As filed with the Securities and Exchange Commission on April 3, 1995
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
GILBERT ASSOCIATES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
GILBERT ASSOCIATES, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(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:(1)
- --------------------------------------------------------------------------------
(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 Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
GILBERT ASSOCIATES, INC.
P.O. BOX 1498 READING, PA. 19603
NOTICE OF ANNUAL MEETING OF HOLDERS OF CLASS B COMMON STOCK
TO BE HELD JULY 28, 1995
Notice is hereby given that the Annual Meeting of holders of Class B Common
Stock of GILBERT ASSOCIATES, INC. (the "Company") will be held at The Sheraton
Berkshire Hotel, Woodland & Paper Mill Roads, Wyomissing, Pennsylvania, on
Friday, July 28, 1995 at 11:00 o'clock in the morning (local time):
For the election of seven (7) directors of the Company;
To consider the ratification of the selection by the Board of Directors of
Coopers & Lybrand L.L.P. as independent auditors for the year 1995; and
For the transaction of such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
ONLY HOLDERS OF RECORD OF ISSUED AND OUTSTANDING SHARES OF CLASS B COMMON
STOCK OF THE COMPANY AT THE CLOSE OF BUSINESS ON JUNE 30, 1995 ARE ENTITLED TO
NOTICE OF, AND TO VOTE AT, THE MEETING. Such stockholders may vote in person or
by proxy. The stock transfer books of the Company will not be closed.
By order of the Board of Directors
THOMAS F. HAFER
Secretary
Dated: Reading, Pennsylvania
July 6, 1995
STOCKHOLDERS ARE URGED TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY IN
THE ACCOMPANYING ENVELOPE. THE PROXY IS REVOCABLE AT ANY TIME BY A WRITTEN
INSTRUMENT SIGNED IN THE SAME MANNER AS THE PROXY AND RECEIVED BY THE SECRETARY
OF THE COMPANY AT OR BEFORE THE ANNUAL MEETING. IF YOU ATTEND THE MEETING, YOU
MAY, IF YOU WISH, REVOKE YOUR PROXY BY VOTING IN PERSON.
<PAGE>
GILBERT ASSOCIATES, INC.
P.O. BOX 1498 READING, PA. 19603
(610) 775-5900
PROXY STATEMENT ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING--JULY 28, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Gilbert Associates, Inc. (the "Company")
for use at the Annual Meeting of holders of Class B Common Stock of the Company
to be held at The Sheraton Berkshire Hotel, Woodland & Paper Mill Roads,
Wyomissing, Pennsylvania, at 11:00 A.M. on Friday, July 28, 1995, and at any
adjournment thereof. The Proxy Statement and form of Proxy were first sent or
given to stockholders on or about July 6, 1995.
Only holders of record at the close of business on June 30, 1995 of the
outstanding shares of the Company's Class B Common Stock are entitled to vote at
the meeting. Only directors of the Company, "active employees" of the Company
and of its subsidiaries in which it owns, directly or indirectly, 100% of the
voting shares, and certain trusts for the benefit of such employees, are
entitled to hold Class B Common Stock. (On June 30, 1995, there were outstanding
of record 490,497 shares of the Company's Class B Common Stock.) Such eligible
stockholders are entitled on all matters to cast one vote for each share held of
record. In addition, there were outstanding of record on such date 6,415,209
shares of the Company's Class A Common Stock, excluding treasury shares. Holders
of Class A Common Stock are not eligible to vote at the meeting.
If the enclosed Proxy is appropriately marked, signed and returned in time
to be voted at the meeting, the shares represented by the Proxy will be voted in
accordance with the instructions marked thereon. Signed Proxies not marked to
the contrary will be voted (i) for the election of directors, (ii) for the
proposal to ratify the selection by the Board of Directors of Coopers & Lybrand
L.L.P. as independent auditors for the year 1995 and (iii) as the proxy holders
may in their discretion determine, on any other matter which may properly come
before the meeting or any adjournment or adjournments thereof.
Abstentions and withheld votes are not counted as votes "for" or "against" a
proposal, but where the affirmative vote of a majority of the shares of Class B
Common Stock present or represented on a proposal is required for approval,
abstentions and withheld votes are counted in determining the number of shares
present or represented.
