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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Dames & Moore, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- - --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / 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:
- - --------------------------------------------------------------------------------
SEC 1913 (12/93)
<PAGE>
[LOGO]
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Dames & Moore, Inc. on August 12, 1996, beginning at 8:30 a.m., at the Sheraton
Grande Hotel Los Angeles, 333 South Figueroa Street, Los Angeles, California
90071.
Details of business to be conducted at the annual meeting are provided in
the enclosed Notice of Annual Meeting of Shareholders and Proxy Statement. Also
enclosed for your information is a copy of our Annual Report to Shareholders for
1996.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING, REGARDLESS
OF THE SIZE OF YOUR HOLDINGS. THEREFORE, PLEASE COMPLETE AND RETURN THE ENCLOSED
PROXY CARD AS SOON AS POSSIBLE.
We hope you can attend the meeting. If you plan to do so and are a
shareholder of record, please indicate that you plan to attend the meeting on
the space provided on your proxy card.
Very truly yours,
George D. Leal
Chairman of the Board
June 28, 1996
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD.
<PAGE>
DAMES & MOORE, INC.
911 WILSHIRE BOULEVARD, SUITE 700
LOS ANGELES, CALIFORNIA 90017
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 12, 1996
The Annual Meeting of the Shareholders of Dames & Moore, Inc., a Delaware
corporation (the "Company"), will be held on August 12, 1996, beginning at 8:30
a.m., at the Sheraton Grande Hotel Los Angeles, 333 South Figueroa St., Los
Angeles, California 90071, for the following purposes:
1. To elect a Board of Directors of 11 members.
2. To consider and transact such other business as may properly come before
the meeting or at any adjournment thereof.
The Board of Directors has fixed the close of business on June 17, 1996 as
the record date for determining those shareholders entitled to notice of, and to
vote at, the meeting and at any adjournment thereof.
By Order of the Board of Directors,
Stephanie H. Paxton
Assistant Secretary
June 28, 1996
Los Angeles, California
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD IN THE ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE SO THAT YOUR SHARES
WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH YOUR INSTRUCTIONS.
<PAGE>
DAMES & MOORE, INC.
911 WILSHIRE BOULEVARD, SUITE 700
LOS ANGELES, CALIFORNIA 90017
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 12, 1996
This Proxy Statement and the accompanying form of proxy are being mailed to
shareholders on or about June 28, 1996 in connection with the solicitation by
the Board of Directors of Dames & Moore, Inc., a Delaware corporation (the
"Company"), of proxies for use at the Annual Meeting of Shareholders of the
Company on August 12, 1996, and at any adjournment thereof, for the purposes set
forth in the accompanying Notice of Annual Meeting.
Although the principal solicitation of proxies is being made through this
Proxy Statement, proxies may also be solicited personally, by telephone or by
mail by directors, officers or employees of the Company. Such persons will not
receive any additional compensation for their solicitation services. The Company
will pay the entire expense of preparing, printing and mailing proxy
solicitation material on behalf of the Board of Directors, including amounts
paid in reimbursement to banks, brokerage firms and others for their expenses in
forwarding soliciting material to beneficial owners of shares of the Company's
common stock, $.01 par value ("Common Stock").
VOTING SECURITIES
The Board of Directors has fixed the close of business on June 17, 1996 as
the record date for determining those shareholders entitled to notice of, and to
vote at, the annual meeting and at any adjournment thereof. As of June 17, 1996,
there were 21,886,648 shares of Common Stock issued and outstanding and entitled
to vote at the annual meeting. The Company has no other voting securities
outstanding. Each shareholder of record is entitled to one vote per share owned
on all matters submitted to a vote of shareholders except that, as described in
more detail below, each shareholder is entitled to cumulate his or her votes in
electing directors.
Shares represented by duly executed and dated proxies in the accompanying
form and received before the annual meeting will be voted at the annual meeting.
Where a shareholder specifies a choice on the proxy with respect to any matter
to be acted upon, the shares will be voted accordingly by the proxy holders
named in the proxy. Where no choice is specified, the shares represented by the
proxy will be voted as described in this Proxy Statement with respect to the
election of directors and in accordance with the best judgment of the proxy
holders with respect to any other business that properly comes before the annual
meeting.
A shareholder has the power to revoke a proxy at any time before it is
exercised by filing with the Secretary of the Company either an instrument
revoking the proxy or a duly executed proxy bearing a later date. A proxy may
also be revoked by a shareholder who is present at the annual meeting and who
expresses a desire to vote in person.
A majority of the Company's outstanding shares of Common Stock as of June
17, 1996, represented in person or by proxy, will constitute a quorum for the
transaction of business at the annual meeting. Abstentions on any particular
matter will be counted for purposes of determining the presence of a quorum.
