Perini Corporation
73 Mt. Wayte Avenue
Framingham, Massachusetts 01701
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 1997
TO THE STOCKHOLDERS OF PERINI CORPORATION:
NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders of
PERINI CORPORATION will be held at State Street Bank and Trust Company,
Enterprise Room, 5th Floor, 225 Franklin Street, Boston, Massachusetts, on
Thursday, May 15, 1997, at 10:00 a.m., for the following purposes:
A. To elect four Class I Directors, to hold office for a three-year term,
expiring in 2000 and until their successors are chosen and qualified.
B. To consider and ratify the selection of Arthur Andersen LLP, independent
public accountants, as auditors for the fiscal year ending December 31,
1997.
C. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on April 7,
1997, as the record date for the determination of the stockholders entitled to
vote at the meeting.
Stockholders who do not expect to attend in person and who wish their
stock to be voted are urged to fill in, sign, date and return the accompanying
form of proxy in the enclosed envelope, to which no postage need be affixed if
mailed in the United States.
By order of the Board of Directors,
Robert E. Higgins
Acting Secretary
April 9, 1997
The Annual Report of the Company, including financial statements for
the year 1996, is being sent to stockholders concurrently with this Notice.
<PAGE>
Perini Corporation
73 Mt. Wayte Avenue
Framingham, Massachusetts 01701
PROXY STATEMENT
ANNUAL MEETING OF THE STOCKHOLDERS
OF PERINI CORPORATION
This statement is furnished in connection with the solicitation of
proxies by the Board of Directors of PERINI CORPORATION (hereinafter called the
"Company") to be used at the annual meeting of the stockholders of the Company
to be held at State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts, on Thursday, May 15, 1997, at 10:00 a.m., and at any adjournment
or adjournments thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Stockholders. If the accompanying form of proxy is executed
and returned, it may nevertheless be revoked at any time insofar as it has not
been exercised either by notice to the Secretary of the Company, the subsequent
execution of another Proxy, or by voting in person at the meeting. It is
anticipated that the Proxy Statement and the enclosed Proxy will be mailed to
the stockholders of record on or about April 9, 1997.
The Board of Directors has fixed the close of business on April 7,
1997, as the record date for the determination of the stockholders entitled to
vote at the meeting. As of April 7, 1997, the Company had outstanding 4,898,648
shares of common stock. Each share is entitled to one vote. In addition, the
holders of 152,569 shares of Series B Cumulative Convertible Preferred Stock
(the "Series B Preferred Stock"), 150,150 shares issued at the closing on
January 17, 1997 plus a dividend of 2,419 shares paid on March 15, 1997, have
the same voting rights as holders of Common Stock, equal to the number of shares
of Common Stock into which the Series B Preferred Stock can be converted (or
3,151,540 shares of Common Stock). Therefore, the maximum aggregate number of
votes available as of the record date and entitled to vote at the annual meeting
is 8,050,188.
Holders of the Company's $2.125 Depositary Convertible Exchangeable
Preferred Shares (each of which represents 1/10 share of $21.25 Convertible
Exchangeable Preferred Stock) are not entitled to notice of or to vote on any
matters scheduled to come before the meeting.
STOCKHOLDER VOTE REQUIRED
The presence, in person or by proxy, of at least a majority in interest
of the total number of outstanding shares of Common Stock (or 8,050,188 voting
rights) is necessary to constitute a quorum for transaction of business at the
Annual Meeting. Abstentions and "broker non-votes" will be counted as present
for determining the
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<PAGE>
presence or absence of a quorum for the transaction of business at the Annual
Meeting. A "broker non-vote" is a proxy from a broker or other nominee
indicating that such person has not received instructions from the beneficial
owner or other person entitled to vote the shares on a particular matter with
respect to which the broker or other nominee does not have discretionary voting
power.
A quorum being present, the vote of a plurality of the votes cast at
the Annual Meeting is necessary to elect each of the nominees for director. The
vote of a majority of the votes cast at the Annual Meeting is required to ratify
the selection of Arthur Andersen LLP as auditors for the fiscal year ending
December 31, 1997. Abstentions and broker non-votes will not be counted as
voting at the Annual Meeting and, therefore, will not have an effect on the
election of directors or ratification of auditors.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the Company's
1998 Annual Meeting of Stockholders must be received by the Company for
inclusion in the proxy statement and form of proxy for that meeting no later
than December 10, 1997. In addition, stockholder proposals and director
nominations must comply with the requirements of the Company's By-Laws.
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<PAGE>
A.
ELECTION OF DIRECTORS
In accordance with the Company's By-Laws and Massachusetts law, the
Board of Directors is divided into three approximately equal classes, with each
Director serving for a term of three years. As a consequence, the term of only
one class of directors expires each year, and their successors are elected for
terms of three years. The Board of Directors is presently comprised of 12
members as follows:
Class I: Marshall M. Criser, Arthur J. Fox, Jr., Nancy Hawthorne, and
Michael R. Klein are the four nominees for election as Directors at
this Annual Meeting to serve until the 2000 Annual Meeting of
Stockholders and until their successors are chosen and qualified.
Class II: Richard J. Boushka, Jane E. Newman and Bart W. Perini were the
three nominees elected as Directors at the 1995 Annual Meeting to
serve until the 1998 Annual Meeting of Stockholders and until their
successors are chosen and qualified. Effective January 17, 1997,
Ronald N. Tutor was appointed a Class II Director by the
Company's Board of Directors to serve until the 1998 Annual
Meeting of Stockholders and until his successor is duly elected and
qualified.
Class III: Albert A. Dorman, John J. McHale and David B. Perini were the
three nominees elected as Directors at the 1996 Annual Meeting to
serve until the 1999 Annual Meeting of Stockholders and until their
successors are chosen and qualified. Effective January 17, 1997,
Douglas J. McCarron was appointed a Class III Director by the
Company's Board of Directors to serve until the 1999 Annual
Meeting of Stockholders and until his successor is duly elected and
qualified.