STOCKHOLDERS MAY OBTAIN, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 30, 1994, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FROM THOMAS F. HAFER, SECRETARY OF THE
COMPANY, AT GILBERT ASSOCIATES, INC., P.O. BOX 1498, READING, PA 19603. HIS
TELEPHONE NUMBER IS (610) 775-0975.
<PAGE>
1. ELECTION OF DIRECTORS
A. NOMINEES FOR DIRECTOR
At the meeting, seven directors are to be elected to hold office until the
next Annual Meeting of Stockholders and until their successors are elected and
have qualified. It is the intention of the persons named as proxy holders in the
enclosed Proxy to vote all shares that they represent for the election of the
seven nominees listed below. Any stockholder who wishes to withhold from the
proxy holders authority to vote for the election of one or more directors may do
so by marking his Proxy to that effect. Should any nominee become unable to
accept nomination or election, the proxy holders may exercise their voting power
in favor of such other person or persons as the Board of Directors of the
Company may recommend. The Board of Directors, however, has no reason to believe
that any of the nominees listed below will be unable to serve as a director.
Elections of directors are to be determined by a plurality vote.
Each of the nominees is now a director of the Company. Their present
positions with the Company as well as other relevant information are set forth
below:
<TABLE><CAPTION>
YEAR IN WHICH
FIRST BECAME
NAME AGE POSITION WITH COMPANY DIRECTOR
- ------------------------------- --- ---------------------- -------------
<S> <C> <C> <C>
John W. Boyer, Jr. ............ 66 -- 1984
Timothy S. Cobb................ 53 President and Chief 1993
Executive Officer
Donald E. Lyons................ 65 -- 1989
Alexander F. Smith............. 66 Chairman of the Board 1970
James W. Stratton.............. 58 -- 1984
James A. Sutton................ 61 -- 1986
Donald K. Wilson, Jr. ......... 59 -- 1990
</TABLE>
Mr. Boyer retired in May 1993 as Chairman of Philadelphia Suburban
Corporation whose principal subsidiary, Philadelphia Suburban Water Company, is
a regulated water utility. Mr. Boyer served in various senior executive
positions with that company since 1981. He is a director of Philadelphia
Suburban Corporation, Betz Laboratories, Inc. and Rittenhouse Trust Company.
Since 1993, Mr. Boyer has been Distinguished Visiting Professor of Finance,
Eastern College, St. Davids, Pennsylvania.
Mr. Cobb has been Chief Executive Officer of the Company since March 1994
and President and Chief Operating Officer of the Company since October 1993. He
served as President of Gilbert/Commonwealth, Inc., then a subsidiary of the
Company, from January 1991 to September 1993 and as President of GAI-Tronics,
a subsidiary of the Company, from June 1988 to December 1991.
For five years prior to his retirement in 1987, Mr. Lyons served as Chief
Executive Officer and President of the Power Systems Group of Combustion
Engineering, Inc., a supplier of technology, equipment and services to the power
and process industries. Mr. Lyons is also a director of Nuclear Support
Services, Inc.
For more than five years prior to his retirement as President in October
1993 and as Chief Executive Officer of the Company in March 1994, Mr. Smith
served as President and Chief Executive
2
<PAGE>
Officer of the Company. Mr. Smith also serves as a director of Stratton Monthly
Dividend Shares, Inc., Stratton Growth Fund, Inc. and Stratton Small Cap Yield
Fund.
Since 1972, Mr. Stratton has been Chairman and Chief Executive Officer of
Findatex, a financial services firm, and President of the Stratton Management
Company, investment advisors. Mr. Stratton is also a director of Stratton Growth
Fund, Inc., Stratton Monthly Dividend Shares, Inc., Stratton Small Cap Yield
Fund, UGI Corporation, Amerigas Propane Inc., Alco Standard Corp. and Teleflex
Inc.
Mr. Sutton is Chairman of the Board of Directors and Chief Executive Officer
of UGI Corporation, a diversified Pennsylvania-based natural gas and electric
utility with non-utility operations in industrial gases and propane. He has
served in various executive positions with UGI since 1982. Mr. Sutton is also a
director of Amerigas Propane Inc. and a member of Mellon PSFS Regional Advisory
Board.
