<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
JACOBS ENGINEERING GROUP INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
JACOBS ENGINEERING GROUP INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No:
(3) Filing Party:
(4) Date Filed:
<PAGE>
JACOBS ENGINEERING GROUP INC.
251 South Lake Avenue
Pasadena, California 91101
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
TO OUR SHAREHOLDERS
The Annual Meeting of Shareholders of Jacobs Engineering Group Inc. will be
held on Tuesday, February 14, 1995 at 3:30 p.m. at 251 South Lake Avenue, First
Floor Conference Center, Pasadena, California, for the following purposes:
1. To elect four directors to hold office until the 1998 annual
meeting;
2. To approve the appointment of Ernst & Young LLP as independent
accountants to audit the accounts of the Company for the fiscal year
ending September 30, 1995; and
3. To act upon such other matters as may properly come before the
meeting.
The shareholders of record at the close of business on January 5, 1995 will
be entitled to vote at such meeting and any adjournment thereof. This notice
and proxy statement and the accompanying proxy are being mailed to such
shareholders on or about January 12, 1995. The stock transfer books will not
close.
By Order of the Board of Directors
Robert M. Barton
Secretary
Dated: January 5, 1995
YOU ARE URGED TO DATE, SIGN, AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED.
<PAGE>
JACOBS ENGINEERING GROUP INC.
251 South Lake Avenue
Pasadena, California 91101
----------------
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Jacobs Engineering Group Inc., a Delaware corporation
(the "Company"), of proxies to be used at the annual meeting of shareholders of
the Company to be held February 14, 1995, and any adjournment thereof. The
expense of the solicitation will be paid by the Company. Some officers and
regular employees may solicit proxies personally and by telephone if deemed
necessary. The proxy is revocable by you by written notice to the Secretary of
the Company at any time prior to the exercise of the authority granted thereby
or by your being present at the meeting and electing to vote in person.
The holders of common stock of record at the close of business on January 5,
1995, the record date fixed by the Board of Directors (the "Record Date"), will
be entitled to one vote per share on all business of the meeting. The presence
in person or by proxy of the holders of a majority of the outstanding shares of
common stock will constitute a quorum for the transaction of business at the
meeting. This proxy statement and the accompanying proxy are being mailed on or
about January 12, 1995 to the shareholders of record on the Record Date. As of
the Record Date the Company had 25,115,907 shares of common stock outstanding.
In connection with the solicitation of proxies by the Board of Directors for
the Annual Meeting of Shareholders, the Board of Directors has designated
Joseph J. Jacobs, Noel G. Watson and Robert M. Barton as proxies. Shares
represented by all properly executed proxy cards received in time for the
meeting will be voted in accordance with the choice specified on the proxy
card. Unless contrary instructions are indicated on the proxy card, the shares
of common stock will be voted FOR the election of the nominees listed below
under "1. Election of Directors". Where no choice is specified, the shares of
common stock will be voted FOR the approval of the appointment of Ernst & Young
LLP as the independent auditors for the Company for the year ending September
30, 1995 as described under "2. Approval of Ernst & Young LLP as Auditors",
below. The Board of Directors is not aware of any other issue to be brought
before the meeting. If other matters are properly brought before the meeting,
then the proxies will vote in accordance with their best judgment.
Votes cast by proxy or in person at the annual meeting will be tabulated by
the inspectors of election appointed for the meeting who will determine whether
or not a quorum is present. The inspectors of election will treat abstentions
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as not voted for purposes of determining the approval
of any matter submitted to the shareholders for a vote. If a broker indicates
on a proxy that it does not have discretionary authority as to certain shares
to vote on a particular matter, then those shares will not be considered as
present and entitled to vote with respect to that matter.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following tables, based in part upon information supplied by officers,
directors and principal shareholders, set forth certain information regarding
the ownership of the common stock of the Company as of the Record Date by (i)
all those persons known by the Company to be beneficial owners of more than
five percent of the outstanding common stock of the Company; (ii) each
director; (iii) each executive officer named in the compensation tables, below
("Named Executive Officer"); and (iv) all officers and directors of the Company
as a group. Unless otherwise indicated, each of these shareholders has sole
voting and investment power with respect to the shares beneficially owned,
subject to community property laws where applicable.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS (a)
<TABLE>
<CAPTION>
AMOUNT
AND PERCENT
NATURE OF OF
NAME AND ADDRESS OWNERSHIP CLASS
---------------- --------- -------
<S> <C> <C>
Joseph J. Jacobs..................................... 4,348,000 17.3%
251 S. Lake Avenue
Pasadena, California 91101
Wilshire Oil Company of Texas........................ 1,482,760(b) 5.9%(b)
921 Bergen Avenue
Jersey City, New Jersey 07306
Capital Guardian Trust Co. .......................... 1,444,500 5.8%
333 S. Hope Street
Los Angeles, California 90071
</TABLE>
--------
(a) Security ownership information for beneficial owners is taken from
statements filed with the Securities and Exchange Commission pursuant to
Sections 13(d), (f) and (g) and other information made known to the
Company.
