 2001. In
addition to delineating Mr. Cochran's areas of responsibility and reporting
lines, the agreement provides for a base annual salary of $260,000 through June
30, 2000, thereafter subject to increase as determined by the Compensation &
Human Resources Committee. In addition to eligibility under the Company's
employee benefit plans, the agreement also provides for retention bonus's of
$50,000 and $25,000 payable upon the execution of the employment agreement and
on May 1, 2000, respectively, as well as incentive bonus arrangements for
amounts not to exceed $130,000 (representing a bonus opportunity equal to 50% of
the executive's initial annual base salary that is contingent on satisfaction of
operational objectives). Either party may terminate the agreement upon thirty
(30) days' prior written notice. In the event that the agreement is terminated
without "cause" by the Company or by Mr. Cochran with "good reason" (as such
terms are defined in the agreement), Mr. Cochran is entitled to receive a
severance payment equal to two times his annual base salary in effect at the
time of such termination.
Richard A. Leupen. The Company entered into an amended employment agreement
with Mr. Leupen for his services as President, International, of Kaiser Group
International, Inc. for the period June 1, 1999 through December 31, 2000. In
addition to delineating Mr. Leupen's areas of responsibility, the agreement
provides for a base annual salary of $260,000 through June 30, 2000, thereafter
subject to increase as determined by the Compensation & Human Resources
Committee. In addition to eligibility under the Company's employee benefit
plans, the agreement also provides for retention bonuses of $25,000 and $25,000,
payable upon the execution of the employment agreement and on May 1, 2000,
respectively, as well as incentive bonus arrangements for amounts not to exceed
$130,000 (representing a bonus opportunity equal to 50% of the executive's
initial annual base salary that is contingent on satisfaction of operational
objectives). Either party may terminate the agreement upon ninety (90) days'
prior written notice. In the event that the Company terminates the agreement
without "cause" or Mr. Leupen terminates the agreement with "good reason"
(as such terms are defined in the agreement), Mr. Leupen is entitled to receive
a severance payment equal to one time his annual base salary in effect at the
time of such termination.
Prior to the amended agreement, Mr. Leupen's employment agreement with the
Company, for his role as President of the Engineers and Constructors Group and
Executive Vice President of the Company, was for the term of October 5, 1998
through August 4, 2001. In addition to delineating Mr. Leupen's areas of
responsibility and reporting line, the agreement provided for a base annual
salary of $300,000 beginning on October 5, 1998, subject to annual increases to
be determined by the Compensation & Human Resources Committee; a relocation
bonus of $46,000; bonus compensation of $35,000 for the period ended June 30,
1998, not less than $75,000 for the period ended December 31, 1998, not less
than $150,000 for the period ended August 4, 1999; signing bonus of $100,000,
payable in two equal increments on August 4, 1998 and January 1, 1999;
eligibility under the Company's employee benefit plans; reimbursement of
relocation and related expenses for Mr. Leupen and his family; and a one-year
non-competition following termination for "cause" of Mr. Leupen's employment.
The agreement also provided for the grant of 150,000 options, 50% of which
vested immediately and the remainder vested on January 1, 1999
Timothy P. O'Connor. The Company entered into an employment agreement with
Mr. O'Connor for his services as Chief Financial Officer of Kaiser Group
International, Inc. for the period June 1, 1999 through December 31, 2000. In
addition to delineating Mr. O'Connor's areas of responsibility, the agreement
provides for a base annual salary of $260,000 through June 30, 2000, thereafter
subject to increase as determined by the Compensation & Human Resources
Committee. In addition to eligibility under the Company's employee benefit
plans, the agreement also provides for retention bonuses of $75,000 and $55,000,
payable upon the execution of the employment agreement and on May 1, 2000,
respectively, as well as incentive bonus arrangements for amounts not to exceed
$330,000 (representing a bonus opportunity equal to 50% of the executive's
initial annual base salary that
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is contingent on satisfaction of operational objectives and a special bonus
opportunity of $200,000 that is contingent on satisfaction of the Company's
recapitalization objectives) payable at the time and contingent upon the extent
to which the corporation achieves specified objectives. Either party may
terminate the agreement upon thirty (30) days' prior written notice. In the
event that the agreement is terminated without "cause" by the Company or by
Mr. O'Connor with "good reason" (as such terms are defined in the agreement),
Mr. O'Connor is entitled to receive a severance payment equal to two times his
annual base salary in effect of such termination.
Former Directors/Executive Officers
None
Page 35
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
<TABLE>
<CAPTION>
(a) Documents filed as part of this Report
Page
----
<S> <C>
1. Consolidated Financial Statements of Kaiser Group International, Inc. and Subsidiaries
a. Report of Independent Accountants ...................................................... F-1
b. Consolidated Balance Sheets as of December 31, 1999 and December 31, 1998 .............. F-2
c. Consolidated Statements of Operations for the years ended December 31, 1999,
1998 and 1997 ........................................................................ F-3
d. Consolidated Statements of Shareholders' Equity (Deficit) and Comprehensive (Loss)
for the years ended December 31, 1999, 1998 and 1997 ................................. F-4
e. Consolidated Statements of Cash Flows for the years ended December 31, 1999,
1998 and 1997 ........................................................................ F-5
f. Notes to Consolidated Financial Statements ............................................. F-6
2. Supplemental Schedule Relating to the Consolidated Financial Statements of Kaiser Group
International, Inc. and Subsidiaries for the years ended December 31, 1999, 1998 and 1997.
a. Schedule II: Valuation and Qualifying Accounts ........................................ S-1
</TABLE>
All Schedules except the one listed above have been omitted because they are
not applicable or not required or because the required information is included
elsewhere in the financial statements in this filing.
(b) Exhibits
3. Exhibits (listed according to the number assigned in the table in Item 601
of Regulation S-K).
Exhibit No. 2--Plan of Acquisition, reorganization, arrangement, liquidation or
sucession
2(a) Prospectus and Consent Solicitation contained in the Registration
Statement on Form S-4 (Registrant No. 1-12248) filed with the Commission
on October 1, 1999)
Exhibit No. 3--Articles of Incorporation and By-laws of the Registrant
3(a) Restated Certificate of Incorporation of Kaiser Group International, Inc.
(restated through June 26, 1993) (Incorporated by reference to Exhibit No.
3(a) to Quarterly Report on Form 10-Q (Registrant No. 1-12248) for the
second quarter of fiscal 1994 filed with the Commission on October 15,
1993)
1. Amended Certificate of Incorporation of Kaiser Group International,
Inc. (restated through December 27, 1999) (Incorporated by reference
to Exhibit A to Report on Form 8-K (Registrant No. 1-12248) filed with
the Commission on December 29, 1999)
2. Certificate of Ownership and Merger with respect to name change only
dated December 27, 1999 (Incorporated by reference to Exhibit 3(a)(2)
to Registration Statement on Form 8-A filed with the Commission on
April 13, 2000)
3(b) Amended and Restated By-laws of Kaiser Group International, Inc. (as
amended through December 27, 1999) (Incorporated by reference to Exhibit
3(b) to Registration Statement on Form 8-A filed with the Commission on
April 13, 2000)
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<PAGE>
Exhibit No. 3--Articles of Incorporation and By-laws of the Subsidiary
Guarantors
3(c) Articles of Incorporation of Cygna Consulting Engineers and Project
Management, Inc. (Incorporated by reference to Exhibit No. 3(c) to
Registration Statement on Form S-1 Registration No. 333-19519 filed with
the Commission on January 10, 1997)
3(d) By-laws of Cygna Consulting Engineers and Project Management, Inc.
(Incorporated by reference to Exhibit No. 3(d) to Registration Statement
on Form S-1 Registration No. 333-19519 filed with the Commission on
January 10, 1997)
3(e) Certificate of Incorporation of Kaiser Government Programs, Inc.
(Incorporated by reference to Exhibit No. 3(e) to Registration Statement on
Form S-1 Registration No. 333-19519 filed with the Commission on January
10, 1997)
1. Amended Certificate of Incorporation with respect to name change only
filed with the Delaware Secretary of State on August 27, 1999
(Incorporated by reference to Exhibit 3(e)(1) to Registration Statement
on Form 8-A filed with the Commission on April 13, 2000)
3(f) By-laws of Kaiser Government Programs, Inc. (Incorporated by reference to
Exhibit No. 3(f) to Registration Statement on Form S-1 Registration No.
333-19519 filed with the Commission on January 10, 1997)
3(g) Certificate of Incorporation of EDA, Incorporated (Incorporated by
reference to Exhibit No. 3(k) to Annual Report on Form 10-K (Registrant
No. 1-12248) for fiscal year 1997 filed with the Commission on March 31,
1998)
3(h) Amended and Restated By-laws of EDA, Incorporated (Incorporated by
reference to Exhibit No. 3(l) to Annual Report on Form 10-K (Registrant
No. 1-12248) for fiscal year 1997 filed with the Commission on March 31,
1998)
3(i) Certificate of Incorporation of Global Trade & Investment, Inc.
(Incorporated by reference to Exhibit No. 3(o) to Annual Report on Form
10-K (Registrant No. 1-12248 for fiscal year 1997 filed with the
Commission on March 31, 1998)
3(j) Amended and Restated By-laws of Global Trade & Investment, Inc.
(Incorporated by reference to Exhibit No. 3(p) to Annual Report on Form
10-K (Registrant No. 1-12248) for fiscal year 1997 filed with the
Commission on March 31, 1998)
3(k) Certificate of Incorporation of Kaiser Europe, Inc. (Incorporated by
reference to Exhibit No. 3(q) to Annual Report on Form 10-K (Registrant
No. 1-12248) for fiscal year 1997 filed with the Commission on March 31,
1998)
1. Amended Certificate of Incorporation with respect to name change only
filed with the Delaware Secretary of State on September 2, 1999
(Incorporated by reference to Exhibit 3(k)(1) to Registration
Statement on Form 8-A filed with the Commission on April 13, 2000)
3(l) By-laws of Kaiser Europe, Inc. (Incorporated by reference to Exhibit No.
3(r) to Annual Report on Form 10-K (Registrant No. 1-12248) for fiscal
year 1997 filed with the Commission on March 31, 1998)
3(m) Certificate of Incorporation of Kaiser / Georgia Wilson, Inc.
(Incorporated by reference to Exhibit No. 3(s) to Annual Report on Form
10- K (Registrant No. 1-12248) for fiscal year 1997 filed with the
Commission on March 31, 1998)
1. Amended Certificate of Incorporation with respect to name change only
filed with the Delaware Secretary of State December 27, 1999
(Incorporated by reference to Exhibit 3(m)(1) to Registration
Statement on Form 8-A filed with the Commission on April 13, 2000)
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<PAGE>
3(n) By-laws of Kaiser / Georgia Wilson, Inc. (Incorporated by reference to
Exhibit No. 3(t) to Annual Report on Form 10-K (Registrant No. 1-12248)
for fiscal year 1997 filed with the Commission on March 31, 1998)
3(o) Certificate of Incorporation of Kaiser Overseas Engineering, Inc.
(Incorporated by reference to Exhibit No. 3(u) to Annual Report on Form
10-K (Registrant No. 1-12248) for fiscal year 1997 filed with the
Commission on March 31, 1998)
1. Amended Certificate of Incorporation with respect to name change only
filed with the Delaware Secretary of State on November 10, 1999
(Incorporated by reference to Exhibit 3(o)(1) to Registration
Statement on Form 8-A filed with the Commission on April 13, 2000)
3(p) Amended and Restated By-laws of Kaiser Overseas Engineering, Inc.
(Incorporated by reference to Exhibit No. 3(v) to Annual Report on Form
10-K (Registrant No. 1-12248) for fiscal year 1997 filed with the
Commission on March 31, 1998)
3(q) Certificate of Incorporation of Kaiser Engineers Pacific, Inc.
(Incorporated by reference to Exhibit No. 3(w) to Annual Report on Form
10-K (Registrant No. 1-12248) for fiscal year 1997 filed with the
Commission on March 31, 1998)
1. Amended Certificate of Incorporation with respect to name change only
filed with the Nevada Secretary of State on December 8, 1999
(Incorporated by reference to Exhibit 3(q)(1) to Registration
Statement on Form 8-A filed with the Commission on April 13, 2000)
3(r) Amended and Restated By-laws of Kaiser Engineers Pacific, Inc.
(Incorporated by reference to Exhibit No. 3(x) to Annual Report on Form
10-K (Registrant No. 1-12248) for fiscal year 1997 filed with the
Commission on March 31, 1998)
3(s) Certificate of Incorporation of Kaiser Advanced Technology, Inc.
(Incorporated by reference to Exhibit No. 3(y) to Annual Report on Form
10-K (Registrant No. 1-12248) for fiscal year 1997 filed with the
Commission on March 31, 1998) (incorporated by reference to Exhibit E No.
3 (aa) to Quarterly Report on Form 10-Q (Registrant No. 1-12248) for the
third quarter of fiscal 1997 filed with the Commission on November 16,
1998)
1. Amended Certificate of Incorporation with respect to name change only
filed with the Idaho Secretary of State on November 15, 1999
(Incorporated by reference to Exhibit 3(s)(1) to Registration
Statement on Form 8-A filed with the Commission on April 13, 2000)
3(t) By-laws of Kaiser Advanced Technology, Inc. (Incorporated by reference to
Exhibit No. 3(z) to Annual Report on Form 10-K (Registrant No. 1-12248)
for fiscal year 1997 filed with the Commission on March 31, 1998)
(incorporated by reference to Exhibit No. 3 (bb) to Quarterly Report on
Form 10-Q (Registrant No. 1-12248) for the third quarter of fiscal 1997
filed with the Commission on November 16, 1998)
Exhibit No. 4--Instruments Defining the Rights of Security Holders, including
Indentures
4(a) Indenture dated as of January 11, 1994, between ICF Kaiser International,
Inc. and The Bank of New York, as Trustee (Incorporated by reference to
Exhibit No. 4(a) to Quarterly Report on Form 10-Q (Registrant No. 1-12248)
for the third quarter of fiscal 1994 filed with the Commission on January
14, 1994)
1. First Supplemental Indenture dated as of February 17, 1995
(Incorporated by reference to Exhibit No. 4(a)(1) to Annual Report on
Form 10-K (Registrant No. 1-12248) for fiscal year 1995 filed with the
Commission on May 23, 1995)
2. Second Supplemental Indenture dated September 1, 1995 (Incorporated by
reference to Exhibit No. 4(a) (2) to Registration Statement on Form
S-1 Registration No. 33-64655 filed with the Commission on November
30, 1995)
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<PAGE>
3. Third Supplemental Indenture dated October 20, 1995 (Incorporated by
reference to Exhibit No. 4(a)(3) to Registration Statement on Form S-1
Registration No. 33-64655 filed with the Commission on November 30,
1995)
4. Fourth Supplemental Indenture dated as of March 8, 1996 (Incorporated
by reference to Exhibit No. 4 (a)(4) to Transition Report on Form 10-K
(Registrant No. 1-12248) for the transition period from March 1, 1995
to December 31, 1995 filed with the Commission on March 29, 1996)
5. Fifth Supplemental Indenture dated as of June 24, 1996 (Incorporated
by reference to Exhibit No. 4 (a)(5) to Registration Statement on Form
S-1 Registration No. 333-16937 filed with the Commission on November
27, 1996)
6. Sixth Supplemental Indenture dated as of December 3, 1997
(Incorporated by reference to Exhibit No. 4(a)(6) to Annual Report on
Form 10-K (Registrant No. 1-12248) for fiscal year 1997 filed with the
Commission on March 31, 1998)
7. Seventh Supplemental Indenture dated as of August 13, 1998.
(incorporated by reference to Exhibit No. 4(a)(7) to Quarterly Report
on Form 10-Q (Registrant No. 1-12248) for the third quarter of fiscal
1997 filed with the Commission on November 16, 1998)
8. Eighth Supplemental Indenture dated as of April 9, 1999 (incorporated
by reference to Exhibit No. 4(a)(8) to Quarterly Report on Form 10-Q
(Registrant No. 1-12248) for the first quarter of fiscal 1999 filed
with the Commission on May 17, 1999)
9. Ninth Supplemental Indenture dated as of June 25, 1999 (incorporated by
reference to Exhibit No. 4(a)(9) to Pre-Effective Amendment No.3 on
Registration Statement on Form S-4 (Registrant No. 333-82643) filed
with the Commission on October 1, 1999)
10.Form of Tenth Supplemental Indenture with respect to the 12% Senior
Subordinated Notes due 2003 (incorporated by reference to Exhibit
4(a)(10) to Pre-Effective Amendment No. 3 on Registration Statement on
Form S-4 (Registrant No. 333-82643) filed with the Commission on
October 1, 1999)
4(b) Form of 12% Senior Subordinated Note due 2003 (Incorporated by reference
to Exhibit No. 4(b) to Quarterly Report on Form 10-Q (Registrant No. 1-
12248) for the third quarter of fiscal 1994 filed with the Commission on
January 14, 1994)
4(c) Form of Common Stock Purchase Warrant expiring May 15, 1999 (as amended
and restated through January 11, 1994) (Incorporated by reference to
Exhibit No. 4(e) to Quarterly Report on Form 10-Q (Registrant No. 1-12248)
for the third quarter of fiscal 1994 filed with the Commission on January
14, 1994)
4(d) Rights Agreement, dated as of January 13, 1992, between ICF Kaiser
International, Inc. and Office of the Secretary, ICF Kaiser International,
Inc. as Rights Agent, including (1) Form of Certificate of Designations of
Series 4 Junior Preferred Stock; (2) Form of Rights Certificate; and (3)
Summary of Rights to Purchase Preferred Stock (Incorporated by reference
to Exhibit No. 4(h) to Quarterly Report on Form 10-Q (Registrant No. 0-
18025) for the third quarter of fiscal 1992 filed with the Commission on
January 14, 1992)
1. Amendment No. 1 to the Rights Agreement dated as of January 13, 1992.
(incorporated by reference to Exhibit 1 to Form 8-K (Registrant No. 1-
12248) filed with the Commission on July 6, 1999)
2. Amendment No. 2 to the Rights Agreement dated as of January 13, 1992.
(incorporated by reference to No. 4(k) to Form 8-K (Registrant No. 1-
12248) filed with the Commission on October 12, 1999)
4(e) Warrant Agreement dated as of January 11, 1994, between the Registrant and
The Bank of New York, as Warrant Agent (Incorporated by reference to
Exhibit No. 4(c) to Quarterly Report on
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<PAGE>
Form 10-Q (Registrant No. 1-12248) for the third quarter of fiscal
1994 filed with the Commission on January 14, 1994)
4(f) Indenture dated as of December 23, 1996, between ICF Kaiser International,
Inc. and The Bank of New York, as Trustee, including Guarantees, dated
December 23, 1996, by each of the Subsidiary Guarantors (Incorporated by
reference to Exhibit No. 4(g) to Registration Statement on Form S-1
Registration No. 333-19519 filed with the Commission on January 10, 1997)
1. First Supplemental Indenture dated as of December 3, 1997
(Incorporated by reference to Exhibit No. 4(a)(6) to Annual Report
on Form 10-K (Registrant No. 1-12248) for fiscal year 1997 filed
with the Commission on March 31, 1998)
2. Second Supplemental Indenture dated as of August 13, 1998
(Incorporated by reference to Exhibit No. 4(g)(2) to Quarterly
Report on Form 10-Q (Registrant No. 1-12248) for the third quarter
of fiscal 1997 filed with the Commission on November 16, 1998)
3. Third Supplemental Indenture dated as of April 9, 1999
(Incorporated by reference to Exhibit No. 4(f)(3) to Quarterly
Report on Form 10-Q (Registrant No. 1-12248) for the first quarter
of fiscal 1999 filed with the Commission on May 17, 1999)
4. Fourth Supplemental Indenture dated as of June 25, 1999
(Incorporated by reference to Exhibit No. 4(d)(4) to Pre-Effective
Amendment No.3 on Form S-4 (Registrant No. 333-82643) filed with
the Commission on October 1, 1999)
5. Fifth Supplemental Indenture dated as of October 5, 1999
(Incorporated by reference to Exhibit No. 4(d)(5) on Form 8-K
(Registrant No. 1-12248) filed with the Commission on October 12,
1999)
4(g) Form of 12% Senior Note due 2003, Series B (Incorporated by reference to
Exhibit No. 4(i) to Registration Statement on Form S-1 Registration No.
333-19519 filed with the Commission on January 10, 1997)
4(h) Warrant Agreement dated as of December 23, 1996, between ICF Kaiser
International, Inc. and The Bank of New York, as Warrant Agent
(Incorporated by reference to Exhibit No. 4(j) to Registration Statement
on Form S-1 Registration No. 333-19519 filed with the Commission on
January 10, 1997)
4(i) Form of Warrant expiring December 31, 1999 issued under Warrant Agreement
dated as of December 23, 1996 (Incorporated by reference to Exhibit No.
4(k) to Registration Statement on Form S-1 Registration No. 333-19519
filed with the Commission on January 10, 1997)
4(j) Form of Certificate of Designation regarding Redeemable Convertible
Preferred Stock (Incorporated by reference to Exhibit No. 4(h) to Pre-
Effective Amendment No.3 on Form S-4 (Registrant No. 333-82643) filed with
the Commission on October 1, 1999)
4(k) Form of Indenture regarding 12% Senior Notes due 2002 (Incorporated by
reference to Exhibit No. 4(h) to Pre-Effective Amendment No.3 on Form S-4
(Registrant No. 333-82643) filed with the Commission on October 1, 1999)
Exhibit No. 10 -- Material Contracts
10(a) Intentionally Omitted.
*10(b) Kaiser Group International, Inc. Employee Stock Ownership Plan (as
amended and restated as of January 1, 1996)
* 1. Amendment No. 1 with the effective date of January 1, 1998.
* 2. Amendment No. 2 with the effective date of January 1, 1996.
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<PAGE>
*3. Amendment No. 3 dated April 19, 1999.
*4. Amendment No. 4 dated May 20, 1999.
10(c) Trust Agreement with Vanguard Fiduciary Trust Company dated as of August
31, 1995, for ICF Kaiser International, Inc. Employee Stock Ownership Plan
(Incorporated by reference to Exhibit No. 10(c) to Registration Statement
on Form S-1 Registration No. 33-64655 filed with the Commission on
November 30, 1995)
10(d) ICF Kaiser International, Inc. Retirement Plan (as amended and restated as
of March 1, 1993) (and further amended with respect to name change only as
of June 26, 1993) (Incorporated by reference to Exhibit No. 10(d) to
Quarterly Report on Form 10-Q (Registrant No. 1-12248) for the second
quarter of fiscal 1994 filed with the Commission on October 15, 1993)
1. Amendment No. 1 dated April 24, 1995 (Incorporated by reference to
Exhibit No. 10(d)(1) to Annual Report on Form 10-K (Registrant No. 1-
12248) filed with the Commission on May 23, 1995.)
2. Amendment No. 2 dated December 15, 1995 (Incorporated by reference to
Exhibit No. 10(d)(2) to Transition Report on Form 10-K (Registrant No.
1-12248) for the transition period from March 1, 1995 to December 31,
1995 filed with the Commission on March 29, 1996)
3. Amendment No. 3 dated December 13, 1996 (Incorporated by reference to
Exhibit No. 10(d)(3) to Registration Statement on Form S-1
Registration No. 333-19519 filed with the Commission on January 10,
1997)
*4. Amendment No. 4 dated April 19, 1999
*5. Amendment No. 5 dated May 20, 1999
*6. Amendment No. 6 dated August 30, 1999
10(e) Trust Agreement with Vanguard Fiduciary Trust Company dated as of August
31, 1995, for ICF Kaiser International, Inc. Retirement Plan (Incorporated
by reference to Exhibit No. 10(e) to Registration Statement on Form S-1
Registration No. 33-64655 filed with the Commission on November 30, 1995)
10(f) Consolidated, Amended and Restated Deed of Lease Agreement between HMCE
Associates Limited Partnership R.L.L.P. (as Landlord) and ICF Kaiser
Hunters Branch Leasing, Inc. (as Tenant), dated November 12, 1997, for the
lease of the Registrant's headquarters in Fairfax, Virginia known as
Hunters Branch--Phase I (Incorporated by reference to Exhibit No. 10(g) to
Annual Report on Form 10-K (Registrant No. 1-12248) filed with the
Commission on March 25, 1997)
10(g) Consolidated, Amended and Restated Deed of Lease Agreement between HMCE
Associates Limited Partnership R.L.L.P. (as Landlord) and ICF Kaiser
Hunters Branch Leasing, Inc. (as Tenant), dated November 12, 1997, for the
lease of space in the building adjacent to the Registrant's headquarters
in Fairfax, Virginia known as Hunters Branch--Phase II (Incorporated by
reference to Exhibit No. 10(h) to Annual Report on Form 10-K (Registrant
No. 1-12248) filed with the Commission on March 25, 1997)
10(h) Contribution Agreement by and among HMCE Associates Limited Partnership
R.L.L.P.; ICF Kaiser Hunters Branch Leasing, Inc.; and IFA Nutley
Partners, LLC dated November 3, 1997 (Incorporated by reference to Exhibit
No. 10(i) to Annual Report on Form 10-K (Registrant No. 1-12248) filed
with the Commission on March 25, 1997)
10(i) ICF Kaiser International, Inc. Stock Incentive Plan (as amended and
restated through March 1, 1996) (Incorporated by reference to Exhibit No.
10(j) to Registration Statement on Form S-1 Registration No. 333-16937
filed with the Commission on November 27, 1996)
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<PAGE>
10(j) Contract (#DE-AC3495RF00825) between Kaiser-Hill Company, LLC, a
subsidiary of the Corporation, and the U.S. Department of Energy dated as
of April 4, 1995. [IN ACCORDANCE WITH RULE 202 OF REGULATION S-T, THIS
EXHIBIT NO. 10(k) WAS FILED IN PAPER ON MAY 23, 1995, ON FORM SE PURSUANT
TO A CONTINUING HARDSHIP EXEMPTION is incorporated herein by reference
thereto]
1. Modifications 1 to 40 to Contract #DE-AC3495RF00825 (Incorporated by
reference to Exhibit No. 10(p)(l) to Registration Statement on Form
S-1 Registration No. 333-16937 filed with the Commission on November
27, 1996)
2. Modifications 42 to 46 to Contract #DE-AC3495RF00825 (Modification
41 not received) (Incorporated by reference to Exhibit No. 10(p)(2)
to Annual Report on Form 10-K (Registrant No. 1-12248) filed with
the Commission on March 25, 1997)
3. Modifications 47 to 81 to Contract #DE-AC3495RF00825 (Modifications
72 and 78 not received) (Incorporated by reference to Exhibit No.
10(j)(3) to Annual Report on Form 10-K (Registrant No. 1-12248)
filed with the Commission on April 15, 1999)
10(k) ICF Kaiser International, Inc. Section 401(k) Plan (as amended and
restated as of March 1, 1993) (and further amended with respect to name
change only as of June 26, 1993) (Incorporated by reference to Exhibit
No. 10(f) to Quarterly Report on Form 10-Q (Registrant No. 1-12248) for
the second quarter of fiscal 1994 filed with the Commission on October
15, 1993)
1. Amendment No. 1 dated April 24, 1995 (Incorporated by reference to
Exhibit No. 10(p)(1) to Annual Report on Form 10-K (Registrant No.
1-12248) for fiscal 1995 filed with the Commission on May 23, 1995)
2. Amendment No. 2 dated December 15, 1995 (Incorporated by reference
to Exhibit No. 10(p)(2) to Transition Report on Form 10-K
(Registrant No. 1-12248) for the transition period from March 1,
1995 to December 31, 1995 filed with the Commission on March 29,
1996)
3. Amendment No. 3 dated December 13, 1996 (Incorporated by reference
to Exhibit No. 10(q)(3) to Registration Statement on Form S-1
(Registration No. 333-19519) filed with the Commission on January
10, 1997)
*4. Amendment No. 4 dated April 19, 1999
*5. Amendment No. 5 dated May 20, 1999
10(l) Trust Agreement with Vanguard Fiduciary Trust Company dated as of March
1, 1989, for the ICF Kaiser International, Inc. Section 401(k) Plan
(Incorporated by reference to Exhibit No. 28(b) to Registration Statement
on Form S-8 (Registration No. 33-51460) filed with the Commission on
August 31, 1992)
10(m) Asset Purchase Agreement between The IT Group, Inc. and ICF Kaiser
International, Inc. dated March 9, 1999 (Incorporated by reference to
Exhibit C to Registration Statement on Form 8-K (Registration No. 1-
12248) filed with the Commission on April 23, 1999)
10(n) Recapitalization Agreement among ICF Kaiser International, Inc., ICF
Consulting Group Holdings, LLC and Clement International Corporation
dated May 21, 1999 (Incorporated by reference to Exhibit C to
Registration Statement on Form 8-K (Registration No. 1-12248) filed with
the Commission on July 15, 1999)
*10(o) Contract between Kaiser-Hill Company, LLC, a subsidiary of the
Corporation, and the U.S. Department of Energy dated January 24, 2000
Exhibit No. 10--Material Contracts (management contracts, compensatory plans, or
arrangements.)
Page 42
<PAGE>
10(aa) Agreement dated as of May 19, 1997 with James O. Edwards, Chairman and
Chief Executive Officer of the Registrant (Incorporated by reference to
Exhibit No. 10(ll) to Quarterly Report on Form 10-Q (Registrant No. 1-
12248) for the second quarter of fiscal 1997 filed with the Commission
on August 14, 1997)
1. Agreement dated as of November 6, 1998, terminating Mr. Edwards'
employment agreement (Incorporated by reference to Exhibit No.
10(aa)(1) to Annual Report on Form 10-K (Registrant No. 1-12248)
filed with the Commission on April 15, 1999)
10(bb) ICF Kaiser International, Inc. 1998 Compensation (IC) Plan for Senior
Executives (adopted by the Board of Directors on February 27, 1998)
(Incorporated by reference to Exhibit No. 10(bb) to Annual Report on
Form 10-K (Registrant No. 1-12248) filed with the Commission on March
25, 1997)
10(cc) ICF Kaiser International, Inc. Non-employee Director Stock Option Plan
(as amended and restated as of June 26, 1993) (Incorporated by reference
to Exhibit No. 10(bb) to Quarterly Report on Form 10-Q (Registrant
No. 1-12248) for the second quarter of fiscal 1994 filed with the
Commission on October 15, 1993)
10(dd) Agreement dated as of May 19, 1997 with Marc Tipermas, President and
Chief Operating Officer of the Registrant (Incorporated by reference to
Exhibit No. 10(mm) to Quarterly Report on Form 10-Q (Registrant No. 1-
12248) for the second quarter of fiscal 1997 filed with the Commission
on August 14, 1997)
1. Agreement dated as of August 7, 1998terminating Dr. Tipermas'
employment agreement (Incorporated by reference to Exhibit No.
10(dd)(1) to Annual Report on Form 10-K (Registrant No. 1-12248)
filed with the Commission on April 15, 1999)
10(ee) ICF Kaiser International, Inc. Senior Executive Officers Severance Plan
as approved by the Compensation Committee of the Board of Directors on
April 4, 1994, and adopted by the Board of Directors on May 5, 1994, as
further amended through May 1, 1997 (Incorporated by reference to
Exhibit No. 10(ee) to Annual Report on Form 10-K (Registrant No. 1-
12248) filed with the Commission on March 25, 1997)
10(ff) Employment Agreement with Thomas P. Grumbly, Executive Vice President of
the Registrant, effective as of April 7, 1997 (Incorporated by reference
to Exhibit No. 10(ff) to Annual Report on Form 10-K (Registrant No. 1-
12248) filed with the Commission on April 15, 1999)
1. Letter dated March 15, 1999, amending Mr. Grumbly's employment
agreement (Incorporated by reference to Exhibit No. 10(ff)(1) to
Annual Report on Form 10-K (Registrant No. 1-12248) filed with the
Commission on April 15, 1999)
10(gg) ICF Kaiser International, Inc. Consultants, Agents and Part-Time
Employees Stock Plan dated as of June 23, 1995 (Incorporated by
reference to Exhibit No. 99 to Registration Statement on Form S-8
Registration No. 33-60665 filed with the Commission on June 28, 1995)
10(hh) ICF Kaiser International, Inc. Stock Incentive Plan (as amended and
restated through March 1, 1996) (Incorporated by reference to Exhibit
No. 10 (j) to Registration Statement on Form S-1 Registration No. 333-
16937 filed with the Commission on November 27, 1996)
10(ii) Amended Employment Agreement dated as of December 1, 1996, with David
Watson, Executive Vice President and President, ICF Kaiser Engineers and
Constructors Group of the Registrant (Incorporated by reference to
Exhibit No. 10(kk) to Annual Report on Form 10-K (Registrant No. 1-
12248) filed with the Commission on March 25, 1997)
1. Agreement and Mutual Release dated August 17, 1998, terminating Mr.
Watson's employment agreement (Incorporated by reference to Exhibit
No. 10(ii)(1) to Annual Report on Form 10-K (Registrant No. 1-12248)
filed with the Commission on April 15, 1999)
10(jj) Intentionally Omitted.
Page 43
<PAGE>
10(kk) Employment Agreement with Michael F. Gaffney, Executive Vice President
of the Registrant, effective as of January 1, 1997 (Incorporated by
reference to Exhibit No. 10(kk) to Annual Report on Form 10-K
(Registrant No. 1-12248) for fiscal year 1997 filed with the Commission
on March 31, 1998)
1. Agreement dated March 8, 1999, terminating Mr. Gaffney's employment
agreement (Incorporated by reference to Exhibit No. 10(kk)(1) to
Annual Report on Form 10-K (Registrant No. 1-12248) filed with the
Commission on April 15, 1999)
10(ll) Letter Agreement with Cowen Incorporated and Jarrod M. Cohen, dated as
of March 13, 1998 (Incorporated by reference to Exhibit No. 10(ll) to
Annual Report on Form 10-K (Registrant No. 1-12248) for fiscal year 1997
filed with the Commission on March 31, 1998) (Incorporated by reference
to Exhibit No. 10(mm) to Annual Report on Form 10-K (Registrant No. 1-
12248) filed with the Commission on March 25, 1997)
10(mm) ICF Kaiser International, Inc. Non-employee Directors Compensation and
Phantom Stock Plan as adopted by the Board of Directors on February 28,
1997, with an effective date of March 1, 1997 (Incorporated by reference
to Exhibit No. 10(mm) to Annual Report on Form 10-K (Registrant No. 1-
12248) filed with the Commission on April 15, 1999)
10(nn) Letter Agreement with Tennenbaum & Co., L.L.C. and Michael E.
Tennenbaum, dated as of March 13, 1998 (Incorporated by reference to
Exhibit No. 10(nn) to Annual Report on Form 10-K (Registrant No. 1-
12248) for fiscal year 1997 filed with the Commission on March 31, 1998)
10(oo) Employment Agreement with Keith M. Price, President and Chief Executive
Officer of the Registrant, effective as of August 27, 1998 (Incorporated
by reference to Exhibit No. 10(oo) to Quarterly Report on Form 10-Q
(Registrant No. 1-12248) for the Third quarter of 1998 filed with the
Commission on November 16, 1998)
1. Terms of Promotion for Keith M. Price effective as of November 4,
1998 (incorporated by reference to Exhibit No. 10(oo)(1) to Annual
Report on Form 10-K (Registrant No. 1-12248) filed with the
Commission on April 15, 1999)
2. Agreement dated April 27, 1999, terminating Keith M. Price's
employment agreement (Incorporated by reference to Exhibit No.
10(oo)(2) to Registration Statement on Form S-4 (Registrant No. 333-
82643) filed with the Commission on July 9, 1999)
10(pp) Employment Agreement with James J. Maiwurm, President and Chief
Executive Officer of the Registrant, effective as of June 1, 1999
(Incorporated by reference to Exhibit No. 10(oo)(2) to Registration
Statement on Form S-4 (Registrant No. 333-82643) filed with the
Commission on July 9, 1999)
10(qq) Employment Agreement with S. Robert Cochran, Executive Vice President
and President, North America of the Registrant, effective as of June 1,
1999 (Incorporated by reference to Exhibit No. 10(qq) to Registration
Statement on Form S-4 (Registrant No. 333-82643) filed with the
Commission on July 9, 1999)
10(rr) Employment Agreement with Timothy P. O'Connor, Executive Vice President
and Chief Financial Officer of the Registrant, effective as of June 1,
1999 (Incorporated by reference to Exhibit No. 10(rr) to Registration
Statement on Form S-4 (Registrant No. 333-82643) filed with the
Commission on July 9, 1999)
10(ss) Employment Agreement with Richard A. Leupen, Executive Vice President
and President, International of the Registrant, effective as of June 1,
1999 (Incorporated by reference to Exhibit No. 10(ss) to Pre-Effective
Amendment No. 1 to Registration Statement on Form S-4 (Registrant No.
333-82643) filed with the Commission on September 3, 1999)
10(tt) Form of Agreement of Release, Consent and Waiver, dated October 5, 1999,
between ICF Kaiser International, Inc., T. Rowe Price, Penn Series High
Yield Bond Fund, NorthStar Investment Management, and Deutsche Bank
(Incorporated by reference to Exhibit 10(tt) to Registration
Page 44
<PAGE>
Statement on Form 8-K (Registration No. 1-12248) filed with the
Commission on October 12, 1999)
* Exhibits filed as part of this Annual Report on Form 10-K.
Exhibit No. 21--Consolidated Subsidiaries of the Registrant as of April 14,
2000
Exhibit No. 23--Consent of PricewaterhouseCoopers, LLP
Exhibit No. 27--Financial Data Schedule. This schedule contains summary
financial information extracted from the consolidated financial statements of
Kaiser Group International, Inc. as of December 31, 1999 and 1998 and for the
three years ended December 31, 1999 and is qualified in its entirety by
reference to such financial statements.
(c) Reports on Form 8-K
On March 10, 1999, the Company filed a Current Report on Form 8-K.
Pursuant to Item 5 of its Report, the Company disclosed that it had signed a
letter of intent with CM Equity Partners, L.P., (CMEP) an equity investment firm
based in New York City, to sell the ICF Kaiser Consulting Group for $75 million
to CMEP and the group's management.
On April 23, 1999, the Company filed a Current Report on Form 8-K.
Pursuant to Item 5 of its Report, the Company disclosed that it sold the
majority of the active contracts and investments of its Environmental and
Facilities Management Group to The IT Group, Inc.
On May 12, 1999, the Company filed a Current Report on Form 8-K.
Pursuant to Item 5 of its Report, the Company disclosed that James Maiwurm
became CEO and President of the Company, and company veterans Richard Leupen and
Bob Cochran would assume new roles as, respectively, President of International
Business and President of North America Business.
On June 10, 1999, the Company filed a Current Report on Form 8-K.
Pursuant to Item 5 of its Report, the Company disclosed that Chairman of the
Board Tony Coelho had resigned from that position and that Mr. Coelho would
remain a member of the Board of Directors for a transition period effective June
9, 1999.
On July 6, 1999, the Company filed a Current Report on Form 8-K.
Pursuant to Item 5 of its Report, the Company disclosed that it had finalized
the sale of its Consulting Group.
On July 7, 1999, the Company filed a Current Report on Form 8-K.
Pursuant to Item 5 of its Report, the Company disclosed that it amended its
Rights Agreement dated January 13, 1992 that governs its Shareholder Rights Plan
effective July 6, 1999.
On July 16, 1999, the Company filed a Current Report on Form 8-K.
Pursuant to Item 2 of its Report, the Company disclosed that it completed the
sale of its Consulting Group. Pursuant to Item 7 of its Report, the Company
disclosed its Pro Forma financial information and its Recapitalization Agreement
among ICF Kaiser International, Inc., ICF Consulting Group Holdings, LLC and
Clement International Corporation dated May 21, 1999.
On October 12, 1999, the Company filed a Current Report on Form 8-K.
Pursuant to Item 5 of its Report, the Company disclosed that on September 15,
1999, the Company amended its Rights Agreement dated January 13, 1992 that
governs its Shareholder Rights Plan. Also pursuant to Item 5 of its Report, the
Company disclosed that on October 6, 1999, the Company purchased $14,000,000 of
outstanding notes from holders of its $15,000,000 12% Senior Notes due 2003 (the
"Notes"). Also, Pursuant to Item 7 of its Report, the Company disclosed its Form
of Agreement of Release, Consent and Waiver, dated October 5, 1999, between the
Company and T. Rowe Price, Penn Series High Yield Bond Fund, NorthStar
Investment Management, and Deutsche Bank.
On December 29, 1999, the Company filed a Current Report on Form 8-K.
Pursuant to Item 5 of its Report, the Company disclosed that it filed an Amended
Certificate of Incorporation at the close of business on December 27, 1999. The
Company changed the name of its principal operating entity to Kaiser Engineers,
Inc. and at the same time, the name of the parent company changed to Kaiser
Group
Page 45
<PAGE>
International, Inc. The Company's ticker symbol on the New York Stock Exchange
became "KSR" at the start of trading on the morning of December 28, 1999.
Page 46
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Kaiser Group International, Inc.
(Registrant)
/s/ James J. Maiwurm
-----------------------------------------
By: James J. Maiwurm, Chairman
President and Chief Executive Officer
Date: April 14, 2000
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.
(1) Principal executive officer
/s/ James J. Maiwurm
James J. Maiwurm Chairman, President and April 14, 2000
Chief Executive Officer
(2) Principal financial and accounting officer
/s/ Timothy P. O'Connor
- --------------------------------
Timothy P. O'Connor Executive Vice President April 14, 2000
and Chief Financial Officer
(3) Board of Directors
/s/ Jarrod M. Cohen
- --------------------------------
Jarrod M. Cohen Director April 14, 2000
/s/ James O. Edwards
- --------------------------------
James O. Edwards Director April 14, 2000
/s/ Thomas C. Jorling
- --------------------------------
Thomas C. Jorling Director April 14, 2000
/s/ James J. Maiwurm
- --------------------------------
James J. Maiwurm Director April 14, 2000
/s/ Hazel R. O'Leary
- --------------------------------
Hazel R. O'Leary Director April 14, 2000
/s/ Keith M. Price
- --------------------------------
Keith M. Price Director April 14, 2000
Page 47
<PAGE>
/s/ James T. Rhodes
- --------------------------------
James T. Rhodes Director April 14, 2000
/s/ Michael E. Tennenbaum
- --------------------------------
Michael E. Tennenbaum Director April 14, 2000
Page 48
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To Board of Directors and
Shareholders of Kaiser Group International, Inc.:
We have audited the consolidated financial statements and financial statement
schedule of Kaiser Group International, Inc. (formerly ICF Kaiser International,
Inc.) and Subsidiaries (the Company) listed in Item 14(a) of this Form 10-K.
These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 financial position of Kaiser Group
International, Inc and Subsidiaries as of December 31, 1999 and 1998, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States. In addition, in our opinion, the
financial statement schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included therein.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company experienced significant operating
losses in 1998 and 1999, has no revolving credit facility and is negotiating to
restructure its outstanding Senior Subordinated Notes totaling $125.0 million.
These matters raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans in regard to these matters are also
described in Note 1. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
PricewaterhouseCoopers LLP
April 14, 2000
- --------------------------------------------------------------------------------
Kaiser Group International, Inc. Report on Form 10-K for the year
ended December 31, 1999. Page F - 1
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------------------------
1999 1998
------------- --------------
(In thousands, except
share amounts)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents...................................................... $ 26,391 $ 15,267
Restricted cash................................................................ 16,386 3,041
Contract receivables, net...................................................... 158,319 284,078
Prepaid expenses and other current assets...................................... 5,350 9,800
Deferred income taxes.......................................................... -- 34,673
--------- ---------
Total Current Assets................................................. 206,446 346,859
--------- ---------
Fixed Assets
Furniture, equipment, and leaseholds........................................... 14,224 43,996
Less depreciation and amortization............................................. (11,403) (37,411)
--------- ---------
2,821 6,585
--------- ---------
Other Assets
Goodwill, net.................................................................. 17,581 49,292
Investments in and advances to affiliates...................................... 10,040 7,728
Notes receivable............................................................... 6,550 --
Capitalized software development costs......................................... 1,601 5,062
Other.......................................................................... 8,524 12,545
--------- ---------
44,296 74,627
--------- ---------
Total Assets......................................................... $ 253,563 $ 428,071
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Debt currently payable......................................................... $ -- $ 30,729
Accounts payable............................................................... 119,556 189,906
Accrued salaries and benefits.................................................. 27,249 37,931
Other accrued expenses......................................................... 26,921 42,864
Deferred revenue............................................................... 9,015 40,011
Income taxes payable........................................................... 6,597 2,147
--------- ---------
Total Current Liabilities............................................ 189,338 343,588
Long-term Liabilities
Long-term debt................................................................. 124,218 137,488
Other.......................................................................... 7,577 9,664
--------- ---------
Total Liabilities.................................................... 321,133 490,740
--------- ---------
Commitments and Contingencies
Minority Interest.............................................................. 2,333 449
--------- ---------
Shareholders' Equity (Deficit)
Preferred stock................................................................ -- --
Common stock, par value $.01 per share:
Authorized--90,000,000 shares
Issued and outstanding-- 23,655,500 and 24,257,828 shares................. 237 242
Additional paid-in capital..................................................... 73,643 75,422
Notes receivable collateralized by common stock................................ -- (638)
Accumulated deficit............................................................ (140,681) (134,757)
Accumulated other comprehensive (loss)......................................... (3,102) (3,387)
--------- ---------
Total Shareholders' Equity (Deficit)................................. (69,903) (63,118)
--------- ---------
Total Liabilities and Shareholders' Equity (Deficit)................. $ 253,563 $ 428,071
========= =========
</TABLE>
See notes to consolidated financial statements.
- --------------------------------------------------------------------------------
Kaiser Group International, Inc. Report on Form 10-K for the year
ended December 31, 1999. Page F - 2
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------
1999 1998 1997
----------- ----------- -----------
(In thousands, except per share amounts)
<S> <C> <C> <C>
Gross Revenue................................................................... $ 870,267 $ 999,721 $ 926,916
Subcontract and direct material costs...................................... (579,296) (717,794) (621,331)
Provision for contract losses.............................................. -- (76,210) (6,900)
Equity in income of joint ventures and affiliated companies................ 4,480 6,045 2,301
--------- --------- ---------
Service Revenue................................................................. 295,451 211,762 300,986
Operating Expenses
Direct labor and fringe benefits........................................... 244,478 217,862 225,471
Selling, general and administrative........................................ 54,052 65,534 63,851
Depreciation and amortization.............................................. 5,269 8,288 8,595
Restructuring charges...................................................... 14,384 17,079 --
--------- --------- ---------
Operating Income (Loss)......................................................... (22,732) (97,001) 3,069
Other Income (Expense)
Gain on sale of investment................................................. -- -- 1,018
Interest income............................................................ 2,349 1,539 1,750
Interest expense........................................................... (21,065) (20,279) (18,276)
--------- --------- ---------
(Loss) From Continuing Operations Before Income Tax, Minority Interest,
Extraordinary Item, and Cumulative Effect of Accounting Change............. (41,448) (115,741) (12,439)
Income tax (expense) benefit............................................ (1,110) 18,606 9,366
--------- --------- ---------
(Loss) From Continuing Operations Before Minority Interest, Extraordinary
Item, and Cumulative Effect of Accounting Change........................... (42,558) (97,135) (3,073)
Minority interest in net income of subsidiaries........................ (5,184) (7,698) (10,867)
--------- --------- ---------
(Loss) From Continuing Operations Before Extraordinary Item and
Cumulative Effect of Accounting Change..................................... (47,742) (104,833) (13,940)
Income from discontinued operations, net of tax............................ 2,335 11,391 8,953
Gain on sales of discontinued operations, net of tax....................... 40,083 -- --
--------- --------- ---------
(Loss) Before Extraordinary Item and Cumulative Effect of
Accounting Change.......................................................... (5,324) (93,442) (4,987)
Extraordinary items........................................................ (600) (1,090) --
--------- --------- ---------
(Loss) Before Cumulative Effect of Accounting Change............................ (5,924) (94,532) (4,987)
Cumulative Effect of Accounting Change, net of tax......................... -- (6,000) --
--------- --------- ---------
Net (Loss)...................................................................... $ (5,924) $(100,532) $ (4,987)
========= ========= =========
Basic and Fully Diluted Earnings (Loss) Per Share:
Continuing operations, net of tax.......................................... $ (2.00) $ (4.34) $ (0.62)
Discontinued operations, net of tax........................................ 1.78 0.47 0.40
--------- --------- ---------
(Loss) Before Extraordinary Item and Cumulative Effect of
Accounting Change..................................................... (0.22) (3.87) (0.22)
Extraordinary items................................................. (0.03) (0.05) --
--------- --------- ---------
(Loss) Before Cumulative Effect of Accounting Change....................... (0.25) (3.92) (0.22)
Cumulative effect of accounting change, net of tax.................. -- (0.25) --
--------- --------- ---------
Net (Loss) Per Share....................................................... $ (0.25) $ (4.17) $ (0.22)
========= ========= =========
Weighted average shares for basic earnings (loss) per share..................... 23,823 24,092 22,382
Effect of dilutive stock options........................................... -- -- --
--------- --------- ---------
Weighted average shares for diluted earnings (loss) per share................... 23,823 24,092 22,382
========= ========= =========
</TABLE>
See notes to consolidated financial statements.
- --------------------------------------------------------------------------------
Kaiser Group International, Inc. Report on Form 10-K for the year
ended December 31, 1999. Page F - 3
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Common Stock
-----------------------
Accumulated
-----------
Additional Accumulated Other
---------- ----------- -----
Paid-in Notes Earnings Comprehensive Shareholders'
------- ----- -------- ------------- ----------------
Shares Par Value Capital Receivable (Deficit) (Loss) Equity/(Deficit)
----------- ---------- ---------- ---------- --------- ----- ----------------
(In thousands, except share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1997.. 22,311,842 $223 $66,983 $(1,732) $ (29,238) $(1,344) $ 34,892
Net (loss)............... -- -- -- (4,987) -- (4,987)
Issuances of common
stock................... 319,300 3 644 -- -- -- 647
Reacquisition of common
stock................... (155,238) (1) (511) -- -- -- (512)
Foreign currency
translation
Adjustment.............. -- -- -- -- -- (2,023) (2,023)
Other.................... -- -- -- (690) -- -- (690)
---------- ---- ------- ------- --------- ------- ---------
Balance, December 31,
1997..................... 22,475,904 225 67,116 (2,422) (34,225) (3,367) 27,327
Net (loss)............... -- -- -- (100,532) -- (100,532)
Issuances of common
stock................... 1,941,446 19 8,856 -- -- -- 8,875
Reacquisition of common
stock................... (159,522) (2) (550) -- -- -- (552)
Foreign currency
translation
Adjustment.............. -- -- -- -- -- (20) (20)
Other.................... -- -- -- 1,784 -- -- 1,784
---------- ---- ------- ------- --------- ------- ---------
Balance, December 31,
1998..................... 24,257,828 242 75,422 (638) (134,757) (3,387) (63,118)
Net (loss)............... -- -- -- -- (5,924) -- (5,924)
Issuances of common
stock................... 145,788 2 106 -- -- -- 108
Reacquisition of
common stock......... (748,116) (7) (1,885) 638 -- -- (1,254)
Foreign currency
translation
Adjustment.............. -- -- -- -- -- 285 285
---------- ---- -------- ------- --------- ------- ---------
Balance, December 31,
1999..................... 23,655,500 $237 $73,643 $ -- $(140,681) $(3,102) $ (69,903)
========== ==== ======= ======= ========= ======= =========
</TABLE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)
(In thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1999 1998 1997
------------- ------------- -----------
<S> <C> <C> <C>
Net (Loss) $(5,924) $(100,532) $(4,987)
Other Comprehensive (Loss)
Foreign currency translation adjustments................ 285 (20) (2,023)
------- --------- -------
Total Comprehensive (Loss)........................... $(5,639) $(100,552) $(7,010)
======= ========= =======
</TABLE>
See notes to consolidated financial statements.
Page F-4
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------
1999 1998 1997
--------- ----------- ----------
(In thousands)
<S> <C> <C> <C>
Operating Activities
Net (loss)................................................................................. $ (5,924) $(100,532) $ (4,987)
Adjustments to reconcile net (loss) to net cash (used in)
provided by operating activities:
Gain on sale of discontinued operations................................................... (40,083) -- --
Net income of discontinued operations..................................................... (2,335) (11,391) (8,953)
Depreciation and amortization............................................................. 5,163 8,408 8,701
Provision for losses...................................................................... 3,729 29,679 1,195
Provision for deferred income taxes ..................................................... (34,673) (12,228) (4,861)
Charge for cumulative effect of accounting change ....................................... -- 5,000 --
Note receivable write-off................................................................. 638 1,784 --
Extraordinary items....................................................................... 600 1,090 --
Earnings in excess of cash distributions from joint ventures and affiliated companies ... (258) (1,044) (91)
Minority interest in net income of subsidiaries ......................................... 5,184 7,698 10,867
Gain on sale of investment................................................................ -- -- (1,018)
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Contract receivables, net................................................................ 106,613 (18,843) (46,366)
Prepaid expenses and other current assets................................................ 4,512 535 (3,799)
Accounts payable and accrued expenses.................................................... (83,300) 40,552 42,082
Deferred revenue......................................................................... (30,996) 3,484 14,698
Income taxes payable ................................................................... 4,450 1,129 160
Other operating activities............................................................... (1,354) 3,408 3,547
-------- --------- ---------
Net cash (used in) provided by continuing operations............................. (68,034) (41,271) 11,175
Net cash provided by discontinued operations..................................... 8,579 11,833 15,016
-------- --------- ---------
Net Cash (Used in) provided by Operating Activities..................................... (59,455) (29,438) 26,191
-------- --------- ---------
Investing Activities
Investments in subsidiaries and affiliates, net of cash acquired........................... -- 3,456 (4,074)
Sales of subsidiaries and/or investments................................................... 145,041 2,400 17,028
Purchases of fixed assets.................................................................. (2,113) (3,580) (4,621)
-------- --------- ---------
Net cash provided by investing activities of continuing operations............. 142,928 2,276 8,333
Net cash used in investing activities of discontinued operations............... (4,941) (914) (267)
-------- --------- ---------
Net Cash Provided by Investing Activities............................................... 137,987 1,362 8,066
-------- --------- ---------
Financing Activities
Borrowings under revolving credit facility................................................. 61,855 139,629 104,500
Principal payments on revolving credit facility............................................ (92,584) (112,875) (121,000)
Cash collateralize letters of credit....................................................... (12,595) -- --
Extinguishment of Senior Notes............................................................. (12,320) -- --
Distribution of income to minority interest................................................ (3,300) (10,320) (13,950)
Change in book overdraft................................................................... (8,395) 8,395 (2,667)
Debt issuance costs........................................................................ -- (1,380) (624)
Other financing activities................................................................. -- 155 (38)
-------- --------- ---------
Net Cash Provided by (Used in) Financing Activities..................................... (67,339) 23,604 (33,779)
-------- --------- ---------
Effect of Exchange Rate Changes on Cash..................................................... (69) (281) (708)
-------- --------- ---------
Increase (Decrease) in Cash and Cash Equivalents............................................ 11,124 (4,753) (230)
Cash and Cash Equivalents at Beginning of Period............................................ 15,267 20,020 20,250
-------- --------- ---------
Cash and Cash Equivalents at End of Period.................................................. $ 26,391 $ 15,267 $ 20,020
======== ========= =========
Supplemental cash flow information is as follows:
Cash payments for interest ............................................................... $ 21,065 $ 20,051 $ 18,649
Cash payments for income taxes ........................................................... 820 936 402
Non-cash transactions:
Issuance of common stock ................................................................ 44 8,720 434
Reacquisition of common stock ........................................................... (1,254) (552) (261)
Acquisition of promissory notes in exchange for sale of discontinued operation.......... 6,550 -- --
</TABLE>
See notes to consolidated financial statements.
Page F-5
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Liquidity and Capital Resource Outlook
The accompanying financial statements have been prepared assuming that
Kaiser Group International, Inc. and Subsidiaries ("Kaiser" or "the Company")
will continue as a going concern. Significant losses on four large fixed price
projects to construct plants to produce nitric acid incurred primarily during
1998 within the Engineering Operations caused the Company to respond to the
resulting negative cash flows and to operating losses being experienced within
that Group, by implementing a plan designed to significantly restructure
operations and restore profitability. In summary, the components of the
restructuring plan developed by management and the Board of Directors included:
. Divesting operating units and reinvesting the proceeds in the Company to
provide working capital necessary to stabilize the retained business
activities (Note 4);
. Reducing the Company's overhead cost structure that would remain after the
divestitures of the operating units referenced above (Note 3); and
. Revising the Company's capital structure in order to eliminate barriers to
securing new business and improve accessibility to new sources of working
capital (Note 9).
Cash proceeds from the divestitures were subsequently used in part to
complete the nitric acid projects and to repay cash borrowings from a revolving
line of credit that had been used primarily to fund the project losses as well
as working capital needs of the Company's other growing operating units prior to
the 1999 divestitures. Also, in 1999, the Company used some of the proceeds
from the divestitures to repurchase $14.0 million of $15.0 million in
outstanding Senior Notes.
The Company currently has no working capital facility and is financing
working capital shortfalls of its Engineering Operations through the use of the
residual cash proceeds from the sale of its Consulting Group completed in June
1999 as well as from distributions from its Kaiser-Hill subsidiary. Based on (i)
current expectations for near-term operating results, (ii) its current available
cash position and (iii) recent trends and projections in liquidity and capital
needs, management believes the Company has sufficient short-term liquidity to
bridge current operating needs until the implementation of a modified debt
restructuring.
Actions remaining critical, however, to the Company's long-term
liquidity include completing a restructuring of its $125.0 million in
outstanding Senior Subordinated Notes prior to the next interest payment due
date of June 30, 2000, securing a sufficient working capital facility with
acceptable terms, obtaining successful outcomes regarding significant contingent
liabilities (Note 15), and marginally improving operating results. Management
believes that if these steps can be achieved, the Company will have sufficient
liquidity generated by improved operating results, substantially decreased
interest expenses and borrowings on its new credit facility to meet its longer-
term working capital requirements. The inability of the Company to accomplish a
combination of actions described above would have a material adverse effect
on the financial condition, operating results, and the business.
The Company has been engaged in ongoing negotiations with
representatives of the holders of its $125.0 million Senior Subordinated Notes
and believes it could implement a modified restructuring of those notes. Such a
transaction could involve an exchange of Senior Subordinated Notes for a
combination of common stock and newly issued preferred stock on terms that would
permit the Company to retain available cash and not require a new bank credit
agreement. The Company believes such a restructuring would substantially improve
its financial condition and provide a basis for ongoing operations and
continuation of the Company's turnaround. However, such a restructuring would
result in substantial dilution of the equity of existing common stockholders.
While continuing negotiations with representatives of holders of its
Senior Subordinated Notes, the Company has also been exploring other strategic
alternatives. Such alternatives could include generating funds for debt
restructuring or longer-term objectives and operating needs through divestitures
of additional operating assets, replacing the Company's long-term debt, and
negotiating additional equity infusions. This evaluation of alternatives is
still underway. The Company expects to be able to reach a conclusion with
respect to its strategic direction and begin to implement its reorganization
prior to the end of the second quarter of 2000.
The Company expects its financial condition to be materially affected
by the implementation of any debt restructuring or strategic alternative. The
consummation of either a debt restructuring or other strategic alternatives
could be completed through a "prepackaged" plan of reorganization under Chapter
11 of the U.S. Bankruptcy Code. If such a plan were selected as the mechanism
for completing the Company's restructuring, the Company expects that it would
have the support of the largest holders of its Senior Subordinated Notes and,
therefore, be able to implement the plan relatively promptly. Kaiser expects
that any such plan would be designed to (i) minimize adverse effects on Kaiser's
operations, trade creditors and employees and (ii) result in a financially
strengthened and stable organization for purposes of ongoing operations.
These matters raise substantial doubt about the Company's ability to
continue as a going concern. The accompanying consolidated financial statements
do not include any adjustments relating to the recoverability and classification
of asset carrying amounts or the classification of liabilities that might result
should the Company not be successful in attempts to enact the critical actions
summarized above.
2. Significant Accounting Policies
Nature of Operations: The Company provides design, engineering,
procurement, and construction and project management services to domestic and
international clients in the infrastructure, facilities, metals, mining and
industrial markets.
Principles of Consolidation: The consolidated financial statements
include all majority-owned or controlled subsidiaries. Investments in
unconsolidated joint ventures and affiliated companies are accounted for using
the equity method. The difference between the cost of joint venture investments
and the Company's underlying equity is amortized on a straight-line basis over
the estimated lives of the related investments. All significant intercompany
balances and transactions have been eliminated.
Revenue Recognition: The Company's revenue is derived primarily from
long-term contracts of various types. Revenue on time-and-materials contracts is
recognized based on actual hours delivered times the contracted hourly billing
rate, plus the costs incurred for any materials. Revenue on fixed-priced
contracts is recognized using the percentage-of-completion method and is
comprised of the portion of expected total contract earnings represented by
actual costs incurred to date as a percentage of the contract's total estimated
costs at completion. Revenue on cost-reimbursable contracts is recognized to the
extent of costs incurred plus a proportionate amount of the contracted fee.
Certain cost-reimbursable contracts also include provisions for earning
performance-based incentive fees. Such incentive fees are included in revenue at
the time the amounts can be reasonably determined. Provisions for anticipated
contract losses are recognized at the time they become estimable.
Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosed amounts of contingent assets and liabilities at the
date of the financial statements, and the amounts of revenues and expenses
recognized during the reporting period. Actual results could differ from those
estimates.
Foreign Currency Translation: Results of operations for foreign
entities are translated using the average exchange rates during the period.
Assets and liabilities are translated to U.S. dollars using the exchange rate in
effect at the balance sheet date. Resulting translation adjustments are
reflected net of tax in shareholders' equity (deficit) as cumulative translation
adjustments.
Cash Equivalents and Restricted Cash: The Company considers all highly
liquid financial instruments purchased with maturities of three months or less
at date of purchase to be cash equivalents. Restricted cash balances consisted
of the following at December 31, (in thousands):
Page F-6
<PAGE>
<TABLE>
<CAPTION>
1999 1998
-------------- ------------
<S> <C> <C>
Letters of credit collateralized by cash.............................. $13,066 $ 600
Cash balances of wholly owned insurance subsidiary. 2,570 2,441
Escrowed cash......................................................... 750 --
------- ------
$16,386 $3,041
======= ======
</TABLE>
Page F-7
<PAGE>
Fixed Assets: Furniture and equipment are carried at cost or fair
value at acquisition if acquired through the purchase of a business, and are
depreciated using the straight-line method over their estimated useful lives,
ranging from three to ten years. Leasehold improvements are carried at cost and
are amortized using the straight-line method over the remaining lease terms.
Capitalized Software Development Costs: Certain costs, including
consulting expenses and internal labor, incurred to develop major software
applications for internal Company use, as well as for external software product
sales are capitalized and amortized over the estimated useful or economic lives
of the software, respectively. These capitalized costs have been classified with
other long term assets. Amortization expense of $307,000 and $1,260,000 was
recognized during 1999 and 1998, respectively. Certain elements of capitalized
software were sold as part of the asset divestitures in 1999.
<TABLE>
<CAPTION>
1999 1998
----------- -----------
(In thousands)
<S> <C> <C>
Internal use software .......................................... $2,263 $ 7,136
External use software .......................................... -- 816
------ -------
Total capitalized software .................................. 2,263 7,952
Accumulated amortization ....................................... ( 662) (2,890)
------ -------
$1,601 $ 5,062
====== =======
</TABLE>
Goodwill: Goodwill represents the excess of cost of acquired
businesses over the fair value of the identifiable net tangible and intangible
assets acquired. Goodwill is amortized using the straight-line method over the
period for which the Company estimates it will benefit directly from the
acquisitions. The range of estimated benefit from the Company's historical
acquisitions ranges from five to forty years. The Company periodically evaluates
these ranges and the recoverability of goodwill by comparing the estimated
future undiscounted operating cash flows for each underlying acquisition to the
respective carrying value of goodwill. Management does not believe there has
been any impairment in the value of goodwill at December 31, 1999. Accumulated
amortization was $8,100,000 and $20,145,000, at December 31, 1999 and 1998,
respectively.
Income Taxes: Deferred tax assets and liabilities represent the tax
effects of differences between the financial statement carrying amounts and the
tax bases carrying amounts of the Company's assets and liabilities. These
differences are calculated based upon the statutory tax rates in effect in the
years in which the differences are expected to reverse. The effect of subsequent
changes in tax rates on deferred tax balances is recognized in the period in
which a tax rate change is enacted. The Company evaluates its ability to realize
future benefit from all deferred tax assets and establishes valuation allowances
for amounts that may not be realizable.
Unless otherwise noted, provisions are not made for U.S. income taxes
for the undistributed earnings of the Company's foreign subsidiaries because the
Company intends to reinvest such earnings in continuing operations indefinitely.
There are no undistributed earnings of foreign subsidiaries for which income
taxes have not been provided.
Concentrations of Credit Risk and Major Customers: The Company
maintains cash balances primarily in overnight Eurodollar deposits, investment-
grade commercial paper, bank certificates of deposit, and U.S. government
securities. The Company grants uncollateralized credit to its customers.
Approximately 67% of the Company's contract receivables at December 31, 1999,
were from agencies of the U.S. government (see Note 6). The Company also
maintains certain project specific insurance policies related to various
insurable risks such as certain political risks including embargo, war, and non-
payment due to insolvency of the customer. The Department of Energy (DOE)
accounted for approximately for 74%, 63%, and 64% of Kaiser's consolidated gross
revenue for the year ended December 31, 1999, 1998 and 1997, respectively.
Recent Accounting Pronouncements: In April 1998, the Accounting
Standards Executive Committee of the American Institute of Certified Public
Accountants issued Statement of Position 98-5--Reporting on the Costs of Start-
Up Activities (SOP 98-5). The SOP requires costs of organization and start-up
activities to be expensed as incurred. The Company elected early adoption of SOP
98-5 effective April 1, 1998 and, at that time, reported the cumulative effect
of the change as a one-time, non-cash charge of $6,000,000, net of a tax benefit
of $2,930,000.
Reclassifications: Certain reclassifications have been made to the
prior-period financial statements contained herein in order to conform to the
1999 presentation.
Page F-8
<PAGE>
3. Restructuring Plan
Restructuring Charges: In 1998, the Company began implementing the
various phases of its overall restructuring plan (Note 1). Correspondingly,
total restructuring charges recognized in 1999 and 1998 were $14.4 million and
$17.1 million, respectively. The component charges included costs incurred for
involuntary employee severance, including a 25% personnel reduction, or
approximately 250 employees, of the Company's wholly-owned North American
operations and lesser percentage reductions in international operations,
facility closure costs associated with closing of marginally profitable office
locations, and costs to cease certain operating activities. Facility closure and
related costs include disposal costs of equipment, lease restructuring payments,
brokers fees and lease termination costs. These charges have been summarized as
Restructuring Charges on the Consolidated Statement of Operations and consisted
of the following (in thousands):
<TABLE>
<CAPTION>
Current Year
----------------------
1999 January 1, Provisions Uses December 31
---- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Severance.......................................... $4,499 $ 2,211 $ 6,710 $ --
Investment/goodwill impairments.................... -- 3,855 3,855 --
Debt restructuring activities...................... -- 3,690 3,690 --
Divestiture activities............................. 700 1,335 2,035 --
Contingency settlements............................ -- 1,893 1,893 --
Facility downsizing/consolidation.................. 855 1,400 1,900 355
------ ------- ------- ------
$6,054 $14,384 $20,083 $ 355
====== ======= ======= ======
1998
----
Severance.......................................... $ -- $ 7,607 $ 3,108 $4,499
Divestiture activities............................. -- 1,800 1,100 700
Contingency settlements............................ -- 1,750 1,750 --
Facility downsizing/consolidation.................. -- 5,922 5,067 855
------ ------- ------- ------
$ -- $17,079 $11,025 $6,054
====== ======= ======= ======
</TABLE>
As of December 31, 1999, initiatives undertaken as part of the
1999 and 1998 charges relating to the Company's restructuring had been largely
completed consistent with the Corporation's original plans and estimates. The
amounts recorded in the Consolidated Balance Sheet at December 31, 1999 related
to these actions are, in the opinion of management, adequate to complete the
remaining initiatives originally contemplated in the 1999 and 1998 charges.
While these actions were intended to improve the Company's competitive position,
there can be no assurances as to their ultimate success or that additional
restructuring actions will not be required.
Page F-9
<PAGE>
4. Divestitures and Acquisitions
Divestitures
Pursuant to a restructuring plan, the Company divested of several
operating units in 1999. The intention to divest of certain operating units
qualified the related units as discontinued operations for financial accounting
purposes.
. Environment and Facilities Management Group (EFM): On April 9, 1999,
the Company sold the majority of the active contracts and investments, and
transferred a substantial number of employees of EFM to IT Group, Inc. (IT) for
a cash purchase price of $82.0 million, less $8.0 million retained by IT for
EFM's working capital requirements. Contracts which were not sold to IT were
completed by the Company as of December 31, 1999. Net of income tax expense of
$24.5 million, the Company recognized a gain of $12.0 million from the sale.
. Consulting Group: On June 30, 1999, the Company sold 90% of its
Consulting Group to CM Equity Partners, L.P. and the Group's management for
$64.0 million in cash and $6.6 million in interest bearing notes. The Company
retained 10% ownership (Note 7) in the new and independent consulting company,
now known as ICF Consulting Group, Inc. Net of income tax expense of $11.4
million, the Company recognized a gain of $30.3 million from that sale.
The operating results of the EFM and Consulting Groups prior to divestiture
have been segregated from the Company's continuing operations and are reported
as a separate line item on the Statement of Operations for all periods
presented. Details of the net operating results are as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
------------ --------------- ---------------
<S> <C> <C> <C>
EFM
---
Gross Revenue...................................... $ 34,640 $105,300 $ 88,100
Subcontracts and materials........................ (20,053) (53,300) (34,300)
-------- -------- --------
Service Revenue.................................... 14,587 52,000 53,800
Operating Expenses:
Direct labor and fringe........................... 7,495 26,600 30,800
General and administrative........................ 5,631 19,800 18,900
Depreciation & amortization....................... 231 60 100
-------- -------- --------
Operating Income................................... 1,230 $ 5,540 4,000
Income tax expense................................. 595 2,176 1,624
-------- -------- --------
Income from discontinued operations................ $ 635 $ 3,364 $ 2,376
======== ======== ========
Consulting Group
----------------
Gross Revenue...................................... $ 49,519 $105,400 $ 93,100
Subcontracts and materials........................ (10,937) (23,700) (21,800)
-------- -------- --------
Service Revenue.................................... 38,582 81,700 71,300
Operating Expenses:
Direct labor and fringe........................... 18,638 38,100 33,300
General and administrative........................ 16,466 29,800 26,100
Depreciation & amortization....................... 498 700 900
-------- -------- --------
Operating Income................................... $ 2,980 $ 13,100 11,000
Income tax expense................................. 1,280 5,073 4,423
-------- -------- --------
Income from discontinued operations................ $ 1,700 $ 8,027 $ 6,577
======== ======== ========
</TABLE>
Sale of EDA, Inc. (EDA): Additionally, in August of 1999, the Company sold
the majority of the active contracts and transferred selected assets and
liabilities associated with this business to Railplan International, Inc. for
approximately $1.2 million. The Company recognized a book loss of $2.2 million,
net of an income tax benefit of $0.1 million, primarily as a result of the
write-off of goodwill associated with this entity, which comprises a portion
of the total gain on sale of discontinued operations on the Consolidated
Statement of Operations.
Sale of Gary PCI: In December 1996, the Company sold the majority of its
investment in Gary PCI Ltd. L.P. (owners of pulverized coal injection
operations) and a related entity and certain related contractual rights for
$16.6 million resulting in a $9.4 million pretax gain. The buyer exercised an
option on January 5, 1998, to purchase the remaining equity investment for $2.4
million. In 1997, the Company recognized a total pretax gain of $1.0 million,
shown as a gain on sale of investment on the Consolidated Statement of
Operations, as the carrying value of the option was increased to reflect fair
market value.
Page F-10
<PAGE>
The sales price for the second installment was included in other current assets
in the accompanying 1998 balance sheet and was collected in January of the
subsequent year.
Acquisitions:
ICT Spectrum: On February 17, 1998, the Company's Board of Directors
approved the acquisition of ICT Spectrum Constructors, Inc., a construction
contractor, based in Boise, Idaho, specializing in construction management of
fabrication plants and other facilities for semiconductor and microelectronics
customers. Each share of ICT Spectrum stock was exchanged for shares of Kaiser
stock, resulting in the issuance of 1.5 million shares of Kaiser common stock
and a total purchase price of $8,040,000 (see Note 15. Contingencies). The
acquisition of $18.5 million in total assets and $13.7 million in total assumed
liabilities accounted for as a purchase, resulted in approximately $4.8 million
in goodwill, which is being amortized over 12 years. The purchase was completed
on March 19, 1998 and the Company's Consolidated Statement of Operations
includes the operating results of the acquired entity from January 1, 1998.
In December, 1999, the Company and the non-employee former
shareholders of ICT Spectrum agreed to amend the applicable agreements in a
manner that had the result of reducing the amount of the taxable gain created by
former shareholder-employees' involuntary departures from the Company. As
permitted by the agreement, the shareholders agreed to allow the Company to
retain some of the vested shares as payment of the income tax withholding in
lieu of cash. In total, the Company retained 255,669 shares and recorded the
transaction as a $1.37 million reduction of goodwill and paid-in-capital.
5. Business Segments and Foreign Operations
Business Segments: As a result of the 1999 divestitures of the EFM and
Consulting groups, the Company now has two reportable segments:
. the Kaiser-Hill Company, LLC (Kaiser-Hill), the 50%-owned, controlled
and consolidated entity which performs and manages the Department of
Energy's multibillion-dollar management contract at Rocky Flats;
. the Engineering Operations Group (E&C) which provides engineering
and construction services to commercial and state and local entities
in the areas of industry, infrastructure, transportation, and
microelectronics;
These segments are used for internal management purposes primarily
because of the similarities in products and services, customers, and regulatory
environments. The segment operating results include all activities that had sole
direct benefit to the respective segment. Operating activities that are deemed
to benefit more than one segment are managed by the Company and are not
allocated to the segments. The accounting policies of the operating segments are
the same as those described in the summary of significant accounting policies.
Financial data for the segments are as follows (in thousands):
<TABLE>
<CAPTION>
Kaiser-Hill Engineering Operations
Statements of Operations
for the years ended December 31, 1999 1998 1997 1999 1998 1997
-------------------------------- ---------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gross Revenue............................ $ 643,044 $ 632,600 $ 588,700 $ 227,223 $ 367,121 $ 338,216
Subcontracts and materials.............. (456,188) (478,100) (421,200) (123,108) (239,694) (200,131)
Provision for contract losses........... -- -- -- -- (76,210) (6,900)
Equity income of affiliates............. -- -- -- 4,480 6,045 2,301
--------- --------- --------- --------- --------- ---------
Service Revenue.......................... 186,856 154,500 167,500 108,595 57,262 133,486
Operating Expenses:
Direct labor and fringe................. 176,582 138,300 145,500 67,896 79,562 79,971
Selling, general & administrative....... -- -- -- 54,052 65,534 63,851
Depreciation/amortization............... 89 -- -- 5,180 8,288 8,595
Restructuring charges................... -- -- -- 14,384 17,079 --
--------- --------- --------- --------- --------- ---------
Operating Income (Loss).................. $ 10,185 $ 16,200 $ 22,000 $ (32,917) $(113,201) $ (18,931)
========= ========= ========= ========= ========= =========
</TABLE>
Asset information by reportable segment is not reported for any period
prior to December 31, 1999 because the Company did not maintain or use such
information for internal management purposes prior to the divestitures (Note 4).
Page F-11
<PAGE>
<TABLE>
<CAPTION>
Balance Sheets as of December 31, 1999 Kaiser-Hill E&C Total
-------------------------------------- ------------- ------------------ -----------------
<S> <C> <C> <C>
Assets
Cash and cash equivalents $ 5,243 $ 21,148 $ 26,391
Restricted cash -- 16,386 16,386
Contract receivables, net 105,753 52,566 158,319
Other current assets 126 5,224 5,350
Other long-term assets 587 46,530 47,117
-------- -------- ---------
Total Assets 111,709 141,854 253,563
-------- -------- ---------
Liabilities
Accounts payable 90,813 28,743 119,556
Accrued salaries and benefits 14,717 12,532 27,249
Other current liabilities -- 42,533 42,533
Other long-term liabilities -- 131,795 131,795
-------- -------- ---------
Total liabilities 105,530 215,603 321,133
-------- -------- ---------
Net Assets (Liabilities) $ 6,179 $(73,749) $( 67,570)
======== ======== =========
</TABLE>
Foreign Operations: Gross revenue and operating income from foreign operations
and foreign assets of all consolidated subsidiaries were as follows as of and
for the years ended December 31 (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
-------------- ---------------- ---------------
<S> <C> <C> <C>
Foreign gross revenue:
Europe...................................... $ 67,014 $ 89,155 $ 86,937
Asia-Pacific................................ 32,763 31,460 44,871
Other....................................... 2,001 1,387 25,876
-------- -------- --------
101,778 122,002 157,684
Domestic gross revenue......................... 768,489 877,719 769,232
-------- -------- --------
Total gross revenue...................... $870,267 $999,721 $926,916
======== ======== ========
Foreign operating income (loss):
Europe...................................... $ 1,911 $ 2 ,106 $ 11,153
Asia-Pacific................................ (2,636) 2,068 2,209
Other....................................... (1,855) (22,457) 785
-------- -------- --------
(2,580) (18,283) 14,147
Domestic operating income (loss)............... (20,152) (78,718) (17,216)
-------- -------- --------
Total operating income (loss)............ $(22,732) $(97,001) $ 3,069
======== ======== ========
Foreign assets:
Europe...................................... $ 26,449 $ 42,241 $ 34,900
Asia-Pacific................................ 13,336 18,312 15,071
Other....................................... 1,844 1,649 833
-------- -------- --------
41,629 62,202 50,804
Domestic assets................................ 211,934 365,869 348,484
-------- -------- --------
Total assets............................. $253,563 $428,071 $399,288
======== ======== ========
</TABLE>
Page F-12
<PAGE>
6. Contract Receivables
Contract receivables consisted of the following at December 31 (in
thousands) (the 1998 balances include receivables of EFM and Consulting Group
that were divested in 1999):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
U.S. government agencies:
Currently due......................................... $ 2,822 $ 20,193
Retention............................................. 684 3,030
Unbilled.............................................. 105,589 156,025
-------- --------
109,095 179,248
-------- --------
Commercial clients and state and municipal governments:
Currently due......................................... 32,466 74,184
Retention............................................. 13,288 21,267
Unbilled.............................................. 13,064 20,229
-------- --------
58,818 115,680
-------- --------
167,913 294,928
Less allowances for uncollectible receivables.............. (9,594) (10,850)
-------- --------
$158,319 $284,078
======== ========
</TABLE>
Unbilled receivables result from revenue that has been earned but not
billed. The unbilled receivables can be invoiced at contractually defined
intervals -based on the Company's current mix of contract types - the majority
is typically billed in the following month. Retention balances are billable at
contract completion or upon attainment of other specified contract milestones.
Consistent with industry practice, these receivables are classified as current
assets. The balance of billed receivables with U.S. government agencies at
December 31, 1999 includes $2.0 million in claims to which the Company believes
it is entitled, and recovery of which may take more than one year. The Company
anticipates that the remaining unbilled receivables will be substantially billed
and collected within one year.
7. Joint Ventures and Affiliated Companies
The Company has ownership interests in certain unconsolidated corporate
joint ventures and affiliated companies. The Company's net investments in and
advances to these corporate joint ventures and affiliated companies totaled
$10.0 million and $7.7 million at December 31, 1999 and 1998, respectively. The
investment increased in 1999 primarily as a result of the Company's sale of its
Consulting Group with the retention of a 10% interest The Combined summarized
financial information of all of the Company's unconsolidated corporate joint
ventures and affiliated companies as of December 31, was as follows (in
thousands):
1999 1998 1997
-------- -------- --------
Current assets............... $ 36,183 $ 20,390 $ 23,661
Non-current assets........... 12,983 12,462 10,182
Current liabilities.......... 25,601 21,602 20,479
Non-current liabilities...... 34,093 2,641 --
Gross revenue................ 81,915 24,546 41,285
Net income................... 5,209 5,318 7,522
With the intent of significantly restructuring fixed operating leases for
the Company's corporate headquarters, the Company paid $1.5 million on November
12, 1997, for a 4% ownership interest in a limited liability company (the LLC)
that leases the land and owns the buildings leased primarily by the Company for
its corporate headquarters. The Company is committed to make additional annual
capital contributions to the LLC totaling $600,000 annually during each of the
first three years and $700,000 annually during each of the fourth through ninth
years of the LLC. The ownership in the LLC will increase to 16% in fixed annual
2.4% increments in each of the eleventh through fifteenth years of the
agreement. Transaction costs totaling $1.7 million were capitalized and will be
amortized over the estimated 15-year life of the LLC.
8. Notes receivable
The Company accepted two promissory notes as part of the total
consideration received in connection with the sale of the Consulting Group in
June 1999. Principal payments on an escrowed and
Page F-13
<PAGE>
non-escrowed note, in the amounts of $3,250,000 and $3,300,000, respectively,
are due June 25, 2006. Interest payments of 10.5% are due from the inception of
the notes beginning December 31, 2000 and payable semi-annually thereafter. The
notes are subject to reduction in the event that certain divestiture-related
contingencies are not resolved as originally anticipated in the related sale
agreement. The Company believes that the note carrying values at December 31,
1999 approximate fair value.
9. Debt
The Company's long-term debt was as follows at December 31 (in thousands)
and, net of all current maturities, is due in 2003:
1999 1998
-------- --------
12% Senior Subordinated Notes due 2003....... $125,000 $125,000
12% Senior Notes due 2003.................... 1,000 15,000
Revolving credit facility.................... -- 30,729
-------- --------
126,000 170,729
Less unamortized discount.................... 1,782 2,512
-------- --------
124,218 168,217
Less current maturities...................... -- 30,729
-------- --------
$124,218 $137,488
======== ========
Background to 1999 developments: In 1998, the Company realized that it was
going to incur significant cost overruns on four large fixed-price projects. Due
to the significant risks, difficulties and uncertainties involved in estimating
the total costs to complete these large fixed price projects, the Company
revised and increased the total completed project cost estimates several times
in 1998. Given the completion cost uncertainties and the inability to finitely
determine the impact of the losses on the Company's liquidity and financing
sources, management immediately pursued options for additional financing sources
and flexibility. In addition to seeking a replacement working capital facility,
the Company's Board of Directors also began considering and pursuing other
strategic alternatives, including, but not limited to, the sale of portions of
the Company.
On December 18, 1998, the Company successfully entered into a new revolving
credit facility (the Revolver) which offered cash borrowings and letters of
credit up to an aggregate of $60 million. Proceeds totaling $25,000,000 from the
Revolver were used to repay all outstanding amounts from the former revolving
credit facility and the Company wrote off the unamortized balance of the
capitalized costs related to the debt facility and recognized an extraordinary
charge of $1.1 million.
After obtaining the Revolver, the Company again increased the estimate of
the total nitric acid projects cost overruns it expected to incur by an
additional $19 million. This anticipated material adverse change to the
Company's financial condition triggered a technical event of default pursuant to
the Revolver's terms. Despite the technical default status, the lender permitted
the Company to borrow and obtain letters of credit pursuant to all other terms
of the Revolver, primarily conditioned on the provision that proceeds from two
pending asset sale transactions be used to repay all outstanding cash
borrowings. On April 9, 1999, the Company completed the sale of its EFM Group
(see Note 4) and used $36 million of the sale proceeds to extinguish outstanding
Revolver cash borrowings. The Company then received an amendment to the Revolver
(the Amended Revolver) providing for cash borrowing and letters of credit up to
an aggregate of $30 million. The Amended Revolver expired on June 30, 1999 -
concurrent with the Company's completion of the sale of its Consulting Group. A
charge of $0.8 million, net of income taxes, was recognized for the write off of
the unamortized balance of capitalized costs incurred to originally obtain the
facility. This charge was recognized as an extraordinary charge on the Statement
of Operations. Also in connection with the expiration of the Amended Revolver,
the Company was required to use $10.0 million of the asset sale proceeds to
collateralize certain contract performance guarantee letters of credit that were
outstanding under the expired facility. All of the Company's letters of credit
remain cash collateralized as of April 14, 2000 and will continue so until such
time as the Company can secure a replacement credit facility with sufficient
letter of credit capacity.
On September 30, 1999, the Company reached a debt restructuring agreement
in principle with the majority of the holders of its $15.0 million in Senior
Notes and $125.0 million in Senior Subordinated Notes. On or about October 1,
1999, the Company commenced an asset sale offer/exchange offer designed to
restructure its Notes, including the consummation of the first element of the
debt restructuring - using proceeds from completed asset sales to repurchase
$14.0 million of its $15.0 million in
Page F-14
<PAGE>
outstanding Senior Notes for 88% of their face value on October 9, 1999. The
Company also paid the accrued interest on the repurchased notes. After adjusting
the amount of the repurchase discount by the write off of the unamortized issue
discount on the notes and the unamortized balance of capitalized costs incurred
to originally issue the notes and costs incurred in the repurchase, the net
gain on the repurchase was $0.2 million after related income taxes.
By November 3, 1999, the Company had received notice of participation in
the asset sale offer/exchange offer by the holders of approximately 99% of the
principal amount of its $125.0 million Senior Subordinated Notes. On November 4,
1999, the Company obtained the necessary approvals of its common shareholders to
be able to effect the proposed restructuring. The detailed elements of the plan
are described in the Company's Prospectus dated October 1, 1999. In general
terms, the plan contemplated the cash repurchase of at least $35.0 million of
the Senior Subordinated Notes and the exchange of 2,600,000 shares of new
redeemable convertible preferred stock (liquidation preference of $65.0 million)
and up to $25.0 million in new unsecured 15% Senior Notes to be due December 31,
2002 for the balance of the Senior Subordinated Note.
Consummation of the approved debt restructuring plan was conditioned on the
Company's ability to obtain a new bank revolving credit facility satisfactory to
the Company and an unofficial committee of the Senior Subordinated Noteholders.
The Company was not able to obtain a facility that was compatible with the
Company's needs. Due to the fact that the Company could not secure an acceptable
credit facility and on continued financial underperformance of it Engineering
Operations, on December 31, 1999, the Company paid the scheduled interest
payment on the $126.0 million in remaining notes and decided to delay
implementation of the proposed debt restructuring and re-open negotiations with
its noteholders and potential lenders.
The Company has remained in ongoing negotiations with representatives of
the holders of its Senior Subordinated Notes and believes it can implement a
modified restructuring of those Notes. Such a transaction could involve an
exchange of Senior Subordinated Notes for a combination of common stock and
newly issued preferred stock on terms that would permit the Company to retain
available cash and not require a new bank credit agreement. The Company believes
that such a restructuring would resolve concerns with respect to its financial
condition and provide a basis for ongoing operations and continuation of the
Company's turnaround. However, such a restructuring would result in
substantially more dilution of the equity of existing common stockholders than
the restructuring proposed during the fall of 1999.
Terms of Senior Notes: The 12% Senior Notes (Senior Notes) are due in 2003,
(Senior Notes). Each note unit consists of $1,000 principal amount of 12% Senior
Notes, and 7 warrants, each to purchase one share of the Company's common stock
at an exercise price of $2.30 per share. The warrants contained certain anti-
dilution provisions and expired on December 31, 1999. On December 31, 1999,
28,000 warrants were exercised for proceeds totaling $64,400. Payment of the
principal and interest on the Senior Notes are unconditionally guaranteed by 8
of the Company's wholly owned subsidiaries (Note 17).
Terms of Senior Subordinated Notes: The Senior Subordinated Notes consist
of 1,000 units, each consisting of $1,000 principal amount and 4.8 warrants,
each to purchase one share of the Company's common stock at an exercise price of
$5.00 per share. The warrants expired on December 31, 1998. The Company's
obligations under the Subordinated Notes are subordinate to its obligations
under the Senior Notes and revolving credit facilities, if any.
Interest payments are due semiannually on the Senior Notes and the
Subordinated Notes (collectively, the Notes). Interest has and will continue to
accrue at 13% until the Company achieves and maintains a specified level of
earnings. The indentures governing the Notes contain business and financial
covenants, including restrictions on additional indebtedness, dividends,
acquisitions and certain types of investments, and asset sales.
At December 31, 1999, the fair value, derived from the average of quoted
financial institution market prices, of the Senior Notes and Subordinated Notes
was approximately $0.88 million and $57.0 million, respectively. The capitalized
balance of the Notes issuance costs totaled $1.9 million and $3.3
Page F-15
<PAGE>
million, respectively, at December 31, 1999 and 1998, and are being amortized
over the terms of the Notes.
Kaiser Hill Working Capital Facility: Kaiser-Hill had a $50 million
receivables purchase facility to support its working capital requirements which
expired, on an extended basis, on September 30, 1999. On November 2, 1999,
Kaiser-Hill subsequently obtained a revolving credit facility from Bank of
America, N.A. that provides for up to $35.0 million in total cash borrowing
availability, such outstanding amount not to exceed the sum of eligible portions
of Kaiser-Hill's eligible billed and unbilled accounts receivable on the DOE
Rocky Flats contract. The facility matures six years from inception. Kaiser-Hill
and both owners granted the lender a first lien security interest in all of the
ownership and equity interest in Kaiser-Hill and have agreed to cure events of
default by Kaiser-Hill on the facility. Interest on advances will accrue at
LIBOR-based rates or the higher of the prime or Federal Funds rates. There are
no amounts outstanding under the facility at December 31, 1999.
10. Capital Stock
Notes Receivable Collateralized by Common Stock: Certain former members of
senior management had outstanding notes to the Company for which 396,849 shares
of the Company's common stock served as the primary collateral. The remaining
management with such notes left the employment of the Company in 1999 and 1998
and the related amounts of note principal in excess of the then fair market
values of the collateral shares totaling $638,000 and $1,784,000, was expensed
in 1999 and 1998, respectively.