Unless otherwise noted thereon, proxies solicited hereby will be voted
for the election of Messrs. Criser, Fox, Klein, and Ms. Hawthorne as Directors
to hold office until the 2000 Annual Meeting of Stockholders and until their
successors are chosen and qualified. The Board of Directors does not contemplate
that any nominee will be unable to serve as a Director for any reason, but, if
that should occur prior to the meeting, the proxy holders will select another
person in his or her place and stead. Information regarding these nominees for
election as Directors, as well as each Director whose term is not scheduled to
expire until the 1998 and 1999 Annual Meeting of Stockholders, is set forth
below.
The Board recommends a vote FOR the election of each of the nominees
for election as Directors.
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<PAGE>
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND OFFICERS
The following table sets forth certain information concerning
beneficial ownership as of February 28, 1997 of the Common Stock of the Company
by each Director and named Executive Officer of the Company, and by all
Directors and Executive Officers of the Company as a group. Also, included in
the table with respect to each Director is principal occupation or employment
during the past five years, age and the period served as a Director of the
Company.
<TABLE>
Number of Shares of Common Stock of the
Company Beneficially Owned
On February 28, 1997(1)(2)
------------------------------------------------
Served Sole Voting
as a and
Name and Principal Occupation Director Investment Percentage
For The Past Five Years Age Since Power Shared Aggregate of Class
- ---------------------------------------- ------ ----------- --------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
David B. Perini (3)(6) 59 1970 162,251 (7) 205,449 (8) 367,700 7.45%
Chairman and Chief Executive
Officer
John J. McHale (5) 74 1962 4,305 (9) 0 4,305 *
Formerly Deputy Chairman,
Montreal Baseball Club Ltd.
Richard J. Boushka (5)(6) 62 1975 5,105 (9) 0 5,105 *
Principal, Boushka Properties, a
private investment firm
Bart W. Perini 57 1971 to 16,621 (10) 205,449 (11) 222,070 4.53%
Formerly President and Chief 1976 &
Operating Officer of Perini Land Since
and Development Company 1979
Marshall M. Criser (3)(4)(5) 68 1985 4,105 (9) 200 (12) 4,305 *
Chairman, Law Firm of Mahoney
Adams and Criser; President
Emeritus, University of Florida
Arthur J. Fox, Jr. (5)(6) 73 1989 4,468 (13) 0 4,468 *
Managing Director, Construction
Industry Presidents Forum; Editor
Emeritus, Engineering News-
Record
Jane E. Newman (4) 51 1992 2,484 (14) 0 2,484 *
Executive Vice President, Exeter
Trust Company, formerly
President, Coastal Broadcasting
Corp., formerly Assistant to the
President of the U.S. (1989-1991)
</TABLE>
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<PAGE>
<TABLE>
Number of Shares of Common Stock
of the Company Beneficially Owned
On February 28, 1997(1)(2)
-----------------------------------------------
Served Sole Voting
as a and
Name and Principal Occupation Director Investment Percentage
For The Past Five Years Age Since Power Shared Aggregate of Class
- ----------------------------------------- ------ ----------- --------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Albert A. Dorman (4)(5) 70 1993 3,407(15) 0 3,407 *
Founding Chairman AECOM
Technology Corporation
Nancy Hawthorne (4)(6) 45 1993 3,100(16) 0 3,100 *
Executive Vice President,
Continental Cablevision
Michael R. Klein (3)(4)(17) 53 1997 0 0 0 *
Partner, Law Firm of Wilmer,
Cutler & Pickering
Douglas J. McCarron (3)(5)(17) 46 1997 0 0 0 *
General President, United
Brotherhood of Carpenters and
Joiners of America
Ronald N. Tutor (3)(6)(17) 56 1997 351,318(18) 0 351,318 7.17%
Acting Chief Operating Officer
since January 17, 1997, and
President and Chief Executive
Officer, Tutor- Saliba Corporation
Richard J. Rizzo 53 - 28,778(19) 0 28,778 *
Executive Vice President, Building
Construction
John H. Schwarz 58 - 21,117(20) 0 21,117 *
Executive Vice President, Finance
& Administration
Donald E. Unbekant 65 - 35,852(21) 0 35,852 *
Executive Vice President, Civil
Construction
All directors and executive officers 642,911 205,649(21) 848,560 17.03%
as a group (15 persons)
</TABLE>
- -----------------------------------------
* Less than one percent
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<PAGE>
(1) Beneficial ownership is the direct or indirect ownership of Common Stock of
the Company including the right to control the vote or investment of or
acquire such Common Stock (for example, through the conversion of shares of
the Company's Series B Preferred Stock or $2.125 Depositary Convertible
Exchangeable Preferred Shares, exercise of options or various trust
arrangements) within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934. The shares owned by each person or by the group, and
the shares included in the total number of shares outstanding have been
adjusted in accordance with said Rule 13d-3. Any securities not outstanding
but which are subject to options, warrants, rights or conversion privileges
shall be deemed to be outstanding for the purpose of computing the
percentage of outstanding securities of the class owned by such person but
shall not be deemed to be outstanding for the purpose of computing the
percentage of the class by any other person. Since the holders of the
Series B Preferred Stock have the same voting rights as holders of Common
Stock, equal to the number of shares of Common Stock into which the Series
B Preferred Stock can be converted, the aggregate percentage owned for each
holder has been determined by dividing the aggregate total of shares
beneficially owned, including the assumed conversion of the Series B
Preferred Stock, by such holder, by the number of shares of Common Stock of
the Company outstanding on February 28, 1997 plus the the number of shares
of Common Stock into which the Series B Preferred Stock held by such holder
could be converted at that date.
(2) The table does not include an aggregate of 12,640 shares allocated to named
executive officers under the terms of the Perini Corporation Employee Stock
Ownership Plan.
(3) Member of the Executive Committee.
(4) Member of the Audit Committee.
(5) Member of the Compensation Committee.
(6) Member of the Nominating Committee.
(7) Includes 6,460 shares in his children's names for which he has Power of
Attorney giving him voting power. Includes 40,500 shares for which Mr.
