Dear Sirs:
Following are Items 10 through 13 to amend the 1994 Annual Report
on Form 10-K for Gilbert Associates, Inc.
Sincerely,
Peter J. Catalano
Corporate Accounting Manager
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 10-K/A
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File No. 0-12588
GILBERT ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2280922
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
P.O. Box 1498, Reading, Pennsylvania 19603
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 775-5900
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $1.00 per share
(Title of Class)
Class B Common Stock, par value $1.00 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K. X
<PAGE>
Item 10. Directors and Executive Officers of the Registrant
The present positions of directors and executive officers 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> <S> <C>
John W. Boyer, Jr. . . . . . . 66 ----- 1984
Timothy S. Cobb . . . . . . . . 53 President and Chief Executive 1993
Officer
James R. Itin . . . . . . . . . . . 62 Vice President and Chief 1983*
Financial Officer
Donald E. Lyons . . . . . . . 65 ----- 1989
Alexander F. Smith . . . . . 66 Chairman of the Board 1970
James W. Stratton . . . . . 58 ----- 1984
James A. Sutton . . . . . . . 60 ----- 1986
Donald K. Wilson, Jr. . . 59 ----- 1990
* - As stated in Form 8-K, filed April 19, 1995, James R. Itin has resigned as
Vice President and Chief Financial Officer and Director of the Company.
</TABLE>
Mr. Smith, Mr. Cobb, and Mr. Itin have served as officers of
the Company or its subsidiaries for at least five years.
Mr. Smith retired as President in October, 1993 and as Chief
Executive Officer in March 1994.
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., a subsidiary of the Company, from
January, 1991 to September, 1993 and as President of GAI-
Tronics, also a subsidiary of the Company, from June, 1988 to
December, 1991.
Mr. Boyer retired in May, 1993 as Chairman of Philadelphia
Suburban Corporation whose principal subsidiary, Philadelphia
Suburban Water Company, is a regulated water utility. He
continues as a director of Philadelphia Suburban Corporation.
Mr. Boyer is also a director of Betz Laboratories, Inc. and
Rittenhouse Trust Company.
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.
Mr. Stratton has been Chairman and Chief Executive Officer
of Findatex, a financial services firm, and President of the
Stratton Management Company, investment advisors, since 1972.
Mr. Stratton is also a director of Stratton Growth Fund, Inc.,
Stratton Monthly Dividend Shares, Inc., Stratton Small Cap
Yield Fund, UGI Corporation, Petrolane Incorporated, 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 Petrolane Inc. and a member of
Mellon PSFS Regional Advisory Board.
Mr. Smith is a director of Stratton Monthly Dividend Shares,
Inc., Stratton Growth Fund, Inc. and Stratton Small Cap Yield
Fund.
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 brokerage firm.
Item 11. 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 a 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.
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.
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. 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 of 1994. Mr. Itin's increase for
1994 was 4.1%, primarily as an inflation adjustment, which was believed
to be consistent with industry increases.
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 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 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 are based primarily
on each recipient's position and performance. 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.
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.
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 $100 was invested on December 30, 1989 in
each company involved and all dividends are reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
(Tabular representation of Performance Graph is set forth below.)
<TABLE>
Comparison of Five Year Cumulative Total Return Gilbert Associates,
Inc., Engineering Services Peer Group and NASDAQ Market Index.
<CAPTION>
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gilbert Associates, Inc. 133 118 121 97 94
Engineering Services
Peer Group 100 108 91 75 53
NASDAQ Stock Market 85 136 159 181 177
Base Yr. 1989 = 100.
</TABLE>
Summary of Cash and Certain Other Compensation
The following table shows, for fiscal 1992, 1993 and 1994, the
cash compensation paid by the Company, as well as other
compensation paid or accrued for those years, to the Executive
Officers of the Company in all capacities in which they served:
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compenation
Annual Securities
Name and Compensation Underlying All Other
Principal Position Year ($)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 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
____________
(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.
</TABLE>
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:
<TABLE>
<CAPTION>
1994 Options/SAR Grants in Last Fiscal Year
Individual Grants
----------------------------------------------------- Potential Realizable
Percent of Value at Assumed
Number of Total Annual Rates of
Securities Options/SAR's Stock Price
Underlying Granted to Appreciation for
Options/SAR's Employees Exercise Price Expiration Option Term
Name Granted(1) in 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 3/18/99 12,087 26,710
_____________
(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. Options may not be exercised for two years
following the date of grant and are then exercisable for
three years.
</TABLE>
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.
<TABLE>
<CAPTION>
Aggregate Stock Option/SAR Exercises in 1994,
and Option/SAR Values as of December 30, 1994
Value of Unexercised
No. of Shares Covered by In-The-Money Stock
Unexercised Options Options/SAR's
at 12/30/94 at 12/30/94(2)
------------------------- ----------------------
Shares
Acquired Value Not 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 0 0 0 0
T. S. Cobb ---- ---- 15,750 12,500 0 ----
J. R. Itin ---- ---- 25,125 5,000 42,188 ----
____________
(1) As of January 1, 1994. 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.
</TABLE>
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. 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 for Mr.
Itin at normal retirement age is $86,983. 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 mentioned 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.
Item 12. Beneficial Ownership of Equity Securities by Certain
Persons
As of March 31, 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 above, and (iii) all officers and
directors of the Company as a group, are set forth in the
following table:
<TABLE>
<CAPTION>
Class B Percentage Class A Percentage
Nominee or Group Common Stock of Class(1) Common Stock Of Class(1)
<S> <C> <C> <C> <C>
J. W. Boyer, Jr. ---- ---- 1,500 *
T. S. Cobb 28,737 (2)(3) 2.23% ---- ----
J. R. Itin 68,259 (2)(3) 5.27% ---- ----
D. E. Lyons 1,700 * ---- ----
A. F. Smith 73,477 5.78% 5,426 (4) *
J. W. Stratton ---- ---- 2,500 *
J. A. Sutton 1,296 * 266 *
D. K. Wilson, Jr. 825 * ---- ----
All officers and directors as a
group. . . . . . . . .174,294 (2)(3) 13.28% 9,692 *
____________
(1) Asterisks indicate beneficial ownership of less than 1% of the
outstanding shares of the class.
(2) Includes options held by Messrs. Cobb and Itin to purchase
16,375 shares and 25,750 shares respectively, 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
January 24, 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.
</TABLE>
Bankers Trust Company, 280 Park Avenue, New York, New York
10017 has advised the Company that at February 28, 1995 it held
through controlled nominees 929,413 shares of the Company's
Class B Common Stock, or 73.16% of the class then outstanding,
as trustee on behalf of employees pursuant to various employee
benefit plans of the Company.
Item 13. Certain Relationships and Related Transactions.
None.
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized this
1st day of May, 1995.
GILBERT ASSOCIATES, INC.
By /s/T. S. Cobb
T. S. Cobb
Chief Executive Officer