Shareholder Rights Plan: The Shareholder Rights Plan (Rights Plan) provides
the Board of Directors (the Board) with the ability to negotiate with a person
or group that might, in the future, make an unsolicited attempt to acquire
control of the Company. The Rights Plan provides for one Right (Right) for each
outstanding share of the Company's common stock. Each right entitles the holder
to purchase /1//100 of a share of Series 4 Junior Preferred Stock at a purchase
price of $50. The Rights generally may cause substantial dilution to a person or
group that attempts to acquire the Company on terms not approved by the Board.
The Rights expire on January 13, 2002.
Preferred Stock: The Company's authorized capital stock includes 3,100,000
shares of Series 4 Junior Preferred Stock, par value $.01 per share, of which
500,000 shares are reserved for the Shareholder Rights Plan described above.
There were no preferred shares issued or outstanding as of December 31, 1999 or
1998.
Page F-16
<PAGE>
11. Income Taxes
The components of net (loss) used to compute the (expense) benefit from
continuing operations for income taxes for the years ended December 31 were as
follows (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
-------- --------- --------
<S> <C> <C> <C>
Income (loss) from continuing operations before
income taxes and minority interests:
Domestic......................................... $(40,998) $(116,431) $(14,325)
Foreign.......................................... (450) 690 1,886
-------- --------- --------
(41,448) $(115,741) $(12,439)
======== ========= ========
(Expense) benefit for income taxes:
Federal:
Current....................................... $ -- $ 6,740 $ 4,615
Deferred...................................... 2,094 9,577 4,505
-------- --------- --------
2,094 16,317 9,120
-------- --------- --------
State:
Current....................................... (236) 1,190 598
Deferred...................................... (2,684) 2,598 911
-------- --------- --------
(2,920) 3,788 1,509
-------- --------- --------
Foreign:
Current....................................... (1,271) (1,621) (764)
Deferred...................................... 987 122 (499)
-------- --------- --------
(284) (1,499) (1,263)
-------- --------- --------
$ (1,110) $ 18,606 $ 9,366
======== ========= ========
</TABLE>
The effective income tax (expense) benefit from continuing operations
varied from the federal statutory income tax (expense) benefit because of the
following differences (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
-------- --------- --------
<S> <C> <C> <C>
Income tax benefit computed at federal statutory
tax rate.......................................... $ 14,092 $ 39,352 $ 4,354
-------- -------- -------
Change in (tax) benefit from:
Goodwill amortization............................ (746) (1,088) (1,010)
Minority interest earnings....................... 1,763 2,617 3,803
State income taxes............................... 1,703 3,388 981
Foreign taxes.................................... (1,192) (2,908) (316)
Valuation allowance.............................. (16,236) (22,031) --
Stock redemption................................. (76) (646) --
Business meals and entertainment................. (189) (349) (220)
Research and experimentation credits............. -- 491 1,881
Other............................................ (229) (220) (107)
-------- -------- -------
(15,202) (20,746) 5,012
-------- -------- -------
$ (1,110) $ 18,606 $ 9,366
======== ======== =======
</TABLE>
The tax effects of the principal temporary differences and carryforwards
that give rise to the Company's net deferred tax asset are as follows (in
thousands):
1999 1998
-------- --------
Net operating loss carryforwards............... $ 15,435 $ 25,899
Reserves for adjustments and allowances........ 17,136 23,686
Vacation and incentive compensation accruals... 2,673 5,264
Tax credit carryforwards....................... 3,200 3,008
Restricted stock............................... 2,167 2,669
Unbilled revenue............................... (2,220) (2,616)
Other.......................................... 1,490 408
-------- --------
39,881 58,318
Valuation allowance............................ (39,881) (23,645)
-------- --------
$ -- $ 34,673
======== ========
The Company has net operating loss carryforwards at December 31, 1999 in
the amount of $42.0 million for federal purposes which expire by 2018. The
Company has $3.2 million of tax credit carryforwards, of which, $1.8 million
have no expiration, and $1.4 million expire by 2012. The ability to derive
benefit from these carryforwards in the future is dependent on the Company's
ability to generate sufficient taxable income prior to the expiration dates.
Page F-17
<PAGE>
The Company provided for an additional valuation allowance in 1999 of $16.2
million, in order to reserve the total amount of the net deferred tax asset, as
the Company cannot reasonably predict that the results of its future operations
will be sufficient to assure utilization of the tax benefit prior to expiration.
In 1998, the Company recognized a valuation allowance sufficient to ensure that
the balance of the net deferred tax asset at December 31, 1998 would be
completely utilized by the income tax gains that were anticipated from sales of
several operating divisions completed in 1999. Upon the consummation of those
asset sales in 1999, the entire $34.7 million deferred tax asset was utilized.
Approximately $0.8 million and $1.2 million of the valuation allowance at
December 31, 1999 and 1998, respectively, is attributed to foreign income tax
benefits also not currently assured of realization.
12. Leases
The Company leases all office space and the majority of all of equipment.
In connection with the Company's divestiture of two operating units during 1999,
the Company entered into long-term subleases with the buyers for the respective
amounts of acquired leased space and equipment. Scheduled annual future minimum
payments on prime noncancelable operating leases as well as scheduled annual
future minimum receipts on subleases for leases with initial or remaining terms
in excess of one year at December 31, 1999 are as follows (in thousands):
Lease Sublease
-------- --------
Year Amount Amount
---- -------- --------
2000...................... $ 18,693 $ 8,939
2001...................... 13,293 7,160
2002...................... 11,520 7,221
2003...................... 10,411 6,887
2004...................... 9,404 6,267
Thereafter................ 64,657 41,780
-------- --------
$127,978 $ 78,254
======== ========
The total rental expense for all operating leases was $27,407,000,
$28,733,000, and $27,576,000, for the years ended December 31, 1999, 1998, and
1997, respectively. Sublease rental income was $7,161,000, $5,482,000, and
$4,617,000 for the years ended December 31, 1999, 1998, and 1997, respectively.
13. Benefits and Compensation Plans
Employee Stock Purchase Plan: The Company's Stock Purchase Plan provides
for the sale of up to 2.0 million shares of common stock to all eligible
employees. Employees may elect to withhold up to 10% of annual base earnings for
the purchase of the Company's common stock. Options to purchase shares of common
stock are offered quarterly with a purchase price equal to 90% of the lower of
the closing market price on the first trading day of the month preceding the
quarter or the last trading day of the quarter. During the years ended December
31, 1999, 1998 and 1997, respectively, 70,208, 98,551 and 101,927 shares were
sold under the plan. Operation of the Stock Purchase Plan was suspended
effective March 31, 1999.
Fixed Stock Option Plans: A Stock Incentive Plan (Incentive Plan) provides
for the issuance of options, stock appreciation rights, restricted shares, and
restricted stock units of up to an aggregate of 6.0 million shares of the
Company's common stock. Awards are made to employees at the discretion of the
Compensation and Human Resources Committee of the Board (Committee). Vesting
periods, determined by the Committee, are generally in equal installments over
three to six years. At December 31, 1999, 1,104,738 shares were available for
grant under this plan.
On February 28, 1997, the Board of Directors adopted the Non-Employee
Directors Compensation and Phantom Stock Plan under which non-employee directors
are given phantom stock awards (PSA's). In lieu of option grants, each non-
employee director of the Company will be granted a PSA equal to $20,000 worth of
common stock on the date of grant. Three years after the PSA grant, the Company
will pay each non-employee director, in cash, the value of the shares to which
the PSA relates. Any increases in value of the PSA after the date of grant and
prior to the cash payment will be expensed in the period of the value increase.
PSA's granted in 1999, 1998 and 1997 totaled 388,892, 49,126 and
Page F-18
<PAGE>
48,545, respectively, with initial share values of $0.36, $2.85 and $2.06,
respectively. Expense associated with this plan of $0, $76,000 and $83,000 was
recognized in 1999, 1998 and 1997, respectively.
The precursor to the above plan was the Non-Employee Directors Stock Option
Plan (Non-Employee Plan) which provided each non-employee director of the
Company an immediately exercisable option to purchase 3,000 shares of the
Company's common stock for each year of service. The Non-Employee Plan does not
specify a maximum number of available shares. As of December 31, 1999, there are
135,000 shares of common stock reserved for issuance upon the exercise of
options granted under this plan and 60,000 are outstanding. This Plan was
suspended following adoption of the Non-Employee Directors Compensation and
Phantom Stock Plan.
The Company's Consultants, Agents, and Part-Time Employees Stock Option
Plan (Consultants Plan) provides for the issuance of options or restricted
shares of up to 1.0 million shares of the Company's common stock to consultants,
agents, and part-time employees. The vesting period is a minimum of one year. In
1999, 1998 and 1997, 0, 100,000 and 200,000 options were granted, respectively.
At December 31, 1999, there were 700,000 options available for grant.
All three active plans provide that the option or grant price is not to be
less than the fair market value on the date of grant. Under the Incentive and
Non-Employee Directors Plans, an option's maximum term is 10 years. As of
December 31, 1999, there have been no options granted under these plans with
terms greater than five years. An option's maximum term under the Consultants
Plan is five years.
A summary of stock option activity under all option plans is as follows:
<TABLE>
<CAPTION>
Weighted-Average
----------------
Shares Option Price Exercise Price
--------- -------------- --------------
<S> <C> <C> <C>
Balance, January 1, 1997.............. 2,182,931 $1.90 to $9.59 $4.29
Granted............................ 885,019 $1.91 to $4.00 $2.39
Expired............................ (572,961) $2.23 to $9.59 $5.77
---------
Balance, December 31, 1997............ 2,494,989 $1.90 to $6.90 $3.27
Granted............................ 1,175,500 $1.24 to $2.99 $1.95
Expired............................ (659,957) $1.90 to $6.07 $3.92
Exercised.......................... (330) $2.23 $2.23
---------
Balance, December 31, 1998............ 3,010,202 $1.24 to $2.42 $2.62
Granted............................ 10,000 $1.41 $1.41
Expired............................ (629,422) $1.90 to $4.39 $3.17
Exercised.......................... -- $ -
---------
Balance, December 31, 1999............ 2,390,780 $1.24 to $4.41 $2.46
=========
</TABLE>
Options exercisable at December 31, 1999 and 1998, were 1,412,808 and
1,408,203, respectively. The weighted-average remaining contractual life on
options outstanding at December 31, 1999, was 2.4 years. There were no
exercisable options outstanding at a price below the fair market value of the
Company's common stock at December 31, 1999.
The following is a summary of fixed stock options outstanding at December
31, 1999:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------------------------ -----------------------------
Weighted-Average
----------------
Range of Remaining Weighted-Average Number Weighted-Average
Number --------- ---------------- ------ ----------------
Exercise Prices Outstanding Contract Life (years) Exercise Price Exercisable Exercise Price
---------------- ----------- --------------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
*$1.90 569,762 2.6 years $1.34 400,417 $1.35
$1.90 to $2.50 1,183,285 3.0 years $2.30 427,017 $2.18
$2.51 to $3.50 126,347 2.1 years $2.91 75,175 $2.92
$3.51 to $4.41 511,386 0.9 years $4.02 510,199 $4.02
</TABLE>
*Less than
Pro Forma Compensation Cost: Statement of Financial Accounting Standards
No. 123, Accounting for Stock-based Compensation (SFAS No. 123), encourages
companies to adopt a fair value method of accounting for employee stock options
and similar equity instruments. The fair value method requires compensation cost
to be measured at the grant date based on the value of the award and to be
recognized over the service period. As alternatively provided by SFAS No. 123,
however, the Company elects to provide pro forma fair value disclosures for
stock-based compensation. Accordingly, had compensation cost been recognized for
awards granted under the Company's stock plans during the years ended December
31, 1999, 1998, and 1997, respectively, the pro-forma net loss would have been
$(6.1)
Page F-19
<PAGE>
million, [$(0.26) per share], $(101.3) million, [$(4.20) per share], and $(5.7)
million, [$(0.26) per share]. These per share amounts reflect basic and diluted
earnings per share.
The fair value of each option grant under the fixed-price option plans and
the fair value of the employees' purchase rights under the employee stock
purchase plan are estimated on the date of grant for pro forma computations
using the Black-Scholes option-pricing model. The dividend yield was assumed to
be zero for both periods below. The weighted-average of all other significant
assumptions and weighted-average fair value of grants made during the years
ended December 31 are as follows:
<TABLE>
<CAPTION>
Fixed Stock Option Plan: Employee Stock Purchase Plan:
----------------------------------- ------------------------------------
Assumptions 1999 1998 1997 1999 1998 1997
----------- --------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Volatility.................... 128.3% 71.6% 61.4% 128.3% 71.6% 61.4%
Risk-free interest rate....... 5.5% 5.2% 6.2% 5.1% 4.7% 5.1%
Expected lives................ 5.0 years 5.0 years 5.0 years 0.3 years 0.3 years 0.3 years
Fair value of grants............... $ 1.22 $1.20 $1.22 $0.05 $0.36 $1.40
</TABLE>
Retirement Benefits Plans: The Company sponsors several retirement benefit
plans covering substantially all employees who meet minimum length of service
requirements. These plans include a defined-contribution retirement plan that
provides for contributions by the Company based on a percentage of covered
compensation, and a 401(k) Plan that allows employees to defer portions of their
salary, subject to certain limitations. Total expense for these plans for the
years ended December 31, 1999, 1998, and 1997, was $3,880,000, $6,970,000, and
$6,784,000, respectively. As of December 31, 1999, the Retirement Plan, 401(k)
Plan, and a discontinued Employee Stock Ownership Plan owned 806,660, 482,653,
and 1,289,313 shares, respectively, of the Company's common stock.
Collective Bargaining Agreements: Certain of the Company's employees are
covered by union-sponsored, collectively bargained, multi-employer benefit
plans. Contributions and costs are determined in accordance with the provisions
of negotiated labor contracts or terms of the plans. Pension expense for these
plans was $454,000, $413,000, and $482,000, for the years ended December 31,
1999, 1998, and 1997, respectively.
Postemployment Benefit Plan: The Company also continues to fulfill the
provisions of a previously curtailed plan which provides certain medical and
dental benefits to a group of former retirees. The benefits, which are limited
to a fixed amount, are funded to an insurance company as participants' insurance
claims are reimbursed. The benefit cost for this curtailed plan for the years
ended December 31 consisted of the following (in thousands):
1999 1998 1997
----- ------ ------
Interest cost............................ $ 315 $ 359 $ 412
Amortization of transition obligation.... 980 980 980
Amortization of unrecognized net gain.... (627) (591) (563)
----- ----- -----
Net benefit charge....................... $ 668 $ 748 $ 829
===== ===== =====
Page F-20
<PAGE>
Because there are no new participants in this plan, there is no current
service cost. The change in the status of the plan as of December 31 was as
follows (in thousands):
1999 1998
------- -------
Benefit obligation at January 1,.................. $ 4,879 $ 5,508
Service cost................................... -- --
Interest cost.................................. 315 359
Benefits paid.................................. (688) (740)
Actuarial gain................................. (508) (248)
------- -------
Benefit obligation at December 31,................ 3,998 4,879
Unamortized transition obligation.............. (7,507) (8,487)
Unrecognized net gain.......................... 5,801 5,920
------- -------
Net benefit obligation liability at December 31,.. $(2,292) $(2,312)
======= =======
The discount rate for both 1999 and 1998 was 7%. The 1999 health-care cost
trend rate is 5%, effective until 2013 when the cost will be in excess of the
Company's maximum obligation. If the trend rate were increased by 1% for each
year, the benefit obligation as of December 31, 1999 would increase by
approximately $115,000 or 3%. The transition obligation is being amortized over
14.5 years.
14. Earnings Per Share
Basic EPS excludes dilution and is computed on the basis of the weighted-
average number of common shares outstanding for the period. Diluted EPS includes
the weighted-average effect of dilutive securities outstanding during the
period. Summary information of other common stock equivalents not included in
the 1999, 1998 and 1997 per share calculations because of their anti-dilutive
impact is as follows:
<TABLE>
<CAPTION>
Weighted-
---------
Number of Average
--------- -------
Year Ended Other Common Remaining Range of Weighted-Average
---------- ------------ --------- -------- ----------------
December 31, Stock Equivalents Contract Life Exercise Prices Exercise Price
------------ ----------------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
1999.... 2,390,780 2.4 years $1.24 - $4.41 $2.46
1998.... 3,390,290 2.5 years $1.24 - $6.87 $2.96
1997.... 3,475,077 2.1 years $1.90 - $6.90 $3.83
</TABLE>
The amounts in the table are exclusive of common shares that would be issued in
the future based on the outcome of the ICT Spectrum acquisition contingency
discussed in Note 15.
15. Contingencies
Bath Contingency: In March 1998, the Company entered into a $187 million
maximum price contract with Bath Iron Works to construct a ship building
facility. In May 1998, the Company subsequently learned that estimated costs to
perform the contract as reflected in actual proposed subcontracts were
approximately $30 million higher than the cost estimates originally used as the
basis for contract negotiation between the Company and the customer. After
learning this, the Company advised the customer that it was not required to
perform the contract in accordance with its terms as a result of a mutual
mistake among them in negotiating that contract. In October 1998, the customer
presented an initial draft of a claim against the Company requesting payment for
estimated damages and entitlements pursuant to the terminated contract. The
customer has also subsequently asserted a claim based on alleged differing site
conditions that allegedly should have been identified by the Company. In March
2000, Bath filed a combined claim against the Company in U.S. District Court in
the District of Maine requesting payment for $38 million. The Company continues
to object to the Bath's allegations and is vigorously defending its position.
Although no resolution has been reached management has recorded a provision in
the financial statements for the Company's proposed settlement of the non-
insured portion of this claim.
Acquisition Contingency: The Kaiser common shares exchanged for the stock
of ICT Spectrum in the March, 1998 acquisition, carry the guarantee that the
fair market value of each share of stock will reach $5.36 by March 1, 2001. In
the event that the fair market value does not attain the guaranteed level, the
Company is obligated to make up the shortfall either through the payment of cash
or by issuing additional shares of common stock with a total value equal to the
shortfall, depending upon the
Page F-21
<PAGE>
Company's preference. Pursuant to the terms of the Agreement, however, the total
number of contingently issuable shares of common stock cannot exceed an
additional 1.5 million shares.
In December, 1999, the Company and certain former Company employees and
shareholders of ICT Spectrum agreed to amend the applicable agreements in a
manner that had the result of reducing the amount of the taxable gain created by
former shareholder-employees' involuntary departures from the Company. As
permitted by the agreement, the shareholders agreed to allow the Company to
retain some of the vested shares as payment of the income tax withholding in
lieu of cash. In total, the Company retained 255,669 shares and recorded the
transaction as a $1.37 million reduction of goodwill and paid-in-capital.
Given that the quoted fair market value of the Company's common stock at
December 31, 1999 was $0.37 per share, and that the Company's current debt
instruments restrict the amount of cash that can be used for acquisitions, the
assumed issuance of an additional 1.5 million shares (now adjusted downward by
the 255,669 retained shares to 1,244,331 shares) would not completely extinguish
the remaining purchase price contingency. In this event, the Company will need
to fund the contingency in cash and would need to obtain an amendment to current
debt instruments or replace them in order to complete a cash fill-up. Any future
distribution of cash or common stock would be recorded as a charge to the
Company's paid-in-capital.
Until the earlier of the contingent purchase price resolution or March 1,
2001, any additional shares assumed to be issued because of shortfalls in fair
market value will be included in the Company's diluted earnings per share
calculations, unless they are antidilutive. The exchanged shares also contain
restrictions preventing their sale prior to March 1, 2001.
On March 29, 1999, one ex-ICT Spectrum shareholder, individually and on
behalf of all others similarly situated, filed a class action lawsuit alleging
false and misleading statements made in a private offering memorandum, and
otherwise, in connection with the Company's acquisition of ICT Spectrum in 1998.
The Company subsequently filed a motion to dismiss the case. On March 14, 2000,
the court ordered the defendant to address certain claim deficiencies. Upon
receipt of the claim amendments, the court is expected to complete the ruling
relative to the Company's motion.
Litigation, Claims and Assessments: In the course of the Company's normal
business activities, various claims or charges have been asserted and litigation
commenced against the Company arising from or related to properties, injuries to
persons, and breaches of contract, as well as claims related to acquisitions and
dispositions. Claimed amounts may not bear any reasonable relationship to the
merits of the claim or to a final court award. In the opinion of management,
adequate reserves have been provided for final judgments, if any, in excess of
insurance coverage, that might be rendered against the Company in such
litigation. The continued adequacy of reserves is reviewed periodically as
progress on such matters ensues.
The Company may from time to time, either individually or in conjunction
with other government contractors operating in similar types of businesses, be
involved in U.S. government investigations for alleged violations of procurement
or other federal laws and regulations. The Company currently is the subject of a
number of U.S. government investigations and is cooperating with the responsible
government agencies involved. No charges presently are known to have been filed
against the Company by these agencies. The Company has provided for its estimate
of the potential effect of these investigations, and the continued adequacy of
reserves is reviewed periodically as progress on such matters ensues.
Prior to the divestitures of its EFM and Consulting Groups, the Company had
a substantial number of cost-reimbursement contracts by the applicable U.S.
government agency, the costs of which are subject to audit and adjustment by the
U.S. government. As a result of pending audits related to fiscal years 1986
forward, the government has asserted, among other things, that certain costs
claimed as reimbursable under government contracts either were not allowable or
not allocated in accordance with federal procurement regulations. The Company is
actively working with the government to resolve these issues. The Company has
provided for its estimate of the potential effect of issues that have been
quantified, including its estimate of disallowed costs for the periods currently
under audit and for periods not yet audited. Neither the government nor the
Company, however, has quantified many of the issues, and others are qualitative
in nature, and their potential financial impact, if any, is not quantifiable by
the government or the Company at this time. The adequacy of provisions for
reserves is reviewed periodically as progress with
Page F-22
<PAGE>
the government on such matters ensues.
Contract warranties and performance guaranty contingencies: In the course
of the Company's normal business activities, many of its contracts contain
provisions for warranties and performance guarantees. As progress on contracts
ensues, the Company regularly updates the estimates of the costs to perform such
contingencies and reserves a proportionate amount of the total related contract
value until such time as the contingency is resolved.
16. Selected Quarterly Financial Information (Unaudited)
<TABLE>
<CAPTION>
Fourth Third Second First
------ ----- ------ -----
Year Ended December 31, 1999 Quarter Quarter Quarter Quarter
- ---------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Gross revenue......................................................... $170,363 $254,527 $219,880 $225,497
Service revenue....................................................... 96,933 71,085 63,274 64,159
Operating income (loss)............................................... (13,590) 2,773 (10,095) (1,820)
income (loss) from continuing operations before
extraordinary item and cumulative effect of
accounting change................................................ (14,767) (5,873) (18,809) (8,293)
Income (loss) from discontinued operations............................ 178 -- (417) 2,574
Gain (loss) on sale of discontinued operations....................... (6,156) (2,516) 48,755 --
income (loss) before extraordinary item and
cumulative effect of accounting change......................... (23,261) (5,873) 29,529 (5,719)
Net income (loss).................................................... (23,163) (5,873) 28,831 (5,719)
Basic and fully diluted per share amounts for:
Income (loss) from continuing operations before extraordinary
item and cumulative effect of accounting change................. $ (0.73) $ (0.14) $ (0.79) $ (0.34)
Discontinued operations............................................. (0.24) (0.11) 2.03 0.10
-------- -------- -------- --------
Income (loss) before extraordinary item and
Cumulative effect of accounting change.......................... (0.98) (0.25) 1.24 (0.24)
Extraordinary item.................................................. -- -- (.03) --
Cumulative effect of accounting change.............................. -- -- -- --
-------- -------- -------- --------
Net income (loss)................................................... $ (0.97) $ (0.25) $ 1.21 $ (0.24)
======== ======== ======== ========
<CAPTION>
Fourth Third Second First
------ ----- ------ -----
Year Ended December 31, 1998 Quarter Quarter Quarter Quarter
- ---------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Gross revenue........................................................ $244,825 $234,928 $263,129 $256,839
Service revenue...................................................... 56,461 47,176 33,593 74,532
Operating income (loss).............................................. (25,796) (36,326) (39,227) 4,348
(loss) from continuing operations before
extraordinary item and cumulative effect of
accounting change.................................................. (29,989) (41,166) (31,612) (2,050)
Income from discontinued operations.................................. 4,061 2,875 1,944 2,495
income (loss) before extraordinary item and
cumulative effect of accounting change............................. (25,928) (38,291) (29,668) 445
Net income (loss).................................................... (27,018) (38,291) (35,668) 445
Basic and fully diluted per share amounts for:
Income (loss) before discontinue operations,
Extraordinary item and cumulative effect of
accounting change............................................ $ (1.26) $ (1.70) $ (1.31) $ (0.08)
Discontinued operations.......................................... 0.18 0.12 0.08 0.10
-------- -------- -------- --------
Income (loss) before extraordinary item and
Cumulative effect of accounting change........................... (1.08) (1.58) (1.23) 0.02
Extraordinary item............................................. (0.05) -- -- --
Cumulative effect of accounting change......................... -- -- (.25) --
-------- -------- -------- --------
Net income (loss)................................................ $ (1.13) $ (1.58) $ (1.48) $ 0.02
======== ======== ======== ========
</TABLE>
Page F-23
<PAGE>
The Company recognized the following significant 1999 fourth quarter
adjustments:
. Due to the January 24, 2000, award to the Kaiser-Hill subsidiary, of the new
Rocky Flats contract, effective February 1, 2000, certain remaining
performance elements contained in the original contract were shifted into
the new contract and the DOE essentially terminated the original contract.
Since the Company had been recognizing the performance fee of the original
contract using the percentage of completion basis and since performance
elements were shifted out of the original contract, the Company had to
revise its estimate of its earnings under the original contract. The
downward revision, due to the shift in performance elements from the
original contract (terminated as of January 31, 2000) to the new contract,
caused the Company to reverse previously recognized revenue of $5.2
million. This adjustment merely reflects a change in the timing of when
Kaiser-Hill will earn this revenue.
. The Company expensed approximately $4.0 million in professional fees
incurred during 1999 in connection with efforts to restructure its
outstanding Notes and with other efforts associated with the Company's
reorganization. Prior to the fourth quarter, these costs had been
capitalized on the balance sheet pending the completion of the related debt
restructuring and reorganization.
. The Company's Engineering Operations operating performance during the fourth
quarter was down due to the near completion of certain foreign projects
during the third quarter of 1999 without replacement projects of similar
magnitude.
. The Company finalized its accounting for the divestitures of its EFM and
Consulting Groups (Note 4) during the fourth quarter and recorded a
reduction to the gain on the sales of $6.2 million primarily for the income
tax effects of the transactions and for the write-off of additional divested
assets.
17. Guarantor Subsidiaries
Pursuant to SEC rules regarding publicly held debt, the Company is required
to provide financial information for wholly owned subsidiaries of Kaiser Group
International, Inc. (Subsidiary Guarantors) which unconditionally guarantee the
payment of the principal, premium, if any, and interest on the Company's Senior
Subordinated Notes and Series B Senior Notes. The Subsidiary Guarantors are
Cygna Consulting Engineers and Project Management, Inc; Kaiser Government
Programs, Inc; Global Trade & Investment, Inc; Kaiser Europe, Inc;
Kaiser/Georgia Wilson, Inc; Kaiser Overseas Engineering, Inc; EDA Incorporated,
Inc.; Kaiser Engineers Pacific, Inc; and Kaiser Advanced Technology, Inc.
Kaiser Remediation Company, a former Guarantor, was included in the sale of
the EFM Group to IT on April 9, 1999, Systems Applications International, Inc.,
also a former Guarantor, was included in the sale of the Consulting Group on
June 30, 1999 and the majority of the assets of EDA Incorporated, Inc. were sold
in an unrelated transaction on August 13, 1999. The guarantor information has
been updated to reflect these transactions.
Condensed consolidating financial information for Kaiser Group
International, Inc. (Parent Company), the Subsidiary Guarantors, and the Non-
Guarantor Subsidiaries follow on pages F-25-29. The information, except for the
December 31, 1999 condensed consolidating balance sheet, is unaudited.
Investments in subsidiaries have been presented using the equity method of
accounting. The Company does not have a formal tax-sharing arrangement with its
subsidiaries and has allocated taxes to its subsidiaries based on the Company's
overall effective tax rate.
Page F-24
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 1999
(In thousands)
<TABLE>
<CAPTION>
Kaiser Group
Parent Subsidiary Non-Guarantor International, Inc.
Company Guarantors Subsidiaries Eliminations Consolidated
-------------- ------------- --------------- -------------- -----------------
ASSETS
Current Assets
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents..................... $ 11,472 $ 8,008 $ 6,911 $ -- $ 26,391
Restricted cash ............................. 13,816 -- 2,570 -- 16,386
Contract receivables, net ................... (3,698) 106,841 55,176 -- 158,319
Intercompany receivables, net ............... 194,308 17,466 (211,774) -- --
Prepaid expenses and other current assets ... 554 949 3,847 -- 5,350
--------- -------- --------- ------------- ---------
Total Current Assets ........................ 216,452 133,264 (143,270) -- 206,446
--------- -------- --------- ------------- ---------
Fixed Assets
Furniture, equipment, and leasehold
improvements ............................. 3,520 1,115 9,589 -- 14,224
Less depreciation and amortization .......... (3,057) (1,013) (7,333) -- (11,403)
--------- -------- --------- ------------- ---------
463 102 2,256 -- 2,821
--------- -------- --------- ------------- ---------
Other Assets
Goodwill, net ............................... -- 3,029 14,552 -- 17,581
Investment in and advances to affiliates .... (144,683) 1 8,844 145,878 10,040
Notes receivable ............................ 6,550 -- -- -- 6,550
Capitalized software development costs ...... 1,601 -- -- -- 1,601
Other ....................................... 3,403 587 4,534 -- 8,524
--------- -------- --------- ------------- ---------
(133,129) 3,617 27,930 145,878 44,296
--------- -------- --------- ------------- ---------
Total Assets ................................ $ 83,786 $136,983 $(113,084) $145,878 $ 253,563
========= ======== ========= ============= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and other accrued
expenses ................................. $ 21,587 $ 94,542 $ 30,348 $ -- $ 146,477
Accrued salaries and employee benefits ...... (11,788) 17,126 21,911 -- 27,249
Other ....................................... 11,956 (2,382) 6,038 -- 15,612
--------- -------- --------- ------------- ---------
Total Current Liabilities ................... 21,755 109,286 58,297 -- 189,338
Long-term Liabilities
Long-term debt, less current portion ........ 124,217 -- 1 -- 124,218
Other ....................................... 4,781 -- 2,796 -- 7,577
--------- -------- --------- ------------- ---------
Total Liabilities ........................... 150,753 109,286 61,094 -- 321,133
--------- -------- --------- ------------- ---------
Minority interests in subsidiaries .......... -- 2,333 -- -- 2,333
Shareholders' equity
Common stock ................................ 227 6,809 114 (6,913) 237
Additional paid-in capital .................. 73,644 2,372 48,266 (50,639) 73,643
Accumulated earnings (deficit) .............. (140,838) 16,545 (219,818) 203,430 (140,681)
Accumulated other comprehensive (loss) ...... -- (362) (2,740) -- (3,102)
--------- -------- --------- ------------- ---------
Total Shareholders' Equity (Deficit) ........ (66,967) 25,364 (174,178) 145,878 69,903
--------- -------- --------- ------------- ---------
Total Liabilities and Shareholders' Equity
(Deficit) ................................ $ 83,786 $136,983 $(113,084) $ 145,878 $ 253,563
========= ======== ========= ============= =========
</TABLE>
Page F-25
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
(In thousands)
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Parent Subsidiary Non-Guarantor
Year Ended December 31, 1999 Company Guarantors Subsidiaries Eliminations Consolidated
- ------------------------------------------------ --------- ----------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Gross Revenue................................... $ 5,575 $ 670,295 $ 194,397 $ -- $ 870,267
Subcontract and direct material costs ... (5,250) (471,838) (102,208) -- (579,296)
Equity in income of affiliates .......... (74,208) -- 7,476 71,212 4,480
-------- --------- --------- ------- ---------
Service Revenue ............................... (73,883) 198,457 99,665 71,212 295,451
Operating Expenses
Operating expenses ...................... (6,918) 185,358 120,090 -- 298,530
Depreciation and amortization ........... 1,651 828 2,790 -- 5,269
Restructuring charges ................... 8,270 1,599 4,515 -- 14,384
-------- --------- --------- ------- ---------
Operating Income (Loss) ....................... (76,886) 10,672 (27,730) 71,212 (22,732)
Other Income (Expense)
Interest income ......................... 1,328 548 473 -- 2,349
Interest expense ........................ (1,328) (1,639) (18,098) -- (21,065)
-------- --------- --------- ------- ---------
Income (Loss) From Continuing Operations
Before Income Taxes, Minority Interest,
Extraordinary Item ...................... (76,886) 9,581 (45,355) 71,212 (41,448)
Income tax (expense) benefit ............ (13,021) (3,784) 15,695 -- (1,110)
-------- --------- --------- ------- ---------
Income (Loss) From Continuing Operations Before
Minority Interest, and Extraordinary Item...... (89,907) 5,797 (29,660) 71,212 (42,558)
Minority interest in net income of
subsidiaries ........................... -- (5,184) -- -- (5,184)
-------- --------- --------- ------- ---------
Income (Loss)From Continuing Operations
Before Extraordinary Item, and Cumulative
Effect of Accounting Change .............. (89,907) 613 (29,660) 71,212 (47,742)
Income from discontinued operations,
net of tax............................ -- -- 2,335 -- 2,335
Gain on sales of discontinued
operations, net of tax................ 84,583 (2,690) (41,810) -- 40,083
-------- --------- --------- ------- ---------
Income (Loss) Before Extraordinary Item ...... (5,324) (2,077) (69,135) 71,212 (5,324)
Extraordinary item, net of tax ........ (600) -- -- -- (600)
-------- --------- --------- ------- ---------
Net Income (Loss) ............................. $ (5,924) $ (2,077) $ (69,135) $71,212 $ (5,924)
======== ========= ========= ======= =========
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Parent Subsidiary Non-Guarantor
Year Ended December 31, 1999 Company Guarantors Subsidiaries Eliminations Consolidated
- --------------------------------------------------- ---------- ----------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net Cash Provided by (Used in)
Operating Activities ......................... $(65,511) $ 7,513 $(1,457) $ -- $(59,455)
-------- ------- ------- ------------ --------
Investing Activities
Cash proceeds from divestitures ............. 140,100 -- -- -- 140,100
Purchases of fixed assets ................... (1,492) (17) (604) -- (2,113)
-------- ------- ------- ------------ --------
Net Cash Provided by (Used in)
138,608 (17) (604) -- 137,987
Investing Activities ................... -------- ------- ------- ------------ --------
Financing Activities
Borrowings under credit facility ............ 61,855 -- -- -- 61,855
Principal payments on credit facility ....... (92,584) -- -- -- (92,584)
Cash collateral for performance guarantees .. (12,595) -- -- -- (12,595)
Change in book overdraft .................... (8,395) -- -- -- (8,395)
Extinguishment of debt ....................... (12,320) -- (12,320)
Distribution of income to minority interest... -- (3,300) -- -- (3,300)
-------- ------- ------- ------------ --------
Net Cash Provided by (Used in)
Financing Activities ................... (64,039) (3,300) -- -- (67,339)
-------- ------- ------- ------------ --------
Effect of Exchange Rate Changes on Cash ....... -- -- (69) -- (69)
-------- ------- ------- ------------ --------
Increase (Decrease) in Cash and Cash
Equivalents .................................. 9,058 4,196 (2,130) -- 11,124
Cash and Cash Equivalents at Beginning
of Period .................................... 2,414 3,812 9,041 -- 15,267
-------- ------- ------- ------------ --------
Cash and Cash Equivalents at End of Period .... $ 11,472 $ 8,008 $ 6,911 $ -- $ 26,391
======== ======= ======= ============ ========
</TABLE>
Page F-26
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Parent Subsidiary Non-Guarantor
Company Guarantors Subsidiaries Eliminations Consolidated
---------- ----------- -------------- ------------- -------------
ASSETS
Current Assets
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents ....................... $ 2,414 $ 3,812 $ 9,041 $ -- $ 15,267
Restricted cash ................................. 600 -- 2,441 -- 3,041
Contract receivables, net ....................... (5,283) 132,758 156,603 -- 284,078
Intercompany receivables, net ................... 184,700 12,311 (197,011) -- --
Prepaid expenses and other current assets ....... 1,585 422 7,793 -- 9,800
Deferred income taxes ........................... 30,367 3,245 1,061 -- 34,673
--------- -------- --------- ------------ ---------
Total Current Assets ............................ 214,383 152,548 (20,072) -- 346,859
--------- -------- --------- ------------ ---------
Fixed Assets
Furniture, equipment, and leasehold
improvements ................................... 4,589 1,495 37,912 -- 43,996
Less depreciation and amortization .............. (4,040) (1,258) (32,113) -- (37,411)
--------- -------- --------- ------------ ---------
549 237 5,799 -- 6,585
--------- -------- --------- ------------ ---------
Other Assets
Goodwill, net ................................... -- 8,745 40,547 -- 49,292
Investment in and advances to affiliates ........ (64,556) 14 6,494 65,776 7,728
Capitalized software development costs .......... 4,296 766 5,062
Other ........................................... 4,910 523 7,112 -- 12,545
--------- -------- --------- ------------ ---------
(55,350) 9,282 54,919 65,776 74,627
--------- -------- --------- ------------ ---------
Total Assets .................................... $ 159,582 $162,067 $ 40,646 $ 65,776 $ 428,071
========= ======== ========= ============ =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt ............... $ 30,729 $ -- $ -- $ -- $ 30,729
Accounts payable and other accrued expenses ..... 39,759 121,769 71,242 -- 232,770
Accrued salaries and employee benefits .......... 7,818 13,690 16,423 -- 37,931
Other ........................................... 1,910 1,176 39,072 -- 42,158
--------- -------- --------- ------------ ---------
Total Current Liabilities ....................... 80,216 136,635 126,737 -- 343,588
Long-term Liabilities
Long-term debt, less current portion ............ 137,487 -- 1 -- 137,488
Other ........................................... 2,000 26 7,638 -- 9,664
--------- -------- --------- ------------ ---------
Total Liabilities ............................... 219,703 136,661 134,376 -- 490,740
--------- -------- --------- ------------ ---------
Minority interests in subsidiaries .............. -- 449 -- -- 449
Shareholders' Equity
Common stock .................................... 230 8,179 121 (8,288) 242
Additional paid-in capital ...................... 75,200 2,372 58,768 (60,918) 75,422
Accumulated earnings (deficit) .................. (134,913) 14,676 (149,502) 134,982 (134,757)
Accumulated other comprehensive (loss) .......... (638) (270) (3,117) -- (4,025)
--------- -------- --------- ------------ ---------
Total Shareholders' Equity (Deficit) ............ (60,121) 24,957 (93,730) 65,776 (63,118)
--------- -------- --------- ------------ ---------
Total Liabilities and Shareholders' Equity
(Deficit) ...................................... $ 159,582 $162,067 $ 40,646 $ 65,776 $ 428,071
========= ======== ========= ============ =========
</TABLE>
Page F-27
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
(In thousands)
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Parent Subsidiary Non-Guarantor .
Year Ended December 31, 1998 Company Guarantors Subsidiaries Eliminations Consolidated
- ------------------------------------------------- ---------- ----------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Gross Revenue .................................. $ 1,120 $ 731,224 $ 267,377 $ -- $ 999,721
Subcontract and direct material costs .... (527) (562,396) (154,871) -- (717,794)
Provision for contract losses ............ -- -- (76,210) -- (76,210)
Equity in income of affiliates ........... (101,187) -- 6,740 100,492 6,045
--------- --------- --------- -------- ---------
Service Revenue ................................ (100,594) 168,828 43,036 100,492 211,762
Operating Expenses
Operating expenses ....................... (16,750) 152,323 147,823 -- 283,396
Depreciation and amortization ............ 2,513 1,319 4,456 -- 8,288
Restructuring charges .................... 12,289 -- 4,790 -- 17,079
--------- --------- --------- -------- ---------
Operating Income (Loss) ........................ (98,646) 15,186 (114,033) 100,492 (97,001)
Other Income (Expense)
Interest income .......................... 248 516 775 -- 1,539
Interest expense ......................... (280) (1,448) (18,551) -- (20,279)
--------- --------- --------- -------- ---------
Income (Loss) From Continuing Operations Before
Income Taxes, Minority Interest,
Extraordinary Item,
and Cumulative Effect Of Accounting Change (98,678) 14,254 (131,809) 100,492 (115,741)
Income tax (expense) benefit ............. (764) (751) 20,121 -- 18,606
--------- --------- --------- -------- ---------
Income (Loss) From Continuing Operations Before
Minority Interest, Extraordinary Item, and
Cumulative Effect of Accounting Change........ (99,442) 13,503 (111,688) 100,492 (97,135)
Minority interest in net income of -- (7,698) -- -- (7,698)
subsidiaries.............................. --------- --------- --------- -------- ---------
Income (Loss) From Continuing Operations Before
Extraordinary Item, and Cumulative Effect of
Accounting Change ........................... (99,442) 5,805 (111,688) 100,492 (104,833)
Income from discontinued operations,
net of tax............................ -- -- 11,391 -- 11,391
--------- --------- --------- -------- ---------
Income Before Extraordinary Item, and
Cumulative Effect of Accounting Change ...... (99,442) 5,805 (100,297) 100,492 (93,442)
Extraordinary item, net of tax ......... (1,090) -- -- -- (1,090)
Cumulative effect of accounting -- (754) (5,246) -- (6,000)
change, net of tax...................... --------- --------- --------- -------- ---------
Net Income (Loss) .............................. $(100,532) $ 5,051 $(105,543) $100,492 $(100,532)
========= ========= ========= ======== =========
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Parent Subsidiary Non-Guarantor
Year Ended December 31, 1998 Company Guarantors Subsidiaries Eliminations Consolidated
- --------------------------------------------------- ---------- ----------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net Cash Provided by (Used in)
Operating Activities .......................... $ (28,568) $ 3,876 $(4,746) $ -- $ (29,438)
--------- -------- ------- ------------ ---------
Investing Activities
Sales of subsidiaries and assets ............. -- -- 2,400 -- 2,400
Purchases of fixed assets .................... (2,208) -- (2,286) -- (4,494)
Investments in subsidiaries and
affiliates, net of cash acquired ........... 4,094 -- (638) -- 3,456
--------- -------- ------- ------------ ---------
Net Cash Provided by (Used in)
Investing Activities .................... 1,886 -- (524) -- 1,362
--------- -------- ------- ------------ ---------
Financing Activities
Borrowings under credit facility ............. 139,629 -- -- -- 139,629
Principal payments on credit facility ........ (112,860) -- (15) -- (112,875)
Distribution of income to minority .......... -- (10,320) -- -- (10,320)
Change in book overdraft ..................... 8,395 -- -- -- 8,395
Proceeds from issuances of stock ............. 155 -- -- -- 155
Debt issuance costs .......................... (1,380) -- -- -- (1,380)
--------- -------- ------- ------------ ---------
Net Cash Provided by (Used in)
Financing Activities .................... 33,939 (10,320) (15) -- 23,604
--------- -------- ------- ------------ ---------
Effect of Exchange Rate Changes on Cash ........ -- -- (281) -- (281)
--------- -------- ------- ------------ ---------
Increase (Decrease) in Cash and Equivalents .... 7,257 (6,444) (5,566) -- (4,753)
Cash and Equivalents at Beginning of Period .... (4,843) 10,256 14,607 -- 20,020
--------- -------- ------- ------------ ---------
Cash and Cash Equivalents at End of Period ..... $ 2,414 $ 3,812 $ 9,041 $ -- $ 15,267
========= ======== ======= ============ =========
</TABLE>
Page F-28
<PAGE>
KAISER GROUP INTERNATIONAL, INC. AND SUBSIDIARIES
(In thousands)
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Parent Subsidiary Non-Guarantor
Year Ended December 31, 1997 Company Guarantors Subsidiaries Eliminations Consolidated
- ----------------------------------------------------- -------- ----------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Gross Revenue ...................................... $ 727 $ 601,380 $ 324,809 $ -- $ 926,916
Subcontract and direct material costs ............ (608) (427,310) (193,413) -- (621,331)
Provision for contract losses .................... -- -- (6,900) -- (6,900)
Equity in income of affiliates ................... (6,059) -- 2,313 6,047 2,301
------- --------- --------- ------ ---------
Service Revenue .................................... (5,940) 174,070 126,809 6,047 300,986
Operating Expenses
Operating expenses ............................... (3,982) 151,675 141,629 -- 289,322
Depreciation and amortization .................... 2,350 1,066 5,179 -- 8,595
------- --------- --------- ------ ---------
Operating Income (Loss) ............................ (4,308) 21,329 (19,999) 6,047 3,069
Other Income (Expense)
Gain on sale of investment ....................... -- -- 1,018 -- 1,018
Interest income .................................. 570 671 567 (58) 1,750
Interest expense ................................. (570) (749) (17,010) 53 (18,276)
------- --------- --------- ------ ---------
Income (Loss) From Continuing Operations Before
Income Taxes and Minority Interest ............... (4,308) 21,251 (35,424) 6,042 (12,439)
Income tax (expense) benefit .................. (679) (4,258) 14,303 -- 9,366
------- --------- --------- ------ ---------
Income (Loss) From Continuing Operations Before (4,987) 16,993 (21,121) 6,042 (3,073)
Minority Interest..................................
Minority interest in net income of subsidiaries. -- (10,867) -- -- (10,867)
------- --------- --------- ------ ---------
Income (Loss) From Continuing Operations............. (4,987) 6,126 (21,121) 6,042 (13,940)
Net income from discontinued operations, net
of tax ................................... -- -- 8,953 -- 8,953
-------- --------- --------- --------- ---------
Net Income (Loss) ................................. $(4,987) $ 6,126 $ (12,168) $6,042 $ (4,987)
======= ========= ========= ====== =========
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Parent Subsidiary Non-Guarantor
Year Ended December 31, 1997 Company Guarantors Subsidiaries Eliminations Consolidated
- ----------------------------------------------------- ---------- ----------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Cash Provided by (Used in)
Operating Activities .............................. $ 21,088 $ 12,141 $(7,532) $ 494 $ 26,191
Investing Activities
Sales of subsidiaries and assets ................. -- -- 17,028 -- 17,028
Purchases of fixed assets ........................ (1,871) (41) (2,976) -- (4,888)
Investments in subsidiaries and
affiliates, net of cash acquired ............... -- (100) (3,974) -- (4,074)
--------- -------- ------- ------------ ---------
Net Cash Provided by (Used
in) Investing Activities .................... (1,871) (141) 10,078 -- 8,066
--------- -------- ------- ------------ ---------
Financing Activities
Borrowings under credit facility ................. 104,500 -- -- -- 104,500
Principal payments on credit facility ............ (121,000) -- -- -- (121,000)
Distribution of income to minority interest ...... -- (13,950) -- -- (13,950)
Change in book overdraft ......................... (2,667) -- -- -- (2,667)
Proceeds from issuances of stock ................. 213 -- -- -- 213
Repurchases of common stock ...................... (251) -- -- -- (251)
Debt issuance costs .............................. (624) -- -- -- (624)
--------- -------- ------- ------------ ---------
Net Cash Used in Financing Activities ............ (19,829) (13,950) -- -- (33,779)
--------- -------- ------- ------------ ---------
Effect of Exchange Rate Changes on Cash ............ -- -- (708) -- (708)
--------- -------- ------- ------------ ---------
Increase (Decrease) in Cash and Cash Equivalents . (612) (1,950) 1,838 494 (230)
Cash and Cash Equivalents at
Beginning of Period ............................... (4,231) 12,206 12,769 (494) 20,250
--------- -------- ------- ------------ ---------
Cash and Cash Equivalents at End of Period ......... $ (4,843) $ 10,256 $14,607 $ -- $ 20,020
========= ======== ======= ============ =========
</TABLE>
Page F-29
<PAGE>
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
KAISER GROUP INTERNATIONAL, INC AND SUBSIDIARIES
(in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- -------------------------------------- ---------- ------------------------------- ------------- --------------
Additions
-------------------------------
Balance at
-----------
beginning Charged to costs Balance at end
----------- ---------------- --------------
Description of Period and expenses Other Deductions of period
- -------------------------------------- ---------- ------------- ----- ---------- ---------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1999
Deducted from asset account:
Allowance for doubtful accounts $10,850 5,414 (2,508)(3) 6,162(1) $ 9,594
Deducted from asset account and
included in other liabilities:
Provision for future losses
on contracts 29,679 9,225 18,437(4) 35,784(2) 19,953
------- ------- --------- --------- -------
$40,529 $14,639 $ 16,305 $ 41,926 $29,547
======= ======= ========= ========= =======
Year Ended December 31, 1998
Deducted from asset account:
Allowance for doubtful accounts $ 7,142 15,111 1,756(4) 13,159(1) $10,850
Deducted from asset account and
included in other liabilities:
Provision for future losses
on contracts 1,199 76,210 - 47,730(2) 29,679
------- ------- --------- --------- -------
$ 8,341 $91,321 $ 1,756 $ 60,889 $40,529
======= ======= ========= ========= =======
Year Ended December 31, 1997
Deducted from asset account:
Allowance for doubtful accounts $ 9,450 1,195 1,150(4) 4,653(1) $ 7,142
Deducted from asset account and
included in other liabilities:
Provision for future losses
on contracts 1,517 494 - 812 1,199
------- ------- --------- --------- -------
$10,967 $ 1,689 $ 1,150 $ 5,465 $ 8,341
======= ======= ========= ========= =======
</TABLE>
- ---------------
(1) Reflects amounts written off against the allowance and related accounts
receivable accounts and settlement of doubtful accounts.
(2) Reflects amounts charged against the provision for contract losses.
(3) Reflects deductions to reserves related to asset divestitures completed in
1999 (Note 4 to consolidated financial statements).
(4) Reflects reclassified additions to reserves.
Page S-1
<PAGE>
Exhibit 10(b)
ICF KAISER INTERNATIONAL, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(As Amended and Restated as of January 1, 1996)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
HISTORY AND EFFECTIVE DATES................................................. 1
ARTICLE I DEFINITIONS................................................. 1
1.1 "Account..................................................... 1
1.2 "Anniversary Date............................................ 1
1.3 "Beneficiary................................................. 1
1.4 "Board....................................................... 1
1.5 "Code........................................................ 1
1.6 "Committee................................................... 1
1.7 "Company..................................................... 1
1.8 "Company Stock............................................... 2
1.9 "Compensation................................................ 2
1.10 "Early Retirement Date....................................... 2
1.11 "Effective Date.............................................. 2
1.12 "Employee.................................................... 2
1.13 "Employer.................................................... 3
1.14 "ERISA....................................................... 3
1.15 "Family Member............................................... 3
1.16 "Fiduciary................................................... 3
1.17 "Highly Compensated Participant.............................. 4
1.18 "Hour of Service............................................. 4
1.19 "Investment Account.......................................... 4
1.20 "Investment Manager.......................................... 4
1.21 "Key Employee................................................ 4
1.22 "Member of a Controlled Group................................ 4
1.23 "Non-Highly Compensated Participant.......................... 5
1.24 "Non-Key Employee............................................ 5
1.25 "Normal Retirement Date...................................... 5
1.26 "Participant................................................. 5
1.27 "Period of Separation........................................ 5
1.28 "Period of Service........................................... 5
1.29 "Period of Severance......................................... 5
1.30 "Plan........................................................ 5
1.31 "Plan Year................................................... 5
1.32 "Qualified Military Service.................................. 5
1.33 "Qualified Participant....................................... 5
1.34 "Retires under the Plan...................................... 6
1.35 "Section..................................................... 6
1.36 "(S) 415 Compensation........................................ 6
1.37 "Separation from Service..................................... 6
1.38 "Service..................................................... 6
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
1.39 "Trust........................................................... 6
1.40 "Trust Agreement................................................. 6
1.41 "Trustee......................................................... 6
1.42 "Valuation Date.................................................. 6
1.43 "Vested.......................................................... 6
ARTICLE II ELIGIBILITY AND PARTICIPATION.................................... 6
2.1 Plan Frozen...................................................... 7
2.2 Eligibility and Commencement of Participation.................... 7
2.3 Determination of Eligibility..................................... 7
2.4 Continuation of Participation.................................... 7
2.5 Qualified Military Service....................................... 7
ARTICLE III VESTING AND CREDITING OF SERVICE................................ 7
3.1 Employees Prior to March 1, 1983................................. 7
3.2 Employees Prior to May 16, 1986.................................. 8
3.3 Employees After May 15, 1986..................................... 8
3.4 Special Vesting Rules............................................ 8
3.5 Years of Service................................................. 8
3.6 Special ESOP Forfeiture Rule..................................... 8
ARTICLE IV CONTRIBUTIONS AND FORFEITURES.................................... 9
4.1 Employer Contributions........................................... 9
4.2 Payment of Contributions......................................... 9
4.3 Maximum Contribution............................................. 9
4.4 Excess Annual Addition........................................... 10
4.5 Multiple Plan Reduction.......................................... 10
ARTICLE V TOP HEAVY PROVISIONS.............................................. 11
5.1 Top Heavy Plan Requirements...................................... 11
5.2 Key Employee..................................................... 12
5.3 Top Heavy Vesting................................................ 12
5.4 Determination of Top Heavy Status................................ 13
5.5 Top Heavy Plan Year Allocations.................................. 16
ARTICLE V INVESTMENTS....................................................... 17
6.1 Investment in Company Stock...................................... 17
6.2 Borrowing and Installment Purchase............................... 17
6.3 Diversification of Investments by Qualified Participants......... 17
ARTICLE VII ALLOCATION, VALUATION AND MAINTENANCE OF ACCOUNTS............... 18
7.1 Allocations...................................................... 18
7.2 Withdrawals from Loan Suspense Account........................... 18
</TABLE>
<PAGE>
<TABLE>
<S> <C>
7.3 Credits to Accounts............................................... 18
7.4 Valuations........................................................ 18
7.5 Special Acquisition Loan Rules.................................... 19
7.6 Limitation on Electing Shareholder................................ 19
7.7 Participant Statements............................................ 19
ARTICLE VIII FORM, AMOUNT AND DISTRIBUTION OF BENEFITS...................... 20
8.1 Distribution at Required Beginning Date........................... 20
8.2 Determination Of Benefits Upon Death.............................. 20
8.3 Distribution of Benefits on Retirement or Other Separation
from Service...................................................... 21
8.4 Diversification by Distribution................................... 22
8.5 Distribution in Cash or Stock..................................... 22
8.6 Put Option........................................................ 23
8.7 Restrictions of Transfer.......................................... 24
8.8 Dividend Distributions............................................ 25
8.9 Distribution on the Sale of Subsidiary or Assets.................. 25
8.10 Forfeiture of Benefit of Missing Claimant......................... 25
ARTICLE IX ADMINISTRATION AND CLAIMS PROCEDURES............................. 25
9.1 Named Fiduciaries................................................. 25
9.2 Responsibilities Set Forth In Trust Agreement..................... 26
9.3 Advisors.......................................................... 26
9.4 Trustee........................................................... 26
9.5 Administration by Committee....................................... 26
9.6 Expenses of the Plan and Trust.................................... 30
9.7 Shareholder Rights................................................ 30
ARTICLE X ADOPTION, AMENDMENT, MERGER AND TERMINATION....................... 30
10.1 Adoption.......................................................... 30
10.2 Amendment of Plan................................................. 31
10.3 Merger or Consolidation........................................... 31
10.4 Termination....................................................... 31
ARTICLE XI GENERAL PROVISIONS............................................... 31
11.1 Participant's Rights.............................................. 31
11.2 Exclusive Benefit of Employees.................................... 32
11.3 Alienation and Qualified Domestic Relations Order................. 32
11.4 Governing Law..................................................... 33
11.5 Headings.......................................................... 33
11.6 Procedure with Multiple Employers................................. 33
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
11.7 Separation of Employer Contributions.............................. 33
11.8 Revocation of Employer Participation.............................. 33
11.9 Limitation of Liability........................................... 34
11.10 Action by the Employer............................................ 34
11.11 Uniformity and Construction....................................... 34
11.12 Mistakes.......................................................... 34
11.13 Approval by Internal Revenue Service.............................. 34
EXHIBIT A EXCLUDED ENTITIES................................................. 35
</TABLE>
iv
<PAGE>
ICF KAISER INTERNATIONAL, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(As Amended and Restated as of January 1, 1996)
HISTORY AND EFFECTIVE DATES
---------------------------
The ICF Kaiser International, Inc. Employee Stock Ownership Plan (the
"Plan") was adopted, together with Amendment Number One, effective as of March
1, 1987, and was amended and restated as of May 6, 1991. The Plan was further
amended as of March 1, 1991, April 25, 1992, March 1, 1993 and June 24, 1994.
The Plan was most recently amended and restated as of April 24, 1995. This
amendment and restatement is effective as of January 1, 1996.
The Plan was frozen as of March 1, 1994, and there have been no new
Participants in the Plan and no Employer contributions made to the Plan on or
after February 28, 1994.
ARTICLE I
DEFINITIONS
1.1 "Account" shall mean the balance to the credit of a Participant under
the Plan. The balance to the credit of a Participant under this Plan originates
from Employer Contributions, and income (or losses) allocated thereto.
1.2 "Anniversary Date" shall mean the last day of December.
1.3 "Beneficiary" shall mean the person or persons entitled to receive any
benefits under the Plan in the event of a Participant's death.
1.4 "Board" shall mean the Board of Directors of ICF Kaiser International,
Inc., or any committee thereof authorized to act therefor in accordance with
applicable law.
1.5 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations issued thereunder.
1.6 "Committee" shall mean the Employee Stock Ownership Plan Committee
appointed by the Board to administer the Plan and to give instructions to the
Trustee.
1.7 "Company" shall mean ICF Kaiser International, Inc., a Delaware
corporation, and any successors thereto.
<PAGE>
1.8 "Company Stock" shall mean shares of voting common stock or any class
of capital stock convertible into voting common stock which the Company (or a
corporation that is a Member of a Controlled Group with the Company) is
authorized to issue. The Plan shall be primarily invested in Company Stock that
is "qualifying employer securities" for purposes of (S) 409(1) of the Code and
(S) 407(d) of ERISA.
1.9 "Compensation" shall mean the total compensation paid to a Participant
by an Employer for personal services actually rendered in the course of
employment for any Plan Year, including salary, wages, commissions, overtime
compensation, bonuses (including completion bonuses) and overseas incentives.
Amounts contributed by the Company or an Employer to this Plan, the ICF Kaiser
International, Inc. Retirement Plan, or the ICF Kaiser International, Inc.
Section 401(k) Plan and any non-taxable fringe benefits shall not be considered
as Compensation. Compensation generally includes only those items specified in
Treasury Regulations (S) 1.415-2(d)(2) and shall exclude all items listed in
Treasury Regulations (S) 1.415-2(d)(3). Notwithstanding the above, or purposes
of Section 4.1 of the Plan, salary reduction amounts contributed to the
Company's Dependent Care Assistance Plan, the Health Flexible Spending Account
Plan and Pre-tax Contribution Plan, and the ICF Kaiser International, Inc.
Section 401(k) Plan shall be considered Compensation.
For purposes of contributions or benefits on behalf of Participants,
Compensation shall be limited to the dollar amount applicable pursuant to (S)
401(a)(17) of the Code. For purposes of applying the dollar limit on
compensation, a highly compensated Employee's Family Member will be treated as a
single employee with one compensation, and the limit will be allocated among the
members of the family unit in proportion to each member's compensation, to the
extent required under the Code.
Determinations of whether payments made to a Participant are for personal
services actually rendered in the course of employment shall be made by the
Committee, in a uniform and nondiscriminatory manner, in good faith, and in the
exercise of its sole discretion. Payments that may be determined not to be for
personal services actually rendered in the course of employment may include, for
example, but are not limited to, a signing bonus, reimbursement of moving
expenses, a gross-up to offset a personal income tax liability resulting from a
transaction, or a payment treated by the Company as an acquisition cost for
financial reporting purposes.
With respect to nondiscrimination testing, the Board reserves the right to
define Compensation in any manner that satisfies the requirements of (S)
401(a)(4) of the Code.
1.10 "Early Retirement Date" shall occur on or after the Participant's
55th birthday, provided that the Participant has completed 10 years of Service
and has not reached his 65th birthday.
1.11 "Effective Date" shall mean January 1, 1996.
1.12 "Employee" shall mean a person employed by an Employer, who has met
the eligibility requirements specified in Section 2.1, except that such term
shall not include:
2
<PAGE>
(a) a person who is a nonresident alien and who receives no earned
income (within the meaning of (S) 911(d)(2) of the Code) which constitutes
income from sources within the United States (within the meaning of (S)
861(a)(3) of the Code);
(b) an independent contractor;
(c) a self-employed person;
(d) a person included in a unit of employees covered by a collective
bargaining agreement between employee representatives and an Employer in
connection with which retirement benefits were the subject of good faith
bargaining between such employee representative and an Employer, unless
otherwise provided by such collective bargaining agreement;
(e) a leased employee within the meaning of (S) 414(n) of the Code
unless required by (S) 414(n) of the Code to be treated as an employee for
certain plan qualification purposes; and
(f) an individual employed by any entity, or by the division, set
forth on Exhibit A, attached hereto, unless such individual was hired by a then
Member of a Controlled Group prior to December 1, 1986 and was transferred to
the division set forth in Exhibit A.
1.13 "Employer" shall mean the Company or any subsidiary corporation of
the Company, as defined in (S) 424(f) of the Code, which has been designated by
the Company as an Employer participating in the Plan and which has accepted such
designation and has agreed to the terms of the Plan and the Trust Agreement.
1.14 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations issued thereunder.
1.15 "Family Member" shall mean any individual as defined in Section
414(q)(6) of the Code who is a member of the family of a 5% owner or of a highly
compensated employee in the group consisting of the 10 highest compensated
employees, to the extent required under the Code.
1.16 "Fiduciary" shall mean any person who, in accordance with (S)
3(21)(A) of ERISA:
(a) exercises any discretionary authority or discretionary control
respecting management of the Plan or exercises any authority or control
respecting management or disposition of its assets;
(b) renders investment advice for a fee or other compensation, direct
or indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so; or
(c) has any discretionary authority or discretionary responsibility
in the
3
<PAGE>
administration of the Plan, including, but not limited to, the Trustee, the
Employer, the Committee, and the Company, except insofar as it is performing
settlor functions.
1.17 "Highly Compensated Participant" shall mean any Participant who is
Highly Compensated as defined in (S) 414(q) of the Code.
1.18 "Hour of Service" shall mean:
(a) each hour for which an Employee directly or indirectly receives
Compensation or is entitled to Compensation from a Member of the Controlled
Group for the performance of duties during the applicable computation period;
(b) each hour for which an Employee directly or indirectly receives
Compensation or is entitled to Compensation by a Member of the Controlled Group
(irrespective of whether the employment relationship has terminated) for reasons
other than the performance of duties (such as vacation, holidays, sickness, jury
duty, disability, layoff, military duty or paid leave of absence) during the
applicable computation period; and
(c) each hour for which back-pay is awarded or agreed to by a Member
of the Controlled Group without regard to mitigation of damages.
Notwithstanding the above, no more than 501 Hours of Service are required
to be credited to an Employee on account of any single continuous period during
which the Employee performs no duties (whether or not such period occurs in a
single computation period). An hour for which an Employee is directly or
indirectly paid, or is entitled to payment, on account of a period during which
no duties are performed is not required to be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, unemployment compensation or
disability insurance laws. Hours of Service are not required to be credited for
a payment which solely reimburses an Employee for medical or medically related
expenses incurred by the Employee. The provisions of Department of Labor
Regulations (S) 2530.200b-2(b) and (c) are incorporated herein by reference.
1.19 "Investment Account" shall mean any portion of the Trust segregated
in accordance with Section 9.5(d).
1.20 "Investment Manager" shall mean an entity that has the power to
manage, acquire, or dispose of Plan assets, and acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.21 "Key Employee" shall mean those Employees defined in (S) 416(i) of
the Code.
1.22 "Member of a Controlled Group" shall mean any corporation, trade or
business which belongs to a controlled group of corporations (as defined in (S)
414(b) of the Code) with the Company or is under common control (as defined in
(S) 414(c) of the Code) with the Company, or
4
<PAGE>
is a member of an affiliated service group (as defined in (S) 414(m) of the
Code) with the Company.
1.23 "Non-Highly Compensated Participant" shall mean any Participant who
is neither a Highly Compensated Participant nor a Family Member.
1.24 "Non-Key Employee" shall mean any Employee or former Employee who is
not a Key Employee, and the Beneficiary of any Non-Key Employee.
1.25 "Normal Retirement Date" shall mean the Participant's 65th birthday.
1.26 "Participant" shall mean any Employee who satisfied the eligibility
requirements of Section 2.1 prior to February 28, 1994.
1.27 "Period of Separation" shall mean a period of time commencing with
the date an Employee incurs a Separation from Service and ending with the date
such Employee resumes employment with the Employer.
1.28 "Period of Service" shall mean, for purposes of determining an
Employee's initial or continued eligibility to participate in the Plan or the
Vested portion of his Account, the time period commencing with his employment
commencement date and ending on the date a Period of Severance begins. A Period
of Service for these purposes includes any Period of Separation of less than 12
consecutive months.
1.29 "Period of Severance" shall mean a Period of Separation commencing
with the date an Employee incurs a Separation from Service and ending with the
date, if any, on which such Employee resumes employment with the Employer. If an
Employee's absence is attributable to a Maternity or Paternity Leave of Absence,
a Period of Severance will not begin before the second anniversary of the date
the individual is first absent and does not perform an Hour of Service.
1.30 "Plan" shall mean ICF Kaiser International, Inc. Employee Stock
Ownership Plan, as set forth herein, and includes the Trust Agreement by which
the Plan is funded, as they may be amended from time to time. The Plan is
intended to be a qualified stock bonus plan under (S) 401(a) of the Code, and an
employee stock ownership plan under (S) 4975(e)(7) of the Code and (S) 407(d) of
ERISA.
1.31 "Plan Year" shall mean the calendar year, provided that there was a
short Plan Year beginning March 1, 1995 and ending December 31, 1995.
1.32 "Qualified Military Service" shall mean qualified military service as
defined in (S) 4 14(u) of the Code.
1.33 "Qualified Participant" shall mean an individual who has been a
Participant for 10 years and has attained age 55.
5
<PAGE>
1.34 "Retires under the Plan" shall mean that a Participant incurs or has
incurred a Separation from Service on or after his Early Retirement Date or
Normal Retirement Date.
1.35 "Section" shall mean a section of this Plan unless the context
indicates otherwise. References in this Plan to a section of the Code, ERISA or
other statute shall use a "(S)" sign or "(S)(S)" sign to designate more than one
section and shall refer to any renumbering of that section in that statute, or
any successor statute, and shall also refer to the regulations issued under that
section.
1.36 "(S) 415 Compensation" shall mean compensation as defined in (S)
415(c)(3) of the Code.
1.37 "Separation from Service" shall apply to any voluntary or involuntary
termination of employment with an Employer (and for eligibility, distribution,
or vesting purposes only, any Member of a Controlled Group) for any reason.
1.38 "Service" shall mean employment with an Employer, or another
corporation which is a Member of a Controlled Group with the Company and shall
generally include paid layoffs, authorized leave of absence, sickness, and jury
duty.
1.39 "Trust" shall mean the IOF Kaiser International, Inc. Employee Stock
Ownership Trust created by the Trust Agreement entered into between the Company
and the Trustee.
1.40 "Trust Agreement" shall mean the agreement between the Company and
the Trustee establishing the Trust and specifying the powers and duties of the
Trustee, as amended from time to time.
1.41 "Trustee" shall mean Vanguard Fiduciary Trust Company, or such
successor or successors thereto designated by the Company to act as such under
the provisions of the Trust Agreement, who agrees to act as such by executing
the Trust Agreement.
1.42 "Valuation Date" shall mean the most current date with respect to
which the Trustee determines the fair value of the assets comprising the Trust
or any portion thereof, in accordance with the Trustee's procedures. Under
current procedures, Valuation Date shall mean each business day of the Trustee.
1.43 "Vested" shall mean the portion of a Participant's Account that is
nonforfeitable under the applicable provisions of this Plan.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.1 Plan Frozen. Employees who were not Participants on February 28, 1994
-----------
are not entitled to participate in the Plan. Sections 2.2 through 2.7 govern
eligibility and participation
6
<PAGE>
prior to March 1, 1994.
2.2 Eligibility and Commencement of Participation. Prior to March 1, 1994,
---------------------------------------------
an Employee became a Participant under the Plan after he completed 1,000 Hours
of Service. An Employee participated in the Plan as of the date on which he
became an Employee, if he met the 1,000 Hours of Service requirement in the
first Plan Year in which he was employed; if an Employee met the 1,000 Hours of
Service requirement in a subsequent Plan Year, he participated in the Plan as of
the first day of the Plan Year in which the 1,000 Hours of Service requirement
was met.
2.3 Determination of Eligibility. Subject to any contrary final order or
----------------------------
judgment of a court of competent jurisdiction, the decision of the Committee
shall be final and conclusive as to the eligibility of individuals for
participation hereunder.
2.4 Continuation of Participation. A Participant shall retain the status
-----------------------------
as a Participant until he has received distributions that represent the Vested
Account under the Plan.
2.5 Qualified Military Service. Notwithstanding any provision of this Plan
--------------------------
to the contrary, contributions, benefits and service credit with respect to
Qualified Military Service will be provided in accordance with (S) 414(u) of the
Code.
ARTICLE III
VESTING AND CREDITING OF SERVICE
The Vested portion of a Participant's Account will be determined on the
basis of his Vested interest in his Account as of the most recent Valuation Date
in accordance with one of the following schedules:
3.1 Employees Prior to March 1, 1983.
--------------------------------
Participants who were Employees of a then Member of the Controlled
Group prior to March 1, 1983:
Vested
Period of Service Percentage
----------------- ----------
1 20%
2 40%
3 60%
4 80%
5 100%
3.2 Employees Prior to May 16, 1986.
-------------------------------
Participants who were Employees of a then Member of the Controlled
Group after February 28, 1983 but prior to May 16, 1986:
7
<PAGE>
Period of Service Vested Percentage
----------------- -----------------
Less than 2 years 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
3.3 Employees after May 15, 1986.
----------------------------
Participants who become Employees of a Member of the Controlled Group
after May 15, 1986;
Period of Service Vested Percentage
----------------- -----------------
Less than 3 years 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
3.4 Special Vesting Rules. Notwithstanding the above, any Participant who
---------------------
was an Employee on March 1, 1993, is 100% vested in his Account, and any
Employee who becomes a Participant after that date but on or before February 28,
1994, shall be 100% `vested in his Account.
3.5 Years of Service. For purposes of Article III, a Participant shall be
----------------
credited with as many years of Service as his Period of Service contains
Anniversary Dates of the Plan, under the elapsed time method.
3.6 Special ESOP Forfeiture Rule. That portion of a Participant's Account
----------------------------
which is not Vested will become a forfeiture and shall be allocated to remaining
Participants in the manner set forth in Section 7.3. If a portion of a
Participant's Account is forfeited, Company Stock acquired by the Trust through
a financing transaction in which the Trust incurs debt obligations and allocated
under Section 7.1 shall be forfeited only after other assets in the
Participant's Account. If interests in more than one class of employer
securities have been so acquired and allocated to the Participant's Account
pursuant to Section 7.1, the same proportion of each such class shall be
forfeited.
8
<PAGE>
ARTICLE IV
CONTRIBUTIONS AND FORFEITURES
4.1 Employer Contributions. For each Plan Year commencing prior to March
----------------------
1, 1993, each Employer will contribute to the Trust for each Participant who (a)
has not terminated employment on the last day of the Plan Year and who has 1,000
Hours of Service; (b) Retires under the Plan; or (c) dies, an amount equal to 4%
of his Compensation for the Plan Year. For the Plan Year beginning March 1,
1993, each Employer will contribute to the Trust for each Participant who is
employed on the last day of the Plan Year and who has completed 1,000 Hours of
Service during the Plan Year an amount equal to 2% of his Compensation for the
Plan Year. No Company contribution will be for Plan Years beginning on or after
March 1, 1994.
4.2 Payment of Contributions. Employer contributions shall be paid to the
------------------------
Trust not later than the due date for filing the Employer's Federal income tax
return for that year, including extensions of such date. A Participant who
becomes an officer or employee of the United States Government or any
independent agency of the United States, in a position that could involve
regulatory oversight or administrative discretion over Company activities (a
"Qualifying Position"), may request an expedited payment of current
contributions and expedited distribution of his Account. This request should
include information sufficient to enable the Committee to determine that the
Participant is in a Qualifying Position. If the Committee so determines, in the
exercise of its reasonable discretion, Employer contributions shall be paid to
the Trust as soon as practicable after the Participant has terminated employment
with an Employer and filed such request. Employer contributions may be paid to
the Trust in cash or Company Stock, as determined by the Board.
4.3 Maximum Contribution. The "Annual Additions" to the Account of any
--------------------
Participant for any Limitation Year may not exceed the lesser of 25% of his
Compensation or $30,000 (adjusted for cost-of-living increases as provided in
(S) 415(d)(1) of the Code). The Limitation Year shall be the Plan Year. For
purposes of applying the limitations of (S) 415 of the Code, "Annual Additions"
means the sum credited to a Participant's accounts under all defined
contribution plans of the Employer for any "Limitation Year" of (a) Employer
contributions, (b) Employee contributions, (c) forfeitures, (d) amounts
allocated to an individual medical account, as defined in (S) 415(1)(1) of the
Code which is part of a defined benefit plan maintained by the Employer and (e)
amounts derived from contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to post-retirement
medical benefits allocated to the separate account of a Key Employee (as defined
in (S) 419A(d)(3) of the Code) under a welfare benefit plan (as defined in (S)
419(e) of the Code) maintained by the Employer. The limitation year shall be the
Plan Year.
Rollover contributions and transfers from another qualified plan to this
Plan are not included in Annual Additions. In addition, all defined contribution
plans of the Employer, terminated or not, shall be considered as one plan for
purposes of these limitations.
9
<PAGE>
If an Employee is a Participant in more than one defined contribution plan
maintained by the Employer and if the limitation on Annual Additions provided in
this Section would otherwise be exceeded, forfeitures under this Plan shall be
reduced first, then salary deferral contributions and the respective matching
contributions under the ICF Kaiser International, Inc. Section 401(k) Plan shall
be reduced and, then, to the extent necessary, allocations under the ICF Kaiser
International, Inc. Retirement Plan shall be reduced.
For purposes of the application of limits under (S) 415(c) of the Code,
all defined contribution plans of the Employer, including (a) key employee
accounts under a welfare benefit plan described in Code (S) 419(b), accounts
under any terminated plan and (c) any defined benefit plan of the Employer to
which Employee contributions are made, shall be treated as one plan and any
Member of the Controlled Group of which the Employer is a member shall be
treated as the Employer. For purposes of the Plan Year beginning March 1, 1995
and ending December 31, 1995, the limits under (S) 415 shall be pro-rated as
required under the applicable regulations.
4.4 Excess Annual Addition. If, as a result of the allocation of
----------------------
forfeitures, a reasonable error in estimating a Participant's Compensation, a
reasonable error in determining the amount of elective contributions that may be
made with respect to any individual under the limits of (S) 415 of the Code, or
other circumstances to which Treasury Regulations (S) 1.415-6(b)(6) applies, the
Annual Additions under this Plan would cause the maximum Annual Additions to be
exceeded for any Participant, allocations of forfeitures under the Plan shall be
reduced, then elective contributions made to the ICF Kaiser International, Inc.
Section 40 1(k) Plan during the limitation year shall be reduced except that, to
the extent allowable under the Treasury Regulations in effect under (S) 401(k)
of the Code, Employer contributions under this Plan shall be reduced before the
return of elective contributions made prior to December 31 of the applicable
limitation year. Such excess amounts, other than amounts returned to
Participants from the ICF Kaiser International, Inc. Section 401(k) Plan, shall
be retained in a (S) 415 suspense account. Excess amounts held in a (S) 415
suspense account shall be allocated to the affected individuals as part of the
Employer contribution for the next Plan Year, or succeeding Plan Years as
necessary, and to the extent not so allocated, shall be allocated to all
Participants in accordance with Treasury Regulations (S) 1.415-6(b)(6)(ii).
4.5 Multiple Plan Reduction.
-----------------------
(a) Reduction. If an Employee is a Participant in one or more defined
---------
benefit plans and one or more defined contribution plans maintained by the
Employer, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any year may not exceed 1.0. The defined benefit
plan fraction for any year is a fraction the numerator of which is the projected
"annual benefit" of the Participant under the Plan (determined as of the close
of the Plan Year), and the denominator of which is the lesser of: (i) the
product of 1.25 multiplied by the maximum dollar limitation in effect under (S)
415(b)(1)(A) of the Code for such year, or (ii) the product of 1.4 multiplied by
the amount which may be taken into account under (S) 415(b)(1)(B) of the Code
for such year. The defined contribution plan fraction for any year is a
10
<PAGE>
fraction the numerator of which is the sum of the Annual Additions to the
Participant's Account as of the close of the Plan Year and the denominator of
which is the sum of the lesser of the following amounts determined for such year
and each prior year of service with the Employer: (1) the product of 1.25
multiplied by the dollar limitation in effect under (S) 415(c)(1)(A) of the Code
for such year (determined without regard to (S) 415(c)(6) of the Code), or (2)
the product of 1.4 multiplied by the amount which may be taken into account
under (S) 415(c)(1)(B) of the Code for such year.
(b) Top Heavy Plan. Notwithstanding the foregoing, for any Top Heavy
--------------
Plan Year, 1.0 shall be substituted for 1.25 unless the extra minimum allocation
is being made pursuant to Section 5.5(b). However, for any Plan Year in which
this Plan is a Super Top Heavy Plan, 1.0 shall be substituted for 1.25 in any
event.
(c) Section 415 Adjustment. If the sum of the defined benefit plan
----------------------
fraction and the defined contribution plan fraction shall exceed 1.0 in any Year
for any Participant in this Plan, the Employer shall adjust the numerator of the
defined benefit plan fraction so that the sum of both fractions shall not exceed
1.0 in any Plan Year for such Participant.
(d) Special Rule for Forfeitures. The limitation described in Section
----------------------------
4.3 with respect to any Participant shall not apply to forfeitures of Company
Stock acquired through a financing transaction described in Section 6.2 and
shall be doubled for a Plan Year beginning before March 1, 1990 for which no
more than one-third of the Employer Contributions are allocated to Participants
who are:
(i) Officers of an Employer;
(ii) Shareholders who, without regard to Company Stock held by
the Trust, own (after application of (S) 1563(e) of the Code) shares having more
than 10% of the total combined voting power of all classes of voting stock of an
Employer or more than 10%) of the total value of all classes of stock of an
Employer; or
(iii) Participants whose compensation (as defined in (S)
415(c)(3) of the Code) for the Plan Year is more than twice the amount described
in Section 4.3.
ARTICLE V
TOP HEAVY PROVISIONS
5.1 Top Heavy Plan Requirements. For any Top Heavy Plan Year, the Plan
---------------------------
shall provide the following:
(a) special vesting requirements of Code (S) 416(b) pursuant to
Section 5.3 of the Plan;
11
<PAGE>
(b) special minimum allocation requirements of (S) 416(c) of the Code
pursuant to Section 5.5 of the Plan.
5.2 Key Employee. A Key Employee shall mean those Employees, former
------------
Employees, or Beneficiary of an Employee or former Employee who at any time
during the Plan Year or any of the four preceding Plan Years, is:
(a) an officer of the Company (as defined under (S) 416 of the Code)
having annual (S) 415 compensation greater than 50% of the amount in effect
under (S) 415(b)(l)(A) of the Code for any such Plan Year;
(b) one of the 10 Employees owning (or considered as owning within
the meaning of (S) 318 of the Code) the largest interests in all employers
required to be aggregated under Code (S)(S) 414(b), (c) and (m). However, an
Employee will not be considered a top 10 owner for a Plan Year if the Employee
earns less than $30,000 (or such other amount adjusted in accordance with (S)
415(c)(1)(A) of the Code as in effect for the calendar year in which the
determination date falls);
(c) a "5% owner" of the Employer, i.e., any person who owns (or is
----
considered as owning within the meaning of (S) 318 of the Code) more than 5% of
the outstanding stock of the Employer or stock possessing more than 5%) of the
total combined voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than 5% of the capital or
profits interest in the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under (S)(S) 414(b), (c) and (m) of
the Code shall be treated as separate employers; or
(d) a "1%" of the Employer having an annual (S) 415 Compensation from
the Employer of more than $150,000. "1% owner" means any person who owns (or is
considered as owning within the meaning of (S) 318 of the Code) more than 1% of
the outstanding stock of the Employer or stock possessing more than 1% of the
total combined voting power of all stock of the Employer. In determining
percentage ownership hereunder, employers that would otherwise be aggregated
under Code (S)(S) 414(b), (c) and (m) shall be treated as separate employers.
However, (S) 415 Compensation from each employer required to be aggregated under
Code (S)(S) 414(b), (c) and (m) shall be taken into account for purposes of the
maximum limits under (S) 401(a)(17).
5.3 Top Heavy Vesting.
-----------------
(a) Special Vesting Schedule. If at any time during a Plan Year the
------------------------
Plan is Top Heavy, the following vesting schedule shall be applicable to the
minimum allocation for that Plan Year and for all subsequent Plan Years:
12
<PAGE>
Period of Service Vested Percentage
----------------- -----------------
Less than 2 years 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
Notwithstanding the above, a Participant shall become fully Vested in any
top-heavy contributions allocated to his Account if he is an Employee on his
Normal Retirement Date.
(b) Forfeitures. A Participant shall forfeit the portion of his Account
-----------
attributable to top-heavy contributions (and earnings) that are not Vested on
the earlier of
(i) the distribution of the entire Vested portion of a Participant's
Account, including the occurrence of a distribution event before any portion of
a Participant's Account was Vested;
(ii) the date of Separation from Service by a Participant before any
portion of a Participant's Account was Vested; or
(iii) the last day of the Plan Year in which the Participant incurs
five consecutive One-Year Breaks in Service.
5.4 Determination of Top Heavy Status.
---------------------------------
(a) Top Heavy Plan. This Plan shall be a Top Heavy Plan for any Plan
--------------
Year in which, as of the Determination Date, (i) the Present Value of Accrued
Benefits of Key Employees and (ii) the sum of the Aggregate Accounts of Key
Employees under this Plan and all plans of an Aggregation Group, exceeds 60% of
the Present Value of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such Participant's
Present Value of Accrued Benefit and/or Aggregate Account balance shall not be
taken into account for purposes of determining whether this Plan is a Top Heavy
or Super Top Heavy Plan (or whether any Aggregation Group which includes this
Plan is a Top Heavy Group). In addition, if a Participant or Former Participant
has not received any Compensation from any Employer maintaining the Plan (other
than benefits under the Plan) at any time during the 5 year period ending on the
Determination Date, the Aggregate Account and/or Present Value of Accrued
Benefit for such Participant or Former Participant shall not be taken into
account for the purposes of determining whether this Plan is a Top Heavy or
Super Top Heavy Plan.
(b) Super Top Heavy Plan. This Plan shall be a Super Top Heavy Plan
--------------------
for any
13
<PAGE>
Plan Year in which, as of the Determination Date, (i) the Present Value of
Accrued Benefits of Key Employees or (ii) the sum of the Aggregate Accounts of
Key Employees under this Plan and any plan of an Aggregation Group, exceeds 90%
of the Present Value of Accrued Benefits or the Aggregate Accounts of all
Participants under this Plan and any plan of an Aggregation Group.
(c) Aggregate Account. A Participant's Aggregate Account as of the
-----------------
Determination Date is the sum of:
(i) the Participant's Account as of the most recent Valuation
Date occurring within a 12-month period ending on the Determination Date;
(ii) any adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any contributions
actually made after the Valuation Date but before the Determination Date, except
for the first Plan Year when such adjustment shall also reflect the amount of
any contributions made after the Determination Date that are allocated as of a
date in that first Plan Year;
(iii) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four preceding Plan Years.
However, in the case of distributions made after the Valuation Date and prior to
the Determination Date, such distributions are not included as distributions for
top heavy purposes to the extent that such distributions are already included in
the Participant's Aggregate Account balance as of the Valuation Date.
Notwithstanding anything herein to the contrary, all distributions, including
distributions made prior to January 1, 1984, and distributions under a
terminated plan which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted;
(iv) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible employee contributions shall not
be considered to be a part of the Participant's Aggregate Account balance;
(v) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by another employer), if this
Plan provides for rollovers or plan-to-plan transfers, it shall always consider
such rollover or plan-to-plan transfer as a distribution for the purposes of
this Section. If this Plan is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or plan-to-plan transfers
accepted after December 31, 1983 as part of the Participant's Aggregate Account
balance;
(vi) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover or plan-to-
plan transfer, it shall not be counted as a distribution for purposes of this
Section. If this Plan is the plan accepting such rollover or plan-to-plan
transfer, it shall consider such rollover or plan-to-plan transfer as part of
the Participant's Aggregate
14
<PAGE>
Account balance, irrespective of the date on which such rollover or plan-to-plan
transfer is accepted.
(d) Aggregation Group - means either a Required Aggregation Group or
-----------------
a Permissive Aggregation Group as hereinafter determined.
(i) In determining a Required Aggregation Group hereunder, each
plan of the Employer in which a Key Employee is a Participant (in the Plan Year
containing the Determination Date or any of the four preceding Plan Years), and
each other plan of the Employer which enables any plan in which a Key Employee
participates to meet the requirements of (S)(S) 401(a)(4) or 410 of the Code,
will be required to be aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group will be
considered a Top Heavy Plan if the Required Aggregation Group is a Top Heavy
Group. No plan in the Required Aggregation Group will be considered a Top Heavy
Plan if the Required Aggregation Group is not a Top Heavy Group.
(ii) The Employer may also include any other plan not required
to be included in the Required Aggregation Group, provided the resulting group,
taken as a whole, would continue to satisfy the provisions of (S)(S) 401(a)(4)
or 410 of the Code. Such group shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan that is part of
the Required Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(iii) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in order to
determine whether such plans are Top Heavy Plans.
(e) Determination Date - means the last day of the preceding Plan
------------------
Year.
(f) Present Value of Accrued Benefit. In the case of a defined
--------------------------------
benefit plan, a Participant's Present Value of Accrued Benefit shall be as
determined under the provisions of the applicable defined benefit plan.
(g) Top Heavy Group - means an Aggregation Group in which, as of the
---------------
Determination Date, the sum of:
(i) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group, and
(ii) the Aggregate Accounts of Key Employees under all defined
15
<PAGE>
contribution plans included in the group, exceeds sixty percent (60%) of a
similar sum determined for all Participants.
(h) Top Heavy Plan Year - means that, for a particular Plan Year, the
-------------------
Plan is a Top Heavy Plan.
5.5 Top Heavy Plan Year Allocations.
-------------------------------
(a) Minimum Allocation. Notwithstanding the foregoing, for any Top
------------------
Heavy Plan Year, the sum of the Employer's contributions and forfeitures
allocated to the Account of each Non-Key Employee shall be equal to at least 3%
of such Non-Key Employee's Compensation. However, should the sum of the
Employer's contributions and forfeitures allocated to the Account of each Key
Employee for such Top Heavy Plan Year be less than 3% of each Key Employee's
Compensation, the sum of the Employer's contributions and forfeitures allocated
to the Account of each Non-Key Employee shall be equal to the largest percentage
allocated to the Account of each Key Employee. The percentage allocated to the
Account of any Key Employee shall be equal to the ratio of the sum of the
Employer's contribution and forfeitures allocated on behalf of such Key Employee
divided by the Compensation for such Key Employees.
(b) Additional Allocation. If a Key Employee is a Participant in both
---------------------
a defined contribution plan and a defined benefit plan that are both part of a
Top Heavy Group (but neither of such plans is a Super Top Heavy Plan), the
defined contribution and the defined benefit fractions set forth in Article IV
shall remain unchanged, provided the Account of each Non-Key Employee who is a
Participant receives an extra allocation (in addition to the minimum allocation
set forth above) equal to not less than 1% of such Non-Key Employee's
Compensation.
(c) Entitlement to Allocation. For any Top Heavy Plan Year, the
-------------------------
minimum allocations set forth above shall be allocated to the Accounts of all
Non-Key Employees who are Participants and who have not terminated employment by
the Employer on the last day of the Plan Year, including Non-Key Employees who
have failed to complete a Year of Service during the Plan Year.
(d) Multiple Plans. Notwithstanding anything herein to the contrary,
--------------
in any Plan Year in which a Non-Key Employee is a Participant in both this Plan
and another tax-qualified plan of the Company, and both such plans are Top Heavy
Plans, the Employer shall not be required to provide a Non-Key Employee with
both the minimum top-heavy allocations or accruals under both plans.
16
<PAGE>
ARTICLE V
INVESTMENTS
6.1 Investment in Company Stock. Employer contributions in cash and other
---------------------------
cash received by the Trustee shall be invested primarily in Company Stock or may
be applied, as necessary, to pay currently maturing debt obligations (including
interest), if any, incurred by the Trust for the acquisition of Company Stock.
Purchases of Company Stock may be made from shareholders or directly from the
Company. If no Company Stock is available for purchase, the Trustee may invest
Trust assets in savings accounts, certificates of deposit, high-grade short-term
securities, equity stocks, bonds or other investments desirable for the Trust,
or Trust assets may be held in cash. All purchases of Company Stock shall be
made at prices which do not exceed the fair market value of such shares at the
time of purchase.
6.2 Borrowing and Installment Purchase. The Trustee shall be permitted to
----------------------------------
borrow funds or to contract for the purchase of Company Stock which qualifies
under (S) 409(1) of the Code to be paid for in installments, but only subject to
the following provisions:
(a) The loan or deferred payment must be at a reasonable rate of
interest;
(b) Any collateral pledged to the creditor by the Trust shall consist
only of the assets purchased with the borrowed funds and assets used as
collateral on a prior exempt loan repaid with the proceeds of a current exempt
loan. A creditor may also acquire rights to contributions (other than
contributions of employer securities) made to meet the Plan obligations under
the loan and earnings attributable to the collateral and investment of such
contributions;
(c) Under the terms of the loan or of the installment purchase
agreement, the creditor shall have no recourse against the Trust except with
respect to such collateral;
(d) The loan shall be repaid only from amounts contributed by the
Employer to the Trust and from amounts earned on Trust investments;
(e) The Employer agrees to contribute to the Trust amounts sufficient
to enable the Trust to pay each installment of principal and interest on the
loan or installment purchase agreement on or before the date such installment is
due, whether or not a tax benefit results from such contribution; and
(f) At least annually, upon the repayment of any portion of the
balance due on the loan or installment purchase agreement, the assets originally
pledged as collateral for such portion shall be released from encumbrance.