(b) In an amendment to its Schedule 13D dated March 24, 1994, Wilshire Oil
Company of Texas reported that it had sole voting and dispositive power
over all shares.
2
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME OF AMOUNT OF COMMON STOCK PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED(A) OF CLASS(B)
---------------- ---------------------- ----------
<S> <C> <C>
Joseph F. Alibrandi..................... 2,750(c) *(c)
Robert M. Barton........................ 11,638(c) *(c)
James E. Berkley........................ 10,443(d) *(d)
Peter H. Dailey......................... 2,750(c) *(c)
Robert B. Gwyn.......................... -- --
Joseph J. Jacobs........................ 4,348,000 17.3%
Linda K. Jacobs......................... 281,470(c) 1.1%(c)
William R. Kerler....................... 47,717(d) 0.2%(d)
James Clayburn La Force................. 2,750(c) *(c)
Dale R. Laurance........................ 1,000 *
David M. Petrone........................ 8,250(c) *(c)
James L. Rainey, Jr..................... 950(c) *(c)
J. W. Simmons........................... 12,750(c) *(c)
Richard J. Slater....................... 39,991(d) 0.2%(d)
Gerald L. Stevenson..................... 69,490(d) 0.3%(d)
Noel G. Watson.......................... 192,388(d) 0.8%(d)
All directors and executive officers as
a group................................ 5,256,305(c),(d) 20.9%(c),(d)
</TABLE>
* Less than 0.1%
--------
(a) Ownership is direct unless indicated otherwise.
(b) Calculation is based on 25,115,907 shares of Common Stock outstanding as of
January 5, 1995.
(c) Shares beneficially held include 750 shares subject to unexercised Outside
Director Stock Options exercisable within 60 days following the date of
this proxy statement.
(d) Shares beneficially held include shares subject to unexercised employee
stock options exercisable within 60 days following the date of this proxy
statement, as follows: Mr. Berkley, 1,800; Mr. Kerler, 24,400; Richard J.
Slater, 10,400; Mr. Stevenson, 36,000; and Mr. Watson, 31,800, and all
directors and executive officers as a group, 242,859.
1. ELECTION OF DIRECTORS
The bylaws of the Company presently provide for eleven directors. The
Certificate of Incorporation and the bylaws of the Company divide the Board of
Directors into three classes with the terms of office of the directors of each
class ending in different years: The terms of Classes I, II and III end at the
annual meetings in 1997, 1995 and 1996, respectively. Classes I and II have
four directors, each, and Class III has three directors.
3
<PAGE>
The nominees for Class II are to be voted upon at this annual meeting. The
directors in Classes I and III will continue in office until expiration of
their respective terms. Mr. J. W. Simmons, currently a director in Class II,
has stated that he does not wish to stand for re-election. Mr. Simmons'
contributions to the Company were many and are greatly appreciated.
The Board of Directors has nominated Joseph F. Alibrandi, Hon. Peter H.
Dailey, Robert B. Gwyn and Linda K. Jacobs for election as Class II directors
for three year terms expiring at the 1998 annual meeting.
The persons named as proxies on the accompanying proxy card intend to vote
the shares as to which they are granted authority to vote for the election of
the nominees listed above. The proxies may not vote for a greater number of
persons than four. In the event that anyone other than these individuals
should be nominated for election as a director, the proxies will vote in
accordance with their best judgment.
Although the Board of Directors does not know of any reason why any nominee
will be unavailable for election, in the event any nominee should be
unavailable at the time of the meeting, the proxies may be voted for a
substitute nominee as selected by the Board of Directors.
The following table sets forth information about these nominees and the
directors whose terms of office do not expire at the 1995 annual meeting.
<TABLE>
<CAPTION>
NAME AND POSITIONS DIRECTOR
HELD WITH THE COMPANY CLASS SINCE
--------------------- ----- --------
<S> <C> <C>
Joseph J. Jacobs, Chairman of the Board and Director. Dr. III 1974
Jacobs, age 78, was chief executive officer of the Company and
its predecessors from 1957 until November 19, 1992. Dr. Jacobs
founded the Company as a sole proprietorship in 1947 and
incorporated it in 1957.
Noel G. Watson, President, Chief Executive Officer and I 1986
Director. Mr. Watson, age 58, has been with the Company since
1965 and has held senior executive positions with the Company
for more than the past five years.
