-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WPuEq1xQVcE4sQCoUN676AMQABjmq7/wh1ul6XZdoWbnTgat5uVzYmetX6XEmQgf IHVNLP8s3qqKL+2PKQ7NLg== 0000928385-97-001316.txt : 19970815 0000928385-97-001316.hdr.sgml : 19970815 ACCESSION NUMBER: 0000928385-97-001316 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICF KAISER INTERNATIONAL INC CENTRAL INDEX KEY: 0000856200 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 541437073 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12248 FILM NUMBER: 97659857 BUSINESS ADDRESS: STREET 1: 9300 LEE HWY CITY: FAIRFAX STATE: VA ZIP: 22031 BUSINESS PHONE: 7039343600 MAIL ADDRESS: STREET 1: 9300 LEE HWY CITY: FAIRFAX STATE: VA ZIP: 22031 FORMER COMPANY: FORMER CONFORMED NAME: ICF INTERNATIONAL INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN CAPITAL & RESEARCH CORP /DE/ DATE OF NAME CHANGE: 19910314 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 Commission File No. 1-12248 ICF KAISER INTERNATIONAL, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 54-1437073 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9300 Lee Highway, Fairfax, Virginia 22031-1207 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (703) 934-3600 -------------- 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 --- --- On July 31, 1997, there were 22,436,572 shares of ICF Kaiser International, Inc. Common Stock, par value $0.01 per share, outstanding. ICF KAISER INTERNATIONAL, INC. INDEX TO FORM 10-Q Page Part I - Financial Information Item 1. Financial Statements: Consolidated Balance Sheets - June 30, 1997 and December 31, 1996.............................. 3 Consolidated Statements of Operations - Six Months Ended June 30, 1997 and 1996.......................... 4 Consolidated Statements of Operations - Three Months Ended June 30, 1997 and 1996........................ 5 Consolidated Statements of Cash Flows - Six Months Ended June 30, 1997 and 1996.......................... 6 Notes to Consolidated Financial Statements....................... 7-16 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................................ 17-23 Item 3. Quantitative and Qualitative Disclosures About Market Risk....... 243 Part II - Other Information Item 1. Legal Proceedings................................................. 23 Item 2. Changes in Securities............................................. 23 Item 3. Defaults Upon Senior Securities................................... 23 Item 4. Submission of Matters to a Vote of Security Holders............... 24 Item 5. Other Information................................................. 24 Item 6. Exhibits and Reports on Form 8-K.................................. 25
2 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except shares) ================================================================================
June 30, December 31, 1997 1996 ----------- ------------ (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 12,355 $ 16,761 Contract receivables, net 246,799 223,278 Prepaid expenses and other current assets 9,416 27,096 Deferred income taxes 12,764 9,739 ---------- ---------- Total Current Assets 281,334 276,874 ---------- ---------- Fixed Assets Furniture, equipment, and leasehold improvements 50,874 48,410 Less depreciation and amortization (38,108) (37,208) ---------- ---------- 12,766 11,202 ---------- ---------- Other Assets Goodwill, net 48,511 49,699 Investments in and advances to affiliates 6,676 6,443 Due from officers and employees 796 716 Other 20,570 21,039 ---------- ---------- 76,553 77,897 ---------- ---------- $ 370,653 $ 365,973 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current portion of long-term debt $ 22 $ 43 Accounts payable and subcontractors payable 87,937 73,320 Accrued salaries and employee benefits 45,875 45,779 Accrued interest 17 47 Other accrued expenses 13,302 15,838 Income taxes payable 620 852 Deferred revenue 26,777 21,829 Other 8,040 5,268 ---------- ---------- Total Current Liabilities 182,590 162,976 ---------- ---------- Long-term Liabilities Long-term debt, less current portion 141,767 156,519 Other 4,928 5,432 ---------- ---------- 146,695 161,951 ---------- ---------- Commitments and Contingencies Minority Interests in Subsidiaries 6,866 6,154 Common Stock, par value $.01 per share: Authorized-90,000,000 shares Issued and outstanding- 22,410,749 and 22,311,842 shares 224 223 Additional Paid-in Capital 66,980 66,983 Notes Receivable Related to Common Stock (1,732) (1,732) Retained Earnings (Deficit) (29,188) (29,238) Cumulative Translation Adjustment (1,782) (1,344) ---------- ---------- $ 370,653 $ 365,973 ========== ==========
================================================================================ See notes to consolidated financial statements. 3 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) ================================================================================
Six Months Ended June 30, ----------------------------- 1997 1996 ---------- ---------- (Unaudited) GROSS REVENUE $ 507,543 $ 643,439 Subcontract and direct material costs (294,818) (350,716) Equity in income of joint ventures and affiliated companies 834 2,144 ---------- ---------- SERVICE REVENUE 213,559 294,867 OPERATING EXPENSES Direct cost of services and overhead 166,977 240,963 Administrative and general 27,853 32,515 Depreciation and amortization 4,742 5,306 ---------- ---------- OPERATING INCOME 13,987 16,083 OTHER INCOME (EXPENSE) Interest and investment income 1,016 423 Interest expense (9,157) (8,311) ---------- ---------- INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS 5,846 8,195 Income tax provision 1,134 2,295 ---------- ---------- INCOME BEFORE MINORITY INTERESTS 4,712 5,900 Minority interests in net income of subsidiaries 4,662 2,943 ---------- ---------- NET INCOME 50 2,957 Preferred stock dividends and accretion - 1,092 ---------- ---------- NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 50 $ 1,865 ========== ========== NET INCOME PER COMMON SHARE: PRIMARY $ 0.00 $ 0.09 ========== ========== FULLY DILUTED $ 0.00 $ 0.09 ========== ========== WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING: PRIMARY 22,370 21,785 ========== ========== FULLY DILUTED 22,468 21,785 ========== ==========
================================================================================ See notes to consolidated financial statements. 4 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) ================================================================================
THREE MONTHS ENDED JUNE 30, --------------------------- 1997 1996 ---------- --------- (Unaudited) GROSS REVENUE $ 241,586 $ 332,320 Subcontract and direct material costs (132,552) (183,398) Equity in income of joint ventures and affiliated companies 547 1,420 --------- --------- SERVICE REVENUE 109,581 150,342 OPERATING EXPENSES Direct cost of services and overhead 85,292 122,318 Administrative and general 14,527 16,710 Depreciation and amortization 2,373 2,699 --------- --------- OPERATING INCOME 7,389 8,615 OTHER INCOME (EXPENSE) Interest and investment income 677 193 Interest expense (4,804) (4,211) --------- --------- INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS 3,262 4,597 Income tax provision 566 1,294 --------- --------- INCOME BEFORE MINORITY INTERESTS 2,696 3,303 Minority interests in net income of subsidiaries 2,693 1,670 --------- --------- NET INCOME 3 1,633 Preferred stock dividends and accretion - 553 --------- --------- NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 3 $ 1,080 ========= ========= NET INCOME PER COMMON SHARE: PRIMARY $ 0.00 $ 0.05 ========= ========= FULLY DILUTED $ 0.00 $ 0.05 ========= ========= WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING: PRIMARY 22,441 21,846 ========= ========= FULLY DILUTED 22,556 21,846 ========= =========
=============================================================================== See notes to consolidated financial statements. 5 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ================================================================================
Six Months Ended June 30, ------------------------- 1997 1996 ---------- ---------- (Unaudited) OPERATING ACTIVITIES Net income $ 50 $ 2,957 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 4,742 5,306 Provision for losses on contract receivables 871 826 Provision for deferred income taxes (3,025) 561 Earnings less than (in excess of) cash distributions from joint ventures and affiliated companies 87 (286) Minority interests in net income of subsidiaries 4,662 2,943 Unusual items, net - 1,528 Changes in operating assets and liabilities, net of acquisitions and dispositions: Contract receivables, net (24,392) 8,147 Prepaid expenses and other current assets 1,140 3,041 Other assets (1,935) 475 Accounts payable and accrued expenses 12,583 (13,466) Income taxes payable (232) (169) Deferred revenue 4,948 (1,844) Other liabilities 2,495 (121) Other operating activities 105 147 ---------- ---------- Net Cash Provided by Operating Activities 2,099 10,045 ---------- ---------- INVESTING ACTIVITIES Sales of subsidiary and subsidiary assets 16,540 - Sale of fixed assets - 22 Purchases of fixed assets (2,683) (3,089) Investments in subsidiaries and affiliates, net of cash acquired (345) (725) ---------- ---------- Net Cash Provided by (Used in) Investing Activities 13,512 (3,792) ---------- ---------- FINANCING ACTIVITIES Borrowings under credit facility 38,000 27,000 Principal payments on credit facility and other borrowings (53,000) (32,000) Distribution of income to minority interest (3,950) (823) Proceeds from issuances of common stock 109 213 Repurchases of common stock (252) - Preferred stock dividends - (1,478) Debt issuance costs (486) (375) Other financing activities - (46) ---------- ---------- Net Cash Used in Financing Activities (19,579) (7,509) ---------- ---------- Effect of Exchange Rate Changes on Cash (438) 84 ---------- ---------- Decrease in Cash and Cash Equivalents (4,406) (1,172) Cash and Cash Equivalents at Beginning of Period 16,761 16,357 ---------- ---------- Cash and Cash Equivalents at End of Period $ 12,355 $ 15,185 ========== ========== SUPPLEMENTAL INFORMATION: Cash payments for interest $ 9,521 $ 7,904 Cash payments (refunds) for income taxes $ 230 $ 401 NON-CASH TRANSACTIONS: Issuance of common stock pursuant to agreements with employees $ 287 $ 500 Reacquisition of common stock $ 227 $ - Issuance of common stock in connection with an acquisition $ - $ 350
================================================================================ See notes to consolidated financial statements. 6 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The accompanying consolidated financial statements of ICF Kaiser International, Inc. and subsidiaries (the Company), except for the December 31, 1996 balance sheet, are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Company's audited consolidated financial statements and footnotes thereto for the year ended December 31, 1996 and the information included in the Company's Annual Report to the Securities and Exchange Commission (SEC) on Form 10-K for the year ended December 31, 1996. Certain reclassifications have been made to the prior period financial statements to conform to the presentation used in the June 30, 1997 financial statements. 2. Net Income Per Common Share Net income per common share was computed under the treasury stock method for the six and three months ended June 30, 1997 and the modified treasury stock method for the six and three months ended June 30, 1996, using net income available for common shareholders and the weighted average number of common stock and common stock equivalents outstanding during the periods. Common stock equivalents include stock options and warrants and additional shares which will be or may be issued in connection with acquisitions. 3. 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, an adequate reserve has been provided for final judgments, if any, in excess of insurance coverage, that might be rendered against the Company in such litigation. 7 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. Management does not believe that there will be any material adverse effect on the Company's financial position, results of operations, or cash flows as a result of these investigations. The Company has a substantial number of cost-reimbursement contracts with the U.S. government, 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. Many of the issues, however, have not been quantified by the government or the Company, 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 Company's provision will be reviewed periodically as discussions with the government progress. 4. Long-term Debt The Company's $40 million revolving credit facility is provided by a group of three banks and expires on December 31, 1998. The credit facility was amended in 1997 to modify certain financial ratios, to extend the termination date of the credit facility from June 30, 1998, to December 31, 1998, and to permit certain investments and acquisitions. 5. Guarantor Subsidiaries Four wholly owned subsidiaries of ICF Kaiser International, Inc. (Subsidiary Guarantors) unconditionally guarantee the payment of the principal, premium, if any, and interest on the Company's Subordinated Notes and the Series B Senior Notes. The Subsidiary Guarantors are Cygna Consulting Engineers and Project Management, Inc.; ICF Kaiser Government Programs, Inc.; PCI Operating Company, Inc.; and Systems Applications International, Inc. Presented below is condensed consolidating financial information for ICF Kaiser International, Inc. (Parent Company), the Subsidiary Guarantors, and the Non- Guarantor Subsidiaries. The information, except for the December 31, 1996 condensed consolidating balance sheet, is unaudited. Investments in subsidiaries have been presented using the equity method of accounting. In the Company's opinion, separate financial statements for the Subsidiary Guarantors would not provide additional information that is material to investors. Therefore, the Subsidiary Guarantors are combined in the presentation below. 8 ICF Kaiser International, Inc. and Subsidiaries Condensed Consolidating Balance Sheet June 30, 1997 (In thousands) ================================================================================
ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated -------- ---------- ------------- ------------ ------------------- (Unaudited) ASSETS Current Assets Cash and cash equivalents $ (1,133) $ 2,553 $ 11,435 $ (500) $ 12,355 Contract receivables, net 249 97,134 149,416 - 246,799 Intercompany receivables, net 103,585 7,949 (111,534) - - Prepaid expenses and other current assets 4,758 28 4,763 (133) 9,416 Deferred income taxes 12,764 - - - 12,764 -------- -------- --------- -------- ---------- Total Current Assets 120,223 107,664 54,080 (633) 281,334 -------- -------- --------- -------- ---------- Fixed Assets Furniture, equipment, and leasehold improvements 9,363 2,198 39,313 - 50,874 Less depreciation and amortization (4,715) (2,097) (31,296) - (38,108) -------- -------- --------- -------- ---------- 4,648 101 8,017 - 12,766 -------- -------- --------- -------- ---------- Other Assets Goodwill, net - - 48,511 - 48,511 Other 80,214 2,246 21,820 (76,238) 28,042 -------- -------- --------- -------- ---------- 80,214 2,246 70,331 (76,238) 76,553 -------- -------- --------- -------- ---------- $205,085 $110,011 $ 132,428 $(76,871) $ 370,653 ======== ======== ========= ======== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current portion of long-term debt $ - $ - $ 22 $ - $ 22 Accounts payable and other accrued expenses 12,751 65,909 22,579 - 101,239 Accrued salaries and employee benefits 3,322 23,419 19,134 - 45,875 Other 7,700 243 27,543 (32) 35,454 -------- -------- --------- -------- ---------- Total Current Liabilities 23,773 89,571 69,278 (32) 182,590 -------- -------- --------- -------- ---------- Long-term Liabilities Long-term debt, less current portion 142,356 - - (589) 141,767 Other 2,672 34 2,222 - 4,928 -------- -------- --------- -------- ---------- 145,028 34 2,222 (589) 146,695 -------- -------- --------- -------- ---------- Minority Interests in Subsidiaries - 6,866 - - 6,866 Common Stock 224 108 166 (274) 224 Additional Paid-in Capital 66,980 224 61,119 (61,343) 66,980 Retained Earnings (Deficit) (29,188) 13,208 1,425 (14,633) (29,188) Other Equity (1,732) - (1,782) - (3,514) -------- -------- --------- -------- ---------- $205,085 $110,011 $ 132,428 $(76,871) $ 370,653 ======== ======== ========= ======== ==========
9 ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING BALANCE SHEET December 31, 1996 (In thousands) ================================================================================
ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated ------------- ------------- ------------- ------------- ------------------- ASSETS Current Assets Cash and cash equivalents $ (7,720) $ 11,974 $ 13,001 $ (494) $ 16,761 Contract receivables, net 183 78,585 144,510 - 223,278 Intercompany receivables, net 155,653 (2,543) (153,110) - - Prepaid expenses and other current assets 4,509 187 22,731 (331) 27,096 Deferred income taxes 12,504 - (2,765) - 9,739 ------------- ------------- ------------- ------------- ----------------- Total Current Assets 165,129 88,203 24,367 (825) 276,874 ------------- ------------- ------------- ------------- ----------------- Fixed Assets Furniture, equipment, and leasehold improvements 7,243 2,198 38,969 - 48,410 Less depreciation and amortization (3,430) (2,079) (31,699) - (37,208) ------------- ------------- ------------- ------------- ----------------- 3,813 119 7,270 - 11,202 ------------- ------------- ------------- ------------- ----------------- Other Assets Goodwill, net - - 49,699 - 49,699 Other 58,494 2,602 21,774 (54,672) 28,198 ------------- ------------- ------------- ------------- ----------------- 58,494 2,602 71,473 (54,672) 77,897 ------------- ------------- ------------- ------------- ----------------- $ 227,436 $ 90,924 $ 103,110 $ (55,497) $ 365,973 ============= ============= ============= ============= ================= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Current portion of long-term debt $ - $ - $ 43 $ - $ 43 Accounts payable and other accrued expenses 16,467 53,612 19,079 - 89,158 Accrued salaries and employee benefits 10,242 22,498 13,039 - 45,779 Other 4,454 447 23,126 (31) 27,996 ------------- ------------- ------------- ------------- ----------------- Total Current Liabilities 31,163 76,557 55,287 (31) 162,976 ------------- ------------- ------------- ------------- ----------------- Long-term Liabilities Long-term debt, less current portion 157,306 - - (787) 156,519 Other 2,731 - 2,701 - 5,432 ------------- ------------- ------------- ------------- ----------------- 160,037 - 2,701 (787) 161,951 ------------- ------------- ------------- ------------- ----------------- Minority Interests in Subsidiaries - 6,154 - - 6,154 Common Stock 223 108 167 (275) 223 Additional Paid-in Capital 66,983 224 44,619 (44,843) 66,983 Retained Earnings (Deficit) (29,238) 7,881 1,680 (9,561) (29,238) Other Equity (1,732) - (1,344) - (3,076) ------------- ------------- ------------- ------------- ----------------- $ 227,436 $ 90,924 $ 103,110 $ (55,497) $ 365,973 ============= ============= ============= ============= =================
10 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Six Months Ended June 30, 1997 (In thousands) ================================================================================
ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated --------- ---------- ------------- ------------- ------------------- (Unaudited) GROSS REVENUE $ 223 $ 271,844 $ 235,476 $ - $ 507,543 Subcontract and direct material costs (301) (188,848) (105,669) - (294,818) Equity in income of joint ventures and affiliated companies and subsidiaries 12,978 - 761 (12,905) 834 ------- --------- --------- -------- --------- SERVICE REVENUE 12,900 82,996 130,568 (12,905) 213,559 OPERATING EXPENSES Operating expenses 11,182 72,959 110,689 - 194,830 Depreciation and amortization 1,143 370 3,229 - 4,742 ------- --------- --------- -------- --------- OPERATING INCOME 575 9,667 16,650 (12,905) 13,987 OTHER INCOME (EXPENSE) Interest and investment income 399 347 316 (46) 1,016 Interest expense (9,143) (24) (31) 41 (9,157) ------- --------- --------- -------- --------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTERESTS (8,169) 9,990 16,935 (12,910) 5,846 Income tax provision (benefit) (8,219) 2,078 7,275 - 1,134 ------- --------- --------- -------- --------- INCOME BEFORE MINORITY INTERESTS 50 7,912 9,660 (12,910) 4,712 Minority interests in net income of subsidiarie - 4,662 - - 4,662 ------- --------- --------- -------- --------- NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 50 $ 3,250 $ 9,660 $(12,910) $ 50 ======= ========= ========= ======== =========
11 ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Six Months Ended June 30, 1996 (In thousands) ================================================================================
ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated --------- ---------- ------------- ------------ ------------------ (Unaudited) GROSS REVENUE $ 1,192 $ 266,399 $ 375,848 $ - $ 643,439 Subcontract and direct material costs (363) (168,210) (182,143) - (350,716) Equity in income of joint ventures and affiliated companies and subsidiaries 5,513 - 2,405 (5,774) 2,144 ------- --------- --------- ---------- --------- SERVICE REVENUE 6,342 98,189 196,110 (5,774) 294,867 OPERATING EXPENSES Operating expenses (4,045) 91,863 185,663 (3) 273,478 Depreciation and amortization 1,115 585 3,606 - 5,306 ------- --------- --------- ---------- --------- OPERATING INCOME 9,272 5,741 6,841 (5,771) 16,083 OTHER INCOME (EXPENSE) Interest and investment income 145 140 273 (135) 423 Interest expense (8,268) (101) (38) 96 (8,311) ------- --------- --------- ---------- --------- INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS 1,149 5,780 7,076 (5,810) 8,195 Income tax provision (benefit) (1,808) 1,069 3,034 - 2,295 ------- --------- --------- ---------- --------- INCOME BEFORE MINORITY INTERESTS 2,957 4,711 4,042 (5,810) 5,900 Minority interests in net income of subsidiaries - 3,038 (95) - 2,943 ------- --------- --------- ---------- --------- NET INCOME 2,957 1,673 4,137 (5,810) 2,957 Preferred stock dividends and accretion 1,092 - - - 1,092 ------- --------- --------- ---------- --------- NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 1,865 $ 1,673 $ 4,137 $ (5,810) $ 1,865 ======= ========= ========= ========== =========
12 ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Three Months Ended June 30, 1997 (In thousands) ===============================================================================
ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------------- (Unaudited) GROSS REVENUE $ (234) $114,811 $127,009 $ - $ 241,586 Subcontract and direct material costs (127) (71,074) (61,351) - (132,552) Equity in income of joint ventures and affiliated companies and subsidiaries 7,212 - 538 (7,203) 547 ------- -------- -------- ---------- ---------- SERVICE REVENUE 6,851 43,737 66,196 (7,203) 109,581 OPERATING EXPENSES Operating expenses 6,373 38,157 55,289 - 99,819 Depreciation and amortization 602 184 1,587 - 2,373 ------- -------- -------- ---------- ---------- OPERATING INCOME (LOSS) (124) 5,396 9,320 (7,203) 7,389 OTHER INCOME (EXPENSE) Interest income 309 222 164 (18) 677 Interest expense (4,855) 54 (21) 18 (4,804) ------- -------- -------- ---------- ---------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTERESTS (4,670) 5,672 9,463 (7,203) 3,262 Income tax provision (benefit) (4,673) 1,150 4,089 - 566 ------- -------- -------- ---------- ---------- INCOME BEFORE MINORITY INTERESTS 3 4,522 5,374 (7,203) 2,696 Minority interests in net income of subsidiaries - 2,693 - - 2,693 ------- -------- -------- ---------- ---------- NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 3 $ 1,829 $ 5,374 $ (7,203) $ 3 ======= ======== ======== ========== ==========
13 ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Three Months Ended June 30, 1996 (In thousands) ================================================================================
ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------------- (Unaudited) GROSS REVENUE $ 639 $ 133,766 $ 197,915 $ - $ 332,320 Subcontract and direct material costs (46) (82,493) (100,859) - (183,398) Equity in income of joint ventures and affiliated companies and subsidiaries 2,961 - 1,558 (3,099) 1,420 ------- ---------- ------------ ------------ ------------------- SERVICE REVENUE 3,554 51,273 98,614 (3,099) 150,342 OPERATING EXPENSES Operating expenses (2,150) 47,635 93,543 - 139,028 Depreciation and amortization 693 230 1,776 - 2,699 ------- ---------- ------------ ------------ ------------------- OPERATING INCOME 5,011 3,408 3,295 (3,099) 8,615 OTHER INCOME (EXPENSE) Interest income 49 102 130 (88) 193 Interest expense (4,183) (63) (14) 49 (4,211) ------- ---------- ------------ ------------ ------------------- INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS 877 3,447 3,411 (3,138) 4,597 Income tax provision (benefit) (756) 674 1,376 - 1,294 ------- ---------- ------------ ------------ ------------------- INCOME BEFORE MINORITY INTERESTS 1,633 2,773 2,035 (3,138) 3,303 Minority interests in net income of subsidiaries - 1,704 (34) - 1,670 ------- ---------- ------------ ------------ ------------------- NET INCOME 1,633 1,069 2,069 (3,138) 1,633 Preferred stock dividends and accretion 553 - - - 553 ------- ---------- ------------ ------------ ------------------- NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 1,080 $ 1,069 $ 2,069 $ (3,138) $ 1,080 ======= ========== ============ ============ ===================
14 ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 1997 (In thousands) ================================================================================
ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------------- (Unaudited) Net Cash Provided by (Used in) Operating Activities $ 23,088 $ (8,234) $ (12,749) $ (6) $ 2,099 -------- ---------- ------------- ------------ ------------------ INVESTING ACTIVITIES Sales of subsidiaries and subsidiary assets - 2,763 13,777 - 16,540 Purchases of fixed assets (872) - (1,811) - (2,683) Investments in subsidiaries and affiliates, net of cash acquired - - (345) - (345) -------- ---------- ------------- ------------ ------------------ Net Cash Provided by (Used) in Investing Activities (872) 2,763 11,621 - 13,512 -------- ---------- ------------- ------------ ------------------ FINANCING ACTIVITIES Borrowings under credit facility 38,000 - - - 38,000 Principal payments on credit facility (53,000) - - - (53,000) Distribution of income to minority interest - (3,950) - - (3,950) Proceeds from issuances of common stock 109 - - - 109 Repurchases of common stock (252) - - - (252) Debt issuance costs (486) - - - (486) -------- ---------- ------------- ------------ ------------------ Net Cash Used in Financing Activities (15,629) (3,950) - - (19,579) -------- ---------- ------------- ------------ ------------------ Effect of Exchange Rate Changes on Cash - - (438) - (438) -------- ---------- ------------- ------------ ------------------ Increase (Decrease) in Cash and Cash Equivalents 6,587 (9,421) (1,566) (6) (4,406) Cash and Cash Equivalents at Beginning of Period (7,720) 11,974 13,001 (494) 16,761 -------- ---------- ------------- ------------ ------------------ Cash and Cash Equivalents at End of Period $ (1,133) $ 2,553 $ 11,435 $ (500) $ 12,355 ======== ========== ============= ============ ==================
15 ICF Kaiser International, Inc. and Subsidiaries CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 1996 (In thousands) ================================================================================