6.3 Diversification of Investments by Qualified Participants.
--------------------------------------------------------
Notwithstanding Section 6.1, a Qualified Participant shall be eligible to
diversify his Account in accordance with (S) 401(a)(28) of the Code among three
or more investment options as authorized by the Committee.
17
<PAGE>
ARTICLE VII
ALLOCATION, VALUATION AND MAINTENANCE OF ACCOUNTS
7.1 Allocations. The contributions to the Trust made by each Employer in
-----------
each Plan Year, whether of Company Stock (including fractional shares) or cash,
shall be allocated, as of each Anniversary Date only to the Accounts of
Participants employed by it who (a) render at least 1,000 Hours of Service in
that Plan Year and who have not terminated employment on the Anniversary Date of
such Plan Year; (b) Retire under the Plan during the Plan Year; or (c) die. Said
Accounts shall also be credited with forfeitures, cash and stock dividends on
Company Stock allocated or related to said Accounts, and with Company Stock
received from splits thereof.
Company Stock that is acquired by the Trust through a financing transaction
in which the Trust incurs debt obligations, whether by loan or installment
purchase and whether or not the stock is pledged as security therefor, shall be
added to and maintained in a suspense account. Company Stock shall be withdrawn
from the suspense account in accordance with Section 7.2 as if the Company Stock
was pledged as security for the debt. Company Stock withdrawn from the suspense
account for each Plan Year will be allocated pursuant to Section 7.3.
7.2 Withdrawals from Loan Suspense Account. For each Plan Year during the
--------------------------------------
term of debt obligations incurred for the acquisition of Company Stock, the
number of shares withdrawn from the loan suspense account must equal the number
of shares in the loan suspense account held immediately before release for the
current Plan Year multiplied by a fraction, the numerator of which is the amount
of principal and interest paid for the year and the denominator of which is the
sum of the numerator plus the principal and interest to be paid for all future
Plan Years. The number of future years constituting the term of the debt
obligations will be determined without consideration of possible extensions or
renewal periods. The interest to be paid in future Plan Years is computed by
using the interest rate applicable as of the end of the Plan Year.
7.3 Credits to Accounts. The allocation for each Participant entitled to
-------------------
an allocation of Employer contributions for a Plan Year shall be made by
multiplying the amount to be allocated by a fraction the numerator of which is
the Compensation of the Participant paid by the contributing Employer for the
Plan Year and the denominator of which is the Compensation of all Participants
entitled to an allocation paid by the contributing Employer for the Plan Year. A
Participant may receive an allocation from more than one Employer, and the
aggregate of all allocations will be credited to the Participant's Account.
Notwithstanding any other provision of the Plan, the Trustee may credit the
contribution for a Plan Year as of the date such contribution is actually
received by the Trustee, subject to any required approval by the Internal
Revenue Service.
7.4 Valuations. The Trust assets shall be valued at their current fair
----------
market value on each Valuation Date. On each such Valuation Date, the earnings
or losses of the Plan since the immediately preceding Valuation Date shall be
allocated to the Account of each Participant in
18
<PAGE>
the ratio that the fair market value of each Participant's Account as of the
immediately preceding Valuation Date, reduced by any distributions from the
Account or after such date, bears to the total fair market value of the Accounts
of all Participants as of the immediately preceding Valuation Date, reduced by
any distributions from such Accounts on or after such date.
7.5 Special Acquisition Loan Rules. Any Employer contributions which are
------------------------------
used by the Trust (not later than the due date, including extensions, for filing
the Company's Federal income tax return) to pay interest on an acquisition loan,
and any financed shares which are allocated as forfeitures, shall not be
included as Annual Additions under Section 4.3; provided, however, that the
provisions of this Section shall be applicable only for a Plan Year in which not
more than one-third of the Employer contributions applied to pay principal
and/or interest on an acquisition loan are allocated to Participants who are
officers of an Employer, shareholders owning more than 10% of Company Stock, as
determined under (S) 415(c)(6) of the Code, or Employees whose Compensation
exceeds an amount equal to twice the dollar amount referred to in Section 4.3;
and the Committee shall reallocate such Employer contributions to the extent
necessary to satisfy this special rule.
7.6 Limitation on Electing Shareholder. To the extent that Company Stock
----------------------------------
is sold to the Trust and nonrecognition of gain is elected (with the consent of
the Company) under (S) 1042 of the Code, no portion of the Company Stock so
purchased (under this Plan) from such shareholder or the executor of a deceased
shareholder by the Trust (or any dividends or other income attributable thereto)
may be allocated during the Nonallocation Period to the Accounts of:
(a) any selling shareholder who elected (S) 1042 treatment as to whom
the Nonallocation Period has not lapsed;
(b) his spouse, brothers or sisters (whether by the whole or half
blood), ancestors or lineal descendants; or
(c) any shareholder owning (as determined under (S) 318(a) of the
Code) more than 25% in value of any class of Company stock.
"Nonallocation Period" means the period beginning on the date of the sale
of the qualified securities and ending on the later of (i) the date which is 10
years after the date of sale, or (ii) the date of the plan allocation
attributable to the final payment of acquisition indebtedness incurred in
connection with such sale.
7.7 Participant Statements. The Company shall provide to each Participant
----------------------
a statement of his Account as of the last day of the calendar quarter showing:
(a) the balance in his Account as of the last day of the preceding
calendar quarter;
(b) the amount of Employer contributions and forfeitures, if any,
allocated to
19
<PAGE>
his Account for the current calendar quarter;
(c) the adjustments to his Account to reflect his share of dividends
and the net income or loss of the Trust for the current calendar quarter; and
(d) the new balance in his Account as of the last day of the current
calendar quarter.
Neither the maintenance of Accounts nor the statement of Account shall
operate to vest in any Participant any right or interest in or to any assets of
the Trust except as the Plan specifically provides.
ARTICLE VIII
FORM, AMOUNT AND DISTRIBUTION OF BENEFITS
8.1 Distribution at Required Beginning Date. A Participant who remains an
---------------------------------------
Employee after he reaches Normal Retirement Age shall continue to participate in
this Plan until the date of his actual retirement, provided that, he shall begin
to receive a distribution of his Account in accordance with the minimum
distribution requirements of section 401(a)(9) of the Code no later than April 1
following the calendar year in which he attains age 70-1/2.
8.2 Determination of Benefits Upon Death.
------------------------------------
(a) General Rule. The Committee shall direct the Trustee to
------------
distribute the Account of a deceased Participant to the Participant's
Beneficiary in accordance with the provisions of Section 8.4, which distribution
shall be made as soon as practicable following the death of the Participant.
(b) Proof of Death. The Committee may require such proper proof of
--------------
death and such evidence of the right of any person to receive payment of the
value of the Account of a deceased Participant or former Participant as the
Committee may deem desirable. The Committee's determination of death and of the
right of any person to receive payment shall be conclusive.
(c) Designation of Beneficiary. The Participant's Beneficiary shall
--------------------------
be the Participant's spouse; however, the Participant may designate a
Beneficiary other than his spouse if:
(i) the spouse has waived her right to be the Beneficiary, or
(ii) the Participant has no spouse, or
(iii) the spouse cannot be located.
20
<PAGE>
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Committee. Any consent by the Participant's spouse to waive
any rights to the death benefit must be in writing, must acknowledge the effect
of such waiver, and must be witnessed by a plan representative or a notary
public, provided that any such waiver dated on or after January 1, 1993 must be
witnessed by a notary public. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by filing written notice
of such revocation or change with the Committee. However, the Participant's
spouse must again consent in writing to any such change or revocation. In the
event no valid designation of Beneficiary exists at the time of the
Participant's death, the death benefit shall be payable to the following in the
following priority:
(i) spouse;
(ii) children and, if any child has predeceased the Participant,
that child's children;
(iii) siblings and children of any predeceased siblings;
(iv) parents, or the survivor;
(v) grandparents, or the survivor;
(vi) estate.
8.3 Distribution of Benefits on Retirement or Other Separation from
--------------- -----------------------------------------------
Service.
-------
(a) General Rule. If a Participant Retires under the Plan, dies, or
------------
Separates from Service for any other reason, the entire vested balance of his
Account shall be distributed as provided in this Section 8.4 or Section 8.6. The
Vested portion of a Participant's Account shall be computed as soon as
practicable after receipt of authorized distribution instructions, as of the
applicable Valuation Date under the Trustee's procedures, as they may be amended
from time to time. Notwithstanding the above, a terminated Participant's Vested
benefit may not be paid without the written consent of the Participant and his
spouse, if any, if the resent value of his accrued benefit exceeds, or at any
time exceeded, $3,500. If a participant requests an expedited contribution and
distribution, and is determined by the Committee to be in a Qualifying Position,
as defined in Section 4.2 of this Plan, the Vested portion of his Account shall
be distributed as soon as practicable after the Participant has terminated
employment with an Employer.
(b) Crediting of Earnings and Losses. If any part of the Vested
--------------------------------
portion of a Participant's Account is retained in the Trust after his Service
or participation ends, his Account will continue to be treated as provided in
Article VII. However, such Account will not be credited with any additional
Employer contributions or forfeitures.
(c) Installment Distributions. The Participant may elect that the
-------------------------
Vested portion of his Account be distributed to him in substantially equal
periodic payments (not less
21
<PAGE>
frequently than annually) over a period not longer than five years, plus one
additional year, up to a total of five additional years, for each $100,000 or
fraction thereof by which the Vested portion of the Participant's Account
exceeds $500,000, or such greater amount as may be established pursuant to (S)
409(o)(2) of the Code.
(d) Latest Distribution Date. Unless the Participant otherwise
------------------------
elects, the payment of benefits under the Plan to the Participant will begin no
later than the 60th day after the latest of the close of the Plan Year in which
occurs --
(i) the Participant's Normal Retirement Date;
(ii) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(iii) the date the Participant terminates his Service with the
Employer.
8.4 Diversification by Distribution. An individual may elect, within 90
-------------------------------
days after the close of the first Plan Year in which he becomes a Qualified
Participant and within 90 days of the close of each of the five succeeding Plan
Years, to diversify his Account in accordance with Section 6.3 or alternatively
to have up to 25% of the total number of shares of Company Stock that have been
allocated to the Qualified Participant's Account on or before the most recent
Anniversary Date, inclusive of shares which were subject to prior election
pursuant to Section 6.3 and this Section, reduced by any shares which were the
subject of a prior election pursuant to Section 6.3 and this Section,
distributed to him in the form of a single payment, except that in the last year
"50%" shall be substituted for "25%" herein. Such a Qualified Participant may
also elect, within 90 days after the close of the Plan Year within which the
last such election is offered, to have 50% of the total number of shares
acquired or contributed to the Plan that have been allocated to the Qualified
Participant's Account on or before the most recent Anniversary Date, inclusive
of shares which were subject to a prior election pursuant to Section 6.3 and
this Section, reduced by any shares which were the subject of a prior election
pursuant to Section 6.3 and this Section, distributed to him in the form of a
single payment. Distributions under this Section will be made within 90 days
after such election is made. However, to the extent the Participant is
considered an insider for purposes of section 16(a) of the Securities Exchange
Act of 1934, then the first shares distributed under this Section shall be the
first shares allocated to such Participant's Account which remain in the Account
after the application of Section 6.3 and the application of this Section 8.5 in
previous Plan Years.
8.5 Distribution in Cash or Stock.
-----------------------------
(a) Right to Request Stock. Distribution of the Vested portion of a
----------------------
Participant's Account will be made in whole shares of Company Stock (with the
value of any fractional share paid in cash), cash, or a combination of both, at
the election of the Participant.
(b) Restrictions on Stock Distributions. If the Company's charter or
-----------------------------------
bylaws restrict ownership of substantially all shares of Company Stock to
Employees and the Trust, as
22
<PAGE>
described in (S) 409(h)(2) of the Code, the distribution of the Vested portion
of a Participant's Account may be made entirely in cash without granting the
Participant the right to demand distribution in shares of Company Stock.
(c) Eligible Rollover Distribution. A Participant or "distributee"
------------------------------
may elect at any time to have any portion of an "eligible rollover distribution"
paid in a direct rollover to the trustee or custodian of an "eligible
retirement plan" specified by the Participant or distributee, whichever is
applicable. For purposes of this Section 8.4 the following terms shall have the
following meanings:
(i) "Distributee" means a surviving spouse or a spouse or
former spouse who is an alternate payee under a "qualified domestic relations
order."
(ii) "Eligible retirement plan" means an individual retirement
account described in (S) 408(a) of the Code, an individual retirement annuity
described in (S) 408(b) of the Code, an annuity plan described in (S) 403(a) of
the Code, or a qualified trust described in (S) 401(a) of the Code that accepts
an eligible rollover distribution;
(iii) "Eligible rollover distribution" means any distribution of
all or a portion of the Participant's Account, but does not include a
distribution in installments over a period of ten years or more, or to the
extent it is required under (S) 401(a)(9) of the Code.
8.6 Put Option. To the extent required by law, the Employer will offer to
----------
repurchase any Company Stock distributed to a Participant (or Beneficiary) if at
the time of distribution such Company Stock is not publicly traded or is subject
to a restriction under any Federal or state securities law, or regulation
thereunder, or an agreement which would make such Company Stock not subject to
such restriction. The duration of the offer to repurchase will be 60 days
beginning on the date the Company Stock is distributed. The 60 day period of the
offer to repurchase shall not include any time during which the Participant (or
Beneficiary) is unable to accept the offer to repurchase because the Employer is
prohibited from repurchasing Company Stock by applicable Federal or state law.
After the end of the Employer's fiscal year in which the initial offer to
repurchase lapses, the Employer shall notify each distributee who did not accept
the offer to repurchase of the value of the Company Stock (determined as of the
end of the Employer's fiscal year in accordance with Section 7.4). Each such
distributee will then have sixty (60) days to require the Employer to repurchase
his shares of Company Stock.
If Company Stock that was acquired with the proceeds of an exempt loan,
within the meaning of (S) 4975(d)(3) of the Code, is distributed to a
Participant (or Beneficiary) and at the time of such distribution such Company
Stock is not publicly traded or is subject to a trading limitation when
distributed, then such Participant or his donee, estate, or testamentary
distributee shall have an option to require the Employer to repurchase such
stock. This option shall be exercisable during a 15-month period beginning on
the date Company Stock subject to this option is distributed. If any Company
Stock is distributed which is subject to both the 60-day
23
<PAGE>
option periods and the 15-month option period provided in this Section, such
option periods may run concurrently and under no circumstances shall such
periods be consecutive.
The offer to repurchase may be accepted by written notification to the
Employer. The price at which the repurchase will be made is the fair market
value of the Company Stock established pursuant to Section 7.4. Payment of the
purchase price under the offer to repurchase may be made in no more than 5 equal
annual installments after the offer to repurchase is exercised, if adequate
security and a reasonable interest rate is provided for any deferred payments.
If Company Stock is publicly traded without restrictions at the time it is
distributed from the Trust but ceases to be traded within the repurchase periods
previously described, the Employer will offer to repurchase such shares for the
remainder of the 15 month repurchase period with respect to such Company Stock
on the foregoing terms. The Employer will notify each Participant (and
Beneficiary) who has received a distribution of Company Stock during such
repurchase period in writing on or before the tenth day after the Company Stock
ceases to be publicly traded without restrictions that the Company Stock will be
subject to an offer to repurchase. If notice is actually given more than 10 days
after Company Stock ceases to be publicly traded, the number of days between the
such tenth day and the date notice was actually given will be added to the
duration of the offer to repurchase. The protections and rights contained in
this Section 8.6 are nonterminable.
8.7 Restrictions of Transfer.
------------------------
(a) Right of Refusal. Shares of Company Stock distributed by the
----------------
Trustee shall be subject to a "right of first refusal." Any agreement to the
contrary notwithstanding, such right shall be exercisable with respect to any
Company Stock acquired with the proceeds of an exempt loan, within the meaning
of (S) 4975(d)(3) of the Code, only when such Company Stock is not publicly
traded. The right of first refusal shall provide that, prior to any subsequent
transfer, such Company Stock must first be offered in writing to the Company,
and then to the Trust, for purchase at the then fair market value. Any agreement
to the contrary notwithstanding, the selling price and other terms shall not be
less favorable to the seller than the greater of the value of the security
determined under Section 7.4 of the Plan or the purchase price and other terms
offered by a buyer (other than the Employer or the Plan) making a good faith
offer to purchase the stock.
Any agreement to the contrary notwithstanding, the right of first
refusal shall lapse 14 days after the stockholder first gives written notice to
the Company that an offer to purchase the stock has been received from a third
party. A Participant (or Beneficiary) entitled to a distribution of Company
Stock may be required to execute an appropriate stock transfer agreement
evidencing the right of first refusal prior to receiving a certificate for
Company Stock.
(b) Other Restrictions on Transfer. Shares of Company Stock held or
------------------------------
distributed by the Trustee may include such legend restrictions on
transferability as the Company may reasonably require in order to assure
compliance with applicable Federal and state securities laws. Except as
otherwise provided in Section 8.6(b), 8.7 and 8.8, no shares of Company Stock
held or distributed by the Trustee may be subject to a put, call or other
option, or buy-sell or
24
<PAGE>
similar arrangement. The provisions of this Section shall continue to be
applicable to shares of Company Stock even if the Plan ceases to be an employee
stock ownership plan under (S) 4975(e)(7) of the Code.
8.8 Dividend Distributions. If so determined by the Board, any cash
----------------------
dividends on Company Stock allocated to the Accounts of Participants may be paid
currently (or within 90 days after the end of the Plan Year in which the
dividends are paid to the Trust) in cash to such Participants on a
nondiscriminatory basis, or the Company may pay such dividends directly to
Participants. Such distribution (if any) of cash dividends to Participants may
be limited to Participants who are still Employees, may be limited to dividends
on shares of Company Stock which are then Vested or may be applicable to
dividends on all shares allocated to Participants' Accounts.
8.9 Distribution on the Sale of Subsidiary or Assets. The Vested balance
------------------------------------------------
to the credit of a Participant shall be distributed on or before the end of the
Plan Year next following the effective date of (a) the disposition of the stock
of a subsidiary corporation that was 80% owned directly or indirectly by the
Company, whether by liquidation, sale, or other means of terminating the parent-
subsidiary relationship or (b) the transfer to an acquiring corporation of
substantially all the assets used by the previous employer of the Participant in
a trade or business conducted by the employer. In no event shall a distribution
be made under this Section later than the end of the second calendar year after
the calendar year in which occurs the liquidation, sale, or other disposition of
stock or assets.
8.10 Forfeiture of Benefit of Missing Claimant. If the Account of a
------------------------ ----------------
Participant becomes payable and the Company is unable to locate such Participant
or the Participant's Beneficiary, then the Participant's Account shall be
treated as a forfeiture as of the last day of the Plan Year in which the Company
determines that the Participant or Beneficiary can not be located; provided,
however, that such Account shall be reinstated if the Participant or Beneficiary
makes a claim before the expiration of five years of the date of the forfeiture.
Forfeitures shall be allocated to remaining Participants in the manner set forth
in Section 7.3.
ARTICLE IX
ADMINISTRATION AND CLAIMS PROCEDURES
9.1 Named Fiduciaries. The named fiduciaries (as defined in (S) 402 of
-----------------
ERISA) of the Plan shall be:
(a) the Board, which shall have the right to appoint and remove the
Trustee; amend the Trust Agreement; appoint and remove the members of the
Committee; fix the compensation of any member of the Committee who is not an
employee or director of the Company; and amend or terminate the Plan;
(b) the Trustee, which shall have the authority and duties specified
in the
25
<PAGE>
Trust Agreement; and
(c) the Committee, which shall be the administrator (as defined in
(S) 414(g) of the Code), shall have the duties and powers specified in Section
9.5, and shall be the only named fiduciary with respect to the exercise of
shareholder rights under Section 9.7.
9.2 Responsibilities Set Forth In Trust Agreement. The responsibilities of
---------------------------------------------
the Board, the Trustee and the Committee for the operation and administration of
the Plan are allocated among them by the several provisions of the Plan and
Trust Agreement in which their respective duties are specified. Each Fiduciary
shall have only the duties and powers specifically given to it under the Plan
and Trust Agreement, shall be responsible for the proper exercise of its own
duties and powers and, except as provided by law, shall not be responsible for
any act or failure to act of any other Fiduciary.
9.3 Advisors. Any Fiduciary with respect to the Plan may:
--------
(a) employ one or more persons to render advice with regard to or
carry out any responsibility that such Fiduciary has under the Plan; and
(b) rely upon any direction from, information provided by or action
of any other Fiduciary, acting within the scope of its responsibilities under
the Plan, as being proper under the Plan.
9.4 Trustee. A Trustee shall be designated by the Board, and a Trust
-------
Agreement shall be executed between the Company and such Trustee under the terms
of which a fund shall be established to receive, hold and invest all
contributions made by the Company and/or Employers and to pay the benefits
provided by the Plan. The Trustee shall have the authority, responsibility and
discretion to manage, control and invest the assets of the Plan, including the
voting of any Company stock held in the Trust, subject to the requirements of
Section 9.7. The Trust Agreement may be amended from time to time by action of
the Board and the Trustee. Subject only to the provisions of the Trust
Agreement, the Board may remove the Trustee at any time. Upon the removal or
resignation of a Trustee, the Board shall designate a successor Trustee.
9.5 Administration by Committee.
---------------------------
(a) Committee. The Plan shall be administered by a Committee
---------
consisting of three or more members, each member to be appointed by resolution
of the Board to serve until his resignation or removal by the Board. The Board
shall appoint one of the members of the Committee as Chairman. The Committee
shall appoint a Secretary who may be, but need not be, a member of the
Committee.
(b) Authority of Committee. The Committee shall have the authority to
----------------------
make any and all necessary rules and regulations, consistent with the Plan, as
it considers necessary or desirable for the conduct of its affairs. Such rules
and regulations shall be binding upon all participating Employers and all
Participants. The Committee may retain advisors and consultants
26
<PAGE>
(including, without limitation, legal counsel and financial advisors) who are
independent of the Company, the Board and the Trustee to the extent the
Committee determines such independent advice to be necessary or appropriate.
(c) Quorum and Voting Requirements. Any determination of the
------------------------------
Committee may be made by a majority of those present at any duly convened
meeting of the Committee at which at least a majority of the members are
present, or without a meeting by a writing signed by a majority of the members
of the Committee. The Committee may authorize one or more of its members, its
Secretary or any other person to execute and deliver any instruction, notice,
document or other instrument to the Board, to the Trustee, to the Company, to
any governmental agency, or to any Employee, Participant, or Beneficiary, and
all of the aforesaid shall be entitled to rely thereon, and such member may take
any action necessary to implement the administrative policies of the Committee.
(d) Division of Trust Into Investment Accounts. The Committee may, in
------------------------------------------
its discretion, determine that, for purposes of investment, all or part of the
Trust may be designated as one or more "Investment Accounts." In such event, the
Committee shall, with respect to each such Investment Account:
(i) designate an Investment Manager to manage, control and
invest the assets of such Investment Account;
(ii) direct that the Trustee retain as Trustee the authority to
manage, control and invest such Investment Account. The Trustee and any
Investment Manager shall have the responsibilities with respect to the assets of
the Investment Accounts as provided in the Trust Agreement; or
(iii) designate that such Investment Account shall be subject to
Participant direction by a Qualified Participant.
The Committee may also direct the Trustee, in the exercise of its sole
discretion, to choose an Investment Manager for any Investment Account.
(e) Allocation of Assets. The Committee shall direct the manner of
--------------------
allocation of assets among Investment Accounts, subject where applicable to the
proper direction of a Qualified Participant with respect to his Account, and may
direct the transfer of assets between Investment Accounts on reasonable prior
notice to the Trustee and any affected Investment Manager or insurance company.
At all times the assets of each Investment Account shall be subject to the
management of a duly qualified Investment Manager, the Trustee, or a Qualified
Participant.
(f) Authority and Responsibility of Committee. The Committee shall
-----------------------------------------
have the responsibility and authority to administer the Plan (except for the
management, control and investment of the Trust allocated to an Investment
Manager or the Trustee) in accordance with the terms of the Plan and Trust
Agreement including, but not by way of limitation, the
27
<PAGE>
responsibility and authority to:
(i) interpret and construe the terms of the Plan;
(ii) establish rules for the administration of the Plan;
(iii) determine all questions of eligibility under the Plan and
of the status, benefits and other rights under the Plan of Participants, former
or retired Participants, Beneficiaries and others;
(iv) maintain all records and data as necessary for the
administration of the Plan and for the determination of the benefits provided
under the Plan;
(v) compute and certify to the Trustee the amounts payable
under the Plan to any Participant, former or retired Participant or Beneficiary;
(vi) receive and review the periodic valuations of the Plan;
(vii) receive and review the reports of disbursements from the
Trust made by the Trustee;
(viii) receive and review the periodic audits of the Plan made
by a certified public accountant;
(ix) prepare and file, or cause to be prepared and filed, all
reports required to be filed by the Plan with any governmental agency;
(x) comply with all requirements imposed by law concerning
disclosure to Participants and others with respect to the Plan; and
(xi) maintain a record of all its proceedings.
(g) Binding Effect of Committee Determinations. In all cases the
------------------------------------------
determination of the Committee shall be final, conclusive and binding on all
persons. In making its determinations the Committee shall pursue uniform
policies and shall not discriminate in favor of or against any Employee or group
of Employees. It is recognized that unusual circumstances may occur and
questions may arise which are not specifically covered by any provision of this
Plan. The Committee shall have the sole and exclusive right and duty to resolve
such questions, bearing always in mind that the purpose of the Plan is to
benefit the Participants.
(h) Reliance on Records. The Committee shall have the right to rely
-------------------
on the records of the Company as to earnings, service, employment, termination
of employment, reemployment, authorized absences, age and marital status of any
Employee, and the like.
28
<PAGE>
(i) Legal Counsel. The Committee may consult with legal counsel (who
-------------
may also be counsel for the Company), public accountants, the Trustee and any
other experts, and the Committee shall be fully protected in any action or
decision of this Plan taken or made in good faith by it in accordance with the
advice of such an expert. The Committee, however, shall have no duty or
obligation to obtain or follow any such opinion.
(j) Delegation. The Committee may delegate to any agent such duties
----------
and powers as it deems appropriate, except that any matter of dispute or
interpretation of the Plan shall be determined by the Committee.
(k) Procedure Upon Denial of Claims.
-------------------------------
(i) If a written claim to the Committee for a benefit under the
Plan is wholly or partially denied, the Committee shall, within 60 days after
receipt of the claim, furnish to the claimant a written notice setting forth the
specific reason or reasons for the denial; reference to the pertinent Plan
provisions; a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and an explanation of the claim review procedure
provided in paragraph (ii).
(ii) By a written application filed with the Committee within 60
days after receipt by a claimant of the written notice described in paragraph
(i), the claimant or his duly authorized representative may request a review of
the denial of his claim. A claim which has been neither granted nor denied by
the Committee within 60 days after its receipt shall be deemed to have been
denied for this purpose. In connection with such review, the claimant or his
duly authorized representative may review all pertinent documents and may submit
issues and comments to the Committee in writing. The Committee shall render a
decision in writing within 60 days after the receipt by the Committee of the
request for review, which period may be extended to 120 days if special
circumstances, such as the need to hold a hearing, so require. The decision
shall include specific reasons for the decision and references to the pertinent
Plan provisions.
(l) Compensation. Members of the Committee (and the Secretary) who
------------
are also employees or directors of the Company shall serve without compensation
for their services. Members of the Committee who are not employees or directors
of the Company may be compensated for their services. Any such compensation paid
to Committee members shall be fixed by the Board. The compensation of all
agents, counsel or other persons retained or employed by the Committee may be
fixed by the Committee. All compensation authorized by this Section and any
other expenses properly incurred by the Committee shall be reimbursed or paid by
the Company if the Company so elects; any other compensation or expenses shall
be paid out of the Trust.
(m) Indemnification. To the extent required under (S) 412 of ERISA,
---------------
the Company shall secure fidelity bonding for the fiduciaries of the Plan.
29
<PAGE>
The Company shall obtain a policy or policies of insurance for the
Committee (and other fiduciaries of the Plan) to cover liability or loss
occurring by reason of the act or omission of a fiduciary. If such insurance is
purchased with Trust assets, the policy must permit recourse by the insurer
against the fiduciary in the case of a breach of a fiduciary obligation by such
fiduciary. To the extent permitted by applicable law, applicable Certificates of
Incorporation, and the applicable By-laws, the Company shall indemnify each
member of the Committee, the Secretary of the Committee, and any agent of the
Committee who is an employee or director of the Company (to the extent permitted
by law) against any personal liability or expense resulting from his service on
or for the Committee, except such liability or expense as may result from his
own willful misconduct.
9.6 Expenses of the Plan and Trust. If the Company so elects, the Company
------------------------------
shall pay some or all costs of administering the Plan and Trust, including
Trustee's fees, other than normal brokerage charges which are included in the
cost of securities purchased or charged to proceeds in the case of sales. If the
Company fails to pay any such expenses, said expenses shall be charged to, and
paid from, the Trust. The expenses paid from the Trust shall be allocated
ratably to the Accounts of Participants.
9.7 Shareholder Rights.
------------------
(a) Voting Rights. A Participant (or Beneficiary) shall have the
-------------
right to direct the Trustee to take or refrain from taking any shareholder
action, including but not limited to, voting and the acceptance or rejection of
a tender offer, with respect to the shares of Company Stock allocated to the
Participant's Account. In the absence of receipt of written direction from the
Participant within three business days prior to the exercise of such shareholder
rights, the Committee, in its sole discretion, shall direct the Trustee how to
exercise such shareholder rights and the Trustee shall exercise such shareholder
rights in accordance with the directions of the Committee. The Committee shall
notify the Participants in writing of each occasion for the exercise of voting
rights as soon as practicable, and generally not less than 30 days, before such
rights are to be exercised. Such notification shall include all the information
that the Company distributes to shareholders regarding the exercise of such
rights.
(b) Fractional Shares. If practicable, the Trustee shall vote the
-----------------
combined fractional shares (or fractional rights to shares) allocated to all
Participants' Accounts to reflect, to the extent possible, the direction of the
Participants holding fractional shares (or fractional rights to shares).
ARTICLE X
ADOPTION, AMENDMENT, MERGER AND TERMINATION
10.1 Adoption. Notwithstanding anything herein to the contrary, with the
--------
consent of the Company and the Committee, any other corporation or entity,
whether an affiliate or subsidiary or not, may adopt this Plan by evidencing
said intent and will of such Employer. The Board may designate which affiliates
or subsidiaries will participate in the Plan, and may revoke
30
<PAGE>
such designation.
10.2 Amendment of Plan. The Board reserves the right to amend the Plan.
-----------------
Written notice of any amendment shall be given by the Company to the Committee
and the Trustee and, if required, to the Participants. No amendment, however,
shall reduce retroactively the rights of any Participant or of any Beneficiary
or permit any part of the Trust assets to be diverted or used for any purpose
other than for the exclusive benefit of the Participants and their Beneficiaries
or expand or increase the duties of the Trustee without his consent. For the
purposes of this Section, a Plan amendment which has the effect of eliminating
or reducing an early retirement benefit or eliminating an optional form of
benefit shall be treated as reducing the amount credited to the Account of a
Participant (as provided in Treasury Regulations).
10.3 Merger or Consolidation. This Plan and Trust may be merged or
-----------------------
consolidated with, or its assets and/or liabilities may be transferred to any
other Plan and Trust only if the benefits which would be received by a
Participant of this Plan, in the event of a termination of the Plan immediately
after such transfer, merger or consolidation, are at least equal to the benefits
the Participant would have received if the Plan had terminated immediately
before the transfer, merger or consolidation. The Company reserves the right to
accept or deny any transfer, merger or consolidation and shall direct the
Committee and the Trustee with respect to such decision. Upon appropriate
authorization by the Company or Committee, the Trustee may accept a direct
transfer of assets from a qualified plan or may make a direct transfer of assets
to a qualified plan.
10.4 Termination. The Company shall have the right at any time to
-----------
terminate the Plan by delivering to the Trustee and Committee written notice of
such termination. Upon any termination (full or partial) or complete
discontinuance of contributions, all amounts credited to the affected
Participants' Accounts shall be 100% Vested. Upon such termination of the Plan,
the Company, by written notice to the Trustee and Committee, may direct either:
(a) complete distribution of the assets in the Trust to the
Participants, in Company Stock or cash, or a combination thereof, in a manner
consistent with the requirements of Section 8.3; or
(b) continuation of the Trust and the distribution of benefits at
such time and in such manner as though the Plan had not been terminated.
ARTICLE XI
GENERAL PROVISIONS
11.1 Participant's Rights. This Plan shall not be deemed to constitute a
--------------------
contract between the Company or the Employer and any Participant or to be a
consideration or an inducement for the employment of any Participant or
Employee. Nothing contained in this Plan shall be deemed to give any Participant
or Employee the right to be retained in the service of the
31
<PAGE>
Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.
11.2 Exclusive Benefit of Employees. The Trust created in connection with
------------------------------
this Plan is created for the exclusive benefit of Employees and their
Beneficiaries and for defraying the reasonable costs of the Plan and Trust. It
shall be interpreted and administered in a manner consistent with the
requirements of the Code and ERISA.
Wherever discretionary powers are given to any party or wherever any
interpretation may be necessary, such power shall be exercised and such
interpretation shall be made in a nondiscriminatory manner and in conformity
with the fiduciary duties established under (S) 404 of ERISA.
Except as expressly provided below, it shall not be permissible at any time
for any part of the corpus or income of the Trust to be used for, or diverted
to, purposes other than for the exclusive benefit of such Participants or their
Beneficiaries. In the event the Employer shall make an excess contribution under
a mistake of fact pursuant to (S) 403(c)(2)(A) of ERISA, the Employer may demand
repayment of such excess contribution at any time within one year following the
time of payment, and the Trustees shall return such amount to the Employer
within the one-year period. Earnings of the Plan attributable to the excess
contributions may not be returned to the Employer but any losses attributable
thereto must reduce the amount so returned.
11.3 Alienation and Qualified Domestic Relations Order.
-------------------------------------------------
(a) Alienation of Benefits. Except as provided in Section 8.10, no
----------------------
benefit which shall be payable out of the Trust to any person (including a
Participant or his Beneficiary) shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be void; and no such benefit shall in any manner be liable
for, or subject to, the debts, contracts, liabilities, engagements, or torts of
any such person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the Trustee, except
to such extent as may be required by law.
(b) Qualified Domestic Relations Order. This Section 11.3 shall not
----------------------------------
apply to a "qualified domestic relations order", as defined in (S) 414(p) of the
Code. The Committee shall establish a written procedure to determine the
qualified status of domestic relations orders and to administer distributions
under such qualified orders. Further, to the extent provided under a qualified
domestic relations order, a former spouse of a Participant shall be treated as
the spouse or surviving spouse for all purposes under the Plan. Notwithstanding
the foregoing, nothing contained in this Plan shall prevent the Committee from
complying with the provisions of a qualified domestic relations order. This Plan
specifically permits distribution to an "alternate payee", as defined in (S)
414(p) under a qualified domestic relations order, prior to the earliest
distribution date with respect to a Participant and regardless of whether the
Participant has attained his "earliest retirement age", as defined in (S)
414(p)(4) of the Code if: (i) the qualified
32
<PAGE>
domestic relations order were to specify distribution at that time or permit an
agreement between the Plan and the alternate payee to authorize an earlier
distribution; and (ii) if the present value of the Alternate Payee's benefits
under the Plan were to exceed $3,500.00, the qualified domestic relations order
requires the alternate payee's consent to any distribution occurring prior to
the earliest distribution date with respect to a Participant and prior to the
Participant's attaining earliest retirement age. Nothing in this paragraph shall
give a Participant a right to receive a distribution at a time otherwise not
permitted under the Plan, nor shall it permit the alternate payee to receive a
form of payment not permitted under the Plan. Payment will occur as soon as
administratively feasible after receipt of the qualified domestic relations
order by the Committee.
11.4 Governing Law. This Plan shall be construed and enforced according to
-------------
ERISA and the laws of the Commonwealth of Virginia, other than its laws
respecting choice of law, to the extent not preempted by ERISA.
11.5 Headings. The headings and subheadings of this Plan have been
--------
inserted for convenience of reference and are to be ignored in any construction
of the provisions or the Plan.
11.6 Procedure with Multiple Employers.
---------------------------------
(a) Same Trustee. Each such Employer shall be required to use the
------------
same Trustee as provided in this Plan.
(b) Commingling of Assets. The Trustee may, but shall not be required
---------------------
to, commingle, hold and invest as one trust fund all contributions made by
Employers, as well as all increments thereof.
(c) Participant Transfer. The transfer of any Participant between
--------------------
Employers shall not affect such Participant's rights under the Plan, and all
amounts credited to such Participant's Account as well as his Period of Service,
shall continue to be recognized under the Plan.
(d) Trust Expenses. Expenses of the Trust shall be borne by the
--------------
Trust, unless such expenses are paid by the Employer, and shall be allocated
ratably to each Employer.
11.7 Separation of Employer Contributions. All contributions made by an
------------------------------------
Employer, as provided for in this Plan, shall be determined separately on the
basis of its total Compensation paid. The Company shall keep separate books and
records concerning the affairs of each participating Employer hereunder and as
to the accounts and credits of the Employees of each participating Employer. The
Trustee may, but need not, register contracts so as to evidence that a
particular participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one participating Employer to another,
the employing Employer shall immediately notify the Committee thereof.
11.8 Revocation of Employer Participation. Any Employer shall be permitted
------------------------------------
to discontinue or revoke its participation in the Plan. At the time of any such
discontinuance or
33
<PAGE>
revocation, the Committee in its discretion and upon receipt of satisfactory
evidence thereof and of any applicable conditions, shall thereafter transfer,
deliver and assign contracts and other Trust assets allocable to the
Participants of such Employer to such new trustee as shall have been designated
by such Employer pursuant to a trustee to trustee transfer, in the event that it
has established a separate retirement plan for its Employees. If no successor is
designated, the Trustee shall retain or, as applicable, distribute such assets
for the Employees of said Employer pursuant to the provisions of this Plan.
11.9 Limitation of Liability. All benefits payable under this Plan shall
-----------------------
be paid only from the Trust assets and neither the Company, any Employer, the
Committee nor the Trustee shall have any duty or liability to furnish the Trust
with any funds, securities or other assets except as expressly provided in this
Plan.
11.10 Action by the Employer. Whenever the Employer under the terms of the
----------------------
Plan is permitted or required to do or perform any act or matter or thing, it
shall be done and performed by a person duly authorized by its legally
constituted authority.
11.11 Uniformity and Construction. All provisions of this Plan shall be
---------------------------
interpreted and applied in a uniform, nondiscriminatory manner. Where
appropriate, the singular shall include the plural, the plural the singular, and
the masculine, feminine and neuter shall refer equally to each other.
11.12 Mistakes. If an error or omission is discovered in any Account, the
--------
Company shall make an appropriate equitable adjustment in order to remedy such
error or omission as of the Plan Year in which the error or omission is
discovered.
11.13 Approval by Internal Revenue Service. Notwithstanding anything
------------------------------------
herein to the contrary, contributions to this Plan are conditioned, to the
extent allowable under the Code and ERISA, upon the continued qualification of
the Plan under (S) 401 of the Code. A contribution shall be returned to the
Employer that made such contribution to the extent that a deduction for such
contribution is disallowed under Code (S) 404, within one year after such
disallowance.
Adopted this _____ day of December, 1996.
ICF Kaiser International, Inc.
By: /s/ Michael K. Goldman
------------------------
Name: Michael K. Goldman
Title: Executive Vice President and
Chief Administrative Officer
34
<PAGE>
EXHIBIT A
---------
EXCLUDED ENTITIES
-----------------
Kaiser Engineers Hanford Company
KE Services Company
KE Livermore, Inc.
Kaiser Engineers Southern Company
Kaiser Engineers Australia Pty. Ltd.
The ESAT and QATS Special Projects Divisions
of ICF Kaiser Engineers, Inc.
Henry J. Kaiser Company (Canada) Ltd.
35
<PAGE>
EXHIBIT 10(b)(1)
AMENDMENT NO. 1
ICF KAISER INTERNATIONAL, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, the ICF Kaiser International, Inc. Employee Stock Ownership Plan
(the "Plan") was established effective March 1, 1987 and most recently amended
and restated effective January 1, 1996, and is duly maintained by ICF Kaiser
International, Inc. (the "Company"); and
WHEREAS, pursuant to Section 10.2 of the Plan, the Board of Directors has
the right to amend the Plan;
NOW THEREFORE, BE IT RESOLVED that the following provision be, and hereby
is, adopted, effective January 1, 1998:
1. Sections 8.3(a) and 11.3(b) of the Plan are amended by substituting
the term "$5,000" for the term "$3,500" where it occurs therein.
FURTHER RESOLVED that any steps taken by officers or directors of the
Company to effectuate the foregoing resolutions prior to their formal adoption
are hereby accepted, confirmed and ratified by the Company.
<PAGE>
EXHIBIT 10(b)(2)
AMENDMENT NO. 2 TO THE
ICF KAISER INTERNATIONAL, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, ICF Kaiser International, Inc. (the "Company") maintains the ICF
Kaiser International, Inc. Employee Stock Ownership Plan (the "Plan"), which was
most recently amended and restated effective January 1, 1996;
WHEREAS, the Company submitted the Plan to the Internal Revenue Service to
request a determination that the Plan is qualified under section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, the Internal Revenue Service requested that the Plan be amended to
clarify that compensation taken into account is limited to $150,000, as adjusted
by section 401(a)(17)(B) of the Code;
WHEREAS, the Company has retained the authority pursuant to section 10.2 of
the Plan to amend the Plan;
NOW THEREFORE, BE IT RESOLVED, that, effective January 1, 1996, the second
paragraph of Section 1.9 is amended to read as follows:
For purposes of contributions or benefits on behalf of Participants,
Compensation shall be limited to $150,000, as adjusted for increases in
the cost-of-living in accordance with (S) 401(a)(17)(B) of the Code. For
Plan Years beginning prior to January 1, 1997, a highly compensated
Employee's Family Member will be treated as a single employee with one
compensation, and the limit will be allocated among the members of the
family unit in proportion to each member's compensation for purposes of
applying the dollar limit on compensation, to the extent required under
the Code.
FURTHER RESOLVED, that the appropriate officers are hereby authorized to
amend and restate the Plan to incorporate these amendments, and to take any
other actions necessary to effectuate the intent of these amendments.
<PAGE>
EXHIBIT 10(b)(3)
THIRD AMENDMENT
TO THE
ICF KAISER INTERNATIONAL, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, the ICF Kaiser International, Inc. Employee Stock Ownership
Plan (hereinafter referred to as the "Plan") was established effective as of
March 1, 1987, by ICF Kaiser International, Inc. (hereinafter referred to as the
"Company"); and
WHEREAS, effective as of March 1, 1994, the Plan was frozen so that no
individual became a Participant, and no Plan contributions were made, after
February 28, 1994; and
WHEREAS, the Plan was most recently restated as of January 1, 1998;
and
WHEREAS, the restated Plan was amended subsequently on two occasions;
and
WHEREAS, the Company desires to amend the Plan again to comply with
recent tax legislation, to reflect various administrative changes, and to
accommodate certain divestitures;
NOW, THEREFORE, effective as of April 7, 1999, unless specifically
provided otherwise, the Plan is hereby amended in the respects hereinafter set
forth.
1. Section 1.6 of the Plan is hereby amended to provide as follows:
1.6 "Closing" shall mean the consummation of a transaction in
which the Company disposes of (i) substantially all of the assets
used by the Company in a trade or business of the Company, or
(ii) the Company's interest in a subsidiary.
2. The last sentence of the second paragraph of Section 1.9 of the
Plan is hereby deleted effective as of January 1, 1997.
3. Paragraph (e) of Section 1.12 of the Plan is hereby amended
effective January 1, 1997, to provide as follows:
(e) a leased employee who pursuant to Section 414(n)(2) of
the Code means any person (other than a person who is an employee
without regard to this Paragraph (e)) engaged in performing
services for a Member of the Controlled Group (the "recipient")
pursuant to an agreement between the recipient and any other
person ("Leasing Organization") who meets the following
requirements:
(i) he has performed services for one or more Members
of the Controlled Group (or for any other "related persons"
<PAGE>
determined in accordance with Section 414(n)(6) of the Code)
on a substantially full-time basis for a period of at least
one year;
(ii) such services are under the primary direction or
control of the recipient; and
(iii) he is not participating in a "safe harbor plan"
of the Leasing Organization. (For this purpose a "safe
harbor plan" is a plan that satisfies the requirements of
Section 414(n)(5) of the Code, which will generally be a
money purchase pension plan with a nonintegrated company
contribution rate of at least 10% of compensation and which
provides for immediate participation and full and immediate
vesting).
A person who is a leased employee shall also be considered an employee
of a Member of the Controlled Group during such period (and solely for
the purpose of determining length of service for vesting purposes, and
shall also be considered to have been an employee for any earlier
period in which he was a leased employee) but shall not be a
Participant and shall not otherwise be eligible to become covered by
the Plan during any period in which he is a leased employee.
Notwithstanding the foregoing, the sole purpose of this Paragraph (e)
is to define and apply the term "leased employee" strictly (and only)
to the extent necessary to satisfy the minimum requirements of Section
414(n) of the Code relating to "leased employees.
4. Section 1.15 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
1.15 "Fund" shall mean any of the investment funds or options
established and maintained in accordance with the provisions of
Section 6.3.
5. Section 1.17 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
1.17 "Highly-Compensated Employee" shall mean any Employee of the
Company or a Member of a Controlled Group for a Plan Year who:
(a) during the immediately preceding Plan Year, received
compensation (as defined in Section 4.3(b)(ii) of the Plan without
regard to Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code) in
excess of $80,000 (such dollar limitation shall be adjusted
automatically in accordance with the maximum amount permitted under
Section 414(q) of the Code); or
2
<PAGE>
(b) during such Plan Year or during the immediately preceding
Plan Year owned directly or indirectly 5% or more of the Company or a
Member of a Controlled Group (so that he is a "5% owner" as defined in
Section 416(i)(1) of the Code);
A former Employee shall be treated as a Highly Compensated Employee if
such Employee was a Highly Compensated Employee when such Employee
separated from service or such Employee was a Highly Compensated
Employee at any time after attaining age 55. Notwithstanding the
foregoing provisions of this paragraph, the sole purpose of this
Section 1.17 is to define and apply the term Highly-Compensated
Employee strictly (and only) to the extent necessary to satisfy the
minimum requirements of Section 414(q) of the Code relating to
"highly-compensated employees." This Section 1.17 shall be
interpreted, applied and, if and to the extent necessary, deemed
modified without formal amendments of language, so as to satisfy
solely the minimum requirements of Section 414(q) of the Code.
6. Section 1.23 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
1.23 "Non-Highly Compensated Participant" shall mean any Participant
who is not a Highly Compensated Participant.
7. Section 2.5 of the Plan is hereby amended to provide as follows:
2.5 Qualified Military Service and Compliance with Uniformed Services
-----------------------------------------------------------------
Employment and Reemployment Rights Act. Notwithstanding any provision
--------------------------------------
of the Plan to the contrary, effective as of December 12, 1994,
contributions, benefits, and service credit with respect to Qualified
Military Service shall be provided in accordance with Section 414(u)
of the Code.
8. Section 4.3 is hereby amended effective January 1, 1998, to provide as
follows:
4.3 Limitation on Benefits.
----------------------
(a) Incorporation of Section 415 of the Code. The provisions set
----------------------------------------
forth in this Section 4.3 are intended solely to comply with the
requirements of Section 415 of the Code and shall be interpreted,
applied, and if and to the extent necessary deemed modified without
further formal language so as to satisfy solely the minimum
requirements of said Section. For such purposes, the limitations of
Section 415 of the Code are hereby incorporated by reference and made
part hereof as though fully set forth herein, but shall be applied
only to particular Plan benefits in accordance with the provisions of
this Section 4.3, to the extent such provisions are
3
<PAGE>
not consistent with said Section 415. The limitations contained in
this Section 4.3 shall be applicable only with respect to benefits
provided pursuant to defined contribution plans and defined benefit
plans specified in Section 415(k) of the Code.
(b) Definitions. For purposes of this Section 4.3, the
-----------
following definitions shall apply in addition to those set forth in
Article I:
(i) The term "Annual Additions" shall mean the amount
defined in Section 415(c)(2) of the Code.
(ii) The term "Annual Benefit" shall mean the benefit
amount defined in Section 415(b)(2)(A) of the Code as adjusted
pursuant to the provisions of Section 415(b)(2)(B), (C), (D), and
(E) of the Code.
(iii) The term "Compensation" shall mean compensation as
defined in Section 415(c)(3) of the Code.
(iv) The term "Defined Benefit Fraction" for any
Limitation Year beginning prior to January 1, 2000, shall mean
the fraction defined in Section 415(e)(2) of the Code.
(v) The term "Defined Contribution Fraction" for any
Limitation Year beginning prior to January 1, 2000, shall mean
the fraction defined in Section 415(e)(3) of the Code.
(vi) The term "Employer" shall mean the Company and all
Members of a Controlled Group; provided, however, that for
purposes of applying the limitations of this Section 4.3 with
respect to Limitation Years after December 31, 1999, "50 percent"
rather than "80 percent" shall be used in determining Member of
the Controlled Group defined under Section 414(b) and Section
414(c) of the Code.
(vii) The term "Excess Amount" shall mean the excess of the
Participant's Annual Additions for a Limitation Year over the
Defined Contribution Maximum Permissible Amount.
(viii) The term "Highest Average Compensation" shall mean
the average Compensation for the three consecutive calendar years
during which the Participant was an active Participant in the
Plan and had the greatest aggregate Compensation from the
Employer.
4
<PAGE>
(ix) The term "Limitation Year" shall mean a calendar year
or such other 12-month period elected by the Company pursuant to
regulations and rulings under Section 415 of the Code.
(x) The term "Defined Contribution Maximum Permissible
Amount" shall mean Annual Additions of a Participant which do not
exceed the lesser of (i) $30,000 (adjusted in accordance with
regulations prescribed by the Secretary of the Treasury for
increases in the cost of living), or (ii) 25 percent of such
Participant's Compensation paid for such Limitation Year as set
forth in Section 415(e)(1) of the Code. If a short Limitation
Year is created because of an amendment changing the Limitation
Year to a different 12-month consecutive period, such Annual
Additions shall not exceed $30,000 multiplied by a fraction, the
numerator of which is the number of months in the short
Limitation Year and the denominator of which is 12.
(xi) The term "Defined Benefit Maximum Permissible Amount"
shall mean the Annual Benefit of a Participant which does not
exceed the lesser of $90,000 or 100 percent of the Participant's
Highest Average Compensation as set forth in Section 415(b)(1) of
the Code.
(xii) The term "Projected Annual Benefit" shall mean the
annual retirement benefit of a Participant attributable to
Employer contributions which would be payable to such Participant
under a plan based on the assumptions that he continues his
employment as a Participant until the Social Security Retirement
Age and that his Compensation for the Limitation Year continues
at the same rate until the Social Security Retirement Age, and on
the basis of the federal Social Security Act as in effect on the
last day of the Limitation Year. A Participant's "aggregate
Projected Annual Retirement Benefit" shall include his Projected
Annual Benefit, if any, under any other defined benefit plan
maintained by the Employer.
(xiii) The term "Social Security Retirement Age" shall mean
the age used as the retirement age under Section 216(l) of the
federal Social Security Act, without regard to any age increase
factor and as if the early retirement age under Section 216(l)(2)
were 62.
(c) Limitations on Allocations Under the Plan. Notwithstanding
-----------------------------------------
any other provision of the Plan to the contrary, the amount of Annual
Additions which may be credited to the Participant's Account for any
Limitation Year shall not exceed the lesser of the Defined
Contribution Maximum Permissible Amount or any other limitation
contained in the
5
<PAGE>
Plan. If the Annual Additions to the Account of a Participant in any
Limitation Year would otherwise exceed such amount, the Excess Amount
shall be disposed of by reducing the Employer contributions and
forfeitures, if any, otherwise allocable to the Participant's Accounts
for the Limitation Year. Amounts deemed to be forfeitures under this
Paragraph (c) shall be held unallocated in a suspense account
established for the Limitation Year and shall be applied against the
Employer's contribution obligation for the next following Limitation
year (and succeeding Limitation Years, as necessary). If a suspense
account is in existence at any time during a Limitation Year, all
amounts in the suspense account must be allocated to Participants'
Accounts (subject to the limitations set forth in this Section 4.3 )
before any further Employer contributions may be made to the Plan on
behalf of Participants. If a suspense account is in existence at any
time during a Limitation Year pursuant to this Section 4.3, it will
not participate in the allocation of the investment gains and losses
on the Plan's assets.
(d) Limitation for Multiple Defined Contribution Plan
-------------------------------------------------
Participation. If a Participant is covered by any other qualified
-------------
defined contribution plan (whether or not terminated) maintained by
the Employer concurrently with the Plan, and if the Annual Additions
for the Limitation Year would otherwise exceed the amount that may be
applied for the Participant's benefit under the limitation contained
in Section 4.3(c), such excess shall be reduced first by returning any
employer contributions made with respect to the Participant under this
Plan as provided in Section 4.3(c) and then by returning from any such
other plan or plans any elective employer contributions made on behalf
of the Participant under Section 401(k) of the Code for the Limitation
Year with the income distributable thereto and any corresponding
matching employer contributions thereto as provided in such other
plans.
(e) Limitation for Defined Benefit Plan Participation. For
-------------------------------------------------
Limitation Years beginning prior to January 1, 2000, if a Participant
in the Plan is also covered by a qualified defined benefit plan
(whether or not terminated) maintained by the Employer, in no event
shall the sum of the Defined Benefit Fraction and the Defined
Contribution Fraction exceed 1.0 in any Limitation Year.
(f) Scope of Limitations. The limitations contained in
--------------------
Paragraphs (c), (d), and (e) of this Section 4.3 shall be applicable
only with respect to benefits provided pursuant to defined
contribution plans and defined benefit plans described in Section
415(k) of the Code and all such defined contribution plans (whether or
not terminated) of the Employer shall be treated as one defined
contribution plan and all such defined benefit plans (whether or not
terminated) of the Employer shall be treated as one defined benefit
plan.
6
<PAGE>
9. Sections 4.4 and 4.5 of the Plan are hereby deleted effective January
1, 1998, in their entirety.
10. Article V of the Plan is hereby amended effective January 1, 1998, to
provide as follows:
ARTICLE V
TOP-HEAVY PROVISIONS
--------------------
5.1 Applicability. Notwithstanding any other provision to the
-------------
contrary, in the event the Plan is deemed to be a top-heavy plan for
any Plan Year, the provisions contained in this Article V with respect
to vesting and contributions made by the Employer shall be applicable
with respect to such Plan Year. In the event that the Plan is
determined to be a top-heavy plan and upon a subsequent determination
date is determined to no longer be a top-heavy plan, the vesting and
the contribution provisions in effect immediately preceding the Plan
Year in which the Plan was determined to be a top-heavy plan shall
again become applicable as of such subsequent determination date.
5.2 Top-Heavy Definitions. Notwithstanding the definitions set forth
---------------------
in Article I, the following definitions shall be applicable to this
Article V.
(a) The term "Compensation" shall have the meaning set forth in
------------
Treas. Reg. Section 1.415-2(d).
(b) The term "Determination Date" shall mean for any Plan Year
------------------
subsequent to the first Plan Year, the last day of the preceding Plan
Year and for the first Plan Year of the Plan, the last day of that
Plan Year.
(c) The term "Employer" shall mean the Company and all Members of
--------
the Controlled Group.
(d) The term "Key Employee" shall mean any Employee or former
------------
Employee (and the beneficiaries of such Employer) who at any time
during the Plan Year and any of the four preceding Plan Years was an
officer of the Employer with annual compensation greater than 50
percent of the dollar limitation under Section 415(b)(1)(A) of the
Code, an owner (or considered an owner) under Section 318 of the Code)
of one of the ten largest interests in the Employer with compensation
greater than 100 percent of the limitation under Section 415(b)(1)(A)
of the Code, a 5 percent owner of the Employer, or a 1 percent owner
of the Employer with annual compensation of more than $150,000.
(e) The term "Permissive Aggregation Group" shall mean the
----------------------------
Required Aggregation Group of plans plus any other plan or plans of
the
7
<PAGE>
Employer which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of
Section 401(a)(4) and 410 of the Code.
(f) The term "Present Value" shall mean for purposes of computing
-------------
present value calculations in determining the Top-Heavy Ratio, present
value calculations based on the actuarial assumptions as stated in the
applicable plan.
(g) The term "Required Aggregation Group" shall mean (a) each tax
--------------------------
qualified plan of the Employer in which at least one Key Employee
participates or participated at any time during the determination
period (regardless of whether the plan terminated), and (b) any other
tax qualified plan of the Employer which enables a plan described in
clause (a) to meet the requirements of Section 401(a)(4) or 410 of the
Code.
(h) The term "Super Top-Heavy Group" with respect to a particular
---------------------
Plan Year shall mean a Required or Permissive Aggregation Group that,
as of the Determination Date, would qualify as a Top-Heavy Group under
the definition in Paragraph (j) of this Section 5.2 with "90 percent"
substituted for "60 percent" each place where "60 percent" appears in
such definition.
(i) The term "Super Top-Heavy Plan" with respect to a particular
--------------------
Plan Year shall mean a plan that, as of the Determination Date, would
qualify as a Top-Heavy Plan under the definition in Paragraph (k) of
this Section 5.2 with "90 percent" substituted for "60 percent" each
place where "60 percent" appears in such definition. A plan is also a
"Super Top-Heavy Plan" if it is part of a Super Top-Heavy Group.
(j) The term "Top-Heavy Group" with respect to a particular Plan
---------------
Year shall mean a Required or Permissive Aggregation Group if the sum,
as of the Determination Date, of the present value of the cumulative
accrued benefits for Key Employees under all defined benefit plans
included in such group and the aggregate of the account balances of
Key Employees under all defined contribution plans included in such
group exceeds 60 percent of a similar sum determined for all employees
covered by the plans included in such group.
(k) The term "Top-Heavy Plan" with respect to a particular Plan
--------------
Year shall mean the Plan if any of the following conditions exist:
(i) If the Top-Heavy Ratio for the Plan exceeds 60 percent
and the Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
8
<PAGE>
(ii) If the Plan is a part of a Required Aggregation Group
of plans but not part of a Permissive Aggregation Group and the Top-
Heavy Ratio for the group of plans exceeds 60 percent.
(iii) If the Plan is a part of a Required Aggregation Group
and part of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60 percent.
(l) The term "Top-Heavy Ratio" shall mean:
---------------
(i) While the Employer maintains one or more defined
contribution plans (including any simplified employee pension plan)
and the Employer has not maintained any defined benefit plan which
during the 5-year period ending on the Determination Date has or has
had accrued benefits, the Top-Heavy Ratio for the Plan alone or for
the Required or Permissive Aggregation Group, as appropriate, is a
fraction, the numerator of which is the sum of the account balances of
all Key Employees as of the Determination Date (including any part of
any account balance distributed in the five-year period ending on the
Determination Date), and the denominator of which is the sum of all
account balances (including any part of any account balance
distributed in the five-year period ending on the Determination Date),
both computed in accordance with Section 416 of the Code. Both the
numerator and denominator of the Top-Heavy Ratio are adjusted to
reflect any contribution not actually made as of the Determination
Date, but which is required to be taken into account on that date
under Section 416 of the Code.
(ii) While the Employer maintains one or more defined
contribution plans (including any simplified employee pension plans)
and the Employer maintains or has maintained one or more defined
benefit plans which during the five-year period ending on the
Determination Date has or has had any accrued benefits, the Top-Heavy
Ratio for any Required or Permissive Aggregation Group as appropriate
is a fraction, the numerator of which is the sum of account balances
under the aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with subparagraph (i) above, and
the present value of accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees as of the Determination
Date, and the denominator of which is the sum of the account balances
under the aggregated defined contribution plan or plans for all
participants, determined in
9
<PAGE>
accordance with Section 416 of the Code. The accrued benefits under a
defined benefit plan in both the numerator and denominator of the Top-
Heavy Ratio are adjusted for any distribution of an accrued benefit
made in the five-year period ending on the Determination Date.
(iii) For purposes of subparagraphs (i) and (ii) above, the
value of account balances and the present value of accrued benefits
shall be determined as of the most recent valuation date that falls
within or ends with the 12-month period ending on the Determination
Date, except as provided in Section 416 of the Code for the first and
second plan years of a defined benefit plan. The account balances and
accrued benefits of a participant (1) who is not a Key Employee but
who was a Key Employee in a prior year, or (2) who has not performed
services for the Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date will be disregarded.
The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers and transfers are taken into account will be
made in accordance with Section 416 of the Code. Deductible employee
contributions shall not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans the value of
account balances and accrued benefits will be calculated with
reference to the Determination Date that falls within the same
calendar year.
(m) The term "Valuation Date" shall mean, for purposes of computing
--------------
the Top-Heavy Ratio, the Determination Date.
5.3 Top-Heavy Minimum Allocation Rules. The following Top-Heavy Plan
----------------------------------
minimum allocation rules shall apply:
(a) Except as otherwise provided in Paragraph (b) and (c) below, the
Employer contributions and forfeitures allocated on behalf of any
Participant who is not a Key Employee shall be the lesser of 3 percent of
such Participant's Compensation or in the case where the Employer has no
defined benefit plan which designates the Plan to satisfy Section 401 of
the Code, the largest percentage of compensation allocated with respect to
a Key Employee for the Plan Year. Tax-Deferred Contributions cannot be used
to satisfy the minimum contributions for non-Key Employees under Section
416 of the Code. Furthermore, in making the determination of the percentage
at which contributions are made for the Key Employee with the highest
percentage, Tax-Deferred Contributions on behalf of Key Employees shall be
taken into account.
(b) The provisions in paragraph (a) shall not apply to any
Participant who is not actively employed as an Employee by the Employer
10
<PAGE>
on the last day of the Plan Year for which the minimum allocation is to be
made.
(c) The provisions in paragraph (a) shall not apply to any
Participant to the extent the Participant is covered under any other plan
or plans of the Employer, and by the terms of such plan or plans it is
provided that the minimum allocation or benefit requirements applicable to
Top-Heavy Plans shall be met in such other plan or plans. If such other
plan is, or if one of such other plans is, a defined benefit plan
maintained by the Employer, and such plan is a Top-Heavy Plan, the minimum
benefit requirements applicable to Top-Heavy Plans shall be met under such
defined benefit plan as provided therein, to the extent such benefit can be
provided under such plan or plans. If such other plan is, or if one of such
other plans is, a defined contribution plan maintained by the Employer, and
such plan is a Top-Heavy Plan, the minimum allocation requirements shall be
met under such plan, except as may be otherwise provided in such other
plan. The application and administration of the minimum allocation or
benefit requirements for Top-Heavy Plans shall be satisfied in a manner so
as to only satisfy the minimum allocation/benefit requirements as
permissible and so as to avoid any duplication of minimum
allocation/benefits for non-Key Employees, as provided under Section 416 of
the Code.
5.4 Top-Heavy Vesting Schedule. A Participant shall be entitled to the
--------------------------
vested interest in his Account attributable to Employer contributions
calculated in accordance with the provisions of Article IV (or, if greater,
in accordance with the provisions of Section 5.3) determined in accordance
with the following schedule if greater than under Article III:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
If the Plan becomes a Top-Heavy Plan and subsequently ceases to be such,
the vesting schedule set forth above shall continue to apply in determining
the rights to benefits of any Participant who had at least three years of
Service as of December 31 in the last Plan Year in which the Plan was a
Top-Heavy Plan. For other Participants, such schedule shall apply only to
that portion of their Account that became vested under the vesting schedule
set forth above as of such December 31.
5.5 Top-Heavy Compensation Limitation. The annual compensation of any
---------------------------------
Participant to be taken into account under the Plan during any Plan
11
<PAGE>
Year in which the Plan is determined to be a Top-Heavy Plan shall not
exceed the limitation on Compensation set forth in the second
paragraph of Section 1.9.
5.6 Top-Heavy Plan/Benefit Limitations. In any Plan Year beginning
----------------------------------
prior to January 1, 2000, in which the Plan is a Top-Heavy Plan, the
denominators of the defined benefit fraction and the defined
contribution fraction (as such terms are used in applying the benefit
limitation provisions of Section 415 of the Code) shall be computed
using 100 percent of the dollar limitation instead of 125 percent.
11. Section 6.3 of the Plan is hereby amended to provide as follows:
6.3 Diversification of Investments by Qualified Participants. The
--------------------------------------------------------
Company shall cause at least three Funds to be established and
maintained for Qualified Participants and, notwithstanding the
provisions of Section 6.1, a Qualified Participant shall be eligible
to direct the diversifications of a portion of his Account in
accordance with Section 401(a)(28) of the Code among such Funds. Each
such Fund shall be diversified and have different risk and return
characteristics from the other Funds. Any Fund which invests in
investments with restrictions regarding Funds to which investment
transfers may be made or to which a minimum investment period is
applicable shall not be considered as one of such requisite three
Funds. The portions of the Accounts of Qualified Participants so
invested shall be charged or credited with their share of net
earnings, gains, losses and expenses and shall reflect the
appreciation or depreciation, as the case may be, of the Funds.
Insofar as this Section 6.3 of the Plan complies with Section 404(c)
of ERISA and DOL Regs. Section 2550.404c-1, Plan fiduciaries shall be
relieved of liability for any losses which are the direct result of
investment instructions given by Qualified Participants.
Notwithstanding the foregoing, to the extent that Section 404(c) of
ERISA is not applicable, Qualified Participants shall be named
fiduciaries with respect to the investment of the portion of their
Accounts subject to the provisions of this Section 6.3.
12. Section 8.1 is hereby amended effective January 1, 1997, to provide as
follows:
8.1 Distribution at Required Beginning Date. Notwithstanding any
---------------------------------------
other provision of the Plan to the contrary, on and after January 1,
1997 payment of a retired or former Participant's benefit shall
commence not later than the earlier of:
(i) the 60th day after the end of the Plan Year in which the
latest of the following dates occurs: (i) Participant's Normal
Retirement Date, (ii) the tenth anniversary of the date on which
the
12
<PAGE>
Participant first became a Participant, and (iii) the date of the
Participant's retirement or other termination of employment; or
(ii) the April 1 following the calendar year in which the
later of the following dates occurs: (i) the date on which the
Participant attains 70-1/2, or (ii) the date on which the
Participant retires (except for a Participant who is a 5% owner,
as defined in Section 416(i)(1)(B) of the Code, the date
determined under this Paragraph (d) shall be April 1 of the
calendar year following the calendar year in which the
Participant attains age 70-1/2 without regard to the date of the
Participant's retirement.
All payments required under this Article VIII, shall be determined and
made in accordance with the regulations under Section 401(a)(9) of the
Code, including the minimum distribution incidental benefit
requirements of proposed Treas. Reg. (S)1.401(a)(9)-2, if applicable.
Any non-retired Participant (other than a 5% owner) who has attained
age 70-1/2 and who is receiving payment of his benefit while employed
by a Member of a Controlled Group, may elect in writing in the manner,
time, and form required by the Company to terminate payment of his
Plan benefit otherwise payable after January 1, 1997, until after his
retirement under the terms of the Plan in effect at such time. Any
non-retired Participant (other than a 5% owner) who attains age 70-1/2
in 1997 or 1998, may elect in writing in the manner, time, and form
required by the Company to defer payment of his Plan benefit until
after his retirement pursuant to the terms of the Plan in effect at
such time. If such a Participant does not make such an election or if
the Participant is a 5% owner, payment of his Plan benefit shall be
made or shall continue to be made to him pursuant to the provisions of
this Section 8.3 in effect prior to January 1, 1997.
13. The first sentence of Paragraph (a) of Section 8.3 of the Plan is
hereby amended to provide as follows:
(a) General Rule. If a Participant Retires under Plan, dies,
------------
Separates from Service due to the sale of the EFM Group or ICF
Consulting Group, or Separates from Service for any other reason, the
entire vested balance of his Account shall be distributed pursuant to
the provisions of this Section 8.3 and Section 8.5.
14. The third sentence of Paragraph (a) of Section 8.3 of the Plan is
hereby amended by the deletion of the phrase ", or his over exceeded".
15. Paragraph (d) of Section 8.3 of the Plan is hereby deleted effective
January 1, 1997, in its entirety.
13
<PAGE>
16. Paragraph (a) of Section 8.5 of the Plan is hereby amended to provide
as follows:
(a) Distribution in Kind. Distribution of any portion of a
--------------------
Participant's Account invested in Company Stock shall be made in whole
shares of Company Stock (with the value of any fractional share paid
in cash), cash, or a combination of both, at the election of the
Participant; provided, however, that the distribution of any such cash
payment shall be made no later than two months after the date that
distribution of Company Stock would have occurred and shall be
determined as of the value of Company Stock on such date of
distribution.
17. Article IX of the Plan is hereby amended effective March 17, 1997, to
provide as follows:
ARTICLE IX
ADMINISTRATION AND CLAIMS PROCEDURES
------------------------------------
9.1 Authority of the Company. The Company shall be the Plan
------------------------
administrator for purposes of ERISA and the Code and shall have the
authority and the power to perform the functions conferred upon it
herein, subject to the limitations hereinafter set forth. The Company
shall have the sole right to interpret and construe the Plan, and to
determine any disputes arising thereunder, subject to the provisions
of Section 9.3. In exercising such powers and authorities, the Company
shall at all times exercise good faith, apply standards of uniform
application, and refrain from arbitrary action. The Company may employ
such attorneys, agents, and accountants as it may deem necessary or
advisable to assist it in carrying out its duties hereunder. The
Company is hereby designated as a "named fiduciary" of the Plan as
such term is defined in Section 402(a)(2) of ERISA. The Company may
allocate any of its responsibilities for the day-to-day operation and
administration of the Plan to any person or persons employed by it. In
addition, the Company, by action of its Board of Directors, may
designate a person other than itself to carry out any of the powers,
authorities or responsibilities which are retained by it or granted to
it by this Article IX.
9.2 Action of Company. Any act authorized, permitted, or required to
-----------------
be taken by the Company under the Plan, which has not been allocated
or delegated in accordance with Section 9.1, may be taken by a
majority of the members of the Board of Directors of the Company,
either by vote at a meeting, or in writing without a meeting. All
notices, advices, directions, certifications, approvals, and
instructions required or authorized to be given by the Company under
the Plan shall be in writing and signed by either (a) a majority of
the members of the Board of Directors of the Company, or by such
member or members as may be designated by an instrument in writing,
signed by all the members thereof, as having
14
<PAGE>
authority to execute such documents on its behalf, or (b) a person who
becomes authorized to act for the Company in accordance with the
provisions of Section 9.1. Subject to the provisions of Section 9.3,
any action taken by the Company which is authorized, permitted, or
required under the Plan shall be final and binding upon the Company
and the Trustee, all persons who have or who claim an interest under
the Plan, and all third parties dealing with the Company or the
Trustee.
9.3 Claims Review Procedure. Whenever the Company decides for
-----------------------
whatever reason to deny, whether in whole or in part, a claim for
benefits filed by any person (hereinafter referred to a the
"Claimant"), the Plan administrator shall transmit to the Claimant a
written notice of the Company's decision, which shall be written in a
manner calculated to be understood by the Claimant and contain a
statement of the specific reasons for the denial of the claim and a
restatement advising the Claimant that, within 60 days of the date on
which he receives such notice, he may obtain review of the decision of
the Company in accordance with the procedures hereinafter set forth.
Within such 60-day period, the Claimant or his authorized
representative may request that the claim denial be reviewed by filing
with the Plan Administrator a written request therefor, which request
shall contain the following information:
(a) the date on which the Claimant's request was filed with the
Plan administrator; provided, however, that the date on which the
Claimant's request for review was in fact filed with the Plan
Administrator shall control in the event that the date of the actual
filing is later than the date stated by the Claimant pursuant to this
paragraph (a);
(b) the specific portions of the denial of his claim which the
Claimant requests the Plan administrator to review;
(c) a statement by the Claimant setting forth the basis upon
which he believes the Plan administrator should reverse the Trustee's
previous denial of his claim for benefits and accept his claim as
made; and
(d) any written material (offered as exhibits) which the
Claimant desires the Plan administrator to examine in its
consideration of his position as stated pursuant to paragraph (c).
Within 60 days of the date determined pursuant to paragraph (a) of
this Section 9.3, the Plan administrator shall conduct a full and fair
review of the Company's decision denying the Claimant's claim for
benefits. Within 60 days of the date of such hearing, the Plan
administrator shall render its written decision on review, written in
a manner calculated to be understood by the Claimant, specifying the
reasons and Plan provisions upon which its decision was based.
15
<PAGE>
9.4 Indemnification. In addition to whatever rights of
---------------
indemnification the members of the Board of Directors of the Company,
or any other person or persons to whom any power, authority, or
responsibility of the Company is allocated or delegated pursuant to
Section 9.1, may be entitled under the articles of incorporation,
regulations, or by-laws of the Company, under any provision of law, or
under any other agreement, the Company shall satisfy any liability
actually and reasonably incurred by any such person or persons,
including expenses, attorneys' fees, judgments, fines, and amounts
paid in settlement, in connection with any threatened, pending, or
completed action, suit, or proceeding which is related to the exercise
or failure to exercise by such person or persons of any of the powers,
authority, responsibilities, or discretion provided under the Plan, or
reasonably believed by such person or persons to be provided
hereunder, and any action taken by such person or persons in
connection therewith.
9.5 Administrative Expenses. The fees of the Trustee and all other
-----------------------
administrative expenses of the Plan and Trust shall be paid by the
Trustee from the assets of the Trust unless the Company, in its
discretion, elects to pay any such fees and/or expenses.
9.6 Voting of Company Stock in the ICF Kaiser Stock Fund. Each
----------------------------------------------------
Participant or Beneficiary who has shares of Company Stock allocated
to his Account shall be a named fiduciary with respect to the voting
of Company Stock held thereunder and shall have the following powers
and responsibilities:
(a) Prior to each annual or special meeting of the shareholders
of the Company, the Company shall cause to be sent to each Participant
and Beneficiary who has Company Stock allocated to his Account and
invested in the ICF Kaiser Stock Fund under the Plan a copy of the
proxy solicitation material therefor, together with a form requesting
confidential voting instructions, with respect to the voting of such
Company Stock as well as the voting of Company Stock for which the
Trustee does not receive instructions. Each such Participant and/or
Beneficiary shall instruct the Trustee to vote the number of such
uninstructed shares of Company Stock equal to the proportion that the
number of shares of Company Stock allocated to his Account and
invested in the ICF Kaiser Stock Fund bears to the total number of
shares of Company Stock in the Plan for which instructions are
received. Upon receipt of such a Participant's or Beneficiary's
instructions, the Trustee shall then vote in person, or by proxy, such
shares of Company Stock as so instructed.
(b) The Company shall cause the Trustee to furnish to each
Participant and Beneficiary who has Company Stock allocated to his
16
<PAGE>
Account and invested in the ICF Kaiser Stock Fund under the Plan
notice of any tender or exchange offer for, or a request or invitation
for tenders or exchanges of, Company Stock made to the Trustee. The
Trustee shall request from each such Participant and Beneficiary
instructions as to the tendering or exchanging of Company Stock
allocated to his Account. Each Participant and Beneficiary who does
not instruct the Trustee with respect to the tendering or exchanging
of Company Stock allocated to his Account shall be deemed to have
decided not to participate in any such tender or exchange offer. The
Trustee shall provide Participants and Beneficiaries with a reasonable
period of time in which they may consider any such tender or exchange
offer for, or request or invitation for tenders or exchanges of,
Company Stock made to the Trustee. Within the time specified by the
Trustee, the Trustee shall tender or exchange such Company Stock as to
which the Trustee has received instructions to tender or exchange from
Participants and Beneficiaries.
(c) Instructions received from Participants and Beneficiaries by
the Trustee regarding the voting, tendering, or exchanging of Company
Stock shall be held in strictest confidence and shall not be divulged
to any other person, including officers or employees of the Company,
except as otherwise required by law, regulation or lawful process.
18. The first sentence of Section 10.1 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "and the Committee".
19. The second sentence of Section 10.2 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "the Committee and".
20. The second sentence of Section 10.3 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "the Committee and".
21. The third sentence of Section 10.3 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "or Committee".
22. The first sentence and third sentence of Section 10.4 of the Plan are
hereby amended effective March 17, 1999, by the deletion of the phrase "and
Committee".
17
<PAGE>
23. The term "Committee" is hereby deleted, effective March 17, 1999,
throughout the Plan and the term "Company" is hereby substituted in place
thereof.
Executed this 8/th/ day of April, 1999.
ICF KAISER INTERNATIONAL, INC.
By: /s/ Timothy P. O'Connor
-------------------------------
And: Senior Vice President
------------------------------
And Chief Financial Officer
------------------------------
18
<PAGE>
EXHIBIT 10(b)(4)
FOURTH AMENDMENT
TO THE
ICF KAISER INTERNATIONAL, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, the ICF Kaiser International, Inc. Employee Stock Ownership Plan
(hereinafter referred to as the "Plan") was established effective as of March 1,
1987, by ICF Kaiser International, Inc. (hereinafter referred to as the
"Company"); and
WHEREAS, effective as of March 1, 1994, the Plan was frozen so that no
individual became a Participant, and no Plan contributions were made, after
February 28, 1994; and
WHEREAS, the Plan was most recently restated as of January 1, 1998; and
WHEREAS, the restated Plan was amended subsequently on three occasions; and
WHEREAS, the Company desires to amend the Plan again;
NOW, THEREFORE, effective as of April 7, 1999, unless specifically provided
otherwise, the Plan is hereby amended in the respects hereinafter set forth.
1. The first sentence of Paragraph (a) of Section 8.3 of the Plan is
hereby amended to provide as follows:
(a) General Rule. If a Participant Retires under Plan, dies,
------------
Separates from Service due to the sale of the Environment and
Facilities Management Group of the Company or the sale by the Company
of the majority of its capital stock of ICF Consulting Group, Inc. to
ICF Consulting Group Holdings, LLC or any other unrelated entity, or
Separates from Service for any other reason, the entire vested balance
of his Account shall be distributed pursuant to the provisions of this
Section 8.3 and Section 8.5.
2. The third sentence of Paragraph (a) of Section 8.3 of the Plan is
hereby amended by the deletion of the phrase ", or at any time exceeded".
<PAGE>
3. Paragraph (c) of Section 9.3 of the Plan is hereby amended by the
deletion of the word "Trustee's" and the substitution of the word "Company's" in
place thereof.
Executed this 25th day of June, 1999.
ICF KAISER INTERNATIONAL, INC.
By: /s/ Timothy P. O'Connor
---------------------------------
And: Senior Vice President and
--------------------------------
Chief Financial Officer
--------------------------------
2
<PAGE>
EXHIBIT 10(d)(4)
FOURTH AMENDMENT
TO THE
ICF KAISER INTERNATIONAL, INC.
RETIREMENT PLAN
WHEREAS, the ICF Kaiser International, Inc. Retirement Plan
(hereinafter referred to as the "Plan") was established effective August 1,
1971, by ICF Kaiser International, Inc. (hereinafter referred to as the
"Company"); and
WHEREAS, the Plan was most recently restated effective January 1,
1996; and
WHEREAS, the restated Plan was amended subsequently on three
occasions; and
WHEREAS, the Company desires to amend the Plan again to comply with
recent tax legislation, to reflect various administrative changes, and to
accommodate certain divestitures;
NOW, THEREFORE, effective as of April 7, 1999, unless specifically
provided otherwise, the Plan is hereby amended in the respects hereinafter set
forth.
1. Section 1.7 of the Plan is hereby amended to provide as follows:
1.7 "Closing" shall mean the consummation of a transaction in
which the Company disposes of (i) substantially all of the assets
used by the Company in a trade or business of the Company, or
(ii) the Company's interest in a subsidiary.
2. The last sentence of the second paragraph of Section 1.10 of the
Plan is hereby deleted effective January 1, 1997.
3. Paragraph (e) of Section 1.13 of the Plan is hereby amended
effective January 1, 1997, to provide as follows:
(e) a leased employee who pursuant to Section 414(n)(2) of
the Code means any person (other than a person who is an employee
without regard to this subparagraph (e)) engaged in performing
services for a Member of a Controlled Group (the "recipient")
pursuant to an agreement between the recipient and any other
person ("Leasing Organization") who meets the following
requirements:
(i) he has performed services for one or more Members
of a Controlled Group (or for any other "related persons"
determined in accordance with Section 414(n)(6) of the Code)
on a substantially full-time basis for a period of at least
one year;
<PAGE>
(ii) such services are under the primary direction or
control of the recipient; and
(iii) he is not participating in a "safe harbor plan"
of the Leasing Organization. (For this purpose a "safe
harbor plan" is a plan that satisfies the requirements of
Section 414(n)(5) of the Code, which will generally be a
money purchase pension plan with a nonintegrated company
contribution rate of at least 10% of compensation and which
provides for immediate participation and full and immediate
vesting).
A person who is a leased employee shall also be considered an employee
of a Member of a Controlled Group during such period (and solely for
the purpose of determining length of service for vesting purposes, and
shall also be considered to have been an employee for any earlier
period in which he was a leased employee) but shall not be a
Participant and shall not otherwise be eligible to become covered by
the Plan during any period in which he is a leased employee.
Notwithstanding the foregoing, the sole purpose of this Paragraph (e)
is to define and apply the term "leased employee" strictly (and only)
to the extent necessary to satisfy the minimum requirements of Section
414(n) of the Code relating to "leased employees.
4. Section 1.16 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
1.16 "Fund" shall mean any of the investment funds established and
maintained in accordance with the provisions of Article VI.
5. Section 1.26 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
1.26 "Non-Highly Compensated Participant" shall mean any Participant
who is not a Highly Compensated Participant.
6. Section 1.43 of the Plan is hereby amended January 1, 1997, to provide
as follows:
1.43 [Revised]
7. Section 2.1 of the Plan is hereby amended by the addition of a
sentence at the end thereof to provide as follows:
Notwithstanding any other provision of the Plan to the contrary, if an
individual is transferred directly from employment (i) with the
Employer in a capacity other than as an Employee, or (ii) with a
Member of a
2
<PAGE>
Controlled Group to employment with the Employer as an Employee, his
service with the Employer or such Member of a Controlled Group shall
be included in determining his eligibility to participate in the Plan
pursuant to the provisions of this Section 2.1.
8. Section 2.6 of the Plan is hereby amended to provide as follows:
2.6 Qualified Military Service and Compliance with Uniformed Services
-----------------------------------------------------------------
Employment and Reemployment Rights Act. Notwithstanding any provision
--------------------------------------
of the Plan to the contrary, effective as of December 12, 1994,
contributions, benefits, and service credit with respect to Qualified
Military Service shall be provided in accordance with Section 414(u)
of the Code.
9. Article II of the Plan is hereby amended by the addition of Section
2.7 at the end thereof to provide as follows:
2.7 Cessation of Coverage of Certain Participants. Effective as of
---------------------------------------------
the date of the Closing with respect to the sale of the Environment
and Facilities Management Group (the "EFM Group") of the Company to
The IT Group, Inc., coverage under the Plan shall be closed to any
individual employed by, or at a facility of, the EFM Group and
effective as of the date of the Closing with respect to the sale of
the stock of ICF Consulting Group, Inc. ("ICF Consulting Group") to CM
Equity Partners, L.P., CMEP Coinvestment ICF, L.P. and various
individuals, coverage under the Plan shall be closed to any individual
employed by, or at a facility of, ICF Consulting Group.
10. Article III of the Plan is hereby amended by the addition of Section
3.7 at the end thereof to provide as follows:
3.7 Full Vesting of Certain Participants. Notwithstanding any other
------------------------------------
provision of the Plan to the contrary, as of the date of the Closing
with respect to the sale of the EFM Group to The IT Group, Inc., each
Participant employed by, or at a facility of, the EFM Group shall be
fully vested in his Account, and as of the date of the Closing with
respect to the sale of ICF Consulting Group to CM Equity Partners,
L.P., CMEP Coinvestment ICF, L.P. and various individuals, each
Participant employed by, or at a facility of, ICF Consulting Group
shall be fully vested in his Account.
3
<PAGE>
11. The first sentence of Section 4.1 of the Plan is hereby amended by the
deletion of the phrase "or (c) dies" and the substitution of a phrase in place
thereof to provide as follows:
"(c) dies; or (d) is terminated from employment with the Company or a
Member of a Controlled Group due to the sale of the EFM Group or ICF
Consulting Group,".
12. Section 4.4 is hereby amended effective January 1, 1998, to provide as
follows:
4.4 Limitation on Benefits.
----------------------
(a) Incorporation of Section 415 of the Code. The provisions set
----------------------------------------
forth in this Section 4.4 are intended solely to comply with the
requirements of Section 415 of the Code and shall be interpreted,
applied, and if and to the extent necessary deemed modified without
further formal language so as to satisfy solely the minimum
requirements of said Section. For such purposes, the limitations of
Section 415 of the Code are hereby incorporated by reference and made
part hereof as though fully set forth herein, but shall be applied
only to particular Plan benefits in accordance with the provisions of
this Section 4.4, to the extent such provisions are not consistent
with said Section 415. The limitations contained in this Section 4.4
shall be applicable only with respect to benefits provided pursuant to
defined contribution plans and defined benefit plans specified in
Section 415(k) of the Code.
(b) Definitions. For purposes of this Section 4.4, the
-----------
following definitions shall apply in addition to those set forth in
Article I:
(i) The term "Annual Additions" shall mean the amount
defined in Section 415 (c)(2) of the Code.
(ii) The term "Annual Benefit" shall mean the benefit
amount defined in Section 415(b)(2)(A) of the Code as adjusted
pursuant to the provisions of Section 415(b)(2)(B), (C), (D), and
(E) of the Code.
(iii) The term "Compensation" shall mean compensation as
defined in Section 415(c)(3) of the Code.
(iv) The term "Defined Benefit Fraction" for any Limitation
Year beginning prior to January 1, 2000, shall mean the fraction
defined in Section 415(e)(2) of the Code.
(v) The term "Defined Contribution Fraction" for any
Limitation Year beginning prior to January 1, 2000, shall mean
the fraction defined in Section 415(e)(3) of the Code.
4
<PAGE>
(vi) The term "Employer" shall mean the Company and all
Members of a Controlled Group; provided, however, that for
purposes of applying the limitations of this Section 4.4 with
respect to Limitation Years after December 31, 1999, "50 percent"
rather than "80 percent" shall be used in determining Member of a
Controlled Group defined under Section 414(b) and Section 414(c)
of the Code.
(vii) The term "Excess Amount" shall mean the excess of the
Participant's Annual Additions for a Limitation Year over the
Defined Contribution Maximum Permissible Amount.
(viii) The term "Highest Average Compensation" shall mean
the average Compensation for the three consecutive calendar years
during which the Participant was an active Participant in the
Plan and had the greatest aggregate Compensation from the
Employer.
(ix) The term "Limitation Year" shall mean a calendar year
or such other 12-month period elected by the Company pursuant to
regulations and rulings under Section 415 of the Code.
(x) The term "Defined Contribution Maximum Permissible
Amount" shall mean Annual Additions of a Participant which do not
exceed the lesser of (i) $30,000 (adjusted in accordance with
regulations prescribed by the Secretary of the Treasury for
increases in the cost of living), or (ii) 25 percent of such
Participant's Compensation paid for such Limitation Year as set
forth in Section 415(e)(1) of the Code. If a short Limitation
Year is created because of an amendment changing the Limitation
Year to a different 12-month consecutive period, such Annual
Additions shall not exceed $30,000 multiplied by a fraction, the
numerator of which is the number of months in the short
Limitation Year and the denominator of which is 12.
(xi) The term "Defined Benefit Maximum Permissible Amount"
shall mean the Annual Benefit of a Participant which does not
exceed the lesser of $90,000 or 100 percent of the Participant's
Highest Average Compensation as set forth in Section 415(b)(1) of
the Code.
(xii) The term "Projected Annual Benefit" shall mean the
annual retirement benefit of a Participant attributable to
Employer contributions which would be payable to such Participant
under a plan based on the assumptions that he continues his
employment as a
5
<PAGE>
Participant until the Social Security Retirement Age and that his
Compensation for the Limitation Year continues at the same rate
until the Social Security Retirement Age, and on the basis of the
federal Social Security Act as in effect on the last day of the
Limitation Year. A Participant's "aggregate Projected Annual
Retirement Benefit" shall include his Projected Annual Benefit,
if any, under any other defined benefit plan maintained by the
Employer.
(xiii) The term "Social Security Retirement Age" shall mean
the age used as the retirement age under Section 216(l) of the
federal Social Security Act, without regard to any age increase
factor and as if the early retirement age under Section 216(l)(2)
were 62.
(c) Limitations on Allocations Under the Plan. Notwithstanding
-----------------------------------------
any other provision of the Plan to the contrary, the amount of Annual
Additions which may be credited to the Participant's Account for any
Limitation Year shall not exceed the lesser of the Defined
Contribution Maximum Permissible Amount or any other limitation
contained in the Plan. If the Annual Additions to the Account of a
Participant in any Limitation Year would otherwise exceed such amount,
the Excess Amount shall be disposed of by reducing the Employer
contributions and forfeitures, if any, otherwise allocable to the
Participant's Account for the Limitation Year. Amounts deemed to be
forfeitures under this Paragraph (c) shall be held unallocated in a
suspense account established for the Limitation Year and shall be
applied against the Employer's contribution obligation for the next
following Limitation year (and succeeding Limitation Years, as
necessary). If a suspense account is in existence at any time during a
Limitation Year, all amounts in the suspense account must be allocated
to Participants' Accounts (subject to the limitations set forth in
this Section 4.4 ) before any further Employer contributions may be
made to the Plan on behalf of Participants. If a suspense account is
in existence at any time during a Limitation Year pursuant to this
Section 4.4, it will not participate in the allocation of the
investment gains and losses on the Plan's assets.