Perini holds options. Includes 198 shares of Common Stock resulting from
the assumed conversion of 300 shares of Convertible Preferred Stock (.662
shares of Common Stock for each share of Preferred Stock). Includes 56,499
shares, held in testamentary trust established under the will of Louis R.
Perini, Sr. David Perini is one of four trustees of such trust and is one
of the beneficiaries of such trust.
(8) Includes 205,449 shares, as to which Mr. Perini disclaims any beneficial
ownership, held by The Perini Memorial Foundation, Inc., a Massachusetts
charitable corporation ("The Perini Foundation"), of which David B. Perini
is one
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<PAGE>
of three officers and directors.
(9) Includes 1,148 shares awarded on May 19, 1994, 366 shares awarded on May
19, 1988 and 835 shares awarded on May 16, 1991 pursuant to the 1988 Perini
Corporation Restricted Stock Plan for Outside Directors. Also includes
1,756 shares of Common Stock received in payment of the 1996 director's
annual retainer. See "Directors Compensation" on page 21.
(10) Includes 7,500 shares for which Mr. Perini holds options.
(11) Includes 205,449 shares, as to which Mr. Perini disclaims any beneficial
interest, held by The Perini Foundation, of which Bart W. Perini is one of
three officers and directors.
(12) Includes 200 shares which Mr. Criser owns jointly with his wife.
(13) Includes 1,148 shares awarded on May 19, 1994, 214 shares awarded on March
21, 1989 and 835 shares awarded on May 16, 1991 pursuant to the 1988 Perini
Corporation Restricted Stock Plan for Outside Directors. Also includes
1,756 shares of Common Stock received in payment of the 1996 director's
annual retainer. See "Directors Compensation" on page 21.
(14) Includes 1,148 shares awarded on May 19, 1994 pursuant to the 1988 Perini
Corporation Restricted Stock Plan for Outside Directors. Also includes
1,336 shares of Common Stock received in payment of the 1996 director's
annual retainer. See "Directors Compensation" on page 21.
(15) Includes 1,148 shares awarded on May 19, 1994, and 303 shares awarded on
March 10, 1993 pursuant to the 1988 Perini Corporation Restricted Stock
Plan for Outside Directors. Also includes 1,756 shares of Common Stock
received in payment of the 1996 director's annual retainer. See "Directors
Compensation" on page 21.
(16) Includes 1,148 shares awarded on May 19, 1994 and 196 shares awarded
December 7, 1993 pursuant to the 1988 Perini Corporation Restricted Stock
Plan for Outside Directors. Also includes 1,756 shares of Common Stock
received in payment of the 1996 director's annual retainer. See "Directors
Compensation" on page 21.
(17) Holders of the Series B Preferred Stock have the right to elect and/or
nominate for election three directors to the Board of Directors. Messrs.
Klein, McCarron and Tutor were elected and/or nominated by the holders of
the Series B Preferred Stock.
(18) Includes 351,318 shares held in the name of Tutor-Saliba Corporation, a
company of which Mr. Tutor is the sole stockholder and Chief Executive
Officer.
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<PAGE>
(19) Includes 14,000 shares for which Mr. Rizzo holds options.
(20) Includes 9,000 shares for which Mr. Schwarz holds options.
(21) Includes 14,000 shares for which Mr. Unbekant holds options.
(22) The number of shares beneficially owned by all Directors and named
executive officers as a group (see Note 1 above) has been adjusted to
eliminate the duplicate inclusion of 205,449 shares owned by The Perini
Foundation.
David B. Perini and Bart W. Perini are first cousins.
- 8 -
<PAGE>
The Board of Directors met twenty times during 1996. The Board of
Directors has a Compensation Committee, the duties of which are summarized in
"The Compensation Committee Report" on pages 14 to 16 herein. The Compensation
Committee held eleven meetings during 1996. The Board also has an Audit
Committee, the duties of which are to oversee the audit function of the
Company's independent certified public accountants, to review periodically
significant financial information relating to the Company and to act as a
communication link between the Board of Directors and such certified public
accountants. The Audit Committee met four times during 1996. The Board of
Directors has a Nominating Committee which met once during 1996. This Committee
does not accept nominations from shareholders. The Board of Directors has an
Executive Committee. This Committee did not meet during 1996. The members of
each such committee are identified in the above table. During 1996 all of the
directors of the Company attended at least 75% of the meetings of the Board of
Directors and its committees of which they are members.
Except as set forth below, none of the Directors is a director of any
company which is subject to the reporting requirements of the Securities
Exchange Act of 1934 or which is a registered investment company under the
Investment Company Act of 1940.
Name of Director Director of
- ---------------- -----------
Richard J. Boushka ....................... Tremont Corporation
Marshall M. Criser ...................... Barnett Banks, Inc.
Bell South Corporation
Emerald Funds
FPL Group, Inc.
Nancy Hawthorne .......................... New England Zenith Fund
Michael R. Klein . . . . . . . . . . . . . .National Educational Corporation
Steck Vaughn Publishing Corporation
Jane E. Newman............................ NYNEX Telecommunications
Consumers Water Company
Public Service Co. of N.H.
David B. Perini ......................... State Street Boston Corp.
Ronald N. Tutor . . . . . . . . . . . . . . Southdown, Inc.
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<PAGE>
CERTAIN OTHER BENEFICIAL HOLDERS
The following table sets forth certain information concerning
beneficial ownership as of February 28, 1997 of the Common Stock of the Company
by certain other holders of in excess of 5% of the Common Stock of the Company.
