<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(e)(2))
[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, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] 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 Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<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 11, 1997, 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 2000 annual
meeting;
2. To approve amendments to the 1981 Executive Incentive Plan to
reserve an additional 1,200,000 shares for that Plan and extend its
expiration date to March 1, 2001;
3. To approve the appointment of Ernst & Young LLP as auditors for the
year ending September 30, 1997; and
4. To act upon such other matters as may properly come before the
meeting.
The shareholders of record at the close of business on January 3, 1997, 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 9, 1997. The stock transfer books will not
close.
By Order of the Board of Directors
Robert M. Barton
Secretary
Dated: January 3, 1997
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 11, 1997, 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 3,
1997, 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 9, 1997, to the shareholders of record on the
Record Date. As of the Record Date the Company had 25,686,327 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 amendments to the 1981
Executive Incentive Plan described under "2. Approval of Amendments to the
1981 Executive Incentive Plan," and FOR the approval of the appointment of
Ernst & Young LLP as the independent auditors for the Company for the year
ending September 30, 1997, as described under "3. 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 purpose 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....................................... 4,053,000 15.8%
251 S. Lake Avenue
Pasadena, California 91101
The Capital Group Companies, Inc. ..................... 1,763,200 6.9%(b)
333 South Hope Street
Los Angeles, California 90071
RCM Capital Management................................. 1,370,900 5.3%(c)
Four Embarcadero Center, Suite 3000
San Francisco, California 94111
</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) of the Securities Exchange Act of 1934, as
amended and information made known to the Company.
(b) Certain operating subsidiaries of The Capital Group Companies, Inc.
exercised investment discretion over various institutional accounts that
held, as of December 29, 1995, a total of 1,763,200 shares of common stock
of the Company. At that date Capital Guardian Trust Company, a bank, and
one of such operating companies, exercised investment discretion over
1,046,200 of said shares. Also, on that date Capital Research and
Management Company, a registered investment adviser, and Capital
International Limited, another operating subsidiary, had investment
discretion with respect to 705,000 and 12,000 shares, respectively, of the
above shares.
(c) On February 5, 1996, RCM Capital Management ("RCM Capital"), a registered
investment advisor, reported that it had sole investment power over
1,370,900 shares and sole voting power over 1,107,500 shares. RCM Limited
L.P. (the general partner of RCM Capital) and RCM General Corporation (the
general partner of RCM Limited L.P.) reported that they beneficially owned
the securities reported by RCM Capital only to the extent that they might
be deemed to have beneficial ownership of securities managed by RCM
Capital.
2
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
SHARES
SUBJECT TO
NAME OF AMOUNT OF COMMON STOCK UNEXERCISED PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED(a) OPTIONS(b) TOTAL OF CLASS(c)
---------------- ---------------------- ----------- --------- -----------
<S> <C> <C> <C> <C>
DIRECTORS (EXCLUDING OF-
FICERS):
Joseph F. Alibrandi..... 2,000 3,000 5,000 *
Peter H. Dailey......... 2,000 3,000 5,000 *
Robert B. Gwyn.......... 1,000 1,250 2,250 *
Linda K. Jacobs......... 239,965 3,000 242,965 0.95%
James Clayburn LaForce.. 2,000 3,000 5,000 *
Dale R. Laurance........ 1,000 1,750 2,750 *
Linda Fayne Levinson.... -- 500 500 *
David M. Petrone........ 10,000 3,000 13,000 *
James L. Rainey, Jr. ... 200 3,000 3,200 *
NAMED EXECUTIVE OFFI-
CERS:
Joseph J. Jacobs........ 4,053,000 -- 4,053,000 15.78%
Noel G. Watson.......... 166,824 108,600 275,424 1.07%
William R. Kerler....... 29,717 55,400 85,117 0.33%
Richard J. Slater....... 34,591 35,600 70,191 0.27%
Thomas R. Hammond....... 3,011 36,000 39,011 0.15%
All directors and execu-
tive officers as a
group.................. 4,662,467 501,423 5,163,890 20.10%
</TABLE>
- --------
* Less than 0.1%
(a) Ownership is direct.
(b) Includes only those unexercised options that are exercisable within 60
days following the date of this proxy statement.
(c) Calculation is based on the number of shares of common stock outstanding
as of January 3, 1997.