(d) Limitation for Multiple Defined Contribution Plan
-------------------------------------------------
Participation. If a Participant is covered by any other qualified
-------------
defined contribution plan (whether or not terminated) maintained by
the Employer concurrently with the Plan, and if the Annual Additions
for the Limitation Year would otherwise exceed the amount that may be
applied for the Participant's benefit under the limitation contained
in Section 4.4(c), such excess shall be reduced first by returning any
employer contributions made with respect to the Participant under an
employee stock ownership plan, and then by returning from any such
other plan or plans any elective employer contributions made on behalf
of the Participant under Section
6
<PAGE>
401(k) of the Code for the Limitation Year under all such other plans
with the income attributable thereto and any corresponding matching
employer contributions thereto. If the limitation contained in Section
4.4(c) is still not satisfied after the return of all such
contributions, then the Employer contributions under this Plan shall
be reduced as provided in Section 4.4(c).
(e) Limitation for Defined Benefit Plan Participation. For
-------------------------------------------------
Limitation Years beginning prior to January 1, 2000, if a Participant
in the Plan is also covered by a qualified defined benefit plan
(whether or not terminated) maintained by the Employer, in no event
shall the sum of the Defined Benefit Fraction and the Defined
Contribution Fraction exceed 1.0 in any Limitation Year.
(f) Scope of Limitations. The limitations contained in
--------------------
Paragraphs (c), (d), and (e) of this Section 4.4 shall be applicable
only with respect to benefits provided pursuant to defined
contribution plans and defined benefit plans described in Section
415(k) of the Code and all such defined contribution plans (whether or
not terminated) of the Employer shall be treated as one defined
contribution plan and all such defined benefit plans (whether or not
terminated) of the Employer shall be treated as one defined benefit
plan.
13. Sections 4.5 and 4.6 of the Plan are hereby deleted effective January
1, 1998, in their entirety.
14. Article V of the Plan is hereby amended effective January 1, 1998, to
provide as follows:
ARTICLE V
TOP-HEAVY PROVISIONS
--------------------
5.1 Applicability. Notwithstanding any other provision to the
-------------
contrary, in the event the Plan is deemed to be a top-heavy plan for
any Plan Year, the provisions contained in this Article V with respect
to vesting and contributions made by the Employer shall be applicable
with respect to such Plan Year. In the event that the Plan is
determined to be a top-heavy plan and upon a subsequent determination
date is determined to no longer be a top-heavy plan, the vesting and
the contribution provisions in effect immediately preceding the Plan
Year in which the Plan was determined to be a top-heavy plan shall
again become applicable as of such subsequent determination date.
7
<PAGE>
5.2 Top-Heavy Definitions. Notwithstanding the definitions set forth
---------------------
in Article I, the following definitions shall be applicable to this
Article V.
(a) The term "Compensation" shall have the meaning set forth in
------------
Treas. Reg. Section 1.415-2(d).
(b) The term "Determination Date" shall mean for any Plan Year
------------------
subsequent to the first Plan Year, the last day of the preceding Plan
Year and for the first Plan Year of the Plan, the last day of that
Plan Year.
(c) The term "Employer" shall mean the Company and all Members
--------
of a Controlled Group.
(d) The term "Key Employee" shall mean any Employee or former
------------
Employee (and the beneficiaries of such Employer) who at any time
during the Plan Year and any of the four preceding Plan Years was an
officer of the Employer with annual compensation greater than 50
percent of the dollar limitation under Section 415(b)(1)(A) of the
Code, an owner (or considered an owner) under Section 318 of the Code)
of one of the ten largest interests in the Employer with compensation
greater than 100 percent of the limitation under Section 415(b)(1)(A)
of the Code, a 5 percent owner of the Employer, or a 1 percent owner
of the Employer with annual compensation of more than $150,000.
(e) The term "Permissive Aggregation Group" shall mean the
----------------------------
Required Aggregation Group of plans plus any other plan or plans of
the Employer which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of
Section 401(a)(4) and 410 of the Code.
(f) The term "Present Value" shall mean for purposes of
-------------
computing present value calculations in determining the Top-Heavy
Ratio, present value calculations based on the actuarial assumptions
as stated in the applicable plan.
(g) The term "Required Aggregation Group" shall mean (a) each
--------------------------
tax qualified plan of the Employer in which at least one Key Employee
participates or participated at any time during the determination
period (regardless of whether the plan terminated), and (b) any other
tax qualified plan of the Employer which enables a plan described in
clause (a) to meet the requirements of Section 401(a)(4) or 410 of the
Code.
(h) The term "Super Top-Heavy Group" with respect to a
---------------------
particular Plan Year shall mean a Required or Permissive Aggregation
Group that, as of the Determination Date, would qualify as a Top-Heavy
Group under the definition in Paragraph (j) of this Section 5.2 with
"90
8
<PAGE>
percent" substituted for "60 percent" each place where percent"
appears in such definition.
(i) The term "Super Top-Heavy Plan" with respect to a particular
--------------------
Plan Year shall mean a plan that, as of the Determination Date, would
qualify as a Top-Heavy Plan under the definition in Paragraph (k) of
this Section 5.2 with "90 percent" substituted for "60 percent" each
place where "60 percent" appears in such definition. A plan is also a
"Super Top-Heavy Plan" if it is part of a Super Top-Heavy Group.
(j) The term "Top-Heavy Group" with respect to a particular Plan
---------------
Year shall mean a Required or Permissive Aggregation Group if the sum,
as of the Determination Date, of the present value of the cumulative
accrued benefits for Key Employees under all defined benefit plans
included in such group and the aggregate of the account balances of
Key Employees under all defined contribution plans included in such
group exceeds 60 percent of a similar sum determined for all employees
covered by the plans included in such group.
(k) The term "Top-Heavy Plan" with respect to a particular Plan
--------------
Year shall mean the Plan if any of the following conditions exist:
(i) If the Top-Heavy Ratio for the Plan exceeds 60 percent
and the Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(ii) If the Plan is a part of a Required Aggregation Group
of plans but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds 60 percent.
(iii) If the Plan is a part of a Required Aggregation Group
and part of a Permissive Aggregation Group of plans and the Top-
Heavy Ratio for the Permissive Aggregation Group exceeds 60
percent.
(l) The term "Top-Heavy Ratio" shall mean:
---------------
(i) While the Employer maintains one or more defined
contribution plans (including any simplified employee pension
plan) and the Employer has not maintained any defined benefit
plan which during the 5-year period ending on the Determination
Date has or has had accrued benefits, the Top-Heavy Ratio for the
Plan alone or for the Required or Permissive Aggregation Group,
as appropriate, is a fraction, the numerator of which is the sum
of the account balances of all Key Employees as of the
Determination Date (including any part of any account balance
distributed in the five-year period ending
9
<PAGE>
on the Determination Date), and the denominator of which is the
sum of all account balances (including any part of any account
balance distributed in the five-year period ending on the
Determination Date), both computed in accordance with Section 416
of the Code. Both the numerator and denominator of the Top-Heavy
Ratio are adjusted to reflect any contribution not actually made
as of the Determination Date, but which is required to be taken
into account on that date under Section 416 of the Code.
(ii) While the Employer maintains one or more defined
contribution plans (including any simplified employee pension
plans) and the Employer maintains or has maintained one or more
defined benefit plans which during the five-year period ending on
the Determination Date has or has had any accrued benefits, the
Top-Heavy Ratio for any Required or Permissive Aggregation Group
as appropriate is a fraction, the numerator of which is the sum
of account balances under the aggregated defined contribution
plan or plans for all Key Employees, determined in accordance
with subparagraph (i) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans for
all Key Employees as of the Determination Date, and the
denominator of which is the sum of the account balances under the
aggregated defined contribution plan or plans for all
participants, determined in accordance with subparagraph (i)
above, and the present value of accrued benefits under the
defined benefit plan or plans for all participants as of the
Determination Date, all determined in accordance with Section 416
of the Code. The accrued benefits under a defined benefit plan in
both the numerator and denominator of the Top-Heavy Ratio are
adjusted for any distribution of an accrued benefit made in the
five-year period ending on the Determination Date.
(iii) For purposes of subparagraphs (i) and (ii) above,
the value of account balances and the present value of accrued
benefits shall be determined as of the most recent valuation date
that falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Section 416 of the Code
for the first and second plan years of a defined benefit plan.
The account balances and accrued benefits of a participant (1)
who is not a Key Employee but who was a Key Employee in a prior
year, or (2) who has not performed services for the Employer
maintaining the Plan at any time during the 5-year period ending
on the Determination Date will be disregarded. The calculation of
the Top-Heavy Ratio, and the extent to which distributions,
rollovers and transfers are taken into account will be made in
accordance with Section 416 of the Code. Deductible employee
contributions shall
10
<PAGE>
not be taken into account for purposes of computing the Top-Heavy
Ratio. When aggregating plans the value of account balances and
accrued benefits will be calculated with reference to the
Determination Date that falls within the same calendar year.
(m) The term "Valuation Date" shall mean, for purposes of computing
--------------
the Top-Heavy Ratio, the Determination Date.
5.3 Top-Heavy Minimum Allocation Rules. The following Top-Heavy Plan
----------------------------------
minimum allocation rules shall apply:
(a) Except as otherwise provided in Paragraph (b) and (c) below, the
Employer contributions and forfeitures allocated on behalf of any
Participant who is not a Key Employee shall be the lesser of 3 percent of
such Participant's Compensation or in the case where the Employer has no
defined benefit plan which designates the Plan to satisfy Section 401 of
the Code, the largest percentage of compensation allocated with respect to
a Key Employee for the Plan Year. Contributions made pursuant to the
provisions of Section 401(k) of the Code cannot be used to satisfy the
minimum contributions for non-Key Employees under Section 416 of the Code.
Furthermore, in making the determination of the percentage at which
contributions are made for the Key Employee with the highest percentage,
Contributions made pursuant to the provisions of Section 401(k) of the Code
on behalf of Key Employees shall be taken into account.
(b) The provisions in paragraph (a) shall not apply to any
Participant who is not actively employed as an Employee by the Employer on
the last day of the Plan Year for which the minimum allocation is to be
made.
(c) The provisions in Paragraph (a) shall not apply to any
Participant to the extent the Participant is covered under any other plan
or plans of the Employer, and by the terms of such plan or plans it is
provided that the minimum allocation or benefit requirements applicable to
Top-Heavy Plans shall be met in such other plan or plans. If such other
plan is, or if one of such other plans is, a defined benefit plan
maintained by the Employer, and such plan is a Top-Heavy Plan, the minimum
benefit requirements applicable to Top-Heavy Plans shall be met under such
defined benefit plan as provided therein, to the extent such benefit can be
provided under such plan or plans. If such other plan is, or if one of such
other plans is, a defined contribution plan maintained by the Employer, and
such plan is a Top-Heavy Plan, the minimum allocation requirements shall be
met under such plan, except as may be otherwise provided in such other
plan. The application and administration of the minimum allocation or
benefit requirements for Top-Heavy Plans shall be satisfied in a manner
11
<PAGE>
so as to only satisfy the minimum allocation/benefit requirements as
permissible and so as to avoid any duplication of minimum
allocation/benefits for non-Key Employees, as provided under Section 416 of
the Code.
5.4 Top-Heavy Vesting Schedule. A Participant shall be entitled to the
--------------------------
vested interest in his Account attributable to Employer contributions
calculated in accordance with the provisions of Article IV (or, if greater,
in accordance with the provisions of Section 5.3) determined in accordance
with the following schedule, if greater than under Article III:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
If the Plan becomes a Top-Heavy Plan and subsequently ceases to be such,
the vesting schedule set forth above shall continue to apply in determining
the rights to benefits of any Participant who had at least three years of
Service as of December 31 in the last Plan Year in which the Plan was a
Top-Heavy Plan. For other Participants, such schedule shall apply only to
that portion of their Account that became vested under the vesting schedule
set forth above as of such December 31.
5.5 Top-Heavy Compensation Limitation. The annual Compensation of any
---------------------------------
Participant to be taken into account under the Plan during any Plan Year in
which the Plan is determined to be a Top-Heavy Plan shall not exceed the
limitation on Compensation set forth in Section 1.10.
5.6 Top-Heavy Plan/Benefit Limitations. In any Plan Year beginning prior
----------------------------------
to January 1, 2000, in which the Plan is a Top-Heavy Plan, the denominators
of the defined benefit fraction and the defined contribution fraction (as
such terms are used in applying the benefit limitation provisions of
Section 415 of the Code) shall be computed using 100 percent of the dollar
limitation instead of 125 percent.
15. Section 6.1 of the Plan is hereby amended to provide as follows:
6.1 Directed Investment in Funds. The Company shall cause at least three
----------------------------
Funds to be established and maintained at all times. Each such Fund shall
be diversified and have different risk and return characteristics from the
other Funds. Any Fund which invests in investments with restrictions
regarding Funds to which investment transfers may be made or to which a
minimum investment period is applicable shall not be considered as one of
12
<PAGE>
such requisite three Funds. Each Participant, pursuant to procedures
provided by the Trustee and accepted by the Company, upon becoming a
Participant under the Plan, shall make an investment election
directing the manner in which the assets of his Account (except for
assets that have been contributed in a form other than cash and have
not been reduced to cash), shall be invested in the Funds. The
Accounts of Participants shall be charged or credited with their share
net earnings, gains, losses and expenses and shall reflect the
appreciation or depreciation, as the case may be, of the Funds. The
Plan is intended to constitute a plan described in Section 404(c) of
ERISA and DOL Regs. Section 2550.404c-1 and insofar as the Plan
complies with said Section 404(c), Plan fiduciaries shall be relieved
of liability for any losses which are the direct result of investment
instructions given by Participants. Notwithstanding the foregoing, to
the extent that Section 404(c) of ERISA is not applicable,
Participants shall be named fiduciaries with respect to the investment
of their Accounts.
16. The next to last sentence of Section 6.2 of the Plan is hereby amended
to provide as follows:
"The distribution of a Participant's Account shall be made in cash or
in shares of Company Stock, or part in each, at the election of the
Participant, pursuant to the provisions of Article VIII."
17. The last sentence of Section 6.2 of the Plan is hereby amended by the
deletion of the reference to "Section 9.7" and the substitution of a reference
to "Section 9.6" in place thereof.
18. The first sentence of Section 7.1 of the Plan is hereby amended by the
deletion of the phrase "or (c) die" and the substitution of a phrase in place
thereof to provide as follows:
"(c) die; or (d) terminate employment with the Company or a Member of
a Controlled Group due to the sale of the EFM Group or ICF Consulting
Group."
19. Section 8.1 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
8.1 Distribution at Required Beginning Date. Notwithstanding any
---------------------------------------
other provision of the Plan to the contrary, on and after January 1,
1997, payment of a retired or former Participant's benefit under the
Plan shall commence not later than the earlier of:
(i) the 60th day after the end of the Plan Year in which
the latest of the following dates occurs: (i) Participant's
Normal Retirement Date, (ii) the tenth anniversary of the date on
which the
13
<PAGE>
Participant first became a Participant, and (iii) the date of the
Participant's retirement or other termination of employment; or
(ii) the April 1 following the calendar year in which the
later of the following dates occurs: (i) the date on which the
Participant attains 70-1/2, or (ii) the date on which the
Participant retires (except for a Participant who is a 5% owner,
as defined in Section 416(i)(1)(B) of the Code, the date
determined under this Paragraph (d) shall be April 1 of the
calendar year following the calendar year in which the
Participant attains age 70-1/2 without regard to the date of the
Participant's retirement.
All payments required under this Article VIII shall be determined and
made in accordance with the regulations under Section 401(a)(9) of the
Code, including the minimum distribution incidental benefit
requirements of proposed Treas. Reg. (S)1.401(a)(9)-2, if applicable.
Any non-retired Participant (other than a 5% owner) who has attained
age 70-1/2 and who is receiving payment of his benefit while employed
by a Member of a Controlled Group, may elect in writing in the manner,
time, and form required by the Company to terminate payment of his
Plan benefit otherwise payable after January 1, 1997, until after his
retirement under the terms of the Plan in effect at such time. Any
non-retired Participant (other than a 5% owner) who attains age 70-1/2
in 1997 or 1998, may elect in writing in the manner, time, and form
required by the Company to defer payment of his Plan benefit until
after his retirement pursuant to the terms of the Plan in effect at
such time. Notwithstanding the foregoing, the spouse of any
Participant who so elects to terminate receiving Plan benefits which
are being paid in a qualified joint and survivor annuity (within the
meaning of Section 417(b) of the Code) must consent to such election
and acknowledge the effect of the election. For purposes of Section
417 of the Code, any recommencement of benefits under this Section 8.1
shall be considered a new annuity starting date. If such a Participant
does not make such an election or if the Participant is a 5% owner,
payment of his Plan benefit shall be made or shall continue to be made
to him pursuant to the provisions of this Section 8.1 in effect prior
to January 1, 1997.
20. The first sentence of Paragraph (a) Section 8.3 of the Plan is hereby
amended to provide as follows:
(a) General Distribution Rule. If a Participant Retires under
-------------------------
the Plan, dies, Separates from Service due to the sale of the EFM
Group or ICF Consulting Group, or Separates from Service for any other
reason, the entire vested balance of his Account shall be distributed
pursuant to the provisions of this Section 8.3 and Section 8.4.
14
<PAGE>
21. Paragraph (c) of Section 8.3 is hereby amended to provide as follows:
(c) Distribution in Kind. Distribution of the Vested portion of
--------------------
a Participant's Account invested in Company stock shall be made in
whole shares of Company Stock (with the value of any fractional share
paid in cash), cash, or a combination of both, at the election of the
Participant; provided, however, that the distribution of any cash
payment shall be made no later than two months after the date that
distribution of Company Stock would have occurred and shall be
determined as of the value of Company Stock on such date of
distribution.
22. Paragraph (d) of Section 8.3 of the Plan is hereby deleted.
23. Subparagraph (a)(v) of Section 8.4 of the Plan is hereby amended
effective January 1, 1997, to provide as follows:
(v) Notwithstanding any other provision of the Plan to the
contrary, any rejection, or revocation of a rejection, of the
automatic election of the qualified joint and survivor annuity shall
be made only within the 90-day period prior to the Participant's
annuity starting date. Within a reasonable period of time prior to the
annuity starting date, the Company shall provide each Participant with
a written explanation of (1) the terms and conditions of the qualified
joint and survivor annuity and its financial effect on his retirement
benefit; (2) the Participant's right to waive such joint and survivor
annuity; (3) the rights of the Participant's spouse regarding consent
as described above in subparagraph (ii); and (4) the right to make and
the effect of, a revocation of an election to waive the automatic
qualified joint and survivor annuity. Such explanation shall be
provided at least 30 days prior to distribution unless the Participant
(with any applicable spousal consent) waives such 30-day requirement
and distribution commences more than 7 days after such explanation is
provided.
24. Paragraph (a) of Section 8.9 of the Plan is hereby amended effective
March 17, 1997, to provide as follows:
(a) General. Upon proper application of a Participant in such
-------
form as the Company may specify, the Company in its sole discretion
may direct the Trustee to make a loan to the Participant. The
application, and the resulting loan, must comply with conditions
specified in procedures established by the Company and meet the
following conditions:
(i) loans shall be made available to all parties in interest
who are Participants or Beneficiaries on a reasonably equivalent
basis;
15
<PAGE>
(ii) loans shall not be made available to highly compensated
Employees, officers, or shareholders in an amount greater then the
amount made available to other Participants and Beneficiaries;
(iii) loans shall bear a reasonable rate of interest;
(iv) loans shall be adequately secured; and
(v) loan documents shall provide for repayment within five
years or over a reasonable period of time, in the case of a loan
used to acquire any dwelling unit for use as a principal residence
as provided under Section 72(p) of the Code.
25. Article IX of the Plan is hereby amended effective March 17, 1999, to
provide as follows:
ARTICLE IX
ADMINISTRATION AND CLAIMS PROCEDURES
------------------------------------
9.1 Authority of the Company. The Company shall be the Plan
------------------------
administrator for purposes of ERISA and the Code and shall have the
authority and the power to perform the functions conferred upon it
herein, subject to the limitations hereinafter set forth. The Company
shall have the sole right to interpret and construe the Plan, and to
determine any disputes arising thereunder, subject to the provisions
of Section 9.3. In exercising such powers and authorities, the Company
shall at all times exercise good faith, apply standards of uniform
application, and refrain from arbitrary action. The Company may employ
such attorneys, agents, and accountants as it may deem necessary or
advisable to assist it in carrying out its duties hereunder. The
Company is hereby designated as a "named fiduciary" of the Plan as
such term is defined in Section 402(a)(2) of ERISA. The Company may
allocate any of its responsibilities for the day-to-day operation and
administration of the Plan to any person or persons employed by it. In
addition, the Company, by action of its Board of Directors, may
designate a person other than itself to carry out any of the powers,
authorities or responsibilities which are retained by it or granted to
it by this Article IX.
9.2 Action of Company. Any act authorized, permitted, or required to
-----------------
be taken by the Company under the Plan, which has not been allocated
or delegated in accordance with Section 9.1, may be taken by a
majority of the members of the Board of Directors of the Company,
either by vote at a meeting, or in writing without a meeting. All
notices, advices, directions, certifications, approvals, and
instructions required or authorized to be
16
<PAGE>
given by the Company under the Plan shall be in writing and signed by
either (a) a majority of the members of the Board of Directors of the
Company, or by such member or members as may be designated by an
instrument in writing, signed by all the members thereof, as having
authority to execute such documents on its behalf, or (b) a person who
becomes authorized to act for the Company in accordance with the
provisions of Section 9.1. Subject to the provisions of Section 9.3,
any action taken by the Company which is authorized, permitted, or
required under the Plan shall be final and binding upon the Company
and the Trustee, all persons who have or who claim an interest under
the Plan, and all third parties dealing with the Company or the
Trustee. The Company shall have exclusive responsibility with respect
to determining the amount of any Employer contributions. Such
determination shall be final, binding, and conclusive upon the
Employer, the Trustee, and all Participants, and Beneficiaries.
9.3 Claims Review Procedure. Whenever the Company decides for
-----------------------
whatever reason to deny, whether in whole or in part, a claim for
benefits filed by any person (hereinafter referred to a the
"Claimant"), the Plan administrator shall transmit to the Claimant a
written notice of the Company's decision, which shall be written in a
manner calculated to be understood by the Claimant and contain a
statement of the specific reasons for the denial of the claim and a
restatement advising the Claimant that, within 60 days of the date on
which he receives such notice, he may obtain review of the decision of
the Company in accordance with the procedures hereinafter set forth.
Within such 60-day period, the Claimant or his authorized
representative may request that the claim denial be reviewed by filing
with the Plan administrator a written request therefor, which request
shall contain the following information:
(a) the date on which the Claimant's request was filed with the
Plan administrator; provided, however, that the date on which the
Claimant's request for review was in fact filed with the Plan
administrator shall control in the event that the date of the actual
filing is later than the date stated by the Claimant pursuant to this
paragraph (a);
(b) the specific portions of the denial of his claim which the
Claimant requests the Plan administrator to review;
(c) a statement by the Claimant setting forth the basis upon
which he believes the Plan administrator should reverse the Company's
previous denial of his claim for benefits and accept his claim as
made; and
(d) any written material (offered as exhibits) which the
Claimant desires the Plan administrator to examine in its
consideration of his position as stated pursuant to paragraph (c).
17
<PAGE>
Within 60 days of the date determined pursuant to paragraph (a) of
this Section 9.3, the Plan administrator shall conduct a full and fair
review of the Company's decision denying the Claimant's claim for
benefits. Within 60 days of the date of such hearing, the Plan
administrator shall render its written decision on review, written in
a manner calculated to be understood by the Claimant, specifying the
reasons and Plan provisions upon which its decision was based.
9.4 Indemnification. In addition to whatever rights of
---------------
indemnification the members of the Board of Directors of the Company,
or any other person or persons to whom any power, authority, or
responsibility of the Company is allocated or delegated pursuant to
Section 9.1, may be entitled under the articles of incorporation,
regulations, or by-laws of the Company, under any provision of law, or
under any other agreement, the Company shall satisfy any liability
actually and reasonably incurred by any such person or persons,
including expenses, attorneys' fees, judgments, fines, and amounts
paid in settlement, in connection with any threatened, pending, or
completed action, suit, or proceeding which is related to the exercise
or failure to exercise by such person or persons of any of the powers,
authority, responsibilities, or discretion provided under the Plan, or
reasonably believed by such person or persons to be provided
hereunder, and any action taken by such person or persons in
connection therewith.
9.5 Administrative Expenses. The fees of the Trustee and all other
-----------------------
administrative expenses of the Plan and Trust shall be paid by the
Trustee from the assets of the Trust unless the Company, in its
discretion, elects to pay any such fees and/or expenses.
9.6 Voting of Company Stock in the ICF Kaiser Stock Fund. Each
----------------------------------------------------
Participant or Beneficiary who has shares of Company Stock allocated
to his Account shall be a named fiduciary with respect to the voting
of Company Stock held thereunder and shall have the following powers
and responsibilities:
(a) Prior to each annual or special meeting of the shareholders
of the Company, the Company shall cause to be sent to each Participant
and Beneficiary who has Company Stock allocated to his Account and
invested in the ICF Kaiser Stock Fund under the Plan a copy of the
proxy solicitation material therefor, together with a form requesting
confidential voting instructions, with respect to the voting of such
Company Stock as well as the voting of Company Stock for which the
Trustee does not receive instructions. Each such Participant and/or
Beneficiary shall instruct the Trustee to vote the number of such
uninstructed shares of Company Stock equal to the proportion that the
number of shares of
18
<PAGE>
Company Stock allocated to his Account and invested in the ICF Kaiser
Stock Fund bears to the total number of shares of Company Stock in the
Plan for which instructions are received. Upon receipt of such a
Participant's or Beneficiary's instructions, the Trustee shall then
vote in person, or by proxy, such shares of Company Stock as so
instructed.
(b) The Company shall cause the Trustee to furnish to each
Participant and Beneficiary who has Company Stock allocated to his
Account and invested in the ICF Kaiser Stock Fund under the Plan
notice of any tender or exchange offer for, or a request or invitation
for tenders or exchanges of, Company Stock made to the Trustee. The
Trustee shall request from each such Participant and Beneficiary
instructions as to the tendering or exchanging of Company Stock
allocated to his Account. Each Participant and Beneficiary who does
not instruct the Trustee with respect to the tendering or exchanging
of Company Stock allocated to his Account shall be deemed to have
decided not to participate in any such tender or exchange offer. The
Trustee shall provide Participants and Beneficiaries with a reasonable
period of time in which they may consider any such tender or exchange
offer for, or request or invitation for tenders or exchanges of,
Company Stock made to the Trustee. Within the time specified by the
Trustee, the Trustee shall tender or exchange such Company Stock as to
which the Trustee has received instructions to tender or exchange from
Participants and Beneficiaries.
(c) Instructions received from Participants and Beneficiaries by
the Trustee regarding the voting, tendering, or exchanging of Company
Stock shall be held in strictest confidence and shall not be divulged
to any other person, including officers or employees of the Company,
except as otherwise required by law, regulation or lawful process.
26. The first sentence of Section 10.1 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "and the Committee".
27. The second sentence of Section 10.2 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "the Committee and".
28. The third sentence of Section 10.3 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "or Committee".
29. The first sentence and third sentence of Section 10.4 of the Plan are
hereby amended effective March 17, 1999, by the deletion of the phrase "and
Committee".
19
<PAGE>
30. The term "Committee" is hereby deleted effective March 17, 1999,
throughout the Plan and the term "Company" is hereby substituted in place
thereof.
Executed this 8/th/ day of April, 1999.
ICF KAISER INTERNATIONAL, INC.
By: /s/ Timothy P. O'Connor
--------------------------------------
And: Senior Vice President and
------------------------------------
Chief Financial Officer
------------------------------------
20
<PAGE>
EXHIBIT 10(d)(5)
FIFTH AMENDMENT
TO THE
ICF KAISER INTERNATIONAL, INC.
RETIREMENT PLAN
WHEREAS, the ICF Kaiser International, Inc. Retirement Plan (hereinafter
referred to as the "Plan") was established effective August 1, 1971, by ICF
Kaiser International, Inc. (hereinafter referred to as the "Company"); and
WHEREAS, the Plan was most recently restated effective January 1, 1996; and
WHEREAS, the restated Plan was amended subsequently on four occasions; and
WHEREAS, the Company desires to amend the Plan again;
NOW, THEREFORE, effective as of April 7, 1999, unless specifically provided
otherwise, the Plan is hereby amended in the respects hereinafter set forth.
1. Section 2.7 of the Plan is hereby amended to provide as follows:
2.7 Cessation of Coverage of Certain Participants. Effective as of
---------------------------------------------
the date of the Closing with respect to the sale of the Environment
and Facilities Management Group (the "EFM Group") of the Company to
The IT Group, Inc., coverage under the Plan shall be closed to any
individual employed by, or at a facility of, the EFM Group and
effective as of the date of the Closing with respect to the sale by
the Company of the majority of its capital stock of ICF Consulting
Group, Inc. ("ICF Consulting Group") to ICF Consulting Group Holdings,
LLC or any other unrelated entity, coverage under the Plan shall be
closed to any individual employed by, or at a facility of, ICF
Consulting Group.
2. Section 3.7 of the Plan is hereby amended to provide as follows:
3.7 Full Vesting of Certain Participants. Notwithstanding any other
------------------------------------
provision of the Plan to the contrary, as of the date of the Closing
with respect to the sale of the EFM Group to The IT Group, Inc., each
Participant employed by, or at a facility of, the EFM Group shall be
fully vested in his Account, and as of the date of the Closing with
respect to the sale by the Company of the majority of its capital
stock of ICF Consulting Group to ICF Consulting Group Holdings, LLC or
any other unrelated entity, each Participant employed by, or at a
facility of, ICF Consulting Group shall be fully vested in his
Account.
<PAGE>
3. Clause (d) in the first sentence of Section 7.1 of the Plan is hereby
amended to provide as follows:
(d) terminate employment with the Company or a Member of a Controlled
Group due to the sale of the EFM Group or the sale of the majority of
the Company's capital stock of ICF Consulting Group to ICF Consulting
Group Holdings, LLC or any other unrelated entity.
Executed this 25th day of June, 1999.
ICF KAISER INTERNATIONAL, INC.
By: /s/ Timothy P. O'Connor
----------------------------------
And: Senior Vice President and
---------------------------------
Chief Financial Officer
---------------------------------
2
<PAGE>
EXHIBIT 10(d)(6)
SIXTH AMENDMENT
TO THE
ICF KAISER INTERNATIONAL, INC.
RETIREMENT PLAN
WHEREAS, the ICF Kaiser International, Inc. Retirement Plan (hereinafter
referred to as the "Plan") was established effective August 1, 1971, by ICF
Kaiser International, Inc. (hereinafter referred to as the "Company"); and
WHEREAS, the Plan was most recently restated effective January 1, 1996; and
WHEREAS, the restated Plan was amended subsequently on five occasions; and
WHEREAS, the Company desires to amend the Plan again;
NOW, THEREFORE, effective as of August 30, 1999, the first sentence of
Section 4.2 of the Plan is hereby amended to provide as follows:
"Employer contributions shall be paid to the Trust on the due date for
filing the Employer's Federal income tax return for that year, including
extensions of that date, or as of such other date or dates approved by the
Board."
Executed this 30th day of August, 1999.
ICF KAISER INTERNATIONAL, INC.
By: /s/ James J. Maiwurm
-----------------------
James J. Maiwurm
Chairman, President and
Chief Executive Officer
<PAGE>
EXHIBIT 10(k)(4)
FOURTH AMENDMENT
TO THE
ICF KAISER INTERNATIONAL, INC.
SECTION 401(K) PLAN
WHEREAS, the ICF Kaiser International, Inc. Section 401(k) Plan
(hereinafter referred to as the "Plan") was established effective as of March 1,
1989, by ICF Kaiser International, Inc. (hereinafter referred to as the
"Company"); and
WHEREAS, the Plan was most recently restated as of January 1, 1998; and
WHEREAS, the restated Plan was amended subsequently on three occasions; and
WHEREAS, the Company desires to amend the Plan again to comply with recent
tax legislation, to reflect various administrative changes, and to accommodate
certain divestitures;
NOW, THEREFORE, effective as of April 7, 1999, unless specifically provided
otherwise, the Plan is hereby amended in the respects hereinafter set forth.
1. Section 1.6 of the Plan is hereby amended to provide as follows:
1.6 "Closing" shall mean the consummation of a transaction in which
the Company disposes of (i) substantially all of the assets used by
the Company in a trade or business of the Company, or (ii) the
Company's interest in a subsidiary.
2. The last sentence of the second paragraph of Section 1.9 of the Plan
is hereby deleted effective as of January 1, 1997.
3. Paragraph (e) of Section 1.12 of the Plan is hereby amended effective
January 1, 1997, to provide as follows:
(e) a leased employee who pursuant to Section 414(n)(2) of the
Code means any person (other than a person who is an employee without
regard to this Paragraph (e)) engaged in performing services for a Member
of the Controlled Group (the "recipient") pursuant to an agreement between
the recipient and any other person ("Leasing Organization") who meets the
following requirements:
(i) he has performed services for one or more Members of
the Controlled Group (or for any other "related persons"
determined in accordance with Section 414(n)(6) of the Code) on a
substantially full-time basis for a period of at least one year;
(ii) such services are under the primary direction or
control of the recipient; and
<PAGE>
(iii) he is not participating in a "safe harbor plan" of
the Leasing Organization. (For this purpose a "safe harbor plan"
is a plan that satisfies the requirements of Section 414(n)(5) of
the Code, which will generally be a money purchase pension plan
with a nonintegrated company contribution rate of at least 10% of
compensation and which provides for immediate participation and
full and immediate vesting).
A person who is a leased employee shall also be considered an employee
of a Member of the Controlled Group during such period (and solely for
the purpose of determining length of service for vesting purposes, and
shall also be considered to have been an employee for any earlier
period in which he was a leased employee) but shall not be a
Participant and shall not otherwise be eligible to become covered by
the Plan during any period in which he is a leased employee.
Notwithstanding the foregoing, the sole purpose of this Paragraph (e)
is to define and apply the term "leased employee" strictly (and only)
to the extent necessary to satisfy the minimum requirements of Section
414(n) of the Code relating to "leased employees.
4. Section 1.18 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
1.18 [Reserved]
5. Section 1.20 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
1.20 "Highly-Compensated Employee" shall mean any Employee of the
Company or a Member of a Controlled Group for a Plan Year who:
(a) during the immediately preceding Plan Year, received
compensation (as defined in Section 4.3(b)(ii) of the Plan without
regard to Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code) in
excess of $80,000 (such dollar limitation shall be adjusted
automatically in accordance with the maximum amount permitted under
Section 414(q) of the Code); or
(b) during such Plan Year or during the immediately preceding
Plan Year owned directly or indirectly 5% or more of the Company or a
Member of a Controlled Group (so that he is a "5% owner" as defined in
Section 416(i)(1) of the Code);
A former Employee shall be treated as a Highly Compensated Employee if
such Employee was a Highly Compensated Employee when such Employee
separated from service or such Employee was a Highly
2
<PAGE>
Compensated Employee at any time after attaining age 55.
Notwithstanding the foregoing provisions of this paragraph, the sole
purpose of this Section 1.17 is to define and apply the term Highly-
Compensated Employee strictly (and only) to the extent necessary to
satisfy the minimum requirements of Section 414(q) of the Code
relating to "highly-compensated employees." This Section 1.17 shall be
interpreted, applied and, if and to the extent necessary, deemed
modified without formal amendments of language, so as to satisfy
solely the minimum requirements of Section 414(q) of the Code.
6. Section 1.26 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
1.26 "Non-Highly Compensated Participant" shall mean any Participant
who is not a Highly Compensated Participant.
7. Section 1.38 of the Plan is hereby amended effective January 1, 1997,
to provide as follows:
1.38 [Reserved]
8. Section 2.5 of the Plan is hereby amended to provide as follows:
2.5 Qualified Military Service and Compliance with Uniformed Services
-----------------------------------------------------------------
Employment and Reemployment Rights Act. Notwithstanding any provision
--------------------------------------
of the Plan to the contrary, effective as of December 12, 1994,
contributions, benefits, and service credit with respect to Qualified
Military Service shall be provided in accordance with Section 414(u)
of the Code.
9. Article II of the Plan is hereby amended by the addition of Section
2.6 at the end thereof to provide as follows:
2.6 Cessation of Coverage of Certain Participants. Effective as of
---------------------------------------------
the date of the Closing with respect to the sale of the Environment
and Facilities Management Group ("EFM Group") of the Company to The IT
Group, Inc., coverage under the Plan shall be closed to any individual
employed by, or at a facility of, the EFM Group and effective as of
the date of the Closing with respect to the sale of the stock of ICF
Consulting Group, Inc. ("ICF Consulting Group") to CM Equity Partners,
L.P., CMEP Coinvestment ICF, L.P. and various individuals, coverage
under the Plan shall be closed to any individual employed by, or at a
facility of, ICF Consulting Group.
10. Section 4.4 is hereby amended effective January 1, 1998, to provide as
follows:
3
<PAGE>
4.4 Limitation on Benefits.
----------------------
(a) Incorporation of Section 415 of the Code. The provisions set
----------------------------------------
forth in this Section 4.4 are intended solely to comply with the
requirements of Section 415 of the Code and shall be interpreted,
applied, and if and to the extent necessary deemed modified without
further formal language so as to satisfy solely the minimum
requirements of said Section. For such purposes, the limitations of
Section 415 of the Code are hereby incorporated by reference and made
part hereof as though fully set forth herein, but shall be applied
only to particular Plan benefits in accordance with the provisions of
this Section 4.4, to the extent such provisions are not consistent
with said Section 415. The limitations contained in this Section 4.4
shall be applicable only with respect to benefits provided pursuant to
defined contribution plans and defined benefit plans specified in
Section 415(k) of the Code.
(b) Definitions. For purposes of this Section 4.4, the following
-----------
definitions shall apply in addition to those set forth in Article I:
(i) The term "Annual Additions" shall mean the amount
defined in Section 415 (c)(2) of the Code.
(ii) The term "Annual Benefit" shall mean the benefit
amount defined in Section 415(b)(2)(A) of the Code as adjusted
pursuant to the provisions of Section 415(b)(2)(B), (C), (D), and
(E) of the Code.
(iii) The term "Compensation" shall mean compensation as
defined in Section 415(c)(3) of the Code.
(iv) The term "Defined Benefit Fraction" for any Limitation
Year beginning prior to January 1, 2000, shall mean the fraction
defined in Section 415(e)(2) of the Code.
(v) The term "Defined Contribution Fraction" for any
Limitation Year beginning prior to January 1, 2000, shall mean
the fraction defined in Section 415(e)(3) of the Code.
(vi) The term "Employer" shall mean the Company and all
Members of a Controlled Group; provided, however, that for
purposes of applying the limitations of this Section 4.4 with
respect to Limitation Years after December 31, 1999, "50 percent"
rather than "80 percent" shall be used in determining Member of a
Controlled Group defined under Section 414(b) and Section 414(c)
of the Code.
4
<PAGE>
(vii) The term "Excess Amount" shall mean the excess of
the Participant's Annual Additions for a Limitation Year over the
Defined Contribution Maximum Permissible Amount.
(viii) The term "Highest Average Compensation" shall mean
the average Compensation for the three consecutive calendar years
during which the Participant was an active Participant in the
Plan and had the greatest aggregate Compensation from the
Employer.
(ix) The term "Limitation Year" shall mean a calendar
year or such other 12-month period elected by the Company
pursuant to regulations and rulings under Section 415 of the
Code.
(x) The term "Defined Contribution Maximum Permissible
Amount" shall mean Annual Additions of a Participant which do not
exceed the lesser of (i) $30,000 (adjusted in accordance with
regulations prescribed by the Secretary of the Treasury for
increases in the cost of living), or (ii) 25 percent of such
Participant's Compensation paid for such Limitation Year as set
forth in Section 415(e)(1) of the Code. If a short Limitation
Year is created because of an amendment changing the Limitation
Year to a different 12-month consecutive period, such Annual
Additions shall not exceed $30,000 multiplied by a fraction, the
numerator of which is the number of months in the short
Limitation Year and the denominator of which is 12.
(xi) The term "Defined Benefit Maximum Permissible
Amount" shall mean the Annual Benefit of a Participant which does
not exceed the lesser of $90,000 or 100 percent of the
Participant's Highest Average Compensation as set forth in
Section 415(b)(1) of the Code.
(xii) The term "Projected Annual Benefit" shall mean the
annual retirement benefit of a Participant attributable to
Employer contributions which would be payable to such Participant
under a plan based on the assumptions that he continues his
employment as a Participant until the Social Security Retirement
Age and that his Compensation for the Limitation Year continues
at the same rate until the Social Security Retirement Age, and on
the basis of the federal Social Security Act as in effect on the
last day of the Limitation Year. A Participant's "aggregate
Projected Annual Retirement Benefit" shall include his Projected
Annual Benefit, if any, under any other defined benefit plan
maintained by the Employer.
5
<PAGE>
(xiii) The term "Social Security Retirement Age" shall mean
the age used as the retirement age under Section 216(l) of the
federal Social Security Act, without regard to any age increase
factor and as if the early retirement age under Section 216(l)(2)
were 62.
(c) Limitations on Allocations Under the Plan. Notwithstanding
-----------------------------------------
any other provision of the Plan to the contrary, the amount of Annual
Additions which may be credited to the Participant's Account for any
Limitation Year shall not exceed the lesser of the Defined
Contribution Maximum Permissible Amount or any other limitation
contained in the Plan. If the Annual Additions to the Account of a
Participant in any Limitation Year would otherwise exceed such amount,
the Excess Amount shall be disposed of by reducing the Salary
Deferrals of a Participant and corresponding matching Employer
contributions and forfeitures otherwise allocable to the Participant's
Account for the Limitation Year. Amounts deemed to be forfeitures
under this Paragraph (c) shall be held unallocated in a suspense
account established for the Limitation Year and shall be applied
against the Employer's contribution obligation for the next following
Limitation year (and succeeding Limitation Years, as necessary). If a
suspense account is in existence at any time during a Limitation Year,
all amounts in the suspense account must be allocated to Participants'
Accounts (subject to the limitations set for in this Section 4.4 )
before any further Employer contributions may be made to the Plan on
behalf of Participants. If a suspense account is in existence at any
time during a Limitation Year pursuant to this Section 4.4, it will
not participate in the allocation of the investment gains and losses
on the Plan's assets.
(d) Limitation for Multiple Defined Contribution Plan
-------------------------------------------------
Participation. If a Participant is covered by any other qualified
-------------
defined contribution plan (whether or not terminated) maintained by
the Employer concurrently with the Plan, and if the Annual Additions
for the Limitation Year would otherwise exceed the amount that may be
applied for the Participant's benefit under the limitation contained
in Section 4.4(c), such excess shall be reduced by first returning any
employer contributions made with respect to the Participant under an
employee stock ownership plan and then by returning the Salary
Deferrals made on behalf of the Participant for the Limitation Year
under this Plan and corresponding matching Employer contributions and
the income attributable thereto as provided in Section 4.4(c). If the
limitation contained in Section 4.4(c) is still not satisfied after
returning all of such contributions, then the Employer contributions
and forfeitures for the Limitation Year under any other plans that
have been contributions and forfeitures for the Limitation Year under
such other plans that have been allocated to the Participant shall be
reduced and disposed of as provided in any such other plans.
6
<PAGE>
(e) Limitation for Defined Benefit Plan Participation. For
-------------------------------------------------
Limitation Years beginning prior to January 1, 2000, if a Participant
in the Plan is also covered by a qualified defined benefit plan
(whether or not terminated) maintained by the Employer, in no event
shall the sum of the Defined Benefit Fraction and the Defined
Contribution Fraction exceed 1.0 in any Limitation Year.
(f) Scope of Limitations. The limitations contained in
--------------------
Paragraphs (c), (d), and (e) of this Section 4.4 shall be applicable
only with respect to benefits provided pursuant to defined
contribution plans and defined benefit plans described in Section
415(k) of the Code and all such defined contribution plans (whether or
not terminated) of the Employer shall be treated as one defined
contribution plan and all such defined benefit plans (whether or not
terminated) of the Employer shall be treated as one defined benefit
plan.
11. Sections 4.5 and 4.6 of the Plan are hereby deleted effective January
1, 1998, in their entirety.
12. Article V of the Plan is hereby amended effective January 1, 1998, to
provide as follows:
ARTICLE V
TOP-HEAVY PROVISIONS
--------------------
5.1 Applicability. Notwithstanding any other provision to the
-------------
contrary, in the event the Plan is deemed to be a top-heavy plan for
any Plan Year, the provisions contained in this Article V with respect
to vesting and contributions made by the Employer shall be applicable
with respect to such Plan Year. In the event that the Plan is
determined to be a top-heavy plan and upon a subsequent determination
date is determined to no longer be a top-heavy plan, the vesting and
the contribution provisions in effect immediately preceding the Plan
Year in which the Plan was determined to be a top-heavy plan shall
again become applicable as of such subsequent determination date.
5.2 Top-Heavy Definitions. Notwithstanding the definitions set forth
---------------------
in Article I, the following definitions shall be applicable to this
Article V.
(a) The term "Compensation" shall have the meaning set forth in
------------
Treas. Reg. Section 1.415-2(d).
(b) The term "Determination Date" shall mean for any Plan Year
------------------
subsequent to the first Plan Year, the last day of the preceding Plan
Year and for the first Plan Year of the Plan, the last day of that
Plan Year.
7
<PAGE>
(c) The term "Employer" shall mean the Company and all Members
--------
of a Controlled Group.
(d) The term "Key Employee" shall mean any Employee or former
------------
Employee (and the beneficiaries of such Employer) who at any time
during the Plan Year and any of the four preceding Plan Years was an
officer of the Employer with annual compensation greater than 50
percent of the dollar limitation under Section 415(b)(1)(A) of the
Code, an owner (or considered an owner) under Section 318 of the Code)
of one of the ten largest interests in the Employer with compensation
greater than 100 percent of the limitation under Section 415(b)(1)(A)
of the Code, a 5 percent owner of the Employer, or a 1 percent owner
of the Employer with annual compensation of more than $150,000.
(e) The term "Permissive Aggregation Group" shall mean the
----------------------------
Required Aggregation Group of plans plus any other plan or plans of
the Employer which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of
Section 401(a)(4) and 410 of the Code.
(f) The term "Present Value" shall mean for purposes of
-------------
computing present value calculations in determining the Top-Heavy
Ratio, present value calculations based on the actuarial assumptions
as stated in the applicable plan.
(g) The term "Required Aggregation Group" shall mean (a) each
--------------------------
tax qualified plan of the Employer in which at least one Key Employee
participates or participated at any time during the determination
period (regardless of whether the plan terminated), and (b) any other
tax qualified plan of the Employer which enables a plan described in
clause (a) to meet the requirements of Section 401(a)(4) or 410 of the
Code.
(h) The term "Super Top-Heavy Group" with respect to a
---------------------
particular Plan Year shall mean a Required or Permissive Aggregation
Group that, as of the Determination Date, would qualify as a Top-Heavy
Group under the definition in Paragraph (j) of this Section 5.2 with
"90 percent" substituted for "60 percent" each place where "60
percent" appears in such definition.
(i) The term "Super Top-Heavy Plan" with respect to a particular
--------------------
Plan Year shall mean a plan that, as of the Determination Date, would
qualify as a Top-Heavy Plan under the definition in Paragraph (k) of
this Section 5.2 with "90 percent" substituted for "60 percent" each
place where "60 percent" appears in such definition. A plan is also a
"Super Top-Heavy Plan" if it is part of a Super Top-Heavy Group.
8
<PAGE>
(j) The term "Top-Heavy Group" with respect to a particular Plan
---------------
Year shall mean a Required or Permissive Aggregation Group if the sum,
as of the Determination Date, of the present value of the cumulative
accrued benefits for Key Employees under all defined benefit plans
included in such group and the aggregate of the account balances of
Key Employees under all defined contribution plans included in such
group exceeds 60 percent of a similar sum determined for all employees
covered by the plans included in such group.
(k) The term "Top-Heavy Plan" with respect to a particular Plan
--------------
Year shall mean the Plan if any of the following conditions exist:
(i) If the Top-Heavy Ratio for the Plan exceeds 60 percent
and the Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(ii) If the Plan is a part of a Required Aggregation Group
of plans but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds 60 percent.
(iii) If the Plan is a part of a Required Aggregation Group
and part of a Permissive Aggregation Group of plans and the Top-
Heavy Ratio for the Permissive Aggregation Group exceeds 60
percent.
(l) The term "Top-Heavy Ratio" shall mean:
---------------
(i) While the Employer maintains one or more defined
contribution plans (including any simplified employee pension
plan) and the Employer has not maintained any defined benefit
plan which during the 5-year period ending on the Determination
Date has or has had accrued benefits, the Top-Heavy Ratio for the
Plan alone or for the Required or Permissive Aggregation Group,
as appropriate, is a fraction, the numerator of which is the sum
of the account balances of all Key Employees as of the
Determination Date (including any part of any account balance
distributed in the five-year period ending on the Determination
Date), and the denominator of which is the sum of all account
balances (including any part of any account balance distributed
in the five-year period ending on the Determination Date), both
computed in accordance with Section 416 of the Code. Both the
numerator and denominator of the Top-Heavy Ratio are adjusted to
reflect any contribution not actually made as of the
Determination Date, but which is required to be taken into
account on that date under Section 416 of the Code.
(ii) While the Employer maintains one or more defined
contribution plans (including any simplified employee pension
plans)
9
<PAGE>
and the Employer maintains or has maintained one or more defined
benefit plans which during the five-year period ending on the
Determination Date has or has had any accrued benefits, the Top-Heavy
Ratio for any Required or Permissive Aggregation Group as appropriate
is a fraction, the numerator of which is the sum of account balances
under the aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with subparagraph (i) above, and
the present value of accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees as of the Determination
Date, and the denominator of which is the sum of the account balances
under the aggregated defined contribution plan or plans for all
participants, determined in accordance with subparagraph (i) above,
and the present value of accrued benefits under the defined benefit
plan or plans for all participants as of the Determination Date, all
determined in accordance with Section 416 of the Code. The accrued
benefits under a defined benefit plan in both the numerator and
denominator of the Top-Heavy Ratio are adjusted for any distribution
of an accrued benefit made in the five-year period ending on the
Determination Date.
(iii) For purposes of subparagraphs (i) and (ii) above, the
value of account balances and the present value of accrued benefits
shall be determined as of the most recent valuation date that falls
within or ends with the 12-month period ending on the Determination
Date, except as provided in Section 416 of the Code for the first and
second plan years of a defined benefit plan. The account balances and
accrued benefits of a participant (1) who is not a Key Employee but
who was a Key Employee in a prior year, or (2) who has not performed
services for the Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date will be disregarded.
The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers and transfers are taken into account will be
made in accordance with Section 416 of the Code. Deductible employee
contributions shall not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans the value of
account balances and accrued benefits will be calculated with
reference to the Determination Date that falls within the same
calendar year.
(m) The term "Valuation Date" shall mean, for purposes of computing
--------------
the Top-Heavy Ratio, the Determination Date.
5.3 Top-Heavy Minimum Allocation Rules. The following Top-Heavy Plan
----------------------------------
minimum allocation rules shall apply:
10
<PAGE>
(a) Except as otherwise provided in Paragraph (b) and (c) below, the
Employer contributions and forfeitures allocated on behalf of any
Participant who is not a Key Employee shall be the lesser of 3 percent of
such Participant's Compensation or in the case where the Employer has no
defined benefit plan which designates the Plan to satisfy Section 401 of
the Code, the largest percentage of compensation allocated with respect to
a Key Employee for the Plan Year. Tax-Deferred Contributions cannot be
used to satisfy the minimum contributions for non-Key Employees under
Section 416 of the Code. Furthermore, in making the determination of the
percentage at which contributions are made for the Key Employee with the
highest percentage, Tax-Deferred Contributions on behalf of Key Employees
shall be taken into account.
(b) The provisions in paragraph (a) shall not apply to any Participant
who is not actively employed as an Employee by the Employer on the last day
of the Plan Year for which the minimum allocation is to be made.
(c) The provisions in paragraph (a) shall not apply to any Participant
to the extent the Participant is covered under any other plan or plans of
the Employer, and by the terms of such plan or plans it is provided that
the minimum allocation or benefit requirements applicable to Top-Heavy
Plans shall be met in such other plan or plans. If such other plan is, or
if one of such other plans is, a defined benefit plan maintained by the
Employer, and such plan is a Top-Heavy Plan, the minimum benefit
requirements applicable to Top-Heavy Plans shall be met under such defined
benefit plan as provided therein, to the extent such benefit can be
provided under such plan or plans. If such other plan is, or if one of such
other plans is, a defined contribution plan maintained by the Employer, and
such plan is a Top-Heavy Plan, the minimum allocation requirements shall be
met under such plan, except as may be otherwise provided in such other
plan. The application and administration of the minimum allocation or
benefit requirements for Top-Heavy Plans shall be satisfied in a manner so
as to only satisfy the minimum allocation/benefit requirements as
permissible and so as to avoid any duplication of minimum
allocation/benefits for non-Key Employees, as provided under Section 416 of
the Code.
5.4 Top-Heavy Vesting Schedule. A Participant shall be entitled to the
--------------------------
vested interest in his Account attributable to Employer contributions
calculated in accordance with the provisions of Article IV (or, if greater,
in accordance with the provisions of Section 5.3) determined in accordance
with the following schedule if greater than under Article III:
11
<PAGE>
Years of Service Vested Percentage
---------------- -----------------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
If the Plan becomes a Top-Heavy Plan and subsequently ceases to be such,
the vesting schedule set forth above shall continue to apply in determining
the rights to benefits of any Participant who had at least three years of
Service as of December 31 in the last Plan Year in which the Plan was a
Top-Heavy Plan. For other Participants, such schedule shall apply only to
that portion of their Account that became vested under the vesting schedule
set forth above as of such December 31.
5.5 Top-Heavy Compensation Limitation. The annual compensation of any
---------------------------------
Participant to be taken into account under the Plan during any Plan Year in
which the Plan is determined to be a Top-Heavy Plan shall not exceed the
limitation on Compensation set forth in the second paragraph of Section
1.9.
5.6 Top-Heavy Plan/Benefit Limitations. In any Plan Year beginning prior
----------------------------------
to January 1, 2000, in which the Plan is a Top-Heavy Plan, the denominators
of the defined benefit fraction and the defined contribution fraction (as
such terms are used in applying the benefit limitation provisions of
Section 415 of the Code) shall be computed using 100 percent of the dollar
limitation instead of 125 percent.
13. The first sentence of Section 6.1 of the Plan is hereby deleted and
four sentences are substituted in place thereof to provide as follows:
The Company shall cause at least three investment funds to be established
and maintained at all times. Each such fund shall be diversified and have
different risk and return characteristics from the other Funds. Any fund
which invests in investments with restrictions regarding funds to which
investment transfers may be made or to which a minimum investment period is
applicable shall not be considered as one of such requisite three
investment Funds. The Plan is intended to constitute a plan described in
Section 404(c) of ERISA and DOL Regs. Section 2550.404c-1 and insofar as
the Plan complies with said Section 404(c), Plan fiduciaries shall be
relieved of liability for any losses which are the direct result of
investment instructions given by Participants. Notwithstanding the
foregoing, to the extent that Section 404(c) of ERISA is not applicable,
Participants shall be named fiduciaries with respect to the investment of
their Accounts.
14. Section 8.1 is hereby amended effective January 1, 1997, to provide as
follows:
12
<PAGE>
8.1 Distribution at Required Beginning Date. Notwithstanding any other
---------------------------------------
provision of the Plan to the contrary, on and after January 1, 1997,
payment of a retired or former Participant's benefit shall commence not
later than the earlier of:
(i) the 60th day after the end of the Plan Year in which the
latest of the following dates occurs: (i) Participant's Normal
Retirement Date, (ii) the tenth anniversary of the date on which the
Participant first became a Participant, and (iii) the date of the
Participant's retirement or other termination of employment; or
(ii) the April 1 following the calendar year in which the later
of the following dates occurs: (i) the date on which the Participant
attains 70-1/2, or (ii) the date on which the Participant retires
(except for a Participant who is a 5% owner, as defined in Section
416(i)(1)(B) of the Code, the date determined under this Paragraph (d)
shall be April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2 without regard to the date of
the Participant's retirement.
All payments required under this Article VIII, shall be determined and made
in accordance with the regulations under Section 401(a)(9) of the Code,
including the minimum distribution incidental benefit requirements of
proposed Treas. Reg. (S)1.401(a)(9)-2, if applicable. Any non-retired
Participant (other than a 5% owner) who has attained age 70-1/2 and who is
receiving payment of his benefit while employed by a Member of a Controlled
Group, may elect in writing in the manner, time, and form required by the
Company to terminate payment of his Plan benefit otherwise payable after
January 1, 1997, until after his retirement under the terms of the Plan in
effect at such time. Any non-retired Participant (other than a 5% owner)
who attains age 70-1/2 in 1997 or 1998, may elect in writing in the manner,
time, and form required by the Company to defer payment of his Plan benefit
until after his retirement pursuant to the terms of the Plan in effect at
such time. Notwithstanding the foregoing, the spouse of any Participant
who so elects to terminate receiving Plan benefits which are being paid in
a qualified joint and survivor annuity (within the meaning of Section
417(b) of the Code) must consent to such election and acknowledge the
effect of the election. If such a Participant does not make such an
election or if the Participant is a 5% owner, payment of his Plan benefit
shall be made or shall continue to be made to him pursuant to the
provisions of this Section 8.3 in effect prior to January 1, 1997. For
purposes of Section 417 of the Code, any recommencement of benefits under
this Section 8.3 shall be considered a new annuity starting date.
15. Paragraph (b) of Section 8.3 of the Plan is hereby amended to provide
as follows:
13
<PAGE>
(b) Lump Sum. Except as provided in Section 8.3(c) and (d), a
--------
Participant's Account shall be distributed in one or more payments
within one calendar year, as soon as practicable after his separation
from service. The Committee shall direct the Trustee to distribute to
a Participant or his Beneficiary any amount to which the Participant
or his Beneficiary is entitled under the Plan in one lump sum payment
in cash, except that with respect to distribution from the ICF Kaiser
Stock Fund, the Committee may direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which the Participant or
his Beneficiary is entitled under the ICF Kaiser Stock Fund in one
lump sum payment in whole shares of qualifying employer securities
(with the value of any fractional share paid in cash), cash, or a
combination of both, at the election of the Participant; provided,
however, that the distribution of any such cash payment shall be made
not later than two months after the date that distribution of Company
Stock would have occurred and shall be determined as of the value of
Company Stock on such date.
16. Paragraph (d)(2) of Section 8.3 of the Plan is hereby amended
effective January 1, 1997, to provide as follow:
(d)(2) Notwithstanding any other provision of the Plan to the
contrary, any rejection, or revocation of a rejection, of the
automatic election of the qualified joint and survivor annuity shall
be made only within the 90-day period prior to the Participant's
annuity starting date. Within a reasonable period of time prior to the
annuity starting date, the Company shall provide each Participant with
a written explanation of (1) the terms and conditions of the qualified
joint and survivor annuity and its financial effect on his retirement
benefit; (2) the Participant's right to waive such joint and survivor
annuity; (3) the rights of the Participant's spouse regarding consent
as described above in subparagraph (ii); and (4) the right to make and
the effect of, a revocation of an election to waive the automatic
qualified joint and survivor annuity. Such explanation shall be
provided at least 30 days prior to distribution unless the Participant
(with any applicable spousal consent) waives such 30-day requirement
and distribution commences more than 7 days after such explanation is
provided.
17. Paragraph (e) of Section 8.3 of the Plan is hereby amended effective
January 1, 1998, to provide as follow:
(e) Alternative Form of Benefit for Amounts Attributable to
-------------------------------------------------------
Benefits Transferred From the Georgia A. Wilson & Associates, Inc.
-----------------------------------------------------------------
Retirement Plan (the "Georgia Wilson Plan"). A Participant whose
-------------------------------------------
Account is credited with benefits from the Georgia Wilson Plan may
elect to receive the portion of his Account attributable to such
benefits from the Georgia Wilson Plan in payments over a period
certain in monthly,
14
<PAGE>
quarterly, semiannual, or annual cash installments, which period shall
not extend beyond the Participant's life expectancy (or the life
expectancy of the Participant and his designated Beneficiary).
18. Article IX of the Plan is hereby amended effective March 17, 1999, to
provide as follows:
ARTICLE IX
ADMINISTRATION AND CLAIMS PROCEDURES
------------------------------------
9.1 Authority of the Company. The Company shall be the Plan
------------------------
administrator for purposes of ERISA and the Code and shall have the
authority and the power to perform the functions conferred upon it
herein, subject to the limitations hereinafter set forth. The Company
shall have the sole right to interpret and construe the Plan, and to
determine any disputes arising thereunder, subject to the provisions
of Section 9.3. In exercising such powers and authorities, the Company
shall at all times exercise good faith, apply standards of uniform
application, and refrain from arbitrary action. The Company may employ
such attorneys, agents, and accountants as it may deem necessary or
advisable to assist it in carrying out its duties hereunder. The
Company is hereby designated as a "named fiduciary" of the Plan as
such term is defined in Section 402(a)(2) of ERISA. The Company may
allocate any of its responsibilities for the day to day operation and
administration of the Plan to any person or persons employed by it. In
addition, the Company, by action of its Board of Directors, may
designate a person other than itself to carry out any of such powers,
authorities or responsibilities which are retained by it or granted to
it by this Article IX.
9.2 Action of Company. Any act authorized, permitted, or required to
-----------------
be taken by the Company under the Plan, which has not been allocated
or delegated in accordance with Section 9.1, may be taken by a
majority of the members of the Board of Directors of the Company,
either by vote at a meeting, or in writing without a meeting. All
notices, advices, directions, certifications, approvals, and
instructions required or authorized to be given by the Company under
the Plan shall be in writing and signed by either (a) a majority of
the members of the Board of Directors of the Company, or by such
member or members as may be designated by an instrument in writing,
signed by all the members thereof, as having authority to execute such
documents on its behalf, or (b) a person who becomes authorized to act
for the Company in accordance with the provisions of Section 9.1.
Subject to the provisions of Section 9.3, any action taken by the
Company which is authorized, permitted, or required under the Plan
shall be final and binding upon the Company and the Trustee, all
persons who have or who claim an interest under the Plan, and all
third parties dealing with the Company or the Trustee.
15
<PAGE>
9.3 Claims Review Procedure. Whenever the Company decides for whatever
-----------------------
reason to deny, whether in whole or in part, a claim for benefits
filed by any person (hereinafter referred to a the "Claimant"), the
Plan administrator shall transmit to the Claimant a written notice of
the Company's decision, which shall be written in a manner calculated
to be understood by the Claimant and contain a statement of the
specific reasons for the denial of the claim and a restatement
advising the Claimant that, within 60 days of the date on which he
receives such notice, he may obtain review of the decision of the
Company in accordance with the procedures hereinafter set forth.
Within such 60-day period, the Claimant or his authorized
representative may request that the claim denial be reviewed by filing
with the Plan Administrator a written request therefor, which request
shall contain the following information:
(a) the date on which the Claimant's request was filed with the
Plan administrator; provided, however, that the date on which the
Claimant's request for review was in fact filed with the Plan
Administrator shall control in the event that the date of the actual
filing is later than the date stated by the Claimant pursuant to this
paragraph (a);
(b) the specific portions of the denial of his claim which the
Claimant requests the Plan administrator to review;
(c) a statement by the Claimant setting forth the basis upon
which he believes the Plan administrator should reverse the Trustee's
previous denial of his claim for benefits and accept his claim as
made; and
(d) any written material (offered as exhibits) which the Claimant
desires the Plan administrator to examine in its consideration of his
position as stated pursuant to paragraph (c).
Within 60 days of the date determined pursuant to paragraph (a) of
this Section 9.3, the Plan administrator shall conduct a full and fair
review of the Company's decision denying the Claimant's claim for
benefits. Within 60 days of the date of such hearing, the Plan
administrator shall render its written decision on review, written in
a manner calculated to be understood by the Claimant, specifying the
reasons and Plan provisions upon which its decision was based.
9.4 Indemnification. In addition to whatever rights of
---------------
indemnification the members of the Board of Directors of the Company,
or any other person or persons to whom any power, authority, or
responsibility of the Company is delegated pursuant to Section 9.1,
may be entitled under the articles of incorporation, regulations, or
by-laws of the Company, under any provision of law, or under any other
agreement, the Company shall satisfy any liability actually and
reasonably incurred by any such person or persons, including expenses,
attorneys' fees, judgments, fines, and
16
<PAGE>
amounts paid in settlement, in connection with any threatened,
pending, or completed action, suit, or proceeding which is related to
the exercise or failure to exercise by such person or persons of any
of the powers, authority, responsibilities, or discretion provided
under the Plan, or reasonably believed by such person or persons to be
provided hereunder, and any action taken by such person or persons in
connection therewith.
9.5 Administrative Expenses. The fees of the Trustee and all other
-----------------------
administrative expenses of the Plan and Trust shall be paid by the
Trustee from the assets of the Trust unless the Company, in its
discretion, elects to pay any such fees and/or expenses.
9.6 Voting of Company Stock in the ICF Kaiser Stock Fund. Each
----------------------------------------------------
Participant or Beneficiary who has shares of Company Stock allocated
to his Account shall be a named fiduciary with respect to the voting
of Company Stock held thereunder and shall have the following powers
and responsibilities:
(a) Prior to each annual or special meeting of the shareholders
of the Company, the Company shall cause to be sent to each Participant
and Beneficiary who has Company Stock allocated to his Account and
invested in the ICF Kaiser Stock Fund under the Plan a copy of the
proxy solicitation material therefor, together with a form requesting
confidential voting instructions, with respect to the voting of such
Company Stock as well as the voting of Company Stock for which the
Trustee does not receive instructions. Each such Participant and/or
Beneficiary shall instruct the Trustee to vote the number of such
uninstructed shares of Company Stock equal to the proportion that the
number of shares of Company Stock allocated to his Account and
invested in the ICF Kaiser Stock Fund bears to the total number of
shares of Company Stock in the Plan for which instructions are
received. Upon receipt of such a Participant's or Beneficiary's
instructions, the Trustee shall then vote in person, or by proxy, such
shares of Company Stock as so instructed.
(b) The Company shall cause the Trustee to furnish to each
Participant and Beneficiary who has Company Stock allocated to his
Account and invested in the ICF Kaiser Stock Fund under the Plan
notice of any tender or exchange offer for, or a request or invitation
for tenders or exchanges of, Company Stock made to the Trustee. The
Trustee shall request from each such Participant and Beneficiary
instructions as to the tendering or exchanging of Company Stock
allocated to his Account. Each Participant and Beneficiary who does
not instruct the Trustee with respect to the tendering or exchanging
of Company Stock allocated to his Account shall be deemed to have
decided not to participate in any such tender or exchange offer. The
Trustee shall provide Participants and Beneficiaries with a reasonable
period of time in which they may consider any such tender or exchange
offer for, or request or invitation for tenders
17
<PAGE>
or exchanges of, Company Stock made to the Trustee. Within the time
specified by the Trustee, the Trustee shall tender or exchange such
Company Stock as to which the Trustee has received instructions to
tender or exchange from Participants and Beneficiaries.
(c) Instructions received from Participants and Beneficiaries by
the Trustee regarding the voting, tendering, or exchanging of Company
Stock shall be held in strictest confidence and shall not be divulged
to any other person, including officers or employees of the Company,
except as otherwise required by law, regulation or lawful process.
19. The first sentence of Section 10.1 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "and the Committee".
20. The second sentence of Section 10.3 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "the Committee and".
21. The third sentence of Section 10.3 of the Plan is hereby amended
effective March 17, 1999, by the deletion of the phrase "or Committee".
22. The first sentence and third sentence of Section 10.4 of the Plan are
hereby amended effective March 17, 1999, by the deletion of the phrase "and
Committee".
23. The term "Committee" is hereby deleted effective March 17, 1999,
throughout the Plan and the term "Company" is hereby substituted in place
thereof.
Executed this 8th day of April, 1999.
ICF KAISER INTERNATIONAL, INC.
By: /s/ Timothy P. O'Connor
--------------------------
And: Senior Vice President and
--------------------------
Chief Financial Officer
--------------------------
18
<PAGE>
Exhibit 10(k)(5)
FIFTH AMENDMENT
TO THE
ICF KAISER INTERNATIONAL, INC.
SECTION 401(K) PLAN
WHEREAS, the ICF Kaiser International, Inc. Section 401(k) Plan
(hereinafter referred to as the "Plan") was established effective as of March 1,
1989, by ICF Kaiser International, Inc. (hereinafter referred to as the
"Company"); and
WHEREAS, the Plan was most recently restated as of January 1, 1998; and
WHEREAS, the restated Plan was amended subsequently on four occasions; and
WHEREAS, the Company desires to amend the Plan again;
NOW, THEREFORE, effective as of April 7, 1999, the Plan is hereby amended
in the respects hereinafter set forth.
1. Section 2.6 is hereby amended to provide as follows:
2.6 Cessation of Coverage of Certain Participants. Effective as of
---------------------------------------------
the date of the Closing with respect to the sale of the Environment
and Facilities Management Group ("EFM Group") of the Company to The IT
Group, Inc., coverage under the Plan shall be closed to any individual
employed by, or at a facility of, the EFM Group and effective as of
the date of the Closing with respect to the sale by the Company of the
majority of capital stock of ICF Consulting Group, Inc. ("ICF
Consulting Group") to ICF Consulting Group Holdings, LLC or any other
unrelated entity, coverage under the Plan shall be closed to any
individual employed by, or at a facility of, ICF Consulting Group.
2. Article VIII of the Plan is hereby amended by the addition of Section
8.10 at the end thereof to provide as follows:
8.10 Transfer to ICF Consulting Plan. As soon as practicable after
-------------------------------
the date of the Closing with respect to the sale by the Company of the
majority of its capital stock of ICF Consulting Group to ICF
Consulting Group Holdings, LLC or any other unrelated entity, the
Account balances of Participants who are employed by ICF Consulting
Group after such date shall be transferred to a tax-qualified defined
contribution plan
<PAGE>
established by ICF Consulting Group (the "ICF Plan") to be held and
maintained thereafter in accordance with the terms of the ICF Plan.
Executed this 25th day of June, 1999.
ICF KAISER INTERNATIONAL, INC.
By: /s/ Timothy P. O'Connor
---------------------------
And: Senior Vice President and
---------------------------
Chief Financial Officer
---------------------------
2
<PAGE>
Exhibit 10(O)
AWARD/CONTRACT 1.THIS CONTRACT IS A RATED ORDER RATING PAGE OF PAGE
UNDER DPAS (15 CFR 350) N/A. 1
2. CONTRACT (Proc. Inst. No.) 3. EFFECTIVE DATE
DE-AC34-00RF01904 1 February 2000
4. REQUISITION/PURCHASE REQUEST/PROJECT
134-00RF01904.000
5. ISSUED BY CODE 6. ADMINISTERED BY (If other CODE
than Item 5)
US Department of Energy
ROCKY FLATS FIELD OFFICE
10808 Highway 93, Unit A
Golden, CO 80403-8200
7. NAME AND ADDRESS OF CONTRACTOR 8. DELIVERY
(No. street, city, county, State [ ] FOB ORIGIN [ ] OTHER
and Zip Code) (See below)
KAISER-HILL COMPANY, L.L.C
10808 Highway 93, Unit B 9. DISCOUNT FOR PROMPT PAYMENT
Golden, CO 80403-8200 N/A
10. SUBMIT INVOICES ITEM
(4 copies unless
otherwise specified
TO THE ADDRESS SHOWN IN: G.3
CODE FACILITY CODE
11. SHIP TO/MARK FOR CODE 12. PAYMENT WILL BE MADE BY CODE
13. AUTHORITY FOR USING OTHER THAN 14. ACCOUNTING AND
FULL AND OPEN COMPETITION: APPROPRIATION DATA
[ ] 10 USC 2304 (c) 89X0251.91
[X] 41 USC 253 (c) ( 7 )
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
15A. ITEM NO. 15B. SUPPLIES/SERVICES 15C. QUANTITY 15D. UNIT 15E. UNIT PRICE 15F. AMOUNT
SEE SECTION B
15G. TOTAL AMOUNT OF CONTRACT:
</TABLE>
16. TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SEC. DESCRIPTION PAGE(S) SEC. I DESCRIPTION PAGE(S)
PART I-THE SCHEDULE PART 11--CONTRACT CLAUSES
X A SOLICITATION/CONTRACT FORM X I CONTRACT CLAUSES
X B SUPPLIES OR SERVICES AND PRICES/COSTS
X C DESCRIPTION/SPECS/WORK STATEMENT PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTCH.
X D PACKAGING AND MARKING
X E INSPECTION AND ACCEPTANCE X J LIST OF ATTACHMENTS
X F DELIVERIES OR PERFORMANCE
X G CONTRACT ADMINISTRATION DATA PART IV - REPRESENTATIONS AND INSTRUCTIONS
X H SPECIAL CONTRACT REQUIREMENTS
X K REPRESENTATIONS, CERTIFICATIONS AND OTHER
STATEMENTS OF OFFERORS
L INSTRS., CONDS., AND NOTICES TO OFFERORS
M EVALUATION FACTORS FOR AWARD
</TABLE>
CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE
17. [X] CONTRACTOR'S NEGOTIATED AGREEMENT
(Contractor is required to sign and this document and return 3 copies to
issuing office.)
Contractor agrees to furnish and deliver all items or perform all the services
set forth otherwise indentified above and on any continuation sheets for the
consideration stated herein. The rights and obligations of the parties to this
contract shall be subject to and governed by the following documents: (a) this
award/contract, (b) the solicitation, if any and (c) such provisions,
representations, certifications, and specifications, as are attached or
incorporated by reference herein. (Attachments are listed herein.)
18. [ ] AWARD (Contractor is not required to sign this document)
Your offer on Solicitation Number _____________ including the additions or
changes made by you which additions or changes are set forth in full above, is
hereby accepted as to the items listed above and on any continuation sheets.
This award consummates the contract which consists of the following documents:
(a) the Government's solicitation and your offer, and (b) this award/contract.
No further contractual document is necessary.
19A. NAME AND TITLE OF SIGNER (Type or print)
Robert G. Card
President and CEO
19B. NAME OF CONTRACTOR
By: /s/ 1/24/00
--------------------------------
(Signature of person authorized to sign)
20A. NAME OF CONTRACTING OFFICER
Paul Golan
Acting Manager
20B. UNITED STATES OF AMERICA 20C. DATE SIGNED
By: /s/ 1/24/00
--------------------------------
(Signature of Contracting Officer)
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
PART I - THE SCHEDULE
SECTION B
SUPPLIES OR SERVICES AND PRICES/COST
Table of Contents
Section Number Clause Title
B.1 SERVICES BEING ACQUIRED
B.2 ESTIMATED COST AND FEE
B.3 OBLIGATION OF FUNDS
B.4 RESERVED
B.5 SCHEDULE INCENTIVE
B.6 FEE PAYMENT SCHEDULE AND FEE PAYMENT WITHHOLDINGS
B.7 FINAL FEE DETERMINATION
B.8 ADDITIONAL ITEM(S) EXCLUDED FROM ACTUAL COST
Section B - Page 1
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SECTION B
SUPPLIES OR SERVICES AND PRICES/COST
B.1 SERVICES BEING ACQUIRED
(a) The Contractor is responsible for completing the Rocky Flats
Closure Project in accordance with this Contract. Except for
personnel, services, facilities, equipment, materials and
supplies utilized or furnished by the Government, the Contractor
will furnish all personnel, facilities, equipment, material,
supplies, and services needed by Contractor to perform the work
in the manner required by this contract.
(b) (OPTIONAL) 903 Pad Remediation Project Removal. Planning,
executing, and completing the 903 Pad Remediation Project as
identified in Work Breakdown Structure (WBS) #1.1.03.12.06.02 may
be removed from the scope of this contract. Execution of this
option will require negotiation on the exact scope and timing of
the action, and associated reduction in available funds to match
funding required for completion by a third party. This option
would represent a change to the contract and require
consideration as set forth in the Clause of this contract
entitled "Changes."
(c) (OPTIONAL) 903 Pad Remediation Project Extension. Planning,
executing, and completing of the 903 Pad Remediation Project as
identified in Work Breakdown Structure (WBS) #1.1.03.12.06.02 may
be extended beyond a fiscal year 2001 start and 2002 completion.
The extension may be from one year to as much as three years, to
a fiscal year 2004 start and 2005 completion. Execution of this
option will require negotiation on the exact timing of the action
and amount of the delay. This option would represent a change to
the contract and require consideration as set forth in the Clause
of this contract entitled "Changes."
B.2 TARGET COST AND TARGET FEE
The Target Cost and Target Fee are:
Target Cost (excludes fee): $ 3,963,000,000
--------------------------
Target Fee: $ 340,000,000
--------------------------
The actual fee will be determined in accordance with contract clause I.23.
B.3 OBLIGATION OF FUNDS
(a) Subject to the "Limitation of Funds," clause in Section I, the total
funds obligated under this contract is $_________________.
(b) (OPTIONAL) $15,000,000 per year (fiscal years [FY] 01, 02, 03 and 04)
funding increase. The annual funding available to Rocky Flats from the
EW-05 Closure Account described in Section C, Technical Exhibit A,
paragraph VIII "Closure Project Funding" will be increased by
$15,000,000 each year from the basis point of $657,000,000 per year
beginning in fiscal year 2001. Execution of this option will result in
the subject increase in available funding for use by the Contractor, and
the Contractor agrees to a reduction in the Target Fee of $15,000,000
for this funding stream. In consideration of the contract modification
to revise funding upward as stated herein for fiscal years 01, 02, 03
and 04, the Target Fee shall be reduced as stated herein without any
adjustments to the maximum and minimum fee and associated share-line,
providing that this option must be exercised prior to the start of each
affected fiscal year.
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
(c) (OPTIONAL) $30,000,000 per year (FYs 01, 02, 03 and 04) funding
increase. The annual funding available to Rocky Flats from the EW-05
Closure Account described in Section C, Technical Exhibit A, paragraph
VIII "Closure Project Funding" will be increased by $30,000,000 each
year from the basis point of $657,000,000 per year beginning in fiscal
year 2001. Execution of this option will result in the subject increase
in available funding for use by the Contractor, and the Contractor
agrees to a reduction in the Target Fee of $30,000,000 for this funding
stream. In consideration of the contract modification to revise funding
upward as stated herein for fiscal years 01, 02, 03 and 04, the Target
Fee shall be reduced as stated herein without any adjustments to the
maximum and minimum fee and associated share-line, providing that this
option must be exercised prior to the start of each affected fiscal
year.
B.4 RESERVED
B.5 SCHEDULE INCENTIVE
(a) Accelerated physical completion of the Rocky Flats Closure Project is a
strategic objective of the DOE and has significant benefits to the
Government.
(b) The Target Schedule Date for physical completion of this contract is set
forth in subparagraph (c) below. As set forth in subparagraph (c)
below, physical completion on Target Schedule Date will result in $15
million Schedule Incentive Fee. Physical completion earlier than this
date will result in $5 million additional fee payment in a uniform daily
amount, up to a maximum of the Earliest Schedule date dollar value. For
each day that physical completion is later than the Target Schedule
Date, the acceleration payment to Contractor will be reduced a uniform
daily amount up to a maximum of the Latest Schedule date dollar value,
as more fully set forth in the Schedule Incentive graph, Section J,
Attachment H.
(c) Schedule Incentive Fees will be earned in accordance with the following:
Date Incentive Fee
------------------ -------------
Earliest Schedule March 31, 2006 $20,000,000
-----------
Target Schedule December 15, 2006 $15,000,000
-----------
Zero Point March 31, 2007 $ 0
-----------
Latest Schedule March 31, 2008 $20,000,000 Reduction
-----------
This is graphically depicted in Section J, Attachment H.
(d) In no event shall the schedule incentive fee payable under subparagraphs
(b) and (c) plus the incentive fee payable in accordance with Clause
I.23 exceed $450,000,000. Any fee reduction for late schedule set forth
in subparagraphs (b) and (c) shall be deducted from the incentive fee
payable under Clause I.23. Nothing in this subparagraph shall limit the
deduction from fee for Category 1, 2 or 3 events as set forth in Clause
B.6(3).
B.6 FEE PAYMENT SCHEDULE AND FEE PAYMENT WITHHOLDINGS
(a) This provision establishes the method for payments of incentive fee as
set forth in Clause I.23 entitled "Incentive Fee (MAR 1997)" from FAR
52.216-10. The amount of any conditional incentive fee payment shall be
determined and paid by the Contracting Officer as set forth in Clause
I.23 and other applicable clauses of this contract. As used in this
contract, the following definitions shall apply:
(1) "Target Cost"( TC )means the Target Cost specified in Section B.2
of this contract. The Target Cost may be adjusted for equitable
adjustments as set forth in the Clause of this contract entitled,
"Changes," or other clauses of this contract.
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
(2) "Target Fee"( TF ) means the Target Fee specified in Section B.2
of this contract. The Target Fee may be adjusted for equitable
adjustments as set forth in the Clause of this contract entitled,
"Changes," or other clauses of this contract.
(3) "Budgeted Cost of Work Scheduled at Target Cost" (BCWSTC) means
that portion of the approved Target Cost planned to be spent on
an activity during a given period, measurable by period and
cumulative to date, that reflects the Target Cost (TC). This will
be established by the submittal of a revised baseline to execute
the closure contract (ref. Paragraph H.1.04 (e)). The BCWSTC will
be changed through equitable adjustments in accordance with the
applicable clauses of the contract.
(4) "Budgeted Cost of Work Performed at Target Cost" (BCWPTC) is the
sum of the approved Target Cost elements for activities completed
during a given period, measurable by period and cumulative to
date, that relates directly to the Budgeted Cost for Work
Scheduled at Target Cost (BCWSTC).
(5) "Actual Cost of Work Performed at Target Cost" (ACWPTC) means the
adjusted (as reflected in Clause B.8) total allowable costs
expended under the contract to achieve the accomplished work,
measurable by period and cumulative to date.
(6) "Cost Variance at Target Cost" (CVTC) means the variance between
budgeted Target Cost of work accomplished and actual cost of work
accomplished, measurable by period and cumulative to date. It is
expressed by the formula: BCWPTC - ACWPTC.
(7) "Schedule Variance at Target Cost" (SVTC) as set forth in Section
B.6(d)(2) means the variance between planned and actual work
accomplishment, measurable by period and cumulative to date. It
is expressed by the formula: BCWPTC - BCWSTC.
(8) "Schedule Incentive Fee" (SF ) means the Schedule Incentive Fee
specified in Section B.5 of this contract. The Schedule Incentive
Fee may be adjusted for equitable adjustments as set forth in the
Clause of this contract entitled, "Changes," or other clauses of
this contract.
(9) "Conditional Incentive Fee" means Target Fee divided by the
number of quarters in the contract using the target physical
completion date of December 15, 2006: (CF = TF / 27.67 quarters).
(10) "Ordinary Fee", means Conditional Incentive Fee less a 50%
withholding.
(11) "Physical completion" as used in this contract and Clause I.23,
Incentive Fee shall be defined as set forth by contract Clause
F.2.
(12) "Maximum Fee" (MaxF ) means the highest fee the Contractor can
earn as set forth in Clause I.23, Incentive Fee.
(13) "Minimum Fee" (MinF ) means the lowest fee the Contractor can
earn as set forth in Clause I.23, Incentive Fee.
(14) "Actual cost of physical completion" means the total allowable
cost to achieve physical completion, as set forth in Clause I.23
and as adjusted by Section B.8, below.
(15) Non-Legacy Onsite Event is an onsite condition or event created
by the Contractor after the effective date of this contract.
(b) The Contractor may submit invoices for ordinary fee payments following
the submittal of the Quarterly Critical Analysis in accordance with
Clause H.1.03(e)(2). The Government will review and disposition
Contractor's Quarterly Critical Analysis, and within forty (40) calendar
days of submittal date, provide
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
Contractor written notice of consent to submit its invoice. Upon
receipt of an acceptable invoice for ordinary fee, the Contracting
Officer will assess the need for adjustments based upon the factors
discussed later in this provision. Unless the Contracting Officer
elects to do otherwise as set forth below, ordinary fee payments will be
made quarterly, not more than 3 business days consistent with
subparagraph G.7(a) after the Contractor submits an acceptable invoice.
The process for administration of the incentive fees shall be as
follows:
(1) Calculation of Conditional Incentive Fee
(2) Calculation of Ordinary Fee
(3) Cost, schedule, or other adjustment as set forth in
subparagraphs (d) through (g), below
(4) Based on items 1 through 3 immediately above, remittance of fee
payment as set forth herein.
(c) The Contractor may elect not to submit an invoice for an ordinary fee
payment. In the event the Contractor elects not to submit an invoice for
an ordinary fee payment, the Contractor shall affirm its election in
writing to the Contracting Officer. When the Contractor elects not to
submit an invoice, pursuant to this subparagraph, the fee amount not
invoiced will be due and payable in accordance with Clauses F.3 and B.7.
(d) In determining the appropriate amount of fee to be paid, the Contracting
Officer will take the following factors into consideration:
(1) Cost Variance at Target Cost. The Budgeted Cost of Work
Performed at Target Cost (BCWPTC) minus the Actual Cost of Work
Performed at Target Cost (ACWPTC) will define the cost variance.
When there is no cost variance, the Contracting Officer will make
no adjustment to the ordinary fee payment (unless otherwise
warranted for reasons described elsewhere in this Clause). When
cost variances indicate the Contractor will earn Maximum Fee, the
Contracting Officer will adjust the ordinary fee payment upward
proportionally, up to a maximum of MaxF/27.67; if cost variances
indicate the Contractor will earn Minimum Fee, the Contracting
Officer will adjust the ordinary fee payment downward
proportionally, down to a minimum of MinF/27.67.
(2) Schedule Variance at Target Cost. A calculation of "earned value
variance" based on physical completion of project mission tasks
(level of effort work generally excluded) will be used to define
the schedule variance. The "earned value variance" will be
calculated as the BCWPTC minus the Budgeted Cost of Work
Scheduled at Target Cost (BCWSTC) for predetermined work
activities. Earned value variance will be calculated for the
project from contract effective date to current date. Earned
value for each predetermined work activity will only be included
when work is 100% complete. No intermediate calculations of
earned value will be used for schedule variance. The Contracting
Officer may reduce the conditional fee payment for negative
schedule variances as measured by earned value variances, or
increase conditional fee payment for positive schedule variances
as measured by earned value variances. The range of
increases/decreases for schedule variance will be similar to that
for cost variance described above.
(3) Fee Payments During Transition to the New Baseline. The
Contracting Officer will make no adjustments, except for Category
1, 2 or 3 events, to the ordinary fee payments for Cost or
Schedule Variances during transition. The contractor may invoice
for fee in accordance with the following schedule.
Date Ordinary Fee Payment
---- --------------------
March 31, 2000 $4,116,374
June 30, 2000 $6,143,838
September 30, 2000 $6,143,838
December 31, 2000 $6,143,838
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
(e) For reasons and in the manner explained in paragraphs below and to
provide for the remedies and obligations established in Section E or
elsewhere in this contract, the Contracting Officer may decide to reduce
any ordinary fee payment. The Contracting Officer may elect to deduct
fee. This would result both in a reduction of the immediate conditional
incentive fee payment and also in a downward adjustment to the amount of
the total adjusted fee at the contract's physical completion.
Environment, Safety & Health (ES&H) and Safeguards and Security
Compliance
The Rocky Flats Closure Project and this contract have a mission of
accelerated project completion. The nature of the contract, along with
the financial incentives for accelerated completion or for cost
effectiveness should never compromise or impede full and effective
implementation of the Integrated Safety Management System and full ES&H
and Safeguards and Security compliance. Cost and schedule variances due
to work delays resulting from Contractor safety management lapses or
non-compliance will generally not be accepted as a basis for adjustment
to the Target Cost or Target Schedule Date. In addition, the Contractor
will be subject to monetary fee deductions as described below. Such
events or incidents are considered symptomatic of a breakdown in the
safety management system.
(1) Category 1 Events or Incidents:
Category 1 events or incidents are those that would threaten the
success of the Rocky Flats Closure Project. This Category would
include events or incidents that lead to DOE's decision to
disapprove an important system critical to project success, such
as the Safety Management System or the Safeguards and Security
(S&S) System. For Category 1 events or incidents, the Contracting
Officer may deduct up to 6 months worth of ordinary fee payments
in their entirety. Examples include, but are not limited to:
o Nuclear criticality event
o Workplace fatality due to work-related conditions
o Theft, loss or diversion of Special Nuclear Material, as
defined in the 1995 S&S Glossary of terms. Excludes
inventory discrepancies not related to theft or
diversion.
o Fire in a Hazard Category 2 or 3 facility exceeding Max.
Possible Fire Loss as defined in DOE Order 420.1
o Event which results in a consequence greater than 100
mrem to a co-located worker (600 meters from the
facility) due to an accident in a Hazard Category 2 or 3
facility
o Non-legacy onsite event which results in an offsite water
quality exceedence of greater than 15.0 pCi/liter Pu as
measured in accordance with the Integrated Monitoring
Plan.
(2) Category 2 Events or Incidents:
Category 2 events or incidents are those that reflect conditions
significantly adverse to safety or conditions that could result
in significant additional costs to the Government. This Category
would also include events or incidents where an actual injury,
exposure, or exceedence occurred or nearly occurred but has minor
practical long-term health consequence and would also include
potential breakdown or failure of an important system critical to
project success, such as the Safety Management System or the
Safeguards and Security System. For Category 2 incidents, the
Contracting Officer may deduct up to $2 million in ordinary fee
payments. Examples include, but are not limited to:
o Event resulting in individual receiving a calculated
absorbed dose exceeding 25 rem CEDE
o Event which results in loss of all criticality safety
contingencies. Excludes legacy events.
o Facility fire exceeding the Maximum Credible Fire, as
that term is defined in DOE Order 420.1
o Unmitigated acute exposure which exceeds ERPG-2 limits
established for emergency planning purposes
o Total Site level 1 and 2 Technical Safety Requirements
(TSR) violations exceed 30 in a calendar year
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
o Non-legacy onsite event which results in an offsite water
quality exceedence of greater than 1.5 pCi/liter Pu as
measured in accordance with the Integrated Monitoring
Plan
o Contractor-caused packaging deficiency that results in a
container breach and material release during offsite
shipment or receiving
o Theft, loss, or diversion of strategically significant
classified materials (i.e., physical equipment, tooling,
etc) or classified documents. Excludes inventory
discrepancies not related to theft or diversion.
o Air release from project or incident causing a measured
10 mrem dose at the site boundary.
