FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended September 30, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 1-12815
CHICAGO BRIDGE & IRON COMPANY N.V.
Incorporated in The Netherlands IRS Identification Number: Not Applicable Polarisavenue 31 2132 JH Hoofddorp The Netherlands 31-23-568-5660 (Address and telephone number of principal executive offices) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES X NO _____
The number of shares outstanding of a single class of common stock as of September 30, 1998 - 11,659,609
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
TABLE OF CONTENTS PART I. FINANCIAL INFORMATION Page ---- Consolidated Financial Statements Statements of Income Three and Nine Months Ended September 30, 1998 and 1997 3 Balance Sheets September 30, 1998 and December 31, 1997 4 Statements of Cash Flows Nine Months Ended September 30, 1998 and 1997 5 Notes to Consolidated Financial Statements 6 - 7 Management's Discussion and Analysis of Results of Operations and Financial Condition 8 - 11 PART II. OTHER INFORMATION 12 SIGNATURE PAGE 13 |
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE DATA)
THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, 1998 1997 1998 1997 Revenues $ 204,965 $ 166,755 $ 576,654 $ 477,500 Cost of revenues 186,835 158,204 524,098 434,082 ---------- ---------- ---------- ---------- Gross profit 18,130 8,551 52,556 43,418 Selling and administrative expenses 11,589 11,096 35,344 33,436 Management Plan charge - - - 16,662 Other operating income, net 21 (4,053) (643) (4,356) ---------- ---------- ---------- ---------- Income (loss) from operations 6,520 1,508 17,855 (2,324) Interest expense (857) (506) (2,806) (3,131) Other income 473 369 1,232 1,233 ---------- ---------- ---------- ---------- Income (loss) before taxes and 6,136 1,371 16,281 (4,222) minority interest Income tax (expense) benefit (1,717) (384) (4,558) 2,990 ---------- ---------- ---------- ---------- Income (loss) before minority interest 4,419 987 11,723 (1,232) Minority interest in (income) loss 219 125 192 143 ---------- ---------- ---------- ---------- Net income (loss) $ 4,638 $ 1,112 $ 11,915 $ (1,089) ========== ========== ========== ========== Net income (loss) per common share (1) Basic and Diluted $ 0.38 $ 0.09 $ 0.97 $ (0.09) Weighted average common shares outstanding (1) Basic 12,258,132 12,517,552 12,315,087 12,517,552 Diluted 12,281,942 12,517,552 12,323,111 12,517,552 Dividends on common shares Amount $ 738 $ 751 $ 2,211 $ 1,502 Per share $ 0.06 $ 0.06 $ 0.18 $ 0.12 |
(1) Net income (loss) per common share and the weighted average common shares outstanding for 1997 are presented as if the Offering and the Reorganization had occurred at the beginning of the year.
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
SEPTEMBER 30, DECEMBER 31, 1998 1997 ASSETS Current assets Cash and cash equivalents $ 12,474 $ 10,240 Accounts receivable, net of allowance for doubtful accounts of $1,072 in 1998 and $1,909 in 1997 156,430 157,785 Contracts in progress with earned revenues exceeding related progress billings 51,641 63,172 Other current assets 10,938 17,157 --------- --------- Total current assets 231,483 248,354 --------- --------- Property and equipment 113,368 121,798 Goodwill 18,070 18,539 Other non-current assets 11,244 11,959 --------- --------- Total assets $374,165 $400,650 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 2,540 $ 1,158 Accounts payable 46,435 52,904 Accrued liabilities 51,369 46,518 Contracts in progress with progress billings exceeding related earned revenues 73,683 72,810 Income taxes payable 1,683 5,160 --------- --------- TOTAL CURRENT LIABILITIES 175,710 178,550 --------- --------- Long-term debt 27,000 44,000 Minority interest in subsidiaries 4,690 5,273 Other non-current liabilities 66,845 69,001 --------- --------- TOTAL LIABILITIES 274,245 296,824 --------- --------- Shareholders' equity Common stock; nlg .01 par value, 50,000,000 authorized shares issued: 12,517,552 in 1998 and 1997; outstanding: 11,659,609 in 1998 and 12,517,552 in 1997 74 74 Additional paid-in capital 93,831 93,691 Retained earnings 24,374 14,712 Treasury stock, at cost: 857,943 shares in 1998 (10,370) - Cumulative translation adjustment (7,989) (4,651) --------- --------- Total shareholders' equity 99,920 103,826 --------- --------- Total liabilities and shareholders' equity $374,165 $400,650 ========= ========= |
The accompanying notes to consolidated financial statements are an integral part of these financial statements.
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, 1998 1997 Cash flows from operating activities Net income (loss) $ 11,915 $ (1,089) Adjustments to reconcile net income to net cash provided by operating activities Management Plan charge - 16,662 Depreciation and amortization 13,248 12,882 Increase/(decrease) in deferred income taxes 1,041 (7,061) Gain on sale of fixed assets (643) (1,095) Change in operating assets and liabilities (see below) 6,332 22,514 --------- --------- Net cash provided by operating activities 31,893 42,813 --------- --------- Cash flows from capital investment activities Proceeds from sale of fixed assets and assets held for sale 6,798 11,030 Capital expenditures (8,216) (26,717) --------- --------- Net cash used in capital investment activities (1,418) (15,687) --------- --------- Cash flows from financing activities Payment to former Parent Company - (6,008) Increase/(decrease) in notes payable 1,382 (1,822) Net (repayment) of debt to former Parent Company - (53,907) Net (repayment)/borrowing under Revolving Credit Facility (17,000) 42,000 Purchase of common stock (10,860) - Sale of common stock 448 - Dividends paid (2,211) (1,502) --------- --------- Net cash used in financing activities (28,241) (21,239) --------- --------- Increase in cash and cash equivalents 2,234 5,887 Cash and cash equivalents, beginning of the year 10,240 11,864 --------- --------- Cash and cash equivalents, end of the period $ 12,474 $ 17,751 ========= ========= Change in operating assets and liabilities (Increase)/decrease in receivables, net $ 1,355 $(30,250) Decrease in contracts in progress, net 12,404 46,941 Decrease in other current assets 2,140 188 (Decrease)/increase in accounts payable & accrued liabilities (1,618) 11,419 Decrease in income taxes payable (3,477) (1,548) Other, net (4,472) (4,236) --------- --------- Total $ 6,332 $ 22,514 ========= ========= |
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(IN THOUSANDS)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements for Chicago Bridge & Iron Company N.V. and Subsidiaries (the "Company") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 1997 Annual Report on Form 10-K of the Company.
In the opinion of the Company, all adjustments necessary to present fairly the financial position of the Company and the results of its operations and cash flows for the period then ended have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year.
2. SIGNIFICANT ACCOUNTING POLICIES
In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 is effective for fiscal years beginning after June 15, 1999. SFAS 133 requires all derivative instruments be recorded on the balance sheet at their fair value and that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. The Company has not yet determined the impact that the adoption of SFAS 133 will have on its earnings or statement of financial position. However, the Company anticipates that, due to its limited use of derivative instruments, the adoption of SFAS 133 will not have a significant effect on its results of operations or its financial position.
3. LONG-TERM DEBT
The weighted average interest rate on $27,000 of borrowings under the Company's revolving credit facility was 6.13% at September 30, 1998.
4. COMPREHENSIVE INCOME
Three Months Nine Months Ended September 30, Ended September 30, 1998 1997 1998 1997 Net income (loss) $ 4,638 $ 1,112 $ 11,915 $ (1,089) Other comprehensive income, net of tax: Cumulative translation adjustment (1,143) (1,215) (3,338) (2,279) --------- --------- --------- --------- Comprehensive income (loss) $ 3,495 $ (103) $ 8,577 $ (3,368) ========= ========= ========= ========= |
5. EMPLOYEE STOCK PLANS
Under the Company's Long-Term Incentive Plan, the following were granted during the third quarter:
Stock Options - 156,500 non-qualified stock options, with an exercise price of $13.125. The options vest over a four-year period at a rate of one-fourth each year beginning July 1999.
Performance Shares - 51,500 performance shares. The shares are targeted to vest one-third each year over a three-year period beginning February 1999, subject to achievement of specific Company performance goals.
Restricted Stock Units - 97,800 restricted stock units were granted. The units vest one-fourth each year over a four-year period beginning September 1999.