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 presently
end at the annual meetings in 1997, 1998 and 1999, respectively. Classes I and
II have four directors, each, and Class III has three directors.
The nominees for Class I are to be voted upon at this annual meeting. The
directors in Classes II and III will continue in office until expiration of
their respective terms. The Board of Directors has nominated Noel G. Watson,
James Clayburn LaForce, David M. Petrone and James L. Rainey, Jr. for election
as Class I directors for three year terms expiring at the 2000 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.
3
<PAGE>
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 1997 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 80, 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 60, has been with the Company since
1965 and has held senior executive positions with the Company
for more than the past five years. On November 19, 1992
Mr. Watson was elected Chief Executive Officer of the Company.
Joseph F. Alibrandi, Director. Mr. Alibrandi, age 68, has been II 1988
Chairman of the Board and Chief Executive Officer of Whittaker
Corporation for more than five years. Mr. Alibrandi is also a
director of Burlington Northern Southern Pacific Corp.,
Catellus Development Corporation, BankAmerica Corporation and
Bank of America, N.T.&S.A.
The Hon. Peter H. Dailey, Director. Mr. Dailey, age 66, is II 1991
Chairman 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 is also
a Director of Chicago Title and Trust, Pinkerton's, Inc.,
Sizzler, Inc. and Wirthlin Worldwide, and serves as CEO and
Chairman of Memorex Telex, Inc. (which filed for bankruptcy
protection on October 15, 1996).
Robert B. Gwyn, Director. Mr. Gwyn, age 57, is currently a II 1995
Managing Director of Amaryn Group, a private investment
company. He was President, CEO and Chairman of the 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 49, 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 68, was Dean I 1987
of 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 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.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITIONS DIRECTOR
HELD WITH THE COMPANY CLASS SINCE
--------------------- ----- --------
<S> <C> <C>
Dale R. Laurance, Director. Dr. Laurance, age 51, is the III 1994
President 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., Leslie's
Poolmart, Inc., the Armand Hammer Museum of Art and Cultural
Center, Inc., the Chemical Manufacturers Association, and the
American Petroleum Institute.
Linda Fayne Levinson, Director. Ms. Levinson, age 54, has III 1996
served as the President of Fayne Levinson Associates, Inc., a
general management consulting firm to consumer and financial
service organizations, since 1982. Ms. Levinson was an
executive at Creative Artists Agency, Inc. from 1993 through
February 1994 and was a partner of Wings Partners, a Los
Angeles-based merchant bank, from 1989 until 1993. From 1984
until 1987 Ms. Levinson was a Senior Vice President of American
Express Travel Related Services Co., Inc., and from 1972
through 1981 she was at McKinsey & Co., a worldwide general
management consulting firm, where she became the first woman
partner in 1979. Ms. Levinson also serves as a member of the
Boards of Genentech Inc., NCR Corporation and Egghead, Inc.
David M. Petrone, Director. Mr. Petrone, age 52, is Chairman of I 1987
Housing Capital Company, a real estate lending firm. He was
Vice Chairman of Wells Fargo & Co. from 1986 until March 1,
1992. He is a director of Spieker Properties, Inc., Health
Science Properties, Inc. and Finelite, Inc.
James L. Rainey, Jr., Director. Mr. Rainey, age 67, is retired. I 1993
He 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.,
Wirthlin Worldwide, Mid-America Bio-Mat, Inc. and Envino
Nutrients, Inc.
</TABLE>
Board Committees. The Board has two standing committees. The Audit Committee
advises the Board on internal 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 1996 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 awards (stock option grants and
restricted stock) under the Company's 1981 Executive Incentive Plan other than
options issued under the Outside Director Stock Option provisions of that
Plan. During fiscal 1996 this committee held eight meetings. The members of
the Compensation and Benefits Committee are Dr. LaForce (Chairman), Mr. Gwyn,
Dr. Laurance and Ms. Levinson.
Compensation of Directors. The Company pays directors who are not employed
by the Company ("Outside Directors") a retainer at the rate of $25,000 per
year plus a fee of $1,000 for each meeting of the board and each committee on
which they serve that they attend. Pursuant to the terms of the Outside
Director Stock Option Plan, each of the Outside Directors received an option
for 2,000 shares of common stock on April 1, 1993, and has received an option
for 1,000 shares at an option price equal to the Fair Market Value (as defined
in the Plan) of the common stock on the first day of March of each year
commencing March 1, 1994.