Mr. Wilson retired in 1994 as Executive Vice President of The Hartford Steam
Boiler Inspection and Insurance Company, which is engaged in insurance
underwriting, investments and engineering. Mr. Wilson had served in various
executive positions with that company since 1970. He is also a director of
Mechanics Savings Bank in Hartford, Connecticut, and Spencer Turbine Company in
Windsor, Connecticut. He is presently serving as a consultant with Goodwin,
Loomis & Britton Inc., an insurance industry consulting firm.
B. MEETINGS AND COMMITTEES OF DIRECTORS
The Board of Directors held a total of eight regular and special meetings
during 1994. Each incumbent director attended at least 75% of the total number
of meetings of the Board and committees of the Board held while he was a member
thereof.
The Board of Directors has established the following committees:
An audit committee consisting of J. A. Sutton, Chairman, D. E. Lyons and D.
K. Wilson, Jr., which held two meetings in 1994. This committee is primarily
concerned with the effectiveness of the Company's internal financial control
systems and of the audits of the Company's financial statements by the
Company's independent accountants. Its duties include recommending the
selection of independent accountants; reviewing the scope of audits to be
conducted by independent accountants and internal auditors and the results
of such audits; and appraising the Company's financial reporting activities
and accounting policies.
An executive development committee consisting of J. W. Boyer, Jr., Chairman,
J. W. Stratton and J. A. Sutton, which held one meeting in 1994. The
committee assists the Board in structuring compensation and incentive plans
for management, and assists management in the review of candidates,
succession and development of directors, officers and management. Its duties
include reviewing and recommending to the Board compensation and other
benefits for directors, officers and management; serving as any committee
required by incentive compensation plans for such Company personnel; and
reviewing with the Chief Executive Officer the internal organization and key
manpower planning and development of the Company.
A finance committee consisting of J. W. Stratton, Chairman, D. E. Lyons and
D. K. Wilson, Jr., which held two meetings in 1994. The committee assists
the Board in its duties relating to capital
3
<PAGE>
structure and expenditures, financial plans, allocation of assets, cash
management and dividend policy. It also assists the Board and corporate
officials in obtaining and maintaining good working relationships with
financial institutions.
The Board of Directors has not formed a separate standing nominating
committee.
C. BENEFICIAL OWNERSHIP OF EQUITY SECURITIES BY CERTAIN PERSONS
As of June 30, 1995, the number and percentage of equity securities of the
Company beneficially owned by (i) each of the nominees for director, (ii) each
Executive Officer named in the Summary Compensation Table below, and (iii) all
executive officers and directors of the Company as a group, are set forth below:
<TABLE><CAPTION>
CLASS B PERCENTAGE CLASS A PERCENTAGE
INDIVIDUALS COMMON STOCK OF CLASS(1) COMMON STOCK OF CLASS(1)
- -------------------------------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
J. W. Boyer, Jr. ............... -- -- 1,500 *
T. S. Cobb...................... 29,132(2)(3) 5.75% -- --
D. E. Lyons..................... 1,700 * -- --
A. F. Smith..................... 73,477 14.98% 5,426(4)
J. W. Stratton.................. -- -- 2,500 *
J. A. Sutton.................... 1,296 * 266 *
D. K. Wilson, Jr. .............. 1,025 * -- --
All executive officers and
directors
as a group.................... 106,630(2)(3) 9,692 *
</TABLE>
- ------------
(1) Asterisks indicate beneficial ownership of less than 1% of the outstanding
shares of the class.
(2) Includes options held by Mr. Cobb to purchase 16,375 shares of Class B
Common Stock exercisable within 60 days.
(3) Includes shares purchased on his behalf under the Company's Stock Purchase
Program from contributions made through May 31, 1995 and the Payroll Stock
Ownership portion of the Retirement Savings Plan.
(4) Includes 468 shares owned of record and beneficially by Mr. Smith's wife, as
to which shares he disclaims beneficial ownership.
Bankers Trust Company, 280 Park Avenue, New York, New York 10017 has advised
the Company that at June 30, 1995 it held through controlled nominees 282,139
shares of the Company's Class B Common Stock, or 57.52% of the class then
outstanding, as trustee on behalf of employees pursuant to various employee
benefit plans of the Company.