6. PER SHARE COMPUTATIONS
Three Months Nine Months Ended September 30, Ended September 30, 1998 1997 1998 1997 Net income (loss) - Basic and Diluted $4,638 $ 1,112 $ 11,915 $ (1,089) ========== ========== ========== ========== Weighted average shares outstanding - Basic 12,258,132 12,517,552 12,315,087 12,517,552 Effect of Restricted Stock Units 23,397 - 7,885 - Effect of Directors Deferred Fee Shares 413 - 139 - ---------- ---------- ---------- ---------- Weighted average shares outstanding - Diluted 12,281,942 12,517,552 12,323,111 12,517,552 ========== ========== ========== ========== Net income (loss) per share - Basic and Diluted $ 0.38 $ 0.09 $ 0.97 $(0.09) ========== ========== ========== ========== |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes.
RESULTS OF OPERATIONS
For the three months ended September 30, 1998, new business taken was $162.3 million compared with $173.0 million in the third quarter of 1997. For the nine months ended September 30, 1998, new business taken increased to $577.0 million from $561.1 million reported in the comparable 1997 period. More than 60% of the new business taken during the nine months was for contracts awarded outside of North America. For the first three quarters of 1998, new business taken increased 53% in the Europe, Africa, Middle East (EAME) area, increased 45% in the Central and South America (CSA) area, declined 49% in the Asia Pacific (AP) area and was even in North America. In spite of lower oil prices and the Asian economic downturn, a solid level of new business during the first three quarters of 1998 was secured through CB&I's focused marketing approach and from expanding the traditional work scope on existing projects. The nine-month new business total is the highest in recent years. Backlog at September 30, 1998, was $522.4 million compared with a $559.0 million backlog reported at September 30, 1997, and a $555.0 million backlog at year-end 1997.
Revenues for the third quarter of 1998 rose 23% to $205.0 million, compared with $166.8 million in the third quarter of 1997. The increase was due primarily to a significantly greater amount of work put in place in the EAME area and higher revenues at CB&I Constructors, a part of the Company's North American operations. Revenues for the first nine months of 1998 increased 21% to $576.7 million compared with $477.5 million for the first nine months of 1997.
Gross profit for the three months ended September 30, 1998, amounted to $18.1 million, or 8.8% of revenues, compared with $8.6 million, or 5.1% of revenues, in the prior year quarter. Gross profit for the nine-month period of 1998 was $52.6 million, or 9.1% of revenues, compared with $43.4 million, or 9.1% of revenues, for the first nine months of 1997. For the 1998 year-to-date period, an improved gross profit percentage in North American operations was offset by lower gross profit percentages in the AP and CSA regions.
Selling and administrative expenses for the 1998 third quarter were $11.6 million and decreased to 5.7% of revenues compared with $11.1 million or 6.7% of revenues for the prior year quarter. For the first nine months of 1998, selling and administrative expenses of $35.3 million or 6.1% of revenues compared with $33.4 million or 7.0% of revenues in the 1997 period.
Income from operations for the third quarter of 1998 was $6.5 million compared with $1.5 million for the third quarter of 1997. Third quarter 1997 income from operations was negatively affected by an operating loss at CB&I Constructors, which was partially offset by $4.1 million of other operating income. Third quarter 1998 operating income was boosted by strong results in the EAME area, which more than offset improving but still significantly below planned results in CSA. Income from operations for the first nine months of 1998 was $17.9 million compared with operating income of $14.3 million in the 1997 period, excluding the one-time, non-cash
Management Plan charge. Including the one-time, non-cash Management Plan charge, the Company reported an operating loss of $2.3 million in the first nine months of 1997.
Interest expense was $0.9 million for the third quarter of 1998 compared with $0.5 million in the comparable period of 1997. While debt levels continue to be reduced worldwide, third quarter 1998 interest expense was affected by the higher cost of short-term borrowings outside the U.S. Interest expense for the third quarter 1997 included a $0.4 million reduction due to capitalized interest. For the nine-month period, interest expense was $2.8 million in 1998 compared with $3.1 million in 1997. Long-term debt decreased to $27 million from $44 million at year-end 1997 and $39 million at June 30, 1998. Cash and cash equivalents at September 30, 1998 were $12.5 million. Other income consisted primarily of interest earned on cash balances at foreign subsidiaries.
For the nine months ended September 30, 1998, income tax expense was $4.6 million or an effective income tax rate of 28.0% compared to a net income tax benefit of $3.0 million in the comparable period of the prior year. The 1997 income tax benefit was mainly attributable to the one-time, non-cash Management Plan charge. Excluding the Management Plan charge, income tax expense would have been $3.6 million or an effective income tax rate of 29.0% for the first nine months of 1997.
Net income for the three months ended September 30, 1998 was $4.6 million or $0.38 per share, compared with net income of $1.1 million or $0.09 per share for the same period in 1997. Net income for the first nine months of 1998 was $11.9 million or $0.97 per share compared with net income of $9.0 million or $0.72 per share for the first nine months of 1997, excluding the effect of a one-time, non-cash Management Plan charge of $16.7 million ($10.1 million after tax) related to the contribution of common shares to a management compensation program in connection with the Company's initial public offering in 1997. Including the one-time, non-cash Management Plan charge, the Company reported a net loss of $1.1 million or $0.09 per share in the first nine months of 1997.
FINANCIAL CONDITION
For the three months ended September 30, 1998, the Company generated cash from operations of $11.9 million, bringing the year-to-date total to $31.9 million, compared with $42.8 million for the nine months of 1997. Capital expenditures during the third quarter of 1998 were $1.9 million, bringing the year-to-date total to $8.2 million, compared with $26.7 million for the first nine months of 1997 (which included $12.5 million of modifications to the North American fabrication facility). The Company has acquired 737,000 shares of CB&I stock under the recently approved stock repurchase program.
As previously reported, the Company continues to be impacted by the Tuban project in Indonesia, where work remains suspended. At September 30, 1998, the Company's backlog related to this project was approximately $50 million and the Company and its affiliates had approximately $35 million of net receivables outstanding. Similar to other major contractors involved in the project, the Company has received approval to redeploy certain material purchased for this project in order to reduce its costs. While the Company believes the Tuban project is viable, it is expected that permanent financing for the project will not be secured until the political and economic situation in Indonesia improves. The Company believes work on the
Tuban project ultimately will resume, but not until 1999 at the earliest, and no assurances can be given that this will happen.
Management anticipates that by utilizing cash generated from operations and funds provided under the Revolving Credit Facility, the Company will be able to meet its working capital and capital expenditure needs for at least the next 24 months.
YEAR 2000
The Company continues to execute its plan to address the effect of Year 2000
issues on its worldwide businesses. The plan consists of two primary phases:
Assessment (consisting of identification, business criticality ranking and
impact analysis, and remediation planning) and Remediation (consisting of
repair, testing, implementation, certification and contingency plans). This
plan involves representatives of the Company from all operational and
geographical areas and encompasses information technology (IT) systems,
embedded (non-IT) systems and suppliers.
Assessment has been completed on all of the Company's identified North American IT systems. Assessment continues on the Company's international IT systems, primarily payroll systems, and is scheduled to be completed by the end of 1998. As of September 30, 1998, 52% of the Remediation phase for the Company's IT systems was completed. The Remediation phase is scheduled to be completed by June 1999.
Assessment of North American non-IT systems is complete, and the Remediation phase is scheduled for completion by the end of 1998. Non-IT systems include building and mechanical systems (such as telecommunication systems, HVAC and security systems) and fabrication and field construction equipment. Assessment of non-IT systems outside North America continues on building and mechanical systems with completion scheduled by the end of 1998. The Remediation phase is scheduled to be completed by mid-1999. The Company's assessment and remediation of its fabrication and field construction equipment throughout the world has been completed.
The Company has identified key material suppliers and service providers ("suppliers"), and has initiated discussions and mailed correspondence to these suppliers to survey their state of readiness on Year 2000 issues. Completion of this assessment is dependent upon their cooperation. Responses have been received from 80% of the North American inquiries and 55% of the non-North American inquiries. The Company continues to work to get responses from suppliers. At this point, it is not possible to forecast whether there will be any significant disruption due to supplier failure to remediate their own Year 2000 issues. The Company, as part of the Remediation phase, is formulating a contingency plan. This plan includes the Company's continuous communication with suppliers to assure that they are able to continue to perform without disruption. Due to the continual change of geographic location and type of projects on which the Company is executing work, the Company is familiar with reassessing and reestablishing its supplier chain through the use of alternative sourcing of materials and services to meet its business needs.