The Board of Directors held nine meetings during the year ended September
30, 1996. All directors attended at least 75% of all meetings of the Board of
Directors and of the committees on which they served during fiscal 1996 except
Mr. Alibrandi who missed two meetings of the Board and one meeting of the
Audit Committee.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual and long-
term compensation of the Chief Executive Officer and the other four most
highly compensated officers ("Named Executive Officers") of the Company for
services in all capacities to the Company and its subsidiaries during its
1994, 1995 and 1996 fiscal years:
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION (1) COMPENSATION
-------------------- OTHER ANNUAL ------------ ALL OTHER
COMPENSATION OPTIONS/SARS COMPENSATION
NAME YEAR SALARY ($) BONUS ($) ($) (2) (SHS)(3) ($) (4)
---- ---- ---------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Noel G. Watson 1996 $516,670 $453,510 $46,620 60,000 $4,630
Chief Executive 1995 464,310 319,100 27,440 10,000 4,920
Officer 1994 432,200 21,750 21,390 100,000 4,440
Joseph J. Jacobs 1996 432,000 -0- -0- -0- -0-
Chairman of the 1995 432,000 -0- -0- -0- -0-
Board 1994 432,000 -0- -0- -0- -0-
William R. Kerler 1996 318,760 279,790 24,460 15,000 4,630
Executive Vice 1995 284,430 195,480 13,660 9,000 4,920
President 1994 250,900 10,600 70,780(5) 20,000 4,460
Richard J. Slater 1996 254,670 167,660 16,240 10,000 4,630
Group Vice 1995 239,050 123,220 10,080 8,000 4,920
President 1994 223,650 8,440 7,940 20,000 4,440
Thomas R. Hammond 1996 239,590 157,730 8,280 10,000 4,750
Group Vice 1995 215,930 111,300 4,670 8,000 5,080
President 1994 187,330 7,070 4,030 10,000 4,990
</TABLE>
- --------
(1) Represents amounts earned by the named executive during the year
indicated, and includes amounts deferred under the Jacobs Engineering
Group Inc. 401(k) Plus Savings Plan and Trust (the "(S) 401(k) Plan") and
the Company's nonqualified Executive Deferral Plans (the "EDPs").
(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.
(3) Consists solely of non-qualified stock options pursuant to the 1981
Executive Incentive Plan.
(4) Consists solely of Company contributions to the (S)401(k) Plan.
(5) Also includes reimbursement of income tax paid on reimbursed moving
expenses.
6
<PAGE>
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, and consultants and advisors to,
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 1996 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 VALUES
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION OVER
OPTIONS PERCENTAGE EXERCISE MARKET PRICE OPTION TERM (10 YRS.)
GRANTED OF PRICE ON DATE OF EXPIRATION -------------------------------
NAME (SHS)(1) TOTAL (2) ($/SH) GRANT ($/SH) DATE 0% ($) 5% ($) 10% ($)
---- -------- ---------- --------- ------------ ----------- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Noel G. Watson.......... 10,000 14.46% $24.750 $24.750 07-Dec-2005 $-- $155,650 $394,450
50,000 28.375 28.375 13-Feb-2006 -- 892,240 2,261,120
William R. Kerler....... 15,000 3.61% 27.875 27.875 01-Apr-2006 -- 262,960 666,380
Richard J. Slater....... 10,000 2.41% 27.875 27.875 01-Apr-2006 -- 175,300 444,260
Thomas R. Hammond....... 10,000 2.41% 27.875 27.875 01-Apr-2006 -- 175,300 444,260
Gain for all shareholders (based on 25,745,329 shares
outstanding at September 30, 1996 and a year-end stock
price of $22.50 per share)............................ 364,299,730 923,207,040
Gain of Named Executive Officers as a percent of total
gain to all shareholders.............................. 0.46% 0.46%
</TABLE>
- --------
(1) All grants were nonqualified options pursuant to the 1981 Plan.