J.R. Itin, P.O. Box 1498, Reading, Pennsylvania 19603, who retired as Vice
President, Chief Financial Officer and a Director of the Company in April 1995,
beneficially owned at June 30, 1995, 68,931 shares of Class B Common Stock, or
13.35% of the class then outstanding and did not hold any shares of Class A
Common Stock. In addition, at June 30, 1995, R.S. Newlan and G.E. Troendle,
respectively, President and Executive Vice President of Resources Consultants,
Inc., 1960 Gallows Road, Vienna, Virginia 22182, a subsidiary of the Company,
beneficially owned 37,416 and 44,650 shares, respectively, of the Company's
Class B Common Stock, or 7.46%, and 8.93%, respectively, of the class then
outstanding. Such amounts include (i) options held by Messrs. Itin, Newlan and
Troendle to purchase 25,750 shares, 11,125 shares and 9,265 shares,
respectively, of Class B Common Stock exercisable within 60 days and (ii) shares
purchased on each of their behalves under the Company's
4
<PAGE>
Stock Purchase Program from contributions made through May 31, 1995 and the
Payroll Stock Ownership portion of the Retirement Savings Plan.
D. EXECUTIVE COMPENSATION AND OTHER INFORMATION
BOARD COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Development Committee of the Board assists the Board in
structuring compensation arrangements and incentive plans for the officers and
senior management of the Company. Decisions on compensation and the grant of
incentives are generally made by the three-member Committee, each of whom is a
non-employee director. All decisions by the Committee relating to the
compensation and incentives for the Company officers are submitted to the full
Board for ratification or revision. Set forth below is the Committee's report on
the 1994 compensation of the Executive Officers of the Company, Mr. Smith,
Chairman of the Board and until March 1994 Chief Executive Officer, Mr. Cobb,
President and Chief Executive Officer, and Mr. Itin, Vice President and Chief
Financial Officer until his retirement in April 1995.
Compensation Policies Toward Executive Officers
In December 1989, the Committee undertook an in-depth review and revision of
the Company's compensation policies for the officers and management of the
Company and its subsidiaries. During that year, Sibson & Company, Inc.,
compensation consultants, had studied and reported on the existing compensation
practices involved.
As a result, the Committee determined that, for 1990 and subsequent years,
the compensation policy of the Company would be as follows:
. Salary will be the basic compensation mechanism.
. The Annual Incentive Bonus Program will be used to provide specific growth
oriented incentives and reward above normal performance.
. Grants of stock options will align management's interest with
shareholders' and encourage long-term investment and interest in overall
Company performance.
. Other programs will encourage ownership and retention of Company stock by
management personnel and employees generally.
The Committee applies these policies directly to the Executive Officers,
presidents of the subsidiary companies and certain other management personnel.
The Committee also reviews the compensation policies and practices of the
subsidiaries for general alignment and appropriateness across and between
subsidiary units. The Committee engaged Sibson & Company to update this earlier
study during 1994; the compensation consultants recommended continuation of the
basic program as outlined above.
Relationship of Performance Under Compensation Plans
Salaries
Each year the Committee examines the salaries of the officers of the
Company. These are compared with information available about salaries in the
Company's industry, inflation and the performance of the individuals. Depending
upon the officer involved, the Committee may utilize salary information relating
to comparable engineering services companies or companies in other businesses in
5
<PAGE>
which subsidiaries of the Company are engaged. The companies used for these
purposes include some but not all of the companies in the Engineering Services
Peer Group shown in the performance graph on page 7; as necessary a number of
other companies not included in such index are also used. The various factors
considered are not formally weighted and the Committee uses subjective judgment
in making its decisions.
If a salary increase is deemed justified, it is recommended to the Board.
Mr. Cobb's percentage increase of 22.8% received in 1994 was higher than usual
to reflect the increased salary associated with his promotion to Chief Executive
Officer in March 1994. Mr. Itin's increase for 1994 was 4.1%, primarily as an
inflation adjustment, which was believed to be consistent with industry
increases. The salary levels for Mr. Itin and the executive officers were
approximately at the industry median.
Annual Bonus Program
In addition to the Executive Officers, the officers and key management of
the Company and its subsidiaries participate in an annual bonus program. Under
the program, incentive bonus awards are made annually based on performance
measured against predetermined targets. For 1994, the targets for Executive
Officers were based on achieving both current financial performance objectives,
and strategic and operational objectives relating to longer term earnings, with
greater weight being given to the current financial performance objectives. In
1994, the current financial performance objectives were based upon earnings per
share of the Company and resulted in no bonus achievements. Bonuses as awarded
for 1994 were based upon achieving a portion of the longer term strategic and
operational objectives.