The Company estimates that the cost to remediate its Year 2000 issues is $2.5 million, of which 25% was incurred through September 30, 1998. Approximately $0.7 million of the total cost will
be capitalized for the accelerated purchase of desktop hardware. The cost estimate excludes the direct costs of the ongoing J.D. Edwards implementation (which is a Year 2000 compliant system), the costs of which are being capitalized. The decision to implement this new information system was made independent of the Company's Year 2000 compliance efforts. The J.D. Edwards system implementation is scheduled to be completed by August 31, 1999.
The Company has targeted internal compliance with Year 2000 issues for all critical areas, excluding the ongoing J.D. Edwards implementation, by the second quarter of 1999. The Company believes that the current efforts to address and resolve the issues associated with Year 2000 are adequate. However, the Company cannot guarantee that all Year 2000 issues will be anticipated and corrected, and there can be no assurance that the systems of any third party on which the Company's systems and operations rely will be timely converted. It is too soon to determine whether the Company will experience disruption to transportation, communication, electric power or other energy systems due to Year 2000 issues that affect the public infrastructure in the locations where it executes projects. The inability of the Company, its suppliers or the public infrastructure to effectuate solutions to their respective Year 2000 issues on a timely and cost effective basis may have a material adverse effect on the Company.
Because of the uncertainties the Company faces with regard to Year 2000 issues, it is developing contingency plans to provide for continuation of its critical operations in spite of possible Year 2000 disruptions. Development of contingency plans are forecast to be complete by the end of first quarter 1999. If the Company is unsuccessful in implementing the J.D. Edwards system at remaining locations by the Year 2000, the cost of implementing the J.D. Edwards contingency plan would not be material to the Company.
This discussion and analysis contains certain forward-looking statements that involve a number of risks and uncertainties. Actual events or results may differ materially from the Company's expectations. In addition to matters described herein, including the Tuban project and Year 2000 issues, operating risks, risks associated with fixed price contracts, risks associated with percentage of completion accounting, fluctuating revenues and cash flow, dependence on the petroleum and petrochemical industries and competitive conditions, as well as risk factors listed from time to time in the Company's reports filed with the Securities and Exchange Commission (including, but not limited to its Registration Statement on Form S-1 [File No.333-18065], as amended), may affect the actual results achieved by the Company.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There have been no material developments in the legal proceedings as described in Note 7 of the Notes to Consolidated Financial Statements submitted with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.3 The Company's Long-Term Incentive Plan
As amended September 1, 1998
10.16 The Company's Supervisory Board of Directors Fee Payment Plan
10.17 The Company's Supervisory Board of Directors Stock Purchase Plan
27. Financial Data Schedule
(b) Reports on Form 8-K The Company did not file a current report on Form 8-K during the three months ended September 30, 1998.
Pursuant to the requirements 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.
Chicago Bridge & Iron Company N.V.
/s/ Timothy J. Wiggins --------------------------------------- By: Chicago Bridge & Iron Company B.V. Its: Managing Director Timothy J. Wiggins Managing Director (Principal Financial Officer) Date: November 12, 1998 |
EXHIBIT 10.3
CHICAGO BRIDGE & IRON LONG-TERM INCENTIVE PLAN
CHICAGO BRIDGE & IRON COMPANY
(ADOPTED JANUARY 17, 1997, AS AMENDED
THROUGH SEPTEMBER 1, 1998)
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933.
TABLE OF CONTENTS
CHICAGO BRIDGE & IRON LONG-TERM INCENTIVE PLAN....................................... 1 1.1. ESTABLISHMENT OF THE PLAN....................................................... 1 1.2 OBJECTIVES OF THE PLAN.......................................................... 1 1.3. DURATION OF THE PLAN............................................................ 1 ARTICLE 2. - DEFINITIONS............................................................. 1 2.1. "AFFILIATE"..................................................................... 1 2.2. "AWARD"......................................................................... 1 2.3. "AWARD AGREEMENT"............................................................... 2 2.4. "BENEFICIAL OWNER" OR "BENEFICIAL".............................................. 2 2.5. "BOARD" OR BOARD OF DIRECTORS".................................................. 2 2.6. "CB&I".......................................................................... 2 2.7. "CHANGE IN CONTROL"............................................................. 2 2.8. "CODE........................................................................... 2 2.9. "COMMITTE"...................................................................... 2 2.10. "COMPANY"...................................................................... 3 2.11. "DIRECTOR"..................................................................... 3 2.12. "DISABILITY"................................................................... 3 2.13. "EFFECTIVE DATE"............................................................... 3 2.14. "EMPLOYEE"..................................................................... 3 2.15. "EXCHANGE ACT"................................................................. 3 2.16. "FAIR MARKET VALUE"............................................................ 3 2.17. "FISCAL YEAR".................................................................. 3 2.18. "INCENTIVE STOCK OPTION" OR "ISO".............................................. 3 2.19. "INSIDER"...................................................................... 3 2.20. "NAMED EXECUTIVE OFFICER"...................................................... 3 2.21. "NONEMPLOYEE DIRECTOR"......................................................... 3 2.22. "NONQUALIFIED STOCK OPTION" OR "NQSO".......................................... 4 2.23. "OPTION"....................................................................... 4 2.24. "OPTION PRICE"................................................................. 4 2.25. "OPTIONEE"..................................................................... 4 2.26. "PARTICIPANT".................................................................. 4 2.27. "PERFORMANCE-BASED EXCEPTION".................................................. 4 2.28. "PERFORMANCE SHARE"............................................................ 4 2.29. "PERFORMANCE UNIT"............................................................. 4 2.30. "PERIOD OF RESTRICTION"........................................................ 4 2.31. "PERSON"....................................................................... 4 2.32. "RESTRICTED STOCK"............................................................. 4 2.33. "RESTRICTED STOCK SHARES"...................................................... 4 2.34. "RESTRICTED STOCK UNITS"....................................................... 4 2.35. "RETIREMENT"................................................................... 5 2.36. "SHARES"....................................................................... 5 2.37. "SUBSIDIARY"................................................................... 5 2.38. "SUPERVISORY BOARD"............................................................ 5 2.39. "VESTING DATE"................................................................. 5 ARTICLE 3. - ADMINISTRATION.......................................................... 5 3.1 THE COMMITTEE.................................................................... 5 3.2 AUTHORITY OF THE COMMITTEE....................................................... 5 |
3.3 DECISIONS BINDING 6 ARTICLE 4. - SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS.......................... 6 4.1. NUMBER OF SHARES AVAILABLE FOR GRANTS.......................................... 6 4.2. ADJUSTMENTS IN AUTHORIZED SHARES............................................... 6 4.3. FRACTIONAL SHARES.............................................................. 6 ARTICLE 5. - ELIGIBILITY AND PARTICIPATION.......................................... 7 5.1. ELIGIBILITY.................................................................... 7 5.2. ACTUAL PARTICIPATION........................................................... 7 ARTICLE 6. - STOCK OPTIONS.......................................................... 7 6.1. GRANT OF OPTIONS............................................................... 7 6.2. AWARD AGREEMENT................................................................ 7 6.3. OPTION PRICE................................................................... 7 6.4. DURATION OF OPTIONS............................................................ 7 6.5. EXERCISE OF OPTIONS............................................................ 7 6.6. PAYMENT........................................................................ 8 6.7. RESTRICTIONS ON SHARE TRANSFERABILITY.......................................... 8 6.8. TERMINATION OF EMPLOYMENT...................................................... 8 6.9. NONTRANSFERABILITY OF OPTIONS.................................................. 8 (A) INCENTIVE STOCK OPTIONS.................................................... 8 (B) NONQUALIFIED STOCK OPTIONS................................................. 9 ARTICLE 7. - RESTRICTED STOCK....................................................... 9 7.1. GRANT OF RESTRICTED STOCK...................................................... 9 7.2. RESTRICTED STOCK AGREEMENT..................................................... 9 7.3. TRANSFERABILITY................................................................ 9 7.4. OTHER RESTRICTIONS............................................................. 9 7.5. VOTING RIGHTS.................................................................. 10 7.6. DIVIDEND AND OTHER DISTRIBUTIONS............................................... 10 7.7. TERMINATION OF EMPLOYMENT...................................................... 10 7.8. RIGHTS PERSONAL TO PARTICIPANT................................................. 11 ARTICLE 8. - PERFORMANCE UNITS AND PERFORMANCE SHARES............................... 11 8.1. GRANT OF PERFORMANCE UNITS/SHARES.............................................. 11 8.2. VALUE OF PERFORMANCE UNITS/SHARES.............................................. 11 8.3. EARNING OF PERFORMANCE UNITS/SHARES............................................ 11 8.4. FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES......................... 11 8.5. TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.............. 12 8.6. TERMINATION OF EMPLOYMENT FOR OTHER REASONS.................................... 12 8.7. NONTRANSFERABILITY............................................................. 12 ARTICLE 9. - PERFORMANCE MEASURES................................................... 12 ARTICLE 10. - BENEFICIARY DESIGNATION............................................... 13 ARTICLE 11. - DEFERRALS............................................................. 13 ARTICLE 12. - RIGHTS OF EMPLOYEES................................................... 13 12.1. EMPLOYMENT.................................................................... 13 12.2. PARTICIPATION................................................................. 13 ARTICLE 13. - CHANGE IN CONTROL..................................................... 14 |