ICF Kaiser Parent Subsidiary Non-Guarantor International, Inc. Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------------- (Unaudited) Net Cash Provided by (Used in) Operating Activities $ (491) $5,990 $ 4,633 $ (87) $10,045 ------- ------ ------- ------- ------- INVESTING ACTIVITIES Purchases of fixed assets (1,366) (84) (1,639) - (3,089) Investments in subsidiaries and affiliates, net of cash acquired - - (725) - (725) Sale of fixed assets - - 22 - 22 ------- ------ ------- ------- ------- Net Cash Used in Investing Activities (1,366) (84) (2,342) - (3,792) ------- ------ ------- ------- ------- FINANCING ACTIVITIES Borrowings under credit facility 27,000 - - - 27,000 Principal payments on credit facility (32,000) - - - (32,000) Distribution of income to minority interest - (823) - - (823) Proceeds from issuances of common stock 213 - - - 213 Preferred stock dividends (1,478) - - - (1,478) Debt issuance costs (375) - - (375) Other financing activities - - (46) - (46) ------- ------ ------- ------- ------- Net Cash Used in Financing Activities (6,640) (823) (46) - (7,509) ------- ------ ------- ------- ------- Effect of Exchange Rate Changes on Cash - - 84 - 84 ------- ------ ------- ------- ------- Increase (Decrease) in Cash and Cash Equivalents (8,497) 5,083 2,329 (87) (1,172) Cash and Cash Equivalents at Beginning of Period 4,128 1,015 12,578 (1,364) 16,357 ------- ------ ------- ------- ------- Cash and Cash Equivalents at End of Period $(4,369) $6,098 $14,907 $(1,451) $15,185 ======= ====== ======= ======= =======
16 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW ICF Kaiser International, Inc. and subsidiaries (the Company) provides engineering, construction, program management, and consulting services primarily to the public and private environmental, infrastructure, industrial, and energy markets domestically and internationally. Financial Review - ---------------- The Company's operating results by operating group for the six and three months ended June 30, 1997 and 1996 are as follows (in millions):
Six Months Ended June 30, Three Months Ended June 30, ------------------------- --------------------------- 1997 1996 1997 1996 ------ ------ ------ ------ Federal programs $ 10.9 $ 17.9 $ 5.4 $ 8.2 Engineering and construction 10.2 9.0 6.4 5.3 Consulting 7.0 5.8 3.5 3.2 ------ ------ ------ ------ 28.1 32.7 15.3 16.7 Corporate costs (14.1) (16.6) (7.9) (8.1) ------ ------ ------ ------ Total operating income $ 14.0 $ 16.1 $ 7.4 $ 8.6 ====== ====== ====== ======
Six Months Ended June 30, 1997 Versus Six Months Ended June 30, 1996 The decrease in income from federal programs primarily resulted from the termination of the Company's contract to perform services at the U.S. Department of Energy's (DOE) Hanford, Washington, Site (Hanford) in 1996. The Hanford contract had a $9.4 million decrease in income between the six-month periods. The only income under the Hanford contract during the six months ended June 30, 1997 was $1.1 million related to activities associated with the closeout of the Company's work at Hanford. The Hanford decrease was offset partially by a $2.7 million increase in income from the Performance Based Integrating Management Contract at DOE's Rocky Flats Environmental Technology Site in Colorado (Rocky Flats) due to an increase in fees earned. The Rocky Flats contract was awarded in 1995 to Kaiser-Hill Company, LLC (Kaiser-Hill), a limited liability company owned equally by the Company and CH2M Hill Companies, Ltd. (CH2M Hill). Because Kaiser-Hill is a consolidated subsidiary of the Company, operating income includes the portion of income generated under the Rocky Flats contract attributable to CH2M Hill. CH2M 17 Hill's interest in Kaiser-Hill is reflected as a minority interest in subsidiaries in the Company's financial statements. Engineering and construction operations experienced a $1.2 million improvement in income between the six-month periods primarily due to an increase in the volume of work, including a substantial increase in revenue from a mini-mill project for Nova Hut, a.s., an integrated steel maker based in the Ostrava region of the Czech Republic (see Business Outlook). Excluding the Nova Hut project, the increase in volume was offset by slightly lower margins in 1997. Income from consulting operations increased by $1.2 million for the six months ended June 30, 1997 mainly due to a substantial increase in the utilization of labor which resulted in a reduction of indirect labor expenses and increased billable hours. The increase in utilization in 1997 was a direct result of an increase in the availability of work under both existing and new projects and a reduction in the total labor assigned to consulting operations. During the six months ended June 30, 1996, consulting operations were still experiencing some delays in both task-order assignments and funding of some of the Company's consulting contracts due to the federal government's operating under a continuing resolution from October 1995 through April 1996. Those delays contributed to reduced utilization of labor during the six months ended June 30, 1996, primarily in the first quarter. Three Months Ended June 30, 1997 Versus Three Months Ended June 30, 1996 The decrease in income from federal programs was primarily due to a $4.7 million decrease in income from the Hanford contract, which was offset partially by a $1.6 million increase in income from the Rocky Flats contract. The $1.1 million increase in income from engineering and construction operations was primarily due to a significant increase from the Nova Hut project, offset by slightly lower margins on other work. The significant increase from the Nova Hut project was due to the Company's signing a contract in June 1997 for the next phase of the Nova Hut project (see Business Outlook); as a result, the Company recognized additional revenue in the quarter by combining the two Nova Hut contracts for profit recognition purposes. The $0.3 million increase in income from consulting operations was primarily due to the increase in utilization described above. As explained above, the increase in income from consulting operations was not as pronounced between the quarters ended June 30, 1997 and 1996. Business Outlook - ---------------- In March 1996, the Company signed a two-year, $102 million contract to provide engineering and construction services for the initial phase of the mini-mill project for Nova Hut. In June 1997, the Company signed a $160 million contract with Nova Hut for the next phase of the mini-mill project. Earnings associated with this contract for the next phase of work have been material to the Company's engineering and construction operations and are expected to be material in future periods. 18 In 1996, the Company initiated an operational efficiency and cost-savings program with the objective of minimizing the long-term impact associated with the termination of the Hanford contract (see below). Although engineering and construction operations reported a significant improvement in operating results between the six-month periods, those operations continue to produce results below management's requirements for the ongoing business. As a result, the Company is in the process of re-evaluating the amount and types of overhead costs incurred on engineering and construction operations. The objective of this re-evaluation is to enhance the Company's ability to achieve sufficient and sustainable levels of profitability in its engineering and construction lines of business. This evaluation is expected to result in actions during the third quarter to decrease overhead costs and strengthen the engineering and construction operations. These actions during the third quarter could include closing offices at remote locations, merging neighboring offices, and terminating under-utilized employees. The Company is also reviewing administrative costs; this review may result in additional terminations. The Company's contract to perform services at Hanford was terminated by DOE on October 1, 1996. The impact on cash flows and earnings due to the loss of the Hanford contract has been material. The Company believes the impact will continue to be material in 1997 if replacement contracts, in addition to the Nova Hut contract, are not won or if the Company's continuing cost-savings programs (including the efforts for engineering and construction operations discussed above) are not successful. There can be no assurance, however, that the Company will be able to enter into new contracts or to achieve cost savings that will, in the aggregate, offset the effect of the loss of the Hanford contract. RESULTS OF OPERATIONS Revenue - ------- The Company's revenue by operating group for the six months ended June 30, 1997 and 1996 is as follows (in millions):
Six Months Ended June 30, -------------------------------------- 1997 1996 ---------------- ----------------- Gross Service Gross Service ------ ------- ------ ------- Federal programs $294.0 $100.5 $478.7 $195.9 Engineering and construction 169.1 78.4 125.6 67.6 Consulting 44.4 34.7 39.1 31.4 ------ ------ ------ ------ Total $507.5 $213.6 $643.4 $294.9 ====== ====== ====== ======
Gross revenue represents services provided to customers with whom the Company has a primary contractual relationship. Included in gross revenue are costs of certain services subcontracted to 19 third parties and other reimbursable direct project costs such as materials procured by the Company on behalf of its customers. Service revenue is derived by deducting the costs of subcontracted services and direct project costs from gross revenue and adding the Company's share of the equity in income of unconsolidated joint ventures and affiliated companies. Operating profits (fees) generated by certain large government contracts, including the Rocky Flats and Hanford contracts, are based on performance and not revenue. A change in revenue between periods is not necessarily proportionate to the change in the fees earned. Gross revenue for 1997 decreased $135.9 million, or 21.1%, to $507.5 million for the six months ended June 30, 1997 as compared to the six months ended June 30, 1996. The decrease in gross revenue was primarily due to a $184.7 million decrease in gross revenue from federal programs which was attributable to the effective termination of the Hanford contract on October 1, 1996. The Hanford contract experienced a $186.4 million decrease in gross revenue from the comparable period in 1996. The decrease in federal programs was offset partially by a $43.5 million increase in gross revenue from engineering and construction operations primarily due to a $23.9 million increase in gross revenue from the Nova Hut project and a $14.4 million increase in gross revenue from the Company's work on nitric acid plants in 1997. Consulting operations reported a $5.3 million increase in gross revenue as a result of an increase in the volume of work. Service revenue decreased by $81.3 million for the six months ended June 30, 1997 as compared to the six months ended June 30, 1996. The $95.4 million decrease in federal programs was due to an $80.0 million decrease in service revenue from the Hanford contract and a $19.5 million decrease in service revenue from the Rocky Flats contract. The decrease for the Rocky Flats contract was due to an increase in the use of subcontractors in 1997 hired to support a change in the type of work performed at the site. The increase in the use of subcontractors at Rocky Flats was offset partially by a decrease in direct labor and associated fringe benefits resulting from staff reductions during 1996. The decrease in service revenue from federal programs was offset partially by increases in service revenue from consulting and engineering and construction operations due to increases in volume of work described above. Service revenue as a percentage of gross revenue decreased to 42.1% for the six months ended June 30, 1997 from 45.8% for the six months ended June 30, 1996 due to an increase in the use of subcontractors on the Rocky Flats contract. A significant portion of the gross revenue derived from the Rocky Flats contract includes the costs of services subcontracted to third parties. Operating Expenses - ------------------ Direct cost of services and overhead decreased $74.0 million between the six months ended June 30, 1997 and 1996 primarily due to the loss of the Hanford contract. The Hanford contract had $70.8 million of direct cost of services and overhead in 1996. Administrative and general expense decreased $4.7 million, or 14.3%, between the six months ended June 30, 1997 and 1996. The decrease is primarily due to a reduction in labor costs and the Company's unsuccessful efforts in 1996 to re- new the Hanford contract. 20 Interest Expense, Preferred Stock Dividends and Accretion - --------------------------------------------------------- Interest expense increased $0.8 million between the six months ended June 30, 1997 and 1996 primarily due to the issuance of the Company's Series B Senior Notes. The increase in interest expense was offset by a $1.1 million decrease in preferred stock dividends and accretion resulting from the Company's repurchase of its redeemable preferred stock in December 1996. Income Tax Expense - ------------------ The Company's effective income tax rate decreased to 19.4% for the six months ended June 30, 1997, compared with 28.0% for the six months ended June 30, 1996. The income tax provision for both periods presented was computed by excluding the minority interest in Kaiser-Hill's income because Kaiser-Hill is a flow- through entity for tax purposes and is owned partially by an outside party. This had the effect of decreasing the Company's effective tax rate for 1997 as compared to 1996 because the proportion of pretax income from Kaiser-Hill to the Company as a whole was greater in 1997 than 1996. LIQUIDITY AND CAPITAL RESOURCES During the six months ended June 30, 1997, cash and cash equivalents decreased $4.4 million to $12.4 million. Operating activities generated $2.1 million in cash, investing activities provided $13.5 million in cash, and financing activities used $19.6 million in cash. Working Capital - ---------------- The decrease in prepaid expenses and other current assets between June 30, 1997 and December 31, 1996 was due to the receipt in January 1997 of $16.5 million of cash proceeds from the December 1996 sale of an investment in entities that own and operate a pulverized coal injection facility (see below). The increase in contract receivables, net was due primarily to the timing of cash receipts from DOE on the Rocky Flats contract. The increase in accounts payable and subcontractors payable was due primarily to payments made to subcontractors on the Rocky Flats contract and an increase in accounts payable on the Nova Hut contract. The increase in deferred revenue was due primarily to advance billings and collections on the nitric acid projects. In January 1997, the U.S. Environmental Protection Agency approved the Company's provisional billing rates for the year ended December 31, 1996, for the rate variances on cost-plus contracts with U.S. government agencies for costs incurred during that year. The Company received approximately $0.4 million on these billings during the six months ended June 30, 1997, and expects to collect in excess of $3.0 million in future periods. The Company also collected approximately $1.4 million in 1997 on billings for billing rate variances for previous periods. 