In 1994, Mr. Cobb had a bonus opportunity equal to 60% of his salary. He was
awarded a bonus of 22% of his salary, all of which was for meeting certain of
his non-current financial objectives.
Stock Incentive Plan
In 1994, stock options were granted to more than 67 employees, managers and
officers of the Company and its subsidiaries. The Executive Officers and others
each received options potentially exercisable for shares of the Company's common
stock. The options granted to Mr. Cobb represented 15.7% of the total options
granted. The grants to Mr. Cobb and the other officers are based primarily on
each recipient's position and individual performance although the factors are
not formally weighted and the Committee uses subjective judgment in making award
grants. Options become exercisable based upon criteria established by the
Committee. The options granted for 1994 cannot be exercised for two years
following the grant and are exercisable in each of the subsequent three years.
The exercise price for each option was based at the market price of the stock at
the time the option was granted. Primarily as a result of the sale of the
Company's Gilbert/Commonwealth subsidiary, the 1994 stock options grants to 26
individuals will terminate July 20, 1995.
It is the intent of the Company that stock purchased as a result of exercise
of any such options will be held as a long-term personal asset. The Company
believes that this will better align management's interest with shareholders in
the future performance of the Company.
6
<PAGE>
EXECUTIVE DEVELOPMENT COMMITTEE
JOHN W. BOYER, JR., CHAIRMAN JAMES W. STRATTON JAMES A. SUTTON
PERFORMANCE GRAPH
The following graph shows the cumulative total stockholder return on the
Company's common stock over the last five fiscal years as compared to the
returns of the NASDAQ Market Index and those companies contained within the
Standard Industry Code 8711-Engineering Services which must file an Annual
Report with the Securities and Exchange Commission and are publicly traded. The
graph assumes $100 was invested on December 30, 1989 in each company involved
and all dividends are reinvested.
<TABLE><CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
1989 1990 1991 1992 1993 1994
(At Fiscal Year End)
<S> <C> <C> <C> <C> <C> <C>
Gilbert Associates, Inc. $ 100 $ 133 $ 118 $ 121 $ 97 $ 94
Engineering Services 100 100 108 91 75 53
PEER GROUP
NASDAQ Stock Market - US 100 85 136 159 181 177
</TABLE>
7
<PAGE>
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for fiscal 1992, 1993 and 1994, the cash
compensation paid by the Company, as well as other compensation paid or accrued
for those years, to the Executive Officers of the Company in all capacities in
which they served:
SUMMARY COMPENSATION TABLE
<TABLE><CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ----------------
($)COMPENSATION SECURITIES
NAME AND --------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR ($)SALARY ($)BONUS OPTIONS/SAR'S(1) ($)COMPENSATION
- --------------------------------------- ---- --------- -------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
A.F. Smith............................. 1994 $ 142,860 0 -- $ 187,432(3)
Chairman of the Board(2) 1993 414,627 63,200 2,500 46,655
1992 404,617 123,575 2,500 32,316
T.S. Cobb.............................. 1994 $ 358,762 77,000 10,000 $ 13,904(3)
President & Chief 1993 284,538 30,700 2,500 17,733
Executive Officer 1992 268,250 51,480 2,500 9,991
J.R. Itin(4)........................... 1994 $ 274,541 49,500 2,500 $ 28,446(3)
Vice President & Chief 1993 262,515 44,000 2,500 35,176
Financial Officer 1992 250,000 83,850 2,500 27,903
</TABLE>
- ------------
(1) See Note 1 to 1994 Stock Option Grants table below.
(2) Mr. Smith was Chief Executive Officer of the Company until March 1994.
(3) Includes: (a) for Mr. Cobb and Mr. Itin, Company contributions of $10,500
each to their respective accounts under the Company's Retirement Savings
Plan and $3,404 each to their respective accounts in the Company's Stock
Purchase Program and (b) for Mr. Smith and Mr. Itin, $19,870 and $7,273
respectively, as the above market portion of interest credits on salary
deferred under a deferred compensation arrangement with the Company.
Also includes for Mr. Itin, $4,694 in cash and Company matching
contributions of stock under the Stock Bonus Purchase Plan and $2,575 for
split dollar insurance policy premiums.