Abstentions will also be treated as shares that are present and entitled to vote
with respect to the matter on which the abstentions are indicated but as not
voted with respect to that matter. If a broker indicates on the proxy that it
does not have discretionary authority to vote certain shares on a particular
matter, those shares will be counted for purposes of determining the presence of
a quorum. However, the shares will not be treated as shares that are present and
entitled to vote with respect to the matter as to which the broker indicates
that it lacks voting authority.
1
<PAGE>
ELECTION OF DIRECTORS
VOTING PROCEDURES
The Company's Certificate of Incorporation and Bylaws provide that the Board
of Directors shall consist of not less than 10 nor more than 15 directors, the
exact number of directors to be determined from time to time by resolution
adopted by the directors then in office. In August 1995, the Board of Directors
increased the authorized number of directors from 10 to 11. Accordingly, 11
directors are to be elected at the annual meeting, each to hold office until the
next annual meeting of shareholders and the election and qualification of a
successor or the director's earlier death, resignation or removal. The 11
persons receiving the highest number of affirmative votes at the annual meeting
will be elected as directors of the Company.
Because cumulative voting is permitted in the election of the Company's
directors, each shareholder, in person or by proxy, is entitled to cast a number
of votes equal to the number of shares of Common Stock standing in such
shareholder's name as of June 17, 1996, multiplied by the number of directors to
be elected (in this case, 11). A shareholder is entitled to cast all such votes
for a single nominee for director or for any two or more nominees in such
proportion as the shareholder may decide.
If a shareholder desires to cumulate his or her votes, the accompanying
proxy should be marked to indicate clearly that the shareholder desires to
exercise the right to cumulate votes and to specify how the votes are to be
allocated among the nominees for directors. For example, a shareholder may write
next to the name of the nominee or nominees for whom the shareholder desires to
cast votes the number of votes to be cast for such nominee or nominees.
Alternatively, without exercising his or her right to vote cumulatively, a
shareholder may instruct the proxy holders not to vote for one or more nominees
by striking a line through the name(s) of such nominee or nominees.
The Board of Directors recommends that shareholders grant proxies to vote
for all 11 of the nominees for directors listed below. In order to permit the
election of as many as possible of the following nominees, the Board of
Directors also recommends that shareholders do not cast their votes on a
cumulative basis. Unless marked otherwise, proxies will be voted by the proxy
holders in such a manner as to elect all or as many of the following nominees as
possible. Unless marked otherwise, proxies will give the proxy holders
discretionary authority to cumulate votes if they so choose and to allocate
votes among the nominees in such manner as they determine is necessary in order
to elect all or as many of such nominees as possible.
If any of the nominees listed below refuses or is unable to serve as a
director, the proxy holders will vote for a substitute nominee or nominees
recommended by the Board of Directors. Each of the following nominees has agreed
to serve if elected, and the Board of Directors has no reason to believe that
any of such nominees will be unwilling or unable to serve if elected as a
director.
2
<PAGE>
NOMINEES TO THE BOARD OF DIRECTORS
The following persons have been nominated for election as directors:
<TABLE>
<CAPTION>
NAME AGE POSITION
- - --------------------- --- -----------------------------------------------
<S> <C> <C>
George D. Leal 62 Chairman of the Board
Arthur C. Darrow 52 Chief Executive Officer, President and Director
Robert M. Perry 64 Executive Vice President, Interim Chief
Financial Officer and Director
Richard C. Tucker 54 Senior Vice President and Division Manager,
Government Services Division and Director
John P. Trudinger 52 Vice President and Director
Norman A. Barkeley 66 Director
Michael R. Peevey 58 Director
James E. Seitz 68 Director
Robert J. Lynch, Jr. 63 Director
Anthony R. Moore 49 Director
Harald Peipers 68 Director
</TABLE>
George D. Leal has been employed by the Company since 1959. He has served as
Chairman of the Board since 1981, and served as Chief Executive Officer from
1981 through 1994. He is a director of BW/IP, Inc. Mr. Leal has bachelor's and
master's degrees in civil engineering from Santa Clara University and the
California Institute of Technology, respectively, and a master's degree in
business administration from the University of Chicago.
Arthur C. Darrow has been employed by the Company since 1973. He has served
as a director since 1994 and as Chief Executive Officer since 1995. Between 1993
and 1994, he served as Chief Operating Officer. He has served as President since
1993. Between 1991 and 1993, he served as Senior Vice President -- Western North
America Division; and between 1988 and 1991, as the Company's Western Region
General Manager and Division Manager -- Western North America. Mr. Darrow has
bachelor's and master's degrees in geology from the University of California,
Santa Barbara.
Robert M. Perry has been employed by the Company since 1955. He has served
as a director since 1981, and as an Executive Vice President since 1991. Between
1978 and 1995, he served as Chief Financial Officer, and is currently serving as
Interim Chief Financial Officer. He has a bachelor of science degree in civil
engineering from the University of Michigan.