21 Credit Facility - --------------- The Company's $40 million revolving credit facility is provided by a group of three banks and expires on December 31, 1998. The credit facility was amended in 1997 to modify certain financial ratios, to extend the termination date of the credit facility from June 30, 1998, to December 31, 1998, and to permit certain investments and acquisitions. In 1997, net payments on the credit facility were $15.0 million. As of June 30, 1997, the Company had $5.5 million in cash borrowings, $18.7 million of performance letters of credit outstanding, and $15.8 million of additional credit available under the credit facility. Other Investing and Financing Activities - ---------------------------------------- In December 1996, the Company sold the majority portion of its equity interest in entities that own and operate a pulverized coal injection facility, and certain related contractual rights, for $16.6 million. The buyer also has an option to purchase the remaining equity investment for $2.4 million in January 1998. The proceeds from the sale, net of $0.1 million held in escrow, were received in January 1997 and were reinvested in the Company's business. The $0.1 million initially held in escrow was received in July 1997. These entities' earnings and cash flows were material to the Company in 1996, and the absence of these entities' earnings and cash flows will have a material impact on the Company's future earnings and cash flows in 1997 if the Company's cost- savings and marketing programs are not successful. Other significant uses of cash in investing and financing activities included distribution of income by Kaiser-Hill to a minority interest ($4.0 million) and purchases of fixed assets ($2.7 million). Liquidity and Capital Resources Outlook - --------------------------------------- The Company believes that current projected levels of cash flows and the availability of financing, including borrowings under the Company's credit facility, will be adequate to fund its current level of operations, including interest obligations, throughout the next 12 months. The Company currently is exploring options to expand its existing credit facility and provide additional capital for long-term objectives. The credit facility limits the Company's ability to make acquisitions and other investments, and the Indentures governing the Company's Series B Senior Notes and Senior Subordinated Notes limit the Company's ability to make restricted payments, including certain payments in connection with investments and acquisitions. These credit facility and Indenture limitations mean that during the next several years, unless the credit facility and Indentures are amended or replaced, it likely will be necessary for the Company to obtain permission from lenders or to issue additional equity securities to fund any significant acquisitions and to invest significant amounts in joint ventures. 22 In addition to the cash requirements of the Company's daily operations, the Company has semiannual interest payments of $9.1 million due in June and December for the Series B Senior Notes and Senior Subordinated Notes. If the Company achieves and maintains a specified level of earnings, the semiannual interest requirement will be reduced to $8.4 million. The Company expects to meet its interest obligation with either operating cash flows or borrowings under its credit facility. IMPACT OF NEW ACCOUNTING STANDARD The Financial Accounting Standards Board recently issued Statement of Financial Accounting Standards No. 128, Earnings per Share (SFAS No. 128), effective for financial statements for both interim and annual periods ending after December 15, 1997. SFAS No. 128 requires the presentation of basic and diluted earnings per share instead of primary and fully diluted earnings per share. Under the Company's existing equity structure as of June 30, 1997, the computation of basic and diluted earnings per share, as defined under SFAS No. 128, results in earnings per share that is substantially the same as primary and fully diluted earnings per share as presented in the accompanying financial statements. Item 3. Quantitative and Qualitative Disclosures About Market Risk. Not applicable to Registrant until 1998. Part II - Other Information Item 1. Legal Proceedings As previously reported in the Annual Report on Form 10-K for the year ended December 31, 1996. Item 2. Changes in Securities (a) None (b) None (c) None Item 3. Defaults Upon Senior Securities (a) None (b) None 23 Item 4. Submission of Matters to a Vote of Security Holders The Annual Meeting of Shareholders of the Company was held on Friday, May 2, 1997, at the headquarters of the Company, 9300 Lee Highway, Fairfax, VA 22031. The only matters voted on were (a) the election of two management-nominee directors, each to three-year terms expiring at the 2000 Annual Meeting of Shareholders and (b) the approval of the appointment of Coopers & Lybrand as the Company's independent public accountants for the fiscal year ended December 31, 1997. The number of votes cast for, against, or withheld, as well as the number of abstention and broker nonvotes for each of the above-described matters are set forth below:
Total Total Total Total Votes Votes For Votes Broker Votes For (%) Withheld (*) Non-Votes - ----- ---------- --------- ------------ --------- 1. Election of Directors Tony Coelho 18,320,344 95.90% 783,978 0 Marc Tipermas 18,333,571 95.97% 770,751 0 Total Total Total Total Total Votes Votes For Votes Broker Votes For (%) Against Non-Votes Abstain ---------- --------- ------------ --------- ------- 2. Approval of Independent Public Accountants 18,733,372 98.06% 279,989 0 90,961
(*) "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. Item 5. Other Information None 24 Item 6. Exhibits and Reports on Form 8-K (a) The exhibits filed as part of this report are listed below: No. 10(a)(3) Amendment No. 3 dated June 13, 1997, to the Credit Agreement dated May 6, 1996 No. 10(a)(4) Amendment No. 4 dated June 19, 1997, to the Credit Agreement dated May 6, 1996 No. 10(ll) Agreement dated as of May 19, 1997 with James O. Edwards, Chairman and Chief Executive Officer of the Registrant No. 10(mm) Agreement dated as of May 19, 1997 with Marc Tipermas, President and Chief Operating Officer of the Registrant No. 10(nn) Amended and Restated Employment Agreement dated as of July 1, 1997 with Kenneth L. Campbell, Executive Vice President and Chief Financial Officer of the Registrant No. 11 Computation of Primary and Fully Diluted Earnings Per Share No. 27 Financial Data Schedule (b) Reports on Form 8-K Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report of Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized. ICF KAISER INTERNATIONAL, INC. (Registrant) Date: August 14, 1997 /s/ Kenneth L. Campbell ------------------------------- Kenneth L. Campbell Executive Vice President, and Chief Financial Officer (Duly authorized officer and principal financial officer) 25 EX-10.A.3 2 EXHIBIT 10(A)(3) Exhibit No. 10(a)(3) THIRD AMENDMENT TO CREDIT AGREEMENT THIS THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of June 13, 1997 (this "Amendment"), is entered into by and among ICF KAISER INTERNATIONAL, INC. ("Borrower"), a Delaware corporation, each of its subsidiaries signatories hereto (each a "Subsidiary Guarantor" and collectively the "Subsidiary Guarantors"), the banking institutions signatories hereto (each, a "Bank" and collectively, the "Banks") and CORESTATES BANK, N.A., as agent for the Banks under this Agreement (in such capacity, the "Agent"). WITNESSETH ---------- WHEREAS, Borrower, each Subsidiary Guarantor, the Banks and the Agent are parties to a Credit Agreement, dated as of May 6, 1996, as amended by the First Amendment dated as of December 17, 1996, and the Second Amendment dated as of May 5, 1997 (the "Credit Agreement"), whereby the Banks have agreed to provide a revolving credit facility for loans and for letters of credit; WHEREAS, the Borrower and the Subsidiary Guarantors have requested, and the Banks and the Agent have agreed, to amend the Credit Agreement in certain respects, as provided herein. NOW, THEREFORE, in consideration of the premises and intending to be legally bound hereby, the parties hereto agree as follows: 1. Amendment to Credit Agreement a. The following definitions are hereby added to Section 1.1: "Hunters Branch Investment" shall mean the Investment by the Borrower or any Subsidiary in the buildings and associated land at 9300 and/or 9302 Lee Highway, Fairfax, Virginia. "ICF Kaiser Hunters Branch" shall mean ICF Kaiser Hunters Branch, Inc., an entity (however denominated) organized under the laws of the State of Delaware, created in order to own the Hunters Branch Investment. b. Section 7.6 is hereby amended by the addition of the following new subsection (h) at the end of such Section: (h) Borrower or any Subsidiary may make and own the Hunters Branch Investment, provided that the cash amount of such Hunters Branch Investment at the closing thereon (excluding transaction costs) shall be limited to a maximum of $1,500,000, which amount (when used) shall be deducted from the $5,000,000 aggregate Acquisitions limit set forth in subsection (d) of this Section 7.6; provided, further, that the Borrower ----------------- or any Subsidiary may, but is not required to, capitalize any and all transaction costs related to the Hunters branch Investment without deducting such capitalized costs from the afore-mentioned Acquisitions limit; and provided, further, that ICF Kaiser Hunters Branch may make ----------------- such additional Hunters Branch Investments as are set forth below without deducting any such Investments from the afore-mentioned Acquisitions limit: $600,000 in each of years 1997, 1998, and 1999; and $700,000 in each of years 2000, 2001, 2002, 2003, 2004, and 2005. 2. Conditions Precedent. The Amendment to the Credit Agreement contained in --------------------- Section 1 hereof shall be effective upon satisfaction of the following conditions precedent. (a) Evidence of Authorization. The Banks shall have received copies certified by the Secretary or Assistant Secretary of Borrower and each Subsidiary Guarantor of all corporate or other action taken by such party to authorize its execution and delivery and performance of this Amendment, the Second Amendment to the Security Agreement, and the Loan Documents as amended hereby, together with such other related papers as the Banks shall reasonably require; (b) Documents. The Agent shall have received all certificates, instruments and other documents then required to be delivered pursuant to any Loan Documents, in each instance in form and substance reasonably satisfactory to the Agent and the Banks; (c) Other Agreements. Borrower and each Subsidiary Guarantor shall have executed and delivered each other Loan Document required hereunder; 3. Representations and Warranties. ------------------------------- (a) The Borrower confirms the accuracy of the representations and warranties made in Article 3 of the Credit Agreement as of the date originally given and restates to the Banks such representations and warranties, as previously amended, on and as of the date hereof as if originally given on such date. (b) The Borrower confirms that as of the date of this Third Amendment, there has been no litigation, administrative proceeding, investigation, business development, or change in financial condition which could reasonably be expected to have a material adverse effect on the business, operations, assets or condition (financial or otherwise) of the Borrower or its Subsidiaries taken as a whole. 4. Covenants. ---------- (a) The Borrower warrants to the Banks that the Borrower is in compliance and have complied with all covenants, agreements and conditions in each Loan Document on and as of the date hereof, that no Potential Default or Event of Default has occurred and is continuing on the date hereof and that, upon the consummation of the transactions contemplated hereby, no Potential Default or Event of Default shall have occurred and be continuing. (b) The Borrowers shall provide to the Agent and its representatives all requested access and assistance as shall be reasonably necessary for such due diligence review as the Agent shall determine is necessary or advisable, including without limitation a collateral audit. 5. Effect of Agreement. -------------------- This Agreement amends the Loan Documents only to the extent and in the manner herein set forth, and in all other respects the Loan Documents are ratified and confirmed. 6. Counterparts. ------------- 2 This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. 7. Governing Law. -------------- This Agreement and all rights and obligations of the parties hereunder shall be governed by and be construed and enforced in accordance with the laws of Pennsylvania without regard to principles of conflict of law. IN WITNESS WHEREOF, Borrower and the Banks have caused this Agreement to be executed by their proper corporate officers thereunto duly authorized as of the day and year first above written. CORESTATES BANK, N.A. ICF KAISER INTERNATIONAL, INC. By: /s/ John D. Brady By: /s/ Michael K. Goldman -------------------------------- ---------------------------- Name: John D. Brady Name: Michael K. Goldman Title: Assistant Vice President Title: Executive Vice President BHF-BANK AKTIENGESELLSCHAFT SIGNET BANK By: /s/ Linda Pace By: /s/ Brian Haggerty -------------------------------- ---------------------------- Name: Linda Pace Name: Brian Haggerty Title: Vice President Title: Vice President By: /s/ John Sykes -------------------------------- Name: John Sykes Title: Assistant Vice President 3 The Subsidiary Guarantors: CLEMENT INTERNATIONAL CYGNA GROUP, INC. HENRY J. KAISER COMPANY CORPORATION. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------- ----------------------- ----------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer EXCELL DEVELOPMENT ICF INFORMATION ICF INCORPORATED CONSTRUCTION, INC. TECHNOLOGY, INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------- ----------------------- ----------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer ICF KAISER ENGINEERS ICF KAISER ENGINEERS ICF KAISER ENGINEERS CORPORATION (CALIFORNIA) MASSACHUSETTS, INC. CORPORATION By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------- ----------------------- ----------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer ICF KAISER ENGINEERS ICF KAISER GOVERNMENT ICF KAISER ENGINEERS, GROUP, INC. PROGRAMS, INC. INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------- ----------------------- ----------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer ICF KAISER HOLDINGS ICF KAISER HANFORD ICF RESOURCES UNLIMITED, INC. COMPANY INCORPORATED By:/s/ Timothy P. O'Connor By:/s/ Paul Weeks, II By:/s/ Timothy P. O'Connor ----------------------- ----------------------- ----------------------- Name: Timothy P. O'Connor Name: Paul Weeks, II Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Secretary Title: Assistant Treasurer
