Perini Corporation
73 Mt. Wayte Avenue
Framingham, Massachusetts 01701
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 1998
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 14, 1998, at 9:00 a.m., for the following purposes:
Holders of Common Stock, $1.00 par value, of the Company (the "Common
Stock") and Holders of Series B Cumulative Convertible Preferred Stock,
$1.00 par value, of the Company (the "Series B Preferred Stock") voting
together as a class, will:
A. Elect four Class II Directors, to hold office for a three-year
term, expiring in 2001 and until their successors are chosen
and qualified.
B. Consider and ratify the selection of Arthur Andersen LLP,
independent public accountants, as auditors for the fiscal
year ending December 31, 1998.
C. Transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
At this meeting, the Company will also announce the results of the
election of two (2) Directors to the Board of Directors by holders of the
Company's $21.25 Convertible Exchangeable Preferred Stock pursuant to their
rights thereunder (see page 1 of Proxy Statement).
The Board of Directors has fixed the close of business on March 24,
1998, 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, Secretary
April 8, 1998
The Annual Report of the Company, including financial statements for
the year 1997, 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 14, 1998, at 9:00 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 8, 1998.
The Board of Directors has fixed the close of business on March 24,
1998, as the record date for the determination of the stockholders entitled to
vote at the meeting. As of March 24, 1998, the Company had outstanding 5,174,436
shares of Common Stock. Each share is entitled to one vote. In addition, the
holders of 168,408 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 in-kind dividends of 18,258 shares paid through March 15,
1998, 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 3,478,710 shares of Common Stock). Therefore, the maximum
aggregate number of votes of holders of Common Stock and Series B Preferred
Stock available as of the record date and entitled to vote at the annual meeting
is 8,653,146.
The terms of the Company's $21.25 Convertible Exchangeable Preferred
Shares (the "Preferred Stock"), of which 99,990 shares are outstanding, provide
that as a result of dividends on the Preferred Stock being in arrears for at
least six quarters, the holders of the Preferred Stock are entitled, voting as a
separate class, to elect two (2) Directors (the "Preferred Directors") to the
Company's Board of Directors, to hold office until the earlier of (i) the next
Annual Meeting of Stockholders and until their successors are chosen and
qualified or (ii) until all dividends in arrears have been paid or declared and
funds therefor set apart for payment. Bank Boston, N.A., as the Depositary for
the Preferred Stock (the "Depositary"), is the holder of all of the issued and
outstanding Preferred Stock. The terms of the Deposit Agreement by and among the
Company, the Depositary and the holders of Depositary Receipts (the "Receipt
Holders") representing the Preferred Stock provide that the Receipt Holders are
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<PAGE>
entitled to instruct the Depositary to vote the shares of Preferred Stock
represented by their respective Depositary Receipts. Concurrently, with the
mailing of this Proxy, the Depositary is sending the Receipt Holders a Notice of
Election of Preferred Directors and an Information Statement relating thereto.
The Receipt Holders will be forwarding Instruction Cards to the Depositary
instructing the Depositary how to vote the Preferred Stock. The Election of
Preferred Directors will be held and the results will be announced at the
Company's Annual Meeting of Stockholders on May 14, 1998.
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 on a fully diluted
basis (or 8,653,146 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 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, 1998. 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 1999 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the Company's
1999 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 9, 1998. In addition, stockholder proposals and director
nominations must comply with the requirements of the Company's ByLaws.
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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 13
members as follows:
ClassI: Marshall M. Criser, Arthur J. Fox, Jr., Nancy Hawthorne, and
Michael R. Klein were the four nominees elected as Directors
at the 1996 Annual Meeting to serve until the 2000 Annual
Meeting of Stockholders and until their successors are
chosen and qualified.
Class II: Richard J. Boushka, Roger J. Ludlam, Jane E. Newman, and
Ronald N. Tutor are the four nominees for election as
Directors at this Annual Meeting to serve until the 2001
Annual Meeting of Stockholders and until their successors
are chosen and qualified. Mr. Bart Perini, a current Class
II Director, will not be a nominee for re-election.