Richard C. Tucker has been employed by the Company since 1974. He has served
as a director since 1992 and as Senior Vice President and Manager -- Government
Services Division since 1994. Between 1990 and 1994, he served as the Company's
Middle Atlantic Region and Government Services (East) Group General Manager.
Prior to 1990, he was the Washington, D.C. Office Managing Principal-in-Charge.
He has bachelor's and master's degrees in civil engineering from the Georgia
Institute of Technology.
John P. Trudinger has been employed by the Company since 1970. He has served
as a director since 1995 and as a Vice President since 1991. Between 1985 and
1991, he served as General Manager -- Pacific, Far East and Australia Region. He
has a bachelor's degree in geology from the University of Melbourne and a
master's degree from the University of Adelaide.
Norman A. Barkeley is Chairman of the Board and Chief Executive Officer of
Ducommun Incorporated, a manufacturer of components and assemblies for the
aerospace and wireless communications industry. He has served with Ducommun
Incorporated in this position since 1988. Mr. Barkeley has served as a director
of the Company since 1993. He is also a director of Golden Systems, Inc. Mr.
Barkeley has a bachelor's degree in business administration from Michigan State
University.
3
<PAGE>
Michael R. Peevey has served as President of New Energy Ventures, Inc. since
March 1, 1995. He retired in 1993 as President and a director of SCEcorp and its
subsidiary, Southern California Edison Company, a position he accepted in 1990.
He was an Executive Vice President of these companies from 1985 to 1990. He has
served as a director of the Company since 1993, and he is also a director of
Electro Rent Corporation, Amerigon and Ocal, Inc. Mr. Peevey has bachelor's and
master's degrees in economics from the University of California at Berkeley.
James E. Seitz has served as a director of the Company since 1992. He was a
partner of Touche Ross & Co. and, as a result of the merger of Touche Ross & Co.
with another accounting firm, of Deloitte & Touche from 1955 to 1990. Mr. Seitz
has a bachelor's degree in engineering and a master's degree in business
administration from the University of Michigan.
Robert J. Lynch, Jr. is President and Chief Executive Officer of American &
Foreign Enterprises, Inc., a New York-based company that represents European and
Latin American companies and investors. He has served in this position since
1975. Mr. Lynch has served as a director of the Company during 1994 and
previously served as a director of the Company from 1987 to 1992. Mr. Lynch was
a director of Data Broadcasting Co. until November 30, 1995, and is a director
of Hadron, Inc. and Colonia Insurance Co.
Anthony R. Moore has been a Chief Executive of Investment Banking Services
at BZW, the investment banking division of Barclays Group, since 1994. He served
previously as a Member of the Board of Bankers Trust International from 1992 to
1994 and as a Member of CNW Management Committee of County NatWest Limited from
1991 to 1992. Mr. Moore has served as a director of the Company since 1995.
Between 1983 to 1991, Mr. Moore served in a number of senior positions for
Goldman Sachs in New York, London, Hong Kong and Tokyo.
Harald Peipers has served as a director of the Company since 1985. Dr.
Peipers is an attorney-at-law in Essen, Germany. He served as a member of the
Board of Executive Directors of Hochtief Aktiengesellschaft vorm. Gebr. Helfmann
("Hochtief AG"), a German corporation engaged in civil engineering and
construction, between 1975 and 1994. He has a doctorate degree in economics and
law from the University of Heidelberg and is a director of Keller Group plc in
London, England.
Dr. Peipers and Mr. Lynch are representatives of Hochtief, Inc., a Delaware
corporation and subsidiary of Hochtief AG which owns 17.1 percent of the
outstanding shares of the Company's Common Stock. The Board of Directors
informally agreed with Hochtief, Inc. to permit it to designate two nominees for
election as directors at the annual meeting.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The business of the Company is managed by and under the direction of the
Board of Directors as provided by the laws of Delaware, the Company's state of
incorporation. During the fiscal year ended March 29, 1996, the Board of
Directors met four times. Each current director attended more than 75 percent of
the aggregate number of meetings of the Board of Directors held during the
period for which he was a director and meetings of the committees of the Board
held during the periods he served on such committees.
The Audit Committee of the Board of Directors reviews the scope of the
independent public auditors' examination and related fees, the accounting
principles applied by the Company in financial reporting, the scope of internal
auditing procedures and the adequacy of internal controls. James E. Seitz
(Chairman) and Michael R. Peevey are the members of the Audit Committee. The
committee met three times during fiscal 1996.