4 ICF LEASING KE SERVICES KE LIVERMORE, INC. CORPORATION, INC. CORPORATION By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------- ----------------------- ----------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer KAISER ENGINEERS AND KAISER ENGINEERS CYGNA CONSULTING CONSTRUCTORS, INC. INTERNATIONAL, INC. ENGINEERS & PROJECT MANAGEMENT, INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------- ----------------------- ----------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer TUDOR ENGINEERING PCI OPERATING COMPANY, SYSTEMS APPLICATIONS COMPANY INC. INTERNATIONAL, INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------- ----------------------- ----------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer
5 EX-10.A.4 3 EXHIBIT 10(A)(4) Exhibit No. 10(a)(4) FOURTH AMENDMENT TO CREDIT AGREEMENT THIS FOURTH AMENDMENT TO CREDIT AGREEMENT, dated as of June 19, 1997 (this "Amendment"), is entered into by and among ICF KAISER INTERNATIONAL, INC. ("Borrower"), a Delaware corporation, each of its subsidiaries signatories hereto (each a "Subsidiary Guarantor" and collectively the "Subsidiary Guarantors"), the banking institutions signatories hereto (each, a "Bank" and collectively, the "Banks") and CORESTATES BANK, N.A., as agent for the Banks under this Agreement (in such capacity, the "Agent"). WITNESSETH ---------- WHEREAS, Borrower, each Subsidiary Guarantor, the Banks and the Agent are parties to a Credit Agreement, dated as of May 6, 1996, as amended by the First Amendment dated as of December 17, 1996, the Second Amendment dated as of May 5, 1997, and the Third Amendment dated as of June 13, 1997 (the "Credit Agreement"), whereby the Banks have agreed to provide a revolving credit facility for loans and for letters of credit; WHEREAS, the Borrower and the Subsidiary Guarantors have requested, and the Banks and the Agent have agreed, to amend the Credit Agreement in certain respects, as provided herein. NOW, THEREFORE, in consideration of the premises and intending to be legally bound hereby, the parties hereto agree as follows: 1. Amendment to Credit Agreement a. The following definition is hereby amended in its entirety so that such definition, as so amended, shall read as follows: "Single Purpose Subsidiary" shall mean as to any Person, a Subsidiary of such Person the activities of which, including its Subsidiaries and partnerships or other entities owned, or the management of which are otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Single Purpose Subsidiary, are limited to (a) ownership of all or a portion of the interests in a single project constituting one or more Permitted Businesses, either directly or through the ownership of the Capital Stock of another Person, and (b) the development, engineering, design, project management, construction or operation of such project; ICF Kaiser Brazil Holdings, ICF Kaiser Participacoes Ltda., and IESA shall be deemed to be Single Purpose Subsidiaries for all purposes hereunder. b. The following definitions are hereby added to Section 1.1: "ICF Kaiser Participacoes Ltda." shall mean the entity (however denominated) organized under the laws of Brazil which will own substantially all of the capital stock of IESA following the IESA Investment. "ICF Kaiser Brazil Holdings" shall mean ICF Kaiser Brazil Holdings, Inc., a corporation organized under the laws of the State of Delaware which will have as its sole purpose the ownership of ICF Kaiser Participacoes Ltda. "IESA" shall mean Internacional de Engenharia S.A., a corporation organized under the laws of Brazil, together with its subsidiaries IESA- Tecnologia de Sistemas Ltda., Servap Engenharia e Consultoria Ltda., IESA Negocios Ltda., IESA Participacoes Ltda., and Project Engineering Ltd/Cayman Islands. "IESA Investment" shall mean the Investment in and eventual ownership of substantially all of the capital stock of IESA by ICF Kaiser Participacoes Ltda. c. Clause (1) of Subsection (a) of Section 2.5 is hereby amended by inserting, at the end of such clause, the following sentence: The Borrower agrees not to request the issuance of any Letter of Credit for use by, in connection with, or for IESA, ICF Kaiser Participacoes Ltda., and/or ICF Kaiser Brazil Holdings unless the Borrower has obtained the prior written consent of the Agent for the issuance of such Letter of Credit. d. Section 7.2 is hereby amended by the addition of the following subsection (f) at the end of such Section: (f) (1) Non-Recourse Indebtedness in the amount of $950,000 incurred by ICF Kaiser Participacoes Ltda. in order to complete the IESA Investment; (2) Non-Recourse Indebtedness incurred by IESA and/or ICF Kaiser Participacoes Ltda. following the IESA Investment; and (3) Indebtedness for Borrowed Money and other Debt of IESA existing as of the date of the closing of the IESA Investment; provided that in each of (1), (2), and (3) -------- above, neither the Borrower nor any Subsidiary other than ICF Kaiser Brazil Holdings, ICF Kaiser Participacoes Ltda., or IESA shall be permitted (x) to have any guarantee obligation in respect of such Indebtedness or Debt otherwise permitted by this subsection or (y) to pledge or grant any lien or encumbrances on any assets as collateral or security with respect to such Indebtedness or Debt otherwise permitted by this subsection. e. Section 7.6 is hereby amended by the addition of the following subsection (i) at the end of such Section: (i) ICF Kaiser Participacoes Ltda. may complete the IESA Investment, provided that any cash from Borrower or any Subsidiary made available to ICF Kaiser Participacoes Ltda. in connection with the IESA Investment shall be limited to a maximum of $350,000, which amount (when used) shall be deducted from the $5,000,000 aggregate Acquisitions limit set forth in subsection (d) of this Section 7.6. f. Article VIII (Financial Covenants) is hereby amended by the addition, at the end of such Article, of the following: ; except as provided below, in all calculations made pursuant to this Article, the Borrower shall exclude any and all amounts (positive and negative) attributable to IESA, ICF Kaiser Participacoes Ltda., and/or ICF Kaiser Brazil Holdings that otherwise might be includible in Capital Expenditures, Consolidated Fixed Charges, Consolidated Interest Expense, Consolidated Lease Expenses, Consolidated Net Income, Consolidated Net Worth, EBITDA, Indebtedness for Borrowed Money, Senior Funded Indebtedness, and Total Capitalization. 2 2. Conditions Precedent. The Amendment to the Credit Agreement contained in -------------------- Section 1 hereof shall be effective upon satisfaction of the following conditions precedent. (a) Evidence of Authorization. The Banks shall have received copies certified by the Secretary or Assistant Secretary of Borrower and each Subsidiary Guarantor of all corporate or other action taken by such party to authorize its execution and delivery and performance of this Amendment, the Second Amendment to the Security Agreement, and the Loan Documents as amended hereby, together with such other related papers as the Banks shall reasonably require; (b) Legal Opinion. The Banks shall have received a favorable written opinion of Barbosa & Mussnich, Rio de Janeiro, Brazil, Counsel for Borrower, ICF Kaiser Holdings Unlimited, Inc., ICF Kaiser Brazil Holdings, and ICF Kaiser Participacoes Ltda., which shall be addressed to the Banks and be dated the date of this Fourth Amendment, in substantially the form attached as Exhibit A; (c) Documents. The Agent shall have received all certificates, instruments and other documents then required to be delivered pursuant to any Loan Documents, in each instance in form and substance reasonably satisfactory to the Agent and the Banks; (d) Other Agreements. Borrower and each Subsidiary Guarantor shall have executed and delivered each other Loan Document required hereunder; 3. Representations and Warranties. ------------------------------- (a) The Borrower confirms the accuracy of the representations and warranties made in Article 3 of the Credit Agreement as of the date originally given and restates to the Banks such representations and warranties, as previously amended, on and as of the date hereof as if originally given on such date. (b) The Borrower confirms that as of the date of this Fourth Amendment, there has been no litigation, administrative proceeding, investigation, business development, or change in financial condition which could reasonably be expected to have a material adverse effect on the business, operations, assets or condition (financial or otherwise) of the Borrower or its Subsidiaries taken as a whole. 4. Covenants. ---------- (a) The Borrower warrants to the Banks that the Borrower is in compliance and have complied with all covenants, agreements and conditions in each Loan Document on and as of the date hereof, that no Potential Default or Event of Default has occurred and is continuing on the date hereof and that, upon the consummation of the transactions contemplated hereby, no Potential Default or Event of Default shall have occurred and be continuing. (b) The Borrowers shall provide to the Agent and its representatives all requested access and assistance as shall be reasonably necessary for such due diligence review as the Agent shall determine is necessary or advisable, including without limitation a collateral audit. 3 5. Effect of Agreement. -------------------- This Agreement amends the Loan Documents only to the extent and in the manner herein set forth, and in all other respects the Loan Documents are ratified and confirmed. 6. Counterparts. ------------- This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. 7. Governing Law. -------------- This Agreement and all rights and obligations of the parties hereunder shall be governed by and be construed and enforced in accordance with the laws of Pennsylvania without regard to principles of conflict of law. IN WITNESS WHEREOF, Borrower and the Banks have caused this Agreement to be executed by their proper corporate officers thereunto duly authorized as of the day and year first above written. CORESTATES BANK, N.A. ICF KAISER INTERNATIONAL, INC. By: /s/ John D. Brady By: /s/ Michael K. Goldman --------------------------- -------------------------- Name: John D. Brady Name: Michael K. Goldman Title: Assistant Vice President Title: Executive Vice President BHF-BANK AKTIENGESELLSCHAFT SIGNET BANK By: /s/ Linda Pace By: /s/ Brian Haggerty --------------------------- -------------------------- Name: Linda Pace Name: Brian Haggerty Title: Vice President Title: Vice President By: /s/ John Sykes --------------------------- Name: John Sykes Title: Assistant Vice President 4
The Subsidiary Guarantors: CLEMENT INTERNATIONAL CORPORATION. CYGNA GROUP, INC. HENRY J. KAISER COMPANY By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------------- ----------------------------- ----------------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer EXCELL DEVELOPMENT ICF INFORMATION TECHNOLOGY, INC. ICF INCORPORATED CONSTRUCTION, INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------------- ----------------------------- ----------------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer ICF KAISER ENGINEERS CORPORATION ICF KAISER ENGINEERS (CALIFORNIA) ICF KAISER ENGINEERS CORPORATION MASSACHUSETTS, INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------------- ----------------------------- ----------------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer ICF KAISER ENGINEERS GROUP, INC. ICF KAISER GOVERNMENT ICF KAISER ENGINEERS, INC. PROGRAMS, INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------------- ----------------------------- ----------------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer ICF KAISER HOLDINGS UNLIMITED, INC. ICF KAISER HANFORD COMPANY ICF RESOURCES INCORPORATED By:/s/ Timothy P. O'Connor By: /s/ Paul Weeks, II By:/s/ Timothy P. O'Connor ----------------------------- ----------------------------- ----------------------------- Name: Timothy P. O'Connor Name: Paul Weeks, II Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Secretary Title: Assistant Treasurer
5
ICF LEASING CORPORATION, INC. KE SERVICES CORPORATION KE LIVERMORE, INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------------- ----------------------------- ----------------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer KAISER ENGINEERS AND KAISER ENGINEERS CYGNA CONSULTING ENGINEERS & CONSTRUCTORS, INC. INTERNATIONAL, INC. PROJECT MANAGEMENT, INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------------- ----------------------------- ----------------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer TUDOR ENGINEERING COMPANY PCI OPERATING COMPANY, INC. SYSTEMS APPLICATIONS INTERNATIONAL, INC. By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor By:/s/ Timothy P. O'Connor ----------------------------- ----------------------------- ----------------------------- Name: Timothy P. O'Connor Name: Timothy P. O'Connor Name: Timothy P. O'Connor Title: Assistant Treasurer Title: Assistant Treasurer Title: Assistant Treasurer