(2) Calculation based upon grants of options for 406,000 shares, and awards of
9,000 shares of restricted stock during fiscal 1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information regarding option exercises during
the fiscal year 1996 by the Named Executive Officers and the value of their
unexercised options of September 30, 1996. All options were granted under the
1981 Executive Incentive Plan. The Company has not granted any stock
appreciation rights.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FYE (SHARES) OPTIONS AT FYE($)
ACQUIRED TOTAL VALUE ------------------------- -------------------------
NAME ON EXERCISES REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Noel G. Watson........ 12,000 $251,118 96,600 136,200 $351,100 $24,000
William R. Kerler...... 2,400 38,539 55,400 43,600 307,727 67,962
Richard J. Slater...... -- -- 35,600 33,800 164,906 59,287
Thomas R. Hammond...... 1,600 33,482 34,000 31,200 123,535 28,200
</TABLE>
7
<PAGE>
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 fiscal 1996 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 senior management personnel being offered by companies that the
Company regards as its competitors.
The Committee also considered a regression analysis of the executive
compensation paid by certain 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., 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 1996 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 1996.
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, 2001, but there has been no change to Dr. Jacobs'
base salary since 1987. The Committee has approved these amendments
8
<PAGE>
based on its subjective judgment of Dr. Jacobs' past and continuing
contributions to the business strategy, marketing and reputation of the
Company.
Annual Incentive 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. Generally, 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.
The bonus paid to Mr. Watson for 1996 was determined by the Committee 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
1996 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 three of the largest competitors of the Company that are
public companies (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 1996 was determined by the
Committee in the same manner as the option grants to the other executive
officers. 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. The Committee believes that the compensation payable for fiscal
year 1997 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.
JAMES CLAYBURN LAFORCE, Chairman
LINDA FAYNE LEVINSON
ROBERT B. GWYN
DALE R. LAURANCE
9
<PAGE>
PERFORMANCE GRAPHS
The following graphs show the changes over the past five- and ten-year
periods in the value of $100 invested in (1) Jacobs Engineering Group Inc.;
(2) the Standard & Poor's 500 Index; and (3) the Dow Jones Heavy Construction
Group Index. The values of each investment are based on share price
appreciation, with reinvestment of dividends, if any were paid. For each
graph, the investments are assumed to have occurred at the beginning of each
period presented. Because the Dow Jones Heavy Construction Group Index is
available beginning in 1987 (a nine-year period), the ten-year graph of that
index begins with $190 invested on September 30, 1987 (which is the
appreciated value of the initial $100 invested in Jacobs Engineering Group
Inc.).
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG JACOBS ENGINEERING GROUP INC., THE S&P 500 INDEX AND
THE DOW JONES HEAVY CONSTRUCTION GROUP INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Jacobs S&P 500 Dow Jones
- ------------------- ------ ------- ----------
<S> <C> <C> <C>
Measurement Pt- 1991 $100 $100 $100
FYE 1992 $105 $111 $102
FYE 1993 $ 84 $126 $103
FYE 1994 $ 88 $130 $124
FYE 1995 $ 90 $169 $119
FYE 1996 $ 81 $203 $132
</TABLE>
10
<PAGE>
COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN
AMONG JACOBS ENGINEERING GROUP INC., THE S&P 500 INDEX AND
THE DOW JONES HEAVY CONSTRUCTION GROUP INDEX (FOR NINE YEARS)
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Jacobs S&P 500 Dow Jones
- ------------------- ------ ------- ---------
<S> <C> <C> <C>
Measurement Pt- 1986 $100 $100 $
FYE 1987 $190 $143 $190
FYE 1988 $290 $126 $173
FYE 1989 $354 $167 $238
FYE 1990 $535 $152 $238
FYE 1991 $1,621 $199 $285
FYE 1992 $1,709 $221 $293
FYE 1993 $1,364 $250 $298
FYE 1994 $1,430 $259 $333
FYE 1995 $1,459 $336 $361
FYE 1996 $1,320 $404 $386
</TABLE>
The cumulative total return information used to prepare the above graphs was
provided by Media General Financial Services, and Research Holdings, Ltd.
11
<PAGE>
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 $432,200 per year for
a term that has subsequently been extended to September 30, 2001. 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.
INDEBTEDNESS OF MANAGEMENT
On January 3, 1997, Mr. Paul A. Miskimin, an executive officer of the
Company, owed the Company $83,000; the largest amount owed by Mr. Miskimin
during the period September 30, 1995 through January 3, 1997 was $83,000. This
amount was evidenced by promissory notes bearing interest based on the prime
rate and represented advances made to facilitate Mr. Miskimin's relocation to
the Company's headquarters in Pasadena, California.