(3) Category 3 Events or Incidents:
Category 3 events or incidents are those that may indicate or
reflect a lack of focus on improving environment, safety, health,
safeguards, or security performance. For Category 3 incidents,
the Contracting Officer may deduct up to $250,000 from ordinary
fee payments. Examples include, but are not limited to:
o Accident resulting in 5 or more Lost-Workday cases
o Each month that the 12 month rolling average for Total
Recordable Case Rate exceeds 3.5
o Each month that the 12 month rolling average Lost Workday
Case Rate exceeds 2.0
o Each month that NCRs on waste packages exceed 8% on a 12
month rolling average
o More than 15 level 1 or 2 TSR violations in calendar year
o More than 7 Level A and B fire impairments over 30 days
old in a calendar month
o Number of level 3 and above criticality safety
infractions exceeds 14 in a calendar year
o More than 20 skin contaminations above 1,000 dpm per 100
cm2 in a calendar year
o Less than a 10% reduction in site total person-rem from
previous calendar year (excluding DOE). Once collective
site exposure is below 100 rem this event shall no longer
be applicable.
o More than 20 confirmed internal depositions above 100
mrem in a calendar year
o Unmitigated acute exposure which exceeds ERPG-1 limits
established for emergency planning purposes
o Non-legacy onsite event which results in an offsite water
quality exceedence of greater than the 0.15 pCi/liter Pu
as measured in accordance with the Integrated Monitoring
Plan
o Radiological air release from a project exceeding 10
times the planned maximum defined in project documents.
o One or more regulatory milestones missed as identified
from the Rocky Flats Closure Project Baseline by using
the milestone setting process identified in the RFCA
provided that penalties for missed RFCA milestones have
been assessed against DOE.
(4) Mitigation Factors:
In deciding to adjust ordinary fee payments for a Category 1, 2
or 3 event, the Contracting Officer shall apply only a single
penalty for each separate event even if a single event may
qualify for more than one penalty; however, fines and penalties
imposed under the Price-Anderson Act are excepted from this
provision. If event or incident results in Price Anderson fines
or penalties, or penalties for missed RFCA milestones, along with
Category 1, 2 or 3 consequences, the PAAA fines or penalties, or
penalties for missed RFCA milestones will apply. If the
applicable deduction is greater than the fine or penalty, the
difference between the PAAA fines or penalties or penalty for
missed RFCA milestones and the applicable deduction will be an
adjustment to the ordinary fee payment. The Contracting Officer
shall ensure that Contractor receives impartial fair and
equitable treatment, as set forth in FAR 1.602-2, and will take
into account mitigating factors. These may include factors such
as those set forth below:
o Degree of control that the Contractor had over the event
o Event caused by "Good Samaritan" act by the Contractor
(e.g., offsite emergency response)
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
o Efforts that the Contractor had made to anticipate and
mitigate the possibility of the event in advance
o Contractor response to the event to mitigate its impacts
and recurrence
o General status (trend and absolute performance) of safety
and compliance in related areas
The Contracting Officer may apply appropriate fee reductions or
withholdings after the fact to subsequent ordinary fee payments,
provided such fee adjustments are identified in writing to
Contractor within six (6) months of date of the event or incident
occurrence or last event in a trend.
(f) Release of Withheld Fee.
(1) The Contracting Officer may release withheld fees when the
Contractor demonstrates that the condition leading to the
withholding has been corrected. For example, a withheld fee
resulting from one or more cost variance(s) may be paid to the
Contractor when the Contractor recovers from the cost variance,
meaning that there has been acceptable cost variance at the ends
of two consecutive quarters.
(2) Upon physical completion of the contract, fee withholdings will
be released in accordance with Clause F.3.
(g) Bankruptcy or Other Issues with Guarantor Companies. In order to assure
the Contractor's ability to repay any ordinary fees that are determined
to be in excess of the actual fee earned at the physical completion of
the contract, the Contracting Officer reserves the right to discontinue
ordinary fee payments in the event one of the Contractor's Guarantor
companies files bankruptcy or is acquired by other owners, or other
events arise with the Guarantor company that jeopardize the Government's
ability to recover unearned ordinary fee payments.
(h) Repayment of Bankruptcy Reserve. In the event of the bankruptcy,
acquisition by other owner or other event as described in (g) above, the
remaining Guarantor company shall within 120 days after such event,
provide evidence satisfactory to the Contracting Officer that such
bankruptcy, change in ownership or other event does not affect the
ability of the Contractor to continue to perform the obligations under
the contract, or affect a material Governmental or DOE interest. Upon
such showing, the Contracting Officer shall resume making payments of
fee unreduced because of the events in subparagraph (g) and shall
release all fee payments withheld due to events described in (g) during
the preceding 120 days.
Nothing in this Clause B.6 limits the rights of the Contracting Officer set
forth in the clause "Incentive Fee" of this contract.
B.7 FINAL FEE DETERMINATION
(a) Upon the physical completion of the contract, the Contracting Officer
shall determine and pay the total fee earned by the Contractor
consistent with Clause I.23, "Incentive Fee," Clause B.6, "Fee Payment
Schedule and Fee Payment Withholding," Clause B.5, "Schedule Incentive,"
and Section F of the contract. All payments of ordinary fee made
before physical completion of the contract will be conditional. If the
amount of the total adjusted fee is less than the total amount of
ordinary fee payments previously made to the Contractor, the Contractor
shall reimburse the Government the difference. If the amount of total
adjusted fee is more than the total amount of ordinary payments of fee
previously made to Contractor, the Government shall pay the Contractor
the difference.
(b) Termination. If this contract is terminated in its entirety, fee shall
be payable to the Contractor consistent with Clause I.23 and the
termination provisions of this contract. DOE and the Contractor
recognize that accelerated closure is the mission of the Rocky Flats
Environmental Technology Site. The parties agree that the term
"Default" in Clause I.85, Termination, includes the situation where the
aggregate adjustments for Cost Variance at Target Cost and Schedule
Variance at Target Cost equals or exceeds -56% (negative
Section B - Page 8
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
56%) for a period of any 4 consecutive calendar quarters, commencing the
first quarter from July 1, 2001. Nothing in this paragraph shall limit
or restrict the application of Clause I.85, Termination, of this
contract.
B.8 ADDITIONAL ITEM(S) EXCLUDED FROM ACTUAL COST
Subparagraph (e) of Clause I.23 entitled "Incentive Fee" identifies
certain costs that will not be included in "total allowable cost" for the
purposes of fee adjustment. As set forth in subparagraph (e)(5), all other
allowable costs are included in "total allowable cost" for fee adjustment in
accordance with subparagraph (e), unless otherwise specifically provided in this
contract. The following item(s) of cost are not to be included in "total
allowable cost" for the purposes of fee adjustment under the clause "Incentive
Fee":
o The cost of any lump-sum payment directed by the Contracting
Officer in accordance with Clause H.9 " Responsibilities for
Operation/Termination of Benefits Systems."
o Increased disposal or transportation costs for waste disposal
sites controlled by DOE (such as NTS and WIPP)
o All administrative and closeout costs incurred by Contractor as
referenced in Clause F.3 of the contract.
Section B - Page 9
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
PART I - THE SCHEDULE
SECTION C
STATEMENT OF WORK
Table of Contents
Section Number Clause Title
C.1 GENERAL SITE INFORMATION
C.2 DEFINITIONS (GLOSSARY)
C.3 GOVERNMENT FURNISHED SERVICES/ITEMS
C.4 CONTRACTOR FURNISHED ITEMS
C.5 STATEMENTS OF COMMITMENT
TECHNICAL EXHIBITS
A. Detailed Description of Scope and Services
B. Abbreviations, Acronyms, and Definitions
C. List of Rocky Flats Environmental Technology Site Compliance Orders,
Agreements and Permits
D. Rocky Flats Cleanup Agreement
E. Rocky Flats Environmental Technology Site Workforce Restructuring Plan
Section C - Page 1
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
C.1 GENERAL SITE INFORMATION
C.1.1 FACILITY DESCRIPTION
The Rocky Flats Environmental Technology Site (RFETS) is located in
northern Jefferson County, approximately 16 miles northwest of downtown
Denver. The main site is a 384-acre complex consisting of
manufacturing, chemical processing, and laboratory and support
facilities. It is situated within a 6,200-acre preserve which functions
as the site's buffer zone.
Approximately 2 million people live within a 50-mile radius of RFETS.
The proximity of the Denver metropolitan area, and its growth, have
caused increased interest in RFETS in recent years. The type and
quantity of materials at RFETS have presented health, safety and
environmental concerns.
C.1.2 MISSION AND PHYSICAL COMPLETION OF THE CONTRACT
The mission is to accelerate closure of the Rocky Flats Environmental
Technology Site. The Rocky Flats Closure Project is intended to close
the former Rocky Flats Plant that was previously part of the U. S.
Department of Energy's (DOE) Nuclear Weapons Complex. The Contractor
shall accomplish site closure in a safe, compliant and efficient
manner. The Contractor shall take all steps and perform all work
activities in this Statement of Work necessary to accomplish physical
completion of the contract.
Since this is a closure project, the Contractor shall adopt a
management approach to site closure consistent with a finite life cycle
scope project. The RFETS closure project must be accomplished so as to
maintain the site in a safe condition for the workers, the public, and
the environment and by complying with all applicable laws, regulations
and agreements.
The Rocky Flats Closure Project Statement of Work is composed of five
major sections that relate to the key work activities associated with
closure, disposal of Special Nuclear Material, demolition of
facilities, environmental remediation, waste disposal, and
infrastructure and general site operations. Other activities such as
disposition of employee health records and termination or transfer of
benefit programs must also be completed. Other support services will be
terminated when they are no longer needed during the closure process.
In addition, the Contractor shall maintain DOE office accommodations
and implementation of the Three Party Transfer Agreements.
Although the sections identified in Technical Exhibit A provide some
detail for the specific scope of work for site closure, there may be
other ancillary activities related to closure specifically identified
in Technical Exhibit A, but which may be identified in other critical
closure documents such as DOE Orders and the latest revision of the
Rocky Flats Closure Baseline. Dates listed in the scope column of the
Technical Exhibit A are set forth for reference. The Contractor's
failure to meet a date specified in the scope column of Technical
Exhibit A shall not be the sole basis for imposition of penalty, fee
deduct or deferral or termination of the contract. All applicable
federal and state laws must also be followed in the execution of this
contract. All required final regulatory documentation will be completed
including the draft interim final Record of Decision Document for site
closure which shall be prepared by the Contractor and submitted by DOE
to regulatory agencies. All administrative matters including, but not
limited to pension plans, labor agreements, subcontracts, and
litigation will be completed, closed, terminated or transferred to the
approved successor organization. DOE will conduct audits and
surveillances of all aspects of the terms of this contract to ensure
compliance with the terms of this SOW. The results of all audits and
surveillances will be resolved with the Contractor. DOE reserves the
right to stop work in accordance with Clause H.3, Stop Work and
Shutdown Authorization.
The Region VIII Environmental Protection Agency (EPA) Office and the
Colorado Department of Public Health and Environment (CDPHE) are the
regulators for operations at the site. The RFETS is also subject to
oversight by the Defense Nuclear Facilities Safety Board (DNFSB), an
independent agency created to monitor operations and safety-related
activities at the Department of Energy's nuclear facilities.
Section C - Page 2
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
Physical Completion of the Contract
"Physical completion of the contract" as that term is used in Clause
I.23, Incentive Fee, is defined as the point in time in which:
(1) All buildings are demolished, except continuing water
treatment facilities or other structures with a DOE
declared continuing mission;
(2) All IHSSs are remediated or dispositioned per the
Rocky Flats Cleanup Agreement (RFCA) (amended as of
10/01/99);
(3) All wastes are removed except for some materials that
can be left in place, recycled or used as fill
materials in accordance with regulatory requirements;
(4) Closure caps are used for the remediation of two old
landfills, the 700-Area and the solar ponds or these
areas are otherwise remediated in accordance with
RFCA (amended as of 10/01/99);
(5) Building foundations, utilities or other remaining
structures, paved roads and/or parking lots are
covered by a minimum of three feet of fill after
final grade;
(6) Surface water onsite will meet health-based standards
based on open space use calculated using methodology
and toxicity assumptions utilized for the July 19,
1996 surface water action level; and
(7) Water leaving the site in Woman and Walnut Creeks
meets the water quality standards established (as of
10/01/99) by the Colorado Water Quality Control
Commission.
Physical completion of the contract does not include and will be
unaffected by interim storage (and eventual shipment) of waste and
materials awaiting availability of DOE designated receiver site(s) as
described in Section C of the contract, completion work such as
cosmetic grading of the site, removal of uncontaminated buried
underground utilities, removal of railroad tracks, paving of new
surface roads or construction of new structures, and other similar
activities. In the event material and waste receiver sites are
unavailable, the Contractor may construct interim storage facilities,
to include Corrective Action Management Units.
C.2 DEFINITIONS (GLOSSARY)
A listing of abbreviations and technical definitions used in this
contract is provided at Section C, exhibit B.
C.3 GOVERNMENT FURNISHED SERVICES/ITEMS
C.3.1 Within thirty (30) days after the effective date of the contract
and by September 1 prior to each fiscal year end, the Contractor will
provide the Contracting Officer an annual projection which details its
projection of needed Government Furnished Services/Items, identified in
column 3 of Exhibit A, for DOE approval. The Contractor will also
provide quarterly updates to the Contracting Officer. Amendments to the
projection, if any, will be provided to the Contracting Officer 45 days
in advance of the need date. Each Contractor submittal (annual,
quarterly, or individual) shall be reviewed by DOE. Within 15 days
after receipt, DOE shall notify the Contractor whether it will accept
the requested GFS/I. If DOE cannot accept, DOE will identify in writing
no later than 30 calendar days after receipt of Contractor's
notification the requested GFS/I it can accept and provide. If DOE
cannot accept the request for GFS/I that is within the ranges listed in
Technical Exhibit A, then it shall be treated as a change in accordance
with the clause entitled "Changes" in this contract.
C.3.2 Consistent with C.3.1, above, the Government will provide the
Contractor with repository site locations and shipping rates which the
Contractor may use, for storage, treatment or disposal. The
Section C - Page 3
Government Furnished Services/Items are provided in Section C, Exhibit
A. Notwithstanding the specific obligations set forth in GFS/I, the
Government agrees to use its best efforts to accelerate delivery of
GFS/I in support of the Contractor's efforts to successfully close
Rocky Flats. Shipping services provided by DOE will be at a rate in
accordance with the approved shipper/receiver agreements submitted by
the Contractor. DOE will provide certification for containers for all
Special Nuclear Material shipments and a waiver or revision to the DOE
Standard 3013-96 to address Pu oxides between 30 and 50 wt.%, to allow
for potential Pu contamination on the outside of the inner can and to
approve alternative moisture measurement methods.
C.3.3 The Government shall provide all NEPA compliance activities
described in Technical Exhibit A and as detailed in the latest revision
of the Rocky Flats Closure Project Baseline.
C.4 CONTRACTOR FURNISHED ITEMS
Except for Government-Furnished Services/Items, the Contractor shall
furnish all personnel, supervision, management, equipment, materials,
transportation and supplies required to plan, schedule, coordinate and assure
performance of all required services necessary to close the Site.
C.5 STATEMENTS OF COMMITMENT
The Government and Contractor recognize the accelerated closure is a
cooperative undertaking that requires both parties to seek innovative approaches
to achieve the end objective. Streamlining process and eliminating
non-value-added requirements are critical to accomplishing accelerated closure.
Both parties agree through the term of this contract to use their best efforts
and to cooperate in seeking the reduction of non-value-added requirements and
processes that impede progress. Further, both parties agree to use their best
efforts to further accelerate closure activities, including maximizing shipping
and receiving flexibility and capacity.
The Government and Contractor have currently identified a number of key
performance requirements that are particularly amenable to streamlining. The
Statements of Commitment identify the commitments or deliverables necessary to
achieve the stated objective. The parties will work during the term of the
contract to fulfill the objective and meet the commitment and deliverables
identified therein.
During the performance of the contract, the parties agree that
efficiencies and performance improvements will be required to reduce the actual
cost and/or improve the schedule for the work. The benefit to the Government of
any savings resulting from efficiencies and/or performance improvements
occurring during the performance of this contract accrue through the
Government's cost share identified in Clause I.23 of the contract. The parties
further agree that there will be no reduction to the Target Cost, Target
Schedule or Target Fee as a result of any such efficiencies and/or performance
improvements.
The Contractor and the Government will establish a Partnering Agreement
for the work leading to the closure of the site. The agreement will establish a
common vision with supporting goals and missions. It will promote the principles
of teamwork, mutual respect, openness, honesty, trust, professionalism and build
a better understanding of one another's position. The agreement will also
include joint commitments to:
o Maintain high safety performance
o Complete the project on schedule, within cost
o Eliminate barriers to a faster, more cost effective program
o Create an organizational culture able to accommodate change
o Resolve conflicts through a coordinated work effort to avoid
adversarial relations
o Reinforce the partnered relationship with honest feedback and
continual improvement.
Section C - Page 4
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION C
STATEMENT OF WORK
TECHNICAL EXHIBITS
Table of Contents
No. TITLE (Reference Paragraph)
- -----------------------------------------------------------------------------
A. Detailed Description of Scope and Services
B. Abbreviations, Acronyms and Definitions
C. List of Rocky Flats Environmental Technology Site Compliance Orders,
Agreements and Permits
D. Rocky Flats Cleanup Agreement
E. Rocky Flats Environmental Technology Site Workforce Restructuring Plan
Section C - Page 5
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
TECHNICAL EXHIBIT A
DETAILED DESCRIPTION OF SCOPE AND SERVICES
I. Special Nuclear Material
The Contractor will be required to perform the work listed below for the removal
of all Special Nuclear Material (SNM).
SCOPE
A. Plutonium
- ------------
1) Ship all non-classified plutonium metals and oxides to the Savannah River
Site or other DOE approved alternative (2) by September 30, 2002 (except
for Pu holdup discovered and/or removed after 9/30/02).
2) Ship all classified, by shape, plutonium metal to the Savannah River Site
or DOE approved alternative by September 30, 2002.
3) Ship all plutonium fluorides to the Savannah River Site or DOE approved
alternative by September 30, 2002.
4) Ship all plutonium metal composites to Lawrence Livermore National
Laboratory or DOE approved alternative by September 30, 2002.
5) Ship all IAEA material to Savannah River Site or DOE approved alternative
by September 30, 2002.
REQUIREMENT(S)
o Non classified plutonium metal and oxide must be packaged to the
DOE-STD-3013-96 prior to shipment to the DOE approved receiver site.
o All Special Nuclear Material must be shipped in a DOE approved shipping
container (i.e. 9965, 9975, DT22, etc.)
o DOE Orders 5610.12, 5610.14 and 460.1A must be followed.
GOVERNMENT FURNISHED SERVICES & ITEMS (1)
o Safe, Secure Transport services (e.g., escorts, tractor and trailer) at a
rate and number sufficient to support SNM shipments (average number of 5
shipments per month not to exceed 9 shipments per month) started on
10/01/99 and ending as early as 10/1/01 and no later than 9/30/02 for a
total of 175 shipments.
o DOE approved receiver sites that can receive SNM and plutonium fluorides
and IAEA materials at a rate to support shipment completion as early as
10/1/01 and no later than 9/30/02 (average number of 5 shipments per month
not to exceed 9 shipments per month).
o DOE shall certify the following containers for all SNM:
- 9975
- DOT-6M
- DT-22
- 3013
o DOE-provided containers for SNM at a rate and number consistent with the
planning and approval process described in C.3 to support the SNM shipping
schedule. (DOE will certify but not provide 9975 and 3013 containers)
- ----------
1 As used throughout this Technical Exhibit A, "None" is used solely to indicate
that the Government has not identified a specific service or item to be
provided by the Government in support of the particular scope description.
2 Dependent upon the completion of the NEPA process for the Record of Decision
for Disposal.
Section C - Page 6
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SCOPE
B. Highly Enriched Uranium
- --------------------------
Ship all highly enriched uranium metal that is contaminated with plutonium to
the DOE approved receiver site by September 30, 2002.
C. Other Nuclear Materials
- --------------------------
Ship all depleted uranium, 4.5% LEU, radioactive sources, thorium samples, U-233
non-combustibles to designated DOE or other approved receiver sites by September
30, 2002.
REQUIREMENTS
o All Special Nuclear Material must be shipped in a DOE approved shipping
container (i.e. 9965, 9975, DT22, etc.)
o DOE Orders 5610.12, 5610.14 and 460.1A must be followed.
GOVERNMENT FURNISHED SERVICES & ITEMS
o Same items as for Section A. Plutonium.
o In addition for C,
- NEPA as required
- Designated receiver sites
- Certified shipping containers
o DOE shall certify the following containers for all SNM:
- 9975
- DOT-6M
- DT-22
- 3013
o DOE-provided containers for SNM at a rate and number consistent with the
planning and approval process described in C.3 to support the SNM shipping
schedule. (DOE will certify but not provide 9975 and 3013 containers)
Section C - Page 7
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
II. Facility Deactivation, Decommissioning and Demolition
The Contractor will be required to deactivate, decommission and demolish the
Rocky Flats facilities in accordance with the Rocky Flats Cleanup Agreement,
except for those facilities specifically defined by DOE to remain as detailed
below:
SCOPE
A. SNM Buildings
- ----------------
The Contractor shall deactivate, decontaminate and demolish all former Special
Nuclear Material building clusters & supporting facilities to include (See
Project Baseline Descriptions, for cluster descriptions)
o B371/374 cluster by March 1, 2006,
o B771/774 cluster by October 1, 2004,
o B707/750 cluster by February 1, 2005,
o B776/777 cluster by March 1, 2004, and
o B559 cluster by September 1, 2004.
B. Other Facilities
- -------------------
The Contractor shall decontaminate and demolish the remaining building clusters
& supporting facilities by September 30, 2006. (See Project Baseline
Descriptions for cluster and supporting facility descriptions.)
REQUIREMENT(S)
Planning, characterization, area preparations, physical decontamination,
dismantlement, demolition and reporting requirements shall be accomplished in
accordance with the Rocky Flats Cleanup Agreement.
Planning, characterization, area preparations, physical decontamination,
dismantlement, and demolition shall be accomplished in accordance with the Rocky
Flats Cleanup Agreement.
GOVERNMENT FURNISHED SERVICES & ITEMS
o CERCLA Administrative Record Repository
o DOE shall provide comments on draft decision documents and regulatory
reports within 20 business days of receipt.
o CERCLA Administrative Record Repository
o DOE shall provide comments on draft decision documents and regulatory
reports within 20 business days of receipt.
Section C - Page 8
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
III. Waste Management
The Contractor shall store, process and/or package and ship to DOE approved or
other storage, treatment or disposal sites all wastes. These wastes consist of
transuranic (TRU) and transuranic mixed (TRU mixed), low level radioactive (LLW)
and low level radioactive mixed (LLW mixed), hazardous, and sanitary waste.
These wastes must be processed and/or packaged to meet disposal or receiver site
criteria as stipulated below:
SCOPE
A. Transuranic and Transuranic Mixed Waste
- ------------------------------------------
Ship to the Waste Isolation Pilot Plant (WIPP) and other DOE designated sites,
all transuranic and transuranic mixed waste by December 15, 2006.
REQUIREMENT(S)
o The Waste Isolation Pilot Plant (WIPP) Waste Acceptance Criteria (WAC)
Rev. 5, dated April 1996, and DOE Order 435.1.
o The TRUPACT-II Authorized Methods for Payload Control TRUPACT IIs were
delivered to Rocky Flats Site (TRAMPAC) procedure and beginning on
10/01/99, and will be delivered at the Site-Specific TRAMPAC for TRU
following rates per month: waste loading requirements.
o The TRUPACT-II SARP (Safety Analysis Report) and TRUCON (TRUPACT-II
Content Code).
o All DOT transportation requirements applicable at the time of shipment
for hazardous and radioactive waste must be met as well.
--10 CFR Parts 70 & 71 (packaging)
--49 CFR Parts 107, 110, 171, 173 (transportation)
--Packaging QA Program Plan
GOVERNMENT FURNISHED SERVICES & ITEMS
TRUPACT II containers and trailers to support transuranic and transuranic mixed
waste (including classified waste) shipments to WIPP and other DOE approved
storage, treatment or disposal sites.
FY00 36/mo
FY01 72/mo
FY02 120/mo
FY03 120/mo
FY04 120/mo
FY05 80/mo
FY06 36/mo
FY07 36/mo
DOE will also provide all transportation services from the loading facilities at
Rocky Flats to all DOE approved sites.
Section C - Page 9
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SCOPE
B. Low Level Waste
- ------------------
Ship to approved DOE or commercial disposal sites all low-level waste by
December 15, 2006.
The Contractor shall provide transportation services to the disposal site and
disposal site fees unless otherwise stipulated by DOE.
C. Low Level Mixed Waste (less than 10 nanocuries per gram)
- ------------------------
Ship to approved DOE or commercial treatment and disposal sites all low level
mixed waste less than 10 nanocuries per gram by December 15, 2006.
The Contractor shall provide transportation services to the disposal site and
treatment and disposal site fees unless otherwise stipulated by DOE.
D. Low Level Mixed Waste (greater than 10 nanocuries per gram and less
- ------------------------ than 100 nanocuries per gram)
Ship to approved DOE or commercial treatment and disposal sites all low-level
mixed waste greater than 10 nanocuries per gram by December 15, 2006. The
Contractor shall provide transportation services to the disposal site and
treatment and disposal fees (up to the unit price in III.C. above) unless
otherwise stipulated by DOE.
REQUIREMENT(S)
Disposal site waste acceptance criteria and DOE Order 435.1, All applicable DOT
requirements at the time of shipment for radioactive waste must be met.
Currently available disposal site - the DOE Nevada Test Site (NTS) in accordance
with NTS Waste Acceptance Criteria dated August 1997, Rev 1, or Commercial Waste
Acceptance Criteria if that disposal option is chosen.
Disposal site waste acceptance criteria and DOE Orders 5480.3 and 435.1. All
applicable DOT requirements for shipment of radioactive and hazardous waste must
be met.
Disposal site waste acceptance criteria and DOE Orders 5480.3 and 435.1, All
requirements for shipment of radioactive and hazardous waste must be met.
GOVERNMENT FURNISHED SERVICES & ITEMS
DOE receiver sites that can accept waste at a rate and number consistent with
the planning and approval process described in C.3. to support low level waste
shipments.
DOE fulfills its commitment in the Waste Management Programmatic Environmental
Impact Statement to designate DOE or commercial receiver site(s) that can accept
waste at a rate and number consistent with the planning and approval process
described in C.3 to support low level mixed waste shipments.
DOE fulfills its commitment in the Waste Management Programmatic Environmental
Impact Statement to applicable DOT designate DOE or commercial receiver site(s)
that can accept waste at a rate and number consistent with the planning and
approval process described in C.3 to support low level mixed waste shipments.
Section C - Page 10
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
E. Sanitary Waste
- -----------------
Ship to commercial facilities for disposal, or recycle, all sanitary waste by
December 15, 2006.
F. RCRA Regulated Hazardous Waste
- ----------------------------------
Ship to commercial facilities, all RCRA Regulated Hazardous Waste by December
15, 2006.
G. Waste Minimization
- ---------------------
The Contractor shall develop and implement a pollution prevention program
incorporating waste prevention, recycling and an affirmative procurement
program.
The Contractor shall establish waste reduction goals for transuranic, low-level
waste, low level mixed and RCRA regulated hazardous waste.
REQUIREMENT(S)
Local and state regulations regarding waste acceptance at sanitary landfills as
well as any requirements associated with individual disposal sites. Sanitary
waste leaving the Rocky Flats Site must be inspected to assure that no
radioactive materials are present in accordance with Colorado Sanitary Waste
regulations (6 CCR 1007-2) for landfills and individual landfill permits.
Disposal sites waste acceptance criteria, the Resource Conservation Recovery Act
and DOE Order 435.1
o Executive Order 12856
o Executive Order 13101
o DOE Order 5400.1
GOVERNMENT FURNISHED SERVICES & ITEMS
None
None
None
Section C - Page 11
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
IV. Environmental Remediation
The Contractor shall prepare a draft interim final record of decision (ROD),
submit to DOE for DOE, EPA, and CDPHE approval, and complete all actions
required by the approved interim final ROD to remediate soil, surface water,
ground water, and other contaminated media. The remediation shall be completed
as stipulated below:
SCOPE
A. Remediation
- --------------
The Contractor shall remediate Individual Hazardous Substance Sites (IHSS) (3),
Potential Areas of Concern (PAC), or under building contamination (UBC) by
December 15, 2006.
The total waste volumes for this environmental remediation portion of the
project are assumed not to exceed those quantities as follows:
o Non-Rad Waste: 11,000 cubic yards
o Low Level Waste: 107,000 cubic yards
o Low Level Mixed Waste less than 1 nanocurie: 41,000 cubic yards
o Low Level Mixed Waste greater than 1 nanocurie: 220 cubic yards
B. Post Closure Care under RCRA Permit
- --------------------------------------
The Contractor shall perform the closure and post-closure care requirements for
RCRA permitted and interim status units during the performance of this contract.
REQUIREMENT(S)
o Planning, characterization, area preparations, remediation, disposition,
final regulatory approvals and reporting requirements shall be accomplished
in accordance with RFCA
o Remediation shall be specified in the approved interim final Record of
Decision (ROD) and Proposed Plan
o Contractor must transport and maintain CERCLA administrative record IAW 40
CFR 300-311
The Contractor shall comply with closure and post closure care requirements
under the RCRA permit in accordance with RCRA, 40 CFR Parts 264 and 265, the
Colorado Hazardous Waste Act requirements, 6 CCR 1007-3 and RFCA. (4)
GOVERNMENT FURNISHED SERVICES & ITEMS
o CERCLA Administrative Record Repository
o DOE shall provide comments on draft decision documents and regulatory
reports within 20 business days of receipt.
None
- ----------
3 If the 903 Pad Remediation Project removal option is exercised, then the
project planning, execution and completion as identified in WBS
#1.1.03.12.06.02 shall be removed from the scope of work and this contract.
4 Assumes RCRA Permit is not extinguished and its requirements are not absorbed
into RFCA.
Section C - Page 12
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
C. End State
- ------------
The Contractor shall develop and submit for RFFO and regulatory approval a Draft
Interim Final ROD and Proposed Plan. The end state is defined in Clause C.1.2.
REQUIREMENT(S)
o Draft Interim Final ROD shall be in accordance with RFCA and be of
sufficient quality and completeness to obtain regulatory approval and
issuance of an approved Interim Final ROD and Proposed Plan.
o Draft Interim Final ROD will be prepared and presented in sufficient time to
allow:
o Public and regulatory review as provided in RFCA
o Regulatory approval and publication
o Completion of remediation actions described in the ROD and Proposed Plan
prior to December 15, 2006
o Contractor must transport and maintain CERCLA administrative record in
accordance with 40 CFR 300-311.
GOVERNMENT FURNISHED SERVICES & ITEMS
o CERCLA Administrative Record Repository
o DOE shall provide comments on draft decision documents and regulatory
reports within 20 business days of receipt.
o DOE will use its best efforts to obtain an approved Interim Final ROD.
Section C - Page 13
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
V. Infrastructure and General Site Operations
The Contractor shall perform the infrastructure operations and general support
services listed below in support of the site closure mission.
o All items listed below are required until the end of this contract unless
otherwise approved for termination by DOE.
o These items are generally required to support the items listed Sections I
through IV above, or the general operation of the site until closure
o It is recognized that this is a closure site, all facilities have a limited
life span, and the nuclear safety risk and required controls should be
steadily declining throughout the project. The standard requirements
referenced in this contract are generally designed for continuous ongoing
facility operations. this will create the desirability for a number of
interpretations and/or exceptions and deviations from the standard
requirements to ensure that project costs are being deployed for the maximum
net government risk reduction. The Contractor and DOE shall actively engage
in early identification and appropriate requirements reduction activities to
ensure a safe and cost effective closure.
o The Contractor shall provide any other services or operations not listed
below as required by other contract requirements including those DOE Orders
listed in Section J, Attachment B.
o Safety services are subdivided into three sections: 1) Nuclear safety
requirements which apply to handling and processing fissile material and to
the operation of facilities that house fissile material, 2) radiological
safety requirements that apply to handling and processing of radioactive
waste and operations in facilities that are radiologically contaminated or
house radioactive materials, and 3) industrial safety requirements which
apply to all work activities and facilities at the Site.
SCOPE
A. Environmental Monitoring
- ---------------------------
The Contractor shall conduct required environmental monitoring in compliance
with environmental laws, regulations, permits, agreements, decision documents
and in support of emergency response activities.
The Contractor shall provide annual updates to the Historical Release Report and
CERCLA Administrative Record.
The Contractor shall maintain the current and any new enforceable agreements at
the Site as identified in the technical exhibit D in this section C.
REQUIREMENT(S)
Environmental Monitoring shall be accomplished in accordance with the provisions
of Resource Conservation and Recovery Act (RCRA); the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA); the Clean Air
Act; the Clean Water Act; the Colorado Water Quality Control Commission (CWQCC)
standards; natural resource management regulations, and RFCA. (5)
GOVERNMENT FURNISHED SERVICES & ITEMS
DOE will provide necessary access to accomplish all offsite environmental
monitoring.
- ----------
5 Requirements will be revised if RFCA is amended to include above stated
requirements as ARARs.
Section C - Page 14
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SCOPE
B. Facility Operation and Material Storage
- ------------------------------------------
The Contractor shall operate all facilities until they are demolished in
accordance with applicable safety, security requirements and store all materials
(chemicals, etc.), waste, property, etc., in accordance with applicable
requirements.
C. Safeguards & Security
- ------------------------
The Contractor shall ensure appropriate levels of protection against
unauthorized access; theft, diversion, loss of custody of Special Nuclear
Material; espionage; loss or theft of classified matter or Government property;
and other hostile acts that may cause unacceptable adverse impacts on national
security or the health and safety of DOE and contractor employees, the public or
the environment.
The Contractor shall promptly prepare and submit applications for security
clearances as required for work under this contract.
The Contractor shall deter, prevent, detect and respond to unauthorized
possession, use, or sabotage of Special Nuclear Materials.
The Contractor shall provide an integrated system of activities, systems,
programs, facilities and policies for the protection of classified information,
nuclear materials, and DOE and certain DOE contractor property and personnel as
required by the Atomic Energy Act of 1954, as amended, other Federal statutes,
Executive orders, and other directives.
REQUIREMENT(S)
Applicable requirements for facility operation or material storage are listed in
Section J, Attachment B..
o Program Management, DOE Order 470 Series
o Personnel Security, DOE Order 472 Series
o Protection Operations, DOE Order 5632 and DOE Order 473 Series
o Materials Control And Accountability, DOE Order 5633 and DOE Order 474
Series
o Information Security, DOE Order 5639 and DOE Order 471 Series
GOVERNMENT FURNISHED SERVICES & ITEMS
None
DOE shall promptly process Contractor security clearances. On average,
processing time will be in accordance with DOE Order 472 guidelines which for
clear cases will be at or below the following:
Q clearance- 75 calendar days
L clearance - 75 calendar days
AAA clearance - 60 calendar days
Processing time begins upon receipt of the case from the Contractor.
Section C - Page 15
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SCOPE
D. Analytical Services
- ----------------------
The Contractor shall perform and maintain Analytical Services and/or
Laboratories.
The Contractor shall ensure that any lab samples analyzed by off-site
laboratories will be disposed of from the laboratory and not returned to the
Rocky Flats Site for disposal unless there is prior contractual agreement for
the return of specific samples for which no other disposition is possible.
E. Public Relations & Media Support
- -----------------------------------
The Contractor shall provide communication services to include Citizens Advisory
Board representation, tours and visits and other stakeholder support.
F. Litigation Management
- ------------------------
The Contractor shall maintain a legal function and demonstrate sound litigation
management practices to include litigation, arbitration, legal advice on
environmental matters, procurement, employment, labor, and the Price-Anderson
Act (PAA); review and interpretation of legislation and laws; research and
drafting of memorandum, and the management and oversight of outside legal
counsel; for both the prime and subcontractors.
The Contractor shall provide litigation support to the Government when judged
necessary by the Contracting Officer (or Contracting Officer Representative) in
cases of actual or threatened litigation, regulatory matters, or third-party
claims and subject to applicable rules and regulations. Litigation support
includes, but is not limited to: case preparation assistance; document
retrieval, review and reproduction; witness preparation and testimony; expert
witness testimony; and assisting Government counsel as necessary in response to
discovery or other information related activities responsive to any legal
proceeding.
REQUIREMENT(S)
Analytical Services and laboratories shall be operated in accordance with one or
more of the following references: 10 CFR 830.120, DOE Order 414.1, ASME-NQA-1,
ANSI/ASQC E4, and/or ISO 9000.
o Communication services shall be provided as needed to maintain stakeholder
support for the Rocky Flats Closure Project.
o Contractor must transport and maintain supporting community documents in the
established DOE Reading room(s).
o Litigation management practices shall be provided in accordance with the
RFFO approved Litigation Management Plan.
o Department of Energy, Office of General Counsel, Legal Services and
Litigation Management Policies and Procedures
GOVERNMENT FURNISHED SERVICES & ITEMS
DOE shall maintain a quality National Analytical Management Program or a DOE
alternative program which supports the analytical services necessary to close
the site.
DOE Reading Room(s)
None
Section C - Page 16
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SCOPE
G. Audit Support Services
- -------------------------
The Contractor shall provide audit support services for GAO, IG, DNFSB, EPA,
CDPHE and other external audits that examine and evaluate Site-wide activities.
H. Utilities & Infrastructure
- -----------------------------
The Contractor shall provide and maintain the infrastructure, utilities, etc.
necessary to support the closure mission. DOE will provide at a later date a
specific definition of which roads and components of the site utility system
that will remain after closure.
I. Radiological Assistance Program
- ----------------------------------
The Contractor shall provide a field unit under the Radiological Assistance
Program (RAP) until the RAP program is terminated by DOE.
J. Health Effects
- -----------------
The Contractor shall provide support for health programs/ambulatory care,
beryllium and radiation worker health surveillance programs and personnel
monitoring program. These services are required to assess, monitor, record data,
and provide medical support for current site workers who are or may be exposed
to radiological and hazardous materials. This is expected to encompass 6500
(+/-1000) current site workers through the term of this contract. The Contractor
shall maintain medical records of former workers and make them available for
health effects studies as requested by DOE.
REQUIREMENT(S)
Audit Support Services shall be provided in accordance with DOE Order 2300.1B,
Audit Resolution and Follow-up, DOE Order 2320.1C, Cooperation with the Office
of Inspector General, DOE Order 2321.1B, Auditing of Programs and Operations;
and, Department of Energy, Office of General Counsel, Legal Services and
Litigation Management Policies and Procedures
Utilities and infrastructure shall be maintained in accordance with DOE Order
430.2 and the Site Safety Analysis Report.
DOE Order 5530.3 provides the requirements for the Radiological Assistance
Program.
Health effects shall be maintained in accordance with Public Law 102-484, DOE
Order 440.1, and will last until the program and documents are turned over to
DOE at the end of this contract.
GOVERNMENT FURNISHED SERVICES & ITEMS
DOE /OIG Rocky Flats Audit Plan
DOE shall provide and pay for site utilities to include raw water, electricity,
natural gas and heating oil.
DOE shall provide additional funding for the RAP and one member and may provide
up to three (3) members for the RAP team.
None
Section C - Page 17
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SCOPE
K. Occupational Health
- ----------------------
The Contractor shall provide the following classes of examinations for the
purpose of providing initial and continuing assessment of employee health:
pre-placement in accordance with the Americans with Disabilities Act (42 United
States Code 12101), qualification examinations, fitness for duty, medical
surveillance and health monitoring, return to work health evaluations, and
termination examinations. The occupational medical department shall be informed
of all job transfers and shall determine whether a medical evaluation is
necessary. The physician responsible for the delivery of medical services or
his/her designee shall inform contractor management of appropriate employee work
restrictions.
L. Emergency Management
- -----------------------
The Contractor shall provide Site Emergency Management Services to include
emergency planning and preparedness as well as response to possible incidents
involving nuclear, radiological and hazardous materials on site.
The Contractor shall provide a fully equipped and adequately staffed Emergency
Operations Center on the site.
REQUIREMENT(S)
DOE Order 440.1A provides the requirements for employee health examinations.
This applies to all contractor and sub-tier contractor personnel as required by
DOE Order 440.1A.
DOE Order 151.1 specifies the performance requirements, capabilities and
response times for emergency management services. Emergency management shall be
performed at the levels specified until the major nuclear facilities' hazards
are removed or ameliorated, or the facilities are demolished. A reduced level of
emergency services may be allowed once the major hazards on-site are removed and
as they are approved by DOE. DOE Order 225.1A specifies the requirements for
conducting accident investigations.
GOVERNMENT FURNISHED SERVICES & ITEMS
None
None
Section C - Page 18
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SCOPE
M. Nuclear Criticality Safety
- -----------------------------
The Contractor shall maintain a Nuclear Criticality Safety Program which ensures
that operations with fissionable materials which pose a criticality accident
hazard shall be evaluated and documented to demonstrate that the operation will
be subcritical under both normal and credible abnormal conditions. Fissionable
material operations shall be conducted in such a manner that consequences to
personal and property that result from a criticality accident will be mitigated.
No single credible event or failure shall result in a criticality accident
having unmitigated consequences.
N. Nuclear Safety
- ------------------
The Contractor shall develop and maintain the safety analysis and controls for
nuclear facilities, operations, and activities. Readiness determinations for
restart of activities and for start-up of new activities will be required to
demonstrate readiness to safely start the activity.
O. Occupational Safety
- ----------------------
The Contractor shall meet all occupational safety and health requirements
(including but not limited to industrial safety, fire protection, construction
safety, firearms safety, explosive safety, industrial hygiene, pressure safety
and motor vehicle safety) for all site-related operations and conditions.
REQUIREMENT(S)
DOE Order 420.1 provides the requirements and invokes the applicable ANSI/ANS 8
Standards. Sabotage and seismic events that are predicted to result in facility
collapse are exempt from the requirement for double contingency. The Criticality
Safety Program will be required in each facility until fissile materials
inventories are reduced to less than that stipulated in ANSI/ANL8.
DOE Orders 420.1, 425.1, 5480.21, 5480.22, and 5480.23 specify the requirements
for nuclear safety.
Occupational safety requirements are as stipulated in DOE Orders 420.1, DOE
Order 440.1A.
GOVERNMENT FURNISHED SERVICES & ITEMS
None
DOE complies with the following authorization basis review schedule:
A. Justification for Continued Operation - 4 calendar weeks
B. Page Change- 4 calendar weeks
C. New -Authorization Basis- 2 calendar months
D. Authorization Basis revision- 6 calendar weeks
E. Positive unreviewed safety question - 2 calendar weeks
DOE will work cooperatively with the Contractor to improve upon this review
schedule as a part of the best efforts approach of the Nuclear Licensing
Statement of Commitment.
None
Section C - Page 19
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SCOPE
P. Fire Protection
- ------------------
The Contractor shall maintain an acceptable fire protection program which
supports a level of fire protection and fire suppression capability sufficient
to minimize losses from fire and related hazards consistent with the best in
class of protected property in private industry.
Q. Quality Assurance Program
- ----------------------------
The Contractor shall perform all work on site in accordance with applicable
quality assurance requirements.
R. International Agreements
- ----------------------------
The Contractor shall support 12 inspections per year by the International Atomic
Energy Agency (IAEA) as well as maintain material surveillance equipment.
S. Records Management and Document Control
- -------------------------------------------
The Contractor shall provide on an ongoing basis the maintenance, storage,
protection, and disposition of active and inactive classified and unclassified
records, retrieval from on-site and off-site storage facilities and support in
ongoing discovery efforts for litigation. All Government records, regardless of
media, in the Contractor's custody must be properly inventoried, indexed, moved
to DOE approved off-site storage facilities, and possess a disposition schedule
or equivalent thereof pending a schedule being developed, including those
records that are required to document closure activities. Those records that are
radiologically, beryllium or otherwise contaminated shall be handled and
dispositioned in accordance with site procedures including applicable free
release levels. The Contractor will provide a complete records inventory list in
a hardcopy and electronic format to the post closure records custodian
identified by the DOE Contracting Officer.
REQUIREMENT(S)
DOE Order 420.1 provides the requirements and invokes the National Fire
Protection Association Standards.
DOE Order 414.1 and 10 CFR 830.120 specify basic requirements that apply to the
quality assurance program. For site activities where transuranic waste will be
characterized, packaged, or shipped, the DOE Carlsbad Area Office Quality
Assurance Program Document, CAO-94-1012 and DOE Carlsbad Area Office Quality
Assurance Program Plan, CAO-94-1010 shall apply. The Nevada Test Site Waste
Acceptance Criteria shall apply for those activities where Low Level Waste is
characterized, certified, packaged, or shipped.
o IAEA agreement INFCIRC 288 and DOE Order 1270.2B
o This requirement will remain in effect until IAEA materials have been
permanently removed from the Site.
Records management and document control will be conducted in accordance with DOE
Order 200.1, 36 CFR Chapter 12, Subchapter B and the Joint Records Management
Strategy for Site Closure.
GOVERNMENT FURNISHED SERVICES & ITEMS
None
None
None
DOE approved receiver site(s)
Section C - Page 20
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SCOPE
T. Radiation Protection Program
- -------------------------------
The Contractor shall ensure that all site activities are conducted in compliance
with a documented Radiation Protection Program to minimize occupational exposure
to internal radiation, direct, external exposure to ionizing radiation as well
as to minimize the spread of contamination. The As Low As Reasonably Achievable
(ALARA) process will be applied to all site activities.
U. Environmental Permits
- ------------------------------
The Contractor shall obtain, maintain, and comply with environmental permits as
required and allowed by law.
REQUIREMENT(S)
10 CFR 835 and the Departmental Implementing Guides shall apply.
Contractor's compliance with environmental permits shall be in accordance with
the Resource Conservation and Recovery Act (RCRA); the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA); the Clean Air
Act; the Clean Water Act; and the Rocky Flats Cleanup Agreement. (6)
GOVERNMENT FURNISHED SERVICES & ITEMS
None
None
- ----------
6 Requirements will be revised if RFCA is amended to include above stated
requirements as ARARs.
Section C - Page 21
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
VI. DOE Office Accommodations
The Contractor shall provide basic office accommodations for DOE personnel as
specified below. A central DOE office will be needed as well as smaller office
accommodations in a few critical facilities until they are decommissioned.
During the final stages of closure it is expected that DOE will relocate its
office off-site.
SCOPE
DOE Offices
- -----------
DOE will continue to occupy Building 460 until the facility is scheduled for
demolition or until the Contractor provides alternate office space, whichever
occurs first. This includes space for up to 250 DOE and support service
personnel. Regardless of location, DOE will require that at least 150 of the
individual offices must be located in one building until the end of FY04. Up to
a maximum total of 10 office spaces (no more than three in each building) must
be maintained in or within 150 feet of Buildings 371, 750, 771, and 707 until
the Contractor closes the facilities. DOE will require additional space for
approximately 10 regulators doing Site inspections. Lunch services must be
provided within 500 feet of the single large DOE office on-site until 2005. The
Contractor shall provide for movement of DOE furniture property and other
materials if offices are moved from the satellite offices, or from B460.
Adequate access for DOE personnel is required through closure.
REQUIREMENT(S)
DOE office accommodations will be provided in Building 460, or an alternative.
Any central office location besides Building 460 requested to house the DOE
offices must be approved by the Manager, RFFO.
GOVERNMENT FURNISHED SERVICES & ITEMS
None
Section C - Page 22
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
VII. Tri-Party Agreement
The Contractor shall continue to implement the Three Party Transfer Agreements.
SCOPE
Tri-Party Agreement
- -------------------
The Contractor shall ensure the continued support and assistance to Rockwell and
EG&G as prescribed by the RFP Three Party Transfer Agreement dated June 30,
1995.
REQUIREMENT(S)
RFETS Three Party Transfer Agreement with DOE, EG&G Rocky Flats, Inc., and
Kaiser-Hill Company, L.L.C., June 30, 1995, and as incorporated by reference,
the RFP Three Party Transfer Agreement with DOE, EG&G Rocky Flats, Inc., and
Rockwell International Corporation, October 23, 1989.
GOVERNMENT FURNISHED SERVICES & ITEMS
None
VIII. Closure Project Funding
The Contractor shall plan to execute this Statement of Work assuming a minimum
annual funding of $657 Million from the Closure Account, (EW-05) received no
later than October 1, of each year, for the term of the contract. The receipt of
funding is subject to Congressional and Departmental funding Authorization. The
following table describes the maximum funding RFFO may receive during the
project from the Closure Account. If DOE removes scope, such as the 903 Pad
remediation, adjustment to this funding may be negotiated.
- --------------------------------------------------------------------------
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
& Outyears
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
$18.8M $18.8M $18.8M $18.2M $17.6M $16.6M $16.3M $3.9M
- --------------------------------------------------------------------------
Section C - Page 23
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
Exhibit B
Abbreviations, Acronyms, and Definitions
Abbreviations and Acronyms:
ACP Accelerated Cleanup Plan
ADS Activity Data Sheets
ALARA As Low As Reasonably Achievable
APSF Advanced Plutonium Storage Facility
ASAP Accelerated Site Action Project
BCP Baseline Change Proposal
BEST97 Basis of Estimate Software Tool
BOES Basic Operating and Essential Services
CAB Citizens Advisory Board
CAD Corrective Action Decision
CAMU Corrective Active Management Unit
CDPHE Colorado Department of Public Health and Environment
CERCLA Comprehensive Environmental Response, Compensation and
Liability Act of 1980
CFR Code of Federal Regulations
CID Cumulative Impacts Document
D&D Decontamination and Decommissioning
DNFSB Defense Nuclear Facilities Safety Board
DOE Department of Energy
DOR Direct Oxide Reduction
ECA Energy Communities Alliance
EIS Environmental Impact Statement
EM Environmental Management
EPA Environmental Protection Agency
ER Environmental Restoration
FSUWG Future Site Use Working Group
FTIRS Fourier Transform Infrared System
FY Fiscal Year
HQ Headquarters
IAW In Accordance With
ICCB Internal Change Control Board
ID Department of Energy Idaho Operations Office
IDC Item Description Code
IHSS Individual Hazardous Substance Site
IMC Integrating Management Contract
INEEL Idaho National Engineering and Environmental Laboratory
IPL Integrated Priority Listing
ISM Integrated Safety Management
LANL Los Alamos National Laboratory
LCB Life Cycle Baseline
LLMW Low Level Mixed Waste
LLW Low Level Waste
M&O Management & Operating
Mat'l Material
Misc. Miscellaneous
MLLW Mixed Low Level Waste
MOL Minimum Operating Level
MOX Mixed Oxide Fuel
MR Mortgage Reduction Milestones
mrem Millirem
MSE/ER Molten Salt Extraction/Electrorefining
NEPA National Environmental Policy Act
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
NTS Nevada Test Site
Ops. Operations
OR Oak Ridge
OU Operable Unit
PA Protected Area
PAC Potential Area of Concern
PBIMC Performance Based Integrating Management Contract
PBD Project Baseline Description
pCi/g Pico Curies per gram
PEIS Programmatic Environmental Impact Statement
PPI Program Planning and Integration
Pu Plutonium
PuF4 Plutonium Fluoride
RESRAD Computer Model Pertaining to Residual Radiation Material
RFCA Rocky Flats Cleanup Agreement
RFETS Rocky Flats Environmental Technology Site
RFFO Rocky Flats Field Office
ROD Record of Decision
SAL Soil Action Levels
SCCB Site Change Control Board
SISMP Site Integrated Stabilization Management Plan
Site Rocky Flats Environmental Technology Site
SMEs Subject Matter Experts
SNM Special Nuclear Material
SRS Savannah River Site
SS&C Salt Sand & Crucible
SSTs Safe Secure Transport
SSSP Site Safeguard & Security Plan
STCG Site Technology Coordination Group
STLs Safeguards Treatability Limits
STP Site Treatment Plan
TBD To be determined
TRU Transuranic
TRUM Transuranic Mixed
TRUPACT Transuranic Waste Packaging and Transportation
TSCA Toxic Substance Control Act
TYP Ten Year Plan
USTs Underground Storage Tanks
WAD Work Authorization Document
WBS Work Breakdown Structure
WIPP Waste Isolation Pilot Plant
WM Waste Management
Definitions:
Baseline: A work activity based plan that describes the Contractor'
s approach to execute the project Statement of Work,
including the schedule for those work activities and
estimates of the associated costs (plus or minus approved
changes). Defined as the Rocky Flats Closure Project
Baseline.
Statement of Work: Narrative description of products or services to be
supplied/delivered under the contract (see Section C).
Scope: Sum of the products or services to be provided as the
project.
Technical Safety Requirements (TSR) Level 1 Violation: A Level 1 violation is
indicative of a significant breakdown of safety controls in a facility. It
results in an actual release of material to the environment, or allows
conditions to exist where there are no remaining barriers to release to the
environment. DOE discovery of a Level 2 violation also represents a Level 1
violation.
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
Technical Safety Requirements (TSR) Level 2 Violation: Level 2 violations are
significant violations of the control set, but do not pose an immediate threat
to the co-located worker, the public or to the environment. A violation that can
or does result in adverse consequences to facility workers is a Level 2
violation. Level 2 violations also result from DOE discovery of a failure to
comply with administrative controls or lack of rigor in maintaining the safety
envelope.
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
Exhibit C
List of Rocky Flats Environmental Technology Site Compliance Orders, Agreements
and Permits
Parties Statute Type Date Executed
- ----------------------------------------------------------------------------
DOE/Colorado RFCO Site Treatment Plan COOC 10/3/95
DOE-Kaiser-Hill-RMRS RCRA Mixed Residue SA & COOC 4/23/93
- -Safe Sites/Colorado
DOE-Kaiser-Hill/ RCRA Waste Chemicals COOC 8/21/97
Colorado
DOE-Kaiser-Hill/ RCRA Idle Equipment and Tanks 8/21/97
Colorado COOC
DOE/Colorado RCRA Mixed Residues COOC 8/14/98
DOE-Kaiser-Hill- RCRA RCRA Permit 6/30/97
Safe Sites-RMRS -
Closure Site Services/
Colorado
DOE/EPA/Colorado RCRA/ RFCA 7/19/96
CERCLA
DOE-Kaiser-Hill/EPA CWA NPDES Permit 6/30/84
DOE/EPA CWA NPDES FFCA 3/91
COOC = Compliance Order on Consent
SA = Settlement agreement
RFCO = RCRA Facility Consent Order
FFCA = Federal Facility Compliance Agreement
RFCA = Rocky Flats Cleanup Agreement
1. Note that RFFO and K-H are parties to the RFETS facility Clean Air Act
Permit Application filed with CDPHE. No facility permit has been issued, but
various sources on site continue to have specific air permits.
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
Exhibit D
ROCKY FLATS CLEANUP AGREEMENT
Incorporated by reference as of October 1, 1999.
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
Exhibit E
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE WORKFORCE RESTRUCTURING PLAN
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
WORK FORCE RESTRUCTURING
PLAN THREE
U.S. Department of Energy
Rocky Flats Environmental Technology Site
Golden, Colorado
MAY 5, 1997
<PAGE>
ROCKY FLATS WORK FORCE RESTRUCTURING PLAN 3
TABLE OF CONTENTS
INTRODUCTION 1
Work Force Restructuring Programs 1
CORRELATION WITH THE TEN-YEAR PLAN 2
GOALS 2
OUTSOURCING OF CURRENT ACTIVITIES 2
Strategy 2
Decision-Making Process 3
Implementation Process 3
WORK FORCE PLANNING 4
Work Force Analysis 4
Salaried Employee Selection Process 5
Hourly Employee Selection Process 5
Management Rights 5
Eligibility 6
Maximize Use of Existing Staff 7
Employee and Community Notification Requirements 8
RESTRUCTURING ELEMENTS 8
Voluntary Separation Payment Program (VSPP) 8
Involuntary Separation Process 9
Health Insurance Benefits 9
Relocation Assistance 9
Separated Employee Training 9
TRAINING FOR THE RETAINED WORK FORCE 10
REHIRING AT DOE FACILITIES AND THE RESUME NETWORK 10
Resume Network 10
CAREER ASSISTANCE FOR PLACEMENT AT NON-DOE FACILITIES 11
PREFERENTIAL TREATMENT OF DOE COMPLEX EMPLOYEES 11
STAKEHOLDER CONSULTATION 12
Consultation With Outside Sources 12
Employee and Stakeholder Input and Review 12
COMMUNITY IMPACT ASSISTANCE 13
Mitigate Economic Impact on Local Communities 13
Rocky Flats Local Impacts Initiative (RFLII) Activities 13
Community Transition 13
<PAGE>
ROCKY FLATS WORK FORCE RESTRUCTURING PLAN 3
TABLE OF CONTENTS (con't)
MEASURING RESULTS ------------------------------------------------- 15
CONCLUSION -------------------------------------------------------- 15
APPENDIX 1 - Standard Area Full-Time Employment Definitions ------- 16
APPENDIX 2 - Voluntary Separation Payment Program Guidelines
and General Release and Waiver ----------------------- 17
APPENDIX 3 - Draft Employee Letters ------------------------------- 18
APPENDIX 4 - Separated Employee Health Insurance Guidelines ------- 19
APPENDIX 5 - Relocation Guidelines -------------------------------- 20
APPENDIX 6 - Separated Employee Training Guidelines --------------- 21
APPENDIX 7 - Stakeholder Comments and Public Meetings ------------- 22
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
WORK FORCE RESTRUCTURING PLAN 3
INTRODUCTION
- ------------
Since the implementation of Section 3161 of the Fiscal Year (FY) 1993 National
Defense Authorization Act Rocky Flats Environmental Technology Site (Site) has
voluntarily or involuntarily separated approximately 3,400 employees. This
action is a result of the Department of Energy's (DOE) mission change and the
designation of Rocky Flats for accelerated closure.
One of the DOE Rocky Flats Field Office's (RFFO) basic goals is to maintain a
trained work force to meet the Site's new closure mission. Unfortunately, budget
reductions and adjustments in skills needed to accomplish closure have resulted
in work force restructuring.
Section 3161 gives specific guidance to DOE on work force restructuring and
requires that a plan be prepared when it has been determined that a change in
the work force of a defense nuclear facility is necessary. The Rocky Flats Work
Force Restructuring Plan 3 responds to this requirement. It details the programs
under which future downsizing actions will occur. The actual restructuring
figures will depend on future budgets and required skill mix in order to
accomplish the closure mission. The Plan will be updated, as necessary, in
accordance with Section 3161 provisions.
Savings generated from downsizing actions across the DOE Complex equal
approximately $60,000 annually in pay and benefits for each separated employee.
Projected cost savings for the number of individuals who will be impacted by
this plan will be reported once the final restructuring numbers am identified.
Work Force Restructuring Programs
- ---------------------------------
Since the implementation of the Voluntary Separation Payment Program (VSPP) at
the Site, approximately 2,732 employees have separated under that program, and
approximately 686 have been involuntarily separated. Then numbers include 596
voluntary separations, and up to 372 involuntary separations in FY96. An
additional 352 employees accepted employment with lower-tier subcontractors in
FY95.
Outplacement assistance and retraining options are available to employees who
voluntarily or involuntarily separate from Rocky Flats and who am eligible for
such benefits wider the terms of this Plan. Counseling services and community
resources for job placement are part of the outplacement assistance for
employees before and after separation. A Career Assistance Center for current
employees and an Outplacement Center for separated employees have been
established and staffed to help employees with a variety of services that
include workshops on job search skills, resume preparation, interview skills,
job identification; financial counseling, and community services. Eligible
separated employees may use the training programs identified in this Plan to
pursue courses in current or new career fields.
-1-
<PAGE>
Future job openings at Rocky Flats will require review of involuntarily
separated workers within the DOE complex using the Job Opportunity Bulletin
Board System (JOBBS) database before external hiring is considered. The resumes
of employees involuntarily separated from Rocky Flats will be provided to other
DOE sites for similar consideration. Relocation assistance will be provided for
individuals hired for positions within the DOE Complex.
Additional approvals will not be required for implementation of any work force
restructuring program as long as the threshold of 500 separations in a twelve-
month period is not exceeded and as long as the restructuring can be
accomplished within current funding allocations consistent with the terms of
this Plan. Notification to RFFO, the Office of Worker and Community Transition
and stakeholders is required at least one week prior to any activity and shall
include a complete copy of the documents for employees in conjunction with
implementation of the program. Any deletions or modification in program
documents will be approved by DOE with the concurrence of counsel. There is no
guarantee that any required future restructuring of the work force will have
benefits equal to or greater than those contained within this Plan. Nor is it
the intent of DOE in implementing this Plan to create any private rights of
action or to create any rights in third parties.
CORRELATION WITH THE TEN-YEAR PLAN
- ----------------------------------
The projectization concept of the Ten-Year Plan and the Rocky Flats Clean-up
Agreement will provide greater certainty about the scope and schedule for clean-
up and closure. Implementation of the Site closure plan will likely require
smaller, selective, and more predictable restructuring activities in both scope
and schedule. As projects are completed, workers will be moved to other tasks or
separated if their skills are no longer required.
GOALS
- -----
The basic goals of RFFO and its contractors during the required work force
restructuring are to maintain a trained work force to accomplish the revised
mission of the Rocky Flats Site; to keep involuntary separations to a minimum;
to offer to the extent practicable, the work force retraining opportunities for
positions required to meet the new mission; and to minimize the impact of the
mission change and associated restructuring on the work force and, surrounding
communities. Stakeholder involvement has been, and will continue to be, an
integral part of the restructuring planning process.
OUTSOURCING OF CURRENT ACTIVITIES
- -------------------------------
Strategy
- --------
The Kaiser-Hill Team will retain employees with the skills needed to deliver the
core activities at the Site. Ancillary support activities that require
fluctuating staffing levels may be performed by contractors outside of the
Kaiser-Hill Team (outsourcing).
-2-
<PAGE>
Consistent with DOE policies and procedures and collective bargaining agreement
obligations, "make or buy" cost evaluation tools will be used to determine the
cost/benefit ratio of any proposed outsourcing action.
Examples of ancillary support activities include medical services, training, and
non-routine safety analyses. Examples of activities requiring fluctuating
staffing levels include construction and demolition.
Staffing flexibility, avoidance of capital expenditures, increased efficiency,
or access to expertise not available at the Site will be important
considerations when making the ultimate outsourcing decisions.
Decision-Making Process
- -----------------------
Consistent with DOE policies and procedures and collective bargaining agreement
obligations, an analysis will be conducted by the Kaiser-Hill Team to determine
whether outsourcing will accomplish measurable cost savings, or meet other
outsourcing objectives or provide staffing flexibility to meet fluctuating
needs. The Kaiser-Hill Team will establish a make-or- buy review committee to
review initial outsourcing decisions. The committee will request bargaining unit
involvement in appropriate instances that have the potential to impact
bargaining unit employees. 'Me purpose of outsourcing will, not be to reduce
wages and benefits for existing employees, but rather to improve productivity.
Implementation Process
- ----------------------
Once an area is identified for outsourcing, the Kaiser-Hill Team will pursue the
following process:
1. The Kaiser-Hill Team will notify DOE every six months of potential
outsourcings that are being considered for implementation during the next
six-month period. The Team will also report outsourcings that became
effective during the preceding six-month period.
2. Affected employees will be notified prior to the anticipated contract
effective date that their scope of work is at risk of being subcontracted
and that they are, therefore, at risk of being involuntarily separated.
At that time, affected employees will be provided detailed, written
notification of their separation benefit program options. In the event that
a VSPP is one of the options, employees will receive adequate advance
notice to comply with the requirements of the Age Discrimination in
Employment Act and the Older Workers Benefit Protection
-3-
<PAGE>
Act. If an employee is eligible, and elects a VSPP option, he or she will
have to comply with the restrictions on reemployment set out in the General
Release and Waiver. (See Appendix 2)
3. Affected employees who are involuntarily separated will receive a two-week
layoff notice prior to the effective date of the new subcontract. In some
cases, management may choose to involuntarily separate employees after the
subcontract has taken effect. At management's discretion, employees receiving
their two-week notice will either remain at work during the two weeks, or
will be sent home With pay pending the termination of their employment.
Salaried employees will receive the standard Involuntary Separation Program
(ISP), including severance pay.
Hourly employees will receive severance pay according to the collective
bargaining agreement in effect at the time of separation, and may receive
standard ISP benefits when involuntarily separated.
After the two-week notice is given and their termination from employment is
effective, employees will be free to accept and begin employment With another
employer at the Site or elsewhere without forfeiting their rights to
severance pay under the ISP. Consistent with applicable collective bargaining
agreements and personnel policies, employees who quit and begin new
employment before the two-week notice will be treated as voluntary quits and
will receive no severance pay.
4. An on-site tuition reimbursement program provides employees with an ongoing
opportunity to retrain themselves to provide core functions, and thus remain
employed in the jobs available on site. Employees whose functions are being
outsourced are also offered the following:
1) Voluntary separation through the current VSPP, if offered;
2) Involuntary Separation through the current ISP, and
3) Involuntary Separation after accepting a position with the outsourccd
entity. (This option allows the employee to accept employment with the
new entity, work through the separation notice period, and receive his
or her full severance payment and hiring preference).
WORK FORCE PLANNING
- -------------------
Work Force Analysis
- -------------------
The Rocky Flats work force is being restructured to meet new mission
requirements. Contractor input is the first step in the work force analysis.
DOE, however, recognizes its obligation to oversee and independently assess the
information that it receives.
RFFO and Kaiser-Hill cooperated to produce a work force analysis that shows the
job category changes and future impacted classifications projected from current
Kaiser-Hill budget-based estimates.
-4-
<PAGE>
This information will be provided as specific restructuring activities are
identified. Initially, RFFO provided Kaiser-Hill guidance on the format and
methodology used for conducting the analysis.
Several meetings were held throughout the process in which RFFO continually
reviewed the progress and findings of the analysis in order to assure that the
analysis was being conducted in the appropriate manner. RFFO and the Office of
Worker and Community Transition reviewed and approved the final analysis.
A work force analysis was released to employees concurrent with the work force
restructuring notification issued on February 4, 1997.
Salaried Employee Selection Process
- -----------------------------------
Generally, the retention status of each salaried employee is based on
demonstrated performance as reflected by past performance evaluations,
versatility, foreseeable business requirements, and length of service (where
other factors are relatively equal).
Retention lists for each organization are reviewed and approved by the
organization's management. Employees can challenge this assessment through the
company complaint procedure.
Equal Employment Opportunity and Affirmative Action and diversity requirements
are considered in accordance with the protocols established by EEOC. Prior to
the proposed action, a detailed analysis is conducted within all major employee
groups by EEO-I categories, as established by the Equal Employment Opportunity
Commission, to determine whether the action would disparately impact a protected
employee classification and, if so, what legitimate business reasons would
create the disparity. At a minimum, all lawful steps will be taken to assure
that there is no disproportionate impact on protected groups from the
restructuring effort. A final diversity report will be developed for each
contractor's review before the final selection of salaried employees for
involuntary layoffs.
Hourly Employee Selection Process
- ---------------------------------
Any hourly employees impacted will be laid off using the applicable portions of
the labor agreements in effect.
Management Rights
- -----------------
In the event Kaiser-Hill finds cause to terminate a subcontract for default,
Kaiser-Hill has the authority to terminate the subcontract in accordance with
the provisions of the subcontract Employment of key personnel (specifically
defined by position in the subcontract), who are separated as a direct result of
the subcontract's termination for default will be treated as terminations for
cause for purposes of implementing this Plan. Employees who are key personnel of
the terminated subcontract will not be subject to the terms of this Plan.
-5-
<PAGE>
Eligibility
- -----------
Employees who meet the Job Attachment Test listed below can use the appropriate
benefits within the Work Force Restructuring Plan. Continuous service with a
Management and Operating (M&O) contractor or an Integrating Management
Contractor (IMC) equivalent covered by the requirements of Section 3161 at other
DOE defense nuclear facilities as defined in Appendix C-1 of the Interim
Planning Guidance for Contractor Work Force Restructuring, will be recognized
for determining overall eligibility for benefits. Such service will not be
recognized if work force restructuring benefits were previously received for
such period of service. Breaks in employment of 30 days or less between
continuous service dates will be allowed. Only continuous service at Rocky
Flats With the most current employer or its predecessor will continue to be used
in calculating the voluntary separation payment. Again, periods of service for
which an employee has previously received severance pay, separation pay, or
other work force restructuring benefits will not be recognized for eligibility
purposes and will not be counted or used in the calculation of severance or
voluntary separation payments.
Employees who were transferred by their employer for the benefit of DOE to the
M&O or IMC equivalent contractor at Rocky Flats from another M&O or IMC
equivalent contractor at another DOE facility with the understanding that their
service at Rocky Flats would be considered for all purposes as a continuation of
the prior service and that the prior service would be credited for purposes of
their Rocky Flats employment, may be eligible to have their continuous service
at the previous site recognized in the calculation of the voluntary separation
payment. For such service to be recognized for calculating separation pay, the
employee must have received no work force restructuring benefits coincident with
the transfer and there must have been no break in employment. Employees will
be required to furnish satisfactory proof of eligibility under this provision.
None of the benefits resulting from Section 3161 are available to employees re-
employed at or in support of RFETS.
Regular Employees
- ------------------
1. The employee must have been working for a contractor with a direct contract
for DOE at a defense nuclear facility on September 27, 1991;
2. The employee must have worked full-time (or regular part-time) at or in
support of the Rocky Flats Site from that date through February 4, 1997, the
date of the work force restructuring notification, and through the date of
their separation under either an ISP or VSPP.
3. The employee must have accepted a voluntary separation incentive or have been
involuntarily separated from employment at the Rocky Flats Site as a
consequence of the work force restructuring notice, set out in number two (2)
above, upon which the employee relies to establish eligibility.
4. Employees hired after September 27, 1991, are only eligible for the benefits
provided by their company's standard policies, access to Career Assistance
Center services, and participation in the Displaced Workers Medical Benefits
Program (if program eligibility requirements are met.)
-6-
<PAGE>
Intermittent Workers Including Construction Workers
- ---------------------------------------------------
1. The employee must have worked for a contractor at a defense nuclear
facility on or before September 27, 1991;
2. The employee must have worked for a contractor at or in support of the
Rocky Flats Site within 180 days preceding the work force restructuring
notification of February 4, 1997.
3. The employee must have worked for a contractor at or in support of the
Rocky Flats Site a total number of hours, including time worked prior to
September 27, 1991, equivalent to an employee having worked full time from
September 27, 1991, through the work force restructuring notification of
February 4, 1997, depending on the date the employee used to establish
eligibility, or have actually worked the local industry standard of fall
time as shown in Appendix 1, from September 27,1991, through the work force
restructuring notification of February 4, 1997, depending on the date the
employee uses to establish eligibility;
4. The employee's job at the Rocky Flats Site must be affected as a result of
the announced work force restructuring. For an intermittent employee, this
would mean the termination of a project or the completion of the assignment
or project without prospect for a follow-on assignment at the site.
Colorado Building Trades craft workers who meet the eligibility requirements
shown above will be eligible for a one-time, special 3161 payment of six weeks'
pay at the base hourly wage rate, relocation, tuition reimbursement, and Career
Assistance Center services. Any Building Trades craft worker who accepts this
3161 benefit will not be eligible for rehire by the site subcontractor for a
period of one year unless he or she pays back a pro rata, share of the voluntary
separation payment to DOE.
Department of Energy Support Service Contractors (SSC) am separated into two
categories:
1. Those employees whose Task Order or Contract is ending, or who are
displaced because they did not take a job with the new contractor, will be
eligible for Outplacement Center access and will be placed on the priority
hiring list for six months.
2. SSC's who are displaced because their position was converted to a Federal
position am eligible for Outplacement Center access, and placement on the
priority hiring list for six months.
Maximize Use of Existing Staff
- ------------------------------
Rocky Flats contractor and subcontractor management personnel are fully
committed to maximizing use 'of the existing work force to the extent consistent
with efficient operation. Minimizing external hiring is one way to accomplish
this.
-7-
<PAGE>
Employee and Community Notification Requirements
- ------------------------------------------------
Pursuant to Section 3161 of the National Defense Authorization Act for Fiscal
Year 1993, a work force restructuring notification was issued to employees at
the work site and to surrounding communities on February 4, 1997.
The notification announced ongoing work force restructuring activities that
could affect up to 400 positions over the next few years. The restructuring
efforts may result from completion of projects, outsourcing of some functions,
efficiency and productivity improvement measures.
Rocky Flats announcements, bulletins and newspaper articles will continue to be
used to ensure that employees and stakeholders are kept informed concerning
work force restructuring activities.
Under certain conditions, the Worker Adjustment and Retraining Notification Act
(WARN) requires notification at least 60 days prior to layoff or site closure.
WARN Act notification is generally required when there is a layoff of 33 percent
of the employees totaling 50 or more at a single site of employment or a total
of 500 or more employees, or when there is a "plant closing" resulting in a
loss of employment for 50 or more employees in a 30-day period. DOE, in
consultation with the contractor, will determine whether WARN applies.
RESTRUCTURING ELEMENTS
- ----------------------
Voluntary Separation Payment Program (VSPP)
- -------------------------------------------
An optional VSPP may be offered under this Plan in hopes that work force
reductions will occur voluntarily to the maximum extent possible. While this
program has a significant cost impact, it may be needed to attract the required
number of employee reductions.
An employee voluntarily terminating his or her employment pursuant to the VSPP,
cannot become employed at Rocky Flats with DOE or any other contractor or
subcontractor at Rocky Flats for a period of one year from the date of his or
her separation unless he or she refunds a pro rata share of his or her
separation payment to DOE. This also applies to employees whose functions are
being outsourced and who terminate employment pursuant to a VSPP. Further
clarification is contained within the General Release and Waiver contained in
Appendix 2.
Unlike previous VSPPs, many of the future VSPPs may occur on a smaller, more
limited scale. This will happen in two ways: 1) creating targeted VSPPs
affecting only those job classifications actually requiring reduction; and 2)
permitting employees to select their departure date from predetermined VSPP
dates allowing advanced planning for both the employee and employer. In
addition, implementation of large-scale VSPPs may be justified by further
significant budget reductions. With the approval of DOE, the Kaiser-Hill Team
will determine which VSPP method would be most appropriate. They may use one or
all of the methods based on the circumstances that occur during the year. The
VSPP is detailed in Appendix 2.
-8-
<PAGE>
Draft letters to employees concerning the three options above are contained in
Appendix 3. These letters are examples only and are subject to modification.
Involuntary Separation Process
- ------------------------------
The process for involuntary separations is outlined by each contractor in its
policy manual for salaried employees and in the labor agreements for hourly
employees. At company discretion, employees may be paid for a minimum of a
two-week notice period while performing a job search. The 60-day notice required
under the WARN Act will only be made when it is determined by DOE, in
consultation with the contractor, that the WARN Act applies to the specific
situation.
Health Insurance Benefits
- -------------------------
Health insurance benefits for employees vary by company and by negotiated labor
agreements. However, extended coverage for eligible employees is available
pursuant to DOE's Displaced Worker Health Benefit Program (DWHBP) or the
Consolidated Omnibus Budget Reconciliation Act (COBRA). Eligible employees are
employees who either voluntarily or involuntarily separate and are not eligible
for such coverage under another employer's group plan, including that of a
spouse, or under Medicare coverage. Appendix 4 details this benefit
Relocation Assistance
- ---------------------
An involuntarily separated employee who moves 50 miles or mom from the Site and
his or her current residence to accept employment within the DOE Complex with a
company that does not provide moving expense reimbursement in the normal course
of business, may receive a maximum $4,000 reimbursement for actual allowable
expenses. This program is detailed in Appendix 5.
Separated Employee Training
- ---------------------------
Education assistance helps voluntarily and involuntarily separated employees
prepare for other positions. Separated employees must apply for this benefit
during the 12 months following their separation. This is a reimbursement program
which shall not exceed $10,000 total for each person, for a 24-month period
following approval of his or her plan of studies. Existence of this program is
dependent upon the availability of funding.
The Department of Labor (DOL) granted $2,100,000 in Job Training Partnership Act
(JTPA) funds from the Defense Conversion Act to the State of Colorado Governor's
Job Training Office (GJTO) for retraining surplus Rocky Flats workers through
December 31, 1997. These funds can only be used when individual employees have
been targeted for layoffs. JTPA funds am used to retrain individuals already
possessing minimum job skills.
-9-
<PAGE>
Another alternative for separated employees is starting their own businesses
using the Rocky Flats Local Impacts Initiative Entrepreneur Resource Program or
by taking courses in operating small businesses from local community colleges.
A third alternative is payments for approved on-the-job training with a new
employer subsidizing the worker's pay for his or her training period. This
program shall have no more than a maximum of 10 participants at any given time.
Appendix 6 details the Separated Employee Training program.
TRAINING FOR THE RETAINED WORK FORCE
- ------------------------------------
It is the goal of the contractor and DOE to provide training opportunities in
order to help employees who are retained at Rocky Flats under the environmental
management mission meet new mission requirements. As training needs become
available from various line and support organizations, the current training
programs and the necessity for new programs will be evaluated. Modifications to
existing programs will be made to maintain up-to-date programs which meet
emerging business needs.
REHIRING AT DOE FACILITIES AND THE RESUME NETWORK
- --------------------------------------------------
DOE developed the Job Opportunity Bulletin Board System (JOBBS) to simplify
implementation of hiring preference by eligible individuals, and by contractors
and subcontractors. Those individuals who have applied for and have been
determined to be eligible for the preference may have their resumes entered into
JOBBS where they will be specifically identified as job seekers with a hiring
preference.
Companies doing new hiring for DOE work should place job announcements into
JOBBS. Contractors and designated subcontractors (those whose DOE contracts
equal or exceed $500,000 in value) must first seek eligible workers from among
individuals listed in JOBBS who are eligible for a hiring preference. All other
subcontractors are encouraged to use JOBBS when hiring for DOE work.
Those individuals who do not want to enter their resumes into JOBBS are
responsible for informing potential employers of their eligibility for a hiring
preference. External hiring is considered only after specific criteria have been
met. The hiring and job-posting procedures are available at the Career
Assistance Centers, and at the Kaiser-Hill Team human resource departments.
Resume Network
- --------------
Current legislation requires that defense nuclear facility employees who are
involuntarily terminated be given preferential hiring consideration by other DOE
facilities. In order to best facilitate a process by which resume and
qualifications can be readily available to all contractors, a resume network
system has been developed by DOE for those employees who
request it.
-10-
<PAGE>
The system provides the following services:
o Resume distribution to Management and Operating and Integrating Contractors
o Opportunity announcements accessible to all separated or potentially
separated workers
o Resume development support for matching surplus workers with known
vacancies
o Matching separated or potentially separated workers with anticipated or
existing vacancies
o Removal of expired vacancies
o Tracking and reporting of preferential hire opportunities
CAREER ASSISTANCE FOR PLACEMENT AT NON-DOE FACILITIES
- -----------------------------------------------------
Career assistance will be provided to those employees whose positions are at
risk, who have been deemed surplus, or who have voluntarily separated as
described in this Plan. Counseling services for employees before and after
separation and the use of community resources will be part of this assistance.
PREFERENTIAL TREATMENT OF DOE COMPLEX EMPLOYEES
- -----------------------------------------------
Section 3161 provides that, to the extent practicable, employees whose
employment at a defense nuclear facility has been involuntarily terminated
receive hiring preference in filling vacancies in the work force of DOE and its
contractors and subcontractors. DOE has determined that employees must be
identified as having helped maintain the nation's nuclear deterrent during the
Cold War in order to qualify for this hiring preference. The preference should
be honored by all prime contractors, and by subcontractors whose contracts with
DOE equal or exceed $500,000 in value.
DOE established the following criteria for determining eligibility for the
hiring preference: the individual must be a former employee (1) who was
involuntarily terminated (except if terminated for cause); (2) who meets the
eligibility standards under the Section 3161 Job Attachment Test ; and (3) who
is qualified for the job at the time the work is to begin. Where qualifications
are approximately equal, eligible individuals will be given preference in
hiring. However, the preference will be administered so that it is consistent
with applicable law, regulation, or executive order, and collective bargaining
agreements.
This hiring preference is applicable with respect to vacancies in employment at
DOE facilities. However, no such vacancies occur when positions become available
through an outsourcing action or follow-on contract. Current employees are first
offered continued employment with the replacement contractor to avoid a layoff.
Subsequently, the current employees pursue their personal options and then it
becomes necessary to consider employment of non-employees of RFFO.
An individual's hiring preference continues until termination by the action (or
inaction) of that individual. Initially, and on an annual basis thereafter,
eligible individuals must certify their desire to retain their hiring
preference.
-11-
<PAGE>
Actions that will terminate an individual's hiring preference include: voluntary
termination or termination for cause from a position that was obtained through
the exercise of the preference, or failure to comply with the annual
certification requirement.
Future Rocky Flats employment opportunities will require review of involuntarily
separated workers within the DOE complex before a contractor considers hiring
individuals not previously employed at Rocky Flats. Of such individuals,
involuntarily separated Rocky Flats workers, who meet the requirements
previously discussed, will be given first preference for future job openings at
Rocky Flats. Currently, hourly contractor employees at Rocky Flats also have
recall rights in accordance with the provisions in their collective bargaining
agreements. Salaried employees do not have specific contractual recall rights.
Involuntarily separated employees from other DOE sites will also receive
consideration after individuals involuntarily separated from employment at Rocky
Flats, for P04itions for which they qualify. DOE has developed a resume network
described in the "Resume Network" Section. Resumes of impacted workers willing
to relocate from downsizing DOE defense nuclear facilities will be kept on file
for 12 months. These resumes will be reviewed for potential candidates prior to
considering candidates from any non-DOE complex source.
RFFO has completed a review of the Kaiser-Hill Team's implementation of
preferential hiring prior to issuance of this draft Work Force Restructuring
Plan. Reviews will continue to occur as needed in order to assure that the
hiring processes conform to preferential hiring requirements.
STAKEHOLDER CONSULTATION
- ------------------------
Consultation With Outside Sources
- ---------------------------------
In compliance with Section 3161 of the National Defense Authorization Act for
Fiscal Year 1993, a mechanism has been developed to use publicly funded
consultation programs. Consultation with outside agencies is required to support
the Plan.
Employee and Stakeholder Input and Review
- -----------------------------------------
This Plan has been developed by RFFO with the input and review of a variety of
stakeholders, including the Rocky Flats Local Impacts Initiative (RFLII) and
labor organizations representing potentially affected employees.
Their activities are described below in the "Community Impact Assistance"
Section. RFLII sponsored many meetings; some were designed to gather general
input while others were to interface with, and gather input from, state and
community agencies and local educational institutions. Meetings were also held
on-site to gather input on the draft plan that was distributed to employees. A
public comment period was conducted on the document.
-12-
<PAGE>
Appendix 7 provides specific information concerning stakeholder comments and the
types and numbers of public meetings held.
COMMUNITY IMPACT ASSISTANCE
- ---------------------------
Many businesses and local government service agencies could be significantly
impacted by the work force restructuring at Rocky Flats. The community impact
assistance described below is designed to offset the effects of work force
restructuring Rocky Flats employees who are impacted by restructuring efforts
are an important part of the picture.
Mitigate Economic Impact on Local Communities
- ---------------------------------------------
A goal of the Work Force Restructuring Plan is to minimize the economic impacts
on local communities. Much of this will be accomplished by the programs and
activities previously described. Allowing employees to leave voluntarily means
that people who are best prepared for and desirous of other employment are those
who leave. Many already have other employment opportunities available to them or
currently operate small businesses they can expand. Most people in the
aforementioned situations will remain in the area and will not tax the services
of the community. Other efforts to minimize the impacts on surrounding
communities are described below.
Rocky Flats Local Impacts Initiative (RFLII) Activities
- -------------------------------------------------------
The RFLII is a coalition of local governments, workers, community-based and
private sector interest groups, surrounding landowners and citizens working
together to identify, assess and mitigate impacts resulting from the change of
mission at Rocky Flats and to plan for its future. Membership is open to any
individual or group.
RFLII also includes non-voting representatives from DOE, Kaiser-Hill, and other
federal and state agencies and legislators who participate fully. Members
participate through various committees and meet as a full group regularly to
hear committee reports, exchange information, and discuss issues. The group was
formed in 1991, is governed by a 19-member board under an intergovernmental
agreement, and has a staff of four.
Community Transition
- --------------------
Based on evaluation of past programs and the results of numerous studies
including the efforts discussed above, RFLII has adopted a revised Community
Transition Plan for 1997-98. Its work plan has the following long term goal and
strategies:
Long Term Goal. Create new, permanent high-wage private sector jobs, especially
in fields matching the skills of displaced Rocky Flats workers. This will be
accomplished by strengthening and diversifying the local economy, helping
companies in target growth sectors expand, assisting businesses started by Rocky
Flats workers, and enhancing research, training, education, and technical
assistance in target industry sectors through the following strategies:
-13-
<PAGE>
Strategy 1. Strengthen the Manufacturing Base in the Denver metropolitan area,
with special emphasis on advanced machining, advanced structural materials,
telecommunications equipment, biomedical and electromedical equipment, advanced
computer system hardware, and environmental technologies.
Strategy 2. Promote and Strengthen Colorado as a Center for Environmental
Commerce, with special emphasis on professional services or consulting,
recycling or waste management, pollution control and prevention, analytical
laboratory or characterization .services, renewable energy technology, and
environmental restoration; and achieving a high rate of ISO 14000 certification.
Strategy 3. Assist startup companies in target industries (see numbers 1 and 2
above), and companies started by Rocky Flats workers to succeed and expand.
Strategy 4. Assist Rocky Flats vendors and other area businesses who rely on
defense-related contracts, to diversify and expand their markets. Promote
utilization of local vendors by Rocky Flats, unless doing so would jeopardize
other local jobs.
Strategy 5. Support existing small an medium size companies in the Denver
metropolitan area and help them expand, especially through coordinated
activities with area financial, economic development and business support
entities.
Strategy 6. Promote and facilitate transfer of technologies to and from DOE and
local companies, especially as they relate to Rocky Flats activities.
Based on an analysis of where displaced Rocky Flats workers reside, the
following Colorado counties are included in the RFLII impact area: Adams,
Arapahoe, Boulder, Clear Creek, Denver, Douglas, Gilpin, Jefferson, Larimer and
Weld.
RFLII programs include an Entrepreneurial Resource Program assisting small and
start-up businesses in targeted industries, or those started by Rocky Flats
workers, with management assistance and information resources and the Equipment
Transfer Program authorized by a Memorandum of Agreement enacted in July of
1996.
In addition, RFLII and RFFO are working with regulators and the private sector
to continue the National Conversion Pilot Project at Rocky Flats. Begun by
former Secretary O'Leary, the project tests the feasibility of converting four
former defense production facilities, along with technology and personnel, to
commercial use.
The second stage, cleanup of two of the buildings and refurbishing of equipment,
was complete at the end of March 1997. A solicitation is scheduled to be issued
in the fall of 1997. If the project proceeds to the manufacturing stage, one of
its goals will be to employ former Rocky Flats workers.
-14-
<PAGE>
MEASURING RESULTS
- -----------------
An annual report will be provided setting out implementation of the Plan. The
report will also reflect relevant changes in circumstances since the previous
plan and an evaluation of the Plan's implementation during the previous year. A
feedback program is being used to evaluate the restructuring program and to
provide for Plan updates, as required by Section 3161 of the National Defense
Authorization Act.
Rocky Flats maintains records that track employees' use of the various
restructuring activities and the expenditures on those activities; e.g., how
many accepted voluntary separation and what the costs were of these incentives;
how many enrolled in retraining programs and what the costs of retraining were;
how many were transferred to either new jobs within the DOE complex or to new
jobs off-site and the costs of relocation; etc. The Plan update also reports on
the completed actions and future plans of local community impact initiatives.
CONCLUSION
- ----------
This Plan is intended to be used as an umbrella for future work force
restructuring activities. The Plan may be modified as needed, in accordance with
departmental guidance on work force restructuring, as amended.
-15-
<PAGE>
APPENDIX 1
STANDARD AREA FULL-TIME EMPLOYMENT
DEFINITIONS
HOURS REQUIRED IN A YEAR
TO MAINTAIN CONSTRUCTION
LOCAL UNION WORKER BENEFITS
- ------------------------------------------------------------------------
Asbestos Workers, Local 28 1,600 Hours
Boilermakers, Local 101 1,000 Hours
Bricklayers, Local 7 1,000 Hours
Carpenters District Council 1,560 Hours
Carpenters , Local 1396 1,560 Hours
Carpet & Resilient Tile, Local 419 1,320 Hours
Cement Masons, Local 577 1,440 Hours
Electricians, Local 68 1,620 Hours
Operating Engineers, Local 9 1,600 Hours
Glaziers, Local 930 1,600 Hours
Ironworkers, Local 24 1,200 Hours
Laborers District Council 1,440 Hours
Laborers, Local 720 1,440 Hours
Millwrights, Local 2834 1,560 Hours
Painters & Drywall, Local 79 1,440 Hours
Plumbers & Gas, Local 3 1,500 Hours
Pipefitters, Local 208 1,500 Hours
Roofers, Local 41 1,200 Hours
Sheet Metal, Local 9 1,920 Hours
Sprinkler Fitters, Local 669 1,700 Hours
Teamsters, Local 13 1,600 Hours
<PAGE>
APPENDIX 2
VOLUNTARY SEPARATION PAYMENT PROGRAM
GUIDELINES AND
GENERAL RELEASE AND WAIVER
-17-
<PAGE>
APPENDIX 2
Rocky Flats Environmental Technology Site
Voluntary Separation Payment Program (VSPP)
Guidelines
General
- -------
A Voluntary Separation Payment Plan (VSPP) could be implemented for one or more
reasons which include: budget reductions, outsourcing or privatization of a
function or activity, building or function shutdown, or efficiencies gained
through realignment of work process. When such actions result in a VSPP, the
guidelines below will be followed. The guidelines have been established to
accomplish work force restructuring activities under Section 3161 of the
National Defense Authorization Act for Fiscal Year 1993. An employee voluntarily
terminating his or her employment cannot become employed at the Rocky Flats Site
by the Department of Energy or any other contractor or subcontractor for a
period of one (1) year from the date of his or her separation unless the
employee refunds a pro rata share of his or her separation payment to DOE. Only
those employees who were hired on or before September 27,1991, will be eligible
to participate in the VSPP.
o Voluntary Separation Program Benefits
- VSPP payments will be based on continuous years of service since the last
hire date with the current contractor, its predecessor or eligible
subcontractor at the Rocky Flats Site (with the exception noted above) in
accordance with the attached schedule.