Robert M. Barton, Secretary and Director. Mr. Barton, age 72, III 1974
is counsel to the law firm of Barton, Klugman & Oetting. He
was a partner in that firm from 1957 until December 31, 1992.
The firm has been general counsel to the Company and its
predecessors since 1957.
Joseph F. Alibrandi, Director. Mr. Alibrandi, age 66, has been II 1988
Chairman of the Board and Chief Executive Officer of Whittaker
Corporation for more than five years. He became Chairman of
the Board of BioWhittaker, Inc. in November 1991 when that
company was spun off from Whittaker Corporation. Mr. Alibrandi
is also a director of Santa Fe Pacific Corporation, Catellus
Development Corporation, BankAmerica Corporation and Bank of
America, N.T.&S.A.
The Hon. Peter H. Dailey, Director. Mr. Dailey, age 64, is Chairman II 1991
of Enniskerry Financial, a private investment firm. He was formerly
Ambassador to Ireland and Special Envoy to NATO. Prior to
government service, he was Vice-chairman of Interpublic Group of
the Dailey International Group. He serves as non-executive Chairman
of Memorex Telex, Inc. and is a Director of Chicago Title and
Trust, Pinkerton's, Inc., Sizzler, Inc. and the Wirthlin Group.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITIONS DIRECTOR
HELD WITH THE COMPANY CLASS SINCE
--------------------- ----- --------
<S> <C> <C>
Robert B. Gwyn, age 55, was President, CEO and Chairman of the II --
Board of Agricultural Minerals and Chemicals, Inc., a company
engaged in the fertilizer and methanol businesses, from 1990 until
1994, when that company was sold. From 1985 until 1990 he was
President of Agrico Chemical Company, a domestic and international
manufacturer of fertilizers.
Linda K. Jacobs, Director. Dr. Linda K. Jacobs, age 47, is II 1986
President of Middle East Technology Assistance, a non-profit
corporation. From 1985 until 1993 she was a principal in Jabara-
Jacobs Associates, a consulting firm. She is a daughter of Dr.
Joseph J. Jacobs.
James Clayburn LaForce, Director. Dr. LaForce, age 66, was Dean of I 1987
the Anderson Graduate School of Management, University of
California at Los Angeles from 1978 until 1993, when he retired.
Dr. LaForce is a director of Shearson V.I.P. Separate Account, Eli
Lilly & Co., Rockwell International Corporation, Imperial Credit
Industries, Inc., Blackrock Funds, The Timken Company, Provident
Investment Counsel Mutual Funds and Payden and Rygel Investment
Trust.
Dale R. Laurance, Director. Mr. Laurance, age 49, is Executive Vice III 1994
President and Senior Operating Officer and a director of Occidental
Petroleum Corporation where he has been an executive since 1983.
Dr. Laurance is also a director of Canadian Occidental Petroleum,
Ltd., the Armand Hammer Museum of Art and Cultural Center, Inc. and
the Chemical Manufacturers Association.
David M. Petrone, Director. Mr. Petrone, age 50, is Chairman of I 1987
Petrone, Petri & Company, a real estate finance and investment
firm. He was Vice Chairman of Wells Fargo & Co. from 1986 until
March 1, 1992. He is a director of The Ralphs Grocery Company,
Spieker Properties, Inc., Health Science Properties, Inc. and
Finelite, Inc.
James L. Rainey, Jr., Director. Mr. Rainey, age 65, is retired. He I 1993
was President and Chief Executive Officer of Farmland Industries,
Inc., an agricultural cooperative, from 1986 until 1991. Mr. Rainey
is a director of AIR . CURE Environmental, Inc., the Wirthlin Group
and Mid-America Bio-Mat, Inc.
</TABLE>
Board Committees. The Board has two standing committees. The Audit Committee
advises the Board on internal control and external audit matters affecting the
Company, including recommendations as to the appointment of the independent
auditors of the Company; reviews with such auditors the scope and results of
their examination of the financial statements of the Company and any
investigations by such auditors. During fiscal 1994 the Audit Committee held
two meetings. The members of the Audit Committee are Messrs. Petrone
(Chairman), Alibrandi, Dailey and Rainey and Dr. Linda K. Jacobs.
The Compensation and Benefits Committee approves the salaries and bonuses of
the executive officers and approves all grants of stock options under the
Company's 1981 Executive Incentive Plan (other than options issued under the
Outside Director Stock Option Plan). During fiscal 1994 this committee held
eight meetings. The members of the Compensation and Benefits Committee are
Messrs. Barton (Chairman) and Simmons and Dr. LaForce.