2. APPROVAL OF AMENDMENTS TO THE 1981 EXECUTIVE INCENTIVE PLAN
The shareholders will be asked to approve certain amendments to the Jacobs
Engineering Group Inc. 1981 Executive Plan (the "1981 Plan"), including an
increase in the number of shares reserved for the 1981 Plan by 1,200,000
shares of common stock to a total of 1,684,350 shares and an extension of the
expiration date of the 1981 Plan to March 1, 2001. The amendments to the 1981
Plan requiring shareholder approval are discussed below under "Amendments
Requiring Shareholder Approval."
The purpose of the 1991 Plan is to attract and retain, and to provide an
incentive for, management and key employees of the Company and its
subsidiaries. The 1981 Plan was originally adopted by the Board of Directors
on October 29, 1980, and was approved by the shareholders of the Company on
February 10, 1981. On February 9, 1982, the shareholders approved amendments
to the Plan permitting the grant of incentive stock options under the Plan. On
February 14, 1989, the shareholders readopted the 1981 Plan and extended its
expiration date from January 1, 1999. On February 11, 1992, the shareholders
approved an addition of 1,771,128 shares of common stock to the 1981 Plan.
12
<PAGE>
ADMINISTRATION
The 1981 Plan is administered by the Compensation and Benefits Committee of
the Board of Directors. The Committee is authorized to approve all incentive
awards under the 1981 Plan, to interpret the Plan, to fix the forms and terms
of incentive awards and the times of issuance, to implement any provision of
the 1981 Plan by appropriate rules and determinations and to exercise such
powers as may be necessary to carry out their functions under the 1981 Plan.
The members of the Committee must be directors who are not eligible to receive
incentive awards under the 1981 Plan or any other plan of the Company providing
for the award of stock, stock options or stock appreciation rights and who have
not been so eligible for at least a year prior to their service on the
Committee.
ELIGIBILITY FOR AWARDS
Incentive awards may be granted only to salaried officers or other salaried
key employees of the Company and its subsidiaries. There are presently
approximately 200 employees eligible to receive awards under the 1981 Plan.
FORMS OF AWARDS
The Plan provides for the grant of the following types of awards:
1. Stock Options. The Company may grant nonqualified stock options and
incentive stock options ("ISOs") under the 1981 Plan. A nonqualified stock
option gives the optionee the right to purchase common stock of the Company at
a price that is not less than 85% of the fair market value of such shares on
the date the option is granted. ISOs must comply with Section 422 of the
Internal Revenue Code of 1986. The total fair market value, determined at the
time the option was granted, of shares for which ISOs first becoming
exercisable by an optionee during any calendar year may not exceed $100,000.
Except under certain circumstances, an employee may not be granted an ISO if,
immediately after the ISO is granted, the optionee would own shares, including
options for shares, representing more than five percent of the voting power or
value of all classes of shares of the Company.
Under both forms of option an optionee must agree as a condition to the
exercise of the option to remain in the employ of the Company or its
subsidiaries for not less than one year after the grant of the option. The
option will become exercisable in such amounts and during such time periods as
the Committee in its sole discretion determines and provides in the option
agreement that it enters into with the option holder. In no event, however,
will any option be exercisable after the expiration of the tenth year following
the date on which the option is granted. Options are not assignable or
transferable other than by will or by the laws of descent and distribution or a
qualified domestic relations order and may be exercised during the lifetime of
the optionee only by him. An option expires when the optionee's employment is
terminated for cause. If an optionee dies or becomes permanently disabled, then
the option may be exercised within twelve months following the date of death or
permanent disability. If termination is for any other reason, the optionee has
three months in which to exercise the option. In all cases the option may be
exercised only for the installments that are otherwise exercisable at
termination of employment, and neither termination, death nor disability will
extend any installment that would otherwise expire.
The purchase price payable upon the exercise of an option is payable in full
in cash or its equivalent acceptable to the Company, as determined by the
Committee. In the discretion of the Committee, the purchase price may be paid
by the assignment and delivery to the Company of shares of common stock of the
Company already owned by the optionee or a combination of shares and cash equal
in value to the option exercise price.
