INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant /X/
Filed by Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, For Use of the
Commission Only (as Permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Guy F. Atkinson Company of California
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
(5) Total fee paid:
- -------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- -------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- -------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
GUY F. ATKINSON COMPANY OF CALIFORNIA
1001 BAYHILL DRIVE
SAN BRUNO, CALIFORNIA 94066
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------
San Bruno, California
March 27, 1997
The Annual Meeting of Shareholders of Guy F. Atkinson Company
of California (the "Company") will be held at the South San
Francisco Conference Center, 255 South Airport Boulevard, South
San Francisco, California, on Thursday, April 17, 1997, at 10:30
a.m. for the following purposes:
1. To elect directors to serve until the 1998 Annual Meeting of
Shareholders and thereafter until their respective successors are
elected or appointed.
2. To approve a proposal to amend and restate the 1990
Executive Stock Plan.
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
All of the above matters are more fully described in the accompanying
Proxy Statement. Only shareholders of record on the books of the Company at the
close of business on March 4, 1997 will be entitled to vote at the meeting or
any postponement or adjournment thereof.
To assure your representation at the meeting, it would be appreciated if
you would sign and return the enclosed proxy. The giving of such proxy will not
affect your right to vote in person should you decide to attend the meeting.
Therese Ambrusko
Secretary
<PAGE>
ATKINSON
1001 BAYHILL DRIVE
SAN BRUNO, CALIFORNIA 94066
----------------
PROXY STATEMENT
----------
Mailing date: March 27, 1997
Your proxy in the form enclosed is solicited by the Board of Directors of
Guy F. Atkinson Company of California (the "Company") in connection with the
Annual Meeting of Shareholders to be held on April 17, 1997 and any adjournment
thereof. A proxy may be revoked at any time before it is exercised by voting in
person at the meeting, by giving written notice to the Secretary of the Company
or by giving a later dated proxy. The shares represented by the proxies received
which have been properly dated and signed and not revoked will be voted at the
Annual Meeting.
Only shareholders of record on the books of the Company at the close of
business on March 4, 1997 will be entitled to vote at the meeting. As of March
4, 1997, the outstanding voting securities of the Company consisted of 8,987,467
shares of Common Stock, par value $0.01 per share. Each shareholder entitled to
vote at the meeting is entitled to one vote for each share held as of the record
date.
With respect to the election of directors, the candidates elected are
those receiving the highest number of affirmative votes up to the number of
directors to be elected. Any other matter submitted for shareholder approval at
the Annual Meeting will require the affirmative vote of a majority of the shares
of the Company's Common Stock represented and entitled to vote at the meeting,
assuming that shares constituting more than 50% of the total number of shares
entitled to vote are represented at the meeting. The number of abstentions and
broker non-votes with respect to any matter being voted on are not counted
either for or against the matter.
All expenses in connection with the solicitation of proxies will be paid
by the Company. In addition to solicitation by mail, officers, directors, and
regular employees of the Company who will receive no extra compensation for
their services may solicit proxies by telephone, facsimile or personal call.
A copy of the Company's Annual Report on Form 10-K containing financial
statements for the fiscal year ended December 31, 1996 accompanies this Proxy
Statement.
ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting to serve until the
next Annual Meeting of Shareholders or until their respective successors are
elected or appointed and qualified. All of the nominees are presently members of
theBoard of Directors of the Company. Unless marked to the contrary, the proxies
received will be voted FOR the election of the nominees named below. In the
event any nominee is unable or declines to serve as a director at the time of
the Annual Meeting, the proxies will be voted for the balance of those named and
for such other nominee as the Board may select, or the size of the Board may be
reduced accordingly.
- 1 -
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES
Listed below are the names and ages of the nominees, their principal
employment for at least the past five years and the year in which each nominee
became a director of the Company.
PRINCIPAL EMPLOYMENT FOR AT DIRECTOR
NAME AGE LEAST THE PAST FIVE YEARS SINCE
Jack J. Agresti........59 Chief Executive Officer and President 1990
of the Company since April, 1994;
President and Chief Operating Officer
of the Company from April, 1991 to April,
1994; Executive Vice President from April,
1990 to April, 1991.
Duane E. Atkinson......69 Vice President of the Company since 1980 1979
Ray N. Atkinson .......68 Vice Chairman of the Company from May, 1979
1982 to May, 1991, when he retired.
William E. Burch.......72 Director of Kuhlman Industrial Corporation 1988
and Central PreMix Concrete Company;
Director, President and Chief Executive
Officer of Sedgwick-James from June, 1975
to January, 1981.
J. Phillip Frazier.... 58 President and Chief Executive Officer of 1987
Plum Street Enterprises, Inc. since Novem-
ber, 1996; Operating Partner, Stonebridge
Partners from September, 1994 to March,
1996; Chairman and Chief Executive Officer
of Hyster-Yale Materials Handling, Inc.
from June, 1989 to September, 1992
Donald R. Kayser...... 66 Principal, Kayser Partners, Ltd. since 1992
June, 1988; Interim Chairman and Chief
Executive Officer of Louisiana Pacific
Corporation from August, 1995 to January,
1996; Executive Vice President and Chief
Financial Officer of Morrison-Knudsen Corp.
from September, 1988 to February, 1990;
Senior Vice President and Chief Financial
Officer of Allied Signal Corporation from
April, 1984 to June, 1988.
- 2 -
<PAGE>
PRINCIPAL EMPLOYMENT FOR AT DIRECTOR
NAME AGE LEAST THE PAST FIVE YEARS SINCE
Ross J. Turner........ 66 Chairman of Genstar Investment Corporation 1988
since 1986; Director of Rio Algom Limited,
Great West Life & Annuity Insurance Co.,
and Blue Shield of California.
John F. Whitsett...... 56 Chairman of the Board of Directors of the 1979
Directors of the Company since February,
1995; President of Standard Brass Foundry
for more than the past five years.
John F. Whitsett is the first cousin of Duane E. Atkinson and
Ray N. Atkinson, who are brothers.
- 3 -
<PAGE>
STOCK OWNERSHIP OF EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth information as of January 31, 1997 as to
shares of Common Stock of the Company beneficially owned by each of the present
directors and nominees for election as directors, and by each of the executive
officers named in the Summary Compensation Table beginning on page _ and all
directors and executive officers of the Company as a group. Except as otherwise
indicated and subject to applicable community property laws, each person has
sole investment and voting power with respect to the shares shown.