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. Boushka, Ludlam and Tutor, and Ms. Newman as
Directors to hold office until the 2001 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 1999 or 2000 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 March 2, 1998 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>
<CAPTION>
Number of Shares of Common Stock of the
Company Beneficially Owned
On March 2, 1998(1)(2)
--------------------------------------------------
Served Sole Voting
as a and
Name and Principal Occupation For Director Investment Percentage
The Past Five Years Age Since Power Shared Aggregate of Class
- ----------------------------------------- ------ ----------- --------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
David B. Perini (3)(6) 60 1970 173,195 (7) 205,449 (8) 378,644 7.29%
Chairman and Chairman of the Board
of Directors
Ronald N. Tutor (3)(6) 57 1997 351,318 (9) 0 351,318 6.81%
Vice Chairman since January 1, 1998,
formerly Acting Chief Operating
Officer since January 17, 1997, and
President and Chief Executive
Officer, Tutor- Saliba Corporation
Roger J. Ludlam 55 1997 0 0 0 -
President and Chief Executive Officer
since January 1, 1998
John J. McHale (5) 75 1962 6,590(10) 0 6,590 *
Formerly Deputy Chairman,
Montreal Baseball Club Ltd.
Richard J. Boushka (5)(6) 63 1975 7,390(10) 0 7,390 *
Principal, Boushka Properties, a
private investment firm
Bart W. Perini 58 1971 to 21,499(11) 205,449(12) 226,948 4.40%
Formerly President and Chief 1976 &
Operating Officer of Perini Land Since
and Development Company 1979
Marshall M. Criser (3)(4)(5) 69 1985 6,390(10) 200(13) 6,590 *
Of Counsel, Law firm of McGuire
Woods Battle & Boothe, LLP,
formerly Chairman, Law Firm of
Mahoney Adams and Criser
Arthur J. Fox, Jr. (5)(6) 74 1989 6,753(14) 0 6,753 *
Managing Director, Construction
Industry Presidents Forum; Editor
Emeritus, Engineering News-
Record
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Number of Shares of Common Stock
of the Company Beneficially Owned
On March 2, 1998(1)(2)
---------------------------------------------------
Served Sole Voting
as a and
Name and Principal Occupation For Director Investment Percentage
The Past Five Years Age Since Power Shared Aggregate of Class
- ----------------------------------------- ------ ----------- --------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jane E. Newman (4) 52 1992 4,769(15) 0 4,769 *
Interim Dean, Whittemore School of
Business & Economics, University of
New Hampshire, formerly Executive
Vice President, Exeter Trust
Company
Albert A. Dorman (4)(5) 71 1993 5,692(16) 0 5,692 *
Founding Chairman AECOM
Technology Corporation
Nancy Hawthorne (4)(6) 46 1993 5,385(17) 0 5,385 *
Chief Executive Officer & Managing
Partner, Hawthorne, Krauss &
Associates, formerly Executive Vice
President, Media One
Michael R. Klein (3)(4) 54 1997 2,285(18) 0 2,285 *
Partner, Law Firm of Wilmer,
Cutler & Pickering
Douglas J. McCarron (3)(5) 47 1997 0 0 0 -
General President, United
Brotherhood of Carpenters and
Joiners of America
Richard J. Rizzo 54 - 18,000(19) 0 18,000 *
Executive Vice President, Business
Development
John H. Schwarz (22) 59 - 19,046(20) 0 19,046 *
Executive Vice President, Finance
& Administration during 1997
Donald E. Unbekant (22) 66 - 18,000(21) 0 18,000 *
Executive Vice President, Civil
Construction during 1997
Robert Band 50 - 6,500(23) - 6,500 *
Executive Vice President, Chief
Financial Officer since December
1997
All Directors and Executive Officers as
a group (17 persons) 652,812 205,649(24) 858,461 16.65%
</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 March 2, 1998 plus 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 13,260 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, and 132 shares of Common Stock (resulting in the
assumed conversion of 200 shares of Convertible Preferred Stock, .662
shares of Common Stock for each share of Preferred Stock) in his children's
names for which he has Power of Attorney giving him voting power. Includes
36,500 shares for which Mr. Perini holds options. Includes 66 shares of
Common Stock resulting from the assumed conversion of 100 shares of
Convertible 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 Charles B. and Louis R. Perini Family Foundation,
Inc., formerly The
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<PAGE>
Perini Memorial Foundation, Inc., a Massachusetts charitable corporation
("The Perini Foundation"), of which David B. Perini is one of three
officers and directors.
(9) Includes 351,318 shares held in the name of Tutor-Saliba Corporation, a
company in which Mr. Tutor is the sole stockholder and Chief Executive
Officer.