13.1. TREATMENT OF OUTSTANDING AWARDS.................................................... 14 13.2. TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL PROVISIONS.......... 14 ARTICLE 14. - AMENDMENT, MODIFICATION, AND TERMINATION................................... 14 14.1. AMENDMENT, MODIFICATION, AND TERMINATION........................................... 14 14.2. ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING EVENTS. 14 14.3. AWARDS PREVIOUSLY GRANTED.......................................................... 15 14.4. COMPLIANCE WITH CODE SECTION 162(M)................................................ 15 ARTICLE 15. - WITHHOLDING................................................................ 15 15.1. TAX WITHHOLDING.................................................................... 15 15.2. SHARE WITHHOLDING.................................................................. 15 ARTICLE 16. - INDEMNIFICATION............................................................ 15 ARTICLE 17. - SUCCESSORS................................................................. 16 ARTICLE 18. - LEGAL CONSTRUCTION......................................................... 16 18.1. GENDER AND NUMBER.................................................................. 16 18.2. SEVERABILITY....................................................................... 16 18.3. REQUIREMENTS OF LAW................................................................ 16 18.4. SECURITIES LAW COMPLIANCE.......................................................... 16 18.5. GOVERNING LAW...................................................................... 16 |
CHICAGO BRIDGE & IRON LONG-TERM INCENTIVE PLAN
1.1. ESTABLISHMENT OF THE PLAN. Chicago Bridge & Iron Company, a Delaware corporation, a wholly owned subsidiary of Chicago Bridge & Iron Company N.V., a Dutch corporation, hereby establishes an incentive compensation plan to be known as the "Chicago Bridge & Iron Long-Term Incentive Plan" (hereinafter referred to as the "Plan"), as set forth in this document. The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Performance Shares and Performance Units.
The Plan shall become effective as of the consummation of the initial public offering of Chicago Bridge & Iron Company N.V. (the "Effective Date") and shall remain in effect as provided in Section 1.3 hereof.
1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the profitability and growth of CB&I, the Company and their respective Subsidiaries, through incentives which are consistent with CB&I's goals and which link the personal interests of Participants to those of the Company's stockholders; to provide Participants with an incentive for excellence in individual performance; and to promote teamwork among Participants.
The Plan is further intended to provide flexibility to CB&I in its ability to motivate, attract, and retain the services of Participants who make significant contributions to CB&I's success and to allow Participants to share in the success of CB&I.
1.3. DURATION OF THE PLAN. The Plan shall commence on the Effective Date, as described in Section 1.1 hereof, and shall remain in effect, subject to the right of the Board of Directors to amend or terminate the Plan at any time pursuant to Article 14 hereof, until all Shares subject to it shall have been purchased or acquired according to the Plan's provisions.
ARTICLE 2. - DEFINITIONS
Whenever and wherever used in the Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized:
2.1. "AFFILIATE" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations of the Exchange Act.
2.2. "AWARD" means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Performance Shares or Performance Units.
2.3. "AWARD AGREEMENT" means an agreement entered into by CB&I and each Participant setting forth the terms and provisions applicable to Awards granted under this Plan.
2.4. "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
2.5 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of CB&I.
2.6. "CB&I" means Chicago Bridge & Iron Company, a Delaware corporation and the sponsor of the Plan.
2.7. "CHANGE IN CONTROL" will be deemed to have occurred as of the first day any one (1) or more of the following paragraphs shall have been satisfied:
(a) Any Person, other than Praxair, Inc., a Delaware corporation ("Praxair") or the Company or any majority owned subsidiary of Praxair or the Company, becomes the Beneficial Owner of twenty-five percent (25%) or more of the total voting power of the Company's outstanding securities;
(b) During any period of two years or less, individuals who at the beginning of such period constituted the Supervisory Board of the Company, as the case may be, cease for any reason to constitute at least a majority thereof; provided that any new member of the Supervisory Board who is nominated for election to the Supervisory Board with the approval of at least 75% of the other members then still in office who were members at the beginning of the period shall be treated as though having been a member at the beginning of such period; or
(c) Upon the consummation of (i) any merger or other business combination of the Company with or into another corporation pursuant to which the stockholders of the Company as the case may be, do not own, immediately after the transaction, more than fifty percent (50%) of the voting power and the value of the stock of the corporation that survives, or (ii) the sale, exchange or other disposition of all or substantially all the assets of the Company.
2.8. "CODE" means the Internal Revenue Code of 1986, as amended from time to time.
2.9. "COMMITTEE" means the Committee appointed by the Board to administer the Plan as provided in Article 3 herein or, to the extent it functions as the Committee as provided in Article 3 herein, the Organization and Compensation Committee of the Supervisory Board.
2.10. "COMPANY" means Chicago Bridge & Iron Company N.V., a Netherlands corporation, including, as may be applicable to the context, any and all Subsidiaries and Affiliates, and any successor thereto.
2.11. "DIRECTOR" means any individual who is a member of the Board of Directors of CB&I or any Subsidiary of Affiliate.
2.12. "DISABILITY" shall mean a mental or physical condition of a Participant which the Committee, on the basis of information satisfactory to it, finds to be a permanent condition which renders such member unfit to perform the duties of an Employee, as such duties shall be determined by the Committee. Any determination of whether any condition of a Participant constitutes Disability shall be made under rules uniformly applied to all Participants.
2.13. "EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.14. "EMPLOYEE" means any employee of CB&I or the Company or their respective Subsidiaries and Affiliates. Directors who are not employed by any of the foregoing shall not be considered Employees under this Plan.
2.15. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
2.16. "FAIR MARKET VALUE" shall be determined on the basis of the closing sale price on the principal securities exchange on which the Shares are traded or, if there is no such sale on the relevant date, then on the last previous day on which a sale was reported.
2.17. "FISCAL YEAR" means the fiscal year of CB&I.
2.18. "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares granted under Article 6 herein and which is designated as an Incentive Stock Option and which is intended to meet the requirements of Code Section 422.
2.19. "INSIDER" shall mean an individual who is, on the relevant date, an officer, director or ten percent (10%) beneficial owner of any class of the Company's equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act.
2.20. "NAMED EXECUTIVE OFFICER" means a Participant who, as of the last date of the taxable year of CB&I, is one of the group of "covered employees," as defined in the regulations promulgated under Code Section 162(m), or any successor statute.
2.21. "NONEMPLOYEE DIRECTOR" means an individual who is a member of the Supervisory Board but who is not an Employee.
2.22. "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase Shares granted under Article 6 herein and which is not intended to meet the requirements of Code Section 422.
2.23. "OPTION" means an Incentive Stock Option or a Nonqualified Stock Option, as described in Article 6 herein.
2.24. "OPTION PRICE" means the price at which a Share may be purchased by a Participant pursuant to an Option.
2.25. "OPTIONEE" means the Participant or, if the Participant has died, his or her Beneficiary or other person determined under Section 6.9, entitled to exercise any Option.
2.26. "PARTICIPANT" means an Employee or Nonemployee Director who has outstanding an Award granted under the Plan.
2.27. "PERFORMANCE-BASED EXCEPTION" means the performance-based exception from the tax deductibility limitations of Code Section 162(m).
2.28. "PERFORMANCE SHARE" means an Award granted to a Participant, as described in Article 8 herein.