- Medical may continue after separation as identified in Appendix 4.
- Separated employee training nay be provided as identified in Appendix 6.
- Career Assistance services shall be provided on-site prior to separation
and off-site after after separation.
o Eligibility for Voluntary Separation Payment Program
- All integrating and eligible subcontractor personnel (as defined in the
Work Force Planning Section of the Work Force Restructuring Plan 3) at the
Rocky Flats Site are eligible for the voluntary separation package when
offered by their employer.
- Each application shall be screened by the integrating contractor or
eligible subcontractor, using the following criteria to accept Or reject
applicants:
- Impact to a critical environmental safety and health mission supported
by the applicant,
- Impact to a critical safeguard and security mission supported by the
applicant,
- Creation of a condition which would require hiring off-site to backfill
a resulting vacancy,
- Probability that the applicant will be involuntarily separated,
- Probability that the voluntary separation by the applicant will save
another worker from being involuntary separated.
o Voluntary Separation Payment Program Options
- There are three VSPP options which may be used depending an the Site's
circumstances.
Under all options, eligible employees shall receive written descriptions
of program elements, have an opportunity to apply for the VSPP and to
rescind their decision within a specified time frame. Management will
review the applications for impact, retention of critical skills and
give approvals. The schedule details the VSPP percentage amounts.
<PAGE>
APPENDIX 2
VSPP Options
- ------------
Targeted VSPP
-------------
When it has been determined that a particular department, job classification or
employee group must downsize, the affected employees may be given an
opportunity to be voluntarily separated. Once final approval has been given,
the approved employees will separate on a specified date.
Process
-------
Affected departments, job classifications and employee groups would be given
written notice of work force restructuring. Included with this notice would be
the forms required to apply for a VSPP. Information would also include the
particulars (application and rescission time frame, available benefits, VSPP
schedule, waiver, etc.).
The worker would complete the appropriate paper work and return it to the
designated department by the application due date. At the close of the due
date, the worker would have a specified time in which to rescind his Or her
decision in writing. Once the recision period expires, management will review
the VSPP application for impact according to the criteria listed in the
Eligibility for Voluntary Separation Payment Program section.
Employees who are accepted for the VSPP will be notified by management and
their separation date will occur on the designated departure date (unless there
are special circumstances which require the worker to stay beyond the normal
VSSP date).
Predetermined VSPP
- ------------------
Unlike the goals of many other DOE sites, the Rocky Flats site goal is closure,
and all employees will eventually be impacted by work form restructuring.
Consequently, workers should plan their futures and careers with this in mind.
With the implementation of the Ten Year Plan and the Rocky Flats Clean-up eat,
the contractor will have a plan outlining the work force required to Complete
the project. The plan also provides a completion schedule which can help
determine when areas will require work force restructuring. The projectization
concept of the Ten-Year Plan and the Rocky Flats Clean-Up Agreement establishes
a manageable process by which workers can select a semi-annual VSPP date. This
allows for maximum planning on both the workers' and management's parts.
Under this option employees who apply and am selected to participate in the
VSPP win terminate employment on a date sometime in the future (potentially 6
to 36 months away) based an the completion of their work assignment building
closure, or project This would provide certainty to both the employee and the
company as to a separation date. By participating in the VSPP, an employee will
be agreeing to execute the General Release and Waiver and to terminate
employment on the date set by the Kaiser-Hill Tom An employee will not be
entitled to benefits under the VSPP if 1) he or she leaves earlier than the
release date without the agreement of the Kaiser-Hill Team, 2) he or she is
under a disciplinary suspension or subject to dismissal under the Kaiser-Hill
Team Disciplinary Policy, 3) he or she refuses to execute the Waiver, or 4) he
or she revokes agreement to the Waiver.
Large-scale VSPP
- ----------------
If a large-scale VSPP is necessary, management will determine which company
employee groups (salary exempt, salary non-exempt or hourly) shall be eligible
for the VSPP. Once final approval has been given, the approved employees will
separate on a specified date. This tool will continue to be used again if the
Site is faced with significant budget reductions or closure requirements.
<PAGE>
APPENDIX 2
Process
- -------
Company employee groups would would be given written notice of work force
restructuring. Information with this notice would be the forms required to apply
for a VSPP. Information would also include the particulars (application and
rescission time frame, available benefits, VSPP schedule waiver etc.)
The worker would complete the appropriate paper work and, return it to the
designated department by the application due date. At the close of the due date,
the worker would have a specified time in which which to rescind his or bar
decision in writing.
Once the recision period expires, management will review the VSPP applications
for impact according to the criteria listed in the Eligibility for Voluntary
Separation Payment Program section.
Employees who are accepted for he VSPP will be notified by management and their
separation date will occur on the designated departure date (unless there are
special circumstances which require the worker to stay beyond the normal VSPP
date).
<PAGE>
APPENDIX 2
Voluntary Separation Payment Schedule Percentages
*Year of service Percent of Annual Base Pay
- ------------------------------------------------------------------------
5 24
6 26
7 28
8 30
9 32
10 34
11 36
12 38
13 40
14 42
15 44
16 46
17 48
18 50
19 52
20 54
21 56
22 58
23 60
24 62
25 64
26 66
27 68
28 70
29 72
30 74
31 76
32 78
33+ 80
Employees hired after September 27, 1991, will not be eligible for the VSPP
and are only eligible for benefits provided by their company's standard
policies, access to Career Assistance Center services, and participation in the
Displaced Workers Medical Benefits Program (if program eligibility requirements
are met).
(*Continuous Rocky Flats service with current or predecessor contractor only.)
<PAGE>
APPENDIX 2
VOLUNTARY SEPARATION PAYMENT PROGRAM
GENERAL RELEASE AND WAIVER
This Voluntary Separation Payment Program, General Release and Waiver
("Agreement") is entered into by and between ________________ ("Employee") and
Kaiser-Hill, L.L.C. and its prime subcontractors, DynCorp of Colorado, Rocky
Mountain Remediation Services, Safe Sites of Colorado/LATA, and Wackenhut
Security, Inc. ("Employer") as part of Employee's voluntary election to
terminate employment with the Employer.
IN EXCHANGE FOR THE PROMISES SET FORTH BELOW, THE PARTIES AGREE AS FOLLOWS:
1. Employee voluntarily terminates his/her employment with the Employer
effective ___________. Absent the express written authorization of the U. S.
Department of Energy, Employee agree not to seek employment with or become
employed at the Rocky Flats Environmental Technology Site by the Department
of Energy or any other future or current contractor or subcontractor at the
Site for a period of one year from the date of employee's separation. This
includes but is not limited to temporary employment service contracts,
general task order assignments, indefinite quality contracts, basic ordering
agreements, and and consultant contracts. However, this does not preclude
Employee from employment with a company which is Providing supplies,
equipment, materials or commodities to the Site under a fixed-price contract
or purchase order.
2. Employee agrees that the Employer has no obligation to reemploy Employee in
the future, and Employee waives my recall, rehire, or rehire preference
rights such as those that my arise under Section 3161 of the National
defense Authorization Act for Fiscal Year 1993. Employee agrees to perform
all steps required by Employee's policies and procedures at the separation
of employment.
3. Except as set forth paragraph 4 below, Employee, on behalf of
himself/herself and any person or entity entitled to sue on Employee's
behalf, waives I releases Employer, its parents, subsidiaries, and
affiliates, the Department of Energy, and its employees, officers,
directors, shareholders, agents, and successors, from any causes of action
or claims whether known or unknown, that arise out of the Employee's
resignation and separation of employment with Employer and any causes of
action or claims that arise out of Employee's employment with Employer, up
to and including the date of Employee's resignation, under any federal,
state or local law, including but not limited to the Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act of 1990, Title VII
of the 1964 Civil Rights Act, the Equal Pay Act, the Family and Medical
Leave Act, the Employee Retirement Income Security Act, and the Americans
with Disabilities Act, or any applicable state or local law. Employee will
not assert any claim or cause of action released under this agreement in any
administrative or judicial proceeding
4. HOWEVER, Employee does not waive:
(i) any causes of action or claims that arise out of Employee's employment
with Employer, up to and including the date of Employee's separation, that
have been asserted in writing and filed with the appropriate agency or court
prior to __________, 1997.
(ii) any rights or claims that may arise after the date this Agreement is
executed,
<PAGE>
APPENDIX~ 2
(iii) any claims relating to pension or retiree health benefits that currently
may be accrued under the Employer's standard retirement program,
iv) any claims under any applicable state worker's compensation laws, or
(v) Any claims for occupational injuries or illnesses arising from Employee's
employment with Employer that are not known or reasonably knowable by the
Employee at the time of the execution of this Agreement.
5. In exchange for Employee's voluntary separation and execution of this
Agreement, Employer Will give Employee the consideration and benefits
outlined in the Rocky Flats Environmental Technology Site, Work Force
Restructuring Plan Number Three, dated ____________.
6. If Employee becomes employed as prohibited in paragraph 1 or otherwise,
violates any provision of this Agreement, then, in addition to any other
remedies Employer has under this Agreement, Employer may require Employee to
repay a prorata portion or all of the payments or other benefits under this
Agreement, and Employee agrees to such payment.
7. Employee has been advised to consider this Agreement and to consult with an
attorney of his/her choice, and Employee has had the opportunity to do so.
Employee has had the right to consider this Agreement for a period of at
least forty-five (45) days prior to entering into this Agreement and has done
so, or has expressly requested that his/her application be granted prior to
the expiration of the 45 days. Employee has the right to revoke this
Agreement for a period of seven (7) days following execution of this
Agreement by giving written notice to the Work Force Restructuring
representative. If Employee revokes the Agreement, It shall not be effective
and enforceable, and Employee will not receive any of the benefits described
in paragraph 5. Employee has read and the terms and contents of this
Agreement, and Employee freely, voluntarily, and without coercion enters into
this Agreement and agrees to be bound by its terms.
8. This agreement constitutes the entire and agreement of Employee and Employer
and can only be modified in writing agreed to by both parties.
9. Employee had access to all of the information required to be disclosed in
these circumstances under the Age in Employment Act regarding who is covered
by the Program, the eligibility factors, the time limits of the Program, the
ages and job tides of everyone eligible for the Program, and the ages of
ineligible employees in the same job or organizational unit.
<PAGE>
APPENDIX 2
PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF KNOWN AND UNKNOWN
CLAIMS AS DESCRIBED IN PARAGRAPH 3, ABOVE, SUBJECT TO THE LIMITATIONS EXPRESSLY
SET FORTH IN PARAGRAPH 4.
Agreed to:
- --------------------------------------------------------
Employee Signature/Date
- --------------------------------------------------------
Employer Signature/Date
<PAGE>
APPENDIX 3
DRAFT EMPLOYEE LETTERS
<PAGE>
DRAFT
(TARGETED OR OUTSOURCING ACTIONS LETTER - OPTION 1)
Date
To: (EMPLOYEE)
From: (MANAGER)
Subject: NOTICE OF INVOLUNTARY SEPARATION AND VSPP OPTION - XXX-???-9X
This letter serves as notice that your organization will experience involuntary
separations on or after (DATE-at least 52 days after the date of this notice).
You may be one of the employees selected as a part of this action. If you are
selected for involuntary separation, you will be notified of your selections no
less than two weeks prior to the date of your involuntary separation.
Because you are now at risk of involuntary separation, you have three options
available to you:
Option 1: You may choose not to take any action. If you are selected for
involuntary separation you will remain an employee through your two week
notification period. At the end of the notification period you will be
terminated and receive your Involuntary Separation Program (ISP) severance
payment and other ISP benefits.
If you are selected for the ISP, then during the period between (MONTH, DAY) and
(MONTH, DAY, YEAR) you must report any full-time or part-time jobs obtained, or
changes in address For any employment during this time you should review Policy
HR 1.12, Conflict of Interest, available at do Offsite Career Assistance Center
(CAC). Should you begin full-time employment with another employer an or before
(MONTH, DAY, YEAR) you must terminate your employment with (COMPANY), under this
policy. Since this will constitute resignation to take another job, you will
cease receiving a weekly paycheck and you will not receive separation pay or any
separation benefits. If you do not secure other employment during this period,
you will remain on the payroll through (MONTH,DAY YEAR). Your paycheck will be
mailed to your home or bank each payday until that time. You will continue to
earn Time Off With Pay (TOWP). Contributions will continue to be made to your
Thrift Plan account during this time if you participate in that program. Your
final weekly paycheck will include all money due to you for unused TOWP. The
check for separation pay will be issued on or about (MONTH, DAY, YEAR).
Based an Section 3161 of the FY 1993 National Defense Authorization Act,
involuntarily separated workers have certain rights. If you meet the eligibility
requirements defined in the Work Force Restructuring Plan, you will be eligible
for preferential hiring consideration at DOE defense nuclear facilities for
future positions requiring the skill and expertise that you possess, should
hiring become necessary. The attached packet of information contains a form
entitled Preferential Hiring Form and a Resume Release Form. In order to
maintain your hiring preference status please complete them and return them to
Work Force Restructuring. We will need you to provide an up-to-date resume n a
computer disc if you wish to be included in the DOE Job Opportunity Bulletin
Board system. If you do not have a resume, the Offsite CAC will work with you to
develop one that is effective. It is your responsibility to maintain your resume
in current status.
<PAGE>
Option 2: You are immediately eligible to apply for Voluntary Separation Payment
Program (VSPP) benefits if you were hired on or before September 27, 1991. You
may also be eligible if you had less than a 30-day period between employment
with another DOE nuclear weapons facility and employment at the Rocky Flats
Environmental Technology Site. If you were a corporate transfer from another DOE
nuclear weapons facility you may receive some service credit. Contact your Human
Resources department for further information on these Work Force Restructuring
benefits. You may apply for the VSPP no later than (DATE). If you apply, you
will have a 7-day period, during which you may rescind your decision. If you do
not rescind and your application is accepted by management based on Work Force
Restructuring Plan criteria, you will be required to terminate your employment
(DATE) unless your management approves an alternate date. With prior management
approval, it may be possible to leave before the normal separation date or
extend beyond it. If interested, discuss this issue with your manager or your
Career Assistance Center (CAC) representative.
Attached is a VSPP Information Packet that includes information regarding
application and recision periods, all necessary forms, and a comparison of ISP
vs. VSPP benefits. Please review it carefully.
Option 3: YOU may terminate at any tune to accept other employment or for any
other reason. If you separate prior to the separation date determined by your
management, you will be considered a normal quit You will not receive your VSPP
or involuntary separation monies nor any of the associated Work Force
Restructuring benefit However, you am entitled to continue your medical
coverage wider the Consolidated Omnibus Budget Reconciliation Act (COBRA) if you
choose.
Please review your options carefully and consult with attorneys, accountants, or
financial advisors as necessary. Direct any questions you have to (NAME), (PHONE
NUMBER), in Work Force Restructuring. A final separation date will be provided
to you once you have determined your choice of options.
If you require further information about your possible involuntary separation or
associated benefits available to you, please contact (NAME), Work Force
Restructuring, at (PHONE NUMBER)- We appreciate your past service and
contributions the Site and regret this action may be necessary.
<PAGE>
DRAFT
(SELECTED DEPARTURE DATES VSPP LETTER - OPTION 2)
DATE:
TO: (EMPLOYEE)
FROM: (MANAGER)
SUBJECT: FY9X WORK FORCE RESTRUCTURING-XXX-???-9X
I would like to personally notify you that the Department Of Energy announced to
the Rocky Flats Environmental Technology Site (RFETS) a 120 Day Notice of
additional work force restructuring on (MONTH, DAY, YEAR). The announcement
indicated that up to (NUMBER) positions may be eliminated. Approval to offer a
Voluntary Separation Payment Program (VSPP) was also recently received.
A VSPP is being opened effective (MONTH, DAY) for all active, full time
employees at (COMPANY), RFETS who were hired on or before September 27, 1991.
You may also be eligible if you had less than a 30-day employment with another
DOE Nuclear Weapons facility and employment at the RFETS. If you were a
corporate transfer from another DOE nuclear weapons facility you May receive
some service credit. Contact your Human Resources department for further
information on these Work Force Restructuring benefits.
Selections for a future involuntary layoff, if one is required and approved,
will be determined by the Site's projected work requirements defined by the
Site's work force analysis. The number of employees to be involuntarily laid off
in order to attain the required reduction will be determined after the
completion of the VSPP.
Attached is a description of the VSPP, a summarization of voluntary versus
involuntary benefits a Payment Schedule, Application Form, commonly asked
questions and answers to them, information regarding continuation of health
benefits, and the General Release and Waiver Form which you will be required to
execute on your application date. Your agreement to be bound by the General
Release and Waiver Form is a DOE requirement for participation in this offering.
Please review it carefully with your financial advisor and attorney prior to
making your decision.
A major change has been implemented in this VSPP. It allows you to request a
particular separation date as a part of your application process from among a
number of predetermined future separation dates. Complete details are included
in the attached materials.
To assure that you received the best possible information on the upcoming work
force reduction we are taking the following actions. Managers were briefed the
week of (MONTH, DAY) and given information top resent to their employees.
Managers will hold "all-hands" meetings the week of (MONTH, DAY) to provide VSPP
information and to let you know the impact on your organization. Crossroads
articles and bulletin board postings will provide ongoing information. Also, the
Work Force Restructuring Department will hold a series of employee meetings
starting (MONTH, DAY) to give you an opportunity to ask questions you may have.
A meeting schedule is attached. Informational briefings on the VSPP and
available Career Assistance Center services have also been scheduled
<PAGE>
through the Career Assistance Center. The schedule of these briefings and the
telephone numbers to call to make a reservation are enclosed. Please plan on
attending to get all the information necessary to make an informed decision. You
are urged to consult with a financial advisor and your attorney before applying
for the VSPP.
The Onsite Career Assistance Center, Building T130J, is available to you to
provide services which may make your decision more clear. It has listings of
available jobs and continues to offer classes in interviewing techniques, job
search skills, resume writing, and a series of specialty classes dealing with
self esteem, and other work issues. Please call the center at extension 6050
for information or to arrange a meeting with an advisor if you desire.
VSPP SUMMARY
You are invited to review the enclosed information and decide if you would like
to apply. The program will be open until (MONTH, DAY, YEAR) and you will have
an opportunity to withdraw from the program during your 7 day recision period.
All withdrawals from the program will be final. You will not be able to change
your election before or after your recision period.
All active employees hired on or before September 27,1991 will be eligible to
apply for this VSPP- Employees who had prior service within the DOE Complex with
less than a 30-day break in employment may also be eligible. See your Human
Resources representative. Corporate transfers from other DOE nuclear defense
facilities may be given service credit. Employees eligible for retirement may
apply for the VSPP and retire concurrently based on our standard retirement plan
provisions. As in previous VSPPs, managers do have the authority to deny the
VSPP applications of those employees whose skills and abilities am required to
accomplish the Site mission.
Employees accepted for do VSPP will have a choice of a number of separation
dates but may separate from employment with the Site no later than (MONTH, DAY,
YEAR). Separation pay will be based on continuous Rocky Flats service from the
latest him date with the Kaiser Kill Team, or its based on the attached
schedule. Where an employee has separated from employment at the Site and been
rehired, the latest date of employment will prevail. This separation payment is
in lieu of any severance payment to which employees might have otherwise been
entitled. Employees will receive separation pay in a lump sum approximately two
weeks after their termination date.
BENEFITS HIGHLIGHTS
All salaried employees with four or more years of service who are currently
enrolled in the Rocky Flats Thrift Plan would be fully vested. Employees have a
variety of options available to them for these funds. Employees will be provided
a notice explaining their rights to make tax free rollover of company or
deferred funds. Other options include leaving the money in the Site Thrift Plan,
or receiving a payout of all monies. Please consult with your financial
advisor concerning the tax implications of your decision.
Employees who am eligible for and elect to take retirement will receive
insurance benefits as a regular retiree. Employees who are not eligible for
retirement benefits but who participate in the VSPP will be eligible for
continuation of medical benefits after separation, as set forth in the attached
guidelines.
<PAGE>
Outplacement services will be provided by the Offsite Career Assistance Center
2420 West 26 Avenue Building D, Suite 110, Denver Co. 80211-5302. Their phone
number is (303) 477-2036.
APPLICATION PROCESS
Employees electing to apply for the VSPP must complete the attached application,
obtain their manager's signature and submit the application in person to your
Human Resources department before close of business on (MONTH, DAY, YEAR). A
receipt will be given for each application.
Application may be withdrawn only during the employee's recision period. All
withdrawals will be final and must be submitted in person to your Human
Resources Department.
Please be aware that per Department of Energy guidelines you will not be able to
return to work at or in support of the Rocky Flats Technology Site with DOE or
any other contractor or subcontractor for one year unless you pay back a prorata
portion of the voluntary separation payment to DOE.
<PAGE>
DRAFT
(LARGE-SCALE VSPP LETTER - OPTION 3)
DATE:
TO: (EMPLOYEE)
FROM: (MANAGER)
SUBJECT: FY9X WORK FORCE REStRUCTURING-XXX-???-9X
I would like to personally notify you that the Department Of Energy announced to
the Rocky Flats Environmental Technology Site a 120 Day Notice of additional
work force restructuring on (MONTH, DAY, YEAR). The announcement indicated
that up to (NUMBER) positions may be eliminated. Approval to offer a Voluntary
Separation Payment Program (VSPP) was also recently received.
A Voluntary Separation Payment Program (VSPP) is being opened effective (MONTH,
DAY) for all active, full time employees at (COMPANY), Rocky Flats Environmental
Technology Site (RFETS) hired on or before September 27,1991. You may also be
eligible if You had less than a 30-day period between employment with another
DOE nuclear weapons facility and employment at the RFETS. If you were a
corporate transfer from another DOE nuclear weapons facility you may receive
some service credit. Contact your Human Resources department for further
information on these Work Force Restructuring benefits.
Selections for a future involuntary layoff, if one is required and approved,
will be determined by the Site's projected work requirements defined in the work
force analysis. The number of employees who might be involuntarily laid off in
order to attain the required reduction will be determined after the completion
of the VSPP.
Attached is a description of the VSPP, a summary of voluntary versus
involuntary benefits, a Payment Schedule, Application Form, commonly asked
questions and answers to them, information regarding continuation of health
benefits, and the General Release and Waiver Form which you will be required to
execute on your separation date. Your agreement to be bound by the General
Release and Waiver Form is a DOE requirement for participation in this offering.
Please review it carefully with your financial advisor and attorney prior to
making your decision.
To assure that you receive the best possible information available on the
upcoming work force reduction we are taking the following actions. Managers were
briefed the week of (MONTH, DAY) and given information to present to their
employees. Managers will hold "all-hands" meetings the we& of (MONTH, DAY) to
provide VSPP information and to let you know the impact on your organization.
Crossroads articles and bulletin board postings will provide ongoing
information. Also, the Work Force Restructuring Department win hold a series of
employee meetings starting (MONTH, DAY) to give you an opportunity to ask
questions you may have. A meeting schedule is attached. Informational briefings
on the VSPP and available Career Assistance Center services have been scheduled
through the Career Assistance Center.
<PAGE>
The schedule of these briefings and the telephone numbers to call to make a
reservation are enclosed. Please plan on attending to get all the information,
necessary to make an informed decision. You are urged to consult with a
financial advisor and your attorney before applying for the VSPP. It is a very
important life and career decision.
The Onsite Career Assistance Center, Building T130J, is also available to you to
provide services which may make your decision more clear. It has listings of
available jobs and continues to Offer classes in interviewing techniques, job
search skills, resume writing, and a series of specialty classes dealing with
self esteem, and other worker issues. Please call the center at extension 6050
for information or to arrange a meeting with an advisor if you desire.
VSPP SUMMARY
All active employees hired an or before September 27,1991 are eligible to apply
for this VSPP. Employees who had prior service with the DOE Complex with less
than a 30-day break in employment may also be eligible. See your Human Resources
representative. Corporate transfers from other DOE nuclear defense facilities
may be given service credit. Employees eligible for retirement may apply for the
VSPP and retire concurrently based on our standard retirement plan provisions.
Employees applying for this VSPP will receive the benefits described in the
Rocky Flats Environmental Technology Site Work Force Restructuring Plan (WFRP)
and summarized in the attached package of information. As in previous VSPPs,
managers do have the authority to deny the VSPP applications of employees whose
skills and abilities are required to accomplish the Site mission.
You are invited to review the enclosed information and decide if you would like
to apply. The program will be open until (MONTH, DAY, YEAR) and you will have an
opportunity to withdraw from the program during your 7-day recision period. All
withdrawals from the program will be final. You will not be able to change your
election before or after your recision period. With prior management approval it
may be possible to leave before the normal separation due or extend beyond it.
If interested, discuss this issue with your manager and/or your Career
Assistance Center (CAC) representative.
Employees accepted for the VSPP will separate from employment with the Site no
later than (MONTH, DAY, YEAR). Separation pay will be based on continuous Rocky
Flats service from the latest hire date with the Kaiser-Hill Team, or us
predecessors, based on the attached schedule. Where an employee has separated
from employment at the Site and been rehired, the latest date of reemployment
will prevail. This separation payment is in lieu of any severance payment to
which employees might have otherwise been entitled. Employees will receive
separation pay in a lump sum approximately two weeks after their separation
date.
BENEFITS HIGHLIGHTS
All salaried employees with four or more years of service who are currently
enrolled in the Rocky Flats Thrift Plan would be fully vested. Employees have a
variety of options available to them for these funds. Employees will be provided
with a notice explaining their rights to make tax free rollover of company or
deferred funds. Other options include leaving the money in the funds in which it
is invested or receiving a payout of all monies. Please consult with your
financial advisor concerning the tax implications of your decision.
<PAGE>
Employees who are eligible for and elect to take retirement will receive
insurance benefits as a regular retiree. Employees who am not eligible for
retirement benefits but participate in the VSPP will be eligible for
continuation of medical benefits after separation, as set forth in the attached
guidelines.
Outplacements services will be provided by The Offsite Career Assistance Center,
2420 West 26 Avenue Building D, Suite 110, Denver Co. 80211-5302. Their phone
number is (303) 477-2036.
APPLICATION PROCESS
Employees electing to apply for the VSPP must complete the attached application,
obtain their manager's signature and submit the application in person to their
Human Resources department before close of business on (MONTH, DAY, YEAR). A
receipt will be given for each application.
Applications may be withdrawn only during the employee's recision period. All
withdrawals will be final and must be submitted in person to the employee's
Human Resources department.
Please be aware that per Department of Energy guidelines, you will not be able
to return to work at or in support of the Rocky Flats Environmental Technology
Site with DOE or any other contractor or subcontractor for one year unless you
pay back a prorata portion of the voluntary separation payment to DOE.
<PAGE>
APPENDIX 4
SEPARATED EMPLOYEE HEALTH INSURANCE
GUIDELINES
-19-
<PAGE>
APPENDIX 4
Rocky Flats Environmental Technology Site
Separated Employee Health Insurance Guidelines
Kaiser-Hill Team employees voluntarily separated (who are not retiring) may be
eligible for healthcare coverage continuation as follows:
MEDICAL BENEFITS
- ----------------
Separating employees have the following 3 options regarding medical benefits.
1. DOE Displaced Workers Health Benefit (DWHB) Program
- ------------------------------------------------------
o Provides the same medical coverage you were enrolled in while you were an
active employee.
o Requires submission of the completed Continuation of Medical Coverage
election/Enrollment form within 30 days of receiving such.
o Requires submission of monthly premium and Statement of Certification/Payment
Coupon.
o First Twelve Months: Employee pays the active employee premium rate during the
first year following termination of employment. Rates are subject to change
annually beginning January 1. Employee premiums along with the Statement of
Certification/Payment coupon, are to be submitted monthly by personal check to
Mutual of Omaha. Employees will be sent invoices by Mutual of Omaha. The
effective date for extended benefits coverage under DWHB will be the first day
of the month following termination.
o Second Twelve Months: Employee pays half of the Consolidated Omnibus Budget
Reconciliation Act (COBRA) rate the second year (13th mouth through 24th
month, following termination of employment). The COBRA rate is 102 percent of
the total premium cost of the plan (including employer and employee shares).
COBRA rates are reviewed and revised each calendar year.
o Twenty-Fifth Month and After: Employee pays full COBRA rate during the third
and subsequent years (starting the 25th month following termination of
employment). COBRA rates are reviewed and revised each year.
If the separated employee's premiums and Statement of Certification/Payment
Coupon are not received by Mutual of Omaha by their due dates, coverage will
terminate effective to the last premium payment period and cannot later be
reinstated.
Coordination of benefits does not apply since employees and their dependents are
not eligible for extended medical coverage under DWHB if they are, or become,
eligible for group coverage elsewhere (Including through Medicare).
You and your dependents at no longer eligible for extended medical coverage
under DWHB when you become eligible for group medical benefits from another
plan. However coverage under DWHB can continue during a required waiting period
(if applicable) for now coverage to begin since you are not yet eligible for
benefits from another plan. For example, if you take a new job that offers
medical benefits that become effective 30 days after your new job begins, you
can continue your DWHB medical coverage during the 30-day wait.
<PAGE>
APPENDIX 4
If you are eligible for group coverage from another employer, but that employees
coverage contains a pre-existing condition limitation or exclusion, you will
continue to receive coverage for the pre-existing condition under the extended
medical coverage under DWHB until the preexisting condition limitation or
exclusion period is satisfied. Claims should be filed with the other employer's
insurance plan first. Then an Explanation of Benefits from the other employer's
plan (showing the benefits coverage limitation or exclusion for the preexisting
condition) should be filed with your medical carrier.
Eligible participants include only those dependents who were covered under your
medical plan immediately prior to termination of active employee coverage.
Dependents can be covered without the employee being covered, if the dependent
is not eligible for coverage under another plan. For example, if a terminating
employee is age 65 (or older) and eligible for Medicare (and therefore not
eligible for extended medical coverage und DWHB) and the employee has a spouse
who is age 62 (who is not eligible for coverage under another employer or
through Medicare), then only the spouse is eligible for coverage under DWHB and
the single person rate would be applied.
You can add or delete dependents to your extended medical coverage under DWHB
with a "qualifying event" provided you notify Mutual of Omaha of your qualifying
event/request for change no more that 31 days after the qualifying event occurs.
Informmation about typical qualifying events is contained in the Rocky Flats
Technology Site (RFETS) Summary Plan Description.
Dependents who experience loss of eligibility for extended medical beneft
coverage under DWHB due to a "subsequent qualifying event" (divorce, death of
spouse, children no longer meeting the eligibility provisions of the plan) are
eligible to continue extended medical benefits coverage under COBRA for a
maximum of 36 months from the loss of active employee coverage/termination of
employment provided all of the following are met: (1) they were covered by the
medical benefits plan immediately prior to termination of active employee
coverage, (2) they were continuously covered und extended medical coverap under
DWHB, (3) the subsequent event occurred no more than 18 months from the loss of
active employee coverage/termination of employment, and (4) they provide Mutual
of Omaha formal notification of the qualifying event/request for change no more
than 60 days after the occurrence of the subsequent qualifying event.
2. Normal COBRA Benefits
---------------------
. COBRA continuation coverage must be elected no more than 60 days after
termination of employment. Enrollment will be in the same medical choice in
which you were enrolled just prior to separation from employment with the
Kaiser-Hill Team. The effective date of continuation of coverage will be the
date following the last pay period after separation (which is the date that
insurance coverage as an active employee terminates).
. The separated employee pays full COBRA rate monthly. Employees will be sent
invoices by Mutual of Omaha.
. If coverage is not elected within 60 days after termination of employment,
and/or applicable premiums are not received by their due dates, coverage will
terminate effiective at the end of the last premium payment period and cannot
later be reinstated.
. When continuing medical coverage through COBRA, you may add or delete
dependents only upon the occurrence of a "qualifying event." You may change
your coverage option to become effective at the beginning of the next calendar
year.
<PAGE>
APPENDIX 4
o COBRA rates are reviewed and revised each calendar year.
3. No Coverage
- --------------
o Coverage terminates for claims incurred after termination (as of the last date
of the pay period) without continued participation by payment of employee
premiums under extended medical coverage under DWHB or by electing normal
COBRA benefits.
DENTAL BENEFITS
- ---------------
Normal COBRA Benefits
- ---------------------
o Dental coverage my only be continued by electing COBRA continuation coverage
for dental benefits no more than 60 days after termination of employment.
Enrollment will be in the same dental plan which you were enrolled just prior
to separation from RFETS. The effective date of COBRA continuation coverage
will be the date following the last pay period after separation (which is the
date that insurance coverage as an active employee terminates).
o The separated employee pays the full COBRA rate for dental coverage monthly by
personal check. Employees will be sent invoices by Mutual of Omaha, (Note:
full, monthly premium payment will be required rather than a pro-rata amount
for mid-month effective dates). Up to 18 months coverage is available as long
as premium payments continue to be made to Mutual of Omaha.
o If coverage is not elected within 60 days after termination of employment
and/or premiums are not received by their due dates, coverage will terminate
effective at the end of the last premiums payment period and cannot later be
reinstated.
o When continuing dental coverage through COBRA, you may add or delete
dependents only upon the occurrence of a "qualifying event." Further
information about COBRA is contained in the RFETS Summary Plan Descriptions.
o COBRA rates are reviewed and revised each calendar year.
"Dual Couples" (Both Spouses Work for the Kaiser-Hill Team)
- -----------------------------------------------------------
Loss of your employment or your spouse's employment is considered a "qualifying
event" for adding or deleting dependents from coverage. Therefore, an employee
who, separates from the Kaiser-Hill Team, whose spouse also works for the
Kaiser-Hill Team and is eligible for coverage, can be covered by their actively
employed Kaiser-Hill Team spouse. The active employee will need to contact
Benefits Administration at Building 452 or by telephoning 966-2856 to obtain the
necessary forms to add dependents (children and/or spouse). coverage must be
elected within 31 days of the "qualifying event" in which case the coverage
will be effective on the day immediately following the pay period in which the
employee separates from RFETS.
<PAGE>
APPENDIX 5
RELOCATION GUIDELINES
-20-
<PAGE>
APPENDIX 5
Rocky Flats Environmental Technology Site
Relocation Guidelines
Eligible involuntarily separated employees, as defined in the Work Force
Planning Section of the Work Force Restructuring Plan 3, who move 50 miles or
more from the Site and their current residence to accept employment within the
DOE Complex may receive a maximum $4,000 reimbursement. This reimbursement only
covers documented actual allowable relocation expenses incurred within 12 months
from the date of separation. Only expenses or receipts from established
businesses will be accepted.
Eligibility Requirements for Separated Employees:
- -------------------------------------------------
o Must have a confirmed full time job and start date before moving.
o The new employer does not provide moving expense reimbursement in the normal
course of business.
o If starting their own business, must have a business license established
prior to moving, and other documentation as required.
o Must be employed by new company for a minimum of two weeks.
o Receipts must reflect that the move occurred either after their start date or
within 14 calendar days prior to their start date.
o Employees traveling a minimum of 350 miles per day and not less than 150
miles on the last day may be eligible for meals and lodging en route.
o Employees moving a minimum of 100 miles from the Rocky Flats Site AND their
current residence may be eligible for temporary living expenses at their
destination.
o Employees who resign from the company under normal separation policies (other
than this Involuntary Separation Program) are not eligible for relocation
benefits.
Reimbursable Relocation Expenses
- --------------------------------
o Mileage or towing charges for one (1) vehicle for individuals with single
status and two (2) vehicles for individuals with family status. Direct
mileage will be determined by the Rand McNally Guide.
o The cost of packing, unpacking, and transportation of household goods and
personal effects, not to exceed 15,000 lbs., plus up to 30 days of storage at
an established storage business at your destination.
o Receipts are required from an established business for reimbursement of labor
charges and moving supplies.
o Up to five (5) days of temporary living expenses at your destination (meals
and lodging at an established business).
Taxes
- -----
Changes in the tax law, effective January 1, 1994, make some relocation
reimbursements taxable income. Taxes will be withheld on these amounts at the
rate of 40.65% (Federal Income Tax 28%, Colorado State Income Tax 5%, FICA 6.20%
and Medicare 1.45%). Consult your tax advisor.
NOTE: THE WORK FORCE RESTRUCTURING RELOCATION GUIDELINES FURTHER DETAIL THIS
PROGRAM. THEY ARE AVAILABLE AT THE ON-SITE CAREER ASSISTANCE CENTER
<PAGE>
APPENDIX 6
SEPARATED EMPLOYEE TRAINING GUIDELINES
-21-
<PAGE>
APPENDIX 6
Rocky Flats Environmental Technology Site
Separated Employee Training Guidelines
Education Assistance
- --------------------
The education assistance training program helps voluntary and involuntarily
separated employees prepare for positions that are available in the Denver
Denver and Metropolitan Areas. Extension Of education assistance for 36 months
past the separation date continues to be approved for those who are
involuntarily or voluntarily separated to help in their training needs.
Separated employees must apply for this benefit during the 12 months following
their separation. This program ends when the employee meets the $10,000 maximum
over a 24-month period or when his or her plan of study is completed, whichever
comes first. The funding for this program continues to be dependent upon budget
availability.
Self-Employment
- ---------------
Another alternative for separated employees is starting their own business using
the Rocky Flats Local Impacts Initiative Entrepreneur Resource Program or by
taking courses in operating small businesses from local community colleges.
These courses help prepare them to either begin their own business or buy an
existing business. The Small Business Administration has supported these efforts
by providing information and, where possible, financial support. Educational
advise on curriculum availability, educational program costs, and credit
transferability will be provided by the educational institution representatives.
These representatives will help to develop an appropriate individual plan of
studies.
Outplacement Apprenticeship Program
- -----------------------------------
A third alternative is subsidizing the worker's pay for his or her training
period to pay for approved on-the-job training with a new employer. This
training period will not exceed one year and a maximum of one-third (up to $4.00
per hour) of his or her pay with do new employer. This program shall have no
more than a maximum of 10 participants at any given time.
<PAGE>
APPENDIX 7
STAKEHOLDER COMMENTS AND PUBLIC MEETINGS
-22-
<PAGE>
COMMENT PERIOD
- --------------
A public comment period was opened and advertised December 6,1996 through
January 10, 1997.
BRIEFINGS AND INFORMATIONAL MEETINGS
- ------------------------------------
December 10, 1996 Briefing to the Rocky Flats Local Impacts
Initiative Worker Impacts Committee.
Sponsored by DOE
December 11, 1996 Employee informational meeting held on-site.
Sponsored by DOE.
December 12, 1996 Employee informational meeting held on-site.
Sponsored by DOE.
December 16, 1996 Two Employee informational meetings held on-site site.
Sponsored by DOE.
December 17, 1996 Employee informational meeting held on-site.
Sponsored by DOE.
December 18, 1996 Employee informational meeting held on-site.
Sponsored by DOE.
December 18, 1996 Briefing to Congressman David Skaggs' Office.
SUMMARY OF STAKEHOLDER COMMENTS
- -------------------------------
# COMMENTS SUBJECT
---------- -------
55 VSPP PAYMENT SCHEDULE - All 55 comments
requested that no reduction be made in the VSPP
payment schedule.
31 ELIGIBILITY FOR SECTION 3161 BENEFITS -
The majority of the comments requested that
individuals hired after September 27, 1991,
continue to be eligible for all Section 3161
benefits.
29 CREDITING SERVICE FROM OTHER DOE
DEFENSE NUCLEAR FACILITIES All 29 comments
requested that prior service at other
DOE Defense Nuclear Facilities be recognized
for the purpose of eligibility for Section 3161
benefits.
17 RELOCATION ASSISTANCE - The comments requested
that both voluntarily and involuntarily
employees be eligible for relocation
assistance as allowed in to approved 1995 Work
Force Restructuring Plan.
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
PART I - THE SCHEDULE
SECTION D
PACKAGING AND MARKING
Table of Contents
Section Number Clause Title
D.1 PACKAGING
D.2 MARKING
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION D
PACKAGING AND MARKING
D.1 PACKAGING
Preservation, packaging, and packing for shipment or mailing of all work
delivered hereunder shall be in accordance with good commercial practice and
adequate to insure acceptance by common carrier and safe transportation at the
most economical rate(s).
D.2 MARKING
Each package, report or other deliverable shall be accompanied by a
letter or other document which:
(a) Identifies the contract by number under which the item is being
delivered.
(b) Identifies the deliverable Item Number or Report Requirement that
requires the delivered item(s).
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
This page intentionally left blank.
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
PART I - THE SCHEDULE
SECTION E
INSPECTION AND ACCEPTANCE
Table of Contents
Section Number Clause Title
E.1 INSPECTION OF SERVICES - COST REIMBURSEMENT (APR
1984) FAR 52.246-05
E.2 ACCEPTANCE
E.3 INSPECTION
E.4 CONTRACTOR QUALITY CONTROL
E.5 GOVERNMENT QUALITY ASSURANCE
E.6 TECHNICAL EXHIBITS
GOVERNMENT QUALITY ASSURANCE/SURVEILLANCE PLAN
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION E
INSPECTION AND ACCEPTANCE
E.1 FAR 52.246-05 INSPECTION OF SERVICES - COST-REIMBURSEMENT
(APR 1984)
E.1.1 Definitions. "Services," as used in this clause, includes services
performed, workmanship, and material furnished or used in performing
services.
E.1.2 The Contractor shall provide and maintain an inspection system
acceptable to the Government covering the services under this contract.
Complete records of all inspection work performed by the Contractor
shall be maintained and made available to the Government during
contract performance and for as long afterwards as the contract
requires.
E.1.3 The Government has the right to inspect and test all services called
for by the contract, to the extent practicable at all places and times
during the term of the contract. The Government shall perform
inspections and tests in a manner that will not unduly delay the work.
E.1.4 If any of the services performed do not conform to contract
requirements, the Government may require the Contractor to perform the
services again in conformity with contract requirements for no
additional fee. When the defects in services cannot be corrected by
re-performance, the Government may (1) require the Contractor to take
necessary action to ensure that future performance conforms to contract
requirements, and (2) reduce any fee payable under the contract to
reflect the reduced value of the services performed.
E.1.5 If the Contractor fails to promptly perform the services again or take
the action necessary to ensure future performance in conformity with
contract requirements, the Government may (1) by contract or otherwise,
perform the services and reduce any fee payable by an amount that is
equitable under the circumstances, or (2) terminate the contract for
default.
E.2 ACCEPTANCE
Acceptance of all work and effort under this contract (including
"Reporting Requirements," if any) shall be accomplished by the Contracting
Officer, or any duly designated representative.
E.3 INSPECTION
Inspection of all items under this contract shall be accomplished by
the DOE Contracting Officer's Representative (COR) or any other duly authorized
Government representative in accordance with Sections H and I of this contract.
E.4 CONTRACTOR QUALITY CONTROL
In accordance with the "FAR 52.246-05, INSPECTION OF SERVICES - COST
REIMBURSEMENT" Clause, the Contractor shall establish and maintain an inspection
system acceptable to the Government, to assure the requirements of the contract
are provided as specified. This system shall:
(1) Identify deficiencies in the quality of services performed
throughout the entire scope of the contract and implement
timely corrective action before the level of performance
becomes unsatisfactory.
(2) Be implemented on the contract start date.
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
E.5 GOVERNMENT QUALITY ASSURANCE/SURVEILLANCE PLAN
(a) The Government Quality Assurance/Surveillance Plan identifies specific
services from the Statement of Work for which compliance with the
identified standards is required. The Surveillance Plan identifies
standards by which the Contractor is expected to perform in a
continuous satisfactory manner. The Contracting Officer may impose a
Category 3 fee adjustment in accordance with section B.6 of this
contract if the Contractor fails to correct DOE identified
non-compliance with the Standard in the timeframe specified by the
Contracting Officer, or if there are three non-compliance activities
with a specific standard within any given quarter. The Contractor
shall not be relieved of full performance of the services hereunder and
may be terminated for default based upon inadequate performance of
services, even if a penalty has been imposed.
(b) The services rendered under this contract are subject to Government
inspection both during the Contractor's operations and after completion
of the tasks. After each inspection, the Contractor will be advised of
any unsatisfactory condition(s) for which they are responsible. The
Contractor shall correct such deficiencies promptly and, by written
report to the Contracting Officer, shall address corrective/preventive
actions taken.
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
TECHNICAL EXHIBIT
GOVERNMENT QUALITY ASSURANCE/SURVEILLANCE PLAN
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
REQUIRED SERVICE SOW REF. NO. STANDARD SURVEILLANCE METHOD
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SNM Shipments Sec. I, A. & B. o All SNM shipped Periodic
in a DOE approved assessments, monthly
shipping container observations, and
o All DOT assessment of each
requirements shipping manifest
satisfactorily met.
o All requirements of
DOE Orders 5610.12,
5610.14 and 460.1A
satisfactorily met.
- ---------------------------------------------------------------------------------------------------
Waste Shipments Sec. III, A-F o All wastes Periodic
shipped in either DOE assessments, monthly
or DOT approved observations, and
shipping containers assessment of each
o All DOT shipping manifest
requirements
satisfactorily met.
o Requirements of DOE
Order 435.1
satisfactorily met.
o All disposal site
waste acceptance
criteria
satisfactorily met.
- ---------------------------------------------------------------------------------------------------
SNM Building Deactivation Sec, II, A Safe and Stable condition Periodic assessments
according to the Project and monthly
Execution Plan (PEP) observations
where vaults are empty,
residues and all SNM is
removed, MAA is closed,
chemicals and excess
equipment is removed and
process systems are
drained of SNM solutions.
- ---------------------------------------------------------------------------------------------------
Facility Decommissioning Sec, II, A All end state Periodic assessments
requirements of the and monthly
approved DOP have been observations
met. Holdup has been
reduced to a specified
manageable level,
equipment and gloveboxes
have been removed and
packaged for disposal and
the
</TABLE>
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
<TABLE>
<CAPTION>
<S> <C> <C> <C>
facility has been
decontaminated and
determined to be at the
required specified level.
- ---------------------------------------------------------------------------------------------------
Facility Demolition Sec, II. A All end state criteria of Periodic assessments
the approved DOP have and monthly
been met including observations
disposition of building
rubble, and protection of
any known areas of
contamination.
- ---------------------------------------------------------------------------------------------------
Safeguard and Security Program Sec, V, C. All requirements of the Periodic Surveys,
o Program Management, SSSP following DOE Orders are periodic
o Personnel Security satisfactorily met: DOE assessments, and
o Protection Operations Orders 470.1, 470.2, monthly
o Materials Control and 471.1, 471.2A, 472.1B, observations
Accountability 473.2-1, 474.1-2,
o Information Security 5632.1C, 5639.8A
- ---------------------------------------------------------------------------------------------------
Fire Protection Sec. V, P All requirements of DOE Periodic assessments
Order 420.1and the and
monthly National Fire
Protection observations
Association Standards
satisfactorily met.
- ---------------------------------------------------------------------------------------------------
Occupational Safety Sec. V, O All requirements in DOE Periodic assessments
Orders 420.1, 440.1A and
and monthly the
Occupational Health
observations and Safety
requirements
satisfactorily met.
- ---------------------------------------------------------------------------------------------------
Nuclear Criticality Safety Sec. V. M All requirements of DOE Periodic assessments
Order 420.1 and ANSI/ANS8 and monthly
satisfactorily met. observations
- ---------------------------------------------------------------------------------------------------
Radiological Protection Sec. V, T All requirements of 10 Periodic assessments
CFR 835 satisfactorily and monthly
met. observations
- ---------------------------------------------------------------------------------------------------
Nuclear Safety Sec. V, N All requirements of DOE Periodic assessments
Orders 420.1, 425.1, and
monthly 5480.21, 5480.22,
and observations 5480.23
satisfactorily met.
- ---------------------------------------------------------------------------------------------------
Environmental Monitoring Sec. V, A All requirements of Periodic assessments
Resource Conservation and and monthly
Recovery Act (RCRA); the observations
Comprehensive
Environmental
</TABLE>
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Response,
Compensation, and
Liability Act (CERCLA);
the Clean Air Act; the
Clean Water Act; the
Colorado Water Quality
Control Commission
(CWQCC) standards;
natural resource
management regulations,
and RFCA satisfactorily
met.
- ---------------------------------------------------------------------------------------------------
Environmental Remediation Section IV,A All requirements of Periodic assessments
Resource Conservation and and monthly
Recovery Act (RCRA); the observations
Comprehensive
Environmental Response,
Compensation, and
Liability Act (CERCLA);
the Clean Air Act; the
Clean Water Act; the
Colorado Water Quality
Control Commission
(CWQCC) standards;
natural resource
management regulations,
and RFCA satisfactorily
met.
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
PART I- THE SCHEDULE
SECTION F
DELIVERIES OR
PERFORMANCE
Table of Contents
Section Number Clause Title
F.1 PRINCIPAL PLACE OF PERFORMANCE
F.2 DELIVERY
F.3 PROJECT COMPLETION
Section F - Page 1
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION F
DELIVERIES OR PERFORMANCE
F.1 PRINCIPAL PLACE OF PERFORMANCE
The principal place of performance of this contract shall be within the
site outlines of the Rocky Flats Environmental Technology Site, near Golden,
Colorado, and such other facilities as may be leased or acquired from time to
time. All deliverable items shall be delivered to the Contracting Officer or
designee, unless otherwise specified.
F.2 DELIVERY
(a) Performance will commence with the effective date of this contract on
February 1, 2000. The target date for physical completion of the contract
is December 15, 2006.
(b) "Physical completion of the contract" as that term is used in Clause I.23,
Incentive Fee, is defined in Clause C. 1.2.
F.3 PROJECT COMPLETION
(a) Release of Withholdings. When the Contractor completes elements (1), (2),
(3) and (4) of physical completion as defined in Clause C. 1.2, the
Contracting Officer will project the Contractors expected fee earnings and
release withheld fees accordingly, but will retain a withholding of at
least $5,000,000 until physical completion as defined in Clause C. 1.2.
The release of withholdings by the Contracting Officer, at this point,
does not change the conditional nature of these fee payments. For
remaining conditional incentive fee payments, the Contracting Officer will
continue to withhold fees in accordance with Clause B.6.
(b) Declaration of Physical Completion. Upon physical completion of contract
as set forth in Clause C. 1.2, the Contractor may prepare a letter
declaring that the Rocky Flats Closure Project has been physically
completed. If the Contractor submits such a letter, the Government will
have one business day to decide whether the Contractor's declaration is
reasonable, after which the Government will, within ninety (90) calendar
days accept the project as complete or provide the Contractor with a final
definitive punch list of material deficiencies which preclude the
Government from accepting the physical completion of the contract. During
the acceptance period, the actual completion date shall be suspended and
fixed as of the date Contractor declares project completion. The
Contractor shall complete the identified deficiencies, the costs of which
shall be considered unallowable, during the nine (9) months immediately
succeeding the receipt of the Government's notification. During this
period, the actual completion date shall remain fixed while the Contractor
completes the remaining open deficiencies.
Upon completion of punch list material deficiencies, the Contractor will
submit a Final Declaration Letter for physical completion of the contract.
The Contractor's final Declaration Letter and the Contractor's
responsibility for completion of any material deficiencies shall be
limited only to completion of the Government's final definitive punch list
of material deficiencies established above, inasmuch as all other work was
previously accepted by the Government. In the event the Government
determines that a portion of its final punch list of material deficiencies
is not completed, the Contractor will be notified accordingly within
thirty (30) calendar days of receipt of the Contractor's Final Declaration
Letter. These costs shall also be considered unallowable. In this event,
and for any future incomplete final punch list work identified by the
Government, the Contractor shall proceed diligently with the completion of
the work and, upon completion, all withholding shall be released to the
Contractor except the required retainage amount set forth by Clause I.23.
Section F - Page 2
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
(c) Withheld Fee Funding and Payment.
(1) The Contractor will request a reserve of appropriate budget ninety
(90) days prior to the start of the next fiscal year or,
alternatively, the Contracting Officer will confirm in writing to the
Contractor that sufficient funds am available in the current fiscal
year to fund all or a portion of the Contractor's withheld fee.
Withheld fee shall be paid to the Contractor in the next quarter
subject to the provisions of (a) above.
(2) Upon Government acceptance of physical completion of the contact, all
remaining withholdings shall be paid to the Contractor within thirty
(30) calendar days of receipt of the Contractor's invoice.
(d) Upon full acceptance of physical completion of the contract the Government
will pay the Contractor as set forth by Clauses F. 3(c) and B.7.
(e) Contract Close-out. After the Contractor's declaration of physical
completion of the contract, the Government and Contractor shall establish
a separate plan including budget and schedule for close-out of the
contract. The Contract Close-out Plan will include all remaining
administrative matters necessary to close out the contract, including but
not limited to, resolution of remaining and open litigation, audit of
indirect costs, remaining records disposition required by the Government
ongoing monitoring and stewardship costs or any other activities required
by Clause I.22, Allowable Cost and Payment, to close-out the contract. As
set forth in Clause B.8, the cost, schedule and budget established for
contract close out activities shall not be included in Target Cost or
Target Schedule.
Section F - Page 3
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
This page intentionally left blank.
Section F - Page 4
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-OORF01904
SECTION J
ATTACHMENT A
PERFORMANCE GUARANTEES
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-OORF01904
PERFORMANCE AGREEMENT
---------------------
For value received, and in consideration of, and in order to induce the
United States (the Government) to enter into Contract DE-AC34-OORF01904 for the
Rocky Flats Closure Contract, (the Contract) dated, 1/24/00 by and between the
Government and Kaiser-Hill Company, L.L.C. (Contractor), the undersigned, Kaiser
Group International, Inc. (Guarantor), a corporation incorporated in the State
of Delaware, with its principal place of business at: 9300 Lee Highway, Fairfax,
Virginia, hereby unconditionally guarantees to the Government (a) The full and
prompt payment and performance of all obligations, accrued and executory, which
Contractor presently or hereafter may have to the Government under the Contract,
and (b) the full and prompt payment and performance by Contractor of all other
obligations and liabilities or the Contractor to the Government, fixed or
contingent, due or to become due, direct or indirect, now existing or hereafter
and howsoever arising or incurred under the Contract, and Guarantor further
agrees to indemnify the Government against any losses the Government may sustain
and expenses it may incur as a result of the enforcement by the Government of
any of its rights and remedies under the Contract, in the event of a default by
Contractor thereunder, and/or as a result of the enforcement by the Government
of any of its rights against Guarantor hereunder.
Guarantor has read and consents to the signing of the Contract. Guarantor
further agrees that Contractor shall have the full right, without any notice to
or consent from Guarantor, to make any and all modifications or amendments to
the Contract without affecting, impairing, or discharging, in whole or in part,
the liability of Guarantor hereunder.
Guarantor hereby expressly waives all rights and defenses which might
constitute a legal or equitable discharge of a surety or guarantor. and agrees
that this Performance Guarantee Agreement shall be valid and unconditionally
binding upon Guarantor regardless of (i) any acquisition, (ii) the
reorganization, merger, or consolidation of Contractor into or with another
entity corporate or otherwise, or the liquidation or dissolution of Contractor,
or the sale or other disposition of all or substantially all of the capital
stock, business or assets of Contractor to any other person or party, or (iii)
the enforcement or judgment or the institution of any bankruptcy,
reorganization, insolvency, debt agreement, or receivership proceedings by or
against Contractor, or adjudication of Contractor as a bankrupt, or (iv) the
assertion by the Government against Contractor of any of the Government's rights
and remedies provided for under the Contract, including any modifications or
amendments thereto, or under any other document(s) of instrument(s) executed by
Contractor, or existing in the Governments favor in Law, equity, or bankruptcy.
Guarantor further agrees that its liability under this Performance Guarantee
Agreement shall be continuing, absolute, primary, and direct on itself, any
successors or assigns, and that the Government shall not be required to pursue
any right or remedy it may have against Contractor or other Guarantors under the
Contract. or any modifications or amendments thereto, or any other document(s)
or instrument(s) executed by Contractor, or otherwise. Guarantor affirms that
the Government shall not be required to first commence any action or obtain any
judgment against Contractor before enforcing this Performance Guarantee
Agreement against Guarantor. and that Guarantor will. upon demand, pay the
Government any amount, the payment of which is guaranteed hereunder and law
payment of which by Contractor is in default under the Contract or under any
other document(s) or instrument(s) executed by Contractor as aforesaid, and that
Guarantor will upon demand, perform all other obligations of Contractor, the
performance of which by Contractor is guaranteed hereunder.
Notwithstanding anything in this Performance Guarantee Agreement, the
Guarantor's obligations for performance of the contract hereunder shall not be
any greater than those of the Contractor, and the rights and defenses available
to the Contractor, and specifically related to those rights and defenses arising
out of matters of Contract performance, shall also be available to
1
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-OORF01904
the Guarantor in respect of any claim made against the Guarantor upon its
assuming its responsibilities under the Contract.
Guarantor agrees to assure that it shall cause this Performance Guarantee
Agreement to be unconditionally binding upon any successor(s) or assigns to its
interests regardless of (i) any acquisition, (ii) the reorganization, merger, or
consolidation of Guarantor into or with another entity corporate or otherwise,
or the liquidation or dissolution of Guarantor, or the sale or other disposition
of all or substantially all of the capital stock, business, or men of Guarantor
to any other person or party, or (iii) the enforcement of judgment or the
institution of any bankruptcy, reorganization, insolvency, debt agreement, or
receivership proceedings by or against Guarantor, or adjudication of Guarantor
as a bankrupt.
Guarantor further warrants and represents to the Government that the
execution and delivery of this Performance Guarantee Agreement is not in
contravention of Guarantor's Articles or organization, Charter, by-laws, and
applicable law, that the execution and delivery of this Performance Guarantee
Agreement, and the performance thereof has been duly authorized by the
Guarantor's Board of Directors, Trustees, or any other management board which is
required to participate in such decisions; and that the execution, delivery, and
performance of this Performance Guarantee Agreement will not result in a breach
of, or constitute a default under, any loan agreement indenture debt judgment or
contract to which Guarantor is a party or by or under which it is bound.
Notwithstanding any other provisions of this Performance Guarantee
Agreement, this Performance Guarantee Agreement shall expire upon the final
payment at Close out of the Contract
No express or implied provision, warranty, representation or term of this
Performance Guarantee Agreement is intended, or is to be construed. to confer
upon any third person(s) any rights or remedies whatsoever, except as expressly
provided in this Performance Guarantee Agreement.
Interpretation of this Performance Guarantee Agreement shall be subject to
Federal law.
In witness thereof. Guarantor has caused this Performance Guarantee
Agreement to be executed by its duly authorized officer, and its corporate seal
to be affixed hereto on 01/12/00
--------
Date
KAISER GROUP INTERNATIONAL, INC.
By: /s/
-----------------------------
Name
01/12/00
-----------------------------
Date
ATTESTATION INCLUDING APPLICATION
OF SEAL BY AN OFFICIAL OF
GUARANTOR AUTHORIZED TO AFFIX
CORPORATE SEAL
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Rocky Flats Closure Contract No. DE-AC34-OORF01904
PERFORMANCE GUARANTEE AGREEMENT
-------------------------------
For value received, and in consideration of, and in order to induce the
United States (the Government) to enter into Contract DE-AC34-OORF01904 for the
Rocky Flats Closure Contract (the Contract) dated, 1/24/00 by and between the
Government and Kaiser-Hill Company, L.L.C. (Contractor), the undersigned, CH2M
Hill Companies, LTD. (Guarantor), a corporation incorporated in the State of
Oregon with its principal place of business at 6060 South Willow, Denver, CO,
hereby unconditionally guarantees to the Government (a) the full and prompt
payment and performance of all obligations, accrued and executory, which
Contractor presently or hereafter may have to the Government under the Contract,
and (b) the full and prompt payment and performance by Contractor of all other
obligations and liabilities of the Contractor to the Government, fixed or
contingent, due or to become due, direct or indirect, now existing or hereafter
and howsoever arising or incurred under the Contract, and Guarantor further
agrees to indemnify the Government against any losses the Government may sustain
and expenses it may incur as a result of the enforcement by the Government of
any of its rights and remedies under the Contract, in the event of a default by
Contractor thereunder, and/or as a result of the enforcement by the Government
of any of its rights against Guarantor hereunder.
Guarantor has read and consents to the signing of the Contract. Guarantor
further agrees that Contractor shall have the full right, without any notice to
or consent from Guarantor, to make any and all modifications or amendments to
the Contract without affecting, impairing, or discharging, in whole or in part,
the liability of Guarantor hereunder.
Guarantor hereby expressly waives all rights and defenses which might
constitute a legal or equitable discharge of a surety or guarantor, and agrees
that this Performance Guarantee Agreement shall be valid and unconditionally
binding upon Guarantor regardless of (i) any acquisition, (ii) the
reorganization, merger, or consolidation of Contractor into or with another
entity, corporate or otherwise, or the liquidation or dissolution of Contractor,
or the sale or other disposition of all or substantially all. of the capital
stock, business or assets of Contractor to any other person or party, or (iii)
the enforcement of judgment or the institution of any bankruptcy,
reorganization, insolvency, debt agreement, or receivership proceedings by or
against Contractor, or adjudication of Contractor as a bankrupt, or (iv) the
assertion by the Government against Contractor of any of the Government's rights
and remedies provided for under the Contract, including any modifications or
amendments thereto, or under any other document(s) or instrument(s) executed by
Contractor, or existing in the Governments favor in law, equity, or bankruptcy.
Guarantor further agrees that its liability under this Performance Guarantee
Agreement shall be continuing, absolute, primary, and direct, on itself, any
successors or assigns, and that the Government shall not be required to pursue
any right or remedy it may have against Contractor or other Guarantors under the
Contract, or any modifications or amendment is thereto, or any other document(s)
or instrument(s) executed by Contractor, or otherwise. Guarantor affirms; that
the Government shall not be required to first commence any action or obtain
any judgment against Contractor before enforcing this Performance Guarantee
Agreement against Guarantor, and that Guarantor will, upon demand, pay the
Government any amount, the payment of which is guaranteed hereunder and the
payment of which by Contractor is in default under the Contract or under any
other document(s) or instrument(s) executed by Contractor as aforesaid, and that
Guarantor will, upon demand, perform all other obligations of Contractor, the
performance of which by Contractor is guaranteed hereunder.
Notwithstanding anything in this Performance Guarantee Agreement, the
Guarantor's obligations for performance of the contract hereunder shall not be
any greater than those of the Contractor, and the rights and defenses available
to the Contractor, and specifically related to those rights and defenses arising
out of matters of Contract performance, shall also be available to
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Rocky Flats Closure Contract No. DE-AC34-OORF01904
the Guarantor in respect of any claim made against the Guarantor upon its
assuming its responsibilities under the Contract
Guarantor agrees to assure that it shall cause this Performance Guarantee
Agreement to be unconditionally binding upon any successor(s) or assigns to its
interests regardless of (i) any acquisition, (ii) the reorganization, merger, or
consolidation of Guarantor into or with another entity, corporate or otherwise,
or the liquidation or dissolution of Guarantor, or the sale or other disposition
of all or substantially all of the capital stock, business, or assets of
Guarantor to any other person or party, or (iii) the enforcement of judgment or
the institution of any bankruptcy, reorganization, insolvency, debt agreement,
or receivership proceedings by or against Guarantor, or adjudication of
Guarantor as a bankrupt.
Guarantor further warrants and represents to the Government that the
execution and delivery of this Performance Guarantee Agreement is not in
contravention of Guarantor's Articles of organization, Charter, by-laws, and
applicable law; that the execution and delivery of this Performance Guarantee
Agreement, and the performance thereof, has been duly authorized by the
Guarantor's Board of Directors, Trustees, or any other management board which is
required to participate in such decisions, and that the execution, delivery, and
performance of this Performance Guarantee Agreement will not result in a breach
of or constitute a default under, any loan agreement, indenture, debt, judgment
or contract to which Guarantor is a party or by or under which it is bound.
Notwithstanding any other provisions of this Performance Guarantee
Agreement, this Performance Guarantee Agreement shall expire upon-the final
payment at close out of the Contract.
No express or implied provision, warranty, representation or term of this
Performance Guarantee Agreement is intended, or is to be construed, to confer
upon any third person(s) any rights or remedies whatsoever, except as expressly
provided in this Performance Guarantee Agreement
Interpretation of this Performance Guarantee Agreement shall be subject to
federal law.
In witness thereof, Guarantor has caused this Performance Guarantee
Agreement to be executed by its duly authorized officer, and its corporate seal
to be affixed hereto on 12 January 2000
---------------
(Date)
CH2M HILL COMPANIES, LTD
By: /s/ Ralph R. Peterson
--------------------------
Name
12 January 2000
--------------------------
Date
ATTESTATION INCLUDING APPLICATION
OF SEAL BY AN OFFICIAL OF
GUARANTOR AUTHORIZED TO AFFIX
CORPORATE SEAL
2
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
PART I - THE SCHEDULE
SECTION G
CONTRACT ADMINISTRATION DATA
Table of Contents
Section Number Clause Title
G.1 CORRESPONDENCE PROCEDURES
G.2 ADDRESSES
G.3 BILLING INSTRUCTIONS
G.4 DEFECTIVE OR IMPROPER INVOICES
G.5 DOE PROPERTY ADMINISTRATION
G.6 REPRESENTATIONS AND CERTIFICATIONS
G.7 INVOICING/PAYMENT PROCEDURES
SECTION G - Page 1
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION G
CONTRACT ADMINISTRATION DATA
----------------------------
G.1 CORRESPONDENCE PROCEDURES
To promote timely and effective administration, correspondence submitted
under this contract shall include the contract number and shall be subject to
the following procedures:
(a) Technical Correspondence. Technical correspondence (as used herein, this
term excludes technical correspondence where patent or technical data
issues are involved and correspondence which proposes or otherwise
involves waivers, deviations, or modifications to the requirements,
terms, or conditions of this contract) shall be addressed to the DOE
Contracting Officer's Representative (COR) with an information copy of
all correspondence to the DOE Contracting Officer.
(b) Other Correspondence. All other correspondence shall be addressed to the
DOE Contracting Officer, with information copies of the correspondence
to the COR and the DOE Patent Counsel (where patent or technical data
issues are involved).
G.2 ADDRESSES
The DOE Contracting Officer's address is:
Contracts Management Division - Bldg. 460
Attn: Melody C. Bell
Rocky Flats Field Office
US Department of Energy
10808 Highway 93, Unit A
Golden, CO 80403-8200
Future revisions of the Contracting Officer or the address may be
accomplished by written notification from the Contracting Officer to the
Contractor, without a formal contract modification.
G.3 BILLING INSTRUCTIONS
(a) The Contractor shall submit the original and three copies of invoices or
vouchers, in accordance with the Payments provisions of this contract,
to the following address:
Office of the Field Chief Financial Officer, Bldg. 460
Attn: Finance Group
Rocky Flats Field Office
US Department of Energy
10808 Highway 93, Unit A
Golden, CO 80403-8200
(b) The Contractor shall submit invoices in accordance with the Billing
Instructions, which will be provided at time of award of a contract, and
other applicable clauses of this document.
SECTION G - Page 2
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
G.4 DEFECTIVE OR IMPROPER INVOICES
Name (where practicable), title, phone number, office name, and complete
mailing address of officials of the business concern who are to be notified when
the Government receives a defective or improper invoice:
Kaiser-Hill Company, LLC
10808 Highway 93 Unit B, Building 111
Golden, CO 80403-8200
Attention:Mr. L. A. Martinez
Vice President, Administration and CFO
Telephone: (303) 966-9768
G.5 DOE PROPERTY ADMINISTRATION
For purposes of administration of government property, the points of
contact are:
For real property:
Steven R. Schiesswohl 966-6501
For other than real property:
Joseph A. Legare (Primary) 966-5918
Steven W. Slaten (Secondary) 966-4639
Assistant Manager for Environment & Infrastructure, Building 460
Rocky Flats Field Office
US Department of Energy
10808 Highway 93, Unit A
Golden, CO 80403-8200
Future revisions of the points of contact may be accomplished by written
notification from the Contracting Officer to the Contractor, without formal
contract modification.
G.6 REPRESENTATIONS AND CERTIFICATIONS
The Representations and Certifications completed as attachment to
Section J leading to award of this contract, dated November 15, 1999, are hereby
incorporated into this contract.
G.7 INVOICING/PAYMENT PROCEDURES
(a) The Government will make payments to the Contractor by electronic funds
transfer not later than three (3) business days after receipt of an
acceptable invoice from the Contractor.
(b) The Contractor may submit cost invoices no more frequently than
bimonthly. Fee invoices will be submitted in accordance with Clause B.6.
(c) Any defects in invoices which are discovered after acceptance and
payment will be corrected on subsequent invoices. If the Government
discovers such defects, the Contracting Officer will notify
SECTION G - Page 3
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
the Contractor in writing to the individual listed in Clause G.4,
DEFECTIVE OR IMPROPER INVOICES, above. The Contracting Officer's
written notification will explain the nature of the defect, and will
direct the Contractor to reflect the appropriate credit on the next
invoice submitted under this Contract. Unless the Contractor reconciles
the defect to the satisfaction of the Contracting Officer within seven
(7) calendar days, the Contractor shall make the credit as previously
directed by the Contracting Officer.
(d) Any bases for withholding, set off or reduction with respect to invoices
which are discovered after acceptance will be corrected on subsequent
invoices. If the Government discovers such bases for withholding, set
off or reduction, the Contracting Officer will notify the Contractor in
writing to the individual listed in Clause G.4, Defective or Improper
Invoices, above. The Contracting Officer's written notification will
explain the nature of the bases for withholding, set off or reduction,
will specify the dollar amount of the withholding, set off or reduction
and will direct the Contractor to reflect the appropriate credit on the
next invoice submitted under this contract. Unless the Contractor
reconciles the bases for withholding, set off or reduction to the
satisfaction of the Contracting Officer within seven (7) calendar days,
the Contractor shall make the credit as previously directed by the
Contracting Officer.
(e) Nothing in this provision shall affect the rights of either the
Government or the Contractor under the Prompt Payment clause of this
contract.
(f) Notwithstanding the provisions of FAR 52.232-25(a)(4), the Government
is not limited to the seven (7) day notification to the Contractor of a
defective invoice.
(g) The Government acknowledges and agrees that the Contractor may finance
its performance under this contract by selling accounts receivable
arising under the contract to an affiliate of the contractor organized
solely for the purpose of assisting in the financing of the Contractor's
performance under the contract. Such affiliate may further sell and/or
otherwise grant a security interest in such receivables to an ultimate
financing source or sources or an agent or trustee acting on behalf of
an ultimate financing source or sources, such further sale and/or grant
of a security interest being solely for the purpose of completing the
financing of the Contractor's performance of the work under the
contract. The ultimate financing source or sources would provide funds
to the affiliate solely for the purpose of financing the affiliate's
purchasing said accounts receivable from the Contractor, thereby
providing the funding to the contractor to perform the work under the
contract. The Government consents to the financing arrangement
described above.
SECTION G - Page 4
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SECTION G - Page 5
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
PART I - THE SCHEDULE
SECTION H
SPECIAL CONTRACT REQUIREMENTS
TABLE OF CONTENTS
Section Number Clause Title
H.1 PROJECT CONTROL SYSTEMS AND REPORTING REQUIREMENTS
H.2 TECHNICAL DIRECTION
H.3 STOP-WORK AND SHUTDOWN AUTHORIZATION
H.4 AUTHORIZATION AGREEMENT
H.5 PERFORMANCE GUARANTEE AGREEMENT
H.6 ROCKY FLATS CLEANUP AGREEMENT
H.7 ASSIGNMENT OF SUBCONTRACTS
H.8 INTERNAL AUDIT
H.9 RESPONSIBILITIES FOR OPERATION/TERMINATION OF BENEFITS SYSTEMS
H.10 LITIGATION SUPPORT AND LITIGATION MANAGEMENT PLAN
H.11 KEY PERSONNEL
H.12 CONTRACTOR SELF-PERFORMANCE
H.13 PATENT INDEMNITY SUBCONTRACTS
H.14 AUTHORIZATION AND CONSENT IN COPYRIGHT
H.15 ROYALTY INFORMATION DURING TERM OF CONTRACT
H.16 ALTERNATE DISPUTE RESOLUTION
H.17 CONTRACT TRANSITION
H.18 EVALUATION OF SUBCONTRACTORS
H.19 EMPLOYEE PERFORMANCE INCENTIVES AND REWARD AND RECOGNITION
H.20 LABOR DISPUTES AND WHISTLEBLOWER ACTIONS
Section H - Page 1
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION H
SPECIAL CONTRACT REQUIREMENTS
H.1 PROJECT CONTROL SYSTEMS AND REPORTING REQUIREMENTS
H.1.01 Project Control System Requirements
(a) In the performance of this contract, the Contractor shall establish,
maintain and use a project control system meeting the requirements
specified in the contract, in the following paragraphs titled "Baseline
Development," "Project Performance," and "Baseline Change Management" of
this Section H.1, and any other system requirements defined by the
Contracting Officer. Contractor may use a pre-existing project control
system if such system satisfactorily addresses the system requirements
defined below.
(b) The project control system must also meet the requirements of the
following DOE guidance:
(1) DOE Order 430.1A, Life-Cycle Asset Management (LCAM), October
14, 1998;
(2) Integrated Planning, Accountability, and Budgeting System -
Information Systems (IPABS-IS) Data Requirements, December 18,
1998;
(3) Integrated Planning, Accountability, and Budgeting System
(IPABS) Handbook, February 16, 1999; and
(4) HQ Baseline Change Control Charter, Office of Environmental
Management, Rev. 0, June 23, 1999.
(c) The Contractor shall provide the Contracting Officer with a detailed
written description of the proposed project control system for review
and approval within 30 days after award of the contract. Cost effective,
graded application of controls will be a critical factor in determining
acceptability of the proposed system.
(d) The Contracting Officer or designated representatives will conduct a
compliance review of the Contractor's proposed project control system to
determine if the description and procedures meet the intent of this
contract clause, "H.1, Project Control Systems and Reporting
Requirements." The Contracting Officer will use the following two
references as the main tools to evaluate the Contractor's project
control system:
(1) DOE/PR-036, Project Control System Guidelines Implementation
Reference Manual, Interim, December 1992; and
(2) A Guide to the Project Management Book of Knowledge, Project
Management Institute, 1996.
Upon system approval by the Contracting Officer, the Contractor shall
fully implement the project control system. The Contractor shall not
make any significant changes to the approved system without the prior
written approval of the Contracting Officer. The Contracting Officer may
direct additional compliance reviews after contract award to determine
whether the Contractor is operating the project control system
efficiently and producing accurate planning, budgeting, reporting and
change control data.
(e) The Contractor shall provide the Contracting Officer or designated
representatives with access to all pertinent records, data, and plans
for purposes of initial approval, approval of proposed changes, and the
ongoing operation of the project control system.
Section H - Page 2
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
H1.02 Baseline Development
(a) Technical Baseline and Work Scope Definition
(1) Work Breakdown Structure. The Work Breakdown Structure (WBS)
shall provide the basis for all project control system
components, including estimating, scheduling, budgeting,
performing, managing, and reporting, as required under this
contract.
(2) Technical Baseline. The approved project technical baseline shall
be established and maintained in a manner that ensures it can be
used to further define and accomplish work, performance can be
objectively measured, and its configuration is controlled and
changes managed by formal processes. The cost account (currently
Work Authorization Documents or WADs) is the fundamental grouping
of work at which the Contracting Officer will receive routine
status reports, evaluate and measure project performance, and
exercise change control authority. Cost accounts will be
summarized into nine Project Baseline Descriptions.
(b) Roles and Responsibilities
(1) Organizational Breakdown Structure. The manager responsible for
each cost account within the WBS shall be identified. The
functional and technical scope responsibilities, limits of
authority, and key interface points for each cost account manager
will also be included.
(2) Indirect Costs. Person(s) with responsibility and authority for
managing and controlling indirect costs shall be identified at a
level consistent with the other cost accounts.
(3) Cost Account Manager Responsibilities. A cost account shall be
assigned to a manager with responsibility and authority to plan
and budget the work, and control the resources and work
activities within the approved technical, schedule, and cost
baselines. The Cost Account Manager is also responsible to report
status to allow complete project rollup of technical, schedule,
and cost performance for current period, cumulative to-date, and
at-completion.
(c) Cost Estimating
(1) Estimating Methodologies. Estimates shall be integrated with the
WBS and use estimating methodologies that are consistent with DOE
Order 5700.2D, Cost Estimating Analysis and Standardization.
(2) Estimate Preparation. Estimates shall be prepared consistent with
the established project baseline and can be identified by each
WBS element, or rolled up to cost account, Project Baseline
Description (PBD), or total closure project level. The control
system must maintain capability to provide Total Estimated Cost
(TEC), Total Project Cost (TPC), Estimates-to-Complete (ETC), and
Estimates-at Completion (EAC).
(d) Planning and Scheduling Baseline
(1) Planning Constraints. A planning process shall be established and
maintained throughout the project life that identifies
programmatic, operational, legislative, institutional, and other
requirements, constraints, and assumptions that may affect
technical, schedule, and cost baselines. Potential impacts are
identified and considered in managing baselines through
contingency planning and management.
Section H - Page 3
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
(2) Project Risk Management. The Risk Management Plan shall be
developed that identifies the various internal and external risks
to achieving the project baseline. The Risk Management Plan will
analyze possible alternatives to mitigate impacts, select and
definitize specific alternatives including cost and
implementation schedules for each alternative, and provide for
routine reporting and updating of the Plan at least quarterly.
(3) Schedule Development. Schedules shall be developed that integrate
with the WBS and cost estimates and represent all project work
scope regardless of funding source. Certain non-project level of
effort work scope may be excluded. Each activity will have
assigned duration representing work scope accomplishment.
Activity logic links shall depict all work scope constraints and
decision points and shall be integrated into a total project
network schedule. Work scope critical path network schedules are
required for the total project and each PBD and in all cost
accounts which exceed $5 million in life-cycle cost.
(4) Schedule Baseline. The project schedule shall clearly depict
critical path activities and milestones from which actual
performance for activities and milestones can be compared, and
from which performance forecasts can be derived. Activities shall
be resource loaded at one level below the cost account or lower
to develop time-phased budgets that are integrated with the
schedule.
(5) Intermediate Schedules. The project schedule shall be developed
in a manner that allows extraction of intermediate and detail
level schedules, for individual Project Baseline Descriptions and
individual cost accounts. Milestones shall be identified and
maintained as part of the schedules.
(e) Cost
(1) Cost Accounts. A cost account structure shall be developed that
is integrated with the WBS and facilitates collection of cost by
functional organization and cost element. All work scope for the
cost account shall be identified and a budget for that work
developed. Budget projections shall be time-phased consistent
with the schedule and anticipated resources, and shall be
reconcilable with the cost estimate.
(2) Total Value of Accounts. All work shall be represented in cost
accounts and the sum of the cost account budgets, plus
contingency and management reserve and fee, equals the baseline
value. The baseline will separately identify the following
individual budget elements:
a) Direct budget - developed at Work Package level, identified at
cost account level
b) Indirect budget - same as direct budget for indirect accounts
c) Management Reserve budget - identified at total closure
project level
d) Cost Contingency - developed at cost account level, but
summarized at PBD level
e) Fee - developed based on adjusted target cost, identified at
baseline summary level
(3) Managing Cost Accounts. A practical and effective method for
controlling and measuring performance of the cost accounts shall
be used, that is verifiable and consistent with schedule
performance management. The Contractor shall exercise specific
control and decision authority at the cost account level or
lower. Indirect budgets, management reserve, and cost contingency
will be included in the cost account management system.
H 1.03 Project Performance
(a) Funds Management
Section H - Page 4
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
(1) Funding Limits. Project commitment and expenditures shall not
exceed funding limits as approved by the Contracting Officer.
Funding controls as established in the Contractor's control
system shall provide early warning before funding limits are
exceeded.
(2) Funding Changes. The Contractor shall analyze DOE proposed or
directed funding changes for their impact on technical, schedule,
and cost elements of the baseline. Baseline changes to adjust for
significant funding changes may be proposed consistent with
Change Control procedures.
(3) Funding Reconciliation. An ability to reconcile forecasted
funding requirements with estimated costs to execute remaining
project work shall be maintained on a monthly basis by cost
account. Analysis of the variance between currently authorized
funds and estimated costs to complete shall be used by the
Contractor to make adjustments to budgets or release contingency
funds to Cost Account Managers as appropriate.
(b) Accounting
(1) Recording Costs. All actual direct costs incurred for resources
applied in the performance of work shall be recorded on a timely
basis each month. Cost assignments shall be made in accordance
with an established and auditable system that conforms to
Generally Accepted Government Accounting Standards and Cost
Accounting Standards. Actual costs incurred must be recorded in
the same accounting period that performance is measured and
recorded. Any indirect costs and contingency costs shall also be
collected and appropriately allocated to the project.
(2) Collecting Costs. Costs shall be collected at a Work Package
level or lower and able to be summed through the WBS, cost
account, PBD, or by major Contractor functional organizations.
Mischarges on time cards or other administrative or accounting
errors shall be corrected in a timely manner. Cost Account
Managers shall be provided appropriate reports and information to
analyze monthly charges and are held responsible for the validity
of charges to their cost account.
(c) Work Authorization
(1) Work Authorization. Approval of this Contract provides
authorization for the Contractor to complete the full scope of
work in the Contract. Any Contractor requested changes or DOE
directed changes shall be addressed through the established
Change Control process.
(2) Contract Funding. The Closure Project Baseline with any approved
revisions shall provide the basis for annual authorization of
funds to the Contractor for each fiscal year. The Manager of the
Rocky Flats Field Office will under normal conditions obligate to
the contract the total annual project funding at the start of the
fiscal year. Contract funding under this contract shall be
subject to the administrative controls as described below:
Annual Work Analysis. Prior to the release of funds for
each fiscal year, the DOE will analyze the technical,
schedule, and cost baseline for that upcoming fiscal year.
By May 31st each year the DOE will provide an estimate of
any budget restrictions, or specific technical or schedule
guidance for the upcoming fiscal years through the
remainder of the project. The Contractor shall prepare a
project performance forecast for all upcoming fiscal years
from the approved total Closure Project Baseline and the
DOE guidance. By July 31st each year the Contractor shall
submit to the Contracting Officer or designee a
comprehensive analysis of total project status, including
impacts to technical, schedule, and cost elements of the
Closure Project Baseline and the projected budget
allocations to
Section H - Page 5
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
cost accounts with a focus to activities described in the
baseline for the upcoming fiscal year. This deliverable is
known as the Annual Work Analysis (AWA), as derived from
the life-cycle project baseline. Variations from the
life-cycle project baseline described in the AWA, which
exceed established thresholds, shall be addressed through
established Change Control procedures and if necessary,
incorporated into the contract by modification.
(3) Resolving Conflicts. In the event there is a conflict between
the requirements of this clause and the referenced DOE Orders and
guidance, the Contractor shall obtain guidance from the DOE
Contracting Officer.
(4) Responsibility to Achieve Environmental, Safety and Health
Compliance. It is the intention of the Government that all work
performed by the Contractor be conducted in a manner that
protects the environment, the health and safety of employees, and
the public. Notwithstanding the other provisions of this clause,
the Contractor has, in the event of an emergency, authority to
authorize corrective actions as may be necessary to sustain
operations in a manner consistent with applicable environmental,
safety and health statutes, regulations, and procedures. The
Contracting Officer shall be notified in writing within 24 hours
of any Contractor action taken pursuant to this provision.
(d) Performance Analysis
(1) Project Performance. Differences between planned and actual
performance, shall be analyzed and reviewed monthly against the
total project baseline and the Target Cost and Target Schedule
for the current fiscal year portion of the total project.
Performance analysis techniques shall be commercially accepted
and documented, and shall utilize earned-value methods at the
cost account or lower levels of the WBS and shall be reported to
DOE at the PBD level. Objective measures are preferred for
measurement of all technical work scope. For variances between
planned and actual that exceed thresholds established by the
Contracting Officer, the analysis shall describe the causes for
variance, impact on other cost accounts, and corrective action
required.
(2) Project Risk and Contingency Management. The risk from project
and program factors that may affect the technical, schedule, or
cost aspects shall be included in the development of the project
baseline. Changes in the nature of these risks due to evolving
social, political, organizational, environmental or other factors
shall be analyzed quarterly, and resulting impacts to the project
baseline evaluated. Risk plans shall be adjusted and risk
management actions taken as appropriate, including performance
improvements, reallocation of budgets to cost accounts, release
of contingency funds, or baseline change proposals submitted if
thresholds are exceeded.
(3) Estimate at Completion. Quarterly the Estimate at Completion
(EAC) for the total project shall be reviewed and evaluated for
consistency with observed trends in performance, emerging or
resolved issues, and changes in the assessment of project risk.
(e) Reporting
(1) Periodic Plans and Reports. The Contractor shall submit periodic
plans and reports in such form and substance as required by the
Contracting Officer. These periodic plans and reports shall
address general management, schedule/labor/cost, performance
measurement, financial incentives, and other technical
information relating to performance under the Contract. Section
J, Attachment F (Reporting Requirements Checklist) provides
specific information regarding the required plans and reports,
frequency, due dates, reporting levels, distribution, and
thresholds which apply. Where
Section H - Page 6
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
specific forms are required for individual plans and reports, the
Contracting Officer shall provide such forms to the Contractor.
(2) Quarterly Critical Analysis (QCA). Once each quarter the
Contractor shall prepare and submit a comprehensive report which
critically analyzes the overall status of the closure project as
well as many key metrics. This report shall include overall
narrative summaries, analysis of schedule trends and projects
float, critical path performance, analysis of critical manpower
skills of other resources, budget and funding figures, and
project risk and contingency plan updates. Reporting elements
required for the QCA are indicated on the Section J, Attachment F
(reporting Requirements Checklist). Each QCA will be signed by
the top executive for the Contractor to revalidate the
Contractor's commitment and accountability for the project
performance.
(3) Report Consistency. Plans and reports shall be prepared in such
a manner as to provide for consistency with the contract
Statement of Work, the project baseline, the approved Work
Breakdown Structure, and correlation of data among the various
plans and reports. The reporting system established and
maintained by the Contractor pursuant to this clause shall
recognize changes in work effort directed by the Contracting
Officer. The Contractor's reporting system shall be able to
provide for the following at the PBD level:
1) Timely incorporation of contractual changes affecting
estimated cost and schedule;
2) Reconciliation of estimated costs for those elements of
the WBS or discrete cost accounts with current
performance measurement budgets in terms changes to the
authorized work and internal replanning;
3) Changes to records pertaining to work performed that will
change previously reported costs for correction of errors
and routine accounting adjustments;
4) Revisions to the Contract's estimated costs for
Government-directed changes to the contractual effort.
(4) Full Access. The Contractor shall provide the Contracting
Officer, or designated authorized representatives, access to any
and all information and documents comprising the Contractor's
project control and reporting system. Generally access will not
be requested more than one level below the level chosen by the
DOE for control and approval authority (PBD), except during
compliance reviews.
(5) Flow-Down of Reporting. The Contractor shall include graded
reporting requirements in all subcontracts adequate to fairly
evaluate performance. The full requirements of this clause shall
be in all cost-reimbursement type contracts when:
1) The value of the subcontract is greater than $12.5
million per year, unless specifically waived by the
Contracting Officer; or,
2) The Contracting Officer determines that the
contract/subcontract effort is, or involves, a critical
task related to the contract.
H.1.04 Baseline Change Management
(a) Baseline Changes. The baseline (which shall be defined for all purposes
notwithstanding any other language in this contract as the Rocky Flats
Closure Project Baseline) is the source document for all project control
and baseline change management. The processes for managing
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
and administering changes to all elements of the baseline shall be
timely, formal, and documented. Baseline changes shall be proposed when:
(1) Necessitated by significant project delays, events or other
impacts; or
(2) The parties have negotiated an equitable adjustment in accordance
with Clause, I.75 entitled "Changes - Cost Reimbursement" or
other clauses of this contract.
(b) Baseline Thresholds. Provided that the change does not affect Target
Cost and Target Schedule, the baseline change control thresholds for
technical, schedule, and cost changes shall be the lesser of the
following:
DOE Headquarters Level $40,000,000 or 20% of the PBD costs
on an annual basis
RFFO Level $20,000,000 or 10% of the PBD costs
on an annual basis
Contractor Level Up to the RFFO level
(c) Spending at Variance. In some circumstances the Contractor may exceed
authorized budget levels for a specific cost account when a baseline
change is not warranted, such as for cost overruns. The change control
system shall track, manage, and provide for approval of changes in
funding level as a separate but integrated part of the overall change
control process. Change control records shall maintain clear distinction
between approved changes in funding and baseline changes.
(d) Change Control Processing. Change proposals shall be initiated and
processed in a timely fashion consistent with the requirements of this
contract. Specific change control time frames for consideration and
approval will be established by the Contracting Officer. Each change
control threshold level shall accommodate emergency changes. A record of
all approved changes, at any level, shall be maintained through the life
of the project.
(e) A baseline update to the Rocky Flats Closure Baseline, revision 3a and
the Contractor's system of earned value will be submitted on June 30,
2000, and will include the following features:
o Will incorporate the Statement of Work and the terms and conditions of
this contract
o Will include baseline changes agreed to through June 30, 2000
o Will align project costs (budgeted cost of work scheduled plus
contingency) and the expected conditional incentive fee with the
annual funding level anticipated for this contract
o Will address Ernst and Young findings on the review of Revision 3a
o Will be developed at the same or lower level of detail as Revision 3a
The Contractor shall have the right to implement the revised baseline
and its system of earned value following submittal of the baseline,
subject to adjustments agreed between the parties.
(f) Target Cost and Schedule Adjustments. Any changes to target cost, target
fee, target date or target schedule incentive fee shall be executed only
by a contract modification pursuant to the contract terms and
conditions. Baseline changes will not imply the need for a contract
modification.