6 EX-10.LL 4 EXHIBIT 10(LL) Exhibit No. 10 (ll) May 19, 1997 James O. Edwards Chairman and Chief Executive Officer ICF Kaiser International, Inc. 9300 Lee Highway Fairfax, VA 22031-1207 Re: Employment Arrangements ----------------------- Dear Jim: The purpose of this letter is to set forth our agreement with respect to your employment by ICF Kaiser International, Inc. (the "Company"). The "ICF Kaiser International, Inc. Standard Terms and Conditions of Employment for Executive Personnel" attached hereto as Exhibit A, the "Senior Executive Officers Severance Plan" (the "SEOSP") attached hereto as Exhibit B, the "Senior Executive's Incentive Compensation Plan" (the "Senior IC Plan") attached hereto as Exhibit C, the Long-Term Incentive Compensation Plan for Senior Executives (the "LTI") attached hereto as Exhibit D, and the ICF Kaiser International, Inc., Stock Incentive Plan (the "Stock Incentive Plan") attached hereto as Exhibit E, together with any amendments to such plans during the Employment Period (as defined herein) that increase the benefits payable thereunder are incorporated herein by reference. This letter and Exhibits A, B, C, D and E, together with the amendments referred to in the preceding sentence, are sometimes hereinafter collectively referred to as this "Agreement." 1. Employment Period; Duties. ------------------------- (a) Employment and Employment Period. The Company shall employ you -------------------------------- to serve as Chairman and Chief Executive Officer ("CEO") of the Company for a period commencing May 1, 1997 (the "Effective Date") and ending December 31, 1999 (the "Employment Period"). (b) Offices, Duties and Responsibilities. You shall be a member of, ------------------------------------ and report to, the Board of Directors of the Company. As Chief Executive Officer of the Company, you shall have general and active management of the business of the Company and shall see that all orders and resolutions of the Board of Directors are carried into effect. Without limiting the generality of the foregoing, you shall have such powers and duties in the management of the Company as generally pertain to the office of the Chief Executive Officer, subject to the overview and control of the Board of Directors. 2. Compensation and Fringe Benefits. -------------------------------- (a) Base Compensation. The Company shall pay you a minimum base ----------------- salary at the rate of (i) $400,000 per year for the period from April 1, 1997 through December 31, 1997, (ii) $425,000 per year for the period of January 1, 1998 through December 31, 1998, and (iii) $450,000 per year for the period of January 1, 1999 through December 31, 1999, in installments in accordance with the Company's regular practice for compensating executive personnel. The salary levels in this Section 2(a) shall serve as the salary level for determination of the severance benefits described in Exhibits A and B. (b) Non-Qualified Salary Deferral Plan. You will be eligible for ---------------------------------- participation in the Company's Deferred Compensation Plan if and when such a plan is implemented. (c) Bonus Compensation. You shall be entitled to receive bonuses as ------------------ determined by the Compensation Committee of the Company's Board of Directors in accordance with the provisions of the Senior IC and the LTI for the Employment Period. The Senior IC Plan and the LTI are subject to change in at the discretion of the Compensation Committee. The EPS target for each year in the Senior IC Plan and LTI shall be determined by the Compensation Committee of the Board of Directors by January 1st of each year. In any year in which no EPS targets are defined by January 1st, you will be guaranteed a bonus of at least $100,000 for that year. (d) Existing Loan. Your existing loan will be amended and restated ------------- as follows: a. Due date: December 31, 1999 b. Interest rate: 6.58%, no compounding c. Principal amount: principal amount of existing loan plus accrued interest through date of execution of amended and restated loan. (e) New Loan. Immediately following the execution of this Agreement -------- by you and the Company, you will receive an additional loan of $100,000. In consideration of this $100,000 loan you agree not to sell any ICF Kaiser stock without prior written approval from the Compensation Committee of the Board of Directors. (f) Fringe Benefits. You will be entitled to such fringe benefits as --------------- are generally made available by the Company to executive personnel. Such benefits shall (i) include participation in the Company's defined contribution retirement plan, 401(k) Plan, and health, term life and disability insurance programs and reimbursement of reasonable expenses incurred in connection with travel and entertainment related to the Company's business and affairs and (ii) be paid by the Company in a manner, and to the extent, consistent with past practice. 3. Restricted Stock. On December 31, 1998, you will be granted 200,000 ---------------- shares of restricted stock which will vest on the following schedule: (a) 100,000 shares on December 31, 1999, and (b) 100,000 shares on December 31, 2000. If during the Employment Period your employment is terminated by you for "good reason" or by the Company without "cause" as those terms are defined in Exhibits A and B, then (i) if the shares have not been granted, 200,000 shares will be granted on your termination date, 100,000 shares of which will vest immediately and, the other 100,000 shares of which will vest on the first anniversary of your termination date; or (ii) if the shares have been granted, the share grants will vest (a) 100,000 shares on your termination date, and (b) 100,000 shares on the first anniversary of your termination date. No shares will be granted nor will any shares vest if during the Employment Period your employment by the Company has been terminated by the Company for "cause" or by you without "good reason" on or before the grant or vesting dates. In the event the Company terminates your Employment Period by reasons of your disability as provided in Section 5(d) of Exhibit A, then (i) if the shares have not been granted 150,000 shares of restricted stock will be granted on your termination date, all of which will vest immediately upon grant, or (ii) if the shares have been granted, 150,000 shares will vest on your termination date and the balance will be forfeited. In event of your death, then (i) if the shares have not been granted, your estate will be paid in cash the value of 150,000 shares at a per share value determined using the average of the per share closing prices on the 20 days immediately preceding the date of your death, or (ii) if the shares have been granted, 150,000 shares will vest on the date of your death and the balance will be forfeited. 4. Non-Competition. You agree that for a period commencing on the --------------- Effective Date and ending (i) on the date of termination of your employment (x) by the Company for reasons that do not constitute "cause" as defined in Exhibits A and B or (y) by you for "good reason" as defined in Exhibits A and B, and (ii) one year following termination of your employment (x) by the Company for "cause" or (y) by you for reasons that do not constitute "good reason", provided that -------- the Company is not in material breach of this Agreement (the "Non-Competition Period"), you will not, except as otherwise provided herein, engage or participate, directly or indirectly, as principal, agent, employee, employer, consultant, stockholder, partner or in any other individual capacity whatsoever, in the planning for, conduct of or management of, or own any stock or any other equity investment in or debt of, any business which is competitive with any business conducted by the Company. For the purpose of this Agreement, a business shall be considered to be competitive with the business of the Company only if such business is engaged in providing services (i) similar to (x) any service currently provided by the Company or provided by the Company during the Employment Period; (y) any service which in the ordinary course of business during the Non-Competition Period evolves from or results from enhancements to the services provided by the Company as of the Effective Date or during the Non-Competition Period; or (z) any future service of the Company as to which you materially and substantially participated in the design or enhancement, and (ii) to customers and clients of the type served by the Company during the Non-Competition Period. (a) Non-Solicitation of Employees. During the Non-Competition Period, ----------------------------- you will not (for your own benefit or for the benefit of any person or entity other than the Company) solicit, or assist any person or entity other than the Company to solicit, any officer, director, executive or employee of the Company or its affiliates to leave his or her employment. (b) Reasonableness. You acknowledge that (i) the markets served by -------------- the Company are national and international and are not dependent on the geographic location of executive personnel or the businesses by which they are employed, (ii) the length of the Non-Competition Period is related to the length of the Employment Period and the Company's agreement to provide severance benefits as set forth in Section 5(b) of Exhibit A and in Exhibit B that, under certain circumstances, will provide additional compensation to you upon the termination of this Agreement; and (iii) the above covenants are reasonable on their face, and the parties expressly agree that such restrictions have been designed to be reasonable and no greater than is required for the protection of the Company. (c) Investments. Nothing in this Agreement shall be deemed to ----------- prohibit you from owning equity or debt investments in any corporation, partnership or other entity which is competitive with the Company, provided that -------- such investments (i) are passive investments and constitute one percent (1%) or less of the outstanding equity securities of such an entity the equity securities of which are traded on a national securities exchange or other public market, or (ii) are approved by the Company. If you find the terms of your employment, as set forth above acceptable, please sign a copy of this letter and return it to me. Upon your acceptance hereof, this letter, together with its Exhibits, will constitute your employment agreement with the Company. Very truly yours, ICF KAISER INTERNATIONAL, INC. By: /s/ Tony Coelho ------------------------------- for the Compensation Committee of the Board of Directors Accepted and Agreed: /s/ James O. Edwards - ------------------------- James O. Edwards EX-10.MM 5 EXHIBIT 10(MM) Exhibit No. 10(mm) May 19, 1997 Marc Tipermas, Ph.D. President and Chief Operating Officer ICF Kaiser International, Inc. 9300 Lee Highway Fairfax, VA 22031-1207 Re: Employment Arrangements ----------------------- Dear Marc: The purpose of this letter is to set forth our agreement with respect to your employment by ICF Kaiser International, Inc. (the "Company"). The "ICF Kaiser International, Inc. Standard Terms and Conditions of Employment for Executive Personnel" attached hereto as Exhibit A, the "Senior Executive Officers Severance Plan" (the "SEOSP") attached hereto as Exhibit B, the "Senior Executive's Incentive Compensation Plan" (the "Senior IC Plan") attached hereto as Exhibit C, the Long-Term Incentive Compensation Plan for Senior Executives (the "LTI") attached hereto as Exhibit D, and the ICF Kaiser International, Inc., Stock Incentive Plan (the "Stock Incentive Plan") attached hereto as Exhibit E, together with any amendments to such plans during the Employment Period (as defined herein) that increase the benefits payable thereunder are incorporated herein by reference. This letter and Exhibits A, B, C, D and E, together with the amendments referred to in the preceding sentence, are sometimes hereinafter collectively referred to as this "Agreement." 1. Employment Period; Duties. ------------------------- (a) Employment and Employment Period. The Company shall employ you -------------------------------- to serve as President and Chief Operating Officer ("COO") of the Company for a period commencing May 1, 1997 (the "Effective Date") and ending December 31, 1999 (the "Employment Period"). (b) Offices, Duties and Responsibilities. You shall report to the ------------------------------------ Chief Executive Officer of the Company and shall be a member of all senior management groups. Your offices shall be in the Executive Suite, which is currently located on the 12th floor of the Company's headquarters building in Fairfax, Virginia. You shall have the responsibility to manage the operating activities of the Company and each of its Operating Groups. Each sentence of this Section 1(b) is a material provision of this Agreement and a material inducement to your acceptance of this Agreement. 