(10) Includes 2,349 shares awarded in prior years pursuant to the 1988 Perini
Corporation Restricted Stock Plan for Outside Directors. Also includes
1,756 and 2,285 shares of Common Stock received in payment of the 1996 and
1997 director's annual retainer, respectively. See "Directors Compensation"
on page 21.
(11) Includes 6,500 shares for which Mr. Perini holds options.
(12) 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.
(13) Includes 200 shares which Mr. Criser owns jointly with his wife.
(14) Includes 2,197 shares awarded in prior years pursuant to the 1988 Perini
Corporation Restricted Stock Plan for Outside Directors. Also includes
1,756 and 2,285 shares of Common Stock received in payment of the 1996 and
1997 director's annual retainer, respectively. See "Directors Compensation"
on page 21.
(15 Includes 1,148 shares awarded in prior years pursuant to the 1988 Perini
Corporation Restricted Stock Plan for Outside Directors. Also includes
1,336 and 2,285 shares of Common Stock received in payment of the 1996 and
1997 director's annual retainer, respectively. See "Directors Compensation"
on page 21.
(16) Includes 1,451 shares awarded in prior years pursuant to the 1988 Perini
Corporation Restricted Stock Plan for Outside Directors. Also includes
1,756 and 2,285 shares of Common Stock received in payment of the 1996 and
1997 director's annual retainer, respectively. All of these shares are in a
Family Trust in which Mr. Dorman is one of two Trustees. See "Directors
Compensation" on page 21.
(17) Includes 1,344 shares awarded in prior years pursuant to the 1988 Perini
Corporation Restricted Stock Plan for Outside Directors. Also includes
1,756 and 2,285, shares of Common Stock received in payment of the 1996 and
1997 director's annual retainer, respectively. See "Directors Compensation"
on page 21.
(18) Includes 2,285 shares of Common Stock received in payment of the 1997
director's annual retainer. See "Directors Compensation" on page 21.
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<PAGE>
(19) Includes 18,000 shares for which Mr. Rizzo holds options.
(20) Includes 13,000 shares for which Mr. Schwarz holds options.
(21) Includes 18,000 shares for which Mr. Unbekant holds options.
(22) Mr. Schwarz and Mr. Unbekant retired at the end of 1997.
(23) Includes 6,500 shares for which Mr. Band holds options.
(24) 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 eleven times during 1997. 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 seven meetings during 1997. 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 five times during 1997. The Board of
Directors has a Nominating Committee which met once during 1997. The Board of
Directors has an Executive Committee, the duties of which are to give final
approval of certain decisions (generally financial in nature) and to give
overall direction to the Company's Chief Executive Officer. This Committee met
seven times during 1997. The members of each such committee are identified in
the above table. During 1997 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 . .................... FPL Group, Inc.
The Emerald Funds
Nancy Hawthorne.......................... Avid Technology
Commercial Union Corporation
New England Zenith Fund
John J. McHale........................... Schwartz Value Fund
Jane E. Newman........................... Consumers Water Company
Public Service Co. of N.H.
David B. Perini.......................... State Street Boston Corp.
Ronald N. Tutor ......................... Southdown, Inc.
CERTAIN OTHER BENEFICIAL HOLDERS
The following table sets forth certain information concerning
beneficial ownership as of
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<PAGE>
March 2, 1998 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:
Amount and
Nature of
Beneficial
Ownership Percentage
Name and Address (1) of Class
- ------------------------------------------------- -------------- ------------
Richard C. Blum & Associates, L.P. 2,618,309 (2) 33.67% (2)
909 Montgomery Street, Suite 400
San Francisco, CA 94133
PB Capital Partners, L.P. 2,091,655 (2) 28.86% (2)
909 Montgomery Street, Suite 400
San Francisco, CA 94133
The Common fund for Non-Profit Organizations 526,654 (2) 9.27% (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 824,634 (3) 13.79% (3)
Account P
111 Massachusetts Avenue, NW
Washington, DC 20001
Perini Corporation 408,639 (5) 7.92%
Employee Stock Ownership Trust ("ESOT") (4)
73 Mt. Wayte Avenue
Framingham, MA 01701
Tutor-Saliba Corporation 351,318 (6) 6.81%
15901 Olden Street
Sylmar, CA 91342
Quest Advisory Corp. 327,000 (7) 6.34%
1414 Avenue of the Americas
New York, NY 10019
Dimensional Fund Advisors, Inc. 284,600 (8) 5.52%
1299 Ocean Avenue
Santa Monica, CA 90401
TCW Group, Inc. 264,500 (9) 5.13%
865 So. Figueroa Street
Los Angeles, CA 90017
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<PAGE>
(1) See Footnote (1) on Page 6.