NUMBER OF
SHARES OF
COMMON STOCK
AND NATURE OF
BENEFICIAL FOOTNOTE PERCENT
NAME OWNERSHIP (1) NUMBER OF CLASS
---- ------------- ------ --------
Jack J. Agresti 159,843 1.78
Duane E. Atkinson 76,325 (2) *
Ray N. Atkinson 104,858 (2) (3) (6) 1.17
William E. Burch 10,000 *
William J. Carlson 68,443 *
J. Phillip Frazier 1,000 *
John F. Huguet 37,372 *
Donald R. Kayser 3,500 *
Herbert D. Montgomery 13,151 *
Ross J. Turner 3,000 *
Thomas J. Walsh, III 23,760 *
John F. Whitsett 115,845 (4) (5) 1.29
All directors and
executive officers as
a group (14 persons
including those named
above) 617,097 (7) 6.87
* Less than 1%
(1) Includes shares allocated under the Company's Retirement Stock and
Investment Plan, as follows: Jack J. Agresti, 35,111 shares; Duane E.
Atkinson, 18,873 shares; Ray N. Atkinson, 15,106 shares; William J.
Carlson, 17,392 shares; Herbert D. Montgomery, 739 shares; Thomas J.
Walsh, III, 9,409 shares; and all directors and executive officers as a
group, 113,648 shares. Also includes options that are currently
exercisable as follows: Jack J. Agresti, 115,902 shares; William J.
Carlson, 50,871 shares; John F. Huguet, 37,272 shares; Herbert D.
Montgomery, 11,412 shares; Thomas J. Walsh, III, 14,351 shares; and all
directors and executive officers as a group, 251,264 shares.
(2) Does not include 641,910 shares held by the Atkinson Foundation of which
Duane E. Atkinson and Ray N. Atkinson are directors. The directors have
no beneficial interest in such shares.
(3) Includes 1,125 shares held in custodial accounts for three grandchildren
of Ray N. Atkinson, as to which he has sole voting and investment power
and as to which he disclaims beneficial ownership. Does not include 3,000
shares held by Mr. Atkinson's wife, as to which he has neither voting nor
investment power and as to which Mr. Atkinson disclaims beneficial
ownership.
(4) Does not include 861,620 shares held by the Myrtle L. Atkinson Foundation,
of which John F. Whitsett is a director. Mr. Whitsett has no beneficial
interest in such shares.
(5) Includes 20,610 shares held in trust or in custodial accounts of which Mr.
Whitsett is the sole trustee or custodian and as to which he has sole
investment and voting power. Does not include 4,723 shares held by Mr.
Whitsett's wife, as to which Mr. Whitsett disclaims beneficial ownership.
(6) Does not include 583,517 shares held by Willamette University. Ray N.
Atkinson is one of eight members of a committee of the Board of Trustees
of Willamette University which has voting power with respect to such
shares. Mr. Atkinson disclaims beneficial ownership thereof.
(7) Excludes shares excluded in notes (2), (3), (4), (5), and (6) above.
Includes shares included in notes (3) and (5) above.
- 4 -
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE OFFICERS' COMPENSATION
The following table sets forth the compensation earned during the three
fiscal years ended December 31, 1996 by the Company's Chief Executive Officer
and the other four most highly compensated executive officers of the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------- ------------------------- -------
(A) (B) (C) (D) (E)(1) (F) (G) (H) (I)(2)
Other Annual Restricted LTIP All Other
Name and Salary Bonus Compensation Stock Options/SARs* Payouts Compensation
Principal Position Year ($) ($) ($) Award(s) (#) ($) ($)
- ------------------- ---- ------ -------- ------------ ---------- ------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. J. Agresti 1996 $415,000 $120,000 0 65,000 $20,166
President and Chief 1995 $375,000 $187,500 0 65,000 $14,544
Executive Officer 1994 $358,271 $50,000 0 51,613 $13,048
W. J. Carlson 1996 $280,000 $80,000 0 30,000 $9,924
Senior Vice President 1995 $250,000 $65,000 0 30,000 $9,563
of the Company, 1994 $250,000 $0 0 18,065 $9,517
President, Atkinson
Construction Company
J. F. Huguet** 1996 $196,498 $0 0 27,000 $27,732
Senior Vice President 1995 $174,456 $100,000 0 30,000 $20,228
of the Company,Presi- 1994 $141,218 $21,951 0 12,903 $14,527
dent, Commonwealth
Construction Company
H. D. Montgomery*** 1996 $192,500 $50,000 0 26,000 $9,039
Senior Vice President, 1995 $175,000 $70,000 0 25,000 $5,676
Chief Financial Offi-
cer and Treasurer 1994 $88,513 $25,000 0 10,323 $598
and Treasurer
T. J. Walsh, III 1996 $180,000 $30,000 0 20,000 $8,842
Vice President of the 1995 $170,000 $40,000 0 25,000 $8,747
Company, President, 1994 $150,000 $0 0 6,452 $8,497
Walsh Construction
Company
</TABLE>
* The number of options granted in 1994 has been adjusted to account for the
extraordinary dividend declared in February, 1995.
** Compensation figures converted from Canadian dollars.
*** Mr. Montgomery joined the Company in June, 1994. His salary on an
annualized basis in 1994 was $160,000.
(1) No named executive officer received perquisites or personal benefits, the
aggregate value of which exceeded the lesser of $50,000 or 10% of salary and
bonus. No other value was received that required reporting in this column.
(2) The amounts disclosed in this column include:
(a) Company contributions made in fiscal year 1996 to the Atkinson
Retirement Stock and Investment Plan on behalf of the named executive officers
as follows: J. J. Agresti, $7,500; W. J. Carlson, $7,500; H. D. Montgomery,
$7,500; T. J. Walsh, III, $7,500.
(b) Company contributions made in fiscal year 1996 to the Guy F.
Atkinson Holdings Ltd. Employees' Money Purchase Pension Plan on behalf of
John F. Huguet in the amount of $26,369. Guy F. Atkinson Holdings Ltd. is a
Canadian subsidiary of Guy F. Atkinson Company.
(c) Payment by the Company in fiscal year 1996 of premiums for term life
insurance on behalf of the named executive officers as follows: J. J. Agresti,
$12,665 W. J. Carlson, $2,424; J. F. Huguet, $1,362; H. D. Montgomery, $1,539;
T. J. Walsh, III, $1,341.
-5 -
<PAGE>
DIRECTORS' COMPENSATION
During 1996 directors who were not employees were entitled to receive an
annual director's fee of $16,000, plus $1,500 for each Board meeting attended.