According to the information available to the Board of Directors no
person owns of record or beneficially more than 5% of the outstanding Common
Stock of the Company except as set forth below and except for David B. Perini
and Ronald N. Tutor as set forth in the table relating to "Election of
Directors" on pages 4 and 5:
<TABLE>
Amount and
Nature of
Beneficial
Ownership Percentage
Name and Address (1) of Class
- ------------------------------------------------- ---------------- ---------------
<S> <C> <C>
Richard C. Blum & Associates, L.P. 2,388,922 (2) 32.78% (2)
909 Montgomery Street, Suite 400
San Francisco, CA 94133
PB Capital Partners, L.P. 1,907,626 (2) 28.03% (2)
909 Montgomery Street, Suite 400
San Francisco, CA 94133
The Common fund for Non-Profit Organizations 481,296 (2) 8.95% (2)
c/o Richard C. Blum & Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133
The Union Labor Life Insurance Company Separate 712,649 (3) 12.70% (3)
Account P
111 Massachusetts Avenue, NW
Washington, DC 20001
Perini Corporation 472,236 (5) 9.64%
Employee Stock Ownership Trust ("ESOT") (4)
73 Mt. Wayte Avenue
Framingham, MA 01701
Tutor-Saliba Corporation 351,318 (6) 7.17%
15901 Olden Street
Sylmar, CA 91342
Quest Advisory Corp. 327,000 (7) 6.68%
1414 Avenue of the Americas
New York, NY 10019
TCW Group, Inc. 289,300 (8) 5.91%
865 So. Figueroa Street
Los Angeles, CA 90017
</TABLE>
- -------------------------------------------------
(1) See Footnote (1) on Page 6.
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<PAGE>
(2) Richard C. Blum & Associates, L.P. ("RCBA"), is the sole general partner of
PB Capital Partners, L.P. ("PB Capital") which beneficially has shared
voting and investing power in 92,350 shares of Series B Preferred Stock
(voting power equal to 1,907,626 shares of Common Stock). In addition, RCBA
is an investment adviser to The Common Fund for Non-Profit Organizations
for the account of its Equity Fund ("The Common Fund") which beneficially
has shared voting and investing power in 23,300 shares of Series B
Preferred Stock (voting power equal to 481,296 shares of Common Stock).
Richard C. Blum & Associates, Inc. ("RCBA Inc."), also at 909 Montgomery
Street, Suite 400, San Francisco, California 94133, is the sole general
partner of RCBA. Richard C. Blum is the Chairman of the Board and a
substantial shareholder of RCBA Inc. Mr. Blum disclaims beneficial
ownership of all securities reported in the table except to the extent of
his pecuniary interest therein. The Common Fund expressly disclaims
membership in any group with RCBA, Richard C. Blum or any other related
entity and disclaims beneficial ownership of securities owned directly or
indirectly by any other person or entity.
(3) In December 1996, PB Capital and the Company entered into a stock
assignment and assumption agreement whereby PB Capital assigned its right
to purchase 34,500 shares of the Series B Preferred Stock to The Union
Labor Life Insurance Company Separate Account P ("Union") which
beneficially has sole voting and investing power in 34,500 shares of Series
B Preferred Stock (voting power equal to 712,649 shares of Common Stock).
The Company has been further advised that PB Capital entered into an
agreement with Union pursuant to which Union agreed to refrain from
disposing of its interest in the Company until the earlier of five years
after its acquisition or the dissolution of PB Capital. Union also has the
right to make earlier dispositions or a pro rata basis to the extent PB
Capital disposes of its shares.
(4) Robert E. Higgins, John E. Chiaverini and Robert J. Howard are Trustees of
the Perini Corporation ESOT and are members of the Committee empowered to
administer the Perini Corporation Employee Stock Ownership Plan ("ESOP")
under the terms thereof.
(5) The ESOT has sole voting and investing power for 110,618 shares. In
addition, there are 361,618 shares held by the Trust that have been
allocated to the accounts of participants in the Perini Corporation
Employee Stock Ownership Plan.
(6) Represents sole voting and investing power based on information contained
in Schedule 13D of Tutor-Saliba Corporation dated March 9, 1995 and
subsequent direct communications by the Company with the appropriate
representatives of Tutor-Saliba Corporation. Ronald N. Tutor, a Director
and Acting Chief Operating Officer of the Company, effective January 17,
1997, is also the sole stockholder and Chief Executive Officer of
Tutor-Saliba Corporation.
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<PAGE>
(7) Represents sole voting and investing power based on information contained
in Schedule 13G of Quest Advisory Corp. (a New York corporation) and Quest
Management Company (a Connecticut general partnership) dated February 15,
1996.
(8) Represents sole voting and investing power based on information contained
in Schedule 13G of the TCW Group, Inc. dated February 12, 1997.
Voting Agreement
In accordance with the terms of the Series B Preferred Stock Purchase
Agreement, the Company, PB Capital, David B. Perini, Perini Memorial Foundation,
David B. Perini Testamentary Trust, Ronald N. Tutor, and Tutor-Saliba
Corporation (collectively the "Stockholders") entered into an agreement (the
"Voting Agreement") on January 17, 1997, whereby the Stockholders agreed to vote
all of the shares of Common Stock and Series B Preferred Stock (collectively,
the "Perini Voting Stock") owned by them or over which they have voting control
in favor of the election to the Board of Directors of the Company of one
representative designated by PB Capital at this Annual Meeting. The Voting
Agreement (which represents a minimum of 32% of the voting power at the meeting)
will terminate immediately after this meeting if the designated director (Mr.
Klein) is elected.
Change In Control
The Company is a party to the Shareholder Rights Agreement dated as of
September 23, 1988, as amended and restated as of May 17, 1990 and as amended
and restated as of January 17, 1997, with The State Street Bank and Trust
Company as Rights Agent (the "Rights Agreement"). Under the Rights Agreement,
the Company issued a dividend distribution of one Preferred Stock Purchase Right
(a "Right") for each outstanding share of Common Stock of the Company. Each
Right entitles the holder thereof to purchase one one-hundredth of a share (a
"Unit") of the Company's Series A Junior Participating Cumulative Preferred
Stock at a cash exercise price of $100.00 per Unit. The Rights Agreement
initially expired on September 23, 1998.
The purpose of the Rights Agreement is to prevent hostile attempts to
acquire control of the Company by making such attempts prohibitively expensive
unless the Board of Directors acts to redeem the Rights. Under the Rights
Agreement, certain anti-takeover provisions become operative in the event a
person or group acquires beneficial ownership of (i) 20% or more of the then
outstanding shares of Common Stock (the date of such announcement of such
acquisition being the "Stock Acquisition Date") or (ii) 10% or more of the then
outstanding shares of Common Stock if the Board of Directors determines that
such person or group is adverse to the interest of the Company (an "Adverse
Person").