13
<PAGE>
Withholding taxes due upon the exercise of nonqualified options may be
satisfied in whole or in part by reassigning to the Company stock acquired upon
the exercise. The Committee is given the authority to adopt special rules for
the payment of withholding taxes with stock by executive officers in order to
comply with the rules of the Securities Exchange Commission under Section 16 of
the Securities Exchange Act of 1934.
2. Restricted Stock. The Company may award and issue to an employee
restricted stock, which is common stock of the Company subject to certain
restrictions. Restricted stock may not be sold, exchanged, donated, pledged or
otherwise transferred until the expiration of the period of time fixed by the
Committee in the agreement with the employee. The 1981 Plan provides that, with
respect to each issuance of shares of restricted stock to an employee, no more
than 20% of such shares may be released from the restrictions on transfer
during each year after the first year that the shares were issued to the
employee. In the event of termination of an employee's employment with the
Company for any reason (including death, unless the Committee in its sole
discretion decides to release the shares from the restrictions on transfer
following the death of the employee), the employee is obligated, for no
consideration, to forfeit and surrender the shares of the Company to the extent
that the shares are still subject to the restrictions on transfer. Withholding
taxes due from the employee upon the lapse of restrictions may be satisfied in
whole or in part by reassigning to the Company shares of stock of the Company
that bear no restriction.
3. Stock Appreciation Rights. The Company may grant stock appreciation rights
("SARs") in conjunction with a stock option pursuant to which the holder can
elect to exercise the SAR and surrender the related unexercised option in
exchange for cash and/or shares in an amount equivalent to the excess of the
fair market value of the option shares as of the date of exercise over the
purchase price specified in the option agreement for such shares. The Plan
confers on the Committee discretion to make payment in shares, in cash or in a
combination of both. The SAR is exercisable only at the time or times, and only
to the extent, that the related option is exercisable. To the extent that
options are exercisable, any related SAR will be proportionately reduced by a
number of shares equal to the number of share with respect to which the options
are exercised.
FEDERAL INCOME TAX CONSEQUENCES
Nonqualified Options and SARs. An employee will not recognize any income upon
receipt of a nonqualified stock option or SAR, and the Company will not be
entitled to a deduction for federal income tax purposes in the year of grant.
Ordinary income will be realized by the holder at the time the nonqualified
stock option or SAR is exercised and the shares are transferred or the cash
paid to him. The amount of such income, in the case of a nonqualified stock
option, will be the difference, if any, between the option price and the fair
market value of the shares on the date of exercise; and, in the case of SARs,
will be equal to the cash received and/or the fair market value of the shares
received.
ISOs. An employee who receives an ISO will not recognize any income for
federal income tax purposes upon receipt of the ISO and the Company will not
realize a deduction for federal income tax purposes. However, the difference
between the fair market value of the stock on the date of grant and the option
exercise price is a tax preference item that may subject the optionee to the
alternative minimum tax. If the optionee does not dispose of the ISO shares
within two years from the date the option was granted or within one year after
the shares were transferred to him on exercise of the option, then that portion
of the gain on the sale of the shares that is equal to the difference between
the sales price and the option exercise price will be treated as a long term
capital gain. The Company will not be entitled to a deduction either at the
time the employee exercises the ISO or subsequently sells the ISO shares. If
the employee sells the ISO shares within two years after the date the ISO is
granted or within one year after the date the ISO is exercised, then the sale
is considered a disqualifying sale,
14
<PAGE>
and the spread on exercise will be taxed as compensation income. The balance of
the gain will be treated as long or short term capital gain depending on the
holding period. If the shares decline in value after the date of exercise, the
compensation income will be limited to the difference between the sale price
and the amount paid for the shares. The tax will be imposed in the year the
disqualifying sale is made. The Company will be entitled to a deduction equal
to the ordinary income recognized by the employee.
Restricted Stock. An employee receiving restricted stock under the Plan will
not recognize any income upon receipt of the restricted stock. Ordinary income
will be realized by the holder at the time that the restrictions on transfer
are removed or have expired. The amount of ordinary income will be equal to the
fair market value of the shares on the date that the restrictions on transfer
have been removed. The Company will be entitled to a deduction at the same time
and in the same amount as the ordinary income the employee is deemed to have
realized as described above.
Generally, when an employee disposes of shares acquired under the 1981 Plan,
the difference between the sales price and his basis in such shares will be
treated as long or short-term capital gain or loss depending upon the holding
period for the shares.