5
<PAGE>
Compensation of Directors. The Company pays directors who are not employed by
the Company ("Outside Directors") a retainer at the rate of $15,000 per year
plus a fee of $1,000 for each meeting of the board and each committee on which
they serve that they attend. Pursuant to the terms of the Outside Director
Stock Option Plan, each of the Outside Directors received an option for 2,000
shares of common stock on April 1, 1993. All Outside Directors receive an
option for 1,000 shares at an option price equal to the Fair Market Value (as
defined in the Plan) of the common stock on the first day of March of each year
commencing March 1, 1994. Newly-elected Outside Directors receive an Option for
2,000 shares at a price equal to the Fair Market Value of the Common Stock on
the first day of the month following the month in which they are elected.
The Board of Directors held nine meetings during the year ended September 30,
1994. All directors attended at least 75% of all meetings of the Board of
Directors and of the committees on which they served during fiscal 1994.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual and long-
term compensation of the Chief Executive Officer and the other five most highly
compensated officers ("Named Executive Officers") of the Company for services
in all capacities to the Company and its subsidiaries during its 1992, 1993,
and 1994 fiscal years:
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION (1) COMPENSATION
----------------- OTHER ANNUAL ------------ ALL OTHER
SALARY BONUS COMPENSATION OPTIONS COMPENSATION
NAME YEAR ($) ($) ($) (2) (SHS)(3) ($) (4)
---- ---- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Noel G. Watson 1994 $432,200 $ 18,700 $21,390 100,000 $4,460
Chief Executive 1993 423,450 383,550 12,900 15,000 4,460
Officer 1992 313,030 352,250 11,000 4,600
Joseph J. Jacobs 1994 432,200 -0- -0- -0- -0-
Chairman of the 1993 432,200 130,000 -0- -0- -0-
Board 1992 432,200 352,250 -0- -0-
James E. Berkley 1994 286,000 12,350 13,400 -0- 4,449
Executive Vice 1993 271,100 244,950 8,300 12,000 4,460
President (5) 1992 256,600 287,250 9,000 4,600
William R.
Kerler 1994 250,900 9,100 70,780(6) 20,000 4,458
Executive Vice 1993 223,250 151,200 14,600(6) 20,000 4,460
President 1992 210,100 175,800 7,000 4,600
Gerald L.
Stevenson 1994 230,050 7,450 12,150 10,000 4,447
Senior Vice 1993 214,150 144,950 7,300 10,000 4,460
President 1992 206,600 172,750 7,000 4,840
Richard J.
Slater 1994 223,650 7,250 7,940 20,000 4,443
Group Vice 1993 210,000 142,100 5,000 10,000 4,464
President 1992 199,800 166,900 7,000 4,600
</TABLE>
--------
(1) Represents amounts earned by the named executive during the year indicated,
and includes amounts deferred under the Company's qualified 401(k) Thrift
Savings Retirement Plan and the Company's nonqualified 1991 Executive
Deferral Plan and 1993 Executive Deferral Plan (the "EDPs").
6
<PAGE>
(2) These amounts represent interest credited to the employees' deferred
compensation account balance under the EDPs in excess of 120% of the
applicable federal rate in effect at the times the interest crediting rates
were set for the EDPs. Under the terms of the EDPs, executives may defer
salary and bonus and are credited interest on such deferrals at rates based
on the Moody's Corporate Bond Yield Averages and the number of years in the
EDPs. The maximum interest rate is credited to deferral amounts only after
seven years of plan participation. Although none of the named executives
have seven years plan participation, the amounts shown here were computed
using the maximum interest rate allowed under the EDPs. Amounts deferred
are used by the Company to purchase life insurance contracts on the lives
of the participants (including the named executives participating in the
plan). Because it is anticipated that over the life of the plan, the
insurance contracts will return value to the Company approximating, on an
after-tax basis, the amounts credited as interest to the participants'
account balances, this plan should have no net cost to the Company over its
life.
(3) Consists solely of non-qualified stock options pursuant to the 1981
Executive Incentive Plan.
(4) Consists solely of Company contributions to the Thrift Savings Retirement
((S) 401(k)) Plan.
(5) Mr. Berkley relinquished his duties as Executive Vice President on May 26,
1994 but he will continue to serve the Company in an advisory capacity
until he retires early in 1995.
(6) Also includes reimbursement of income tax paid on reimbursed moving
expenses.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Company's 1981 Executive Incentive Plan permits the grant of options and
stock appreciation rights to employees of the Company and its subsidiaries,
including officers and directors who are serving in such capacities. The
following table contains information concerning options granted during the
fiscal year 1994 to the only Named Executive Officers who were granted options
that year. No stock appreciation rights have been granted to date.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
PERCENTAGE OF AT ASSUMED ANNUAL RATES OF
TOTAL OPTIONS STOCK PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR MARKET PRICE OPTION TERM (7 YRS.)