2. Compensation and Fringe Benefits. -------------------------------- (a) Base Compensation. The Company shall pay you a minimum base ----------------- salary at the rate of (i) $350,000 per year for the period from April 1, 1997 through December 31, 1997, (ii) $375,000 per year for the period of January 1, 1998 through December 31, 1998, and (iii) $400,000 per year for the period of January 1, 1999 through December 31, 1999, in installments in accordance with the Company's regular practice for compensating executive personnel. The salary levels in this Section 2(a) shall serve as the salary level for determination of the severance benefits described in Exhibits A and B. (b) Non-Qualified Salary Deferral Plan. You will be eligible for ---------------------------------- participation in the Company's Deferred Compensation Plan if and when such a plan is implemented. (c) Bonus Compensation. You shall be entitled to receive bonuses as ------------------ determined by the Compensation Committee of the Company's Board of Directors in accordance with the provisions of the Senior IC Plan and the LTI for the Employment Period. The Senior IC Plan and the LTI are subject to change at the discretion of the Compensation Committee. The EPS target for each year in the Senior IC Plan and LTI shall be determined by the Compensation Committee of the Board of Directors by January 1st of each year. In any year in which no EPS targets are defined by January 1st, you will be guaranteed a bonus of at least $100,000 for that year. (d) Upon execution of this Agreement by you and the Company, you will receive a payment of $50,000 net of all taxes. In consideration of this payment, you agree not to sell any ICF Kaiser stock during the Employment Period without prior written approval from the Compensation Committee of the Board of Directors. (e) Fringe Benefits. You will be entitled to such fringe benefits as --------------- are generally made available by the Company to executive personnel. Such benefits shall (i) include participation in the Company's defined contribution retirement plan, 401(k) Plan, and health, term life and disability insurance programs and reimbursement of reasonable expenses incurred in connection with travel and entertainment related to the Company's business and affairs and (ii) be paid by the Company in a manner, and to the extent, consistent with past practice. 3. Restricted Stock. On December 31, 1998, you will be granted 150,000 ---------------- shares of restricted stock which will vest on the following schedule: (a) 75,000 shares on December 31, 1999, and (b) 75,000 shares on December 31, 2000. If during the Employment Period your employment is terminated by you for "good reason" or by the Company without "cause" as those terms are defined in Exhibits A and B, then (i) if the shares have not been granted, 150,000 shares will be granted on your termination date, 75,000 shares of which will vest immediately and, the other 75,000 shares of which will vest on the first anniversary of your termination date; or (ii) if the shares have been granted, the share grants will vest (a) 75,000 shares on your termination date, and (b) 75,000 shares on the first anniversary of your termination date. No shares will be granted nor will any shares vest if during the Employment Period your employment by the Company has been terminated by the Company for "cause" or by you without "good reason" on or before the grant or vesting dates. In the event the Company terminates your Employment Period by reasons of your disability as provided in Section 5(d) of Exhibit A, then (i) if the shares have not been granted 112,500 shares of restricted stock will be granted on your termination date, all of which will vest immediately upon grant, or (ii) if the shares have been granted, 112,500 shares will vest on your termination date and the balance will be forfeited. In event of your death, then (i) if the shares have not been granted, your estate will be paid in cash the value of 112,500 shares at a per share value determined using the average of the per share closing prices on the 20 days immediately preceding the date of your death, or (ii) if the shares have been granted, 112,500 shares will vest on the date of your death and the balance will be forfeited. 4. Non-Competition. You agree that for a period commencing on the --------------- Effective Date and ending (i) on the date of termination of your employment (x) by the Company for reasons that do not constitute "cause" as defined in Exhibits A and B or (y) by you for "good reason" as defined in Exhibits A and B or (ii) one year following termination of your employment (x) by the Company for "cause" or (y) by you for reasons that do not constitute "good reason", provided that -------- the Company is not in material breach of this Agreement, (the "Non-Competition Period"), you will not, except as otherwise provided herein, engage or participate, directly or indirectly, as principal, agent, employee, employer, consultant, stockholder, partner or in any other individual capacity whatsoever, in the planning for, conduct of or management of, or own any stock or any other equity investment in or debt of, any business which is competitive with any business conducted by the Company. For the purpose of this Agreement, a business shall be considered to be competitive with the business of the Company only if such business is engaged in providing services (i) similar to (x) any service currently provided by the Company or provided by the Company during the Employment Period; (y) any service which in the ordinary course of business during the Non-Competition Period evolves from or results from enhancements to the services provided by the Company as of the Effective Date or during the Non-Competition; or (z) any future service of the Company as to which you materially and substantially participated in the design or enhancement, and (ii) to customers and clients of the type served by the Company during the Non-Competition Period. (a) Non-Solicitation of Employees. During the Non-Competition ----------------------------- Period, you will not (for your own benefit or for the benefit of any person or entity other than the Company) solicit, or assist any person or entity other than the Company to solicit, any officer, director, executive or employee of the Company or its affiliates to leave his or her employment. (b) Reasonableness. You acknowledge that (i) the markets served by -------------- the Company are national and international and are not dependent on the geographic location of executive personnel or the businesses by which they are employed, (ii) the length of the Non-Competition Period is related to the length of the Employment Period and the Company's agreement to provide severance benefits as set forth in Section 5(b) of Exhibit A and in Exhibit B that, under certain circumstances, will provide additional compensation to you upon the termination of this Agreement; and (iii) the above covenants are reasonable on their face, and the parties expressly agree that such restrictions have been designed to be reasonable and no greater than is required for the protection of the Company. (c) Investments. Nothing in this Agreement shall be deemed to ----------- prohibit you from owning equity or debt investments in any corporation, partnership or other entity which is competitive with the Company, provided that -------- such investments (i) are passive investments and constitute one percent (1%) or less of the outstanding equity securities of such an entity the equity securities of which are traded on a national securities exchange or other public market, or (ii) are approved by the Company. If you find the terms of your employment, as set forth above acceptable, please sign a copy of this letter and return it to me. Upon your acceptance hereof, this letter, together with its Exhibits, will constitute your employment agreement with the Company. Very truly yours, ICF KAISER INTERNATIONAL, INC. By: /s/ Tony Coelho ------------------------------- for the Compensation Committee for the Board of Directors Accepted and Agreed: /s/ Marc Tipermas - ---------------------- Marc Tipermas EX-10.NN 6 EXHIBIT 10(NN) Exhibit No. 10 (nn) AMENDED AND RESTATED EMPLOYMENT AGREEMENT ----------------------------------------- THIS AGREEMENT is made as of the 1st day of July, 1997, by and between ICF Kaiser International, Inc., a Delaware corporation (the "Company"), on the one hand, and Kenneth L. Campbell, a resident of Fairfax County, Virginia (the "Executive"), on the other hand. WHEREAS, ICF Kaiser desires to employ Executive in a new position, and Executive desires to assume such new position, on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the premises and the mutual agreements made herein, and intending to be legally bound hereby, the Company, on the one hand, and Executive, on the other hand, agree as follows: 1. Employment Period; Duties. -------------------------- The Company shall employ the Executive to serve as Executive Vice President and Chief Financial Officer of the Company for a period of three years commencing July 1, 1997 (the "Employment Period"). 2. Compensation and Fringe Benefits. --------------------------------- (a) Base Compensation. For the period from the beginning of the ------------------ Employment Period to June 30, 1998, the Company shall pay Executive a base salary at the rate of $270,000 per year; for the period July 1, 1998 to June 30, 1999, the Company shall pay Executive a base salary at the rate of $285,000 per year; for the period July 1, 1999, to June 30, 2000, the Company shall pay Executive a base salary at the rate of $300,000 per year, all in accordance with the Company's regular practice for compensating senior management personnel. (b) Bonus Compensation. The Company shall grant to Executive ------------------- 30,000 shares of the Company's common stock, par value $0.01 per share ("Common Stock"), pursuant to the Company's Stock Incentive Plan. Such shares shall not vest, and shall not be transferable, unless Executive remains as an employee of the Company through and including July 1, 1999, provided that such shares shall vest and become immediately transferable if at any time prior to July 1, 1999, (a) Executive's employment by the Company is terminated (i) by the Company for any reason other than "cause" (as defined in Section 5 below), (ii) by Executive for "good reason" (as defined in Section 5 below), or (iii) by Executive in order to accept employment at a total compensation substantially in excess of that provided by the Employment Agreement, as amended, provided that the Company has been given the opportunity to match substantially such higher total compensation and has declined to do so, or (b) Executive dies or becomes disabled (as defined in Section 6 below). For calendar year 1997, the Executive will participate in the Long-Term Incentive Compensation Plan for Senior Executives and the Annual Incentive Compensation Plan for Senior Executives as described in Attachment A; any bonus is dependent upon the Company's achievement of its profit target and the Executive's personal achievement of performance criteria associated with his position and shall be pro-rated to adjust for the portion of the year that Executive was employed by the Company. For future years (calendar year 1998 and beyond), any bonus will be determined by the Compensation Committee of the Board of Directors. Bonus awards may be comprised of cash, stock options and/or restricted stock. (c) Fringe Benefits. The Executive shall be entitled to such ---------------- fringe benefits as are generally made available by the Company to senior management personnel. Such benefits shall include participation in the Company's defined contribution retirement plan, Section 401(k) Plan, and health, term life and disability insurance programs. The Executive also will be reimbursed for reasonable expenses incurred in connection with travel and entertainment related to the Company's business and affairs which will be paid by the Company in a manner, consistent with past practice and as amended by any subsequent changes of Company Policy. For the retirement plan, credit will be given for prior years of service for purpose of vesting. 3. Stock Options. -------------- (a) On or before May 2, 1997, the Company will grant to the Executive non-qualified stock options under the Company's Consultants, Agents, and Part-time Employees Stock Plan to purchase 100,000 shares of Common Stock, at a purchase price equal to the average of the closing prices of the Common Stock on the New York Stock Exchange on each of the 20 days ending the day immediately preceding the grant date. Such options will be represented by a Stock Option Agreement in the form customarily used by the Company for such agreements, containing the following provisions: (i) Option Term. The options will expire at five years from ----------- date of grant. All unexercised vested options shall expire 90 days after the Executive ceases being employed by the Company for any reason. (ii) Vesting. Twenty-five percent (25%) of the options vest on ------- each of July 1, 1998, 1999, 2000 and 2001. (iii) Exercise. Subject to applicable securities laws and -------- regulations, all vested options are exercisable at any time prior to their expiration. (b) If the price per share of the Common Stock (as adjusted for splits, reverse spits or stock dividends) on July 1, 1999, (or if the Common Stock is not publicly traded on July 1, 1999, on the first day thereafter that shares of Common Stock are publicly traded) is less than $6.00, the Company shall grant to the Executive on July 2, 1999, non-qualified stock options under the Company's Stock Incentive Plan to purchase an additional 100,000 shares of the Company's common stock, par value $0.01 per share ("Common Stock"), at a purchase price equal to the average of the closing prices of the Common Stock on the New York Stock Exchange on each of the 20 days ending on the day immediately preceding the grant date. Such options will be represented by a Stock Option Agreement in the form customarily used by the Company for such agreements, containing the following provisions: (i) Option Term. The options expire 5 years from the date of ----------- grant. All unexercised vested options shall expire 90 days after the Executive ceases being employed by the Company for any reason. (ii) Vesting. The options vest as follows: -------
