For Immediate Release
Tuesday, April 01, 2003
McDermott and Institutional Investors Agree on Expatriate Review Process
WASHINGTON —McDermott International, Inc. ("McDermott"), the American Federation of State, County and Municipal Employees ("AFSCME") Pension Plan and the California Public Employees' Retirement System ("CalPERS") today jointly announced they will work together to bring a fair resolution to the issue of whether McDermott should re-domesticate back from Panama to the United States.
Under the agreement, McDermott will continue its review of restructuring alternatives related to the possible re-domestication, and AFSCME and CalPERS will have access to the analysis and provide feedback.
In addition, McDermott has agreed to place on its next proxy following resolution of The Babcock & Wilcox Chapter 11 proceedings, a management resolution which addresses and recommends in favor of re-domestication in the event the tax, costs and other considerations impacted by re-domestication are believed by McDermott's Board of Directors to be in the best interests of the shareholders.
In the event the resolution does not gain support by McDermott's Board of Directors and its management, the ballot issue will contain a 500-word statement from AFSCME and CalPERS.
"We acknowledge the importance of shareholder concerns on this issue, and we, too, are concerned about this. We believe it is in the best interests of our company and shareholders to diligently examine this issue," said Bruce W. Wilkinson, Chairman of the Board and Chief Executive Officer of McDermott. "We have agreed to present and recommend a vote in favor of changing the company's domicile to the United States, but it is contingent upon a variety of factors, including a tax neutral and otherwise favorable cost analysis by our independent consultants, the final resolution of the Babcock & Wilcox Chapter 11 proceedings and the approval of our Board of Directors," he added.
AFSCME Pension Plan Chair Gerald W. McEntee and CalPERS President Sean Harrigan said they are pleased that McDermott recognizes the importance of this issue to shareholders.
"Their commitment to undertake this full and complete review and their willingness to put this issue on the ballot is the first step in what we believe will be a responsible process that will lead them to coming home," said McEntee.
Harrigan added that as a result of the McDermott's willingness to participate in this process, it is no longer necessary for AFSCME and CalPERS to continue to keep the shareholder resolution on the ballot during this proxy season. "We are satisfied that through this agreement we will get the kind of review and the access needed by shareholders to make the right decision."