The Compensation Committee administers the Company's Long-Term Incentive
Plan. The Compensation Committee also establishes the salary and bonus of the
Company's Chief Executive Officer and approves the salaries and bonuses of the
Company's other executive officers. The Compensation Committee's report on
Executive Compensation is contained in a subsequent section of this Proxy
Statement. Norman A. Barkeley (Chairman), James E. Seitz and Michael R. Peevey
are the members of the Compensation Committee. The Compensation Committee met
five times during fiscal 1996.
4
<PAGE>
The Executive Action Committee of the Board of Directors is permitted to
approve certain contracts and to take various other specified actions on behalf
of the Board of Directors between meetings of the Board. During fiscal 1996, the
members of the Executive Action Committee were George D. Leal, Robert M. Perry,
Arthur C. Darrow and Richard C. Tucker. The Executive Action Committee did not
hold any meetings during the fiscal year ended March 29, 1996.
The Board of Directors is responsible for the nomination of candidates for
election as directors. In March 1995, the Board appointed a Nominating Committee
to establish criteria for desired qualifications of director candidates;
evaluate and recommend qualified candidates for nomination; and recommend
directors for membership on the various Board committees. Recommendations of the
Nominating Committee are subject to the approval of the Board. The members of
the Nominating Committee are Michael R. Peevey (Chairman), Richard C. Tucker and
James E. Seitz. The Nominating Committee met one time during fiscal 1996.
In connection with future shareholders' meetings, the Board of Directors and
the Nominating Committee will consider director nominations recommended by the
Company's shareholders but have not established formal procedures for the
submission of such recommendations.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
With respect to each person known by the Company to be the beneficial owner
of more than five percent of its Common Stock, each director and nominee for
director of the Company, each of the executive officers named in the Summary
Compensation Table presented below and all directors and executive officers of
the Company as a group, the following table sets forth the number of shares of
Common Stock beneficially owned as of March 30, 1996 by each such person or
group and the percentage of the outstanding shares of the Company's Common Stock
beneficially owned as of March 30, 1996 by each such person or group.
5
<PAGE>
Unless otherwise indicated, each of the following shareholders has, to the
Company's knowledge, sole voting and investment power with respect to the shares
beneficially owned, except to the extent that such authority is shared by
spouses under applicable law.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT OF COMMON STOCK
BENEFICIALLY OWNED AS BENEFICIALLY OWNED AS
OF OF
NAME OF BENEFICIAL OWNER MARCH 30, 1996 MARCH 30, 1996
- - ------------------------------------------------------------ ---------------------- -----------------------
<S> <C> <C>
5% SHAREHOLDERS
Hochtief, Inc. (1).......................................... 3,700,000 17.1
DIRECTORS
George D. Leal (2).......................................... 453,651 2.1
Arthur C. Darrow (3)........................................ 271,498 1.3
Robert M. Perry (4)......................................... 366,727 1.7
John P. Trudinger (5)....................................... 141,372 *
Richard C. Tucker (6)....................................... 169,675 *
James E. Seitz (7).......................................... 1,540 *
Harald Peipers (8).......................................... 0 0
Norman A. Barkeley.......................................... 1,500 *
Michael R. Peevey........................................... 3,000 *
Robert J. Lynch, Jr. (9).................................... 0 0
Anthony R. Moore............................................ 1,300 *
NAMED EXECUTIVE OFFICERS NOT INCLUDED ABOVE**
Kevin J. Freeman (10)....................................... 36,027 *
Henry Klehn, Jr. (11)....................................... 397,833 1.8
Peter G. Rowley (12)........................................ 137,848 *
James V. Toto (13).......................................... 345,853 1.6
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (18
PERSONS)................................................... 2,630,609 12.2
</TABLE>
- - ------------------------
* Owns less than 1% of the Company's outstanding shares of Common Stock.
** Mr. Darrow is also a named executive officer.
(1) The address of Hochtief, Inc., a Delaware corporation, is c/o Corporation
Service Company, 1013 Centre Road, Wilmington, Delaware 19805. Hochtief,
Inc. shares voting and investment power, and beneficial ownership, of the
3,700,000 shares of Common Stock as to which it is the record holder with
Hochtief AG, a German corporation and parent of Hochtief, Inc., and with
RWE Aktiengesellschaft ("RWE"), a German corporation and parent of Hochtief
AG. The address of Hochtief AG is Rellinghauser Str. 53-57, D-4300 Essen 1,
Germany; the address of RWE is Kruppstrasse 5, D-4300 Essen 1, Germany. The
foregoing information is based upon a Schedule 13D dated April 10, 1992
that Hochtief, Inc., Hochtief AG and RWE filed with the Securities and
Exchange Commission.
(2) Information presented for Mr. Leal includes 14,000 shares of Common Stock
owned by the George and Mary Ann Leal Foundation, a charitable non-profit
corporation, and as to which Mr. Leal may be deemed the beneficial owner.