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
H.2 TECHNICAL DIRECTION
(a) In addition to those functions specifically reserved throughout this
contract for the Contracting Officer, the Contracting Officer shall be
the sole authority within the RFFO for establishment of Performance
Baseline Descriptions (PBDs), establishment of work priorities, and
directing work requiring the expenditure of funds which have been
obligated for performance of this contract.
(b) Certain actions that require the formal signature of a Contracting
Officer may be officially delegated in writing to Contracting Officer's
Representatives (CORs). For the purpose of this clause, a COR is an
individual designated by the Contracting Officer to act as an authorized
representative for such functions as technical monitoring, inspection,
and other functions of a technical nature not involving a change in the
scope, cost, terms or conditions of the contract. Copies of any such
delegations relating to this contract will be provided to the
Contractor. The Contractor shall comply with direction provided by the
COR. The following positions are identified as having COR authority:
Paul Golan, the Deputy Manager, authority for environmental restoration;
waste management; environmental/ ecological monitoring; nuclear material
management; building management; environment, safety, and health;
nuclear and criticality safety; emergency management; safeguards and
security; architect/engineering and construction management; regulatory
interface and commitment activities; operational baselines and planning;
performance measure development and validation; necessary and sufficient
program; management control system; authorization basis activities;
performance assessment; quality assurance; invoice reviews; and
operations management;
Mell Roy, Chief Counsel, authority for litigation management activities,
invoice reviews and approvals/disapprovals, and the administration of
the DOE Office of General Counsel Legal Services and Litigation
Management Policies and Procedures
Mary Ann Tinney, acting Field Chief Financial Officer, authority for
budget formulation and budget execution activities, finance and
accounting activities, audit and audit-related activities, financial
compliance activities, and invoice reviews;
Mary O. Hammack, Closure Project Communications, authority for Freedom
of Information Act requests;
Michael Weis, Assistant Manager for Field and Performance Assessment,
serving as the Deputy Manager's alternate COR, authority for
environmental restoration; waste management; environmental/ecological
monitoring; nuclear material management; building management;
environment, safety, and health; nuclear and criticality safety;
emergency management; safeguards and security; architect/engineering and
construction management; regulatory interface and commitment activities;
operational baselines and planning; performance measure development and
validation; necessary and sufficient program; management control system;
authorization basis activities; performance assessment; quality
assurance; invoice reviews; and operations management; and
Joe Legare, Assistant Manager for Environment and Infrastructure,
serving as the Deputy Manager's alternate COR, authority for
environmental restoration; waste management; environmental/ecological
monitoring; nuclear material management; building management;
environment, safety, and health; nuclear and criticality safety;
emergency management; safeguards and security; architect/engineering and
construction management; regulatory interface and commitment activities;
operational baselines and planning; performance measure development and
validation; necessary and sufficient program; management control system;
authorization basis activities; performance assessment; quality
assurance; invoice reviews; and operations management.
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
In addition to the above CORs, the Rocky Flats Field Office Manager has
full contracting authority in his/her capacity of Head of the
Contracting Activity. This authority is assumed by any individual he/she
designates to act as the Manager in his/her absence, when that designee
is acting within the limits of the Manager's delegation of authority.
Persons with written delegation of authority to act for the above CORs
on a temporary basis may sign authorizations within the CORs' authority.
Also, DOE personnel designated as Facility Representatives provide
technical oversight of operations to help line management assure that
the facilities are operated in a safe, healthful, and environmentally
acceptable manner in accordance with DOE Directives and other
requirements. As such, they have Stop Work and Shutdown Authorization
Authority.
(c) The performance of work by the Contractor, in compliance with the
Project Control System and PBDs, shall be subject to technical direction
from the CORs as follows:
(1) Directions to the Contractor which redirect the contract effort,
shift work emphasis within a work area or a PBD, require pursuit of
certain lines of inquiry, fill in details, or otherwise serve to
accomplish the contractual Statement of Work.
(2) Provision of written information to the Contractor which assists in
the interpretation of drawings, specifications, or technical
portions of the work description.
(3) Review and, where required by the contract, approval of reports,
drawings, specifications, and information to be delivered by the
Contractor to the Government under the contract.
(4) Monitoring compliance with applicable Environment, Safety and
Health provisions and DOE Rules and Orders.
(d) The Contractor shall only accept technical direction if provided in
writing and if within the provisions of the contract and the scope of
the closure project baseline. Technical direction shall not (1)
authorize the Contractor to exceed the total funds obligated on the
contract; (2) entitle the Contractor to any increase in the total amount
of fee set forth in the contract; (3) change any of the express terms or
conditions of the contract; or, (4) interfere with the Contractor's
rights under the terms and conditions of the contract.
(e) The Contractor shall proceed promptly with the performance required by
duly issued written technical directions. If, in the opinion of the
Contractor, any technical direction violates the prohibitions set forth
in paragraph (d) of this clause, the Contractor shall not proceed but
shall promptly orally notify the Contracting Officer of the direction
and reason(s) the direction violates the provisions of this clause. The
Contractor shall confirm this notification in writing within five (5)
workdays from receipt of DOE's written direction. The Contracting
Officer shall render a decision on whether or not the technical
direction is or is not within the Statement of Work of the contract and
whether or not a change order will be issued pursuant to the clause
entitled, "Changes." This decision shall be issued and/or confirmed in
writing, and the Contractor shall promptly comply with the DOE's
direction.
(f) A failure of the Contractor and DOE to agree that the technical
direction is within the scope of the contract, or a failure to agree
upon the contract action to be taken with respect thereto, shall be
subject to the provision of the clause entitled, "Disputes (Alternate
I)" (FAR 52.233-1).
H.3 STOP-WORK AND SHUTDOWN AUTHORIZATION
(a) In the event of an imminent health and safety hazard, identified by
facility line management or operators or facility health and safety
personnel overviewing facility operations, the individual or group that
identified the imminent hazard situation should immediately take actions
to eliminate or
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
mitigate the hazard (i.e., by directing the operator/implementer of the
activity or process causing the imminent hazard to stop work, or by
initiating emergency response actions or other actions) to protect the
health and safety of the workers and the public and to protect DOE
facilities and the environment. In the event an imminent health and
safety hazard is identified, the individual or group that identified the
hazard should coordinate with an appropriate Contractor official, who
will direct the shutdown or other actions, as required. Such mitigating
actions should subsequently be coordinated with the DOE Field Office
Manager and Contractor management. The suspension or stop work order
should be promptly confirmed in writing from the Contracting Officer.
(b) In the event of a non-imminent health and safety hazard identified by
facility line managers, facility operators, health and safety personnel
overviewing facility operations, or by independent oversight
organizations, the individual or group identifying the potential health
and safety hazard may recommend facility shutdown. However, the
recommendation must be coordinated with Contractor management, and the
responsible Field Office Manager. Any written direction to suspend
operation should be issued by the Contracting Officer.
(c) Imminent Health and Safety Hazard is a given condition or situation
which, if not immediately corrected, could result in serious injury or
death, including exposure to radiation and toxic/hazardous chemicals.
Imminent Danger in relation to the Facility Safety Envelope is a
condition, situation or proposed activity which, if not terminated could
cause, prevent mitigation of, or seriously increase the risk of (1)
Nuclear Criticality, (2) Radiation Exposure, (3) Fire/Explosion, and/or
(4) Toxic/Hazardous Chemical Exposure.
(d) DOE personnel designated as Facility Representatives provide technical
oversight of operations to help line management assure that the
facilities are operated in a safe, healthful, and environmentally
acceptable manner. As such, they have Stop Work and Shutdown Authority.
H.4 AUTHORIZATION AGREEMENT
(a) The purpose of this clause is to 1) formalize the Contractor's and the
DOE's utilization of Authorization Agreements substantially in the
format of Authorization Agreement Nos. RFETS-006 (Building 559) and
RFETS-013 (750/904 Pads) both of which can be found in Section J,
Attachment G of this Contract; and 2) establish the process for
development and administration of Authorization Agreements.
(b) The Contractor and the DOE will periodically negotiate separate
Authorization Agreements for designated Site facilities and activities.
Each Authorization Agreement will identify the Authorization Basis,
which includes the DOE approved facility or activity safety basis and
contains a control set, that when fully implemented, will support the
safe performance of work on Site. An Authorization Basis may be changed
to update a facility or activity's safety basis in accordance with Site
procedures. The current authorization basis for Site facilities and
activities is reflected in the Authorization Basis Document List.
(c) Authorization Agreement(s) will be signed by the Contracting Officer and
the Contractor's President. The effective date for each current and
future Authorization Agreement will be the date of the signature of the
party last to sign the Authorization Agreement, and on this date it will
be considered incorporated into this Contract by reference. Some
Authorization Agreements will contain the date by which the
Authorization Basis in the Authorization Agreement must be completely
implemented if not already implemented at the time of the signature of
the party last to sign the Authorization Agreement.
(d) Except for changes made to an Authorization Basis, under the procedures
referred to in subparagraph (c) above, an Authorization Agreement may
only be changed bilaterally in writing
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
by the Contracting Officer and the Contractor's President. Changes to an
Authorization Agreement shall be considered incorporated into this
Contract by reference.
H.5 PERFORMANCE GUARANTEE AGREEMENT
The Contractor's Guarantor organizations have provided a Performance
Guarantee Agreement in a manner and form acceptable to the Contracting Officer
assuring the performance, duties, and responsibilities of the Contractor will be
satisfactorily fulfilled. The Performance Guarantee Agreement is attached to and
made a part of this contract in Section J, Attachment A.
H.6 ROCKY FLATS CLEANUP AGREEMENT
The Rocky Flats Cleanup Agreement (RFCA), as of October 1, 1999, is the
legally binding agreement between the Department of Energy (DOE), the
Environmental Protection Agency (EPA), and the Colorado Department of Public
Health (CDPHE) to accomplish the required cleanup of radioactive and other
hazardous substances contamination at and from the Rocky Flats Environmental
Technology Site (RFETS). The Contractor agrees to plan and perform the work
under this contract consistent with the implementation of the RFCA requirements
and milestones.
H.7 ASSIGNMENT OF SUBCONTRACTS
The Government reserves the right to direct the Contractor to assign to
the Government or another contractor any subcontract awarded under this
contract.
H.8 INTERNAL AUDIT
The Contractor agrees to conduct internal audits and examinations,
satisfactory to DOE, of records, operations, expenses, and transactions with
respect to costs claimed to be allowable under this contract. The Contractor
shall submit, for the approval of the Contracting Officer, an audit plan for
internal audits of the Contractor and for audits of prime onsite, cost type
subcontractors. The official audit report(s), including the working papers (as
required), shall be submitted or made available to the Contracting Officer or
his/her designee. This clause does not supersede the Government's right to
perform self-initiated reviews, evaluations, or audits directed at improving the
efficiency of operations and an overall reduction in cost.
H.9 RESPONSIBILITIES FOR OPERATION/ TERMINATION OF BENEFITS SYSTEMS
(a) During the final six months of this contract, the Contracting Officer
shall provide written direction to the Contractor regarding certain
post-employment employee benefits systems, such as pension systems,
post-retirement medical insurance, post-retirement life insurance.
(b) The Contracting Officer may direct any of a number of potential means of
addressing the continuing responsibilities for these systems. The
direction will identify the potential means of addressing such
responsibilities that may include, but are not limited to: termination
of the plans in accordance with relevant laws and regulations,
continuation of the plans on a "pay-as-you-go" basis under a separate
contract with the Contractor, or transfer of plan responsibilities to
another contractor or a third party. The selection among these options
is at the sole discretion of the Contracting Officer. The Contractor
will implement the option as directed by the Contracting Officer.
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
(c) To the extent that the Contractor incurs costs under this contract in
implementing the Contracting Officer direction, the Contractor's
allowable costs will be reimbursed according to the Allowable Cost and
Payment provisions of this contract.
H.10 LITIGATION SUPPORT AND LITIGATION MANAGEMENT PLAN
(a) The Contractor shall prepare a Litigation Management Plan, in accordance
with the requirements set forth in the Department of Energy Office of
General Counsel Legal Services and Litigation Management Policies and
Procedures that shall be submitted to the Contracting Officer for
approval within 60 days of contract award. The plan shall include
procedures to manage both the costs and substantive aspects of
litigation, and shall address and apply to subcontractor litigation the
costs of which will be reimbursable as a direct cost. The plan should be
consistent with the DOE policy favoring Alternative Dispute Resolution
(ADR) techniques where appropriate and beneficial to the Government. The
plan will be revised from time to time to conform to litigation
management and ADR policies established by DOE.
(b) The Contractor may, with the prior written authorization of the
Contracting Officer or the Contracting Officer's Representative, and
shall, upon the request of the Government, initiate litigation against
third parties including proceedings before administrative agencies, in
connection with this contract. Unless otherwise directed by the
Contracting Officer or the Contracting Officer's Representative in
writing, the Contractor shall furnish, immediately, to the Contracting
Officer's Representative, copies of all filings and papers received by
the Contractor with respect to such action. The Contractor shall proceed
with such litigation in good faith and as directed from time to time by
the Contracting Officer or the Contracting Officer's Representative, and
in accordance with the DOE-approved Contractor litigation management
plan (including case management and cost guidelines) and as set forth in
the DOE Office of General Counsel Legal Services and Litigation
Management Policies and Procedures, as such procedures may be revised
from time to time, and if not otherwise made unallowable in this
contract.
(c) The Contractor shall give the Contracting Officer and the Contracting
Officer's Representative immediate notice in writing of any action,
including any proceeding before any administrative agency, filed against
the Contractor arising out of the performance of this contract. Except
as otherwise directed by the Contracting Officer or the Contracting
Officer's Representative in writing, the Contractor shall furnish,
immediately, to the Contracting Officer's Representative, copies of all
filings and papers received by the Contractor with respect to such
action. The Contractor shall proceed with such litigation in good faith
and as directed from time to time by the Contracting Officer or the
Contracting Officer's Representative and in accordance with the
DOE-approved Contractor litigation management plan (including case
management and cost guidelines) and as set forth in the DOE Office of
General Counsel Legal Services and Litigation Management Policies and
Procedures, as such procedures may be revised from time to time, and if
not otherwise made unallowable in this contract.
(d) If any suit or action is filed or any claim is made against the
Contractor, the cost and expense of which may be reimbursable to the
Contractor under this contract and the risk of which is then uninsured
or is insured for less than the amount claimed, the Contractor shall:
(1) Immediately notify the Contracting Officer and Contracting
Officer's Representative and promptly furnish copies of all
filings and papers received;
(2) Authorize Government representatives to collaborate with (I)
in-house or approved outside counsel in settling or defending the
claim, or (ii) counsel for the insurance carrier in settling or
defending the claim when the amount of the liability claimed
exceeds the amount of coverage, unless precluded by the terms of
the insurance contract; and,
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
(3) Authorize Government representatives to settle the claim or to
defend or represent the Contractor in and/or to take charge of
any litigation if required by the Department when the liability
is not insured or covered by bond. In any action against more
than one Department Contractor, the Department may require the
Contractor to be represented by common counsel. Counsel for the
Contractor may, at the Contractor's expense, be associated with
the Department representatives in any such claim or litigation.
(e) The term "filings and papers" as used in paragraph H.10 includes any
document (draft or final) related to an anticipated or instant case,
pending legal proceeding (judicial or administrative) involving
contractor or subcontractor litigation the costs of which will be
reimbursable as a direct cost.
(f) The Contractor and its subcontractors shall provide litigation support
to the Government when requested by the Contracting Officer or
Contracting Officer's Representative in cases of actual or threatened
litigation, regulatory matters, or third-party claims and subject to
applicable rules and regulations. Litigation support includes, but is
not limited to case preparation assistance, document retrieval, review
and reproduction, witness preparation and testimony, expert witness
testimony, and assisting Government counsel as necessary in response to
discovery or other information related activities responsive to any
legal proceeding.
H.11 KEY PERSONNEL
(a) The Contractor shall submit for DOE approval a list of key personnel
within 30 days of contract award. The personnel specified in the
submittal are considered to be essential to the work being performed on
this contract. Prior to diverting to other positions or substituting
any of the specified individuals, the Contractor shall notify the
Contracting Officer in writing at least 30 days in advance and shall
submit justification (including proposed substitutions) in sufficient
detail to permit Rocky Flats Field Office evaluation of the impact on
the Site Closure Project. No diversion or substitution shall be made by
the Contractor without the written consent of the Contracting Officer,
provided that the Contracting Officer may ratify in writing such
diversion or substitution, and such ratification shall constitute the
consent of the Contracting Officer required by this clause. Under no
circumstances will a key personnel position remain unfilled, acting
replacements aside, for more than four months. Failure to adhere to
this provision may be classified as a Category 3 event.
(b) Key Personnel are those positions identified by the Contractor and
approved by DOE in accordance with subparagraph (a) above. Reimbursement
of severance payments made to Key Personnel will be consistent with that
for non-Key Personnel.
H.12 CONTRACTOR SELF-PERFORMANCE
The Contractor is expected to provide project management and planning
for the Project while subcontracting the preponderance of the work to
specialized subcontractors. It is the goal of the parties that at least 80
percent of the work (as measured by contract cost) be subcontracted. Before
deciding to perform any of the remediation, waste management, environmental
restoration, decontamination, demolition, or site support services with its own
forces, the Contractor shall provide a detailed make-or-buy analysis for review
and approval by the Contracting Officer. The make-or-buy analysis, as described
in FAR 15.407-2 must be provided no later than 15 days in advance of any
self-performance.
H.13 PATENT INDEMNITY SUBCONTRACTS
Except as otherwise authorized by the Contracting Officer, the
Contractor shall obtain indemnification of the Government and its officers,
agents, and employees against liability, including costs,
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
for infringement of U.S. Letters Patent (except Letters Patent issued upon an
application which is now or may hereafter be kept secret or otherwise withheld
from issue by order of the Government) from the Contractor's subcontractors for
any contract work subcontracted on the terms and in accordance with the Federal
Acquisition Regulations as may be supplemented by the Department of Energy
Acquisition Regulations.
H.14 AUTHORIZATION AND CONSENT IN COPYRIGHT
In the case of suit or potential suit in copyright infringement, the
Contractor may request authorization and consent in copyright from DOE.
Programmatic necessity shall be a major consideration in grant of authorization
and consent.
H.15 ROYALTY INFORMATION DURING TERM OF CONTRACT
(a) Cost of charges for royalties. If any royalty payments are directly
involved in the contract or will be charged to the Government as costs
under the contract, the Contractor agrees to report to the Contracting
Officer the following information relating to each separate item of
royalty or license fee:
(1) Name and address of licensor.
(2) Date of license agreement.
(3) Patent numbers, patent application serial numbers, or other
basis on which the royalty is payable.
(4) Brief description, including any part or model numbers of each
contract item or component on which the royalty is payable.
(5) Percentage or dollar rate of royalty per unit.
(6) Unit price of contract item.
(7) Number of units.
(8) Total dollar amount of royalties.
(b) Copies of current licenses. In addition, if specifically requested by
the Contracting Officer, the Contractor shall furnish a copy of the
current license agreement and an identification of applicable claims of
specific patents of other basis upon which the royalty is payable.
(c) The Contractor shall follow the procedures of 48 CFR 27.204 and 48 CFR
927.206 in all subcontracting.
H.16 ALTERNATE DISPUTE RESOLUTION
The DOE and Contractor both recognize that methods for fair and
efficient dispute resolution are essential to the successful completion of the
closure of the Rocky Flats site by the Target Date and for the Target Cost
identified in Section B of this contract. To facilitate the prevention and early
resolution of disputes, the parties agree to the following alternative dispute
resolution (ADR) provisions:
(a) Dispute Avoidance
(1) The Government and Contractor agree to participate in a
partnering workshop, to be conducted by an experienced
professional, jointly agreed upon by the parties, within 30 days
after execution of the contract.
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
(2) The parties also agree to jointly select a "standing neutral" to
be available to help resolve disputes as soon as they arise. This
can be an individual or a company with specific expertise in this
area. If a neutral cannot be agreed upon, the DOE Office of
Dispute Resolution will assist the parties in this selection. The
specific ADR process(es) and procedures, as well as the selection
of the "standing neutral" will be determined at the partnering
workshop.
(b) Early Resolution of Disputes
(1) The Government and Contractor shall use their best efforts to
informally resolve any dispute, claim, question or disagreement,
by consulting and negotiating with each other in good faith,
recognizing their mutual interests, and attempting to reach a
just and equitable solution satisfactory to both parties. If an
agreement cannot be reached through informal negotiations, then
such disagreement shall be referred to the "standing neutral,"
pursuant to the procedures jointly developed in the partnering
workshop.
(2) If the neutral offers a non-binding advisory opinion, it shall
not be admissible in evidence in any subsequent proceeding. All
costs incurred by the Contractor in connection with the "standing
neutral" shall, if reasonable, be an allowable cost reimbursable
under this contract.
(c) Formal Complaint. If the dispute has not been resolved through the
"standing neutral" process, either party may request ADR under the
Disputes Clause of the contract.
H.17 CONTRACT TRANSITION
(a) The Contractor and the DOE agree that Contractor work completed prior to
the effective date of this contract, and any liabilities associated with
that work shall be governed by the terms and conditions of Contract
Number DE-AC34-94RF00825 ("previous contract"). Any performance measure
fee payable for incremental work completed under the previous contract
up to effective date of this contract shall be paid in accordance with
the terms of the previous contract. For work completed during the
previous contract (number DE-AC34-94RF00825), the Contractor shall be
entitled to submit completion reports after the conclusion of that
contract. Further, the DOE and the Contractor mutually agree to release
and give up all unresolved claims, and claims by the DOE as set forth on
the listing of claims included as Attachment I in Section J. Nothing in
this subparagraph shall alter the obligations of the parties to close
out the previous contract in accordance with its terms.
(b) The contract terms and conditions of this contract including those
relating to the payment of fee shall govern the execution of work
beginning after the start date set forth in Clause F.2. The terms and
conditions governing the performance of work under contract
DE-AC-34-95RF00825 shall cease to be operative irrespective of the
completion date of that contract.
H.18 EVALUATION OF SUBCONTRACTORS
The DOE and Contractor are committed to zero accidents at the RFETS. To
that end, the Contractor will evaluate all site subcontractors to ensure that
they have an acceptable environment, safety and health (ES&H) program, a program
which contains the following values:
o Compliant with applicable local, state and federal regulatory requirements.
o Employees are properly trained and equipped to perform their assigned work.
The Company has an established orientation program for new hires.
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Rocky Flats Closure Contract No. DE-AC34-00RF01904
o Policies and procedures are in place to eliminate accidents,
injuries/illnesses, and damage to property and equipment.
o ES&H records are adequately and properly maintained.
o Accidents/incidents are investigated promptly and required reports are
generated. If the investigation discovers inadequacies in either the work
process or the policies and procedures, the appropriate processes are put in
place to avert the accident/incident in the future and personnel are
provided proper training.
o Hazards are identified and appropriate measures are taken to ensure that
personnel and equipment are adequately protected as a result of identified
hazards.
o Employees have the right to report unsafe conditions and to interrupt or
stop work without fear of reprisal.
o The frequency of ES&H meetings with employees to discuss the work to be
performed and the hazards associated with the work is based upon the scope
of work and commensurate with the work hazards.
o ES&H inspections/audits are conducted to evaluate effectiveness of the
program.
o The Company has an average Experience Modification Rate (EMR), Occupational
Safety and Health Administration (OSHA) Recordable, and Lost Workday case
rate(s) of (1.0, 3.2, and 0.64), respectively, or less, for the previous
three (3) years and shows an improving trend in safety performance.
o The Company has an established written Hazard Communication Program and a
system within the program to maintain Material Safety Data Sheets (MSDS).
o The Company has had no willful citations from OSHA or other regulatory
organizations during the previous three (3) years.
o The Company has received no citations, other than those determined to be
minor violations, or fines for Price-Anderson Amendments Act (PAAA)
non-compliances during the previous three (3) years.
o The Company has received no fines for Nuclear Regulatory Commission
non-compliances during the previous three (3) years.
H.19 EMPLOYEE PERFORMANCE INCENTIVES AND REWARD AND RECOGNITION
The Contractor and its subcontractors may establish monetary incentive
programs to motivate and recognize employees and improve performance. Such
awards will be based on a combination of individual and company performance
aligned to achievement of closure mission objectives. The annual cost of such
programs will be an allowable cost to the Contractor upon Contracting Officer
approval of the overall program as required by DOE Orders. However, the cost to
DOE will not exceed four percent (4%) of annual gross payroll for any given
year.
Section H - Page 17
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
H.20 Labor disputes and whistleblower actions
(a) Labor settlement costs (awards) can arise from judicial orders,
negotiated agreements, arbitration, or an order from a Federal agency or
board. The awards generally involve a violation in one of the following
areas:
(1) Equal Employment Opportunity (EEO) laws,
(2) Union agreements,
(3) Federal labor laws, and
(4) Whistleblower protection laws.
(b) An award or settlement can cover compensatory damages, or underpayment
for work performed. Reimbursement for a complainant employee's legal
counsel may also be covered by an award or settlement.
(c) The allowability of these costs should be determined on a case-by-case
basis after considering the relevant terms of the contract and the
surrounding circumstances; i.e., looking behind the settlement and
considering the causes. If the dispute resulted from actions that would
be taken by a prudent business person (FAR 31.201-3 and 48 CFR (DEAR)
970.3101-3), the costs would be allowable. However, if the dispute was
occasioned by contractor actions which are unreasonable or were found by
the agency or board ruling on the dispute to be caused by unlawful,
negligent or other malicious conduct, the costs would be unallowable.
(d) The allocability of these costs must also be reviewed (FAR 31.201-4 and
48 CFR (DEAR) 970.3101-3). In some circumstances an award may not impact
direct costs, but may be determined to be an allowable indirect cost.
(e) Litigation costs incurred as part of labor settlements shall be
differentiated and accounted for so as to be separately identifiable. If
a contracting officer provisionally disallows such costs, the contractor
may not use funds advanced by DOE to finance litigation costs connected
with the defense of a labor dispute or whistleblower action.
(f) Settlement and litigation costs associated with actions resolved prior
to an adverse determination or finding against a contractor through
judicial action or an agency board will, depending on the circumstances
and facts of each case, generally be allowable, if consistent with
paragraph (c) of this section. Litigation costs associated with an
adverse determination against the contractor require a higher level of
scrutiny before a determination of allowability can be made.
Section H - Page 18
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
This page intentionally left blank.
Section H - Page 19
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Clause # FAR Reference Title Fill-In Information (See FAR 52.104(d))
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
I. 1 FAR 52.202-1 Definitions (OCT 1995) None
I. 2 FAR 52.203-3 Gratuities (APR 1984) None
I. 3 FAR 52.203-5 Covenant Against Contingent Fees (APR 1984) None
I. 4 FAR 52.203-6 Restrictions on Subcontractor Sales to the
Government (JUL 1995) None
I. 5 FAR 52.203-7 Anti-Kickback Procedures (JUL 1995) None
I. 6 FAR 52.203-8 Cancellation, Rescission, and Recovery of
Funds for Illegal or Improper Activity
(JAN 1997) None
I. 7 FAR 52.203-10 Price or Fee Adjustment for Illegal or Improper
Activity (JAN 1997) None
I. 8 FAR 52.203-12 Limitation on Payments to Influence certain
Federal Transactions (JUN 1997) None
I. 9 FAR 52.204-1 Approval of Contract (DEC 1989) Procurement Executive, Department
of Energy
I. 10 FAR 52.204-4 Printing/Copying Double-Sided on Recycled
Paper (JUN 1996) None
I. 11 FAR 52.209-6 Protecting the Government's Interest When
Subcontracting with Contractors Debarred,
Suspended or Proposed for Debarment (JUL 1995) None
I. 12 FAR 52.215-2 Audit and Records -- Negotiation (JUN 1999) None
I. 13 FAR 52.215-8 Order of Precedence -- Uniform Contract
Format (OCT 1997) None
I. 14 FAR 52.215-9 Changes or Additions to Make or Buy Program
(OCT 1997) None
I. 15 FAR 52.215-10 Price Reduction for Defective Cost or Pricing
Data (OCT 1997) None
I. 16 FAR 52.215-12 Subcontractor Cost or Pricing Data (Oct 1997) None
I. 17 FAR 52.215-13 Subcontractor Cost or Pricing Data--
Modifications (OCT 1997) None
I. 18 FAR 52.215-15 Termination of Defined Benefit Pension Plans
(OCT 1997) None
I. 19 FAR 52.215-17 Waiver of Facilities Capital Cost of Money
(OCT 1997) None
I. 20 FAR 52.215-18 Reversion or Adjustment of Plans for
Postretirement Benefits (PRB) Other than
Pensions (OCT 1997) None
I. 21 FAR 52.215-19 Notification of Ownership Changes (OCT 1997) None
I. 22 FAR 52.216-7 Allowable Cost and Payment (APR 1998) None
</TABLE>
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
<TABLE>
<CAPTION>
<S> <C> <C> <C>
I. 23 FAR 52.216-10 Incentive Fee (MAR 1997) e) Fee payable. (1) The fee payable
under this contract shall be the
target fee increased by thirty (30)
cents for every dollar that the
total allowable cost is less than
$3,963,000,000 or decreased by
thirty (30) cents for every dollar
that the total allowable cost
exceeds $4,163,000,000. If the
total allowable cost is between
$3,963,000,000 and $4,163,000,000,
the fee payable shall be the
Target Fee. In no event shall the
total fee payable be greater than
11.6 percent ($460 million) of Target
Cost or less than 3.77 percent
($150 million) of Target Cost. The
provisions set forth above are
depicted by the curve included in
Section J, Attachment H.
I. 24 FAR 52.219-4 Notice of Price Evaluation Preference for
HUBZone Small Business Concerns (JAN 1999) None
I. 25 FAR 52.219-8 Utilization of Small Business Concerns
(JAN 1999) None
I. 26 FAR 52.219-9 Small Business Subcontracting Plan (JAN 1999) -
Alternate II (JAN 1999) None
I. 27 FAR 52.219-16 Liquidated Damages -- Subcontracting Plan
(JAN 1999) None
I. 28 FAR 52.219-23 Notice of Price Evaluation Adjustment for Small
Disadvantaged Business Concerns (OCT 1998) "N/A - Noncompetitive award"
I. 29 FAR 52.219-25 Small Disadvantaged Business Participation
Program -- Disadvantaged Status and Reporting
(JAN 1999) None
I. 30 FAR 52.222-1 Notice to the Government of Labor Disputes
(FEB 1997) None
I. 31 FAR 52.222-3 Convict Labor (AUG 1996)
I. 32 FAR 52.222-4 Contract Work Hours and Safety Standards Act --
Overtime Compensation (JUL 1995) None
I. 33 FAR 52.222-17 Labor Standards for Construction Work --
Facilities Contracts (FEB 1988) None
I. 34 FAR 52.222-21 Prohibition of Segregated Facilities (FEB 1999) None
I. 35 FAR 52.222-26 Equal Opportunity (FEB 1999) None
I. 36 FAR 52.222-35 Affirmative Action for Disabled Veterans and
Veterans of the Vietnam Era (APR 1998) None
I. 37 FAR 52.222-36 Affirmative Action for Workers with Disabilities
(JUN 1998) None
I. 38 FAR 52.222-37 Employment Reports on Disabled Veterans and
Veterans of the Vietnam Era (JAN 1999) None
I. 39 FAR 52.222-41 Service Contract Act of 1965, as amended
(MAY 1989) None
I. 40 FAR 52.223-2 Clean Air and Water (APR 1984) None
I. 41 FAR 52.223-3 Hazardous Material Identification and Material (b)Hazardous material will be
Safety Data (JAN 1997) - Alternate I (JUL 1995) identified as the contract
progresses, and is much too
extensive to be listed
inclusively in this contract
clause.
I. 42 FAR 52.223-5 Pollution Prevention and Right-to-Know
Information (APR 1998) None
I. 43 FAR 52.223-7 Notice of Radioactive Materials (JAN 1997) (a) Notice shall be provided in
accordance with relevant laws,
orders, directives, and
regulations.
</TABLE>
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
<TABLE>
<CAPTION>
<S> <C> <C> <C>
I. 44 FAR 52.223-10 Waste Reduction Program (OCT 1997) None
I. 45 FAR 52.223-11 Ozone-Depleting Substances (JUN 1996) None
I. 46 FAR 52.223-12 Refrigeration Equipment and Air Conditioners
(JUN 1996) None
I. 47 FAR 52.223-14 Toxic Chemical Release Reporting (OCT 1996) None
I. 48 FAR 52.224-1 Privacy Act Notification (APR 1984) None
I. 49 FAR 52.224-2 Privacy Act (APR 1984) None
I. 50 FAR 52.225-3 Buy American Act -- Supplies (JAN 1994) None
I. 51 FAR 52.225-11 Restrictions on Certain Foreign Purchases
(AUG 1998) None
I. 52 FAR 52.226-1 Utilization of Indian Organizations and
Indian-Owned Economic Enterprises (JAN 1999) None
I. 53 FAR 52.227-1 Authorization and Consent (JUL 1995) None
I. 54 FAR 52.227-2 Notice and Assistance Concerning Patent and
Copyright Infringement (AUG 1996) None
I. 55 FAR 52.227-6 Royalty Information (APR 1984) None
I. 56 FAR 52.227-23 Rights to Proposal Data (Technical) (JUN 1987) Except for data contained on
pages none, it is agreed that
as a condition of award of
this contract, and
notwithstanding the conditions
of any notice appearing
thereon, the Government shall
have unlimited rights (as
defined in the "Rights in
Data--General" clause
contained in this contract) in
and to the technical data
contained in the proposal
dated November 1, 1999 as
modified by letter submitted
November 4, 1999
(RGC-116-99/99-RF-04306),
upon which this contract is based.
I. 57 FAR 52.229-3 Federal, State, and Local Taxes (JAN 1991) None
I. 58 FAR 52.230-2 Cost Accounting Standards (APR 1998) None
I. 59 FAR 52.230-6 Administration of Cost Accounting Standards
(APR 1996)
I. 60 FAR 52.232-17 Interest (JUN 1996) None
I. 61 FAR 52.232-18 Availability of Funds (APR 1984) None
I. 62 FAR 52.232-22 Limitation of Funds (APR 1984) None
I. 63 FAR 52.232-23 Assignment of Claims , Alternate I (APR 1984) None
I. 64 FAR 52.232-25 Prompt Payment (JUN 1997) None
I. 65 FAR 52.232-34 Electronic Funds Transfer (MAY 1999) None
I. 66 FAR 52.233-1 Disputes (DEC 1998) -- Alternate I (DEC 1991) None
I. 67 FAR 52.233-3 Protest After Award (AUG 1996) -- Alternate I
(JUN 1985) None
I. 68 FAR 52.237-2 Protection of Government Buildings, Equipment,
and Vegetation (APR 1984) None
I. 69 FAR 52.237-3 Continuity of Services (JAN 1991) None
I. 70 FAR 52.239-1 Privacy or Security Safeguards (AUG 1996) None
I. 71 FAR 52.242-1 Notice of Intent to Disallow Costs (APR 1984) None
I. 72 FAR 52.242-3 Penalties for Unallowable Costs (OCT 1995) None
I. 73 FAR 52.242-13 Bankruptcy (JUL 1995) None
I. 74 FAR 52.242-15 Stop-Work Order (AUG 1989) -- Alternate I
(APR 1984) None
I. 75 FAR 52.243-2 Changes -- Cost Reimbursement (AUG 1987) --
Alternate I (APR 1984) None
I. 76 FAR 52.243-6 Change Order Accounting (APR 1984) None
</TABLE>
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
<TABLE>
<CAPTION>
<S> <C> <C> <C>
I. 77 FAR 52.244-2 Subcontracts (AUG 1998) (e) As directed separately in
writing by the Contracting
Officer (k) Any subcontract
for which the Contractor
received written Contracting
Officer consent previously
under Contract
DE-AC34-95RF00825.
I. 78 FAR 52.244-5 Competition in Subcontracting (DEC 1996) None
I. 79 FAR 52.244-6 Subcontracts for Commercial Items and
Commercial Components (OCT 1998) None
I. 80 FAR 52.245-5 Government Property (Cost Reimbursement,
Time-and-Material, or Labor-Hour Contracts)
(JAN 1986) None
I. 81 FAR 52.246-5 Inspection of Services (Cost-Reimbursement)
(APR 1984) None
I. 82 FAR 52.246-25 Limitation of Liability -- Services (FEB 1997) None
I. 83 FAR 52.247-1 Commercial Bill of Lading Notations (APR 1984) (a) U. S. Department of Energy
(b) U. S. Department of Energy
Contract No. DE-AC34-00RFO1904
U. S. Department of Energy,
Rocky Flats Field Office,
Contracts Management Division,
10808 Highway 93, Unit A,
Golden, CO 80403-8200
I. 84 FAR 52.247-63 Preference for U.S.-Flag Air Carriers (JAN 1997) None
I. 85 FAR 52.249-6 Termination (Cost Reimbursement) (SEP 1996) None
I. 86 FAR 52.249-14 Excusable Delays (APR 1984) None
I. 87 FAR 52.251-1 Government Supply Sources (APR 1984) None
I. 88 FAR 52.251-2 Interagency Fleet Management System Vehicles
and Related Services (Jan 1991) None
I. 89 FAR 52.252-2 Clauses Incorporated by Reference (FEB 1998) http://www.arnet.gov/far;
http://www.pr.doe.gov/dear.html
I. 90 FAR 52.252-6 Authorized Deviations in Clauses (APR 1984) (b) The use in this
solicitation or contract of
any Department of Energy
Acquisition Regulation (48
CFR Part 9) clause with an
authorized deviation is
indicated by the addition
of "(DEVIATION)" after the
name of the regulation
I. 91 FAR 52.253-1 Computer Generated Forms (JAN 1991)
I. 92 DEAR 952.202-1 Definitions (JAN 1997) None
I. 93 DEAR 952.204-2 Security (SEP 1997) None
I. 94 DEAR 952.204-70 Classification/Declassification (SEP 1997) None
I. 95 DEAR 952.204-71 Sensitive Foreign Nations Controls (APR 1994) None
I. 96 DEAR 952.204-74 Foreign Ownership, Control, or Influence over
Contractor (APR 1984) None
I. 97 DEAR 952.208-7 Tagging of Leased Vehicles (APR 1984) None
I. 98 DEAR 952.209-72 Organizational Conflicts of Interest
(JUN 1997) Alternate I None
</TABLE>
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
<TABLE>
<CAPTION>
<S> <C> <C> <C>
I. 99 DEAR 952.222-70 Whistleblower Protection for Contractor
Employees (APR 1999) None
I. 100 DEAR 952.217-70 Acquisition of Real Property (APR 1984) None
I. 101 DEAR 952.223-75 Preservation of Individual Occupational
Radiation Exposure Records (APR 1984) None
I. 102 DEAR 952.224-70 Paperwork Reduction Act (APR 1994) None
I. 103 DEAR 952.226-74 Displaced Employee Hiring Preference (JUN 1997) None
I. 104 DEAR 952.237-70 Collective Bargaining Agreements -- Protective
Services (AUG 1993) None
I. 105 DEAR 952.245-5 Government Property (Cost Reimbursement, time
and materials or labor cost) None
I. 106 DEAR 952.247-70 Foreign Travel (FEB 1997) None
I. 107 DEAR 952.250-70 Nuclear Hazards Indemnity Agreement (JUN 1996) None
I. 108 DEAR 952.251-70 Contractor Employee Travel Discounts (JUN 1995) None
I. 109 DEAR 970.5204-2 Integration of Environment, Safety, and Health
into Work Planning and Execution (JUN 1997) None
I. 110 DEAR 970.5204-31 Insurance -- Litigation and Claims (JUN 1997) None
I. 111 DEAR 970.5204-58 Workplace Substance Abuse Programs at DOE Sites
(AUG 1992) None
I. 112 DEAR 970.5204-72 Patent Rights -- Profit Making Management and
Operating Contractors (MAR 1995) None
I. 113 DEAR 970.5204-75 Pre-Existing Conditions (JUNE 1997) None
I. 114 DEAR 970.5204-77 Workforce Restructuring Under Section 3161 of
the National Defense Authorization Act for
Fiscal Year 1993 (JUN 1997) None
I. 115 DEAR 970.5204-78 Laws, Regulations, and DOE Directives
(JUN 1997) None
I. 116 DEAR 970.5204-79 Access To and Ownership of Records (JUN 1997) None
I. 117 DEAR 970.5204-82 Rights in Data -- Facilities (FEB 1998) None
I. 118 DEAR 970.5204-86 Conditional Payment of Fee (APR 1999) None
</TABLE>
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
PART III - LIST OF DOCUMENTS, EXHIBITS, AND OTHER ATTACHMENTS
SECTION J
LIST OF ATTACHMENTS
Attachment A Performance Guarantees
Attachment B List of DOE Orders
Attachment C Small and Small Disadvantaged Business Subcontracting
Plan
Attachment D Representations and Certifications
Attachment E Key Personnel
Attachment F Reporting Requirements Checklist
Attachment G Authorization Agreements
Attachment H Schedule and Cost Incentive Graphs
Attachment I Listing of Claims
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION J
ATTACHMENT B
LAWS, REGULATIONS, AND DOE DIRECTIVES APPLICABLE TO RFETS
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION J
ATTACHMENT B
LAWS, REGULATIONS, AND DOE DIRECTIVES APPLICABLE TO RFETS
---------------------------------------------------------
The DOE Directives and Laws found in the following listing are the "List of
Applicable Laws and Regulations," "List of Applicable Directives" and "Lists A
and B" as those terms are used in paragraph (b) of Clause I.115, LAWS,
REGULATIONS, AND DOE DIRECTIVES. Exemptions, waivers and variances that exist in
contract DE-AC34-95RF00825 will carry forward to this contract. This is not
necessarily an all-inclusive list. The Contractor should follow the established
exemption process to obtain relief from requirements of these regulations where
applicable.
Section C refers to Statements of Commitment which detail a tailored and focused
application of Directives for a closure project. The Field Office will enable
this tailoring through a "best efforts" approach.
It is anticipated that during the performance of this contract, the conditions
for applicability of certain DOE Directives may no longer exist. For example,
when special nuclear materials (SNM) are removed from the site, the conditions
for applicability of those DOE Directives addressing safeguard and security of
such material may no longer exist. In any such situation where the Contractor
seeks relief from the requirements of such DOE Directives, the Contractor may
notify the Contracting Officer in writing, explaining the reasons for its belief
that the DOE Directives no longer apply to contract performance. The Contractor
may, at its own risk and assumption of all responsibility, cease to fulfill the
requirements of such DOE Directives once written notification has been delivered
to the Contracting Officer. The Contracting Officer may determine that the
conditions for applicability of a DOE Directive still exist, and may direct the
Contractor to continue compliance with the DOE Directive. Additionally, even
without such direction by the Contracting Officer, if the conditions for
applicability of a DOE Directive once again arise (e.g., SNM is discovered
unexpectedly during demolition efforts), the DOE Directive will immediately
become applicable once again. Sections or paragraphs of DOE Directives which are
not applicable to RFETS (e.g., DOE C 460.2 Section 2 relative to shipping
information on SNF and HLW) are self deleting.
LIST A: Applicable Laws and Regulations
10 CFR 835 RADIOLOGICAL PROTECTION
10 CFR 830.120 QUALITY ASSURANCE
10 CFR 850 BERYLLIUM
LIST B. Applicable DOE Directives
DOE C 140.1-1A DEPARTMENT OF ENERGY INTERFACE WITH THE DEFENSE
NUCLEAR FACILITIES SAFETY BOARD 01-26-99
DOE C 151.1 COMPREHENSIVE EMERGENCY MANAGEMENT SYSTEM 08-21-96
DOE C 200.1 INFORMATION MANAGEMENT PROGRAM 09-30-96
DOE M 200.1-1 TELECOMMUNICATIONS SECURITY MANUAL 03-15-97
DOE N 205.1 UNCLASSIFIED CYBER SECURITY PROGRAM 07-26-99
DOE C 210.1 PERFORMANCE INDICATORS AND ANALYSIS OF OPERATIONS
INFORMATION 09-27-95
DOE C 224.1 CONTRACTOR PERFORMANCE-BASED BUSINESS MANAGEMENT
Section J, Attach B - Pg 1
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
PROCESS 12-08-97
DOE C 225.1A ACCIDENT INVESTIGATIONS 11-26-97
DOE M 231.1-1 ENVIRONMENT, SAFETY AND HEALTH REPORTING MANUAL 09-30-95
CHANGE 001 11-07-96
DOE C 232.1A OCCURRENCE REPORTING AND PROCESSING OF OPERATIONS
INFORMATION 07-21-97
DOE C 241.1 SCIENTIFIC AND TECHNICAL INFORMATION MANAGEMENT 08-17-98
DOE M 232.1-1A OCCURRENCE REPORTING AND PROCESSING OF OPERATIONS
INFORMATION 07-21-97
DOE C 311.1A EQUAL EMPLOYMENT OPPORTUNITY AND DIVERSITY
PROGRAM 12-30-96
DOE C 350.1 CONTRACTOR HUMAN RESOURCE MANAGEMENT PROGRAMS,
Change 1 05-08-98
DOE C 413.1 MANAGEMENT CONTROL PROGRAM 12-06-95
DOE C 414.1A QUALITY ASSURANCE 11-24-98
DOE C 420.1 FACILITY SAFETY 10-13-95
DOE O 425.1A STARTUP AND RESTART OF NUCLEAR FACILITIES 12-28-98
DOE O 430.1A LIFE CYCLE ASSET MANAGEMENT 10-14-98
DOE O 435.1 RADIOACTIVE WASTE MANAGEMENT 07-09-99
DOE C of N 440.1 PERFORMANCE ELEMENTS FOR DEVELOPMENT OF A CHRONIC
BERYLLIUM DISEASE PREVENTION PROGRAM 7-15-97
DOE C of O 440.1A WORKER PROTECTION MANAGEMENT FOR DOE FEDERAL 03-27-98
AND CONTRACTOR EMPLOYEES
DOE N 441.1 RADIOLOGICAL PROTECTION FOR DOE ACTIVITIES 09-29-95
DOE O 442.1 DEPARTMENT OF ENERGY EMPLOYEE CONCERNS PROGRAM 02-01-99
DOE C 460.1A PACKAGING AND TRANSPORTATION SAFETY 10-02-96
DOE C 460.2 DEPARTMENTAL MATERIALS TRANSPORTATION AND
PACKAGING MANAGEMENT 09-27-95
DOE C 470.1 CONTRACTOR SAFEGUARDS AND SECURITY PROGRAM
REQUIREMENTS 09-28-95
DOE C 470.2 SAFEGUARDS AND SECURITY INDEPENDENT OVERSIGHT
PROGRAM
DOE C 471.1 IDENTIFICATION AND PROTECTION OF UNCLASSIFIED
CONTROLLED NUCLEAR INFORMATION 08-11-99
DOE C 471.2A INFORMATION SECURITY PROGRAM 03-27-97
Section J, Attach B - Pg 2
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
DOE M 471.2-1B CLASSIFIED MATTER PROTECTION AND CONTROL MANUAL 01-06-99
DOE M 471.2-2 CLASSIFIED INFORMATION SYSTEMS SECURITY MANUAL 08-03-99
DOE C 472.1B PERSONNEL SECURITY ACTIVITIES 03-24-97
DOE M 473.2-1 FIREARMS QUALIFICATION COURSES MANUAL 07-08-97
CHANGE 001 08-21-97
DOE O 474.1 CONTROL AND ACCOUNTABILITY OF NUCLEAR MATERIALS 08-11-99
DOE M 474.1-1 MANUAL FOR CONTROL AND ACCOUNTABILITY OF NUCLEAR
MATERIALS 08-11-99
DOE M 474.1-2 NUCLEAR MATERIALS MANAGEMENT AND SAFEGUARDS
SYSTEM REPORTING AND DATA SUBMISSION 02-10-98
CHANGE 001 04-27-98
CHANGE 002 11-16-98
DOE C 475.1-1 IDENTIFYING CLASSIFIED INFORMATION 05-08-98
[Includes only Attachment 2, the CRD document
within Manual 475.1-1, along with the
Definitions in Attachment 1 and the
"Index-CRD".]
N/A ACCOUNTING HANDBOOK Undated
(This document issued 10/17/95 by letter,
E.E. Smedley to distribution)
DOE O 1240.2B UNCLASSIFIED VISITS AND ASSIGNMENTS BY FOREIGN
NATIONALS 08-21-92
CHANGE 001 09-03-92
DOE O 1270.2B SAFEGUARDS AGREEMENT WITH THE INTERNATIONAL
ATOMIC ENERGY AGENCY 06-23-92
DOE O 1300.2A DEPARTMENT OF ENERGY TECHNICAL STANDARDS PROGRAM 05-19-92
DOE O 1300.3 POLICY ON THE PROTECTION OF HUMAN SUBJECTS 08-23-90
DOE O 1450.4 CONSENSUAL LISTENING-IN TO OR RECORDING
TELEPHONE/RADIO
CONVERSATIONS 11-12-92
DOE O 1500.3 FOREIGN TRAVEL AUTHORIZATION 11-10-86
CHANGE 007 07-06-94
DOE O 2030.4B REPORTING FRAUD, WASTE, AND ABUSE TO THE OFFICE
OF INSPECTOR GENERAL 05-18-92
DOE O 2300.1B AUDIT RESOLUTION AND FOLLOWUP 06-08-92
DOE O 2320.1C COOPERATION WITH THE OFFICE OF INSPECTOR GENERAL 05-18-92
DOE O 2321.1B AUDITING OF PROGRAMS AND OPERATIONS 05-14-92
DOE O 4330.4B MAINTENANCE MANAGEMENT PROGRAM 02-10-94
DOE O 5400.5 RADIATION PROTECTION OF THE PUBLIC AND THE
ENVIRONMENT 02-08-90
CHANGE 002 01-07-93
Section J, Attach B - Pg 3
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
[Excluding Paragraph 1a(3)(a) of Chapter II]
DOE O 5480.19 CONDUCT OF OPERATIONS REQUIREMENTS FOR DOE
FACILITIES 07-09-90
CHANGE 001 05-18-92
DOE O 5480.20A PERSONNEL SELECTION, QUALIFICATION AND TRAINING
REQUIREMENTS FOR DOE NUCLEAR FACILITIES 11-15-94
DOE O 5480.21 UNREVIEWED SAFETY QUESTIONS 12-24-91
DOE O 5480.22 TECHNICAL SAFETY REQUIREMENTS, CHG 2 01-23-96
DOE O 5480.23 SAFETY ANALYSIS REPORTS, CHG 1 03-10-94
DOE O 5530.1A ACCIDENT RESPONSE GROUP 09-20-91
DOE O 5530.2 NUCLEAR EMERGENCY SEARCH TEAM 09-20-91
DOE O 5530.3 RADIOLOGICAL ASSISTANCE PROGRAM 01-14-92
CHANGE 001 04-10-92
DOE O 5530.4 AERIAL MEASURING SYSTEM 09-20-91
DOE O 5530.5 FEDERAL RADIOLOGICAL MONITORING AND ASSESSMENT
CENTER 07-10-92
CHANGE 001 12-02-92
DOE O 5610.2 CONTROL OF WEAPON DATA 08-01-80
CHANGE 001 09-02-86
DOE O 5610.12 PACKAGING AND OFFSITE TRANSPORTATION OF NUCLEAR
COMPONENTS, AND SPECIAL ASSEMBLIES ASSOCIATED
WITH THE NUCLEAR EXPLOSIVES AND WEAPON SAFETY
PROGRAM 07-26-94
DOE O 5610.14 TRANSPORTATION SAFEGUARDS SYSTEM PROGRAM
OPERATIONS 05-12-93
DOE O 5632.1C PROTECTION AND CONTROL OF SAFEGUARDS AND
SECURITY INTERESTS 07-15-94
DOE M 5632.1C-1 MANUAL FOR PROTECTION AND CONTROL OF SAFEGUARDS
AND SECURITY INTERESTS 07-15-94
CHANGE 001 04-10-96
(Excluding Chapter III, paragraphs 1, 2, and
4 - 9; and Excluding Chapter XI)
DOE O 5632.7A PROTECTIVE FORCES 04-13-94
CHANGE 001 02-13-95
DOE O 5639.8A SECURITY OF FOREIGN INTELLIGENCE INFORMATION AND
SENSITIVE COMPARTMENTED INFORMATION FACILITIES 07-23-93
DOE O 5660.1B MANAGEMENT OF NUCLEAR MATERIALS 05-26-94
DOE O 5670.1A MANAGEMENT AND CONTROL OF FOREIGN INTELLIGENCE 01-15-92
DOE O 5670.3 COUNTERINTELLIGENCE PROGRAM 09-04-92
Section J, Attach B - Pg 4
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION J
ATTACHMENT C
SMALL AND SMALL DISADVANTAGED BUSINESS SUBCONTRACTING PLAN
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
Small and Small Disadvantaged Business Subcontracting Plan
for
Kaiser-Hill Company, L.L.C.
Rocky Flats Closure Contract No. DE-AC34-OORF01904
Submitted to Department of Energy
ITEM/SERVICE: Rocky Flats 2006 Closure Project (Closure Project)
I. Introduction
In accordance with Federal Acquisition Regulation 52.219-9, titled Small and
Small Disadvantaged Business Subcontracting Plan, Kaiser-Hill will implement
a graded approach to procurement (i.e. the application of only the
appropriate terms, conditions, and other requirements to a given acquisition)
which maximizes competitive opportunities among small, HubZone small, small
disadvantaged, 8(a) and woman-owned small business concerns while optimizing
opportunities for success in performance of the subcontracted work.
Kaiser-Hill is committed to exceeding the goals set forth in this plan by
implementing effective procurement planning that focuses on meeting project
requirements.
A. Policy Statement
It is the Policy of the United States Government and Kaiser-Hill
Company, L.L.C. that small business concerns, HUBZone small business
concerns, small business concerns owned and controlled by socially
and economically disadvantaged individuals and small business
concerns owned and controlled by women shall have the maximum
practicable opportunity to participate in the performance of
government subcontracts awarded by Kaiser-Hill. It is Kaiser-Hill's
intention to aggressively pursue, wherever possible, subcontracting
opportunities with small business HUBZone small business small
disadvantaged business and woman-owned small business concerns, in
accordance with Public Law 99-661 and 100-180.
B. Definitions
1. Small Business (SB) concern means a small business as defined
pursuant to Section 3 of the Small Business Act and in relevant
regulations promulgated pursuant thereto, defined as a concern,
including its affiliates that is independently owned and operated,
not dominant in the field of operation in which it is bidding on
Government contracts, and qualified as a small business under
applicable size standards.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the SB/SDB Subcontracting Plan -Page 1
restriction on title page of
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
2. Small Disadvantaged Business (SDB) concern means a small business concern
that:
a. Is at least 51 percent owned by one or more individuals who are both
socially and economically disadvantaged or a publicly-owned business
having at least 51 percent of its stock owned by one or more socially
and economically disadvantaged individuals; and
b. Has its management and daily business controlled by one or more such
individuals.
3. Woman-Owned Small Business (WOSB) concern means a small business that is
at least 51 percent owned by a woman or women who control and operate the
business. Control in this context means exercising the power to make
policy decisions. Operate in this context means being actively involved in
the day-to-day management of the business. Woman means all woman small
business owners.
4. HUBZone Small Business means a small business as defined in paragraph B.1
above that appears on the list of Qualified HUBZone Small Business
Concerns maintained by the SBA.
5. Subcontract includes purchase orders.
6. Kaiser-Hill shall have the same meaning as Contractor.
II. FY00 Goals
A. Transition From Existing Prime Contract No. DE-AC34-95RF00825 to New
Closure Contract No. DE-AC3400RF01904:
The closure contract subcontracting plan contained herein includes similar
methods and procedures as the previous Kaiser-Hill subcontracting plan
approved by DOE/RFFO under prime contract number DE-AC34-RFOO825. It is
important to note, however, that this new subcontracting plan for the new
closure prime contract. (DE-AC34-OORF01904) incorporates Kaiser-Hill's new
subcontracting strategy to organizationally and functionally arrange the
site closure work under Kaiser-Hill's new project-focus management
approach. Consequently, Kaiser-Hill Team Subcontractors previously
identified as SSOC, RMRS, RFCSS and WSLLC will transition into traditional
project focused subcontracts (non-Team subcontractors) subject to
individual and separate subcontracting plans as set forth by the
Kaiser-Hill approved subcontracting plan.
B. Transition and Post-Transition FY00 Goals:
It is anticipated that the new project-focused subcontracts will be
awarded by April 1, 2000. Therefore, the calculation methods and
assumptions used from October 1, 1999 to April 1, 2000 for (SSOC, RMRS,
RFCSS and WSLLC) will be those previously applied under prime contract
number DE-AC34-95RFOO825 and yield the following goals:
Use or disclosure of data contained Base Proposal
on this sheet is subject to the SB/SDB Subcontracting Plan -Page 2
restriction on title page of
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
I. Fiscal Year 2000 Goals (October 1, 1999 thru March 30, 2000)
SB SDB WOSB
KH $20,500,000 $6,500,000 $ 2,750,000
RFCSS $ 7,000,000 $1,500,000 $ 1,250,000
RMRS $12,400,000 $7,750,000 $ 2,000,000
SSOC $20,000,000 $3,500,000 $ 2,000,000
WSLLC $ 2,600,000 $750,000 $ 2,000,000
TOTAL $62,500,000 $20,000,000 $10,000,000
2. Fiscal Year 2000 Goals (April 1, 2000 through September 30, 2000)
The following FY00 goal calculation assumptions will be used effective April
1, 2000 or actual date of completion of team subcontractors transition to
project-focused (non-team) -subcontracts and yield the following goals:
SB SDB WOSB HUBZONE
KH $62,500,000 $20,000,000 $10,000,000 $1,396,500
(.5% of FY Contract
Value divided by 2)
3. Total FY2000:
SB SDB WOSB HUBZONE
$125,000,000 $40,000,000 $20,100,000 $1,396,500
4. Calculation Rules:
Kaiser-Hill's proposed small business goals will be submitted in writing
October 1 of each year during the term of this contract or by such later
dates as the Contracting Officer may authorize in writing.
Dollars awarded to small business means all dollars to a SB subcontractor by
Kaiser-Hill and its large business subcontractors (at any tier).
Dollars awarded to HubZone small businesses means all dollars awarded by
Kaiser-Hill, its large business subcontractors, or non-hubzone small
business subcontractors (at any tier).
Use or disclosure of data contained Base Proposal
on this sheet is subject to the SB/SDB Subcontracting Plan -Page 3
restriction on title page of
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
Dollars awarded to small disadvantaged business (includes 8(a)
subcontractors) means all dollars awarded by Kaiser-Hill, its large
business subcontractors, or small, non-disadvantaged business
subcontractors (at any tier).
III. Objectives
The objectives of Kaiser-Hill's SB/SDB/WOSB subcontracting plan are:
A. To seek qualified, diverse SB/SDB/WOSB concerns and provide the entities
an equitable opportunity to compete for subcontracts under this
contract.
B. To establish goals and objectives that encourage increased participation
by SB/ SDB/WOSB concerns in the competitive process. Goals and
objectives will be established prior to each fiscal year.
C. To utilize, to the maximum extent practicable, SB/SDB/WOSB concerns.
D. To focus on SB/SDB/WOSB subcontractor success by rewarding excellent
performance with incentive fees and opportunities for further or
increased participation.
E. Organize and present periodic training seminars on how to qualify for an
SB/SDB/WOSB Subcontract.
F. Implement a Business Opportunity System that uses the Internet to expand
access by SB/SDB1WOSBs to the procurement process by using electronic
bulletin boards, standardized documents such as representations and
certifications, terms and conditions, and electronic source lists.
IV. Procedures
Kaiser-Hill will follow the procedures listed below to achieve the goals and
objectives of this plan.
A. Upon the completion of major team subcontractor transition to project
focused subcontracts, commit that the Small Business Liaison Officer
will assume the responsibilities of managing Kaiser-Hill's SB/SDB/WOSB
subcontracting program under this contract. The designated individual
will:
1. Report directly to the Vice President Subcontract, Technical and
Site Services
2. Interface with SBA to develop opportunities for SB/SDB/WOSB;
3. Maintain liaison with the Government concerning SB/SDB/WOSBs;
4. Search for SB/SDB/WOSB sources and maintain qualified SB/SDB/WOSB
source lists for use by Kaiser-Hill in procurements, including those
expected to exceed $ 100,000. Kaiser-Hill may reserve purchases of
$100,000 or less exclusively for SB's and purchases of $50,000 or
less for SDB's and WOSB's where there is a reasonable expectation
that bids, competitive as to price, quality, and delivery, will be
obtained from two or more responsible firms of the appropriate type;
5. Review and evaluate SB/SDB/WOSB subcontracting plans submitted to
Kaiser-Hill in connection with supply and /or service awards of
$500,000 or greater (or $1,000,000 or
Use or disclosure of data contained Base Proposal
on this sheet is subject to the SB/SDB Subcontracting Plan -Page 4
restriction on title page of
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
greater for construction) and assure that such plans are similar to
the subcontracting plan agreed to by Kaiser-Hill under this
contract; and
6. Submit and ensure subcontractors submit SF 294 and/or SF 295 in
accordance with the instructions on the forms.
B. Assure that SB/SDB/WOSB concerns are provided an opportunity to
equitably compete for subcontracts, particularly by arranging
solicitations to facilitate the participation of these business concerns
in consideration of site priorities. Where Kaiser-Hill's lists of
potential subcontractors are excessively long, reasonable efforts shall
be made to give all such types of concerns an opportunity to compete
over a period of time.
C. Maintain records showing (i) whether each prospective subcontractor is a
SB/SDB/WOSB concern, (ii) procedures that have been adopted to comply
with the requirements set forth in this Subcontracting Plan, and (iii)
with respect to the award of any subcontract exceeding $100,000, as
follows:
1. Whether the subcontract award was to an SB/SDB/WOSB or large
business;
2. Whether more than two SB/SDB/WOSB concerns were solicited;
3. The rationale for not soliciting SB/SDB/WOSB concerns if such firms
were not solicited, and
4. The reasons for award to firms other than SB/SDB/WOSB concerns if
such firms were solicited.
Note: The records maintained above will be in a form determined by
Kaiser-Hill. Such reports will be considered to be management records
only and need not be submitted routinely to the Government; however,
records maintained pursuant to this subcontracting plan will be kept
available for review.
D. Cooperate with the Contracting Officer and the SBA in any requested
studies and surveys of Kaiser-Hill's subcontracting procedures and
practices under this contract.
E. Submit information with respect to subcontracting with SB/SDB/WOSBs as
requested by the Contracting Officer.
F. Maintain and use information from the SB/SDB/WOSB Kaiser-Hill Directory
and from DOE sources, including the Pro-Net to identify each category
and type of subcontractor for new subcontracting opportunities
G. Receive all appropriate visiting SB/SDB/WOSBs who desire to explain the
entity's capabilities, products and services. Explain the routine of
doing business with Kaiser-Hill.
H. Consider categories of procurements for exclusive SB participation,
provided that there are sufficient qualified firms to offer the needed
product or service and to assure reasonable prices, quality and
acceptable delivery.
I. Consider subcontracts with firms certified with the SBA under the
Section 8(a) program.
J. Include the clause entitled Utilization of Small, Small Disadvantaged
and Woman-Owned Small Business Concerns in all subcontracts that offer
further subcontracting opportunities.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the SB/SDB Subcontracting Plan -Page 5
restriction on title page of
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
Require all subcontractors (except SB/SDB/WOSB Concerns) that receive
subcontracts in excess of $500,000 ($ 1,000,000 for construction) to
adopt a plan similar to the plan required by the clause entitled Small
Business and Small Disadvantaged Business Subcontracting Plan.
K. Consider privatization initiatives that are set aside for SB/SDB/WOSB
concerns.
V. Responsibilities
A. Kaiser-Hill's technical groups shall cooperate with the Kaiser-Hill
procurement department in considering SB/SDB/WOSBs equitably and fairly
as sources of supply.
B. Major purchases (in excess of $100,000) shall be examined to determine
the feasibility of breaking them down into smaller units so that
SB/SDB/WOSBs may qualify as manufacturers and/or suppliers for such
requirements.
C. Kaiser-Hill shall, in accordance with Section VI of this document
establish realistic and attainable goals and measure progress toward
reaching those goals.
VI. Reports
A. Reports shall be submitted to the DOE as requested in writing, in the
frequency required and in the format agreed upon. Special reports shall
be kept to a minimum.
B. Quarterly reports on SB/SDB/WOSB activities shall also be furnished to
Kaiser-Hill's management staff.
C. SBA reports will be provided semi-annually.
D. Exceptional performance by any Kaiser-Hill employee in advancing the
SB/SDB/WOSB program will be reported to Kaiser-Hill senior management
and DOE. If weaknesses occur that interfere with the achievement of
goals and objectives, the weakness shall be brought to the attention of
Kaiser-Hill's management staff for appropriate remedial action.
VII. Goals
A. Kaiser-Hill's proposed SB/SDB/WOSB goals will be submitted in writing
by October 1st of each year during the term of this contract or by such
later date as the Contracting Officer may authorize in writing. The
proposed fiscal year goals will be based on the latest available
procurement projections, advance financial plan projections and
historical data.
B. Dollars awarded to SB means all dollars awarded to an SB subcontractor
by Kaiser-Hill and its large business subcontractors (at any tier).
Dollars awarded to HUBZone SBs means all dollars awarded by
Kaiser-Hill, its large business subcontractors, and non-HUBZone SB
awards at any tier awarded to a firm that is a HUBZone SB. Dollars
awarded to SDB means all dollars awarded to a SDB subcontractor by
Kaiser-Hill, its large business subcontractors, or a small,
non-disadvantaged business subcontractor, at any tier.
1. Service Categories
SB/SDB/WOSB are offered opportunities to submit proposals related
to, but not necessarily limited to the following:
Use or disclosure of data contained Base Proposal
on this sheet is subject to the SB/SDB Subcontracting Plan -Page 6
restriction on title page of
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
a. Architect-engineering services
b. Professional services
c. augmentation
d. Travel agency services
e. Construction subcontracts in:
o Mechanical
o Electrical
o Fencing
o General construction
o Testing and inspection
o Painting
o Excavation
o Landscaping
f. Construction management
g. Other Specialty subcontracts
h. Vending service
i. Food service
j. Computer equipment
k. Computer training/software
l. Clerical support
2. Method of Developing Goals
The method used by Kaiser-Hill to develop its SB/SDB/WOSB
subcontracting goals are based on the factors stated in Section II
above. These factors include:
a. DOE-approved goals for FY2000
b. Past projects
c. Analysis of major (over $100,000) procurement projections
d. Established vendor database
e. Survey of procurement managers
f. Consideration of DOE Contracting Officer's recommendations
g. Analysis of historical socioeconomic performance by
Kaiser-Hill
Use or disclosure of data contained Base Proposal
on this sheet is subject to the SB/SDB Subcontracting Plan -Page 7
restriction on title page of
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
h. HUBZone data provided by the SBA
3. Outreach Program
Kaiser-Hill will actively participate in local and national
organizations including but not limited to Minority Enterprises,
Inc., local chambers of commerce, the Small and Disadvantaged
Business Committee, Economic and Empowerment Breakfasts.
Kaiser-Hill will actively seek new SB/SDB/W0SB sources by
establishing a Small/Small Disadvantaged Business/Diversity Advocate
program and by active participation in outreach activities and other
related functions where participation is expected to expose new or
additional qualified concerns to the opportunities at the Rocky
Flats Environmental Technology Site.
Kaiser-Hill will continue its efforts to augment its source data of
SB/SDB/WOSB concerns. To the extent practicable, Kaiser-Hill will
use the following source data:
a. Government agency information
b. Small and small disadvantaged business trade information
c. Small and small disadvantaged business directories both
regional and multi-regional
d. Woman-owned business directories
e. Kaiser FLU internal source lists
f. Existing Rocky Flats vendor information
g. ProNet searches
h. Data provided by the SBA regarding HUBZone areas and HUBZone
subcontractors
4. Method of Identifying Potential Sources
Procurement personnel (and other site personnel as appropriate) will
have access to computerized data files on potential SB/SDB/W0SB
concerns that will be maintained by Kaiser-Hill.
a. Section 8(a) Subcontractors: When authorized by DOE,
Kaiser-Hill will subcontract directly with firms qualified
under Section 8(a) of the Small Business Act. Kaiser-Hill will
identify projects and procurements that appear appropriate for
subcontracting to 8(a) firms.
Lower tier subcontract awards to SB/SDB/WOSB concerns:
Kaiser-Hill will encourage its large business subcontractors
(whether or not their subcontracts require a subcontracting
plan) to provide lower-tier subcontracting opportunities to
SB/SDB/WOSB concerns. Kaiser-Hill will use the same data
sources as described in paragraph III of this plan to assist
large business subcontractors in identifying business sources.
In addition, procurement personnel will be encouraged to
attend procurement conferences, seminars, trade fairs and
other related functions where participation is expected to
expose new or additional qualified SB/SDB/WOSB concerns.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the SB/SDB Subcontracting Plan -Page 8
restriction on title page of
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
b. Access to solicitation sets and data. To the extent
practicable, Kaiser-Hill will assure that SB/SDB/WOSB concerns
have access to solicitations and are provided maximum
opportunity to participate in Kaiser-Hill subcontracts.
Kaiser-Hill will actively solicit and counsel SB/SDB/WOSB
concerns for the purpose of enhancing the potential for
participation in the Kaiser-Hill subcontracting program.
Kaiser-Hill will work toward the utilization of an Internet
home page or electronic bid board for identifying procurement
opportunities
5. Indirect Cost
Kaiser-Hill does not include indirect and Overhead posts in
establishing goals for its Subcontracting Plan for any subcontract
regardless if it is a large business, SB, SDB, or WOSB.
Signed: /s/ Norman B. Sandlin
-------------------------
Norman B. Sandlin
Title: Director, Contracts
Date: November 15,1999
Use or disclosure of data contained Base Proposal
on this sheet is subject to the SB/SDB Subcontracting Plan -Page 9
restriction on title page of
this proposal.
<PAGE>
SECTION J
ATTACHMENT D
REPRESENTATIONS AND CERTIFICATIONS
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
SECTION J
ATTACHMENT D
REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFERORS
TABLE OF CONTENTS
Section Provision
K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY
REFERENCE
K.2 FAR 52.204-3 TAXPAYER IDENTIFICATION (OCT 1998)
K.3 FAR 52.204-5 WOMEN-OWNED BUSINESS (OCT 1995)
K.4 FAR 52.209-5 CERTIFICATION REGARDING DEBARMENT, SUSPENSION,
PROPOSED DEBARMENT, AND OTHER RESPONSIBILITY MATTERS (MAR.
1996)
K.5 FAR 52.219-1 SMALL BUSINESS PROGRAM REPRESENTATIONS (OCT 1998)
ALTERNATE II (JAN 1999)
K.6 FAR 52.219-22 SMALL DISADVANTAGED BUSINESS STATUS (OCT 1998)
K.7 FAR 52.222-22 PREVIOUS CONTRACTS AND COMPLIANCE REPORTS (FEB
1999)
K.8 FAR 52.222-25 AFFIRMATIVE ACTION COMPLIANCE (APR 1984)
K.9 FAR 52.223-1 CLEAN AIR AND WATER CERTIFICATION (APR 1984)
K.10 FAR 52.223-13 CERTIFICATION OF TOXIC CHEMICAL RELEASE REPORTING
(OCT 1996)
K.11 FAR 52.227-6 ROYALTY INFORMATION (APR 1994)
K.12 FAR 52.227-15 REPRESENTATION OF LIMITED RIGHTS DATA AND
RESTRICTED COMPUTER SOFTWARE (JUN 1987)
K.13 FAR 52.230-1 COST ACCOUNTING STANDARDS NOTICES AND
CERTIFICATION (APR 1998)
K.14 FAR 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE
(FEB 1998)
K.15 DEAR 952.204-73 FOREIGN OWNERSHIP, CONTROL, OR INFLUENCE OVER
CONTRACTOR (JUL 1997)
K.16 DEAR 952.209-8 ORGANIZATIONAL CONFLICTS OF INTEREST DISCLOSURE
(JUNE 1997)
K.17 DEAR 970.5204-57 AGREEMENT REGARDING WORKPLACE SUBSTANCE
ABUSE PROGRAMS AT DOE SITES (SEP 1997)
K.18 SIGNATURE/CERTIFICATION
Attachment - Standard Form 328 Certificate Pertaining to Foreign Interests
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 1
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
K.1 NOTICE LISTING SOLICITATION PROVISIONS INCORPORATED BY
REFERENCE
The following solicitation provisions pertinent to this section are hereby
incorporated by reference (by Citation Number, Title, and Date) in
accordance with the FAR provision at FAR "52.252-1 SOLICITATION PROVISIONS
INCORPORATED BY REFERENCE (FEB 1998)."
NUMBER TITLE DATE
52.203-11 CERTIFICATION AND DISCLOSURE APR 1991
REGARDING PAYMENTS TO INFLUENCE
CERTAIN FEDERAL TRANSACTIONS
52.223-4 RECOVERED MATERIALS CERTIFICATION
OCT 1997
K2 FAR 52.204-3 TAXPAYER IDENTIFICATION (OCT 1998)
(a) Definitions.
"Common parent," as used in this provision, means that corporate
entity that owns or controls an affiliated group of corporations
that files its Federal income tax returns on a consolidated basis,
and of which the offeror is a member.
"Taxpayer Identification Number (TIN)," as used in this provision,
means the number required by the Internal Revenue Service (IRS) to
be used by the offeror in reporting income tax and other returns,
The TIN may be either a Social Security Number or in Employer
Identification Number.
(b) All offerors must submit the information required in paragraphs (d)
through (f) of this provision to comply with debt collection
requirements of 31 U.S.C. 770 1(c) and 3325(d), reporting
requirements of 26 U.S.C. 6041, 6041A, and 6050M, and implementing
regulations issued by the IRS. If the resulting contract is subject
to the payment reporting requirements described in Federal
Acquisition Regulation (FAR) 4.904, the failure or refusal by the
offeror to furnish the information may result in a 31 percent
reduction of payments otherwise due under the contract.
(c) The TIN may be used by the Government to collect and report on any
delinquent amounts arising out of the offeror's relationship with
the Government (31 U.S.C. 7701 (c)(3)). If the resulting contract is
subject to the payment reporting requirements described in FAR
4.904, the TIN provided hereunder may be matched with IRS records to
verify the accuracy of the offeror's TIN.
(d) Taxpayer Identification Number (TIN).
[X] TIN 84-1296851
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 2
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
[ ] TIN has been applied for.
[ ] TIN is not required because:
[ ] Offeror is a nonresident alien, foreign corporation, or foreign
partnership that does not have income effectively connected with
the conduct of a trade or business in the United States and does
not have an office or place of business or a fiscal paying agent
in the United States;
[ ] Offeror is an agency or instrumentality of a foreign government;
[ ] Offeror is an agency or instrumentality of the Federal
Government
(e) Type of organization.
[ ] Sole proprietorship;
[ ] Partnership;
[ ] Corporate entity (not tax-exempt);
[ ] Corporate entity (tax-exempt);
[ ] Government entity (Federal, State, or local);
[ ] Foreign government;
[ ] International organization per 26 CFR 1.6049-4;
[X] Other A Limited Liability Company
(f) Common parent.
[X] Offeror is not owned or controlled by a common parent as defined
in paragraph (a) of this provision.
[ ] Name and TIN of common parent:
Name
------------------------------
TIN
------------------------------
K.3 FAR 52.204-5 WOMEN-OWNED BUSINESS (OCT 1995)
(a) Representation. The offeror represents that it [ ] is, [X] is not a
women-owned business concern.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 3
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
(b) Definition. "Women-owned business concern," as used in this
provision, means a concern which is at least 51 percent owned by one
or more women; or in the case of any publicly owned business, at
least 51 percent of the stock of which is owned by one or more women;
and whose management and daily business operations are controlled by
one or more women.
K.4 FAR 52.209-5 CERTIFICATION REGARDING DEBARMENT, SUSPENSION, PROPOSED
DEBARMENT, AND OTHER RESPONSIBILITY MATTERS (MAR 1996)
(a) (1) The Offeror certifies, to the best of its knowledge and belief,
that -
The Offeror and/or any of its Principals -
(A) Are [ ] are not [X] presently debarred, suspended,
proposed for debarment, or declared ineligible for
the award of contracts by any Federal agency;
(B) Have [ ] have not [X], within a 3-year period
preceding this offer, been convicted of or had a
civil judgment rendered against them for- commission
of fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing a
public (Federal, state, or local) contract or
subcontract; violation of Federal or state antitrust
statutes relating to the submission of offers; or
commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making
false statements, tax evasion or receiving stolen
property; and
(C) Are [ ] are not [X] presently indicted for, or
otherwise criminally or civilly charged by a
governmental entity with, commission of any of the
offenses enumerated in subdivision (a)(1)(i)(B) of
this provision.
(ii) The Offeror has [ ] has not [X], within a 3-year period
preceding y this offer, had one or more contracts
terminated for default by an Federal agency.
(2) "Principals," for the purposes of this certification, means
officers; directors; owners; partners; and, persons having
primary management or supervisory responsibilities within a
business entity (e.g., general manager; plant manager; head
of a subsidiary, division, or business segment, and similar
positions).
THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF
AN AGENCY OF THE UNITED STATES AND THE MAKING OF A FALSE,
FICTITIOUS, OR FRAUDULENT CERTIFICATION MAY RENDER THE MAKER
SUBJECT TO
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 4
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
PROSECUTION UNDER SECTION 1001, TITLE 18, UNITED STATES CODE.
(b) The Offeror shall provide immediate written notice to the Contracting
Officer if, at any time prior to contract award, the Offeror learns
that its certification was erroneous when submitted or has become
erroneous by reason of changed circumstances.
(c) A certification that any of the items in paragraph (a) of this
provision exists will not necessarily result in withholding of an
award under this solicitation. However, the certification will be
considered in connection with a determination of the Offeror's
responsibility. Failure of the Offeror to furnish a certification or
provide such additional information as requested by the Contracting
Officer may render the Offeror nonresponsible.
(d) Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render, in good
faith, the certification required by paragraph (a) of this provision.
The knowledge and information of an Offeror is not required to exceed
that which is normally possessed by a prudent person in the ordinary
course of business dealings.
(e) The certification in paragraph (a) of this provision is a material
representation of fact upon which reliance was placed when making
award. If it is later determined that the Offeror knowingly rendered
an erroneous certification, in addition to other remedies available
to the Government the Contracting Officer may terminate the contract
resulting from this solicitation for default.
K.5 FAR 52.219-1 SMALL BUSINESS PROGRAM REPRESENTATIONS (OCT 1998) - ALTERNATE
II (JAN 1999)
(a) (1) The standard industrial classification (SIC) code for this
acquisition is 8744.
(2) The small business size standard is 500 employees.
(3) The small business size standard for a concern which submits an
offer in its own name, other than on a construction or service
contract, but which proposes to furnish a product which it did
not itself manufacture, is 500 employees.
(b) Representations.
(1) The offeror represents as part of its offer that it is[ ], [X] is
not a small business concern.
(2) (Complete only if offeror represented itself as a small business
concern in paragraph (b)(1) of this provision) The offeror
represents, for general
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 5
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
statistical purposes, it is [ ], is not [ ], a small
disadvantaged business concern as defined in 13 CFR 124.1002.
(3) (Complete only if offeror represented itself as a small business
concern in paragraph (b)(1) of this provision.) The offeror
represents as part of its offer that it is, is not a women-owned
small business concern.
(4) (Reserved)
(5) [Complete only if offeror represented itself as a small business
concern in paragraph (b)(1) of this provision.] The offeror
represents, as part of its offer, that
(i) it [ ] is, [ ] is not a HUBZone small business concern
listed, on the date of this representation, on the List
of Qualified HUBZone Small Business Concerns maintained
by the Small Business Administration, and no material
change in ownership and control, principal place of
ownership, or HUBZone employee percentage has occurred
since it was certified by the Small Business
Administration in accordance with 13 CFR part 126; and
(ii) It [ ] is, [ ] is not a joint venture that complies
with the requirements of 13 CFR part 126, and the
representation in paragraph (b)(5)(i) of this provision
is accurate for the HUBZone small business concern or
concerns that are participating in the joint venture.
[The offeror shaft enter the name or names of the
HUBZone small business concern or concerns that are
participating in the joint venture: _______________.]
Each HUBZone small business concern participating in
the joint venture shall submit a separate signed copy
of the HUBZone representation.
(c) Definitions.
"Small business concern", as used in this provision, means a concern,
including its affiliates, that is independently owned and operated,
not dominant in the field of operation in which it is bidding on
Government contracts, and qualified as a small business under the
criteria in 13 CFR Part 121 and the size standard in paragraph (a) of
this provision.
"Women-owned small business concern", as used in this provision, means
a small business concern
(1) Which is at least 51 percent owned by one or more women or, in
the case of any publicly owned business, at least 51 percent of
the stock of which is owned by one or more women; and
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 6
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
(2) Whose management and daily business operations are controlled by
one or more women.
(d) Notice.
(1) If this solicitation is for supplies and has been set aside, in
whole or in part, for small business concerns, then the clause
in this solicitation providing notice of the set-aside contains
restrictions on the source of the end items to be furnished.
(2) Under 15 U.S.C. 645(d), any person who misrepresents a firm's
status as a small or small disadvantaged business concern in
order to obtain a contract to be awarded under the preference
programs established pursuant to sections 8(a), 8(d), 9, or 15
of the Small Business Act or any other provision of Federal law
that specifically references section 8(d) for a definition of
program eligibility, shall
(i) Be punished by imposition of fine, imprisonment, or both;
(ii) Be subject to administrative remedies, including suspension
and debarment; and
(iii) Be ineligible for participation in programs conducted
under the authority of the Act.
K.6 52.219-22 SMALL DISADVANTAGED BUSINESS STATUS (OCT 1998)
(a) General. This provision is used to assess an offeror's small
disadvantaged business status for the purpose of obtaining a benefit
on this solicitation. Status as a small business and status as a
small disadvantaged business for general statistical purposes is
covered by the provision at FAR 52.219-1, Small Business Program
Representation.
(b) Representations.
(1) General. The offeror represents, as part of its offer, that it
is a small business under the size standard applicable to this
acquisition; and either
[ ](i)It has received certification by the Small Business
Administration as a small disadvantaged business concern
consistent with 13 CFR 124, Subpart B; and
(A) No material change in disadvantaged ownership and
control has occurred since its certification;
(B) Where the concern is owned by one or more
disadvantaged individuals, the net worth of each
individual upon whom
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 7
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
the certification is based does not exceed $750,000
after taking into account the applicable exclusions
set forth at 13 CFR 124.104(c)(2); and
(C) It is listed, on the date of this representation, on
the register of small disadvantaged business concerns
maintained by the Small Business Administration; or
(ii) It has submitted a completed application to the Small
Business Administration or a Private Certifier to be
certified as a small disadvantaged business concern in
accordance with 13 CFR 124, Subpart B, and a decision
on that application is pending, and that no material
change in disadvantaged ownership and control has
occurred since its application was submitted.
(2) [ ] For Joint Ventures. The offeror represents, as part of its
offer, that it is a joint venture that complies with the
requirements at 13 CFR 124.1002(f) and that the representation
in paragraph (b)(1) of this provision is accurate for the small
disadvantaged business concern that is participating in the
joint venture. [The offeror shall enter the name of the small
disadvantaged business concern that is participating in the
joint venture: _____________.]
(c) Penalties and Remedies. Anyone who misrepresents any aspects of the
disadvantaged status of a concern for the purposes of securing a
contract or subcontract shall
(1) Be punished by imposition of a fine, imprisonment, or both;
(2) Be subject to administrative remedies, including suspension and
debarment; and
(3) Be ineligible for participation in programs conducted under the
authority, of the Small Business Act.
K.7 FAR 52.222-22 PREVIOUS CONTRACTS AND COMPLIANCE REPORTS (FEB
1999)
The offeror represents that-
(a) It [X] has, [ ] has not participated in a previous contract or
subcontract subject to the Equal Opportunity clause of this
solicitation.
(b) It [X] has, [ ] has not filed all required compliance reports; and
(c) Representations indicating submission of required compliance
reports, signed by proposed subcontractors, will be obtained before
subcontract awards.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 8
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
K.8 FAR 52.222-25 AFFIRMATIVE ACTION COMPLIANCE (APR 1984)
The offeror represents that --
(a) It [X] has developed and has on file, [ ] has not developed and does
not have on file, at each establishment affirmative action programs
required by the rules and regulations of the Secretary of Labor (41
CFR 60-1 and 60-2), or,
(b) It [ ] has not previously had contracts subject to the written
affirmative action programs requirement of the rules and regulations
of the Secretary of Labor.
K.9 FAR 52.223-1 CLEAN AIR AND WATER CERTIFICATION (APR 1984)
The Offeror certifies that--
(a) Any facility to be used in the performance of this proposed contract
is [ ], is not [X] listed on the Environmental Protection Agency
(EPA) List of Violating Facilities;
(b) The Offeror will immediately notify the Contracting Officer, before
award, of the receipt of any communication from the Administrator, or
a designee, of the EPA, indicating that any facility that the Offeror
proposes to use for the performance of the contract is under
consideration to be listed on the (EPA) List of Violating Facilities;
and
(c) The Offeror will include a certification substantially the same as
this certification, including this paragraph (c), in every nonexempt
subcontract.
K.10 FAR 52.223-13 CERTIFICATION OF TOXIC CHEMICAL RELEASE
REPORTING (OCT 1996)
(a) Submission of this certification is a prerequisite for making or
entering into this contract imposed by Executive Order 12969, August
8, 1995.
(b) By signing this offer, the offeror certifies that
(1) As the owner or operator of facilities that will be used in the
performance of this contract that are subject to the filing and
reporting requirements described in section 313 of the
Emergency Planning and Community Right-to-Know Act of 1986
(EPCRA) (42 U.S.C. 11023) and section 6607 of the Pollution
Prevention Act of 1990 (PPA) (42 U.S.C. 13106), the offeror
will file and continue to file for such facilities for the life
of the contract the Toxic Chemical Release Inventory Form (Form
R) as described in sections 313(a) and (g) of EPCRA and section
6607 of PPA; or
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 9
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
(2) None of its owned or operated facilities to be used in the
performance of this contract is subject to the Form R filing
and reporting requirements because each such facility is exempt
for at least one of the following reasons: (Check each block
that is applicable)
[ ] (i) The facility does not manufacture, process, or
otherwise use any toxic chemicals listed under
section 313(c) of EPCRA, 42 U.S.C. 11023(c);
[ ] (ii) The facility does not have 10 or more full-time
employees as specified in section 313(b)(1)(A) of
EPCRA, 42 U.S.C. 11023(b)(1)(A);
[ ] (iii) The facility does not meet the reporting thresholds
of toxic chemicals established under section 313(f)
of EPCRA, 42 U.S.C. 11023(f) (including the
alternate thresholds at 40 CFR 372.27, provided an
appropriate certification form has been filed with
EPA);
[ ] (iv) The facility does not fall within Standard
Industrial Classification Code (SIC) designations 20
through 39 as set forth in Section 19.102 of the
Federal Acquisition Regulation;
[ ] (v) The facility is not located within any State of the
United States, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, American Samoa,
the United States Virgin Islands, the Northern
Mariana Islands, or any other territory or
possession over. which the United States has
jurisdiction.
K.11 FAR 52.227-6 ROYALTY INFORMATION (APR 1984)
(a) Cost or charges for royalties. When the response to this solicitation
contains costs or charges for royalties totaling more than $250, the
following information shall be included in the response relating to
each separate item of royalty or license fee:
(1) Name and address of licensor.
(2) Date of license agreement.
(3) Patent numbers, patent application serial numbers, or other
basis on which the royalty is payable.
(4) Brief description, including any part or model numbers of each
contract item or component on which the royalty is payable.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 10
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
(5) Percentage or dollar rate of royalty per unit.
(6) Unit price of contract item.
(7) Number of units.
(8) Total dollar amount of royalties.
(b) Copies of current licenses. In addition, if specifically requested
by the Contracting Officer before execution of the contract, the
offeror shall furnish a copy of the current license agreement and an
identification of applicable claims of specific patents.
K-12 FAR 52.227-15 REPRESENTATION OF LIMITED RIGHTS DATA AND
RESTRICTED COMPUTER SOFTWARE (JUN 1987)
(a) This solicitation sets forth the work to be performed if a contract
award results, and the Governments known delivery requirements for
data (as defined in FAR 27.401). Any resulting contract may also
provide the Government the option to order additional data under the
Additional Data Requirements clause at 52.227-16 of the FAR, if
included in the contract Any data delivered under the resulting
contract will be subject to the Rights in Data-General clause at
52.227-14 that is to be included in this contract. Under the latter
clause, a Contractor may withhold from delivery data that qualify as
limited rights data or restricted computer software, and deliver
form, fit, and function data in lieu thereof. the latter clause also
may be used with its Alternates II and/or III to obtain delivery of
limited rights data or restricted computer software, marked with
limited rights or restricted rights notices, as appropriate. In
addition, use of Alternate V with this latter clause provides the
Government the right to inspect such data at the Contractor's
facility.
(b) As an aid in determining the Government's need to include any of the
aforementioned Alternates in the clause at 52.227-14, Rights in
Data-General, the offeror's response to this solicitation shall, to
the extent feasible, complete the representation in paragraph (b) of
this provision to either state that none of the data qualify as
limited rights data or restricted computer software, or identify
which of the data qualifies as limited rights data or restricted
computer software. Any identification of limited rights data or
restricted computer software in the offeror's response is not
determinative of the status of such data should a contract be
awarded to the offeror.
REPRESENTATION CONCERNING DATA RIGHTS
Offeror has reviewed the requirements for the delivery of data or
software and states (offeror check appropriate block)
[X] None of the data proposed for fulfilling such requirements
qualifies as limited rights data or restricted computer
software.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 11
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
[ ] Data proposed for fulfilling such requirements qualify as
limited rights data or restricted computer software and are
identified as follows:_____________________________________
NOTE: "Limited rights data" and "Restricted computer software" are
defined in the contract clause entitled "Rights In Data-
General."