On January 17, 1997, the Company sold and issued 150,150 shares of the
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<PAGE>
Series B Preferred Stock to an investor group led by Richard C. Blum &
Associates, L.P., for $30 million. The Series B Preferred Stock is convertible
into 3,101,571 shares of Common Stock or approximately 39% of the currently
outstanding Common Stock on a diluted basis. The issuance and sale of the Series
B Preferred Stock with its conversion right may be deemed to have constituted a
"Change of Control" for purposes of disclosure under the Securities Exchange Act
of 1934. In addition, to the extent the Company elects to pay dividends in the
form of additional Series B Preferred Stock, the investor group will be able to
acquire additional shares of Common Stock upon conversion. But for the amendment
of the Rights Agreement as discussed below, the issuance of the Series B
Preferred Stock would have triggered the anti-takeover provisions of the Rights
Agreement.
Concurrently with the issuance of the Series B Preferred Stock, the
Company amended the Rights Agreement to provide that the issuance of the Series
B Preferred Stock and the Common Stock, into which such stock is convertible,
will not give rise to a Stock Acquisition Date and that none of the holders
thereof will be deemed to be an Adverse Person, thereby avoiding the triggering
of the anti-takeover provisions of the Rights Agreement. Included in the
amendment were additional provisions to lower the threshold for the occurrence
of a Stock Acquisition Date form 20% to 10%, effective until January 21, 2007
and to extend the expiration of the Rights Agreement to January 21, 2007. The
primary purpose of the additional provisions is to maintain the availability of
certain net operating losses for the Company's use in the future; however, it
may also be deemed to have an "anti-takeover" effect as any acquisition of 10%
or more of the Company's Common Stock could result in the loss of the Company's
tax benefits, thus making the Company less attractive in any possible takeover.
Holders of the Series B Preferred Stock also have the right to elect
three of the five members of the Executive Committee. Thus, the members of the
Executive Committee nominated by the Series B Preferred Stockholders will have
an effective veto over certain major decisions of the Company and will provide
oversight to the Company's Chief Executive Officer.
- 13 -
<PAGE>
THE COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company consisted of five Directors
during 1996, none of whom was an employee or an officer of the Company. The
principal powers and duties of the Compensation Committee as established by the
Board of Directors are:
1. To review the Executive Compensation programs and policies and to employ
outside expert assistance, if required, to analyze Company compensation
practices to assure that they are consistent with corporate goals and
objectives;
2. To recommend to the Board of Directors for its approval the base salary of
the Chief Executive Officer ("CEO") and to review and approve the salary
recommendations of the CEO with respect to other members of top management;
3. To administer the Amended and Restated General and Construction Business
Unit Incentive Compensation Plans; such administration shall include the
power to (i) approve participants' participation in the Plans, (ii)
establish performance goals, (iii) determine if and when any bonuses shall
be paid, (iv) pay out any bonuses, in cash or stock or a combination
thereof, as the Committee shall determine from year to year, (v) construe
and interpret the Plans, and establish rules and regulations and perform
all other acts it believes reasonable and proper; and
4. To recommend to the Board of Directors annual profit and other targets for
the Company for the purpose of determining incentive compensation awards
under the provisions of the Amended and Restated General Incentive
Compensation Plan, for those corporate participants covered under this
plan.
Compensation Policy
The Compensation Committee strives to maintain corporate base salaries
and the total compensation package appropriate to attract and retain highly
qualified executives. This results in base salaries that generally are at the
median range of those of other construction companies but allow executives to
substantially exceed the median compensations levels when incentive compensation
is earned. While recognizing that it may be difficult to find other companies
with the same mix of business as the Company, the Committee, nevertheless,
believes that a comparison with other construction companies is appropriate
because the most substantial portion of the business of the Company is in the
construction area. The construction companies used for comparison for
compensation purposes include but are not limited to the same companies which
make up the construction peer group shown in the Performance
- 14 -
<PAGE>
Graph set forth in this proxy statement.
The compensation program for executive officers is composed of three
elements: base salaries, annual incentive bonuses and long term incentive stock
awards. These elements of compensation are designed to provide incentives to
achieve both short-term and long-term objectives and to reward exceptional
performance. Salaries and annual incentive compensation bonuses result in
immediate payout for performance and are largely tied to the profit and/or cash
flow results of the specific business unit over which the individual has a
direct influence. The value of the incentive stock awards depend upon longer
term results and the appreciation in market value of the Company's Common Stock.
Executive Salary Increases in 1996
The last salary increase for the CEO and the majority of senior
officers was as of December, 1994. As of December 31, 1996 there has been no
increase for the CEO and the majority of senior officers since the December 1994
changes.
Section 162 (m) of the Internal Revenue Code, enacted in 1993,
generally disallows a tax deduction to public companies for compensation over
$1,000,000 paid to the Company's Chief Executive Officer and four other most
highly compensated executive officers. The Compensation Committee has not
established any policy regarding annual compensation to such executive officers
in excess of $1,000,000. However, to date, no officer of the company has
received compensation in excess of $1,000,000 for any annual period.
Compensation of the Chief Executive in 1996
The base salary of the CEO remained throughout 1996 at the 1994
determined level of $412,000. In 1996, the CEO earned $136,000 in incentive
compensation based principally on achievement of pre-established corporate goals
prior to the real estate write down (see Note 4 to Notes to the Consolidated
Financial Statements included in the Company's 1996 Annual Report which
accompanies this Proxy Statement).