Mr. Leal is President and Chairman of the Board of the foundation and,
subject to the approval and supervision of the foundation's Board of
Directors, is responsible for directing the voting and disposition of these
14,000 shares. Mr. Leal has no pecuniary interest in these shares and
disclaims beneficial ownership of them. Information presented for Mr. Leal
also includes 21,375 shares which Mr. Leal has the right to acquire through
the exercise of stock options within 60 days.
(3) Information presented for Mr. Darrow includes a total of 500 shares of
Common Stock owned by a child and as to which Mr. Darrow may be deemed the
beneficial owner. Mr. Darrow disclaims
6
<PAGE>
beneficial ownership of these shares. Also included are 173,467 shares of
Common Stock owned by the Darrow Family Trust, of which Mr. Darrow is
trustee. Information presented for Mr. Darrow also includes 17,125 shares
which Mr. Darrow has the right to acquire through the exercise of stock
options within 60 days.
(4) Information presented for Mr. Perry includes 2,109 shares of Common Stock
owned by the Perry Trusts, of which Mr. Perry is the trustee. Information
presented for Mr. Perry also includes 14,700 shares which Mr. Perry has the
right to acquire through the exercise of stock options within 60 days.
(5) Information presented for Mr. Trudinger includes 5,795 shares which Mr.
Trudinger has the right to acquire through the exercise of stock options
within 60 days.
(6) Information presented for Mr. Tucker also includes 13,675 shares which Mr.
Tucker has the right to acquire through the exercise of stock options
within 60 days.
(7) Information presented for Mr. Seitz includes 1,540 shares of Common Stock
owned by the Seitz Family Trust, a revocable living trust of which Mr.
Seitz and his spouse are the trustees and share voting and investment
power.
(8) Dr. Peipers is a representative of Hochtief, Inc. The information presented
for Dr. Peipers does not include any shares owned by Hochtief, Inc.
(9) Mr. Lynch is a representative of Hochtief, Inc. The information presented
for Mr. Lynch does not include any shares owned by Hochtief, Inc.
(10) Information presented for Mr. Freeman also includes 12,275 shares which Mr.
Freeman has the right to acquire through the exercise of stock options
within 60 days.
(11) Information presented for Mr. Klehn includes 364,733 shares of Common Stock
owned by the Henry Klehn and Brenda W. Klehn Trust, of which Mr. Klehn is a
co-trustee. Information presented for Mr. Klehn also includes 16,800 shares
of Common Stock owned by the Klehn Family Foundation, a charitable
non-profit corporation, and as to which Mr. Klehn may be deemed the
beneficial owner. Mr. Klehn is President and Chairman of the Board of the
Klehn Family Foundation and, subject to the approval and supervision of the
foundation's Board of Directors, is responsible for directing the voting
and disposition of these 16,800 shares. Mr. Klehn has no pecuniary interest
in these shares and disclaims beneficial ownership of them. Information
presented for Mr. Klehn also includes 16,300 shares which Mr. Klehn has the
right to acquire through the exercise of stock options within 60 days.
(12) Information presented for Mr. Rowley includes 6,300 shares which Mr. Toto
has the right to acquire through the exercise of stock options within 60
days.
(13) Information presented for Mr. Toto includes 37,500 shares of Common Stock
owned by his spouse and as to which Mr. Toto may be deemed the beneficial
owner. Information presented for Mr. Toto also includes 10,500 shares of
Common Stock held in trusts for the benefit of his children and as to which
Mr. Toto may be deemed the beneficial owner. Mr. Toto's spouse is the
trustee of these trusts. Mr. Toto disclaims beneficial ownership of the
37,500 shares owned by his spouse and the 10,500 shares held in trusts for
his children. Information presented for Mr. Toto also includes 15,300
shares which Mr. Toto has the right to acquire through the exercise of
stock options within 60 days.
Section 16(a) of the Securities Exchange Act of 1934 and regulations adopted
thereunder require the Company's directors and executive officers and persons
who own more than ten percent of the outstanding shares of the Company's Common
Stock to file with the Securities and Exchange Commission, the New York Stock
Exchange and the Company initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Based
solely upon (a) the Company's review of Forms 3, 4 and 5 (and any amendments
thereto) that were furnished to the Company pursuant to Section 16(a) and
applicable regulations by the foregoing persons and (b) written representations
by such reporting persons, the Company believes that all applicable Section
16(a) filing requirements were complied
7
<PAGE>
with on a timely basis by these reporting persons with respect to the Company's
most recent fiscal year, except (1) William M. Greenslade, a former
employee/director and (2) John P. Trudinger, a current employee/director, each
reported two transactions on Form 5 which were not previously reported on Form 4
on a timely basis, and (3) Robert M. Perry, a current employee/director who
reported a transaction on an amended Form 5 which was not reported on his
original Form 5.