K.13 FAR 52.230-1 COST ACCOUNTING STANDARDS NOTICES AND CERTIFICATION (APR
1998)
Note: This notice does not apply to small businesses or foreign
governments. This notice is in three parts, identified by Roman numerals I
through III.
Offerors shall examine each part and provide the requested information in
order to determine Cost Accounting Standards (CAS) requirements applicable
to any resultant contract.
If the offeror is an educational institution, Part II does not apply
unless the contemplated contract will be subject to full or modified CAS
coverage pursuant to 48 CFR 9903.201-2(c)(5) or 9903.201-2(c)(6),
respectively.
I. DISCLOSURE STATEMENT-COST ACCOUNTING PRACTICES AND CERTIFICATION
(a) Any contract in excess of $500,000 resulting from this solicitation
will be subject to the requirements of the Cost Accounting Standards
Board (48 CFR Chapter 99), except for those contracts which are
exempt as specified in 48 CFR 9903.201-1.
(b) Any offeror submitting a proposal which, if accepted, will result in
a contract subject to the requirements of 48 CFR Chapter 99 must, as
a condition of contracting, submit a Disclosure Statement as required
by 48 CFR 9903.202. When required, the Disclosure Statement must be
submitted as a part of the offeror's proposal under this solicitation
unless the offeror has already submitted a Disclosure Statement
disclosing the practices used in connection with the pricing of this
proposal. If an applicable Disclosure Statement has already been
submitted, the offeror may satisfy the requirement for submission by
providing the information requested in paragraph (c) of Part I of
this provision. CAUTION: In the absence of specific regulations or
agreement, a practice disclosed in a Disclosure Statement shall not,
by virtue of such disclosure, be
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 12
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
deemed to be a proper, approved, or agreed-to practice for pricing
proposals or accumulating and reporting contract performance cost
data.
(c) Check the appropriate box below:
[X] (1) Certificate of Concurrent Submission of Disclosure Statement.
The offeror hereby certifies that, as a part of the offer,
copies of the Disclosure Statement have been submitted as
follows:
(i) original and one copy to the cognizant Administrative
Contracting Officer (ACO) or cognizant Federal agency
official authorized to act in that capacity (Federal
official), as applicable, and
(ii) one copy to the cognizant Federal auditor.
(Disclosure must be on Form No. CASB DS-1 or CASB DS-2, as
applicable. Forms may be obtained from the cognizant ACO or
Federal official and/or from the loose-leaf version of the
Federal Acquisition Regulation.)
Date of Disclosure Statement: November 1, 1999
Name and Address of Cognizant ACO or Federal Official Where
Filed:
Steven Scott, Contracting Officer
U.S. Department of Energy, Rocky Flats Field Office
10808 Highway 93, Unit A
Golden, CO 80403-8200
The offeror further certifies that the practices used in
estimating costs in pricing this proposal are consistent with
the cost accounting practices disclosed in the applicable
Disclosure Statement.
[ ] (2) Certificate of Previously Submitted Disclosure Statement.
The offeror hereby certifies that the required Disclosure
Statement was filed as follows:
Date of Disclosure Statement:
Name and Address of Cognizant ACO or Federal Official Where
Filed:_____________________________________________________
___________________________________________________________
The offeror further certifies that the practices used in
estimating costs in. pricing this proposal are consistent with
the cost accounting practices disclosed in the applicable
Disclosure Statement.
[ ] (3) Certificate of Monetary Exemption.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 13
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
The offeror hereby certifies that the offeror, together with all
divisions, subsidiaries, and affiliates under common control, did
not receive net awards of negotiated prime contracts and
subcontracts subject to CAS totaling more than S25 million (of
which at least one award exceeded $1 million) in the cost
accounting period immediately preceding the period in which this
proposal was submitted. The offeror further certifies that if
such status changes before an award resulting from this proposal,
the offeror will advise the Contracting Officer immediately.
[ ] (4) Certificate of Interim Exemption.
The offeror hereby certifies that (i) the offeror first exceeded
the monetary exemption for disclosure, as defined in (3) of this
subsection, in the cost accounting period immediately preceding
the period in which this offer was submitted and (ii) in
accordance with 48 CFR 9903.202-1, the offeror is not yet
required to submit a Disclosure Statement. The offeror further
certifies that if an award resulting from this proposal has not
been made within 90 days after the end of that period, the
offeror Will immediately submit a revised certificate to the
Contracting Officer, in the form specified under subparagraph
(c)(1) or (c)(2) of Part I of this provision, as appropriate, to
verify submission of a completed Disclosure Statement.
CAUTION: Offerors currently required to disclose because they were awarded a
CAS-covered prime contract or subcontract of $25 million or more in the current
cost accounting period may not claim this exemption (4). Further, the exemption
applies only in connection with proposals submitted before expiration of the
90-day period following the cost accounting period in which the monetary
exemption was exceeded.
II. COST ACCOUNTING STANDARDS-ELIGIBILITY FOR MODIFIED CONTRACT COVERAGE
If the offeror is eligible to use the modified provisions of 48 CFR
9903.201-2(b) and elects to do so, the offeror shall indicate by checking
the box below. Checking the box below shall mean that the resultant
contract is subject to the Disclosure and Consistency of Cost Accounting
Practices clause in lieu of the Cost Accounting Standards clause.
[ ] The offeror hereby claims an exemption from the Cost Accounting
Standards clause under the provisions of 48 CFR 9903.201- 2(b) and
certifies that the offeror is eligible for use of the Disclosure and
Consistency of Cost Accounting Practices clause because during the
cost accounting period immediately preceding the period in which
this proposal was submitted, the offeror received less than $25
million in awards of CAS-covered prime contracts and subcontracts,
or the offeror did not receive a single CAS-covered award exceeding
$1 million. The offeror further certifies that if such status
changes before an award resulting from this proposal, the offeror
will advise the Contracting Officer immediately.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 14
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
CAUTION: An offeror may not claim the above eligibility for modified
contract coverage if this proposal is expected to result in the award of
a CAS-covered contract of S25 million or more or if during its current
cost accounting period, the offeror has been awarded a single
CAS-covered prime contract or subcontract of $25 million or more.
III. ADDITIONAL COST ACCOUNTING STANDARDS APPLICABLE TO EXISTING CONTRACTS
The offeror shall indicate below whether award of the contemplated
contract would, in accordance with subparagraph (a)(3) of the Cost
Accounting Standards clause, require a change in established cost
accounting practices affecting existing contracts and subcontracts.
[X] Yes [ ] No
K.14 FAR 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE (FEB 1998)
This solicitation incorporates one or more solicitation provisions 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. The
offeror is cautioned that the listed provisions may include blocks that must be
completed by the offeror and submitted with its quotation or offer. In lieu of
submitting the full text of those provisions, the offeror may identify the
provision by paragraph identifier and provide the appropriate information with
its quotation or offer. Also, the fall text of a solicitation provision may he
accessed electronically at this/these address(es):
Federal Acquisition Regulations http://www.arnet.gov/far/
Federal Acquisition Forms http://www.gsa.gov/forms/farnumer.htm
Department of Energy Acquisition http://www.pr.doe.gov/dear.html and
Regulations http://farsite.hill.af.mil/vfdoel.htm
K.15 DEAR 952.204-73 FOREIGN OWNERSHIP, CONTROL, OR INFLUENCE OVER CONTRACTOR
(JUL 1997) Alternate I (DEC 1993)
(a) For purposes of this provision, a foreign interest is defined as any of the
following:
(1) A foreign government or foreign government agency;
(2) Any form of business enterprise organized under the laws of any
country other than the United States or its possessions;
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 15
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
(3) Any form of business enterprise organized or incorporated under the
laws of the U.S., or a State or other jurisdiction within the U.S.,
which is owned, controlled, or influenced by a foreign government,
agency, firm, corporation, or person; or
(4) Any person who is not a U.S. citizen.
(b) Foreign ownership, control, or influence (FOCI) means the situation
where the degree of ownership, control, or influence over a contractor by
a foreign interest is such that a reasonable basis exists for concluding
that compromise of classified information or significant quantity of
special nuclear material as defined in 10 CFR Part 710 may result.
(c) If the offeror has not previously submitted responses to the following
questions to DOE as part of the facility security clearance process, then
it shall answer the following questions. Answer each question in either
the "yes" or "no" column. If the answer is yes, furnish in detail on a
separate sheet of paper all the information requested in parentheses.
Copies of information which responds to these questions and which was
submitted to other Government agencies may be submitted as responses to
these questions if the earlier responses are accurate, complete, and
current.
Question Yes No
1. Does a foreign interest own or have beneficial ownership in X
5% of more of your organization's voting securities? (Identify
the percentage of any class of shares or other securities issued
which are owned by foreign interests, listed by country. If you
answer "Yes" and have received from an investor a copy of
Schedule 13D and/or Schedule 13G filed by the investors with the
Securities and Exchange Commission, you are to attach a copy of
Schedule 13D and/or Schedule 13G.)
2. Does your organization own 10% or more of any foreign interest? X
(Furnish the name of the foreign interest, address by country,
and the percentage owned. Include name and title of officials of
your organization who occupy positions with the foreign interest,
if any.)
3. Do any foreign interests have management positions such as X
directors, officers, or executive personnel in your organization?
(Furnish fall information concerning the of the foreign interest
and the position he/she holds in your organization.)
4. Does any foreign interest control or influence, or is any X
foreign interest in a position control or influence the election,
appointment, or tenure of any of your directors, officers, or
executive personnel? (Identify the foreign interest(s) and furnish
full details concerning the control or influence.)
5. Does your organization have any contracts, binding agreements, X
understandings, or X arrangements with a foreign interest(s) that
cumulatively represent 10% or more of your organization's gross
income? (Furnish the name of the foreign interest, country, nature
of agreement or involvement.
Agreements include licensing, sales, patent exchange, trade secrets,
agency, cartel, partnership, joint venture, proxy etc. Give overall
percentage by country as related to total income and type of
services or products in general terms. If you answer "Yes" and
have received from the foreign interest a copy of Schedule 13D
and/or Schedule 13G filed by the foreign interest with the
Securities and Exchange Commission, you are to attach a copy of
Schedule 13D and/or Schedule 13G.)
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 16
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
YES NO
6. Is your organization indebted to foreign interests? (Furnish X
the amount of indebtedness related to the current assets of the
organization and identify the creditor. Include specifics as to
the type of indebtedness and what, if any, collateral, including
voting stock, been furnished or pledged. If any, and what will
be received after conversion are to furnished.)
7. Does your organization derive any income from Communist X
countries included in Country Groups Q, S, W, Y, and Z in
Supplement No. 1 in 15 CFR part 770? (Discuss in detail any
income derived from Communist countries, including percentage
from each such country as related to total income, and the
type of services or products involved.)
8. Is 5% or more of any class of your organization's securities X
hold in "nominee shares" in "street names" or in some other
method which does not disclose beneficial owner of table title?
(Identify each foreign institutional investor holding 5 percent
or more of voting stock. Identification should include the name
and address of the investor and percentage of stock held. State
whether the investor has attempted to, or has, exerted any
management control or influence over the appointment of directors,
officers, or other key management personnel, and whether such
investors have attempted to influence the policies of the
corporation. If you have received from the investor a copy of the
Schedule 13D and/or Schedule 13G filed by the investor with the
Securities and Exchange Commission, you are to attach a copy of
Schedule 13D and/or Schedule 13G.)
9. Does your organization have inter-locking directors with foreign X
interests? (Include identifying data on all such directors. If they
have a security clearance, so state. Also indicate the name and
address of all other corporations with which they serve in capacity.)
10. Are there any citizens of foreign countries employed by, or who X
may visit, your X offices or facilities in a capacity which may
permit them to have access to classified information or a
significant quantity of special nuclear material? (Provide complete
information by identifying the individuals and the country of which
they are citizens.)
11 . Does your organization have foreign involvement not otherwise X
covered in your answers to the above questions? (Describe the foreign
involvement in detail, including why the involvement would not be
reportable in the preceding questions.)
(d) Prior to award of a contract under this solicitation, the DOE must
determine that award of the contract to the offeror will not pose an undue
risk to the common defense and security as a result of its access to
classified information or a significant quantity of special nuclear
material in the performance of the contract. In making the determination,
the contracting officer may consider a voting trust or other arrangements
proposed by the offeror to mitigate or avoid FOCI. The contracting officer
may require the offeror to submit such additional information as deemed
pertinent to this determination.
(e) The offeror shall require any subcontractors having access to
classified information or a significant quantity of special nuclear
material to provide responses to the questions in paragraph (c) of this
provision directly to the DOE contracting officer.
(f) Information submitted by the offeror in response to the questions in
(c) above is to be used solely for purposes of evaluating foreign
ownership, control, or influence and shall be treated by
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 17
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
DOE, to the extent permitted by law, as business or financial information
submitted in confidence.
NOTICE
Statute prohibits the award of a contract under a national security program to a
company owned by an entity controlled by a foreign government unless a waiver is
granted by the Secretary of Energy.
K.16 ORGANIZATIONAL CONFLICTS OF INTEREST DISCLOSURE-ADVISORY AND ASSISTANCE
SERVICES (JUN 1997)
(a) Organizational conflict of interest means that because of other activities
or relationships with other persons, a person is unable or potentially unable to
render impartial assistance or advice to the Government, or the person's
objectivity in performing the contract work is or might be otherwise impaired,
or a person has an unfair competitive advantage.
(b) An offeror notified that it is the apparent successful offeror shall provide
the statement described in paragraph (c) of this provision. For purposes of this
provision, "apparent successful offeror" means the proposer selected for final
negotiations or, where individual contracts are negotiated with all firms in the
competitive range, it means all such firms.
(c) The statement must contain the following:
(1) A statement of any past (within the past twelve months), present, or
currently planned financial, contractual, organizational, or other
interests relating to the performance of the statement of work. For
contractual interests, such statement must include the name, address
telephone number of the client or client(s), a description of the
services rendered to the previous client(s), and the name of a
responsible officer or employee of the offeror who is knowledgeable
about the services rendered to each client, if, in the 12 months
preceding the date of the statement services were rendered to the
Government or any other client (including a foreign government or
person) respecting the same subject matter of the instant solicitation,
or directly relating to such subject matter. The agency and contract
number under which the services were rendered must also be included, if
applicable. For financial interests, the statement must include the
nature and extent of the interest and any entity or entities involved
in the financial relationship. For these and any other interests enough
such information must be provided to allow a meaningful evaluation of
the potential effect of the interest on the performance of the
statement of work.
(2) A statement that no actual or potential conflict of interest or unfair
competitive advantage exists with respect to the advisory and
assistance services to be provided in connection with the instant
contract or that any actual or potential conflict of interest or unfair
competitive advantage that does or may exist with respect to the
contract in question has been communicated as part of the statement
required by (b) of this provision.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 18
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
(d) Failure of the offeror to provide the required statement may result in the
offeror being determined ineligible for award. Misrepresentation or failure to
report any fact may result in the assessment of penalties associated with false
statements or such other provisions provided for by law or regulation.
K17 DEAR 970.5204-57 AGREEMENT REGARDING WORKPLACE SUBSTANCE ABUSE PROGRAMS AT
DOE SITES (SEP 1997)
(a) Any contract awarded as a result of this solicitation will be subject
to the policies, criteria, and procedures of 10 CFR part 707,
Workplace Substance Abuse Programs at DOE Sites.
(b) By submission of its offer, the offeror agrees to provide to the
Contracting ,Officer, within 30 days after notification of selection
for award, or award of a contract, whichever occurs first, pursuant
to this solicitation, its written workplace substance abuse program
consistent with the requirements of 10 CFR part 707.
(c) Failure of the offeror to agree to the condition of responsibility
set forth in paragraph (b) of this provision, renders the offeror
unqualified and ineligible for award.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 19
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
K.18 SIGNATURE/CERTIFICATION
By signing below, the offeror certifies, under penalty of law, that the
representations and certifications are accurate, current, and complete.
The offeror further certifies that it will notify the Contacting Officer
of any changes to these representations and certifications. The
representations and certifications made by the offeror, as contained
herein, concern matters within the jurisdiction of an agency of the United
States and the making of a false, fictitious, or fraudulent representation
or certification may reader the maker subject to prosecution under Title
18, United States Code, Section 1001.
/s/ Robert G. Card November 15, 1999
---------------------------------------------------------------
Signature of the Officer or Employee Date of Execution
Responsible for the Offer
Robert G. Card. President and Chief Executive Officer
---------------------------------------------------------------
Typed Name and Title of the Officer or Employee
Responsible for the Offer
Kaiser-Hill Company L.L.C.
---------------------------------------------------------------
Name of Organization
10808 Highway 93, Unit B
---------------------------------------------------------------
Address
Golden. CO 80403-8200
---------------------------------------------------------------
City, State, ZIP
CONTRACT NUMBER DE-AC34-00RF01904
Rocky Flats Environmental Technology Site
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 20
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
Supplemental Information
to
Section K-16, Organizational Conflict of Interest
of
Solicitation No. DE-AC34-OORF01904
Representations and Certifications
by
KAISER-HILL COMPANY, L.L.C.
I hereby certify that I have the authority to represent Kaiser-Hill Company,
L.L.C. and that, to the best of my knowledge and belief, and upon a good faith
investigation, no past (within the past twelve months), present or currently
planned financial, contractual, organizational or other interests exist relating
to the performance of the statement of work. Additionally, Kaiser-Hill Company,
L.L.C. has no actual or potential conflict of interest or unfair competitive
advantage with respect to the advisory and assistance services to be provided in
connection with the instant contract or that any actual or potential conflict of
interest or unfair competitive advantage that does or may exist with respect to
the contract in question has been communicated.
Signature:
/s/ Robert G. Card
------------------------------------
Robert G. Card
President and Chief Executive Officer
Kaiser-Hill Company, L.L.C.
November 15, 1999
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 21
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
This page intentionally left blank.
Use or disclosure of data contained Base Proposal
on this sheet is subject to the Representations and
restriction on title page of Certificates - Page 22
this proposal.
<PAGE>
ROCKY FLATS CLOSURE CONTRACT NO. KAISER-HILL COMPANY, L.L.C.
DE-AC34-00RF01904
SECTION J
ATTACHMENT E
KEY PERSONNEL
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION J
ATTACHMENT E
KEY PERSONNEL
KAISER-HILL COMPANY, L.L.C.
- -------------------------------------------------------------------------
Name Title
- -------------------------------------------------------------------------
Card, Robert G. President and CEO
- -------------------------------------------------------------------------
Tiller, Robert E. Executive Vice President
- -------------------------------------------------------------------------
Parker, Alan M. Director, B771 Project
- -------------------------------------------------------------------------
Parker, Alan M. Director, B776 Project
- -------------------------------------------------------------------------
Fulton, John C. Director, B371 Project
- -------------------------------------------------------------------------
Fulton, John C. Director, B707 Project
- -------------------------------------------------------------------------
Tuor, Nancy R. Director, Industrial Buildings, Site Operations,
and ER Project
- -------------------------------------------------------------------------
Tuor, Nancy R. Director, Planning and Integration
- -------------------------------------------------------------------------
Brailsford, Marvin D. Director, Materials Stewardship Project
- -------------------------------------------------------------------------
Spears, Mark S. Director, Environmental, Safety, Health and Quality
- -------------------------------------------------------------------------
Martinez, Leonard A. Director of Administration
- -------------------------------------------------------------------------
Bensussen, Stanley J. General Counsel
- -------------------------------------------------------------------------
Section J, Attach E - Pg 2
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION J
ATTACHMENT F
REPORTING REQUIREMENTS CHECKLIST
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
Report Distribution List
------------------------
<TABLE>
<CAPTION>
Plan/Report Form No. * Frequency Level No. Copies Address
----------- ---------- --------- ----- ---------- -------
<S> <C> <C> <C> <C> <C>
Management Plan O,A Total project 5 A
Status Report Q PBD, total project 1,8,1 A,B,C
Summary Report 1332.2 Q PBD, total project 1,8,1 A,B,C
- ------------------------------------------------
Milestone Schedule Plan 1332.3 O,Q PBD, total project 1,8,1 A,B,C
Cost Plan 1332.7 O,Q PBD, total project 1,8,1 A,B,C
Milestone Schedule Status 1332.3 M PBD, total project 1,8,1 A,B,C
Cost Management Report 1332.9 M PBD, total project 1,8,1 A,B,C
- ------------------------------------------------
Management Control System Description O,X Total project 1,3,1 A,B,C
WBS Dictionary Index O,X Total project 1,3,1 A,B,C
Cost Performance Reports 1332.12 M M Control Account, PBD 1,8,1 A,B,C
1332.14 PDB 1,8,1 A,B,C
- ------------------------------------------------
Cash Flow Statement O,Q PBD, total project 1,2,2 A,B,C
Operating Budget O,Q PBD, total project 1,2,2 A,B,C
Supplementary Information A As required as required A
- ------------------------------------------------
Other (Quarterly Critical Analysis) Q PBD, total project 1,8,1 A,B,C
</TABLE>
* Alternate format may be authorized upon approval of the Contracting Officer
1
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF0-01904
Due Dates
---------
Within x Calendar
Code Event Days after event
- ---- ----- -----------------
A As requested As specified
M End of calendar month 30
O Contract award 30
Q End of calendar quarter 30
X Significant change 5
2
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF0-01904
List of
A. Contracting Officer
U.S. Department of Energy
Rocky Flats Field Office
10808 Highway 93, Unit A
Golden. CO 80402-8200
B. Assistant Manager for Closure Project management
U.S. Department of Energy
Rocky Flats Field Office
108M Highway 93, Unit A
Golden, CO 80402-8200
C. Field Chief Financial Officer
U.S. Department of Energy
Rocky Flats Field Office
10808 Highway 93, Unit A
Golden, CO 80402-8200
3
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF0-01904
SECTION J
ATTACHMENT G
AUTHORIZATION AGREEMENTS
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 991 Complex Authorization Agreement
--------------------------------------------
Authorization Agreement No. RFETS-014 Revision 1
1. Preamble
The purpose of this Authorization Agreement is to adopt the Building 991
Complex Authorization Basis (AB), as approved by the Department of Energy
(DOE), Rocky Flats Field Office (RFFO) and to authorize the performance of
activities in accordance with the Building 991 Complex AB.
Kaiser-Hill Company L.L.C. (the Contractor) inherited from EG&G Rocky
Flats, Inc., on July 1. 1995, aging facilities with existing hazards arid
outdated or non-existent authorization basis documentation. It is
recognized by the DOE, RFFO and the Contractor that on July 1, 1995, the
following conditions existed regarding Building 991: (a) the hazards,
design basis and construction detail knowledge of the system, structures
and components were incomplete, and (b) a new AB was needed to support the
new and current missions. The new AB was developed following appropriate
guidance contained in DOE Orders 5480.22 Technical Safety Requirements
(TSR) and DOE 5480.23 Nuclear Safety Analysis Reports (SAR) and DOE-STD-
3011-94, Guidance for Preparation of DOE 5480.22 (TSR) and DOE 5480.23
(SAR) Implementation Plans.
2. Scope of Agreement
This agreement authorizes the scope of activities identified and analyzed
in the AB subject to the terms and conditions in section 5 below.
3. Basis for Approval/Contractor Qualification
3.1. Based on the Review Report for the Building 991 Complex Final Safety
Analysis Report (FSAR) dated May 5, 1999, with specified technical
direction, the Department of Energy, Rocky Flats Field Office
concludes that the Building 991 Complex FSAR adequately documents
the operating safety basis and contains a control set, that when
implemented, provides reasonable assurance that the work activities
described in the Building 991 Complex FSAR can be conducted by the
Contractor without endangering the environment or the health and
safety of the workers or public.
3.2. The Department of Energy, Rocky Flats Field Office finds that there
is reasonable assurance that the Contractor is technically qualified
to engage in the activities authorized by this Authorization
Agreement
4. Authorization Basis
4.1. The effective Authorization Basis for the Building 991 Complex is
those documents identified as applicable to the Building 991 Complex
in the AB Document List (ABDL).
4.2. The DOE approved Building 991 Complex FSAR dated May 5. 1999, shall
be completely implemented, meeting the conditions of subsections 5.4
and 5.5, on or before October 28, 1999. The ABDL shall then be
modified to reflect this change.
Page 1 of 2
<PAGE>
Building 991 Complex Authorization Agreement - Continued
--------------------------------------------------------
5. Terms and Conditions
5.1 Applicable federal and state law, including implementing
regulations, and all contractual requirements regarding the Building
991 Complex, except as further defined for safety and health in
subsection 6.2 below, remain in force.
5.2. The Building 991 Complex AB Chapter 3 defines the specific Safety
Management Program commitments under this Authorization Agreement
which meet the applicable safety and health requirements of Section
J, Attachment F, of contract #DE-AC34-95PX-00825. The Administrative
Controls contained in the Building 991 Complex TSRs define the
specific Safety Management Program elements that shall be
implemented under this Authorization Agreement to support the
Building 991 Complex safety analyses.
5.3. The AB including the TSRs will be kept current by The Contractor
through performance of an annual review. As appropriate, changes to
or additional controls that may be needed to safely perform planned
activities will be developed. evaluated and implemented by the
Nuclear Safety Program in accordance with-the Site Integrated Safety
Management System. This change control process shall manage the
configuration of the AB to include timely update and dissemination
of the AB Document List to reflect DOE, RFFO approved AB documents.
5.4. The RFFO has accepted the strategy for implementation of the
Building 991 complex FSAR. The Contractor will approve an
implementation plan (IP) to achieve compliance with the controls and
commitments of the FSAR. The Contractor shall provide written
notification to RFFO of any substantive changes to the IP. This
notification shall include the basis for the change and any
appropriate recovery actions.
5.5. The Contractor will ensure completion of an Implementation
Validation Review prior to implementation of new controls under the
Building 991 Complex FSAR.
6. Special Conditions
None
7. Effective and Expiration Dates of Agreement
This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RFO0825, unless modified in writing by both parties
8. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 9/1/99 /s/ Jessie M. Roberson 9/2/99
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 2 of 2
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 774 Authorization Agreement
------------------------------------
Authorization Agreement No. RFETS-015
1. Preamble
The purpose of this Authorization Agreement is to adopt the Building 774
Authorization Basis (AB) as approved by the Department of Energy (DOE),
Rocky Flats Field Office (RFFO) and to authorize the performance of
activities in Building 774 in accordance with Building 774 AB.
Kaiser-Hill Company L.L.C. (the Contractor) inherited from EG&G Rocky
Flats, Inc., on July 1, 1995, aging facilities with existing hazards and
outdated or non-existent authorization basis documentation. It is
recognized by the DOE, RFFO and the Contractor that on July 1, 1995, the
following conditions existed regarding Building 774: (a) Building 774 was
over 40 years old and had aged and degraded structural and system
deficiencies from its original intended design capability, (b) there was
an incomplete knowledge regarding its design and condition of systems and
components due to less than adequate configuration control, (c) some
building systems and components had exceeded their original design life,
and (d) there was incomplete reliable/available data on building systems.
2. Authorization Scope
This agreement authorizes the scope of activities identified and analyzed
in the AB subject to the terms and conditions in section 5 below.
3. Basis for Approval/Contractor Qualification
3.1. Based on the review of the Building 774 Final Safety Analysis
Report (FSAR) and RFF0 reviews of documents listed In the AB
Document List (ABDL) for Building 774. the DOE, RFFO concludes
that the Building 774 AB adequately documents the operating safety
basis and contains a control set that, when implemented, provides
reasonable assurance that the work activities described in the
Building 774 AB can be conducted by the Contractor without
endangering the environment or the health and safety of the
workers or public
3.2. The DOE, RFFO finds that there is reasonable assurance that the
contractor is technically qualified to engage in the activities
authorized by this Authorization Agreement.
4. Authorization Basis
The effective Authorization Basis for the Building 774 is those documents
identified as applicable to the Building 774 in the ABDL.
Page 1 of 2
<PAGE>
Building 774 Authorization Agreement (Continued)
------------------------------------------------
5. Terms and Conditions
5.1. Applicable federal and state law, including implementing
regulations, and all contractual requirements regarding the
Building 774, except as further defined for safety and health in
subsection 5.2 below, remain in force.
5.2. The Building 774 FSAR, Chapters 9 through 14 define the Safety
Management Program commitments under this Authorization Agreement
which meet the applicable safety and health requirements of
Section J, Attachment F, of contract #DE-AC34-95RF00825. The
Administrative Controls contained in the Building 774 Operational
Safety Requirements (OSRs) define the specific, credited
programmatic elements that shall be implemented under this
Authorization Agreement to support the Building 774 safety
analyses.
5.3. The AB, including the OSRs, will be kept current by the Contractor
through the performance of an annual review. As appropriate,
changes to or additional controls that may be needed to safely
perform planned activities will be developed, evaluated and
implemented by the Nuclear Safety Program in accordance with the
Site Integrated Safety Management System. This change control
process shall manage the configuration of the AB to include timely
update of the AB Document List to reflect DOE, RFFO approved AB
documents.
6. Special Conditions
None
7. Effective and Expiration Dates of Agreement
This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RFO0825, unless modified in writing by both parties
8. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 8/31/99 /s/ Jessie M. Roberson 8/31/99
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 2 of 2
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
750/904 Pads Authorization Agreement
------------------------------------
Authorization Agreement No. RFETS-013
1. Preamble
The purpose of this Authorization Agreement is to adopt the 750/904 Pads
Authorization Basis (AB), and to authorize the performance of activities
in the 750/904 Pads as analyzed in the AB.
Kaiser-Hill Company L. L. C. (Kaiser-Hill) inherited from EG&G Rocky
Flats, Inc., on July 1, 1995, aging facilities with existing hazards and
outdated or non-existent authorization basis documentation. It is
recognized by the Department of Energy, Rocky Flats Field Office (RFFO)
and Kaiser-Hill that on July 1, 1995, the following conditions existed
regarding the 750/904 Pads: (a) there was an absence of complete
knowledge regarding Its design basis, systems and components due to less
than adequate configuration control, (b) the facility required
modifications to meet the requirements of its future mission and (e) the
facility lacked an authorization basis for the current mission. As a
result of the revised mission to store additional waste types, the Final
Safety Analysis Report (FSAR) was revised to incorporate new analyses and
controls for this mission. This revision was developed following
appropriate guidance contained in DOE Orders 5480.22 Technical Safety
Requirements (TSR) and DOE 5480.23 Nuclear Safety Analysis Reports (SAR).
2. Scope of this Agreement
This agreement authorizes the scope of activities identified and analyzed
in the AB subject to the terms and conditions in section 5 below.
3. RFFO Basis for Approval/Contractor Qualification
3.1. Based on the 750/904 Pads Safety Evaluation Report dated September
27, 1995 and revisions up to and including April 5, 1999, the
Department of Energy, Rocky Flats Field Office concludes that the
amended FSAR adequately documents the operating safety basis and
contains a control set which when implemented, will provide
reasonable assurance that the work activities described in the
FSAR can be conducted by the contractor without endangering the
environment or the health and safety of the workers or public.
3.2. The Department of Energy, Rocky Flats Field Office finds that
there is reasonable assurance that the contractor is technically
qualified to engage in the activities authorized by this
Authorization Agreement.
4. Authorization Basis
The effective Authorization Basis for 750/904 Pads is those documents
identified as applicable to 750/904 Pads in the AB Document List (ABDL).
Page 1 of 2
<PAGE>
750/904 Pads Authorization Agreement (Continued)
------------------------------------------------
5. Terms and Conditions
5.1. Applicable federal and state law, including implementing
regulations, and all contractual requirements regarding 750/904
Pads; except as set out in section 5.2 below, remain in force.
5.2. The 750/904 Pads FSAR Chapter 5 describes the Safety Management
Program commitments under this Authorization Agreement which meet
the applicable safety and health requirements of Section J,
Attachment F, of contract #DE-AC34-95RF00825. The Administrative
Controls contained in the 750/904 Pads Technical Safety
Requirements (TSRs) define the specific, credited programmatic
elements that shall be implemented under this Authorization
Agreement to support the 750/904 Pads safety analyses.
5.3. The AB, including the TSRs, will be kept current by Kaiser-Hill
including the performance of an annual review. As appropriate,
changes to or additional controls that may be needed to safely
perform planned activities will be developed. evaluated and
implemented by the Nuclear Safety Program in accordance with the
Site Integrated Safety Management System. This change control
process shall manage the configuration of the 750/904 Pads AB to
Include timely update of the AB Document List to reflect RFFO
approved AB Documents.
6. Special Conditions
None
7. Effective and Expiration Dates
This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RF00825, unless modified in writing by both parties.
8. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 4/13/99 /s/ Jessie M. Roberson 4/28/99
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 2 of 2
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 664 Authorization Agreement
------------------------------------
Authorization Agreement No. RFETS-007
1. Preamble
The purpose of this Authorization Agreement is to adopt the Building 664
Authorization Basis (AB) as approved by the Department of Energy (DOE),
Rocky Flats Field Office (RFFO) and to authorize the performance of
activities in Building 664 in accordance with Building 664 AB.
Kaiser-Hill Company L.L.C. (the Contractor) inherited from EG&G Rocky
Flats, Inc., on July 1, 1995, aging facilities with existing hazards and
outdated or non-existent authorization basis documentation. It is
recognized by the DOE, RFFO and the Contractor that on July 1, 1995, the
following conditions existed regarding Building 664: (a) the hazards,
design basis and construction detail knowledge of the systems, structures
and components were incomplete, and (b) a new AB was needed to support
the new and current missions. The new AB was developed following
appropriate guidance contained in DOE Orders 5480.22 Technical Safety
Requirements (TSR) and DOE 5480.23 Nuclear Safety Analysis Reports (SAR)
2. Authorization Scope
This agreement authorizes the scope of activities identified and analyzed
in the AB subject to the terms and conditions in section 5 below.
3. Basis for Approval/Contractor Qualification
3.1. Based on the Building 664 Final Safety Analysis Report (FSAR)
Safety Evaluation Report approved on August 3,1995, the DOE, RFFO
concludes that the Building 664 FSAR adequately documents the
operating safety basis and contains a control set, that when
implemented, provides reasonable assurance that the work activities
described in the Building 664 FSAR can be conducted by the
Contractor without endangering the environment or the health and
safety of the workers or public.
3.2. The DOE, RFFO finds that there is reasonable assurance that the
contractor is technically qualified to engage in the activities
authorized by this Authorization Agreement.
4. Authorization Basis
The effective Authorization Basis for the Building 664 is those documents
identified as applicable to the Building 664 in the AB Document List
(ABDL).
5. Terms and Conditions
5.1. Applicable federal and state law, including implementing
regulations, and all contractual requirements regarding the
Building 664, except as further defined for safety and health in
subsection 5.2 below, remain in force.
Page 1 of 2
<PAGE>
Building 664 Authorization Agreement (Continued)
------------------------------------------------
5.2. The Building 664 FSAR defines the Safety Management Program
commitments under this Authorization Agreement which meet the
applicable safety and health requirements of Section J, Attachment
F, of contract #DE-AC34-95RFO0825. The Administrative Controls
contained in the Building 664 TSRs define the specific, credited
programmatic elements that shall be implemented under this
Authorization Agreement to support the Building 664 safety
analyses.
5.3. The AB, including the TSRs, will be kept current by the Contractor
through the performance of an annual review. As appropriate,
changes to or additional controls that may be needed to safely
perform planned activities will be developed, evaluated and
Implemented by the Nuclear Safety Program in accordance with the
Site Integrated Safety Management System. This change control
process shall manage the configuration of the AB to include timely
update of the AB Document List to reflect DOE, RFFO approved AB
documents.
6. Special Conditions
None
7. Effective and Expiration Dates of Agreement This Authorization Agreement
is effective as of the date of the last signature below and shall remain
in effect through the life of contract #DE-AC34-95RFO0825, unless modified
in writing by both parties
8. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 6/23/99 /s/ Jessie M. Roberson 7/13/99
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 2 of 2
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 569 Authorization Agreement
------------------------------------
Authorization Agreement No. RFETS-008
1. Preamble
The purpose of this Authorization Agreement is to adopt the Building 569
Basis for Interim Operation (BIO), and to authorize the performance of
activities in Building 569 as analyzed in the BIO.
Kaiser-Hill Company L.L.C. (Kaiser-Hill) inherited from EG&G Rocky Flats,
Inc., on July 1, 1995, aging facilities with existing hazards and
outdated or non-existent authorization basis documentation. It is
recognized by the Department of Energy Rocky Flats Field Office (RFFO)
and Kaiser-Hill that on July 1, 1995, to following conditions existed
regarding Building 569: (a) there was an absence of complete knowledge
regarding Its design basis, systems and components due to less than
adequate configuration control, (b) the building required modifications
to meet the requirements of its future mission and (c) the building
lacked a formal authorization basis for operation. Based upon these
conditions a new authorization basis document the BIO, was developed to
meet DOE Standard 3011, Guidance for Preparation of DOE 5480.22 (TSR) and
DOE 5480.23 (SAR) Implementation Plans, and is the focus of this
agreement.
2. Scope of this Agreement
This agreement covers the scope of activities identified and analyzed in
the BIO.
3. RFF0 Basis for Approval/Contractor Qualification
3.1 Based on the Building 569 Review Report with specified conditions,
The Department of Energy, Rocky Flats Field Office concludes that
the BIO adequately documents the operating safety basis and
contains a control set, which when implemented, will provide
reasonable assurance that the work activities described in the BIO
can be conducted by the contractor without endangering the
environment or the health and safety of the workers or public.
32. The Department of Energy, Rocky Flats Field Office finds that there
is reasonable assurance that the contractor is technically
qualified to engage in the activities authorized by this
Authorization Agreement
4. Authorization Basis
4.1. The Authorization Basis (AB) for Building 569 is the DOE approved
BIO dated December 22,1997, the associated RFFO Review Report with
specified conditions dated February 18, 1998 and the Justification
for audibility deficiencies. The AB list for Building 569 will be
maintained current by the contractor in accordance with the
Nuclear Safety Manual as new activities or discovered conditions
result in DOE RFFO approved changes to the AB.
4.2. The BIO, when completely implemented, supersedes all previous
authorization basis documents for Building 569.
Page 1 of 2
<PAGE>
5. Terms and Conditions
5.1. Applicable federal and state law, including implementing
regulations, and all contractual requirements regarding Building
569, except as set out in section 52 below, remain in force.
5.2. The safety management controls contained in the Building 569
Technical Safety Requirements (TSRs) adequately define the extent
to which the Safety Management Programs shall be implemented under
this Authorization Agreement to meet the applicable requirements of
Section J, Attachment F, of contract #DE-AC34-95RF00825.
5.3. Building 569 operations are authorized to be accomplished in
accordance with the scope, applicable requirements and control set
of the BIO.
5.4. The BIO, including the TSRs, will be kept current by Kaiser-Hill
including the performance of an annual review. As appropriate,
changes to or additional controls that may be needed to safely
perform planned activities will be developed, evaluated and
Implemented by the Nuclear Safety Program in accordance with the
Site Integrated Safety Management System. This change control
process shall manage the configuration of Building 569 AB to
include timely update of the list to reflect RFFO approved changes
(e.g., page changes, USQ determinations, JCOs).
5.5. Kaiser-Hill will approve an implementation plan (IP) to achieve
full compliance with the TSRs. Provisional operation Is authorized
while Implementing the now TSRs. Installation, calibration and
demonstration of readiness of the Passive-Active Drum Counter
(PADC) and Low Specific Activity Counter (LOSAC) under the approved
IP are authorized. Kaiser-Hill will riot authorize operation of the
PA/DC until the completion of a satisfactory Management Review to
verify the safe operation of that equipment. Full compliance with
the TSRs will be achieved by April 20, 1998. Termination of other
authorized operations is not required if the implementation and
review of the new controls is not achieved by this date.
5.6. Kaiser-Hill will ensure completion of an Implementation Validation
Review prior to implementation of new controls under the BIO. RFFO
will perform an independent verification of the Implementation.
6. Special Conditions
None
7. Effective and Expiration Dates
This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RF00825, unless modified in writing by both parties
8. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card /s/ Jessie M. Roberson 3/24/98
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 2 of 2
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 559 Authorization Agreement
------------------------------------
Authorization Agreement No. RFETS-006
1 Preamble
The purpose of this Authorization Agreement is to adopt the Building 559
Authorization Basis, hereinafter referred to as the AS, as approved by
the Department of Energy (DOE), Rocky Flats Field Office (RFFO), and to
authorize the performance of activities in Building 559 in accordance
with the Building 559 AB.
Kaiser-Hill Company L.L.C. (Kaiser-Hill) inherited from EG&G Rocky Flats,
Inc., on July 1, 1995, aging facilities with existing hazards and
outdated or non-exisistent authorization basis documentation. It is
recognized by the DOE RFFO and Kaiser-Hill that on July 1, 1995, the
following conditions existed regarding Building 559: the design basis and
construction detail knowledge of the systems, structures and components
were incomplete.
2. Authorization Scope
This agreement authorizes the scope of activities identified and analyzed
in the AB subject to the terms and conditions in section 5.
3. RFFO Basis for Approval/Contractor Qualification
3.1. Based on the December 1, 1998, Review Report findings and
technical direction, The DOE RFFO concludes that the AB adequately
documents the operating safety basis and contains a control set
that when implemented provides reasonable assurance that the work
activities described in the AB can be conducted by the contractor
without endangering the environment or the health and safety of
the workers or public.
3.2. The DOE RFFO finds that there is reasonable assurance that the
contractor is technically qualified to engage in the activities
authorized by this Authorization Agreement.
4. Authorization Basis
4.1. The effective Authorization Basis for Building 559 is those
documents identified as applicable to Building 559 in the AB
Document List (ABDL).
4.2. The DOE approved Building 559 AB, shall be implemented, meeting
the conditions of subsections 5.4 and 5.5, on or before March 19,
1999. The ABDL shall then be modified to reflect this change.
5. Terms and Conditions
5.1. Applicable federal and state law, including implementing
regulations, and all contractual requirements, except as further
defined for safety and health in subsection 5.2 below, remain in
force.
Page 1 of 2
<PAGE>
Building 559 Authorization Agreement (Continued)
------------------------------------------------
5.2. The Building 559 FSAR Chapter 9 defines the Safety Management
Program commitments under this Authorization Agreement which meet
the applicable safety and health requirements of Section J,
Attachment F, of contract #DE-AC34-95RF00825. The Administrative
Controls contained in the Building 559 Technical Safety
Requirements (TSRs) define the specific Safety Management Program
elements that shall be implemented under this Authorization
Agreement to support the Building 559 safety analyses.
5.3. The AB, including the TSRs, will be kept current by Kaiser-Hill
Including the performance of an annual review. As appropriate,
changes to or additional controls that may be needed to safely
perform planned activities will be developed, evaluated and
implemented by the Nuclear Safety Program in accordance with the
Site Integrated Safety Management System. This change control
process shall manage the configuration of the AB to include timely
update and dissemination of the AB Document List for Building 559
to reflect the DOE RFFO approved changes.
5.4. The DOE RFFO has accepted the strategy for implementation of the
Building 559 AB. Kaiser-Hill will approve an implementation plan to
achieve compliance with the TSRs by March 19, 1999. Subsequent to
the Fire Suppression System modification, the associated TSRs will
be implemented and reviewed by May 31, 1999. Written notification
to the DOE RFFO shall be made for any substantive changes to the
IP, reporting the basis for the change and any appropriate recovery
actions to the DOE RFFO.
5.5. Kaiser-Hill will ensure completion of an Implementation Validation
Review prior to implementation of these new controls under the
Building 559 AB.
6. Special Conditions
None
7. Effective and Expiration Dates
This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RF00826, unless modified in writing by both parties
8. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 3/8/99 /s/ Jessie M. Roberson 3/17/99
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 2 of 2
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 440 Authorization Agreement
------------------------------------
Authorization Agreement No. RFETS-002 Revision 1
Preamble
- --------
The purpose of this Authorization Agreement is to adopt the Building 440 Basis
For Operations and its Review Report, hereinafter referred to as the BFO, and to
authorize the performance of activities in Building 440 which are analyzed in
the Building 440 BFO.
Kaiser-Hill Company L.L.C. (Kaiser-Hill) inherited from EG&G Rocky Flats, Inc.
(EG&G), on July 1, 1995 aging facilities with existing hazards and outdated
authorization basis documentation. It is recognized by the Department of Energy,
Rocky Flats Field Office (RFFO) and Kaiser-Hill that on July 1, 1995, the
following conditions existed regarding Building 440: (a) there was an absence of
complete knowledge regarding its design basis, systems and components due to
less than adequate configuration control, (b) the building required
modifications to meet the requirements of its future mission. Based upon these
conditions a new authorization basis document, the Building 440 BFO, was
developed using DOE Manual DOE-M-450.3-1, The Department of Energy Closure
Process for Necessary and Sufficient Set of Standards and is the focus of this
agreement.
Agreement
- ---------
With respect to Building 440, the Department of Energy, Rocky Flats Field Office
and KaiserHill agree as follows:
A. All Building 440 operations, including mission program and baseline work
activities will be accomplished in accordance with the applicable
requirements and control set in the Building 440 BFO.
B. Except as set out in paragraph C., applicable federal and state law,
including implementing regulations, and all contractual requirements
regarding Building 440 remain in force.
C. The Building 440 BFO Subsection 4.6.3, Administrative Programs, defines the
Safety Management Program commitments under this Authorization Agreement
which meet the applicable safety and health requirements of Section J,
Attachment F, of contract #DE-AC34-95RF00825. The Administrative
Operational Controls contained in the Building 440 BFO Subsection 4.62,
define the specific Safety Management Program controls that shall be
implemented under this Authorization Agreement to support the Building 440
safety analyses.
D. The Building 440 BFO, when completely implemented, supersedes all previous
authorization basis documents for Building 440.
- 1 of 2 -
<PAGE>
Building 440 Authorization Agreement (continued)
------------------------------------------------
E. (Deleted by Revision 1)
F. The Building 440 BFO Operational Controls will be kept current by
Kaiser-Hill including the performance of an annual review. The change
control process indentified in the Building 440 BFO shall be used to add
new activities or to make changes (such as changes in activity
descriptions, status, related control sets or additional hazards analysis)
to existing activities identified in the Building 440 BFO.
G. (Deleted by Revision 1)
H. The Department of Energy, Rocky Flats Field Office concludes that the
Building 440 BFO adequately documents the operating safety basis and
contains a control set that if fully implemented, will provide reasonable
assurance that the work activities described in the BFO can be conducted
without endangering the environment or the health and safety of the workers
or public.
I. This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RF00M, unless modified in writing by both parties
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 1/25/99 /s/ Jessie M. Roberson 2/2/99
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
- 2of 2 -
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 371/374 Complex Authorization Agreement
------------------------------------------------
Authorization Agreement No. RFETS-005
Page 1 of 3
Preamble
- --------
The purpose of this Authorization Agreement is to adopt the Building 371/374
Complex Authorization Basis, hereinafter referred to as the AB, and to authorize
the performance of activities in the Complex which are enveloped by the analysis
in the AB.
On July 1, 1995 Kaiser-Hill Company L.L.C. (Kaiser-Hill) became the integrating
management contractor replacing EG&G Rocky Flats, Inc. It is recognized by
Kaiser-Hill and DOE-RFFO that (a) Building 371/374 Complex facilities were over
20 years old and had system deficiencies from its original intended design
capability, (b) there was incomplete knowledge and limited reliable/retrievable
data regarding its systems and components, (c) some Complex systems and
components required priority upgrades to perform the interim storage mission in
accordance with the Implementation Program Plan for DNFSB Recommendation 94-3,
(d) the planned Complex mission differs from its original design purpose, and
(e) additional upgrades were expected to result from the preparation of a new
authorization basis document. Based upon these conditions a now authorization
basis document, the Building 371/374 Complex Basis for Interim Operation (BIO),
was developed using DOE Standard 3011, Guidance for the Preparation of DOE
5408.22 (TSR) and DOE 5480.23 (SAR) implementation Plans and DOE Standard 3009,
Preparation Guide for the U. S. Department of Energy Nonreactor Nuclear Facility
Safety Analysis Reports, and is the focus of this agreement.
Agreement
- ---------
With respect to Building 371/374 Complex, the Department of Energy, Rocky Flats
Field Office and Kaiser-Hill agree as follows:
A. All BIO activities and operations conducted in the Complex will be
accomplished in accordance with the applicable control set requirements
established in the AB. These control set requirements have been
demonstrated to be adequate to perform the general and current operations
enveloped by the analysis in the AB. During the course of BIO
implementation, any additional controls and technical safety requirements
(TSRS) that may be needed to safely perform planned activities will be
developed and evaluated in accordance with the Activity Control and Nuclear
Safety programs described in the AB.
<PAGE>
Building 371/374
Authorization Agreement No. RFETS-005
Page 2 of 3
B. The AB contains a graded set of requirements consistent with the
requirements in DOE Order 5480.23. The requirements are suitable for
implementing Integrated Safety Management for the 371/374 Complex and its
planned mission, including storage of special nuclear material until 2002.
System Evaluation Reports support the BIO and document the means of
assuring compliance with the functional requirements of Complex safety
systems, structures, aid components. Adherence to these requirements is
required by the TSRs. Information copies of changes to the Building
371/374 Complex System Evaluation Report, Section 4.0. 5.0, and 8.0 shall
be provided to DOE, RFFO.
C. Applicable federal and state law, including implementing regulations, and
all contractual requirements regarding the Building 371/374 Complex remain
in force. The safety management controls in Site Program Plans as
referenced in Chapter 3 of the BIO, will enhance the ability of
Kaiser-Hill to meet the safety management requirements contained in the
Orders and Directives listed in Section J, Attachment F, of contract
#DE-AC34-95RF00825:
D. The Building 371/374 Complex BIO supersedes previous authorization basis
documents for the Complex. Existing Unreviewed Safety Question
Determinations (USQDs) were reviewed to determine the valid compensatory
measures which must be In place to meet the requirements of the proposed
control set and incorporated. Open USQDs and those which may be generated
during implementation of the BID will be addressed in updates to the AB,
as necessary.
E. Building 371/374 Complex TSRs and controls will be kept current by,
Kaiser-Hill including the performance of an annual review. The
Kaiser-Hill evaluation processes (e.g., the USQDs and USQ screens) shall
be used to add new activities or to make changes to existing activities
identified in the AB.
F. Controls in the AB will be implemented in a phased manner as described in
the BIO Implementation Plan (IP). An Information copy of any changes to
the BIO IP shall be provided to DOE, RFFO. The AB for BIO activities will
be unambiguous at any stage during the phased implementation. For each
phase, a readiness determination will be performed in accordance with
established Site protocol which implements DOE Order 425.1, Startup and
Restart of Nuclear Facilities. As of August 1, 1998, the BIO will be the
AB of record for all activities conducted in the Building 371/374 Complex.
<PAGE>
Building 371/374
Authorization Agreement No. RFETS-005
Page 3 of 3
G. The Department of Energy, Rocky Flats Field Office and Kaiser-Hill conclude
that the Building 371/374 Complex BIO adequately documents the operating
safety basis and contains controls (TSRs), that when fully implemented,
will provide reasonable assurance that the work activities described in the
AB can be conducted without endangering the environment or the health and
safety of the workers or public. The BIO Review Report developed by the
RFFO BIO Review Team using DOE-STD-1104, Review and Approval of Final
Safety Analysis Reports, documents the technical bases for RFFO approval of
the BIO and TSRs.
H. The Building 371 Safeguards and Security Plan provides specific direction
for related activities and operations in Building 371.
I. This Authorization Agreement is effective for implementation as of the date
of the last signature below and shall remain in effect through the life of
contract #DE-AC34-95RF00825, unless extended in writing by both parties.
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 9/8/97 /s/ Jessie M. Roberson 9/11/97
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 776/777 Complex Authorization Agreement
------------------------------------------------
Authorization Agreement No. RFETS-012 Revision 1
1. Preamble
The purpose of this Authorization Agreement is to adopt the Building 776/777
Complex Authorization Basis (AB), and to authorize the performance of
activities in the Building 776/777 Complex as analyzed in the AB.
Kaiser-Hill Company L.L.C. (the Contractor) Inherited from EG&G Rocky Flats,
Inc., on July 1, 1995, aging facilities with existing hazards and outdated
or non-existent authorization basis documentation. It is recognized by the
Department of Energy (DOE), Rocky Flats Field Office (RFFO) and the
Contractor that on July 1, 1995, the following conditions existed regarding
the Building 776/777 Complex: (a) the Complex was nearly 40 years old and
had aged and degraded structural and system deficiencies from its original
intended design capability, including some systems and components that had
exceeded their original design life, (b) there was an absence of complete
knowledge regarding its design basis, systems, components and structure due
to less than adequate configuration control, further complicated by the 1969
fire, (c) the complex required modifications to most the requirements of its
future mission, and (d) the complex lacked an accurate authorization basis
for the current mission. Based upon these conditions a new authorization
basis document, the Basis for Interim Operation (BIO), was developed to meet
DOE Standard 3011, Guidance for Preparation of DOE 5480.22 (TSR) and DOE
5480.23 (SAR) Implementation Plans.
2. Scope of this Agreement
This agreement authorizes those activities identified and analyzed in the AB
subject to the terms and conditions in Section 5 below.
3. RFFO Basis for Approval/Contractor Qualification
3.1. Sued on the Building 776/777 Complex Review Report dated March 15,
1999, and addenda dated June 16, 1999 and July 1, 1999 with specified
conditions, the DOE, RFFO concludes that the BIO adequately documents
the operating safety basis and contains a control set which when
implemented, will provide reasonable assurance that the work activities
described in the BIO can be conducted by the Contractor without
endangering the environment or the health and safety of the workers or
public.
3.2. The DOE, RFFO Finds that there is reasonable assurance that the
Contractor is technically qualified to engage in the activities
authorized by this Authorization Agreement.
4. Authorization Basis
4.1. The effective Authorization Basis for the Building 776/777 Complex is
those documents identified as applicable to the Building 776/777
Complex in the AB Document List (ABDL).
4.2. The DOE approved Building 776/777 Complex BIO, Revision 2, shall be
completely implemented, meeting the conditions of subsections 5.4 and
5.5 on or before October 18, 1999. The ABDL shall then be modified to
reflect this change.
Page 1 of 2
<PAGE>
Building 776/777 Complex Authorization Agreement (Continued)
5. Terms and Conditions
5.1. Applicable federal and state law, including implementing regulations,
and all contractual requirements regarding the Building 776/777
Complex, except as set out in section 5.2 below, remain in force.
5.2. The Building 776/777 Complex BIO, Chapter 3 defines the Safety
Management Program commitments under this Authorization Agreement which
meet the applicable safety and health requirements of Section J.
Attachment F, of contract #DE-AC34-95RFO0825. The Administrative
Controls contained in the Building 776/777 Complex Technical Safety
Requirements (TSRs) define the specific, credited programmatic elements
that shall be implemented under this Authorization Agreement to support
the Building 776/777 Complex safety analyses.
5.3. The AB, including the TSRs, will be kept current by the Contractor
including the performance of an annual review. As appropriate, changes
to or additional controls that may be needed to safely perform planned
activities will be developed, evaluated and implemented by the Nuclear
Safety Program in accordance with the Site Integrated Safety Management
System. This change control process shall manage the configuration of
the Building 776/777 Complex AB to include timely update of the AB
Document List to reflect RFFO approved changes.
5.4. The RFFO has accepted the strategy for implementation of the Building
776/777 Complex BIO. The Contractor will approve an implementation plan
(IP) to achieve full compliance with the TSRs. The Contractor shall
provide written notification to RFFO of any substantive changes to the
IP. This notification shall include the basis for the change and any
appropriate recovery actions.
5.5. The Contractor will ensure the completion of an Implementation
Validation Review prior to implementation of these now controls under
the Building 776/777 Complex BIO.
6. Special Conditions
None
7. Effective and Expiration Dates
This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RFO0825, unless modified in writing by both parties.
S. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 8/23/99 /s/ Jessie M. Roberson 8/25/99
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 2 of 2
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 771 Authorization Agreement
------------------------------------
Authorization Agreement No. RFETS-003 Revision 2
Preamble
- --------
The purpose of this Authorization Agreement is to adopt the Building 771 Basis
For Operations and its Review Report, hereinafter referred to as the BFO, and to
authorize the performance of activities in Building 771 which are analyzed in
the Building 771 BFO.
Kaiser-Hill Company L.L.C. (Kaiser-Hill) inherited from EG&G Rocky Flats, Inc,
(EG&G), on July 1, 1995, aging facilities with existing hazards and outdated
authorization basis documentation. It is recognized by Kaiser-Hill and DOE-RFFO
that on July 1, 1995; the following conditions existed regarding Building 771:
(a) Building 771 was over 40 years old and had aged and degraded structural and
system deficiencies from its original intended design capability, (b) there was
an incomplete knowledge regarding its systems and components due to less than
adequate configuration control, (e) some building systems and components had
exceeded their original design life, (d) there was incomplete reliable/available
data on building systems, and (e) remaining and planned activities were limited
to maintaining safe current operations and the building habitable, and those
hazard reduction activities leading to a deactivation and decommissioning ready
state. Based upon these conditions a new authorization basis document the
Building 771 BFO, was developed using DOE Manual DOE-M-450-3-1, The Department
of Energy Closure Process for Necessary and Sufficient Set of Standards and is
the focus of this agreement.
Agreement
- ---------
With respect to Building 771, the Department of Energy. Rocky Flats Field Office
and Kaiser-Hill agree as follows:
A. All Building 771 operations, including mission program and baseline work
activities will be accomplished in accordance with the requirements and
control set in the Building 771 BFO.
B. Applicable federal and state law, including implementing regulations,
and all contractual requirements, except as set out in paragraph C.,
regarding Building 771 remain in force.
C. The Building 771 BFO Chapter 5 describes the Safety Management Program
commitments under this Authorization Agreement which meet the applicable
safety and health requirements of Section J, Attachment F, of contract
#DE-AC34-95RF00825. The Administrative Control Requirements contained in
the Building 771 Technical Safety Requirements (TSRs) define the
specific Safety Management Program controls that shall be implemented
under this Authorization Agreement to support the Building 771 safety
analyses.
- 1 of 2 -
<PAGE>
Building 771 Authorization Agreement (continued)
------------------------------------------------
D. The Building 771 BFO, when completely implemented, supersedes all
previous authorization basis documents for Building 771.
E. The Building 771 Safeguards and Security Plan provides specific
direction for related activities and operations in the Building 771.
F. (Deleted by Revision 2)
G. The Building 771 BFO TSRs will be kept current by Kaiser-Hill including
the performance of an annual review. The change control process
Identified in the Building 771 BFO shall be used to add now activities
or to make changes (such as changes In activity descriptions, deletion
of activities, addition of now activities, status, related control sets
or additional hazards analysis) to existing activities identified in the
Building 771 BFO.
H. (Deleted by Revision 2)
I. The Department of Energy, Rocky Flats Field Office concludes that the
Building 771 BFO adequately documents the operating safety basis and
contains a control set that if fully implemented, will provide
reasonable assurance that the work activities described in the BFO can
be conducted without endangering the environment or the health and
safety of the workers or public.
J. This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RFOO825, unless modified in writing by both parties.
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 1/28/99 /s/ Jessie M. Roberson 2/2/99
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
- 2 of 2 -
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
779 Cluster Authorization Agreement
-----------------------------------
Authorization Agreement No. RFETS-009
1. Preamble
The purpose of this Authorization Agreement is to adopt the 779 Cluster
Authorization Basis, hereinafter referred to as the AB, as approved by
the Department of Energy (DOE), Rocky Flats Field Office (RFFO), and to
authorize the performance of activities in the 779 Cluster in accordance
with the 779 Cluster AB.
Kaiser-Hill Company L.L.C. (Kaiser-Hill) inherited from EG&G Rocky Flats,
Inc., on July 1. 1995, aging facilities with existing hazards and
outdated or non-existent authorization basis documentation. It is
recognized by the DOE, RFFO and Kaiser-Hill that on July 1, 1995, the
following conditions existed regarding the 779 Cluster (a) the hazards,
design basis and construction detail knowledge of the systems, structures
and components were incomplete, and (b) a new AB was needed to support
the new and current missions. The new AB was developed following
appropriate guidance contained in DOE Standard 3011, Guidance for
Preparation of DOE 5480.22 (TSR) and DOE 5480.23(SAR)Implementation
Plans.
2. Authorization Scope
This agreement authorizes the scope of activities identified and analyzed
in the AB with the terms and conditions in section 5.
3. Basis for Approval/Contractor Qualification
3.1. Based on the Review Report for the 779 Cluster Basis for Interim
Operation (BIO) dated April 28, 1998, with specified technical
direction, the Department of Energy, Rocky Flats Field Office
concludes that the 779 Cluster BIO adequately documents the
operating safety basis and contains a control set that when
implemented, provides reasonable assurance that the work activities
described in the 779 Cluster BIO can be conducted by the contractor
without endangering the environment or the health and safety of the
workers or public.
3.2. The Department of Energy, Rocky Flats Field Office finds that there
is reasonable assurance that the contractor is technically
qualified to engage in the activities authorized by this
Authorization Agreement.
4. Authorization Basis
4.1. The effective Authorization Basis for the 779 Cluster is those
documents identified as applicable to the 779 Cluster in the AB
Document List (ABDL).
4.2. The DOE approved 779 Cluster BIO dated April 28, 1998, shall be
completely implemented, meeting the conditions of subsections 5.4
and 5.5, on or before August 18, 1998. The ABDL shall then be
modified to reflect this change.
5. Terms and Conditions
5.1. Applicable federal and state law, including implementing
regulations, and all contractual requirements regarding the 779
Cluster, except as set out in subsection 5.2 below, remain in
force.
Page 1 of 2
<PAGE>
5.2. The Administrative Controls contained in the 779 Cluster TSRs
define the specific Safety Management Program elements that shall
be implemented under this Authorization Agreement to meet the
applicable requirements of Section J, Attachment F, of contract
#DE-AC34-95RF00825. The 779 Cluster BIO Section 1.5 and Chapter 4
further define what the balance of the Safety Management Programs
commitments are under this Authorization Agreement.
5.3. The AB, including the TSRs, will be kept current by K-H through
editorial revision within three months of the change (to reflect
corrections or Unreviewed Safety Question Determination driven
changes) in lieu of an annual review. As appropriate, changes to
or additional controls that may be needed to safety perform
planned activities will be developed, evaluated and implemented by
the Nuclear Safety Program in accordance with the Site integrated
Safety Management System. This change control process shall
manage the configuration of the AB to include timely update and
dissemination of the AB Document List to reflect RFFO approved
changes.
5.4. The RFFO has accepted the strategy for implementation of the 779
Cluster AB. Kaiser-Hill will approve an implementation plan (IP)
to achieve full compliance with the TSRs. Written notification to
RFFO shall be made for any substantive changes to the IP,
reporting the basis for the change and any appropriate recovery
actions to the RFFO.
5.5. Kaiser-Hill will ensure completion of an Implementation Validation
Review prior to implementation of new controls under the 779
Cluster BIO.
6. Special Conditions
6.1. Controls will be eliminated commensurate with a reduction in
hazards and managed per the Nuclear Safety Program.
6.2. Operations are subject to the provisions of the Decommissioning
Operating Plan, RF/RMRS-97-085.UN, Revision 0, Rocky Mountain
Remediation Services, L.L.C., February 6, 1998, or approved
revision.
7. Effective and Expiration Dates of Agreement
This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RF00825, unless modified in writing by both parties
8. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 7/22/98 /s/ Jessie M. Roberson 7/21/98
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 2 of 2
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Building 886 Authorization Agreement
------------------------------------
Authorization Agreement No. RFETS-010
1. Preamble
The purpose of this Authorization Agreement is to adopt the Building 886
Authorization Basis, hereinafter referred to as the AB, as approved by
the Department of Energy (DOE), Rocky Flats Field Office (RFFO) to
authorize the performance of activities in Building 886 in accordance
with Building 886 AB.
Kaiser-Hill Company L.L.C. (Kaiser-Hill) inherited from EG&G Rocky Flats,
Inc., on July 1, 1995, aging facilities with existing hazards and
outdated or non-existent authorization basis documentation. It is
recognized by the DOE, RFFO and Kaiser-Hill that on July 1, 1995, the
following conditions existed regarding Building 886: (a) the hazards,
design basis and construction detail knowledge of the systems, structures
and components were incomplete, and (b) a new AB was needed to support
the new and current missions. The new AB was developed following
appropriate guidance contained in DOE Standard 3011, Guidance for
Preparation of DOE 5480.22 (TSR) and DOE 5480.23 (SAR) Implementation
Plans, and DOE Orders 548,022 Technical Safety Requirements (TSR) and DOE
5480.23 Nuclear Safety Analysis Reports (SAR).
2. Authorization Scope
This agreement authorizes the scope of activities identified and analyzed
in the AB with the terms and conditions in section 5.
3. Basis for Approval/Contractor Qualification,
3.1. Based on the Building 886 Basis for Interim Operation (BIO) Review
Report approved October 10, 1995, and Addendum A approved April 9,
1997, the Department of Energy, Rocky Flats Field Office concludes
that the Building 886 BIO adequately documents the operating safety
basis and contains a control set, that when implemented, provides
reasonable assurance that the work activities described in the
Building 886 BIO can be conducted by the contractor without
endangering the environment or the health and safety of the workers
or public.
3.2. The Department of Energy, Rocky Flats Field Office finds that there
is reasonable assurance that the contractor is technically
qualified to engage in the activities authorized by this
Authorization Agreement.
4. Authorization Basis
The effective Authorization Basis for the Building 886 is those documents
identified as applicable to the Building 886 in the AB Document List
(ABDL).
5. Terms and Conditions
5.1. Applicable federal and state law, including implementing
regulations, and all contractual requirements regarding Building
886, except as set out in subsection 5.2 below, remain in force.
Page 1 of 2
<PAGE>
ROCKY FLATS ENVIRONMENTAL TECHNOLOGY SITE
-----------------------------------------
Site SAR Authorization Agreement
--------------------------------
Authorization Agreement No. RFETS-011
1. Preamble
The purpose of this Authorization Agreement is to adopt the Site Safety
Analysis Report Volume I (Site SAR) as approved by the Department of
Energy (DOE), Rocky Flats Field Office (RFFO), and to authorize the
performance of activities on the Rocky Flats Environmental Technology
Site (Site) in accordance with the Site SAR. Upon implementation of the
Site SAR this Authorization Agreement supersedes the Master Activity List
(MAL) Authorization Agreement.
Kaiser-Hill Company L.L.C. (the contractor) inherited from EG&G Rocky
Flats, Inc., on July 1, 1995, aging facilities with existing hazards and
outdated or non-existent authorization basis documentation. It is
recognized by the DOE, RFFO and the contractor that on July 1, 1995, the
following conditions existed regarding the Site: (a) the mission of the
site had changed from weapons production to providing safe storage and
management of wastes and special nuclear material, with the goal of
reducing existing hazards, decommissioning facilities and ceasing
operations, and (b) the existing safety documentation required updating
due to this change in mission. The Site SAR was developed as part of the
overall plan to provide authorization bases for activities at the Site
not covered by facility ABs and as the mechanism to provide the
appropriate safety documentation for facilities with less than nuclear
hazard Category 2 quantities of material. The Site SAR also identifies
the infrastructure systems inherently relied upon in the other nuclear
Hazard Category 2 and 3 facility AB documents. The Site SAR was developed
following appropriate guidance contained in DOE Standard 3009,
Preparation Guide for U.S. Department of Energy Nonreactor Nuclear
Facility Safety Analysis Report, DOE Standard 1027, Hazard Categorization
and Accident Analysis Techniques for Compliance with DOE Order 5480.23,
Nuclear Safety Reports; DOE Standard 3011, Guidance for Preparation of
DOE 5480.22 (TSR) and DOE Order 5480.23 (SAR) Implementation Plans; and
DOE Order 5481.1B, Safety Analysis and Review System.
2. Authorization Scope
This agreement authorizes those activities bounded by the Site SAR
(Volume 1), subject to the terms and conditions of Sections 6 and 6
below. These include Site infrastructure activities that support Hazard
Category 2 and 3 facility authorization bases, on-site hazardous and
radiological transportation activities and all other ongoing activities
currently governed by the MAL that are not governed by a separate
authorization agreement.
3. Basis for Approval/Contractor Qualification
3.1. Based on the Review Report for the Site Safety Analysis Report
dated November 30, 1998, with specified technical direction, the
DOE, RFFO concludes that the Site SAR adequately documents the
operating safety basis and contains a control set that, when
implemented, provides reasonable assurance that the work
activities bounded by the Site SAR can be conducted by the
contractor without endangering the environment or the health and
safety of the workers or public.
<PAGE>
Site SAR Authorization Agreement (Continued)
3.2. The DOE, RFFO finds that there is reasonable assurance that the
contractor is technically qualified to engage in the activities
authorized by this Authorization Agreement.
4. Authorization Basis
4.1. The effective Authorization Basis (AB) for Site-wide nuclear
activities is constituted by those documents identified as
applicable to the Site in the AB Document List (ABDL).
42. The DOE approved Site SAR and direction dated November 30, 1998
shall be implemented, subject to the conditions of subsections
5.4, 5.6 and section 6, on or before June 30,1999. On the
implementation date, the ABDL shall be modified to reflect the new
AB, and the Site SAR shall supersede the MAL
5. Terms and Conditions
5.1. Applicable federal and state law, including implementing
regulations, and all contractual requirements regarding the Site,
except as further defined for safety and health in subsection 52
below, remain in force.
5.2. The Site SAR Chapter 6 defines the Safety Management Programs
commitments under this Authorization Agreement which meet the
applicable requirements of Section J, Attachment F, of contract
#DE-AC34-95RF00825. The controls contained in Chapter 7 of the
Site SAR shall be implemented under this Authorization Agreement
to maintain the assumptions of the safety analyses.
5.3. The AB, including the above-specified controls, will be kept
current by the contractor through performance of an annual review.
As appropriate, changes to or additional controls that may be
needed to safely perform planned nuclear activities will be
developed, evaluated and implemented by the Nuclear Safety
Program. This change control process shall manage the
configuration of the AB to include timely update and dissemination
of the AB Document List (ABDL) to reflect RFFO approved AB
documents. The ABDL and the Integrated Safety Management System,
through the use of the Integrated Work Control Process and the
Nuclear Safety Unreviewed Safety Question Determination process,
shall ensure that the AB is identified and reviewed for adequacy
prior to performing nuclear activities.
5.4. The RFFO has accepted the strategy for implementation of the Site
SAR. The contractor will approve an implementation plan (IP) to
achieve compliance with the controls and commitments of the Site
SAR. The contractor shall provide written notification to RFFO of
any substantive changes to the IP. This notification shall include
the basis for the change and any appropriate recovery actions.
5.5. The contractor will complete an Implementation Validation Review
of the Implementation of new controls under the Site SAR.
Page 2 of 3
<PAGE>
Site SAR Authorization Agreement (Continued)
6. Special Conditions
6.1. Until the Site SAR approved transportation controls are
Implemented, those interim measures specified in the Appendix to
this Authorization Agreement shall be implemented.
6.2. The interim measures identified in the Appendix will be superseded
by implementation of the Site SAR controls per subsection 4.2
above.
7. Effective and Expiration Dates of Agreement
This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RF00825, unless modified in writing by both parties.
8. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 6/7/99 /s/ Jessie M. Roberson 6/7/99
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 3 of 3
<PAGE>
5.2. The Administrative Controls contained in the Building 886 TSRs
define the specific Safety Management Program elements that shall
be implemented under this Authorization Agreement to meet the
applicable requirements of Section J, Attachment F, of contract
#DE-AC34-95AF00825. The Building 886 BIO Chapter 3 further defines
the contractor's commitment to the balance of the Safety
Management Program elements under this Authorization Agreement.
5.3. The AB, including the TSRs, will be kept current by K-H through
the performance of an annual review. As appropriate, changes to or
additional controls that may be needed to safely perform planned
activities will be developed, evaluated and implemented by the
Nuclear Safety Program in accordance with the Site Integrated
Safety Management System. This change control process shall manage
the configuration of the AB to include timely update and
dissemination of the AB Document List to reflect RFFO approved
changes.
6. Special Conditions
None
7. Effective and Expiration Dates of Agreement
This Authorization Agreement is effective as of the date of the last
signature below and shall remain in effect through the life of contract
#DE-AC34-95RF00825, unless modified in writing by both parties
8. Agreement
For Kaiser-Hill Company L.L.C. For the Department of Energy
Rocky Flats Environmental Technology Site Rocky Flats Field Office
/s/ Robert G. Card 8/31/98 /s/ Jessie M. Roberson 9/9/98
- ------------------------------- -------------------------------
Robert G. Card Date Jessie M. Roberson Date
President Manager
Page 2 of 2
<PAGE>
Site SAR Authorization Agreement (Continued)
Appendix 1
Interim Measure Completion Action
Date
- ------------------------------------------------------------------------------
1. Implement the controls developed for the 2/28/99 Standing Order 55
Salt Stabilization Program Transportation (Completed)
Risk, Nuclear Safety Technical Report NSTR
015-97 for all >200 gram/packages of
aged weapons-grade plutonium equivalent,
non waste, on-site (outside/between
buildings/facilities) transfers of SNM not
packaged In Type B containers by
February 28,1999.
2. Establish route control for all on-site 2/28/99 Standing Orders 55
deliveries of bulk propane during the (Completed) and 56
on-site transfer of SNM not packaged In
Type B containers.
3. Limit all on-site transfers of TRU waste 2/28199 Standing Order 55
packaged in standard waste boxes (SWBs) to (Completed)
10 or less boxes per transfer. This control
limits on-site transfers to one-half the
Material at Risk (MAR) value assumed In the
analysis in the Site SAR.
4. Use only trucks with metal floors for all 2/28/99 Standing Order 55
on-site transfers of TRU waste packed in (Completed)
metal drums.
5. Adopt the applicable controls contained 2/28/99 Standing Order 55
within the LLW Crate JCO for on-site (Completed)
transportation activities involving wooden
waste crates. The applicable controls are
stated as follows: 1) limiting the
collection/assembly of unattended wooden
LLW crates to 10 or less; and 2) ensuring
no unnecessary combustibles are in the
vicinity of unattended wooden LLW crates
during loading, unloading and no unnecessary
combustibles are in the transporting vehicle.
6. Limit the on-site transfers of LLW packed 2/28/99 Standing Order 55
in metal drums to less than 100 drums per (Completed)
transfer and LLW packed in wooden crates to
10 or less per transfer.
7. Implement Site Engineered Control #7 and 2/28/99 Sixteen new signs
Technical Direction B-2(b) by February 28, (Completed) Installed "No
1999. These controls address parking and Parking Within 20
ignition sources near propane tanks. Feet"
Appendix - Page 1 of 2
<PAGE>
Site SAR Authorization Agreement (Continued)
Interim Measure Completion Action
Date
- ------------------------------------------------------------------------------
8. Modify the Air Products contract for 2/28/99 Letter to Air Products
Building 223 by February 28, 1999 to limit (Completed) Identifying concern &
the chemicals brought on Site and into this notifying them of
facility to quantities permitted by the Site contract modification.
SAR. Air Products agreed on
February 24, 1999 to
Contract amendment
No.7 incorporating
limits of hazardous
chemicals per
reportable quantities
reported in 40CFR302.
9. Increase Building Managers awareness 2/17/99 Letter from K-H
(through management bulletins) of the Site (Completed) Nuclear Safety
SAR requirements to limit quantifies of the Manager with
hazardous and radiological materials below guidelines for
threshold quantities to prevent changing the subcontractors'
facility classification. action dated February
17, 1999 (HEG-009-99)
10. Each industrial facility manager will 3/15/99 Reports from
conduct a review of their facility and (Completed) subcontractors on
assert that the current various dates
category classification for the facility is confirming
correct and that their current hazardous current hazard
material inventory does not exceed that categorizations.
allowed by the Site SAR.
Appendix - Page 2 of 2
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION J
ATTACHMENT H
SCHEDULE AND COST INCENTIVE GRAPHS
<PAGE>
Schedule Incentive
[GRAPH APPEARS HERE]
Schedule Incentive ($ millions)
3/31/06 20
12/15/06 15
3/31/07 0
3/31/08 (20)
3/31/06-12/15/06 = $19,230.77/day
12/16/06-3/31/07 = $141,509.43/day
4/1/07-3/31/08 = $54,794.52/day
SECTION J, ATTACHMENT H
<PAGE>
Cost Incentive
[GRAPH APPEARS HERE]
Max Fee $460M
Underrun/Positive Incentive:
Government share: 70%
Contractor share: 30%
Target Fee $340M
Overrrun/Penalty:
Government share: 70%
Contractor share: 30%
Min Fee $150M
Target Cost
$3,563,000,000 $3,963,000,000 $4,163,000,000 $4,796,333,333
NOTE: See Contract B.5(d) for schedule incentive adjustment(s) to fee.
SECTION J, ATTACHMENT H
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
SECTION J
ATTACHMENT I
LISTING OF CLAIMS
<PAGE>
SECTION J
ATTACHMENT I
LISTING OF CLAIMS
Introduction
This Attachment I identifies the actions to be taken and agreements reached in
order to achieve an early start date for contract DE-AC34-00RF01904 beginning on
February 1, 2000. The Contractor and Government agree to the following,
notwithstanding any other actions, requirements or steps necessary to close out
contract DE-AC34-95RF00825 and to transition to the start of contract
DE-AC34-00RF01904.
A. Contractor agrees as follows:
i. Cost Reduction Proposals
In consideration of the commencement of contract DE-AC34-00RF01904 on February
1, 2000, and the Target Fee identified in Clause B.2(a) therein, Contractor
agrees and acknowledges that it has received adequate compensation and
consideration for all Cost Savings Proposals previously submitted DOE under
Clause H.6 of contract DE-AC34-95RF00825 through the payment of Superstretch
Performance Measure fees paid by DOE from 1996 and thereafter. In addition,
Contractor agrees that the CRP program has been superceded by the Superstretch
Performance measure program and Contractor is not entitled to pursue or seek
compensation for CRPs under contract DE-AC34-95RF00825 or DE-AC34-00RF01904.
ii. Claims for Performance Measure Fee
In consideration of the commencement of contract DE-AC34-00RF01904 on February
1, 2000 and the Target Fee identified in Clause B.2(a) therein, Contractor
agrees to withdraw its claim for unpaid Performance Measure Fee for performance
measure 97-S8.17R presently pending before the Energy Board of Contract Appeals
(EBCA No. C-990228). Additionally, in consideration of the payment by DOE in the
amount of $18,075,292, representing the payment of all unpaid fee earned under
contract DE-AC34-95RF00825 for performance measures, Contractor agrees to
forever give up any claims, whether known or unknown for any unpaid or unearned
performance measure fee Contractor may believe it is entitled to under contract
DE-AC34-95RF00825. The performance measure fee amount is based upon projected
quantities to be delivered by the conclusion of contract DE-AC34-95RF00825. This
amount is subject to adjustment if the quantity of performance actually
delivered would have resulted in a payment amount difference of more than five
percent from the projected quantities. The Contracting Officer may elect to make
partial payments for performance measure fee prior to February 1, 2000, based on
previously submitted completion reports.
B. DOE agrees as follows:
i. McCarty and Collateral Litigation Expenses
In consideration for the withdrawal of CRP and Performance Measure Fee claim,
the DOE agrees to withdraw its notice of intend to disallow costs in the McCarty
case and other miscellaneous litigation expenses as specified in a letter to
Contractor dated October 19, 1999, subject: 1999 Audit Report: Kaiser-Hill Legal
Office. DOE agrees that the $66,199.11 identified in that letter and the costs
incurred in defending the McCarty case shall be allowed as reimbursable costs
under contract DE-AC34-95RF00825. Nothing in this subparagraph should be
construed to alleviate the Contractor from compliance with its DOE approved
litigation management procedures.
Section J, Attach I - Pg 1
<PAGE>
Rocky Flats Closure Contract No. DE-AC34-00RF01904
ii. Fee Payments
DOE agrees that all fees paid and earned including Cost Reduction Proposal
payments under contract DE-AC34-95RF00825 shall not be subject to reduction or
deduction notwithstanding any other provision in contract DE-AC34-95RF00825, and
except for (a) Category 1, 2, 3 events/incidents identified, and (b)
circumstances evidencing an intentional failure by Contractor to disclose
material information which would have affected DOE's determination of
entitlement to fee or other obvious administrative or clerical error in
calculating the amount of fee earned.
Section J, Attach I - Pg 2
<PAGE>
1.PROGRAM/PROJECT TITLE Rocky 2. IDENTIFICATION NUMBER
Flats Closure Projects DE-AC34-00RF01904
3. PARTICIPANT NAME AND ADDRESS
Kaiser-Hill Company, L.L.C.
4. PLANNING AND REPORTING REQUIREMENTS
A. General Management Frequency
[X] Management Plan 0, A
[X] Status Report VN Q, A
[X] Summary Report Q
B. Schedule/Labor/Cost
[X] Milestone Schedule/Plan O, Q
[ ] Labor Plan
[ ] Facilities Capital Cost of Money Factors
Computation
[ ] Contract Facilities Cost of Money
[X] Cost Plan O, Q
[X] Milestone Schedule/Status M
[ ] Labor Management Report
[X] Cost Management Report M
C. Exception Reports
[ ] Conference Record
[ ] Hot Line Report
D. Performance Measurement
[X] Management Control System Description
[X] WBS Dictionary O, X
[X] Index O, X
[ ] Element Definition
[X] Cost Performance Reports
[ ] Format 1-WBS M
[ ] Format 2-Function
[ ] Format 3-Baseline M
E. Financial Incentives
[ ] Statement of Income and Expense
[ ] Balance Sheet
[X] Cash Flow Statement O, Q
[ ] Statement of changes in Financial Position
[ ] Loan Drawdown Report
[X] Operating Budget O, Q
[X] Supplementary Information A
F. Technical
[ ] Notice of Energy RD&D Project
(Required with any of the following)
[ ] Technical Progress Report
[ ] Draft for Review
[ ] Final for Approval
[ ] Topical Report
[ ] Final Technical Report
[ ] Draft for Review
[ ] Final for Approval
[ ] Software
[X] Other(Specify): See Attached Q
<TABLE>
<CAPTION>
<S> <C> <C>
5. FREQUENCY CODES
A--As required M--Monthly S--Semi-Annually
C--Change to Contractual Agreement O--Once After Award X--With Proposal/Bid/Application or with Significant Changes
F-Final (end of effort) (end of effort) 0--Quarterly Y--Yearly or Upon Renewal or Contractual Agreement
6. SPECIAL INSTRUCTIONS (ATTACHMENTS)
[X] Report Distribution List/Addressees [X] Due Dates [ ] Work Breakdown
[X] Reporting Elements [ ] Analysis Thresholds [X] Other
</TABLE>
7. PREPARED BY (SIGNATURE AND DATE) 8. PREPARED BY (SIGNATURE AND DATE)
/S/ Signature illegible 1/14/00 /S/ Signature illegible 1/14/00
198
<PAGE>
Exhibit 21
KAISER GROUP INTERNATIONAL, INC.
9300 Lee Highway, Fairfax, Virginia 22031
(703) 934-3300
Kaiser Group International, Inc.'s consolidated subsidiaries are listed
below. Consolidated subsidiaries which are less than wholly owned are indicated
by the ownership percentage figure in parentheses following the name of the
consolidated subsidiary.
<TABLE>
<CAPTION>
Jurisdiction
Consolidated Subsidiary of Formation
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
I. Cygna Group, Inc. Delaware
II. Liability Risk Management, Inc. California
I. EDA, Incorporated Maryland
I. HBG Hawaii, Inc. Delaware
I. HBG International, Inc. Delaware
I. Henry J. Kaiser Development Corporation, Inc. Delaware
II. Global Trade & Investment, Inc. Delaware
I. Kaiser Engineers Group, Inc. Delaware
II. Henry J. Kaiser Company Nevada
II. Kaiser Engineers, Inc. Ohio
III. Henry J. Kaiser Company (Canada) Ltd. Canada
III. Kaiser Engineers & Builders, Inc. Delaware
III. Kaiser Engineers (California) Corporation Delaware
III. Kaiser Engineers Corporation New York
III. Kaiser Engineers of Michigan, Inc. Michigan
III. ICF Kaiser International Planning & Design, Inc. (33 1/3%) Pennsylvania
III. Kaiser Overseas Engineering, Inc. Delaware
III. Kaiser Engineers Limited United Kingdom
IV. Kaiser Engineers Technical Services Limited (80%) Cyprus
III. Kaiser Engineers and Constructors, Inc. Nevada
IV. ICF Kaiser Engenharia e Participacoes Ltda. (99.9%) Brazil
V. ICF Kaiser Construcoes e Engenharia Ltda (99.989%) Brazil
IV. ICF Pty. Ltd. (50%) Australia
IV. Kaiser Engineers Limited (0.02%) U.K.
IV. Kaiser Engenharia S.A. (50%) Portugal
V. ICF Kaiser Construcoes e Engenharia Ltda (0.01%) Brazil
IV. Kaiser Engineers (NZ) Ltd (1%) New Zealand
IV. Kaiser Engineers Pty. Ltd. (50%) Australia
V. KWA Kenwalt (50%) Australia
V. ICF Kaiser Aluterv KFT Hungary
V. ICF Kaiser Engineers Asia Pacific Pty Ltd Australia
V. ICF Kaiser Engineers (Hong Kong) Ltd Hong Kong
V. ICF Kaiser Engineers (Singapore) Pte Ltd Singapore
V. Kaiser Engineers (NZ) Limited (99%) New Zealand
III. Kaiser Engineers International, Inc. Nevada
IV. ICF Pty. Ltd. (50%) Australia
IV. ICF Kaiser Engenharia e Participacoes Ltda.(0.1%) Brazil
</TABLE>
Page 1 of 2
<PAGE>
<TABLE>
<S> <C>
IV. Kaiser Panama S.A. Panama
IV. Kaiser Engenharia S.A. (50%) Portugal
IV. Kaiser Engineers Pty. Ltd. (50%) Australia
III. Kaiser Engineers Limited (99.98%) U.K.
IV. Kaiser Engineers Technical Services Limited (80%) Cyprus
IV. Kaiser Engineers (UK) Limited (50%) U.K.
III. Kaiser Engineers (UK) Limited (50%) U.K.
IV. Kaiser Engineers Technical Services Limited (20%) Cyprus
III. KE Services Corporation Delaware
III. Kaiser Engenharia e Constructoes Limitada Brazil
II. International Waste Energy Systems, Inc. Delaware
II. KE Livermore, Inc. Delaware
I. Kaiser Engineers Massachusetts, Inc. Delaware
I. Kaiser Engineers Pacific, Inc. Nevada
I. Kaiser Europe, Inc. Delaware
I. Kaiser/Georgia Wilson, Inc. Delaware
I. Kaiser Government Programs, Inc. Delaware
II. Kaiser K-H Holdings, Inc. Delaware
III. Kaiser-Hill Company, LLC (50%) Colorado
IV. Kaiser-Hill Funding Company, L.L.C. (98%) Delaware
III. Kaiser-Hill Funding Company, L.L.C. (1%) Delaware
I. Kaiser Hanford Company Delaware
I. Kaiser Holdings Unlimited, Inc. Delaware
II. American Venture Investments Incorporated Delaware
III. American Venture Holdings, Inc. Delaware
II. Cygna Consulting Engineers and Project Management, Inc. California
II. Excell Development Construction, Inc. Delaware
II. Kaiser DPI Holding Co., Inc. Delaware
II. Kaiser Engineers Eastern Europe, Inc. Delaware
III. Kaiser Netherlands B.V. (10%) Netherlands
II. Kaiser Hunters Branch Leasing, Inc. Delaware
II. Kaiser K-T Holdings, Inc. Delaware
II. Kaiser K-A Louisiana, Inc. Louisiana
II. Kaiser K-A Services, Inc. Delaware
II. Kaiser Netherlands B.V. (90%) Netherlands
II. Kaiser Leasing Corporation, Inc. Delaware
I. ICF Kaiser Servicios Ambientales, S.A. de C.V. (66 2/3%) Mexico
I. Kaiser Technology Holdings, Inc. Delaware
II. Kaiser Advanced Technology, Inc. Idaho
III. ICF Kaiser Advanced Technology of New Mexico, Inc. New Mexico
I. Kaiser R G.P. No. 1, Inc. Delaware
I. Monument Select Insurance Company Vermont
I. Phase Linear Systems Incorporated Delaware
I. Tudor Engineering Company Delaware
</TABLE>
Page 2 of 2
<PAGE>
Exhibit No. 23
Consent of Independent Accountants
We consent to the incorporation by reference in the registration statements of
Kaiser Group International, Inc. (formerly ICF Kaiser International, Inc.) (the
Company) on Forms S-8 [Registration Nos. 33-42677 (Non-Employee Directors Stock
Option Plan), 33-42678 (Stock Incentive Plan), 33-51460 (Section 401(k) Plan),
33-60663 (Retirement Plan), 33-60661 and 33-65351 (Employee Stock Ownership
Plan), 33-60665 (Consultants, Agents and Part-Time Employees Stock Plan) and 33-
51812 (Employee Stock Purchase Plan)] of our report dated April 14, 2000, on our
audits of the consolidated financial statements and financial statement schedule
of Kaiser Group International, Inc. and Subsidiaries as of December 31, 1999 and
1998, and for each of the three years in the period ended December 31, 1999,
which report is included in the Company's Report on Form 10-K.
PricewaterhouseCoopers LLP
McLean, Virginia
April 14, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K AS
OF 12/31/199 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 26,391
<SECURITIES> 16,386
<RECEIVABLES> 167,913
<ALLOWANCES> (9,594)
<INVENTORY> 0
<CURRENT-ASSETS> 5,350
<PP&E> 14,224
<DEPRECIATION> (11,403)
<TOTAL-ASSETS> 253,563
<CURRENT-LIABILITIES> 189,338
<BONDS> 124,218
0
0
<COMMON> 237
<OTHER-SE> (70,140)
<TOTAL-LIABILITY-AND-EQUITY> 253,563
<SALES> 870,267
<TOTAL-REVENUES> 874,747
<CGS> 823,774
<TOTAL-COSTS> 59,321
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 14,384
<INTEREST-EXPENSE> 18,716
<INCOME-PRETAX> (41,448)
<INCOME-TAX> (1,110)
<INCOME-CONTINUING> (47,742)
<DISCONTINUED> 42,418
<EXTRAORDINARY> (600)
<CHANGES> 0
<NET-INCOME> (5,924)
<EPS-BASIC> (.25)
<EPS-DILUTED> (.25)
</TABLE>