Also includes for Mr. Smith $126,562 of gains realized on exercising
incentive stock options and subsequent sale to the Company and a deferred
compensation payment of $41,000.
(4) Mr. Itin retired as Vice President, Chief Financial Officer and a Director
of the Company in April 1995.
8
<PAGE>
STOCK OPTIONS
The following table contains information concerning the stock options
granted to Executive Officers during 1994 under the Company's 1989 Stock Option
Plan:
1994 OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE><CAPTION>
INDIVIDUAL GRANTS POTENTIAL
------------------------------------------------------------- REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK
SECURITIES OPTIONS/SAR'S PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS/SAR'S EMPLOYEES IN EXERCISE PRICE EXPIRATION ------------------
NAME GRANTED(1) 1994 PER SHARE DATE 5% 10%
- ------------------------------ ------------- ------------- -------------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
T.S. Cobb..................... 10,000 15.7% $17.50 3/18/99 $48,349 $106,839
J.R. Itin..................... 2,500 3.9% 17.50 6/30/97 12,087 26,710
</TABLE>
- ------------
(1) All options have been granted under the 1989 Gilbert Stock Option Plan. The
exercise price is the fair market value of the stock on the date of grant.
AGGREGATE OPTION EXERCISES AND YEAR-END VALUES
The following table shows stock options exercised by Executive Officers
during 1994, including the aggregate value of any gains on the date of exercise.
In addition, this table includes the number of shares covered by both
exercisable and non-exercisable stock options as of December 30, 1994. Also
reported are the values for "in-the-money" options which represent the positive
spread between the exercise price of outstanding stock options and the year-end
price of Company common stock.
AGGREGATE STOCK OPTION/SAR EXERCISES IN 1994,
AND OPTION/SAR VALUES AS OF DECEMBER 30, 1994
<TABLE><CAPTION>
NO. OF SHARES COVERED BY VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY
AT 12/30/94 STOCK OPTIONS/SAR'S
SHARES ---------------------------- AT 12/30/94(2)
ACQUIRED VALUE NOT --------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE EXERCISABLE(1) EXERCISABLE EXERCISABLE(1)
- ---------------------------- ----------- -------- ----------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
A.F. Smith.................. 28,125 $126,562 -- -- -- --
T.S. Cobb................... -- -- 15,750 12,500 $ 0 --
J.R. Itin................... -- -- 25,125 5 ,000 42,188 --
</TABLE>
- ------------
(1) Future exercise is subject to continued employment by the Company for up to
three years, subject to acceleration for retirement, death or total
disability.
(2) Amounts reflect the December 30, 1994 market price of the Company's common
stock less the exercise price.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Smith, an Executive Officer of the Company during part of 1994, and Mr.
Stratton, a director of the Company and a member of its Executive Development
Committee, serve on the Boards of Directors of three mutual funds, Stratton
Growth Fund, Inc., Stratton Monthly Dividend Shares, Inc.
9
<PAGE>
and Stratton Small Cap Yield Fund, of which Mr. Stratton is Chairman of the
Board and Chief Investment Officer.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
The Company has no formal contracts of employment with its Executive
Officers. In 1989, the Board of Directors adopted a Benefit Equalization Plan
which provides Messrs. Smith, Itin and others with supplemental retirement
income. Payments under the Plan are made only to the extent that income from
Social Security, the Company-paid portions of Company retirement plans, and
retirement income plans of other employers do not equal 50% of an individual's
average annual salary for the three highest paid years. Mr. Smith began
receiving annual benefits of $54,741 upon his retirement in March 1994. The
estimated annual benefits under this Plan payable to Mr. Itin upon his early
retirement are $72,000. The Plan is unfunded and terminates for an individual
upon termination of employment for any reason other than retirement, death or
disability.
The Benefit Equalization Plan and the deferred compensation arrangement
described in Note 3 to the Summary Compensation Table provide that, in the event
of a change of control of the Company, as defined in such plan, the payments due
to Messrs. Smith and Itin will be accelerated. The accelerated payments are
essentially the present value of the stream of payments which would have been
made had there been no such change of control.
DIRECTOR COMPENSATION
Each Board member, other than officers of the Company or its subsidiaries,
receives an annual retainer of $18,000; committee chairmen receive an additional
$5,000. Each such director also receives $1,000 for each committee or Board
meeting attended. Directors may, at their election, defer receipt of payment of
directors' fees. Deferred directors' fees accrue interest at the prime rate of
interest charged by Chemical Bank.