COMPENSATION OF DIRECTORS
The Company pays each of its outside directors an annual retainer fee of
$18,000 plus $1,000 per day, payable either in cash or toward purchase of stock
at fiscal year-end, for each Board meeting and committee meeting attended by the
director. Outside directors also are reimbursed for actual out-of-pocket travel
expenses incurred in connection with attendance at Board or committee meetings
and receive grants of options on the first business day which follows the date
of the conclusion of the annual meeting to purchase 5,000 shares of Common Stock
at an exercise price equal to 100% of the fair market value of the stock as of
the date the option is granted and pursuant to the other terms and conditions
described in the Company's 1995 Stock Option Plan for Non-Employee Directors.
Other directors receive no remuneration for serving as directors other than
reimbursement of travel expenses.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows aggregate cash and long-term compensation paid or
accrued for each of the last three fiscal years to the Chief Executive Officer
and the four other most highly compensated executive officers of the Company.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
(1) UNDERLYING
NAME AND PRINCIPAL ---------------------- OPTIONS/ ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) SARS (#) COMPENSATION ($)(2)
- - ------------------------ ---- ---------- --------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
Arthur C. Darrow 1996 $ 374,712 $90,000 0 $ 8,661
Chief Executive 1995 273,557 95,000 16,000 8,698
Officer and President 1994 233,558 66,000 8,000 13,667
Kevin J. Freeman 1996 218,077 60,000 0 7,022
Senior Vice President 1995 203,846 67,000 12,500 8,190
1994 173,558 59,000 5,500 10,130
Henry Klehn, Jr. 1996 209,039 55,000 0 6,858
Executive Vice 1995 203,846 52,000 9,500 7,877
President 1994 250,000 51,000 7,600 13,634
James V. Toto 1996 209,039 50,000 0 6,420
Senior Vice President 1995 203,846 47,000 9,500 8,311
1994 205,000 55,000 7,100 11,485
Peter G. Rowley 1996 184,038 60,000 0 0
Senior Vice President 1995 178,365 27,000 5,000 0
1994 160,000 33,000 3,600 12,200
</TABLE>
- - ------------------------
(1) The dollar value of perquisites and other personal benefits, if any, for
each of the named executive officers was less than the reporting thresholds
established by the Securities and Exchange Commission.
(2) The compensation reported includes Company contributions to the Capital
Accumulation Plan, a defined contribution retirement plan, made during the
1994, 1995 and 1996 fiscal years and payments to equalize cost of living and
certain other expenses related to international assignment.
8
<PAGE>
OPTION/SAR GRANTS IN 1996 FISCAL YEAR
As discussed in the Report of the Compensation Committee on Executive
Compensation, no options were awarded to executive officers in fiscal 1996,
other than to a newly hired executive as an inducement to accept employment with
the Company. No stock appreciation rights ("SARs") were granted during the year.
AGGREGATED OPTION/SAR EXERCISES DURING 1996 FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table provides information with respect to the exercise of
stock options during the fiscal year ended March 29, 1996 by the executive
officers named in the Summary Compensation Table, and with respect to
unexercised "in-the-money" stock options outstanding as of March 29, 1996.
(In-the-money stock options are options for which the exercise price is less
than the market price of the underlying stock on a particular date.) No
executive officer or any other employee of the Company held or exercised any
SARs at any time during fiscal 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS HELD AT IN-THE-MONEY OPTIONS/SARS
SHARES FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---------------- ------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Arthur C. Darrow 0 0 17,125 17,500 $0 $0
Kevin J. Freeman 0 0 12,275 13,175 0 0
Henry Klehn Jr. 0 0 16,300 12,425 0 0
James V. Toto 0 0 15,300 12,300 0 0
Peter F. Rowley 0 0 6,300 5,550 0 0
</TABLE>
- - ------------------------
(1) These values are based on a price of $11.125 per share, the closing price of
the Common Stock on the New York Stock Exchange on March 29, 1996.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
In line with the Company's objective to maximize long-term return to its
shareholders, the Compensation Committee annually reviews and adjusts, as
required, the compensation of the Company's executive officers. The Committee
believes that maintaining appropriate compensation policies and programs is an
important factor in attracting, motivating, and retaining effective senior
executives. A significant portion of each executive's annual and long-term
compensation is linked directly to performance. Moreover, the Company requires
that senior executives and other officers hold significant stock positions in
the Company, thereby making their long-term interests compatible with those of
public shareholders.
The Compensation Committee of the Board of Directors, which is composed
entirely of independent outside directors, is responsible for establishing
salary and incentive awards for each of the Company's executive officers. The
Company's Board of Directors has established the policy on officer share
ownership. The Compensation Committee has independently approved the share
ownership policy as part of the compensation program and makes compensation
awards accordingly. In making judgments and reaching conclusions on appropriate
levels of executive compensation, the Committee takes many factors into account.