Directors who were not employees of the Company further were entitled to
receive, if serving as chairman of any committee of the Board, an annual fee of
$3,000, plus $1,000 for each committee meeting attended or, if serving as a
member of such committee, an annual fee of $2,000, plus $1,000 for each
committee meeting attended.
Mr. Whitsett receives a fee of $5,000 per month to serve as the Chairman
of the Board of Directors. This is in addition to the other fees he receives as
a director.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth the option grants made to the executive
officers named in the Summary Compensation Table above during the 1996 fiscal
year. No stock appreciation rights were granted in the 1996 fiscal year.
<TABLE>
<CAPTION>
Grant
Individual Grants Value Date
- ----------------------------------------------------------------------------------- ----------
(a) (b) (c) (d) (e) (f)
Options % of Total Options Exercise or Grant Date
Name Granted Granted to Base Price Expiration Present
(# Shares)(1) Employees ($/Share) Date Value ($)(2)
in Fiscal Year
- ------------------- ------------- ------------------ ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
J. J. Agresti 65,000 20.8% 10.00 2/15/06 $439,335
W. J. Carlson 30,000 9.6% 10.00 2/15/06 $202,770
H. D. Montgomery 26,000 8.3% 10.00 2/15/06 $175,734
J. F. Huguet 27,000 8.6% 10.00 2/15/06 $182,493
T. J. Walsh, III 20,000 6.4% 10.00 2/15/06 $135,180
</TABLE>
(1) Options were granted on February 15, 1996. The options are exercisable with
respect to 25% of the shares on the four anniversary dates following the date of
grant. Each option is exercisable over a period of up to ten years from the date
of grant, subject to continued employment. Payment of the option purchase price
may be made in cash, or shares of the Company's Common Stock owned by the
optionee for a period of six (6) months, or in any combination of cash and
shares of the Company's Common Stock.
(2) Present value was calculated using the Black-Scholes pricing model which
involves an extrapolation of future pricing levels based solely on past
performance. Use of this model should not be viewed in any way as a forecast of
the future performance of the Company's stock which will be determined by future
events and unknown factors.
- 6 -
<PAGE>
The inputs used in deriving present value were as follows:
o Option price Current market price at date of award
o Option fair market value Current market price at date of award
o Expected option term 10 years
o Stock price volatility 50.20%
o Expected dividend yield 0.00%
o Risk-free rate of return 5.81%
Stock price volatility is equal to the standard deviation of Atkinson daily
closing stock prices over the period commencing January 1, 1987 and ending
December 31, 1996. The risk-free rate of return is determined using the U.S.
Treasury constant maturity 10 year yield on the date of grant.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1996 AND FISCAL YEAR-END OPTION VALUES*
Exercises During Year Fiscal Year End
-------------------------------- -----------------------------------------------
(A) (B) (C) (D) (E)
Value of
Number of Securities Unexercised
Underlying Unexercised In-The-Money
Options (#) Options ($)**
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
---- ----------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
J. J. Agresti None None 115,902/147,356 $334,296/$291,077
W. J. Carlson None None 50,871/66,082 $151,457/$126,079
H. D. Montgomery None None 11,412/49,911 $29,201/$75,823
J. F. Huguet None None 37,272/58,551 $106,842/$108,008
T. J. Walsh, III None None 14,351/43,601 $45,496/$78,493
</TABLE>
* Option Terms: Option price is market at grant; term is ten years, subject
to continued employment. Right to exercise vests for 25% of each award's
shares per year; full vesting occurs in four years. Optionees may purchase
optioned shares with payment in cash or shares of the Company's common
stock.
** Based upon stock closing price of $10.50 on December 31, 1996
- 7 -
<PAGE>
PENSION PLANS
The following table sets forth the estimated annual benefits payable upon
retirement to Company employees under the Atkinson 1987 Pension Plan and the
Company's Excess-Benefit Plan ("the Pension Plans").
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF SERVICE
--------------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40 45
- ------------ ------- ------- ------- ------- ------- ------- -------
<C> <C> <C> <C> <C> <C> <C> <C>
$200,000 45,858 59,347 72,836 86,325 99,814 113,303 126,792
$250,000 57,758 74,747 91,736 108,725 125,714 142,703 159,692
$300,000 69,658 90,147 110,636 131,125 151,614 172,103 192,592
$350,000 81,558 105,547 129,536 153,525 177,514 201,503 225,492
$400,000 93,458 120,947 148,436 175,925 203,414 230,903 258,392
$450,000 105,358 136,347 167,336 198,325 229,314 260,303 291,292
$500,000 117,258 151,747 186,236 220,725 255,214 289,703 324,192
$550,000 129,158 167,147 205,136 243,125 281,114 319,103 357,092
$600,000 141,058 182,547 224,036 265,525 307,014 348,503 389,992
</TABLE>
The compensation covered for purposes of the Pension Plans includes salary
and bonus. In 1996, the named executive officers received covered compensation
as follows: J. J. Agresti, $535,000; W. J. Carlson, $360,000; J. F. Huguet, not
applicable; H. D. Montgomery, $242,500; T. J. Walsh, III, $210,000. Mr. Huguet
is a resident Canadian and does not participate in the Pension Plan.
The estimated credited years of service for the named executive officers are
as follows: J. J. Agresti, 37; W. J. Carlson, 25; J. F. Huguet, not applicable;
H. D. Montgomery, 2; T. J. Walsh, III, 16.
The calculations are straight-life annuity amounts based upon current plan
formulae and are not subject to Social Security offsets.
EMPLOYMENT AGREEMENTS
In 1994, the Company entered into an employment agreement with J. J.
Agresti, under which Mr. Agresti's employment will continue for a period of
three years from April 21, 1994 and will renew automatically for additional
periods of one year each, unless either party gives three months' written notice
of intent to terminate, up until Mr. Agresti's 65th birthday. The agreement also
provides that if Mr. Agresti voluntarily resigns or the Company terminates his
employment for any reason other than cause following a change in control of the
Company, he will be entitled to receive his salary and benefits for three years
after the termination. In March, 1997, the Agreement was amended to provide that
the Company will purchase an annuity to fund Mr. Agresti's earned Supplemental
Executive Retirement Plan (SERP) benefits following his retirement.