AMENDMENT OF THE PLAN
The Board of Directors may terminate, modify or amend the 1981 Plan at any
time without shareholder approval, except that shareholder approval is required
for any amendment that would increase the number of shares reserved for the
1981 Plan, accelerate the removal of restrictions on restricted stock, increase
the time period during which SARs or options may be exercised, extend the life
of the 1981 Plan or materially increase the benefits accruing to participants
under the 1981 Plan.
ADJUSTMENT OF AWARDS
In the event of any change in capitalization, such as a stock dividend or
stock split, or in the event of a merger where the Company is the surviving
corporation, appropriate adjustments may be made in the awards that have been
or may be granted under the Plan. In the event that the Company is not the
surviving corporation in a merger or other reorganization, then all options and
stock appreciation rights then outstanding under the Plan will be fully vested
and exercisable, and the forfeiture restrictions on restricted stock will
lapse, unless the merger or reorganization agreement provides participants with
substantially similar rights.
CHANGE IN CONTROL OF THE COMPANY
The Board has adopted an amendment to the 1981 Plan providing that, if the
employment with the Company of a holder of an award under the 1981 Plan is
terminated for any reason within three years following a "change in control" of
the Company, then all options and SARs held by him under the 1981 Plan will be
fully vested and exercisable and all forfeiture provisions imposed on
restricted stock will lapse. A "change in control" means a change in control of
such a nature that it would be required to be reported to the United States
Securities and Exchange Commission, and in any event will be deemed to have
occurred if (i) any person is or becomes the beneficial owner, directly or
indirectly, of securities representing 25% or more of the combined voting power
for election of directors of the Company, (ii) during any period of two
consecutive years or less individuals who at the beginning of the period
constituted all of the members of the Board of Directors of the Company fail to
constitute at least a majority of the Board of Directors, unless the election
or nomination for election of each new director was approved by a vote of at
least two-thirds of the directors still in office who were directors at the
beginning of the period, (iii) the shareholders of the Company approve any
merger as a result of which the
15
<PAGE>
common stock would be changed, converted or exchanged for the shares of another
corporation, any liquidation of the Company or any sale or other disposition of
50% or more of the assets or earning power of the Company, or (iv) the
shareholders of the Company approve a merger as a result of which persons who
were shareholders of the Company immediately prior to the merger will have
beneficial ownership of less than 50% of the combined voting power for the
election of directors of the surviving corporation following the merger.
However, in no such event will a change in control be deemed to have occurred
if prior to the occurrence of any event that would otherwise cause a change in
control the Board of Directors determines that such event will not constitute a
change in control.
OUTSIDE DIRECTOR STOCK OPTIONS
On February 14, 1994 the shareholders adopted an Outside Director Stock
Option Plan as part of the 1981 Plan and reserved 100,000 shares for the
Outside Director Stock Option Plan. Under the Outside Director Stock Option
Plan directors of the Company who are not employed by the Company are
automatically granted options for 1,000 shares on the first day of March of
each year at an option price equal to the greater of the average closing price
of the shares for the ten trading days ending on the second trading day prior
to the date of grant and 85% of the closing price on the date of grant. The
options are exercisable in four annual installments of 250 shares each on the
first through the fourth anniversaries of the date of grant and expire on the
earlier of ten years from the date of grant and varying periods of from three
months to a year following the disability, retirement or death of the outside
director.
The Outside Director Stock Option Plan may be amended only by action of the
shareholders. The only effect on the Outside Director Stock Option Plan of the
amendments to the 1981 Plan to be acted upon at the shareholders' meeting will
be extend the term of that Plan to March 1, 2001. There are presently 59,750
shares remaining for grants under the Outside Director Stock Option Plan. See
"Security Ownership of Directors, Nominees and Named Executive Officers,"
above, for information about outstanding Outside Director Stock Options.