2.29. "PERFORMANCE UNIT" means an Award granted to a Participant, as described in Article 8 herein.
2.30. "PERIOD OF RESTRICTION" means the period during which the transfer of Shares or Units of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance goals, or upon the occurrence of other events, as determined by the Committee, at its discretion), and the Shares are subject to a substantial risk of forfeiture, as provided in Article 7 herein.
2.31. "PERSON" shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d) thereof.
2.32. "RESTRICTED STOCK" means an Award of Restricted Stock Shares or Restricted Stock Units granted to a Participant pursuant to Article 7 herein.
2.33. "RESTRICTED STOCK SHARES" means an Award of Restricted Stock in the form of Shares which are issued and awarded to Participants subject to a substantial risk of forfeiture and restrictions on such Shares during the Period of Restriction as provided in Article 7 herein.
2.34. "RESTRICTED STOCK UNITS" means an Award of bookkeeping units each representing the right of a Participant to be issued and to receive a Share upon lapse of risks of forfeiture and restrictions on such Units during the Period of Restriction as
provided in Article 7 herein, or at such later time as shall be determined by the Committee in its discretion upon grant of the Award or, with the consent of the Participant, after grant of the Award.
2.35. "RETIREMENT" means a termination of employment after (i) age 55 and at least a 10 year period of employment by CB&I or the Company or their respective present or former Subsidiaries or Affiliates, (ii) a 30-year period of such employment, or (iii) age 65; provided, however, that the Committee as part of an Award Agreement or otherwise may provide that for purposes of this Section, a Participant may be credited with such additional years of age and employment as the Committee in its sole discretion shall determine is appropriate, and may provide such additional or different conditions for Retirement as the Committee in its sole discretion shall determine is appropriate.
2.36. "SHARES" means the publicly-traded shares of common stock of the Company.
2.37. "SUBSIDIARY" means any corporation in which CB&I or the Company owns directly, or indirectly through subsidiaries, at least fifty percent (50%) of the total combined voting power of all classes of stock, or any other entity (including, but not limited to, partnerships and joint ventures) in which CB&I or the Company owns at least fifty percent (50%) of the combined equity thereof.
2.38. "SUPERVISORY BOARD means the Supervisory Board of Chicago Bridge & Iron Company N.V.
2.39. "VESTING DATE means with respect to Restricted Stock the date (if any) on which the risks of forfeiture and restrictions on such Restricted Stock during the Period of Restriction have terminated (by their terms or by other action of the Committee consistent with this Plan) and all other conditions or restrictions applicable to such Restricted Stock have been satisfied.
ARTICLE 3. - ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by a Committee, the members of which shall be appointed from time to time by, and shall serve at the discretion of, the Board; provided, however, that (i) with respect to grants and Awards made or to be made to or held by any member of such Committee, the Plan shall be administered by the Organization and Compensation Committee of the Supervisory Board; and (ii) the Organization and Compensation Committee of the Supervisory Board may in its sole discretion exercise directly any power, right, duty or function of the Committee including but not limited to the making or amending of an Award to any Employee or Nonemployee Director.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the Certificate of Incorporation or Bylaws of CB&I, and subject to the provisions herein, the Committee shall have full power to select Employees and Nonemployee Directors who
shall participate in the Plan; determine the sizes and types of Awards; determine the terms and conditions of Awards in a manner consistent with the Plan; construe and interpret the Plan and any agreement or instrument entered into under the Plan as they apply to Employees; establish, amend, or waive rules and regulations for the Plan administration as they apply to Employees; and (subject to the provisions of Article 14 herein) amend the terms and conditions of any outstanding Award to the extent such terms and conditions are within the discretion of the Committee as provided in the Plan. Further, the Committee shall make all other determinations which may be necessary or advisable for the administration of the Plan, as the Plan applies to Employees. As permitted by law, the Committee may delegate its authority as identified herein. However, notwithstanding any other provision contained in this Plan to the contrary, until after the first anniversary of the Effective Date, no Awards of any type may be made except in the form of Nonqualified Stock Options.
3.3 DECISIONS BINDING. All determinations and decisions made by the Committee pursuant to the provisions of the a plan and all related orders and resolutions of the Board shall be final, conclusive and binding on all persons, including CB&I, the Company, their respective stockholders, Directors, members of the Supervisory Board, Employees, Participants, and their estates and beneficiaries.
ARTICLE 4. - SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1. NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as provided in Section 4.2 herein, the number of Shares hereby reserved for issuance to Participants under the Plan shall be one million, two hundred fifty-one thousand, seven hundred fifty-five (1,251,755). Unless and until the Committee determines that an Award shall not be designed to comply with the Performance-Based Exception, the maximum aggregate number of Shares that may be granted in the form of Stock Options, pursuant tot any Award granted in any one fiscal year to any one single Participant, shall be two hundred thousand (200,000).
4.2. ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether
or not such reorganization comes within the definition of such term in Code
Section 368) or any partial or complete liquidation of the Company, such
adjustment shall be made in the number and class of Shares which may be
delivered under Section 4.1, in the number and a class of and/or price of
Shares subject to outstanding Awards granted under the Plan, and in the Award
limits set forth in Section 4.1, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that the number of Shares subject to
any Award shall always be a whole number.
4.3. FRACTIONAL SHARES. No fractional Shares shall be issued to Participants under the Plan. If for any reason an Award or adjustment thereto would otherwise result
in the issuance of a fractional Share, the Company shall pay the Participant in cash the Fair Market Value of such fractional Share.
ARTICLE 5. - ELIGIBILITY AND PARTICIPATION
5.1. ELIGIBILITY. Persons eligible to participate in this Plan include all Employees, including Employees who are members of the Board, and Nonemployee Directors.
5.2. ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee may, from time to time, select from all eligible individuals those to whom Awards shall be granted and shall determine the nature and amount of each Award.
ARTICLE 6. - STOCK OPTIONS.
6.1. GRANT OF OPTIONS. Subject to the terms and provisions of the Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee. The date the option is granted shall be the day on which the Committee acts to award a specific number of shares to a Participant, and shall be specified in each Award Agreement.
6.2. AWARD AGREEMENT. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the duration of the Option, the number of Shares to which the Option pertains, and such other provisions as the Committee shall determine. The Award Agreement also shall specify whether the Option is intended to be an ISO within the meaning of Code Section 4.22, or an NQSO whose grant is intended not to fall under the provisions of code Section 422.
6.3. OPTION PRICE. The Option Price for each grant of an Option under this Plan shall be at least equal to one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted. Notwithstanding the foregoing, however, the Option Price of any Options granted coincident with and effective as of the Effective Date shall be equal to the offering price of a Share in the initial public offering of the Company, regardless of whether the Fair Market Value of a Share, as otherwise defined in this Plan, is greater or less than such price.
6.4. DURATION OF OPTIONS. Each Option granted shall expire at such time as the Committee shall determine at the time of grant; provided, however, that if the Award Agreement does not otherwise specify the expiration date, the Option shall expire on the tenth (10th) anniversary date of its grant.
6.5. EXERCISE OF OPTIONS. Options granted under this Article 6 shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant.
6.6. PAYMENT. If the Award Agreement does not otherwise specify the manner of exercise, Options granted under this Article 6 shall be exercised by the delivery of a written notice of exercise to CB&I, completed by the Optionee and delivered during regular business hours to the office of the Secretary of CB&I, or sent by certified mail to the Secretary of CB&I, accompanied by a negotiable check or other cash equivalent in full payment for the Shares. A copy of such notice of exercise shall also be delivered by the Optionee to the office of the Secretary of the Company.
In the discretion of the Committee and as set forth in the Award Agreement, the Option Price upon exercise of any Option may also be payable to CB&I in full either: (a) in cash or its equivalent, or (b) by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Option Price, or (c) by a combination of (a) and (b).
The Committee also may allow cashless exercise as permitted under Federal Reserve Board's Regulation T, subject to applicable securities law restrictions, or by any other means which the Committee determines to be consistent with the Plan's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable after receipt of a written notification of exercise and full payment, CB&I shall deliver, or have delivered, to the Participant, in the Participant's name, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s).
6.7. RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares.
6.8. TERMINATION OF EMPLOYMENT. Each Participant's Option Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option following termination of the Participant's employment as an Employee or service as a Director. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need to be uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on the reasons for termination of employment.
6.9. NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, all ISOs granted to a Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant or by designation of a Beneficiary in accordance with Article 10.