- 8 -
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
The purpose of this report is to describe the executive compensation
policies applied by the Executive Compensation Committee of the Company's Board
of Directors with regard to the executive officers of the Company, and the basis
for compensation awarded to the President and Chief Executive Officer during
fiscal year 1996.
The Executive Compensation Committee (hereafter "Committee") is appointed
annually to advise the Board of Directors on matters of executive compensation.
The Committee makes compensation recommendations to the Board for the Chief
Executive Officer position as well as the Chief Operating Officer position, if
occupied, proposes to the Board the terms of the programs and plans for managing
executive pay, and administers the 1990 Executive Stock Plan. The Committee's
members are William E. Burch (Chairman), Donald R. Kayser, and Ross J. Turner.
Each is an independent, outside Director; none is a former employee of the
Company. In 1996, no one on the Committee participated in the compensation
described here for executives. The Committee retains its own consulting firm to
advise it from time to time.
In evaluating and voting on the Company's executive compensation awards, the
Board and the Committee seek to achieve the following objectives:
o To attract, motivate and retain outstanding executives by providing
compensation opportunities consistent with those in the industry for similar
positions.
o To offer incentive for business success by putting a significant portion of
each executive's total pay at risk, based on Company performance (assessing
in the short term desirable operating results and, in the long term, stock
price growth and total shareholder return).
o To encourage career service by providing retirement income for executive
service consistent with industry practice.
The Committee recommended to the Board the compensation for Jack J. Agresti
as President and Chief Executive Officer. Mr. Agresti, who is also a member of
the Board of Directors, did not participate in any Board discussions regarding
his own pay nor did he vote on his own compensation.
BASE SALARY
The Committee annually reviews salary levels for the named executive
officers in relation to information available about salary levels for comparable
positions in the industry, as well as annual rates of executive salary movement
within the industry. It is the Committee's general policy to position the base
salary of executive officers, including the Chief Executive Officer,
approximately at mid-range (50th percentile) of salaries for comparable industry
positions. Survey data for this analysis is provided by an independent, outside
consulting firm retained by the Committee.
In December 1995, the Board, acting on the Committee's recommendation,
approved increasing Mr. Agresti's annual base salary from $375,000 to $415,000,
effective January 1, 1996. This was the first increase in base salary Mr.
Agresti received since his promotion to President & CEO on April 21, 1994.
Available survey data confirmed that this action met the Board's objective to
maintain salaries at a competitive level.
When the Company appointed Mr. Agresti President and Chief Executive Officer
on April 21, 1994, the Company entered into an employment agreement with Mr.
Agresti. In March 1997, the Board, acting
- 9 -
<PAGE>
upon a recommendation of the Committee, amended Mr. Agresti's employment
agreement relative to future funding of Mr. Agresti's earned Supplemental
Executive Retirement Plan (SERP) benefits. Terms of the employment agreement
and the amendment are described on Page 8 of this Proxy Statement.
The Chief Executive Officer recommends to the Executive Compensation
Committee salary adjustments for the other executive officer positions. The
Committee reviews these recommendations based on the same criteria used to
evaluate the competitive base salary of the Chief Executive Officer position.
In 1996, the four other named executive officers were awarded base salary
increases as recommended by the Chief Executive Officer. The Committee concurred
with these recommendations on the basis of data presented on salary levels for
comparable positions within the industry.
ANNUAL INCENTIVE AWARDS
The Board encourages executives to achieve desirable annual operating
results by offering such executives opportunities to earn annual incentive
awards. These incentive opportunities are designed to put a significant portion
of an executive's total pay "at risk," subject to the achievement of financial
and operating goals at levels designed to be consistent with industry practice.
The Chief Executive Officer and the Chief Operating Officer (when the position
is occupied), participate in individual incentive opportunities funded on the
basis of attainment of specific corporate financial goals for net income, return
on equity, new bookings, and margins on new bookings. These goals are set by the
Board.
The other named executive officers also participate in annual incentive
compensation plans which fund when pre-established corporate financial goals
related to their positions are achieved and/or pre-established goals related to
the operating plans of the businesses for which they are responsible are
achieved. Target awards for the five named executive officers were set from 35%
to 50% of base salary, with maximum awards not to exceed 2.2 times these
targets.
As shown on the Summary Compensation Table, four of the five named executive
officers were granted annual incentive awards for 1996, based on the level of
attainment of pre-established financial goals and individual achievement
factors. The specific 1996 corporate financial goals set by the Board for the
Chief Executive Officer were attained at approximately 58% of the target level.
Because of that achievement, and the Board's evaluation of Mr. Agresti's
individual accomplishments during the year, the Board awarded Mr. Agresti 58% of
his target award amount.
For the other named executives, attainment in 1996 of pre-established
financial goals and individual achievement factors ranged from 0% to 82% of
their target award amounts.
LONG-TERM INCENTIVE AWARDS
The Company offers incentive to management for contributions to stock price
growth and total shareholder return through participation in the 1990 Executive
Stock Plan. The Plan, which was amended and restated by shareholders in April
1995, provides for awards of non-qualified and incentive stock options,
restricted stock, and stock appreciation rights to officers and other key
employees, and represents additional "at risk" compensation. In 1996, awards
were made by the Executive Compensation Committee, whose members were not
participants in the Plan. All named executive officers were participants in the
Plan and all named officers received stock option awards in 1996, which are
shown in the Summary
- 10 -
<PAGE>
Compensation Table and the Option/SAR Grants Table. Most of the options granted
to date have achieved some gain, but the realization of meaningful compensation
values from them depends on future stock price growth.
No awards of restricted stock were made in 1996. Previous awards of
restricted stock were made in 1992, and the unqualified ownership of these
awarded shares of restricted stock were dependent upon attaining specific
earnings per share goals for each of the three years following the grants; short
of achieving each year's goal, a percentage of the awarded restricted shares
were forfeited back to the Company. Earnings per share goals were not met in any
of the three years (1993-1995), and all remaining shares previously awarded were
forfeited on March 5, 1996.
The Board believes the amended and restated 1996 Executive Stock Plan is
well designed to encourage management's effort in the shareholders' interests.
Little value will be realized from the Plan unless those interests are well
served.
The Company has not adopted a policy regarding how it will address Section
162(m) of the Internal Revenue Code regarding the deductibility of certain
compensation, because no officer of the Company will earn compensation that
approaches the million-dollar limitation.
The Board of Directors:
Jack J. Agresti
Duane E. Atkinson
Ray N. Atkinson
William E. Burch
J. Phillip Frazier
Donald R. Kayser
Ross J. Turner
John F. Whitsett
- 11 -
<PAGE>
PERFORMANCE GRAPH*
Note: The stock performance shown on the graph below is not necessarily
indicative of future price performance.