These include the changing business environment in which the Company operates,
competition in the marketplace for executive talent, performance of the Company,
annual and long-term enhancement of shareholder value, and the performance of
each executive officer in meeting his individual financial and non-financial
objectives.
Each element of the compensation program for the CEO and other executive
officers is discussed subsequently. The specific elements consist of base
salary, annual incentive compensation, long-term incentive compensation, and
share ownership.
In establishing executive officer compensation levels for fiscal year 1996,
the Committee referred to previous compensation studies that had been
commissioned by the Company in fiscal 1995 as well as more recent data available
from an industry compensation survey of both privately held and publicly held
9
<PAGE>
engineering companies. The Committee recognized that few engineering firms are
comparable overall to Dames & Moore in size, scope of operations and performance
characteristics, and thus exercised considerable subjective judgment in
establishing executive officer compensation levels for fiscal 1996.
In setting base salaries, the Committee judged that the Company's existing
salary structure for most existing executive positions was competitive with mean
salary levels for positions of comparable responsibility. The exception to this
was the CEO's salary as discussed below. For fiscal 1996, salary increases
ranging from zero to 10%, and averaging 4.7%, were granted to nine executive
officers (excluding the CEO) based on each executive's organizational level of
responsibility and demonstrated past performance in that position.
Cash bonuses were awarded based on individual performance and performance of
the business unit managed by the executive. Consideration was given to
performance in meeting objectives for revenue growth, cost control, increase in
market share, improvement in quality of services provided to clients, human
resource development, and profitability. The Committee also took account of the
Company's relative performance in the increasingly competitive business
environment in which it operated in fiscal 1996. Of these factors, the most
heavily weighted were those relating to whether revenue and profit objectives
were met. Cash incentive bonuses for nine executive officers averaged 26% of
salary.
With one exception, no options were awarded to Executive Officers in fiscal
1996. The purpose of deferring option awards was to put these awards on the same
annual cycle as cash bonus awards; that is, approximately two months after the
close of the fiscal year when operating results for the year are known. Option
awards will resume on this new schedule in fiscal 1997. The one exception
pertains to an award of options granted to a newly hired executive as an
inducement to accept employment with the Company.
At the beginning of fiscal 1996, the Company's revenue base increased
approximately 50% as the result of two major acquisitions. In recognition of the
greater scope and complexity of the CEO's responsibilities resulting from these
acquisitions, early in fiscal 1996 the Committee set the CEO's salary at
$380,000, which represented a salary increase of 17%. The Committee's judgment
was that this salary level was competitive with salary compensation levels
offered by firms of comparable size in the engineering services industry.
At the conclusion of fiscal 1996, the Committee took several factors into
account in determining the appropriate cash incentive bonus award for the
Company's CEO. Among these factors, the following were considered most relevant:
(a) execution of the Company's strategic plan; (b) meeting planned revenue and
profit objectives for fiscal 1996; (c) performance of the Company in relation to
industry peers; (d) meeting personal performance objectives; and, (e)
enhancement of shareholder value through stock price appreciation. In
consideration of the CEO's overall performance in relation to these factors, the
Committee awarded the CEO a cash bonus of $90,000 or 24% of salary. This
compares to a target bonus of 40% of salary if all performance criteria had been
successfully met.
There was no award of stock options to the CEO in fiscal 1996 for the reason
previously stated.
Upon conversion of the Company from a limited partnership to a publicly
traded corporation in March 1992, the former partners who became officers of the
Company acquired significant holdings of the Company's stock. The Board of
Directors adopted a policy which encourages all officers to retain a substantial
percentage of the acquired shares as a means of aligning the interests of the
Company's key management and professional personnel with the interests of the
Company's public shareholders. Through the end of fiscal 1998, any officer
divesting 20% or more of initial shareholdings within a specific fiscal year
will have his or her incentive compensation awards (cash and/or options) reduced
by up to 50%. Divesting 30% or more of initial shareholdings in a specific
fiscal year will result in the reduction of incentive compensation awards to
zero. During fiscal 1996, none of the Company's executive officers divested more
than 20% of shareholdings.
Effective in 1994, Internal Revenue Code Section 162(m) generally precludes
a publicly held corporation from taking a tax deduction for compensation in
excess of $1,000,000 that is paid to its Chief Executive Officer or any of its
four other highest paid executive officers. Certain performance-based
compensation is not subject to the deduction limit if specified requirements are
satisfied.
10
<PAGE>
It is the policy of the Compensation Committee that, under ordinary
circumstances, the Company's compensation programs should be structured in a
manner that is designed to comply with the requirements of Section 162(m) and
any regulations promulgated thereunder in order to ensure the full deductibility
of all compensation paid to the Company's executive officers. The Committee will
reexamine its policy with respect to Section 162(m) on an ongoing basis.