# of Options Grant Date Vesting Date Vested ---------- ------------ ------------ 07/02/99 07/02/99 50,000 07/02/99 07/01/00 addt'l 25,000 07/02/99 07/01/01 addt'l 25,000
(iii) Exercise. Subject to applicable securities laws and -------- regulations, all vested options are exercisable at any time prior to their expiration. 4. Restrictions on Certain Activities ---------------------------------- (a) Restrictions in Respect of Company Securities. Executive --------------------------------------------- agrees that for a period commencing the first day of the Employment Period and running through one year following termination of the Executive's employment by the Company for any reason, whether by action of the Executive or the Company (the "Restriction Period"), the Executive will not: (i) acquire, directly or indirectly, or serve as an employee, director, officer, manager, partner, adviser, consultant or agent of any person, entity or group which acquires directly or indirectly, any voting securities of the Company if, following such acquisition, such Executive, together with his affiliates, or such person, entity or group would directly or indirectly be the Beneficial Owners under Rule 13d-3 under the Securities Exchange Act of 1934 of voting securities of the Company representing in the aggregate more than 20% of the total combined voting power of all issued and outstanding securities of the Company; or (ii) solicit proxies or become a "participant" in a "solicitation" (as such terms are defined in Regulation 14A under the Exchange Act) in opposition to any recommendation of the Board of Directors of the Company. (b) Non-Solicitation of Employees. During the Restriction ----------------------------- Period, the Executive will not (for his own benefit or for the benefit of any person or entity other than the Company) solicit, or assist any person or entity other than the Company to solicit, any officer, director, executive or employee of the Company to leave his or her employment. (c) Investments. Nothing in this Agreement shall be deemed to ----------- prohibit the Executive from owning equity or debt investments in any corporation, partnership or other entity which is competitive with the Company, provided that such investments (i) are passive investments and constitute five - -------- percent (5%) or less of the outstanding equity securities of such an entity the equity securities of which are traded on a national securities exchange or other public market, or (ii) are approved by the Company. 5. Termination ----------- (a) Either the Corporation or the Executive may terminate this Agreement, with or without "cause", upon 30 days' prior written notice. (b) In the event the Corporation elects to terminate this Agreement without "cause", or the Executive elects to terminate this Agreement for "good reason", subject to the provisions of Section 6, the Corporation shall pay to the Executive, in addition to any amounts paid or payable under other provisions of this Agreement or any other agreements between the Corporation and the Executive, one of the following amounts: (i) a severance payment of $540,000 if the termination occurs within the first year of the Employment Period; (ii) a severance payment equal to the remaining term of whole months of the Employment Period times the average monthly base salary paid to the Executive for the 12- month period immediately preceding the termination if the termination occurs within the second year of the Employment Period; or (iii) a severance payment equal to 12 times the average monthly base salary paid to the Executive for the 12-month period immediately preceding the termination if the termination occurs within the third year of the Employment Period. Such severance will be issued in two cash payments (with deduction of such amount as may be required to be withheld under applicable law and regulations): one-half within ten working days of termination, the other one-half one year from the date of termination, provided the Executive has not breached Section 4 of this Agreement. In such event, all unvested options will vest in full on the effective date of termination and expire 90 days after the effective date of termination. Notwithstanding the provisions of the Annual Incentive Compensation Plan for Senior Executives or other bonus plan, if the Company terminates Executive without cause or if Executive terminates this Agreement for good reason, the Company shall pay Executive a bonus as provided in Section 2 (b) above for that year based on the following: if Executive is employed by the Company for at least one day and less than 183 days in the year, the Company shall pay Executive one half of the full year's bonus earned; and if Executive is employed by the Company for more than 182 days in the year, the Company shall pay Executive the full year's bonus earned. Any such bonus shall be paid when other similar bonuses are paid for that year. All other compensation and benefits provided for in this Agreement shall cease upon such termination. (c) In the event the Corporation terminates this Agreement for "cause" or the Executive terminates this Agreement without "good reason", the Executive's rights hereunder shall cease as of the effective date of such termination. (d) For purposes of this Agreement, the Executive shall be considered to have "good reason" to terminate this Agreement if (i) without his express written consent, the responsibilities, compensation or benefits of the Executive are substantially reduced (except in connection with the termination of his employment voluntarily by the Executive or by the Company for "cause" or under the circumstances described in Section 6 hereof), (ii) without the Executive's express written consent the Corporation's principal executive offices shall have been relocated outside the Washington, DC metropolitan area, or the Executive shall be based anywhere other than the Washington, DC metropolitan area (except for required travel on the Company's business, or (iii) a majority of the Board of Directors of the Company is not comprised of "Continuing Directors," where a "Continuing Director" of the Company as of any date means a member of the Board of Directors of the Company who (x) was a member of the Board of Directors of the Company on the effective date of this Agreement or (y) was nominated for election or elected to the Board of Directors of the Company with the affirmative vote of at least a majority of the directors who were Continuing Directors at the time of such nomination or election. For purposes of this Agreement, the Corporation shall have "cause" to terminate the Executive's employment hereunder upon (i) the continued, willful and deliberate failure of the Executive to perform his duties, in a manner substantially consistent with the manner prescribed by the Board of Directors or the Chief Executive Officer of the Corporation (other than any such failure resulting from his incapacity due to physical or mental illness), (ii) the engaging by the Executive in misconduct materially and demonstrably injurious to the Corporation, (iii) the conviction of the Executive of commission of a felony, whether or not such felony was committed in connection with the Corporation's business or (iv) the circumstances described in Section 6 hereof, in which case the provisions of Section 6 shall govern the rights and obligations of the parties. 6. Disability; Death. ------------------ (a) If, prior to the expiration or termination of the Employment period, the Executive shall be unable to perform his duties by reason of disability or impairment of health for at least six consecutive calendar months, the Corporation shall have the right to terminate this Agreement by giving written notice to the Executive to that effect, but only if at the time such notice is given such disability or impairment is still continuing. After giving such notice, the Employment Period shall terminate with the payment of the Executive's base compensation for the month in which notice is given. In the event of a dispute as to whether the Executive is disabled within the meaning of this Section 6(a), either party may from time to time request a medical examination of the Executive by a doctor appointed by the Chief of Staff of a hospital selected by mutual agreement of the parties, or as the parties may otherwise agree, and the written medical opinion of such doctor shall be conclusive and binding upon the parties as to whether the Executive has become disabled and the date when such disability arose. The cost of any such medical examinations shall be borne by the Corporation. (b) If, prior to the expiration or termination of the Employment Period, the Executive shall die, the Corporation shall pay to the Executive's estate his base compensation through the end of the month in which the Executive's death occurred, at which time the Employment Period shall terminate without further notice and the Corporation shall have no further obligations hereunder. (c) Nothing contained in this Section 6 shall impair or otherwise affect any rights and interests of the Executive under any compensation plan or arrangement of the Corporation which may be adopted by the Board of Directors of the Corporation. 7. Other Terms and Conditions -------------------------- The Company's Standard Terms and Conditions of Employment for Executive Personnel (Attachment B) is incorporated herein by reference. 8. Enforcement ----------- Executive agrees that the Company's remedies at law for any breach or threat of breach by him of the provisions of Sections 2, 3 or 4 of Attachment B and Section 4 hereof will be inadequate, and that the Company shall be entitled to an injunction or injunctions to prevent breaches of the provisions of Sections 2, 3 or 4 of Attachment B and Section 4 hereof and to enforce specifically the terms and provisions thereof, in addition to any other remedy to which the Company may be entitled at law or equity. 9. Notices ------- Any notice required or permitted under this Agreement shall be deemed to have been effectively made or given if in writing and personally delivered or mailed properly addressed in a sealed envelope, postage prepaid by certified or registered mail. Unless otherwise changed by notice, notice shall be properly addressed to Executive: Kenneth L. Campbell 9482 Deramus Farm Court Vienna, Virginia 22182 and properly addressed to the Company is addressed to: ICF Kaiser International, Inc. 9300 Lee Highway Fairfax, Virginia 22031-1207 Attn: James O. Edwards with a copy to: Paul Weeks II Senior Vice President, Secretary and General Counsel ICF Kaiser International, Inc. 9300 Lee Highway Fairfax, Virginia 22031-1207 10. Award to Prevailing Party in Dispute ------------------------------------ In the event either of the parties to this Agreement commences any action or proceeding arising out of, or relating in any way to, this Agreement, the prevailing party shall be entitled to recover, in addition to any other relief awarded to such party, his or its costs, expenses and reasonable attorney's fees. 11. Miscellaneous ------------- This Agreement, its Attachments, and the Option Agreement(s) constitute the entire agreement, and supersede all prior agreements, of the parties hereto relating to the subject matter hereof, and there are no written or oral terms or representations made by either party other than those contained herein. The validity, interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Virginia. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first written. Executive ICF Kaiser International, Inc. /s/ Kenneth L. Campbell /s/ James O. Edwards ---------------------------- ------------------------------------- Kenneth L. Campbell James O. Edwards Chairman and Chief Executive Officer EX-11 7 EXHIBIT 11 EXHIBIT 11 1 of 2 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
Three Months Ended June 30, --------------------------- 1997 1996 ------------ ----------- (Unaudited) Primary: Net income available for common shareholders $ 3,000 $ 1,080,000 ============ =========== Weighted average of common shares outstanding not included in amounts below 22,425,393 21,845,748 Weighted average of common shares issuable on exercise of outstanding stock options and warrants 15,610 - ------------ ----------- Weighted average of common and common equivalent shares outstanding, as adjusted 22,441,003 21,845,748 or or 22,441,000 21,846,000 ============ =========== Net income per common share $ 0.00 $ 0.05 ============ =========== Fully Diluted: Net income available for common shareholders $ 3,000 $ 1,080,000 ============ =========== Weighted average of common shares outstanding as adjusted for primary computation 22,441,003 21,845,748 Weighted average of additional common shares issuable on exercise of outstanding stock options and warrants 115,258 - ------------ ----------- Weighted average of common and common equivalent shares outstanding, as adjusted 22,556,261 21,845,748 or or 22,556,000 21,846,000 ============ =========== Net income per common share $ 0.00 $ 0.05 ============ ===========
EXHIBIT 11 2 of 2 ICF KAISER INTERNATIONAL, INC. AND SUBSIDIARIES COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
Six Months Ended June 30, --------------------------- 1997 1996 ------------ ----------- (Unaudited) Primary: Net income available for common shareholders $ 50,000 $ 1,865,000 ============ =========== Weighted average of common shares outstanding not included in amounts below 22,353,667 21,785,315 Weighted average of common shares issuable on exercise of outstanding stock options and warrants 16,397 - ------------ ----------- Weighted average of common and common equivalent shares outstanding, as adjusted 22,370,064 21,785,315 or or 22,370,000 21,785,000 ============ =========== Net income per common share $ 0.00 $ 0.09 ============ =========== Fully Diluted: Net income available for common shareholders $ 50,000 $ 1,865,000 ============ =========== Weighted average of common shares outstanding as adjusted for primary computation 22,370,064 21,785,315 Weighted average of additional common shares issuable on exercise of outstanding stock options and warrants 97,828 - ------------ ----------- Weighted average of common and common equivalent shares outstanding, as adjusted 22,467,892 21,785,315 or or 22,468,000 21,785,000 ============ =========== Net income per common share $ 0.00 $ 0.09 ============ ===========
EX-27 8 EXHIBIT 27
5 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 12,355,000 0 256,812,000 10,013,000 0 281,334,000 50,874,000 38,108,000 370,653,000 182,590,000 141,767,000 0 0 224,000 34,278,000 370,653,000 0 507,543,000 0 166,977,000 0 871,000 9,157,000 5,846,000 1,134,000 50,000 0 0 0 50,000 0.00 0.00 Excludes current portion of bonds, mortgage, and similar debt. Represents gross revenue which includes costs of certain services subcontracted to third parties and other reimbursable direct project costs, such as materials procured by the Company on behalf of its customers. Excludes subcontract and direct material cost of $294,818,000.
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