The following graph compares the percentage change in the cumulative total
shareholder return of the Common Stock of Guy F. Atkinson Company of California
("Atkinson") over the last five fiscal years with the performance of the NASDAQ
Stock Market - US Index and a Peer Group over the same period. The returns were
calculated assuming the investment in Atkinson Common Stock, the NASDAQ Stock
Market - US Index and the Peer Group on December 31, 1991, and reinvestment of
all dividends.
[TABLE FOR PERFORMANCE GRAPH IN EDGAR FORMAT]
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG GUY F. ATKINSON COMPANY, THE NASDAQ STOCK MARKET-US INDEX
AND A PEER GROUP
<TABLE>
<CAPTION>
MEASUREMENT PERIOD NASDAQ STOCK
(FISCAL YEAR COVERED) ATKINSON MARKET-US INDEX PEER GROUP
- -------------------- -------- --------------- ----------
<S> <C> <C> <C>
Measurement Pt -- 12/31/91 $100.00 $100.00 $100.00
FYE 12/31/92 144.00 116.00 93.00
FYE 12/31/93 127.00 134.00 87.00
FYE 12/31/94 154.00 131.00 61.00
FYE 12/31/95 194.00 185.00 67.00
FYE 12/31/96 227.00 227.00 95.00
</TABLE>
* The Peer Group includes the following companies:
Granite Construction Incorporated, Michael Baker Corporation, Morrison Knudsen
Corporation, Perini Corporation, and The Turner Corporation. These are the same
companies which have made up the Peer Group since 1993, except that Blount, Inc.
was deleted in 1994 because it ceased operating as a construction company, and
Kasler Holding Company, which has been in the peer group since 1993, changed its
name to Washington Construction Group, Inc. in April 1996. In September, 1996,
Washington Construction Group, Inc. merged with Morrison Knudsen Corporation.
The data included in this proxy statement for Morrison Knudsen Corporation
includes data from Washington Construction Group, Inc. and Kasler Holding
Company.
- 12 -
<PAGE>
CERTAIN TRANSACTIONS
In 1991, William J. Carlson, then President of Walsh Construction Company
division, was relocated by the Company from Trumbull, Connecticut to its
headquarters in South San Francisco, California. In connection with his
relocation, Mr. Carlson received a loan which is guaranteed by Guy F. Atkinson
Company, a Nevada corporation. The loan is in the amount of $156,000 and is
secured by a deed of trust on Mr. Carlson's residence. The entire principal
amount of the loan is due on December 31, 2001 and annual interest payments are
required on the outstanding principal at the rate of 6.00 percent per annum.
COMMITTEES OF THE BOARD OF DIRECTORS; MEETINGS
The Company has standing audit, executive compensation and corporate
governance committees of the Board of Directors.
The Audit Committee consists of three directors appointed by the Board. The
current members of the Audit Committee are William E. Burch, J. Phillip Frazier,
and Donald R. Kayser. The Audit Committee recommends to the Board the
appointment of an independent accounting firm, reviews the financial statements
of the Company with such accounting firm, inquires into the effectiveness of the
Company's internal auditing methods and procedures, and reports to the Board.
The Audit Committee held four meetings during 1996.
The Executive Compensation Committee consists of three directors appointed
by the Board, none of whom may be the Chairman or the President of the Company.
The current members of the Compensation Committee are William E. Burch, Donald
R. Kayser, and Ross J. Turner. The Compensation Committee held eight meetings
in 1996.
The Corporate Governance Committee, previously called the Nominating
Committee, consists of three directors appointed by the Board. The current
members of the Committee are Duane E. Atkinson, Ray N. Atkinson, and Ross J.
Turner. In December, 1996, the Board reconstituted the Committee to increase its
focus on matters of corporate governance. The Committee also recommends to the
Board nominations of directors. The Committee held one meeting during 1996. The
Committee will consider nominations recommended by shareholders, which should be
directed to the Secretary of the Company.
Six meetings of the Board of Directors were held in 1996. Each of the
directors attended no less than seventy-five percent of the meetings of the
Board and the standing committees on which such director serves.
- 13 -
<PAGE>
CERTAIN BENEFICIAL OWNERS OF SECURITIES
The persons listed below are known to the Company to be beneficial owners as
of January 31, 1997 of more than 5% of the Company's Capital Stock(1). Such
persons have sole voting and investment power with respect to the shares set
forth opposite their names below.
AMOUNT AND
NATURE PERCENT
NAME AND ADDRESS OF OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS
- ----------------------------- ------------- -------
Myrtle L. Atkinson Foundation 861,620 9.6
5828 Naylor Avenue
Livermore, CA 94550
Atkinson Foundation 641,910 7.1
1100 Grundy Lane
San Bruno, CA 94066
Willamette University 583,517 6.5
Salem, OR 97301
David L. Babson & Co. 551,600 6.1
One Memorial Drive
Suite 1100
Cambridge, MA 02142
Quest Advisory Corp. 527,400 5.9
1414 Avenue of the Americas
New York, NY 10019
- ---------
(1) As of January 31, 1997, the trustee of the Atkinson Retirement Stock and
Investment Plan was the owner of 1,373,397 shares of the Common Stock of the
Company, constituting 15.3% of the Common Stock, held for the benefit of
participants in the Plan. The trustee votes such shares only in accordance with
instructions from such participants and disclaims beneficial ownership thereof.
APPROVAL OF AMENDMENT AND RESTATEMENT OF THE 1990 EXECUTIVE
STOCK PLAN OF GUY F. ATKINSON COMPANY OF CALIFORNIA
On March 17, 1997, the Board of Directors amended and restated the Guy F.
Atkinson Company of California 1990 Executive Stock Plan (the "Plan"), subject
to the approval of the stockholders of the Company. The purpose of the Plan is
to encourage stock ownership by directors and key employees of the Company,
thereby providing an incentive for them to promote stock price growth and the
overall financial success of the Company.
PRINCIPAL FEATURES OF THE PLAN, AS AMENDED
(a) The Plan provides for the award of (i) nonqualified stock options
("NSOs") and incentive stock options ("ISOs") to purchase the Company's Common
Stock, (ii) shares of Common Stock for such
- 14 -
<PAGE>
consideration and subject to such restrictions as the Executive Compensation
Committee determines and (iii) rights or other units, the value of which is
based on the value of Common Stock, as the Executive Compensation Committee
deems appropriate.