The Incentive Compensation Plan of the Company
The Incentive Compensation Plan is an integral part of the total
compensation package of the CEO, the approximately twenty executives whose
salaries are reviewed by the Compensation Committee, and at least sixty-five
other employees of the Company. Eligibility and designated levels of
participation are determined by the CEO subject to Compensation Committee
approval. Eligibility to participate under the Plan is limited to individuals
who are executives, managers and key employees of the Company and its
wholly-owned subsidiaries, whose duties and responsibilities provide them the
opportunity to (i) make a material and significant impact to the financial
performance of the Company; (ii) have major responsibility in the control of the
- 15 -
<PAGE>
corporate assets; and (iii) provide critical staff support necessary to enhance
operating profitability.
Participants can achieve incentive compensation awards ranging from
zero to as much as 100% of base salary depending basically on the performance of
the participant's business unit compared to targets established by the
Compensation Committee and each participant's level of participation, which is
reviewed by the Compensation Committee. The mechanisms of the Plan are expressed
in terms of level of participation, points deriving therefrom calculated on base
salary, and achievements, principally in the financial area, of goals such as
net income, cash flow, and pre-tax construction profits on a unit by unit basis.
The members of the executive management group, which currently includes the CEO
and three other executives, earn incentive compensation solely with reference to
the above goals on a total company basis.
No sums attributed to a participant in the Incentive Compensation Plan
become vested until the Compensation Committee approves the payment, usually in
March of each year. At the discretion of the Committee, payment can be made in
cash, stock or a combination of cash and stock.
In 1997, the Committee has authorized the payment of $2,834,000 of
Incentive Compensation payments for 1996 operations, to sixty-seven
participants, excluding participants in the real estate group. Payment of
incentive compensation awards in 1997 will be paid 41% in cash and 59% in common
stock (valued at fair market value, as defined). In 1992, the Committee
determined to abolish the concept of accruing Incentive Compensation for
participants in excess of the maximum annual amounts which could be paid. At
December 31, 1996, $1,836,000 of accrued Incentive Compensation carryforward
from years prior to 1992 remained committed but unpaid.
The Incentive Compensation Plan for the real estate group is based on
cash flow of the unit. The real estate group has been downsized and one of its
primary goals is to achieve cash flow so that debt may be serviced or
extinguished. In 1997, eight employees in the real estate group will receive
$157,000 on account of 1996 operations. Of the twelve cash flow goals
established for 1996 which consisted of net cash received from specified sales
of assets and refinancing of debt, six were accomplished and six were not. At
December 31, 1996, $37,000 of accrued incentive compensation carryforward from
years prior to 1992 remained committed but unpaid.
COMPENSATION COMMITTEE
John J. McHale, Chairman
Richard J. Boushka
Marshall M. Criser
Albert A. Dorman
Arthur J. Fox, Jr.
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<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table shows, for the years ended December 31, 1996, 1995
and 1994, the cash compensation paid by the Company and its subsidiaries, as
well as certain other compensation paid or accrued for those years, to the Chief
Executive Officer and each of the three other most highly compensated Executive
Officers of the Company whose salary and bonus exceeded $100,000 (the "Named
Executive Officers") in all capacities in which they served.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
--------------------------------------------- --------------------------------
Awards Payouts
------------- --------------
Number of
Securities Long-Term
Underlying Performance All Other
Name and Bonus Other Options Units - Compensation
Principal Position Year Salary (1) (2) Granted Payout (3)
- ------------------------ ------- ----------- ------------ --------- ------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
David B. Perini 1996 $412,000 $136,000 $ - - $ - $1,100
Chairman & Chief 1995 412,000 - - - - 1,100
Executive Officer 1994 400,700 - - - - 1,900
Richard J. Rizzo 1996 273,000 90,000 - - - 1,100
Executive Vice 1995 273,000 - - - - 1,100
President, Building 1994 260,400 166,800 - 10,000 - 1,900
Construction
John H. Schwarz 1996 273,000 90,000 - - - 1,100
Executive Vice 1995 273,000 - - 10,000 - 1,100
President, Finance & 1994 216,500 114,100 - - - 1,700
Administration
Donald E. Unbekant 1996 273,000 90,000 - - - 1,100
Executive Vice 1995 273,000 - - - - 1,100
President, Civil 1994 260,400 130,200 - 10,000 - 1,900
Construction
</TABLE>
- ------------------------
(1) Of the total bonus (or incentive compensation) reported for each of the
Named Executive Officers, 59% has been paid in shares of the Company's
Common Stock. The remaining amounts were paid in cash.
(2) Other annual compensation does not include a dollar amount which the
Company is unable to quantify, but which is estimated at not more than the
lesser of $50,000 or 10% of the compensation reported for each executive
officer, resulting from executive perquisites which may be of personal
benefit to such individuals.
- 17 -
<PAGE>
(3) All other compensation represents estimated annual Company 401(k) and ESOP
retirement contributions and, in 1996, consists of $200 of 401(k) and $900
of ESOP contributions for each of the Named Executive Officers.
Stock Options
There were no stock options or SARS granted to any of the named
Executive Officers during the year ended December 31, 1996.
Option Exercises and Holdings
The following table sets forth information with respect to the Named
Executive Officers, concerning the exercise of options during the year December
31, 1996 and unexercised options held as of December 31, 1996:
<TABLE>
<CAPTION>
Aggregated Option Exercises in the Last Fiscal Year
and Fiscal Year-End Option Values
Number of
Securities
Underlying
Shares Value of Unexercised In-the-
Acquired Value Number of Unexercised Money Options at Fiscal
Name on Exercise Realized Options at Fiscal Year-End Year-End (1)
- ------------------- -------------- ---------- --------------------------------- --------------------------------
Exercisable Unexercisable Exercisable Unexercisable
-------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
David B. Perini 0 $ 0 40,500 12,500 $ - $ -
Richard J. Rizzo 0 0 14,000 12,500 - -
John H. Schwarz 0 0 9,000 17,500 - -
Donald E. 0 0 14,000 12,500 - -
Unbekant
</TABLE>
- ---------------
(1) At December 31, 1996, all options listed had exercise prices in excess
of the quoted market value.