GRANTED EMPLOYEES IN BASE PRICE ON DATE OF EXPIRATION --------------------------------
NAME (SHS)(1) FISCAL YEAR ($/SH) GRANT ($/SH) DATE 0% ($) 5% ($) 10% ($)
---- -------- ------------- ----------- ------------ ----------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Noel G. Watson 100,000 22.83% $24.875 $24.875 30-Nov-2000 $ -- $ 1,012,660 $ 2,359,930
William R. Kerler 10,000 4.57% 21.000 21.000 10-May-2001 -- 85,490 199,230
10,000 17.319 20.375 14-Jun-2001 30,560 70,505 164,300
Gerald L. Stevenson 10,000 2.28% 21.000 21.000 10-May-2001 -- 85,490 199,230
Richard J. Slater 10,000 4.57% 21.000 21.000 10-May-2001 -- 85,490 199,230
10,000 17.319 20.375 14-Jun-2001 30,560 70,500 164,300
Gain for all shareholders (based on
25,094,900 shares outstanding at
September 30, 1994 and a year-end
closing price of $24.375) 249,018,200 580,318,400
Gain of Named Executive Officers as a
percent of total gain to all shareholders 0.57% 0.57%
</TABLE>
--------
(1) All grants were non-qualified options pursuant to the 1981 Executive
Incentive Plan. Options are exercisable in five cumulative annual
installments of 20% of the shares subject to option commencing on the first
anniversary of the date of grant. Exercisability will be automatically
accelerated if the optionee is terminated within three years following a
Change in Control of the Company unless the Board of Directors determines
that the event shall not constitute a Change of Control.
7
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION SAR
VALUES
The following table sets forth information regarding option exercises during
the fiscal year 1994 by the Named Executive Officers and the value of their
unexercised options at September 30, 1994. All options were granted under the
1981 Executive Incentive Plan. The Company has not granted any stock
appreciation rights.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE SEPT. 30, 1994 (SHARES) SEPT. 30, 1994 ($)(2)
ON EXERCISE REALIZED ------------------------- -------------------------
NAME (SHARES) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Noel G. Watson.......... -- -- 40,200 134,600 $459,040 $186,670
James E. Berkley........ 12,000 $ 12,890 10,000 27,800 $ 33,960 $146,800
William E. Kerler....... 2,000 $ 36,600 41,600 53,000 $505,370 $286,590
Gerald L. Stevenson..... -- -- 36,000 35,800 $465,890 $201,620
Richard J. Slater....... 20,800 $358,670 10,400 41,000 $ 66,610 $198,090
</TABLE>
--------
(1) Based on market value of the Company's common stock on the date of exercise
less the option exercise price.
(2) Based on the closing price of the common stock of the Company as reported
in the New York Stock Exchange Composite Transactions Report less the
option exercise price.
BOARD COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The overall objectives of the Company's executive compensation program are as
follows:
--To enable the Company to attract, motivate and retain highly-qualified
executives by offering competitive base salaries that are consistent
with the Company's size.
--To reward executives for past performance through a bonus program that
places a substantial component of their pay at risk based on Company
performance as measured by its return on net equity.
--To provide an incentive for continued service and future performance
through the use of stock options.
--To encourage executives to have an equity ownership in the Company.
The Company has no pension plan, but all eligible employees, including
executives, may participate in the Company's Thrift Savings Retirement
((S) 401(k)) Plan and the 1989 Employee Stock Purchase Plan.
The Compensation Committee of the Board of Directors is responsible for
reviewing and approving the compensation of all executive officers and all
stock option grants to all employees.
Base Salary. In setting executive officer base salaries for 1994 the
Committee considered the recommendations of Dr. Jacobs and Mr. Watson, who made
salary recommendations as to all executive officers except themselves, the
Committee's own subjective evaluations of those executive officers, the salary
spread that has normally been maintained by the Company between levels of
management, and information compiled by the Company regarding prevailing
salaries for professional engineers being offered by companies that the Company
regards as its competitors.
8
<PAGE>
The Committee also considered a regression analysis of the executive
compensation paid by the publicly-traded engineering and construction companies
that are comparable to, or greater in size than the Company, that compete with
the Company for experienced employees at all levels and for which executive
salary information is publicly available (the "Peer Group") made by the
Company's financial staff. The Peer Group consists of Guy F. Atkinson, Blount,
Inc., CRSS, Fluor Corporation, Foster Wheeler, International Technology,
Michael Baker Corp., Morrison-Knudsen Corp., Stone & Webster, Inc. and the
Company. This analysis relates the revenues of the members of the Peer Group to
the base salaries paid to their five highest paid executives in the order of
their compensation as reported in their annual reports and proxy statements for
the prior year.