(b) Key employees of the Company, as determined by the Executive
Compensation Committee, are eligible to receive awards under the Plan. The
options, benefits or amounts which would have been received by or allocated to
the named executive officers and executive officers as a group for the 1996
fiscal year if the Plan, as amended, had been in effect are not determinable.
Under a feature added to the Plan in March of 1997, non-employee directors are
eligible to participate in the Plan.
(c) As part of the amendment and restatement of the Plan, the number of
shares available for issuance under the Plan was increased by 700,000 shares. As
a result, up to 2,000,000 shares of Common Stock, $0.01 par value, are reserved
for issuance under the Plan. As of the date of this Proxy statement, no shares
remained available for issuance.
(d) The Board has the authority to amend the Plan at any time; provided,
however, that any amendment which increases the maximum number of shares
available or changes the class of persons eligible to receive awards must be
approved by the stockholders.
(e) The Plan remains in effect until termination by the Board or, if
earlier, March 17, 2007. No awards may be granted after termination of the Plan.
(f) Stock options may not be granted with a term of more than 10 years. ISOs
must bear an exercise price equal to the full fair market value of Common Stock.
NSOs may be granted at below fair market value. No person may receive more than
200,000 options per calendar year.
(g) Options may be subject to vesting and other restrictions, as the
Executive Compensation Committee determines at the time of grant. Shares of
Common Stock may be awarded subject to such restrictions that the Executive
Compensation Committee deems appropriate, including attainment of performance
objectives or completed years of service.
(h) The Plan permits the grant of stock appreciation rights ("SARs") or
units based on the value of Common Stock, payable in cash or stock and subject
to performance requirements, as the Executive Compensation Committee determines.
No person may receive more than 200,000 SARs per calendar year.
(i) Options may be exercised with cash or shares of Common Stock. The Plan
contains "cashless exercise" provisions and permits the withholding of shares
from exercise to cover applicable withholding taxes.
(j) Any options granted to non-employee directors vest and become
exercisable with respect to 33.33% of the options granted on each of the first
three annual anniversary dates of the grant, unless otherwise specified at the
time of the grant. The exercise price is equal to 100% of the fair market value
of Common Stock on the date of grant. A non-employee director's options have a
term of 7 years, regardless of whether or not the individual remains a Director
during the full term.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Neither the optionee nor the Company will incur any federal tax consequences
as a result of the grant of an option or SAR under the Plan. The optionee will
have no taxable income upon exercising an ISO
- 15 -
<PAGE>
(although the alternative minimum tax may apply), and the Company will receive
no deduction when an ISO is exercised. Upon exercising an NSO or SAR, the
optionee generally must recognize ordinary income equal to the "spread" between
the exercise price and the fair market value of Common Stock on the date of
exercise. The Company will be entitled to a deduction for the same amount. The
tax treatment of a disposition of option shares acquired under the Plan depends
on how long the shares have been held and on whether such shares were acquired
by exercising an ISO or by exercising an NSO or SAR. The Company will not be
entitled to a deduction in connection with a disposition of option shares,
except in the case of a disposition of shares acquired under an ISO before the
applicable ISO holding periods have been satisfied.
The Committee may permit a Plan participant to satisfy his or her
withholding tax obligations by surrendering a portion of his or her previously
issued shares to the Company, or by having the Company withhold a portion of any
shares that otherwise would be issued to him or her.
The above description of tax consequences is based on present federal tax
laws and regulations and does not purport to be a complete description of the
federal income tax aspects of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT AND
RESTATEMENT OF THE PLAN. A vote of a majority of the shares represented and
entitled to vote at the Annual Meeting is required for approval. An abstention
or shares represented by proxies which are marked "abstain" will have the same
effect as a vote against the proposal. The failure of a broker or other nominee
to vote shares for a beneficial owner will have no effect on the proposal.
CERTIFIED PUBLIC ACCOUNTANTS
The firm of Coopers & Lybrand L.L.P., Certified Public Accountants, has been
the auditor for the Company for many years. A representative of that firm is
expected to be present at the Annual Meeting. He or she will be available to
respond to appropriate questions and will have an opportunity to make a
statement if he or she desires to do so.
SHAREHOLDER PROPOSALS
To be considered for presentation to the Annual Meeting of Shareholders to
be held in 1998 a shareholder proposal must be received at the offices of the
Company, 1001 Bayhill Drive, San Bruno, California 94066, not later than
November 28, 1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's Directors,
certain executive officers, and any persons holding more than 10 percent of the
Common Stock are required to report their initial ownership of the Common Stock
and any subsequent changes in that ownership to the Securities and Exchange
Commission. Specific due dates for these reports have been established and the
Company is required to identify in this Proxy Statement those persons who failed
to file these reports when due. All of the filing requirements were satisfied in
1996. In making this disclosure, the Company has relied solely on copies of the
reports that have been filed with the Securities and Exchange Commission and
written representations of its Directors and executive officers.
- 16 -
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any other business that will be
presented for consideration at the Annual Meeting. If any other business
properly comes before the Annual Meeting or any adjournment thereof, the proxy
holders will vote in regard thereto according to their best judgment.
Therese Ambrusko
Secretary
- 17 -
<PAGE>
Appendix A - Form of Proxy
PROXY
GUY F. ATKINSON COMPANY OF CALIFORNIA
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
For Annual Meeting of Shareholders
April 17, 1997
Jack J. Agresti, Duane E. Atkinson and John F. Whitsett, and each of them,
each with full power of substitution, are hereby authorized to represent and to
vote any and all shares of Common Stock of GUY F. ATKINSON COMPANY OF
CALIFORNIA which the undersigned is entitled to vote at the Annual Meeting of
Shareholders to be held on April 17, 1997, or any adjournment or postponement
thereof, as specified on the reverse side and with all of the powers which the
undersigned would possess if personally present.
(Please Sign and Date the Proxy on the Reverse Side)
THIS PROXY WILL BE VOTED AS YOU SPECIFY HEREON, UNLESS Please mark
OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR THE your votes as / /
ELECTION OF THE DIRECTORS AND FOR THE PROPOSAL indicated in
this example
1. Election of directors to serve for the ensuing year:
FOR all WITHHOLD Jack J. Agresti, Duane E. Atkinson,
nominees AUTHORITY Ray N. Atkinson, William E. Burch,
listed to the right to vote for J. Phillip Frazier, Donald R.
all nominees Kayser, Ross J. Turner, John F.
listed to the Whitsett
right
/ / / /
(INSTRUCTION: To withhold authority
to vote for any individual nominee,
write that nominee's name in the
space provided below.)