Long-Term Performance Units
Under the Performance Unit award feature of the 1982 Long-Term Plan,
key employees may be contingently awarded a number of units which will be earned
if specified financial performance goals are attained. A Performance Unit will
give an employee the right to receive up to a maximum of 200% of the amount of
the Performance Unit (nominally valued at $100) at the end of a specified period
depending on the level of achievement of the specified financial performance
goals.
No awards were made under the terms of this Plan in 1994, 1995 and 1996
- 18 -
<PAGE>
and the Company has no current plans to award such performance units in the
future.
Pension Plan Disclosure
The following table sets forth pension benefits payable based on an
employee's remuneration ("final average earnings") and "years of service" as
defined under the Company's non-contributory Retirement Plan ("the Plan") for
all its full-time employees and to the extent covered remuneration is limited by
the Internal Revenue Code of 1986, as amended, pension benefits payable have
been augmented based on the Company's Benefit Equalization Plan:
<TABLE>
Pension Plan Table -
Estimated Annual Pension Benefits (2) for
Years of Service Indicated (3)
------------------------------------------------------------------------------------------------
Remuneration(1) 15 Years 20 Years 25 Years 30 Years 35 Years
- --------------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
$125,000 $25,023 $33,364 $41,705 $41,705 $41,705
150,000 30,648 40,864 51,080 51,080 51,080
175,000 36,273 48,364 60,455 60,455 60,455
200,000 41,898 55,864 69,830 69,830 69,830
225,000 47,523 63,364 79,205 79,205 79,205
250,000 53,148 70,864 88,580 88,580 88,580
300,000 64,398 85,864 107,330 107,330 107,330
400,000 86,898 115,864 144,830 144,830 144,830
500,000 109,398 145,864 182,330 182,330 182,330
</TABLE>
- ---------------
(1) Remuneration covered by the Plan and the Benefit Equalization Plan is
limited to an employee's annual salary and for the Named Executive Officers
is limited to the amounts in the Annual Salary column included in the
Summary Compensation Table on page 17.
(2) The estimated annual benefits are calculated on a straight-line annuity
basis and are not subject to any further deductions for social security
since the Plan formula integrates the calculation of the benefits with
certain adjustments for Social Security, as defined.
(3) The years of service for the Named Executive Officers are as follows: D.B.
Perini (34 years), R.J. Rizzo (20 years), J.H. Schwarz (17 years) and D.E.
Unbekant (13 years).
- 19 -
<PAGE>
Performance Graph
Comparison of 5-year Cumulative Total Return
Among Perini Corporation, AMEX Market Value Index,
And Selected Construction and Real Estate Peer Groups
[GRAPHIC OMITTED]
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
Perini $100 153 101 82 72 68
AMEX 100 101 120 106 137 145
Construction 100 93 100 86 114 120
Real Estate 100 92 96 96 111 150
- ----------
(1) The above graph compares the performance of Perini Corporation ("Perini")
with that of the American Stock Exchange Market Value Index ("AMEX") and
selected Construction and Real Estate Peer Groups. Companies in the
Construction Peer Group Index ("Construction") are as follows: Guy F.
Atkinson Company, Banister, Inc., Granite Construction, Inc., Morrison
Knudsen Corporation and Turner Corporation. In 1996, Perini eliminated
Kasler Corporation from its peer group listing because the Company was
acquired. Companies in the Real Estate Peer Group Index ("Real Estate") are
as follows: Newhall Land and Farming Company, AMREP Corporation, FPA
Corporation, Major Realty Corporation, Christiana Companies, Inc., Rouse
Company, and Mission West Properties.
(2) The comparison of total return on investment (change in year end stock
price plus reinvested dividends) for each of the periods assumes that $100
was invested on January 1, 1992, in each of Perini Corporation, the
American Stock Exchange Market Value Index and selected Construction and
Real Estate Peer Groups, with investment weighted on the basis of market
capitalization.
- 20 -
<PAGE>
Directors Compensation
Fees for outside directors of the Company currently consist of an
annual retainer fee of $16,000, plus $900 per Board meeting attended, as well as
$900 per Committee meeting attended by members of the Executive, Audit,
Compensation and Nominating Committees. During 1996, the directors received
payment of their annual retainer fee of $16,000 in shares of the Company's
Common Stock in four quarterly installments. The number of shares was based on a
price equivalent to the average of the high and low prices prevailing on the
American Stock Exchange on the first business day of each quarter and aggregated
1,756 shares of Common Stock for each Director. Meeting fees are paid on a
quarterly basis in cash.
On May 19, 1994, the Outside Directors at that time, Messrs. John J.
McHale, Robert M. Jenney, Marshall A. Jacobs, Richard J. Boushka, Marshall M.
Criser, Arthur J. Fox, Jr., and Albert A. Dorman and Ms. Jane E. Newman and Ms.
Nancy Hawthorne were granted awards under the 1988 Perini Corporation Restricted
Stock Plan for Outside Directors of 1,148 common shares each, subject to certain
specified investment and transfer restrictions which expire on May 18, 1997, for
zero consideration. Based on a price equivalent to the average of the high and
low prices prevailing on the American Stock Exchange, the market value of the
grants approximated $14,000, the amount of the annual retainer in 1994, per
participant on the award date.
In addition, Bart W. Perini retired as an active employee of the
Company effective December 31, 1996. He will continue to serve as a Director.
The Company entered into a severance agreement with Mr. Perini which, in
recognition of his thirty-five years of service, provides for the continuation
of his base salary and benefits, including health and life insurance and pension
accrual, through December 31, 1998.
Employment Agreements
In connection with the closing of the Series B Preferred Stock Purchase
transaction on January 17, 1997, the Company entered into separate employment
agreements with David B. Perini, Richard J. Rizzo, John H. Schwarz and Donald E.
Unbekant. Under the terms of Mr. Perini's agreement, Mr. Perini will continue as
Chief Executive Officer and Chairman of the Board of Directors of the Company
(subject to election by the Board of Directors) for a period of three years. The
agreement provides that Mr. Perini will receive his current salary, which will
continue to be reviewed by the Board of Directors, and certain benefits,
including, but not limited to, health and life insurance and pension accrual. In
addition, Mr. Perini will continue to receive incentive compensation under the
Company's current plans and pursuant to any plans which are in effect
thereafter. Mr. Perini's agreement provides that he may voluntarily terminate
his employment for any reason with 60 days notice to the Company. In such event,
Mr. Perini would be entitled to receive his accrued salary and his accrued bonus
up to the date of such termination. Mr. Perini's agreement also provides that,
during the 90-day period following the first anniversary of the agreement, Mr.