Mr. Watson's initial base salary for 1994 was established in the same manner
as the base salaries of the other executive officers of the Company. The
Committee believes that the total salary and bonus paid to Mr. Watson and each
of the Named Executive Officers was reasonable in light of the performance of
the Company for fiscal 1994.
Dr. Jacobs was the Chief Executive Officer of the Company from its
organization in 1957 until he resigned that position in November 1992; he
continues to serve as Chairman of the Board and as a full-time employee of the
Company. The Company has an employment agreement, originally entered into on
October 1, 1987, with Dr. Jacobs, described below under "Employment Contracts
and Termination of Employment and Change-in-Control Arrangements", that
establishes, among other matters, his base salary. The original agreement
received the approval of the Board of Directors of the Company in 1987, without
dissent and with Dr. Jacobs not voting. The Board subsequently delegated all
decisions regarding this agreement to the Committee, which has approved
subsequent amendments to it, including extensions of its term, which now
expires on September 30, 1999, but there has been no change to Dr. Jacobs' base
salary since 1987. The Committee has approved these amendments based on its
subjective judgment of Dr. Jacobs' past and continuing contributions to the
business strategy, marketing and reputation of the Company.
Annual Bonuses. Pursuant to the Company's Incentive Bonus Plan, each year the
Compensation Committee approves a target percentage of pre-tax profits to the
net equity of the Company that must be achieved before any bonuses are paid.
This target percentage is established on the basis of the Committee's judgment
of what constitutes a reasonable minimum return for the shareholders on their
investment in the Company. If pre-tax profits exceed the target, then a
predetermined percentage of profits in excess of the target is placed in the
bonus pool; if pre-tax earnings exceed two times the target, then a larger
percentage of the excess is placed into the bonus pool. A major percentage of
the bonus pool is allocated to the officers and key managers of the Company.
Fifty percent of the allocation to the officers and key employees is then
individually allocated to them in proportion to their weighted salaries, with
the salaries of the executive officers given the greatest weight. The remainder
of the executive officer pool is usually allocated in the same proportions as
the initial allocations, but individual allocations are in some cases adjusted
on the basis of the Committee's subjective evaluations of individual
performance. However, all of the executive officers of the Company, including
Mr. Watson and the other Named Executive Officers, waived the discretionary
portion of their bonuses for 1994 in order to increase the discretionary pool
for the other employees eligible for bonuses. Bonuses are paid in three annual
installments contingent upon continued employment and may be further deferred
by participants in the Company's deferred compensation plans.
9
<PAGE>
The bonus paid to Mr. Watson for 1994 was determined in the same manner as
the bonuses of the other executive officers. Dr. Jacobs does not receive
bonuses under the formula in the Incentive Bonus Plan, but he is eligible to
receive discretionary bonuses.
Stock Options. In determining stock option awards to executive officers for
1994 the Committee considered Dr. Jacobs' and Mr. Watson's recommendations with
respect to all executive officers other than themselves, the Committee's own
subjective evaluations of the executive officers and previous option awards to
the executive officers. The Committee also considered the stock option awards
made by four of the largest competitors of the Company that are public
companies (CRSS, Fluor, Foster Wheeler and Morrison-Knudsen) to their executive
officers as a percent of outstanding shares. In general, option grants by the
Company as a percentage of outstanding shares have been the second highest in
the named group, but the Committee considered the fact that the Company is the
only company in the group that has no pension plan in evaluating the
significance of its ranking in the group.
The number of options granted to Mr. Watson for 1994 was determined by the
committee on the basis of a request that he be granted such options in lieu of
a salary increase proposed by the Committee. Dr. Jacobs has never been eligible
for stock options by reason of his percentage interest in the outstanding stock
of the Company.
Tax Deductibility Considerations. In 1993, the Internal Revenue Code was
amended to limit the deductibility of certain compensation expenses in excess
of $1 million. This amendment will apply to the Company in fiscal year 1995.
The Committee believes that the compensation payable for fiscal year 1995 will
not result in any loss of tax deductions for the Company. It is the Committee's
intent, pending finalization of the tax regulations, to adopt policies to
obtain maximum deductibility of executive compensation, consistent with the
objectives of the Company's executive compensation program outlined above. The
Committee will continue to monitor the regulations as they are finalized to
determine whether any program changes are appropriate.