AMENDMENTS REQUIRING SHAREHOLDER APPROVAL
Increase in Shares. Under the 1981 Plan, the Company was originally
authorized to grant awards with respect to an aggregate of 4,081,128 shares of
common stock, as adjusted for stock splits and stock dividends. However, new
awards may be granted with respect to awards, including options, that have
expired, but new awards may not be granted with respect to shares surrendered
in connection with the exercise of an SAR. Options for a total of 4,593,604
shares have been granted under the 1981 Plan. Of these, options for 1,788,055
shares have been exercised, options for 1,066,826 shares have expired, options
for 1,738,723 shares are outstanding, and 484,350 shares remain available for
grants. A total of 70,000 shares of restricted stock and no SARs have been
awarded under the 1981 Plan. All outstanding options are non-qualified stock
options. The Board of Directors has approved an increase in the number of
shares reserved for the 1981 Plan by 1,200,000, so that there will be a total
of 1,684,350 shares reserved for the grant of incentive awards, including
options, under the 1981 Plan. For information about options granted to and
exercised by the executive officers of the Company, see "1. Election of
Directors--Stock Options," above.
Extension of the 1981 Plan to March 1, 2001. The 1981 Plan presently expires
on January 1, 1999. The Company believes that the increase of 1,200,000 shares
in the reserve for the 1981 Plan should be sufficient to permit grants of
options and other awards under the 1981 Plan beyond that date. Accordingly, the
shareholders will be asked to extend the expiration date of the 1981 Plan to
March 1, 2001.
16
<PAGE>
The last reported sale of the common stock of the Company on the New York
Stock Exchange on January 3, 1997, was at $24.875 per share.
REQUIRED VOTE
The amendments to the 1981 Plan set forth above under "Amendments Requiring
Shareholder Approval" require the approval of the holders of a majority of the
shares present at the annual meeting and voting on the proposal. THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE YES ON THESE AMENDMENTS.
3. 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, 1997. 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 1997 Annual Meeting will be
subject to ratification by the shareholders at the 1998 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, 1997.
4. 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.
17
<PAGE>
SHAREHOLDERS' PROPOSALS
Proposals of shareholders for consideration at the annual meeting of
shareholders to be held on Tuesday, February 10, 1998, must be received by the
Company no later than September 5, 1997, in order to be included in the
Company's proxy statement and proxy relating to that meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own beneficially 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 from its
directors and executive officers that no other reports were required, 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, 1996, except as follows: Dr.
Linda K. Jacobs, a Director, filed one report late; Mr. John McLachlan, a
Group Vice President, filed two reports late; and Mr. Paul Miskimin, a Senior
Vice President, filed one report late.
ANNUAL REPORT AND FINANCIAL INFORMATION
A copy of the Company's annual report for the year ended September 30, 1996,
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 3, 1997. 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 3, 1997
18
<PAGE>
- -------------------------------------------------------------------------------
PROXY
SOLICITED BY THE BOARD OF DIRECTORS OF JACOBS ENGINEERING GROUP INC.
ANNUAL MEETING OF SHAREHOLDERS--Tuesday February 11, 1997
JACOBS ENGINEERING GROUP INC.
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 11, 1997, and at any adjournment thereof,
upon the matters listed below in accordance with the following instructions:
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.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark
your votes as [X]
indicated in
this example
IF ANY OF THE FOLLOWING BOXES ARE CHECKED, THE SHARES COVERED BY THIS PROXY
WILL BE VOTED IN ACCORDANCE THEREWITH. IF NO BOX IS CHECKED UNDER ANY OF THE
FOLLOWING, THE SHARES WILL BE VOTED FOR THE PERSONS NOMINATED AS DIRECTORS BY
THE BOARD OF DIRECTORS AND FOR THE APPROVAL OF ITEMS 2 AND 3. ON OTHER MATTERS
PRESENTED, THE SHARES WILL BE VOTED IN ACCORDANCE WITH THE PROXIES' BEST
JUDGMENT.
1. ELECTION OF DIRECTORS
NOMINEES:
Noel G. Watson, James Clayburn La Force, David M. Petrone and James L.
Rainey, Jr.
FOR WITHHELD
FOR ALL
[_] [_]
WITHHELD FOR: (Write that nominee's name in the space provided below).
- -------------------------------------------------------------------------------
2. To approve amendments to the 1981 Executive Incentive Plan.
[_] [_] [_]
FOR AGAINST ABSTAIN
3. To approve Ernst & Young LLP as auditors.
[_] [_] [_]
FOR AGAINST ABSTAIN
Receipt of the Jacobs Engineering Group Inc. Proxy Statement dated January 3,
1997 and Annual Report for the year ended September 30, 1996 is hereby
acknowledged. Please vote my (our) shares as indicated on the face of this
proxy.
Signature(s) ___________________________ Date ______________________________
NOTE: 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.