(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a Participant's Award Agreement, no NQSO granted under this Article 6 may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. further, except as otherwise provided in a Participant's Award Agreement, all NQSOs granted to a Participant under this Article 6 shall be exercisable during his or her lifetime only by such Participant or by designation of a Beneficiary in accordance with Article 10.
ARTICLE 7. - RESTRICTED STOCK.
7.1. GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Awards of Restricted Stock Shares or Restricted Stock Units to Participants in such amounts as the Committee shall determine.
7.2. RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be evidenced by a Restricted Stock Award Agreement that shall specify whether the grant is an Award of Restricted Stock Shares or Restricted Stock Units, the Period(s) of Restriction, the number of Shares or Units of Restricted Stock granted, and such other provisions as the Committee shall determine.
7.3. TRANSFERABILITY. Except as otherwise provided in this Article 7, the Shares or Units of Restricted Stock granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction established by the Committee and specified in the Restricted Stock Award Agreement, or upon earlier satisfaction of any other conditions, as specified by the Committee in its sole discretion and set forth in the Restricted Stock Award Agreement. Except as otherwise provided in this Article 7, Restricted Stock Shares shall become freely transferable by the Participant upon the Vesting Date, and Shares issued in respect of Restricted Stock Units shall be freely transferable by the Participant upon issuance to the Participant on or after the Vesting Date.
7.4. OTHER RESTRICTIONS. The Committee may impose such other conditions and/or restrictions on any Shares or Units of Restricted Stock granted pursuant to the Plan as it may deem advisable, including, without limitation, a requirement that Participants pay a stipulated purchase price at a stipulated time for each Share or Unit of Restricted Stock, restrictions and conditions of vesting or forfeiture based upon the achievement of specific performance goals (Company-wide, divisional, and/or individual), time-based restrictions on vesting following the attainment of the performance goals, and/or restrictions under applicable Federal or state securities laws.
If the Restricted Stock Award is made in Restricted Stock Shares, CB&I shall retain the certificates representing Shares in CB&I's possession until the Vesting Date. If the Restricted Stock Award is made in Restricted Stock Units, no Shares shall be issued until the Vesting Date, but shares shall be issued in respect of such Units as of or after the Vesting Date. In either case, certificates for Shares shall be delivered to the Participant on or as soon as practicable after the Vesting Date, or at such later time or times as shall be determined by the Committee in its discretion upon grant of the Award or, with the consent of the Participant, after grant of the Award.
7.5. VOTING RIGHTS. Unless otherwise provided in the Award Agreement, Participants awarded Restricted Stock Shares hereunder which have not been forfeited any exercise full voting rights with respect to those Shares during the Period of Restriction. No voting rights may be exercised in respect of Restricted Stock Units (unless and until Shares are issued therefor on or after the Vesting Date).
7.6. DIVIDEND AND OTHER DISTRIBUTIONS. Unless otherwise provided in the Award Agreement, if during the Period of Restriction prior to a Vesting Date or forfeiture of Restricted Stock:
(a) Cash dividends are paid on Shares, (i) the Company shall pay Participants holding Restricted Stock Shares the regular cash dividends paid with respect to the Shares; and (ii) the Company shall pay Participants holding Restricted Stock Units an amount equal to the cash dividends paid on an equivalent number of Shares;
(b) Dividends in Shares are paid in Shares, (i) Participants holding Restricted Stock Shares shall be credited with such dividends as additional Restricted Stock Shares subject to the same restrictions as the underlying Shares; and (ii) Participants holding Restricted Stock Units shall be credited with additional Restricted Stock Units equivalent to such dividends, subject to the same restrictions as the underlying Units.
The Committee may in its discretion apply any restrictions to the dividends that the Committee deems appropriate.
7.7. TERMINATION OF EMPLOYMENT. Except as otherwise provided in the Award Agreement, if the Participant's employment as an Employee or service as a Director with CB&I or the Company or their respective Subsidiaries and Affiliates terminates for any reason during the Period of Restriction, all Restricted Stock as to which the Period of Restriction has not yet expired or as to which a Vesting Date has not otherwise occurred shall be forfeited. The Committee in its discretion may set forth in the Award Agreement the extent to which the Participant shall nevertheless have the right to receive vested unrestricted Shares at or after termination of the Participant's employment as an Employee or service as a Director. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Shares or
Units of Restricted Stock issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of employment.
7.8. RIGHTS PERSONAL TO PARTICIPANT. All rights prior to the Vesting Date with respect to the Restricted Stock granted to a Participant under the Plan shall be available during his or her lifetime only to such Participant, or in the event of the Participant's death prior to the Vesting Date, to the Beneficiary designated in accordance with Article 10.
ARTICLE 8. - PERFORMANCE UNITS AND PERFORMANCE SHARES
8.1. GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms of the Plan, Performance Units and/or Performance Shares may be granted to Participants in such amounts and upon such terms, and at any time and from time to time, as shall be determined by the Committee.
8.2. VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall have an initial value that is established by the Committee at the time of grant. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the date of grant. The Committee shall set performance goals in its discretion which, depending on the extent to which they are met, will determine the number and/or value of Performance Units/Shares that will be paid out to the Participant. For purposes of this Article 8, the time period during which the performance goals must be met shall be called a "Performance Period."
8.3. EARNING OF PERFORMANCE UNITS/SHARES. Subject to the terms of this Plan, after the applicable Performance Period has ended, the holder of Performance Units/Shares shall be entitled to receive payout on the number and value of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved.
8.4. FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES. Payment of earned Performance Units/Shares shall be made in a single lump sum, as soon as practicable after the Committee has certified the number of Performance Units/Shares earned for the Performance Period, or at such later time or times as shall be determined by the Committee in its discretion upon grant of the Award or, with the consent of the Participant, after grant of the Award. Subject to the terms of this Plan and except as otherwise provided in an Award Agreement, the Committee shall pay earned Performance Shares in Shares but may in its sole discretion pay earned Performance Units in the form of cash or in Shares (or in a combination thereof) which have an aggregate Fair Market Value equal to the value as of the date of distribution of the number of earned Performance Units at the close of the applicable Performance Period. Such Shares may be granted subject to any restrictions deemed appropriate by the Committee.
Unless otherwise provided in the Award Agreement, Participants shall be entitled to receive any dividends paid with respect to Shares which have been earned in connection with grants of Performance Units/Shares but not yet distributed to Participants, such dividends to be subject to the same terms and conditions as apply to dividends earned with respect to Restricted Stock, as set forth in Section 7.6 herein.
8.5. TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT. Unless determined otherwise by the Committee and set forth in the Participant's Award Agreement, in the event the employment or service as a Director of a Participant is terminated by reason of death, Disability, or Retirement during a Performance Period, the Participant shall receive a payout of the Performance Units/Shares which is prorated, as specified by the Committee in its discretion. Payment of earned Performance Units/Shares shall be made at a time specified by the Committee in its sole discretion and set forth in the Participant's Award Agreement. Notwithstanding the foregoing, with respect to Named Executive Officers who retire during a Performance Period, payments shall be made at the same time as payments are made to Participants who did not terminate employment or service during the applicable Performance Period.
8.6. TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that a Participant's employment or service terminates for any reason other than those reasons set forth in Section 8.5 herein, all Performance Units/Shares shall be forfeited by the Participant to CB&I unless determined otherwise by the Committee, as set forth in the Participant's Award Agreement.
8.7. NONTRANSFERABILITY. Except as otherwise provided in a Participant's Award Agreement, Performance Units/Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or by designation of a Beneficiary in accordance with Article 10. Further, except as otherwise provided in a Participant's Award Agreement, a Participant's rights under the Plan shall be exercisable during the Participant's lifetime only by the Participant or the Participant's legal representative.
ARTICLE 9. - PERFORMANCE MEASURES.
Unless and until the Committee proposes for shareholder vote and shareholders of the Company approve a change in the general performance measures set forth in this Article 9, the attainment of which may determine the degree of payout and/or vesting with respect to Awards to Named Executive Officers which are designed to qualify for the Performance-Based Exception, the performance measure(s) to be used for purposes of such grants shall be chosen from among net income (either before or after taxes), share price, earnings per share, operating income, return on assets, return on equity, return on capital or investments, total shareholder return, or economic value added.