ROBERT M. BARTON, Chairman
J. W. SIMMONS
JAMES CLAYBURN LAFORCE
10
<PAGE>
ADDITIONAL INFORMATION WITH RESPECT TO COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS
Robert M. Barton, a director and Secretary of the Company and Chairman of the
Compensation Committee, retired as a partner of the law firm of Barton, Klugman
& Oetting, which rendered legal services to the Company during the fiscal year,
on December 31, 1992. He continues to serve as counsel to the firm.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG JACOBS ENGINEERING GROUP INC., THE S&P 500 INDEX
AND THE DOW JONES HEAVY CONSTRUCTION INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period JACOBS S&P
(Fiscal Year Covered) ENGINEERING 500 INDEX DOW JONES
------------------- ---------- --------- ---------
<S> <C> <C> <C>
Measurement Pt- 1989 $100 $100 $100
FYE 1990 $151 $ 91 $100
FYE 1991 $458 $119 $120
FYE 1992 $483 $132 $124
FYE 1993 $385 $149 $126
FYE 1994 $404 $155 $140
</TABLE>
11
<PAGE>
CERTAIN TRANSACTIONS
On September 28, 1993 the Company invested $150,000, and on January 7, 1994
the Company invested $5,150,000, in Health Science Properties, Inc. ("HSP"), a
company that was then being organized as a real estate investment trust for the
purpose of purchasing or building facilities to be leased by it to
biotechnology companies as offices, laboratories and production facilities. On
various dates between September 30, 1993 and January 12, 1994, Dr. Joseph J.
Jacobs invested a total of $2,650,000, and Mr. Jerry M. Sudarsky, who was then
a director of the Company, invested a total of $650,000, in HSP. During the
same period other unrelated parties invested an additional $8,885,640 in HSP.
All of the investors received a combination of common stock, preferred stock
and notes in the same proportions, except that three of the unrelated investors
purchased only common stock. HSP has advised the Company that, as of September
30, 1994, on a fully diluted basis, the Company owned an approximately 22.5%
equity interest, and Dr. Jacobs owned an approximately 11.3% equity interest,
in HSP.
The purchase price of each class of the securities of HSP purchased by the
Company and Dr. Jacobs was determined by the promoters of HSP and was the same
purchase price as was paid for such securities by the other investors. The
Board of Directors of the Company, with Dr. Jacobs and Mr. Sudarsky absent from
the meeting, approved the amount to be invested by the Company in HSP, which
approval was conditioned upon HSP's obtaining at least $10 million of
additional capitalization from other sources and was given only after the Board
had received full disclosure from Dr. Jacobs and Mr. Sudarsky regarding their
own investments in HSP.
Messrs. David M. Petrone, a director of the Company, and Jerry M. Sudarsky, a
director of the Company until his resignation on February 1, 1994 to become
Chief Executive Officer of HSP, are directors of HSP.
EMPLOYMENT CONTRACTS AND TERMINATION
OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company has an agreement with Dr. Joseph J. Jacobs, originally entered
into in 1986 providing for base pay at an annual rate of $432,500 per year for
a term that has subsequently been extended to September 30, 1999. He does not
receive bonuses under the formula in the Incentive Bonus Plan described above
under "Board Compensation Committee Report on Executive Compensation", but he
is eligible to receive discretionary bonuses. The agreement will continue in
force whether or not Dr. Jacobs continues to be employed by the Company or
becomes disabled. If Dr. Jacobs should die during the term of the agreement,
then payments under the agreement will be made to a beneficiary named by Dr.
Jacobs. If Dr. Jacobs ceases to be an employee of the Company, he will continue
as a consultant to the Company in community and public affairs, in the
promotion of the business expansion and goodwill of the Company and in
undertaking such special assignments as the Company or its Board of Directors
may request. During the term of the agreement, the Company will provide Dr.
Jacobs with the same medical and life insurance and other benefits as are made
available to senior management officials of the Company and will provide him
with office and secretarial services. The agreement contains provisions
intended to prevent Dr. Jacobs from entering into any form of competition with
the Company or disclosing confidential information of the Company. The original
agreement, as well as the initial extensions of its term, received the approval
of the Board of Directors of the Company without dissent and with Dr. Jacobs
not voting. Subsequently, the Board of Directors delegated to the Compensation
Committee of the Board the sole power to approve amendments to the agreement
extending its term. See "Board Compensation Committee Report on Executive
Compensation", above.
12
<PAGE>
2. APPROVAL OF ERNST & YOUNG LLP AS AUDITORS
The Board of Directors, with the concurrence of the Audit Committee, has
selected Ernst & Young LLP to audit the accounts of the Company for its fiscal
year ending September 30, 1995. The Company has been advised by Ernst & Young
LLP that the firm has no relationship with the Company or its subsidiaries
other than that arising from the firm's engagement as auditors.
If the selection of Ernst & Young LLP is not approved by the holders of a
majority of the shares represented at the meeting and voting on the proposal,
or if prior to the Annual Meeting to be held in February, Ernst & Young LLP
should decline to act or otherwise become incapable of acting, or if its
employment should be otherwise discontinued by the Board of Directors, then in
any such case the Board of Directors will appoint other independent auditors
whose employment for any period subsequent to the 1995 Annual Meeting will be
subject to ratification by the shareholders at the 1996 Annual Meeting.