------------------------------------
2. Proposal to amend and restate the 3. In their discretion, the Proxies
1990 Executive Stock Plan, as are authorized to vote upon any
described in the Proxy Statement. other matter that may properly
come before the meeting or any
FOR AGAINST ABSTAIN adjournment or postponement
/ / / / / / thereof.
Please sign exactly as name appears hereon. Give
your full title if signing in other than individual
capacity. All joint owners should sign.
Dated:______________________________________, 1997
__________________________________________________
(Signature)
__________________________________________________
(Signature)
<PAGE>
Appendix B - Amended and Restated 1990 Executive Stock Plan
GUY F. ATKINSON COMPANY OF CALIFORNIA
1990 EXECUTIVE STOCK PLAN
AS AMENDED AND RESTATED
1. Establishment and Purpose.
(a) Guy F. Atkinson Company of California (the "Company")
previously adopted the Guy F. Atkinson Company of
California 1990 Executive Stock Plan (the "Plan"). The
Company hereby amends and restates the Plan to read as
set forth herein, effective as of March 17, 1997 (the
"Effective Date"), but contingent upon approval by the
shareholders of the Company within 12 months after the
Effective Date. The Plan provides a means whereby:
(1) key employees of the Company and its Subsidiaries
may be given an opportunity to purchase shares of
the common stock of the Company (the "Stock")
pursuant to options which may qualify as incentive
stock options under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code")
(referred to as "incentive stock options");
(2) Non-Employee Directors of the Company and key
employees of the Company and its Subsidiaries may
be given an opportunity to purchase shares of
Stock pursuant to options which do not qualify as
incentive stock options (referred to as
"nonqualified stock options");
(3) Non-Employee Directors of the Company and key
employees of the Company and its Subsidiaries may
acquire Stock for such consideration (if any) and
subject to such restrictions (if any) as the
Committee determines appropriate; and
(4) Non-Employee Directors of the Company and key
employees of the Company and its Subsidiaries may
be granted rights or units the value of which is
based on the value of the Stock.
(b) The purpose of the Plan is to promote the long-term
success of the Company by encouraging key employees and
Non-Employee Directors to focus on long-range
objectives, by attracting and retaining key employees
and Non-Employee Directors, and by aligning the finan
cial interests of key employees and Non-Employee
Directors with the interests of shareholders.
2. Definitions.
(a) "Awards" refers collectively to Stock grants, Stock
sales, options to purchase Stock, stock appreciation
rights, and units issued pursuant to this Plan.
-1-
<PAGE>
(b) "Non-Employee Director" refers to a member of the Board
who is not a common-law employee of the Company or a
Subsidiary.
(c) "Participant" refers to a recipient of an Award.
(d) "Subsidiaries" refers to subsidiary corporations, as
defined in Section 424(f) of the Code (but substituting
"the Company" for "employer corporation"), including
entities which become Subsidiaries after adoption of the
Plan.
3. Administration of the Plan.
(a) The Plan shall be administered by the Executive
Compensation Committee (the "Committee") of the Board of
Directors of the Company (the "Board").
(b) The Committee shall consist of not less than two
members, who shall be members of the Board. The
composition of the Committee shall satisfy:
(1) such requirements as the Securities and Exchange
Commission may establish for administrators acting
under plans intended to qualify for exemption
under Rule 16b-3 (or its successor) under the
Securities Exchange Act of 1934; and
(2) such requirements as the Internal Revenue Service
may establish for outside directors acting under
plans intended to qualify for exemption under
section 162(m)(4)(C) of the Code.
(c) The Committee shall meet at such times and places and
upon such notice as the chairperson determines. A
majority of the Committee, but not less than two
persons, shall constitute a quorum. Any acts of the
Committee may be taken at any meeting at which a quorum
is present and shall be by majority vote of those
members entitled to vote. Additionally, any acts
reduced to writing or approved in writing by all the
members of the Committee shall be valid acts of the
Committee.
(d) The Committee shall determine which key employees and
Non-Employee Directors of the Company or its
Subsidiaries shall be granted Awards under the Plan, the
timing of such Awards, the terms thereof, and the number
of shares of Stock subject to each Award.
(e) The Committee shall have the sole authority, in its
absolute discretion, to adopt, amend and rescind such
rules and regulations as, in its opinion, may be
advisable in the administration of the Plan, to construe
and interpret the Plan, the rules and regulations and
the instruments evidencing Awards granted under the
-2-
<PAGE>
Plan, and to make all other determinations deemed
necessary or advisable for the administration of the
Plan. All decisions, determinations, and interpreta
tions of the Committee shall be binding on all
Participants.
(f) The Plan is intended to meet the requirements of
Rule 16b-3 promulgated by the Securities and Exchange
Commission under Section 16(b) of the Securities
Exchange Act of 1934 and the requirements of
Section 162(m)(4)(C) of the Code and shall be
administered and construed accordingly.
4. Stock Subject to the Plan; Limitations on Award.
(a) Awards may be granted under the Plan to eligible persons
for an aggregate of not more than two million
(2,000,000) shares of Stock. If an option is
surrendered for cash or other consideration, or for any
other reason ceases to be exercisable in whole or in
part, the shares which were subject to such option but
as to which the option had not been exercised shall
continue to be available under the Plan. If Stock is
granted or sold subject to restrictions and is
subsequently forfeited, the forfeited shares shall again
be available for Awards under this Plan. If stock
appreciation rights are granted and subsequently lapse
or are forfeited, the shares to which the rights relate
shall again be available for Awards under the Plan.
(b) If there is any change in the Stock subject to the Plan
or the Stock subject to any Award granted under the
Plan, through merger, consolidation, reorganization,
spin-off, recapitalization, reincorporation, stock
split, stock dividend (in excess of two percent), extra
ordinary cash dividend or other change in the corporate
structure of the Company, appropriate adjustments may be
made by the Committee in order to preserve but not to
increase the benefits to the Participants, including
adjustments in the aggregate number of shares subject to
the Plan, the number of shares and the price per share
subject to outstanding Awards, and the limitations in
subparagraph (c) below.
(c) The Company shall not grant, issue or sell to any
employee in any calendar year:
(1) options pursuant to paragraph 7 to purchase more
than two hundred thousand (200,000) shares of
Stock; or
(2) stock appreciation rights with respect to more
than two hundred thousand (200,000) shares of
Stock, pursuant to paragraph 8.