The Committee shall have the discretion to adjust the determinations of the degree of attainment of the preestablished performance goals; provided, however, that Awards which are designed to qualify for the Performance-Based Exception, and which are held
by Named Executive Officers, may not be adjusted upward (the Committee shall retain the discretion to adjust such Awards downward).
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards which shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
ARTICLE 10. - BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plans to be paid, and to exercise any Stock Option or succeed to the ownership of any Restricted Stock Performance Units/Shares or other Award as provided in this Plan, in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Committee during the Participant's lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate.
ARTICLE 11. - DEFERRALS
The Committee may permit or require a Participant to defer such Participant's receive of the payment of cash or the delivery of Shares that would otherwise be due to such Participant by virtue of the exercise of an Option, the lapse or waiver of restrictions with respect to Restricted Stock, or the satisfaction of any requirements or goals with respect to Performance Units/Shares. If any such deferral election is required or permitted, the Committee shall, in its sole discretion, establish rules and procedures for such payment deferrals.
ARTICLE 12. - RIGHTS OF EMPLOYEES
12.1. EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any way the right of CB&I to terminate any Participant's employment at any time, nor confer upon any Participant any right to continue in the employ of CB&I.
12.2. PARTICIPATION. No Employee or Director shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.
ARTICLE 13. - CHANGE IN CONTROL
13.1. TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in Control, unless otherwise specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national securities exchanges:
(a) Any and all Options granted hereunder shall become immediately exercisable, and shall remain exercisable throughout their entire term;
(b) Any restriction periods and restrictions imposed on Restricted Shares shall lapse;
(c) The target payout opportunities attainable under all outstanding Awards of Restricted Stock, Performance Units and performance Shares shall be deemed to have been fully earned for the entire Performance Period(s) as of the effective date of the Change in Control. The vesting of all Awards denominated in Shares shall be accelerated as of the effective date of the Change in Control, and there shall be paid out in cash to Participants within thirty (30) days following the effective date of the Change in Control a pro rata amount based upon an assumed achievement of all relevant performance goals and upon the length of time within the Performance Period which has elapsed prior to the Change in Control.
13.2. TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL PROVISIONS. Notwithstanding any other provision of this Plan or any Award Agreement provision, the provisions of this Article 13 may not be terminated, amendment, or modified on or after the date of Change in Control to affect adversely any Award theretofore granted under the Plan without the prior written consent of the Participant with respect to said Participant's outstanding Awards; provided, however, the Board of Directors, upon recommendation of the Committee, may terminate, amend, or modify this Article 13 at any time and from time to time prior to the date of a Change of Control.
ARTICLE 14. AMENDMENT, MODIFICATION, AND TERMINATION
14.1. AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part; provided, however, that no amendment which requires shareholder approval in order for the Plan to continue to comply with Rule 16b-3 under the Exchange Act, including any successor to such Rule, shall be effective unless such amendment shall be approved by the requisite vote of shareholders of the Company entitled to vote thereon.
14.2. ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in there terms and
conditions of, and the criteria included in, Awards in recognition of unusual
or nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting CB&I or the Company, or the financial statements
of CB&I or the Company, or of changes in applicable laws, regulations or
accounting principles,
whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan; provided that no such adjustment shall be authorized to the extent that such authority would be inconsistent with the Plan's meeting the requirements of Section 162(m) of the Code, as from time to time amended.
14.3. AWARDS PREVIOUSLY GRANTED. The Committee may amend or modify any outstanding Award Agreement in any manner consistent with this Plan for an original Award Agreement, provided, however, that no amendment or modification of an Award Agreement shall adversely affect in any material way the Award previously granted under the Plan without the written consent of the Participant holding such Award. No termination, amendment or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan without the written consent of the Participant holding such Award.
14.4. COMPLIANCE WITH CODE SECTION 162(M). At all times when Code Section
162(m) is applicable, all Awards granted under this Plan shall comply with the
requirements of Code Section 162(m); provided, however, that in the event the
Committee determines that such compliance is not desired with respect to any
Award or Awards available for grant under the Plan, then compliance with Code
Section 162(m) will not be required. In addition, in the event that changes
are made to Code Section 162(m) to permit greater flexibility with respect to
any Award or Awards available under the Plan, the Committee may, subject to
this Article 14, make any adjustments it deems appropriate.
ARTICLE 15 - WITHHOLDING
15.1. TAX WITHHOLDING. CB&I shall have the power and the right to deduct or withhold, or require a Participant to remit to CB&I, an amount sufficient to satisfy Federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan.
15.2. SHARE WITHHOLDING. With respect to withholding required upon the exercise of Options, upon the lapse of restrictions on Restricted Stock, or upon any other taxable event arising as a result of Awards granted hereunder, Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having CB&I withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the committee, in its sole discretion, deems appropriate.
ARTICLE 16. - INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by CB&I against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim action, suit, or proceeding to which he or she may be party or in which he or she may be involved by reasons of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with CB&I's approval, or paid by him or her in satisfaction of any judgment of any such action, suit, or proceeding against him or her, provided he or she shall give CB&I an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's Articles of Association, CB&I's Certificate of Incorporation or Bylaws, any agreement, as a matter of law, or otherwise, or any power that CB&I may have to indemnify them or hold them harmless.
ARTICLE 17. - SUCCESSORS
All obligations of CB&I under the Plan with respect to Awards granted hereunder shall be binding on any successor to CB&I, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of CB&I.
ARTICLE 18. - LEGAL CONSTRUCTION
18.1. GENDER AND NUMBER. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular shall include the plural.
18.2. SEVERABILITY. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
18.3. REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
18.4. SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the 1934 Act. The extent any provision of the Plan or action by the Committee files to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.
18.5. GOVERNING LAW. To the extent not preempted by federal law, the Plan and all agreements hereunder, shall be construed in accordance with and governed by the laws of the state of Illinois, without regard to its rules or provisions of law regarding conflict of laws.
EXHIBIT 10.16
CHICAGO BRIDGE & IRON COMPANY N.V. ("COMPANY")
SUPERVISORY BOARD OF DIRECTORS FEE PAYMENT PLAN ("PLAN")
(THE PLAN IS ADOPTED IN THE FORM OF THE FOLLOWING QUESTIONS AND ANSWERS)
WHAT IS THE PURPOSE OF THE PLAN?
The Plan enables the Company and each Director to enter into an Agreement with respect to the form of payment for Directors Fees.
WHO MAY PARTICIPATE IN THE PLAN?
Each non-employee member of the Supervisory Board of Directors ("Board") of Chicago Bridge & Iron Company N.V. ("Director") is automatically a participant in the Plan.
WHAT ARE DIRECTORS FEES FOR PURPOSES OF THE PLAN?
All annual retainers for Board membership and Board Committee chairperson and all fees for attendance at Board and Board Committee meetings.
WHEN IS THE PLAN EFFECTIVE?
The Plan is effective July 1, 1998 and governs the payment of all Directors Fees earned thereafter.
WHEN MUST THE COMPANY AND EACH DIRECTOR AGREE ON THE PAYMENT FORM FOR DIRECTOR FEES?
An Agreement with respect to the form of payment must be made prior to the date the Directors Fees are earned.
WHEN ARE DIRECTORS FEES DEEMED TO BE EARNED?
A portion of the annual Board membership or Board chairperson retainer equal to the total annual retainer amount divided by the annual number of Board of Directors meetings and fees for attendance at Board or Board Committee meetings are deemed earned on the day of the respective Board or Board Committee meeting.
HOW IS AN AGREEMENT EVIDENCED?
The Company will automatically agree to the form(s) of payment for Directors Fees earned during the period indicated by the Director if submitted on a properly completed, signed and dated Agreement (attached Exhibit A) to the Company's Human Resources Department prior to the date Directors Fees are earned.
WHAT FORMS OF DIRECTORS FEES PAYMENT MAY BE AGREED UPON?
Available forms of Directors Fees payment are (1) cash paid in the form of a U.S. dollar check following each Board meeting, (2) cash paid in the form of a U.S. dollar check as of a specific future date or specific future event (e.g., retirement from the Board) , (3) shares of CB&I N.V. stock ("CB&I stock") delivered following each Board meeting, (4) shares of CB&I stock delivered as of a specific future date or specific future event, and (5) up to 8% of Directors Fees applied to purchase CB&I stock from the Company under the Supervisory Board of Directors Stock Purchase Plan (See separate Question and Answer presentation for the stock purchase plan).