(2) Richard C. Blum & Associates, L.P. ("RCBA"), is the sole general
partner of PB Capital Partners, L.P. ("PB Capital") which directly owns
4,254 shares of Common Stock and beneficially has shared voting and
investing power in 101,053 shares of Series B Preferred Stock (voting
power equal to 2,087,401 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 25,496 shares of
Series B Preferred Stock (voting power equal to 526,654 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 the initial 34,500
shares of Series B Preferred Stock and additional in-kind dividends
representing 3,251 shares of Series B Preferred Stock (combined voting
power equal to 779,809 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. In addition Union directly owns 44,825
shares of Common Stock.
(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 71,118 shares. In
addition, there are 337,521 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
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<PAGE>
Corporation. Ronald N. Tutor, a Director and current Vice Chairman,
is also the sole stockholder and Chief Executive Officer of
Tutor-Saliba Corporation.
(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 dated February 6, 1998. Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment advisor, is
deemed to have beneficial ownership of 284,600 shares of Perini
Corporation stock as of December 31, 1997, all of which shares are held
in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares.
(9) Represents sole voting and investing power based on information
contained in Schedule 13G of the TCW Group, Inc. dated February 12,
1998.
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 was scheduled to expire 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
Series B
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<PAGE>
Preferred Stock to an investor group led by Richard C. Blum & Associates, L.P.,
for $30 million. The Series B Preferred Stock was convertible into 3,101,571
shares of Common Stock or approximately 39% of the outstanding Common Stock at
that time 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, upon conversion of the Series B
Preferred Stock, 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 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 have an
effective veto over certain major decisions of the Company and provide oversight
to the Company's Chief Executive Officer.
- 13 -
<PAGE>
THE COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company consists of six Directors,
none of whom is 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, and competitive with those of
comparable firms in the construction industry.
2. To recommend to the Board of Directors for its approval the base salary
of the Chairman and of the President and Chief Executive Officer and to
review and approve the salary recommendations of the President and
Chief Executive Officer with respect to other members of top
management;
3. 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 included in the Company pool;
and
4. 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 (vi) establish rules
and regulations and perform all other acts it believes reasonable and
proper.
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 allows executives to
substantially exceed the median compensation 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 Graph set forth in
this proxy statement.
The compensation program for executive officers is composed of three
elements: base
- 14 -
<PAGE>
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 payment for
performance and are tied to the achievement of profit and/or cash flow targets.
The value of the incentive stock awards depends upon the appreciation in market
value of the Company's Common Stock.
Executive Salary Increases in 1997
A new President and Chief Executive Officer was elected by the Company
effective January 1, 1998. The previous Chairman and Chief Executive Officer
continues as Chairman of the Company.
The last salary increase for the Chairman was as of December, 1994. As
of December 31, 1997 there has been no increase for the Chairman and the
majority of senior officers since the December 1994 changes. Due to a
realignment of senior management in late 1997, some executive salaries were
revised in accordance with new responsibilities. The newly appointed President
and Chief Executive Officer was granted a salary increase to coincide with his
added responsibilities.
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 Chairman and the Chief Executive Officer
The base salary of the Chairman remained throughout 1997 at the 1994
determined level of $412,000. In 1997, the Chairman earned no incentive
compensation since pre-established corporate goals were not achieved. The
Committee approved the base salary for the newly appointed President and Chief
Executive Officer at $325,000 for 1998. In addition, under the terms of his 1997
hire agreement, the President and Chief Executive Officer received a bonus of
$105,000 as part of his compensation package as Senior Vice President, Civil
Construction in 1997.
The Incentive Compensation Plan of the Company
The Incentive Compensation Plan is an integral part of the total
compensation package of the Chairman and the President and Chief Executive
Officer , as well as the 12 executives whose salaries were reviewed by the
Compensation Committee in 1997, and 50 other employees of the Company.