Perini may voluntarily
- 21 -
<PAGE>
terminate his employment for any reason with 90 days notice to the Company. In
such event, Mr. Perini would be entitled to receive his salary and benefits for
the balance of the contract term. In the event of termination of Mr. Perini's
employment by the Company without cause or termination by Mr. Perini following a
reduction in Mr. Perini's salary, as defined, a reduction in other benefits, a
material change in his responsibilities at the Company or certain other events
deemed to be a "Constructive Termination", Mr. Perini would be entitled to
receive his base compensation and benefits for up to three years, depending on
when the termination of employment occurred. In the event Mr. Perini's
employment were terminated in accordance with any of the above provisions, his
stock options would become fully exercisable and/or vested and could be
exercised at any time during the salary continuation period (but not beyond the
applicable option term).
Each of the agreements with Messrs. Rizzo, Schwarz and Unbekant
provides that the executive will continue to serve the Company, in the position
or positions currently held, through December 31, 1997. Each agreement provides
that the executive will receive his current salary, which will continue to be
reviewed by the Board of Directors. Each executive will also continue to receive
benefits, including, but not limited to, health and life insurance and pension
accrual. In addition, each executive will continue to receive incentive
compensation under the Company's plans as in effect from time to time. Each
agreement provides that the executive may voluntarily terminate his employment
for any reason with 60 days notice to the Company. In such event, the executive
would be entitled to receive his accrued salary and his accrued bonus up to the
date of such termination. Each agreement provides that, in the event of the
termination of the executive's employment by the Company without cause or
termination by the executive following a reduction in the executive's salary or
other benefits, as defined, or a material change in the executive's
responsibilities at the Company or certain other events deemed to be a
"Constructive Termination," the executive would be entitled to receive his base
compensation and benefits for the greater of one year or the remaining contract
term. In the event the executive's employment were terminated in accordance with
the above provision, his stock options would become fully exercisable and/or
vested and could be exercised at any time during the salary continuation period
(but not beyond the applicable option term).
Certain Transactions
Effective January 17, 1997, the Company entered into a Management
Agreement with Tutor-Saliba Corporation in accordance with the terms of the
Series B Preferred Stock Purchase Agreement. Under the terms of the Management
Agreement, Ronald N. Tutor, the sole stockholder and Chief Executive Officer of
Tutor-Saliba Corporation, shall serve as Acting Chief Operating Officer of the
Company through the earlier of December 31, 1998 or other dates, as defined in
the Management Agreement, for an annual fee of $150,000. In addition, in order
to provide incentive to Mr. Tutor in this role, he was granted non-qualified
options on January 17, 1997 to purchase 150,000 shares of Common Stock of the
Company at fair market value, as defined, on the date of
- 22 -
<PAGE>
grant. While these options vest immediately, they are not exercisable until
forty months from date of grant and expire after eight years.
The Company has participated in several joint ventures with
Tutor-Saliba Corporation over the past 25 years and currently participates in
active joint ventures with a total contract value in excess of $1 billion. For
details on Tutor-Saliba Corporation's investment in Common Stock of the Company,
see "Certain Other Beneficial Holders" table on pages 10 to 12.
During 1984 the Company transferred certain income-producing real
estate properties and joint venture interests to a new company, Perini
Investment Properties, Inc. and distributed the common stock of that company to
the Company's shareholders on a share-for-share basis. In 1992, that company
changed its name to "Pacific Gateway Properties, Inc." ("PGP"), reflecting PGP's
West Coast focus and minimal ongoing interdependence with the Company.
The Company, through its wholly-owned subsidiary Perini Land and
Development Company ("PL&D"), and PGP are general partners in a real estate
joint venture known as Rincon Center Associates (a California limited
partnership). PL&D is the managing general partner with a 46% interest and PGP
is the other general partner with a 23% interest.
Other than Rincon Center, where the two parties have an ongoing
relationship in a specific project (see Note 11 to Notes to Consolidated
Financial Statements where PGP is the other general partner referred to in the
disclosure relating to the Rincon Center joint venture for additional
information on this relationship), there are no longer any material business
relationships between the Company and PGP.
B.
RATIFICATION OF APPOINTMENT OF AUDITORS
Upon recommendation of the Audit Committee, the Board has appointed the
firm of Arthur Andersen LLP, independent public accountants, as its auditors for
the fiscal year ending December 31, 1997. Although stockholder ratification is
not required, the Board has determined that it would be desirable to request an
expression from the stockholders as to whether or not they concur with the
foregoing appointment.
Arthur Andersen LLP has audited the accounts of the Company and its
subsidiaries since 1960. Representatives of Arthur Andersen LLP will be present
at the Annual Meeting of Stockholders of the Company and will be available to
respond to appropriate questions and to make a statement if they desire to do
so.
The Board recommends a vote FOR ratification of the appointment of
Arthur Andersen LLP as independent auditors for the Company for the fiscal year
ending December 31, 1997.
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<PAGE>
C.
OTHER MATTERS
The Board of Directors knows of no other matters which are likely to be
brought before the meeting. However, if any other matters, of which the Board of
Directors is not aware, are presented to the meeting for action, it is the
intention of the persons named in the accompanying form of proxy to vote said
proxy in accordance with their judgement on such matters.
The Company will bear the cost of solicitation of proxies. The
solicitation of proxies by mail may be followed by telephone or oral
solicitation of certain stockholders and brokers.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS ARE
URGED TO FILL IN, SIGN, DATE AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE
ENCLOSED ENVELOPE.
By order of the Board of Directors
Robert E. Higgins
Acting Secretary
Framingham, Massachusetts
April 9, 1997
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<PAGE>