CAN MULTIPLE FORMS OF PAYMENT APPLY TO THE DIRECTORS FEES EARNED DURING A SPECIFIC PERIOD?
Yes.
WHAT INTEREST RATE APPLIES TO UNPAID CASH PRIOR TO ITS PAYMENT AS OF A SPECIFIED FUTURE DATE OR EVENT?
Unpaid cash shall be credited with interest at the rate of prime plus 1%, updated quarterly based on the prime rate for the first business day of each calendar quarter as published in the Wall Street Journal.
WHAT IS THE BASIS FOR DETERMINING THE NUMBER OF SHARES OF CB&I. STOCK TO BE DELIVERED TO THE DIRECTOR?
The number of shares of CB&I stock will be determined by dividing the respective Directors Fees earned by the closing price per shares of CB&I stock on the New York Stock Exchange on the first trading day preceding the respective Board meeting.
WHAT IS THE SOURCE OF CB&I STOCK FOR THE PLAN?
All shares of CB&I stock transferred to Directors under the Plan shall be withdrawn from the Company's Treasury Stock account.
HOW ARE DIVIDENDS PAID ON UNDELIVERED SHARES OF CB&I STOCK ACCOUNTED FOR?
Dividends paid on undelivered shares of CB&I stock are converted to additional undelivered shares based on the closing price per shares of CB&I stock on the New York Stock Exchange on the dividend payment date.
HOW ARE SHARES OF CB&I STOCK DELIVERED TO THE DIRECTOR?
A certificate for whole shares and a check for the market value of any fractional share is delivered to the Director or, at the Director's election, the shares (including fractional shares) can be electronically transferred to a Director's brokerage account established by the Company.
WHEN DO DIRECTORS FEES BECOME TAXABLE INCOME?
Directors Fees payments are taxable income for the year when such payments are received by the Director
WHAT PORTION OF DIRECTORS FEES PAID IN CASH OR DELIVERED IN THE FORM OF CB&I STOCK AT A FUTURE SPECIFIED DATE OR EVENT IS NETHERLANDS TAXABLE INCOME AT SUCH TIME?
Directors Fees, when paid or delivered in a year subsequent to the year such Directors Fees were earned, will be reported as taxable income in the Netherlands in the same proportion which would have applied had such Directors Fees been taxable for the year earned.
WILL WITHHOLDING FOR NETHERLANDS TAX PURPOSES APPLY TO ALL PAYMENTS OR DELIVERY (IN THE FORM OF CB&I STOCK) OF DIRECTORS FEES, WHETHER MADE OR DELIVERED WHEN EARNED OR AT A SPECIFIC FUTURE DATE OR SPECIFIC FUTURE EVENT?
Yes. Netherlands tax withholding will be based on the amount of such Directors Fees reportable as Netherlands taxable income. To the extent necessary to accommodate such withholding, payments to be delivered in the form of CB&I stock may need to be adjusted.
MAY AN AGREEMENT BE CHANGED AT A LATER DATE?
A new Agreement may be made at any time, but only with respect to the form of payment of Directors Fees to be earned subsequent to the date of the new Agreement.
HOW ARE DIRECTORS FEES PAID IF NO AGREEMENT HAS BEEN MADE WITH RESPECT TO SUCH DIRECTORS FEES?
Directors Fees earned, but not subject to an Agreement, will be paid by check following the respective Board meeting at which such Directors Fees were earned.
EXHIBIT 10.17
CHICAGO BRIDGE & IRON COMPANY N.V. ("COMPANY")
SUPERVISORY BOARD OF DIRECTORS STOCK PURCHASE PLAN ("PLAN")
(THE PLAN IS ADOPTED IN THE FORM OF THE FOLLOWING QUESTIONS AND ANSWERS)
WHAT IS THE PURPOSE OF THE PLAN?
The Plan provides each Director with an opportunity to purchase Chicago Bridge & Iron N.V. common stock (CB&I stock) in a manner similar to that which applies to employees of the Company.
Each Director may agree with the Company that up to 8% of Directors Fees (in 1% increments) to purchase shares of CB&I stock at 85% the closing price per share of CB&I stock on the New York Stock Exchange on the first trading day following the end of each calendar quarter.
WHO MAY PARTICIPATE IN THE PLAN?
Each non-employee member of the Supervisory Board of Directors ("Board") of Chicago Bridge & Iron Company N.V. ("Director") is automatically eligible to participate in the Plan.
WHEN IS THE PLAN EFFECTIVE?
The Plan is effective July 1, 1998 with respect to Directors Fees earned thereafter.
WHAT IS THE SOURCE OF CB&I STOCK FOR THE PLAN?
All shares of CB&I stock purchased by Directors under the Plan shall be withdrawn from the Company's Treasury Stock account.
WHAT ARE DIRECTORS FEES FOR PURPOSES OF THE PLAN?
All annual retainers for Board membership and Board Committee chairperson and all fees for attendance at Board and Board Committee meetings.
WHEN MUST THE COMPANY AND EACH DIRECTOR AGREE ON WHETHER A PERCENTAGE OF DIRECTORS FEES WILL BE APPLIED TO PURCHASE CB&I STOCK UNDER THIS PLAN?
An Agreement with respect to the form of payment must be made prior to the date the Directors Fees are earned.
WHEN ARE DIRECTORS FEES DEEMED TO BE EARNED?
A portion of the annual Board membership or Board chairperson retainer equal to the total annual retainer amount divided by the annual number of Board of Directors meetings and fees for attendance at Board or Board Committee meetings are deemed earned on the day of the respective Board or Board Committee meeting.
HOW IS AN AGREEMENT EVIDENCED?
By a properly completed, signed and dated Agreement (attached Exhibit A) under the Supervisory Board of Directors Fee Payment Plan submitted to the Company's Human Resources Department prior to the date Directors Fees are earned.
WHEN IS STOCK PURCHASED UNDER THE PLAN DELIVERED TO THE DIRECTOR
Stock purchased under the Plan is delivered per the Agreement, either immediately or as of a specific future date or specific future event (e.g., retirement from the Board).
WHAT ARE THE INCOME TAX CONSEQUENCES OF THE PLAN?
If the Agreement provides that the CB&I stock purchased is delivered immediately, then the amount of Directors Fees applied toward stock purchase under this Plan are taxable income for the year when such fees are earned, and the amount of 15% discount from market value is taxable income for the year when stock is purchased under the Plan.
If the Agreement provides that the CB&I stock purchased is delivered as of a specific future date or specific future event, the market value of the purchased shares of CB&I stock on that future date is reportable as taxable income at that time.
HOW ARE SHARES OF CB&I STOCK DELIVERED TO THE DIRECTOR?
A certificate for whole shares and a check for the market value of any fractional share is delivered to the Director or, at the Director's election, the shares (including fractional shares) can be electronically transferred to a Director's brokerage account established by the Company.
MAY AN AGREEMENT BE CHANGED AT A LATER DATE?
A new Agreement may be made at any time, but only with respect to the form of payment of Directors Fees to be earned subsequent to the date of the new Agreement.
ARTICLE 5 |
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF SEPTEMBER 30, 1998, AND THE INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
PERIOD TYPE | 9 MOS |
FISCAL YEAR END | DEC 31 1998 |
PERIOD END | SEP 30 1998 |
CASH | 12,474 |
SECURITIES | 0 |
RECEIVABLES | 157,502 |
ALLOWANCES | 1,072 |
INVENTORY | 2,555 |
CURRENT ASSETS | 231,483 |
PP&E | 155,807 |
DEPRECIATION | 42,439 |
TOTAL ASSETS | 374,165 |
CURRENT LIABILITIES | 175,710 |
BONDS | 27,000 |
COMMON | 74 |
PREFERRED MANDATORY | 0 |
PREFERRED | 0 |
OTHER SE | 99,846 |
TOTAL LIABILITY AND EQUITY | 374,165 |
SALES | 0 |
TOTAL REVENUES | 576,654 |
CGS | 0 |
TOTAL COSTS | 524,098 |
OTHER EXPENSES | (643) |
LOSS PROVISION | (837) |
INTEREST EXPENSE | 0 |
INCOME PRETAX | 16,281 |
INCOME TAX | 4,558 |
INCOME CONTINUING | 11,915 |
DISCONTINUED | 0 |
EXTRAORDINARY | 0 |
CHANGES | 0 |
NET INCOME | 11,915 |
EPS PRIMARY | 0.97 |
EPS DILUTED | 0.97 |