Eligibility and designated levels of participation are determined by the Chief
Executive Officer subject to Compensation Committee approval. Eligibility to
participate under the Plan is limited to individuals who are executives,
managers and key
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<PAGE>
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 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, part of which depends on the achievement
of business unit goals and part on the achievement of corporate goals. Each of
the business unit president's have the opportunity to earn up to an additional
50% of base salary for performance which is substantially beyond pre-established
targets. The mechanisms of the Plan are expressed in terms of levels of
participation, points deriving therefrom calculated on base salary, and
achievement of goals such as net income, cash flow, and pre-tax construction
profits on a unit by unit basis and on an overall corporate basis. The members
of the senior management group, corporate officers and key corporate staff earn
incentive compensation solely with reference to overall corporate goals.
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 1998, the Committee authorized the payment of $1,994,381 of
Incentive Compensation payments for 1997 operations, to 56 participants,
excluding participants in the real estate group. 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 1998, 4 employees in the real
estate group will receive $68,571 on account of 1997 operations. Payment of
incentive compensation awards for 1997 performance will be paid 41% in cash and
59% in common stock (valued at the average fair market value over the five
business days preceding one business day prior to payment).
In 1992, the Committee abolished the concept of accruing Incentive
Compensation for Participants in excess of the maximum annual amounts which
could be paid. At December 31, 1997, $1,268,038 of accrued Incentive
Compensation Carryforward from years prior to 1992 remained committed but
unpaid. The Committee authorized the payment of the accrued Incentive
Compensation Carryforward amounts in 1998; such amounts will be paid 100% in
shares of the Company's Common Stock.
COMPENSATION COMMITTEE
John J. McHale, Chairman Albert A. Dorman
Richard J. Boushka Arthur J. Fox, Jr.
Marshall M. Criser Douglas J. McCarron
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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, 1997, 1996
and 1995, 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 (4) 1997 $412,000 $ - $ - - $ - $2,300
Chairman & Chief 1996 412,000 136,000 - - - 1,100
Executive Officer 1995 412,000 - - - - 1,100
Richard J. Rizzo (4) 1997 273,000 - - - - 2,300
Executive Vice President, 1996 273,000 90,000 - - - 1,100
Building Construction 1995 273,000 - - - - 1,100
John H. Schwarz (5) 1997 273,000 - - - - 2,300
Executive Vice President, 1996 273,000 90,000 - - - 1,100
Finance & Administration 1995 273,000 - - 10,000 - 1,100
Donald E. Unbekant (5) 1997 273,000 - - - - 2,300
Executive Vice President, 1996 273,000 90,000 - - - 1,100
Civil Construction 1995 273,000 - - - - 1,100
</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.
(3) All other compensation represents estimated annual Company 401(k) and
ESOP retirement contributions and, in 1997 consists of $1,200 of 401(k)
and $1,100 of ESOP
- 17 -
<PAGE>
contributions for each of the Named Executive Officers.
(4) Effective January 1, 1998, Mr. Perini's principal position was changed
to Chairman of the Company and Chairman of the Board of Directors and
Mr. Rizzo's principal position was changed to Executive Vice President,
Business Development.
(5) Effective January 1, 1998, Messrs. Schwarz and Unbekant retired
from the Company.
Stock Options
There were no stock options or SARs granted to any of the named
Executive Officers during the year ended December 31, 1997.
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, 1997 and unexercised options held as of December 31, 1997:
<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 36,500 12,500 $ - $ -
Richard J. Rizzo 0 0 18,000 7,500 - -
John H. Schwarz 0 0 13,000 12,500 - -
Donald E. Unbekant 0 0 18,000 7,500 - -
</TABLE>
- ---------------
(1) At December 31, 1997, 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
- 18 -
<PAGE>
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 1995, 1996 and 1997
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:
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
- ------------ -------- -------- -------- --------- --------
$125,000 $ 24,828 $ 33,104 $ 41,381 $ 41,381 $ 41,381
150,000 30,453 40,604 50,756 50,756 50,756
175,000 36,078 48,104 60,131 60,131 60,131
200,000 41,703 55,604 69,506 69,506 69,506
225,000 47,328 63,104 78,881 78,881 78,881
250,000 52,953 70,604 88,256 88,256 88,256
300,000 64,203 85,604 107,006 107,006 107,006
400,000 86,703 115,604 144,506 144,506 144,506
500,000 109,203 145,604 182,006 182,006 182,006
- ---------------
(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 (35 years), R.J. Rizzo (21 years), J.H. Schwarz (18 years)
and D.E. Unbekant (14 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]
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
Perini $100 66 53 47 44 51
AMEX 100 105 104 120 162 209
Construction 100 108 92 123 129 140
Real Estate 100 119 105 135 143 172
- -------------
(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, BFC Construction Corp., Granite
Construction, Inc., Morrison Knudsen Corporation and Turner
Corporation. 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, 1993, in each of Perini Corporation,
the American Stock Exchange Market
- 20 -
<PAGE>
Value Index and selected Construction and Real Estate Peer Groups, with
investment weighted on the basis of market capitalization.