The Company has been advised that representatives of Ernst & Young LLP will
be present at the Annual Meeting where they will have an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE SELECTION OF ERNST &
YOUNG LLP AS AUDITORS FOR THE YEAR ENDING SEPTEMBER 30, 1995.
3. OTHER BUSINESS
The Board of Directors does not intend to present any other business for
action at the meeting and does not know of any business intended to be
presented by others.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders for consideration at the annual meeting of
shareholders to be held on Tuesday, February 13, 1996 must be received by the
Company no later than September 1, 1995 in order to be included in the
Company's proxy statement and proxy relating to that meeting.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission ("SEC") and the New York Stock Exchange initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company. Officers, directors and greater than ten-
percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms filed by them.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, except for Messrs. Dailey and Laurance, who each filed
one such report late, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with on a timely basis during the fiscal year ended September 30,
1994.
13
<PAGE>
ANNUAL REPORT AND FINANCIAL INFORMATION
A copy of the Company's annual report for the year ended September 30, 1994
is being mailed concurrently with this Proxy Statement to each shareholder of
record on the Record Date.
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF THE COMPANY'S REPORT ON
FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, TO THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION TO ANY PERSON REQUESTING IN
WRITING AND STATING THAT HE WAS THE BENEFICIAL OWNER OF COMMON STOCK OF THE
COMPANY ON JANUARY 5, 1995. THE COMPANY WILL ALSO FURNISH COPIES OF ANY
EXHIBITS TO THE FORM 10-K TO ELIGIBLE PERSONS REQUESTING EXHIBITS AT $0.50 PER
PAGE, PAID IN ADVANCE. THE COMPANY WILL INDICATE THE NUMBER OF PAGES TO BE
CHARGED FOR UPON WRITTEN INQUIRY. REQUESTS AND INQUIRIES SHOULD BE ADDRESSED
TO:
Investor Relations
Jacobs Engineering Group Inc.
251 South Lake Avenue
Pasadena, California 91101
Neither the annual report nor the Form 10-K is to be regarded as proxy
soliciting material or as a communication by means of which a solicitation of
proxies is to be made.
By Order of the Board of Directors
Robert M. Barton
Secretary
Pasadena, California
January 5, 1995
<PAGE>
JACOBS ENGINEERING GROUP INC.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS OF JACOBS ENGINEERING GROUP INC.
ANNUAL MEETING OF SHAREHOLDERS--TUESDAY FEBRUARY 14, 1995
THE UNDERSIGNED hereby appoints Joseph J. Jacobs, Noel G. Watson and Robert
M. Barton his true and lawful proxies (with full power of substitution) to vote
in his name, place and stead all shares in Jacobs Engineering Group Inc. that
the undersigned owns or is entitled to vote at the Annual Meeting of
Shareholders to be held February 14, 1995, and at any adjournment thereof, upon
the matters listed below in accordance with the following instructions:
1. To elect Joseph F. Alibrandi, Hon. Peter H. Dailey, Robert B. Gwyn and
Linda K. Jacobs, directors.
VOTE (except as marked to the contrary below) [_] DO NOT VOTE [_]
(Instructions: To withhold authority to vote for any individual nominee
write that nominee's name in the space provided below.)
--------------------------------------------------------------------------------
2. To approve Ernst & Young LLP as auditors:
YES [_]NO [_]DO NOT VOTE [_]
IF ANY OF THE FOREGOING BOXES ARE CHECKED, THE SHARES COVERED BY THIS PROXY
WILL BE VOTED IN ACCORDANCE THEREWITH. IF NO BOX IS CHECKED UNDER ANY OF THE
FOREGOING, THE SHARES WILL BE VOTED FOR THE PERSONS NOMINATED AS DIRECTORS BY
THE BOARD OF DIRECTORS AND FOR THE APPROVAL OF ITEM 2. ON OTHER MATTERS
PRESENTED, THE SHARES WILL BE VOTED IN ACCORDANCE WITH THE PROXIES' BEST
JUDGMENT.
Receipt of the Jacobs Engineering Group Inc. Proxy Statement dated January 5,
1995 and Annual Report for the year ended September 30, 1994 is hereby
acknowledged. Please vote my (our) shares as indicated on the face of this
proxy.
(L.S.)
--------------------------------
(L.S.)
--------------------------------
Dated: , 1995
-----------------
Attorneys, executors, trustees,
etc. should show such capacity
when signing and unless the
certificate(s) is (are) registered
in their names, should submit a
Proxy from the record owner.
Evidence of their authority should
accompany the Proxy. Joint owners
should each sign individually.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. PLEASE SPECIFY CHOICES,
DATE, SIGN AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED IF RETURNED IN THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES.
