CalPERS Calls on Mcdermott International, Ingersoll-Rand and Tyco to Incorporate in U.S.; Pension Fund Says Offshore Incorporations Weaken Shareholder Protections.

Business/News Editors

SACRAMENTO, Calif.--(BUSINESS WIRE)--Nov. 18, 2002

The California Public Employees' Retirement System (CalPERS) Board of Administration voted today to lend its support to shareholders proposals urging three companies -- McDermott International, Ingersoll-Rand Company and Tyco International -- to bring the incorporation of their businesses back to the United States.

"We have decided to accept the invitation of the American Federation of State, County and Municipal Employees Pension Plan (AFSCME) to join them in sponsoring a shareholder proposal in the 2003 proxy season related to McDermott International, currently based in Panama," said William D. Crist, President of CalPERS Board. In addition, he said, CalPERS will also lend its support to bring to the U.S. from Bermuda the incorporation of Ingersoll-Rand and Tyco International.

"Events from the last 12 months demonstrate it is very important that, in the event of legal violations by officers or directors of a U.S.-domiciled company, that shareowners everywhere have the ability to pursue legal recourse in the event of mismanagement or illegal actions by a company. As long as companies incorporate offshore, shareowners' abilities to pursue their rightful legal remedies is frustrated," added Crist.

CalPERS owns approximately 299,000 shares of McDermott stock, 718,000 shares of Ingersoll-Rand stock, and 1.2 million shares of Tyco stock.

"Today's action by the Board indicates we are dead serious about challenging companies which try to avoid their responsibilities to shareowners," said Michael Flaherman, Chair of CalPERS Investment Committee. "Our inability to bring legal recourse in Panama against officers and directors derivatively and the lack of the recognition of the right of fewer than all shareholders to act by written consent in lieu of a meeting are two examples of the challenges shareowners could face with some companies which chose to incorporate in Bermuda."

CalPERS manages assets valued at approximately $128 billion. The System provides retirement and health benefit to more than 1.3 million State and local public employees and their families. For further information about CalPERS, please visit the System's web site at www.calpers.ca.gov.