-3-
<PAGE>
5. Eligibility.
Persons who shall be eligible to have Awards granted to them
shall be such key employees of the Company or its Subsidi
aries as the Committee, in its discretion, shall designate
from time to time and the Non-Employee Directors of the
Company.
6. Non-Employee Directors.
Any other provision of the Plan notwithstanding, the partici
pation of Non-Employee Directors in the Plan shall be subject
to the following restrictions:
(a) All nonqualified options granted to a Non-Employee
Director under this paragraph 6 shall vest and become
exercisable with respect to 33.33% of the options
granted on each of the first three annual anniversary
dates of grant, unless otherwise specified at the time
of grant.
(b) The exercise price under all nonqualified options
granted to a Non-Employee Director under this para
graph 6 shall be equal to one hundred percent (100%) of
the fair market value of Stock on the date of grant,
payable in any form permitted under paragraph 14.
(c) All nonqualified options granted to a Non-Employee
Director under this paragraph 6 shall terminate on the
seventh (7th) anniversary of the date of the grant,
regardless of whether or not the individual remains a
member of the Board of Directors during the full period.
7. Terms and Conditions of Options.
(a) The exercise price of the Stock covered by each incen
tive stock option shall not be less than the per share
fair market value of such Stock on the date the option
is granted. Notwithstanding the foregoing, in the case
of an incentive stock option granted to a person
possessing more than ten percent (10%) of the combined
voting power of the Company or any Subsidiary, the
exercise price shall not be less than one hundred ten
percent (110%) of the fair market value of the Stock on
the date the option is granted. Nonqualified stock
options may be granted with an exercise price less than
fair market value. The exercise price of an outstanding
stock option shall be subject to adjustment to the
extent provided in paragraph 4.
(b) Each option granted pursuant to the Plan shall be
evidenced by a written stock option agreement executed
by the Company and the person to whom such option is
granted.
-4-
<PAGE>
(c) The Committee shall determine the term of each option
granted under the Plan, but the term of each option
shall be for no more than ten (10) years; provided,
however, that in the case of an incentive stock option
granted to a person possessing more than ten percent
(10%) of the combined voting power of the Company or any
Subsidiary, the term shall be for no more than five (5)
years.
(d) The stock option agreement may contain such other terms,
provisions and conditions as may be determined by the
Committee (not inconsistent with this Plan), including,
without limitation, stock appreciation rights with
respect to options granted under this Plan. If an
option, or any part thereof, is intended to qualify as
an incentive stock option, the stock option agreement
shall contain those terms and conditions which are
necessary to so qualify it.
8. Stock Appreciation Rights.
The Committee may, under such terms and conditions as it
deems appropriate, authorize the surrender by an optionee of
all or part of an unexercised option and authorize a payment
in consideration therefor in an amount equal to the differ
ence obtained by subtracting the option price of the shares
then subject to exercise under such option from the fair
market value of the Stock represented by such shares on the
date of surrender, provided that the Committee determines
that such settlement is consistent with the purpose of the
Plan. Such payment may be made in shares of Stock valued at
their fair market value on the date of surrender of such
option or in cash, or partly in shares and partly in cash.
Acceptance of surrender and the manner of payment shall be in
the discretion of the Committee. Any payments of cash under
this paragraph shall be from the general assets of the
Company.
9. Stock Awards.
The Committee may, in its discretion, issue Stock to eligible
persons as compensation for services rendered to the Company
or its Subsidiaries, on whatever basis and subject to such
performance requirements, terms and conditions as the
Committee determines. The terms and conditions of such an
Award shall be evidenced by a written agreement executed by
the Company and the Participant.
10. Unit Awards.
The Committee may, in its discretion, issue units to eligible
persons as compensation for services rendered to the Company
or its Subsidiaries, the value of such units to be based on
the value of the Stock. Unit Awards shall be subject to
whatever performance requirements, terms and conditions the
Committee determines appropriate. The terms of a Unit Award
-5-
<PAGE>
shall be evidenced by a written agreement executed by the
Company and the Participant.
11. Restrictions on Transfer of Stock.
Stock acquired under the Plan shall be subject to such
restrictions and agreements regarding performance, vesting,
sale, assignment, encumbrance, or other transfer as the
Committee deems appropriate at the time of making an Award.
12. Use of Proceeds.
Any cash proceeds realized from the sale of Stock pursuant to
the Plan or from the exercise of options granted under the
Plan shall constitute general funds of the Company.
13. Amendment, Suspension or Termination of the Plan.
(a) The Board may at any time amend, suspend or terminate
the Plan as it deems advisable; provided, however,
except as provided in paragraph 4, the Board shall not
amend the Plan in the following respects without the
consent of shareholders then sufficient to approve the
Plan in the first instance:
(1) to increase the maximum number of shares subject
to the Plan; or
(2) to change the designation or class of persons
eligible to receive Awards under the Plan.
(b) No Award may be granted during any suspension or after
the termination of the Plan, and no amendment, suspen
sion or termination of the Plan shall, without the
Participant's consent, alter or impair any rights or
obligations under any Award previously made under the
Plan.
(c) This Plan shall terminate 10 years from the date of the
most recent amendment approved by the Company's share
holders, unless previously terminated by the Board
pursuant to this paragraph.
(d) Upon a termination of the Plan, the Committee may
authorize the surrender by an optionee of all or part of
an unexercised option and authorize a payment in consid
eration therefor in the same manner as if the Partici
pant had surrendered an option under paragraph 8
regarding stock appreciation rights.
14. Consideration.
Payment of the exercise price of an option or payment of any
consideration required for a Stock Award granted under this
Plan shall be made in cash; provided, however, that the
Committee, in its sole discretion, may establish procedures
-6-
<PAGE>
which permit a Participant to pay the exercise or purchase
price in whole or in part by delivery (on a form prescribed
by the Committee) of an irrevocable direction to a securities
broker approved by the Committee to sell shares and deliver
all or a portion of the proceeds to the Company in payment
for the Stock. The Committee may also establish procedures
for the sale of shares of Stock to cover withholding taxes or
the withholding of shares of Stock issuable upon exercise of
an option to satisfy applicable withholding taxes to the
extent permitted by applicable law.
Date Amended and Restated By Company: March 17, 1997.
Date Approved By Shareholders: ________, 1997.
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<PAGE>