2. PROPOSAL TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. BY THE BOARD OF
DIRECTORS AS INDEPENDENT AUDITORS FOR THE YEAR 1995
The Board of Directors has selected the firm of Coopers & Lybrand L.L.P.
independent accountants, to audit the accounts of the Company for the year 1995
and requests that such selection be ratified by majority vote of those Class B
stockholders voting upon ratification. Although submission to stockholders of
the appointment of the independent auditors is not required by law, the Board of
Directors, in accordance with its long-standing policy of seeking annual
stockholder ratification of the selection of auditors, believes it appropriate
that such selection be ratified by the stockholders. The firm has acted as
auditors for the Company for many years. The Company has been advised that
neither that firm nor any of its partners has any material direct or indirect
relationship with the Company or its subsidiaries.
A representative of the firm of Coopers & Lybrand L.L.P. will attend the
meeting, will have an opportunity to make a statement if he desires to do so,
and will be available to respond to appropriate questions at the meeting.
10
<PAGE>
STOCKHOLDER PROPOSALS
If a holder of Class B Common Stock has a proposal which he or she intends
to present at the 1996 Annual Meeting, it must be received by the Company on or
before December 8, 1995 in order to be considered for inclusion in the Company's
Proxy Statement and Proxy for the meeting. Stockholder proposals should be
submitted to Thomas F. Hafer, Secretary of the Company, at the address indicated
on the first page of this Proxy Statement.
OTHER MATTERS
The Board of Directors does not intend to bring any other matter before the
meeting and is not informed of any other business which others may bring before
the meeting. However, if any other matters should properly come before the
meeting, or any adjournment thereof, it is the intention of the persons named in
the accompanying Proxy to vote on such matters as they, in their discretion, may
determine.
The Company will pay all costs of soliciting Proxies in the accompanying
form. Solicitation will be made by mail, and officers and regular employees of
the Company may also solicit Proxies by telephone, telecopy or personal
interview.
By order of the Board of Directors,
THOMAS F. HAFER,
Secretary
July 6, 1995
11
<PAGE>
GILBERT ASSOCIATES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING--JULY 28, 1995
The undersigned hereby appoints ALEXANDER F. SMITH and TIMOTHY S. COBB, and
each of them, with full power of substitution, attorneys and proxies to
represent the undersigned at the Annual Meeting of stockholders of Gilbert
Associates, Inc. to be held on Friday, July 28, 1995, and at any adjournment
thereof, and thereat to vote all shares of Class B Common Stock that the
undersigned would possess if personally present:
(INSTRUCTION: PLEASE MARK YOUR CHOICE /X/ IN DARK INK.)
(a) for the election of all of the nominees for director, as to which
authority to vote is hereby
/ / GRANTED for all (except as / / WITHHELD from all
marked to the contrary below)
Please use boxes below only to WITHHOLD your vote from an individual
nominee(s).
Withheld Withheld
- --------- ---------
/ / J. W. BOYER, JR. / / J. W. STRATTON
/ / T. S. COBB / / J. A. SUTTON
/ / D. E. LYONS / / D. K. WILSON, JR.
/ / A. F. SMITH
(continued and to be signed on the reverse side)
<PAGE>
(INSTRUCTION: PLEASE MARK YOUR CHOICE /X/ IN DARK INK.)
(b) / / FOR / / AGAINST / / ABSTAIN the proposal to ratify the selection by
the Board of Directors of Coopers & Lybrand L.L.P. as independent
auditors for the year 1995; and
(c) in their discretion upon such other matters as may properly come before
the meeting; all as set forth in the Notice of Meeting and Proxy
Statement, dated July 6, 1995, receipt of which is hereby acknowledged.
UNLESS OTHERWISE INDICATED, THIS PROXY WILL BE VOTED IN FAVOR OF THE ELECTION OF
ALL OF THE NOMINEES FOR DIRECTOR AND "FOR" THE PROPOSAL REFERRED TO ABOVE.
Dated........................., 1995
...................................
(Signature of Stockholder)
Please sign above exactly as your
name appears on the certificate
representing your shares of Class B
Common Stock.
...................................
(Print Name as Signed Above)