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 Audit, Compensation and
Nominating Committees, and $4,000 per meeting attended by members of the
Executive Committee. Mr. Ronald N. Tutor, acting Chief Operating Officer of the
Company since January 1997 and Vice Chairman of the Company since January 1998,
has opted to receive no Director fees since he is party to a Management
Agreement described in "Certain Transactions" on page 22. During 1997, the
Directors received payment of their annual retainer fee of $16,000 in shares of
the Company's Common Stock on April 9, 1997. The number of shares was based on a
price equivalent to the fair market value, as defined, of prices prevailing on
the American Stock Exchange on the date issued and aggregated 2,285 shares of
Common Stock for each Director, except for Mr. Tutor and Mr. McCarron, the
latter of which has requested that his fees be paid directly to his employer.
Meeting fees are paid on a quarterly basis in cash.
On January 17, 1997, the four non-employee Directors on the redefined
Executive Committee were granted options to purchase shares of the Company's
Common Stock, $1.00 par value, at fair market value at the date of grant. The
terms of these options, which expire on January 16, 2005, are generally similar
to those granted under the 1982 Stock Option Plan, except as to the timing of
their exercisability which is May 17, 2000. Messrs. Criser, Klein and McCarron
each received options to purchase 25,000 shares, the latter of which assigned
his options to the Union Labor Life Insurance Company Separate Account P, a
pension fund of which he is a Trustee, and Mr. Tutor received options to
purchase 150,000 shares (see "Certain Transactions" on page 22).
In addition, Bart W. Perini retired as an active employee of the
Company effective December 31, 1996. He served as a Director until the 1998
Annual Meeting. 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 Agreement
In connection with the closing of the Series B Preferred Stock Purchase
transaction on January 17, 1997, the Company entered into separate employment
agreement with David B. Perini. Under the terms of Mr. Perini's agreement, as
amended, Mr. Perini will continue as Chairman of the Company 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
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<PAGE>
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 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).
Certain Transactions
Effective with the issuance of the Series B Preferred Stock on January
17, 1997, the Company entered into an agreement with Tutor-Saliba Corporation
("TSC"), a California corporation engaged in the construction industry, and
Ronald N. Tutor, Chief Executive Officer and sole stockholder of TSC, to provide
certain management services, as defined. TSC holds a 6.81% interest in the
Company's $1.00 par value Common Stock (see "Certain Other Beneficial Holders"
table on pages 10 to 12), and currently participates in active joint ventures
with the Company with a total contract value of approximately $800 million. Mr.
Tutor was appointed as one of the three new Directors in accordance with the
terms of the Series B transaction, a member of the Executive Committee of the
Board and, during 1997, acting Chief Operating Officer of the Company. Effective
January 1, 1998, Mr. Tutor was appointed Vice Chairman of the Board of
Directors. Compensation for the management services consists of a monthly
payment of $12,500 to TSC and options granted to Mr. Tutor to purchase 150,000
shares of the Company's $1.00 par value Common Stock at fair market value, as
defined on the date of grant. While these options vest immediately, they are not
exercisable until forty months from date of grant and expire after eight years.
During 1997, the Company, with the approval of its Board of Directors,
consummated a transaction whereby it sold its 20% interest in two joint ventures
to TSC, the sponsoring partner, for a negotiated price of $4.5 million,
representing the Company's share of the current total forecasted profit less a
discount of approximately 7%. Since one project was approximately 24% complete
and the other project was 57% complete at December 31, 1997, the impact of this
transaction was to accelerate approximately $3.2 million of contract profits
- 22 -
<PAGE>
and receipt of the related cash.
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, 1998. 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, 1998.
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<PAGE>
C.
OTHER MATTERS
Except for the election of the Preferred Directors discussed on page 1
of this Proxy Statement, 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, Secretary
Framingham, Massachusetts
April 8, 1998
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<PAGE>