COMPENSATION COMMITTEE
Norman A. Barkeley
Michael R. Peevey
James E. Seitz
11
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph sets forth the Company's cumulative total shareholder
return on its Common Stock as compared to the S&P 500 Index and a peer group of
engineering companies based upon an assumed initial investment of $100 in each
of the Common Stock, the S&P 500 Index and the peer group. The graph covers the
period from March 5, 1992 (the date of the Company's initial public offering of
its Common Stock) through March 29, 1996 (the last day of the Company's most
recent fiscal year). The stock price performance shown below is not necessarily
indicative of future price performance, and the companies in the peer group are
not necessarily comparable for any purpose other than the graph.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG DAMES & MOORE, INC., S&P 500
INDEX AND PEER GROUP(1)(2)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1992 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
DAMES & MOORE, INC. 100 97.7 85.61 89.09 56.39 52.79
PEER GROUP 100 94.13 84.42 72.43 63.9 74.52
S&P 500 INDEX 100 98.05 113.01 114.67 132.52 175.07
</TABLE>
- - ------------------------
(1) The graph assumes an investment of $100 at the opening of business on March
5, 1992 in each of the Common Stock, the S&P 500 Index and a peer group of
engineering companies, and also assumes the reinvestment of all dividends.
Investment in the peer group is weighted by relative market capitalization.
(2) The peer group of publicly held companies excludes the Company and includes
Michael Baker Corp.; Emcon; Fluor Daniel/GTI; Gilbert Associates, Inc.
(Class A); Greiner Engineering, Inc.; Harding Associates, Inc.; ICF
International, Inc.; International Technology Corporation; Jacobs
Engineering Group, Inc.; Stone & Webster, Inc.; URS Corp.; and Roy F.
Weston, Inc. (Class A). Geraghty & Miller, Inc., which was previously
included in the Proxy Statement's peer group of companies, is included in
the peer group of companies that is contained in this Proxy Statement for
1992 and 1993, but not for 1994, for which information is not available for
the full year, 1995 or 1996. Geraghty & Miller, Inc. was acquired on
December 30, 1994 by Heidemij NV, a Dutch corporation whose stock has been
publicly traded on the NASDAQ National Market System since only December 30,
1993. CRSS Inc., which was previously included in the Proxy Statement's peer
group of companies, has been excluded from the peer group for this Proxy
Statement as it was acquired by Jacobs Engineering Group, Inc. effective
July 31, 1994, and information is no longer available. A majority of the
stock of Groundwater Technology, Inc. was acquired by Fluor Daniel, Inc. on
December 11, 1995, and Groundwater Technology, Inc. was renamed Fluor
Daniel/GTI, Inc.
12
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP has been selected as the Company's independent public
accountants for the fiscal year 1996. It is expected that a representative of
KPMG Peat Marwick LLP will be present at the meeting. Such representative may
make a statement if he or she desires to do so and will be available to respond
to appropriate questions.
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors knows of no other business to be presented at the
annual meeting. If any other business properly comes before the annual meeting,
it is the intention of the persons named in the accompanying form of proxy or
their substitute(s) to vote on that business in accordance with their best
judgment.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Shareholders of the Company who intend to submit proposals to the Company's
shareholders at the next annual meeting of shareholders must submit such
proposals to the Company no later than February 28, 1997 in order to be included
in the Company's proxy statement and form of proxy relating to that meeting.
Such proposals must also comply with the requirements of the Securities and
Exchange Commission relating to proposals of security holders. Shareholder
proposals should be submitted in writing to the Company's principal executive
offices at 911 Wilshire Boulevard, Suite 700, Los Angeles, California 90017,
Attention: Corporate Secretary.
By Order of the Board of Directors
Stephanie H. Paxton
Assistant Secretary
June 28, 1996
Los Angeles, California
SHAREHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING MAY OBTAIN, WITHOUT
CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED MARCH 29, 1996, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES THERETO, UPON WRITTEN REQUEST TO THE COMPANY AT 911 WILSHIRE
BOULEVARD, SUITE 700, LOS ANGELES, CALIFORNIA 90017, ATTENTION: INVESTOR
RELATIONS. UPON WRITTEN REQUEST, THE COMPANY WILL ALSO FURNISH TO SUCH
SHAREHOLDERS A COPY OF ANY EXHIBITS TO ITS ANNUAL REPORT ON FORM 10-K FOR A FEE
OF $.20 PER PAGE, PAYABLE IN ADVANCE. THIS FEE COVERS ONLY THE COMPANY'S
REASONABLE EXPENSES IN FURNISHING SUCH EXHIBITS.
13
<PAGE>
DAMES & MOORE, INC.
PROXY - ANNUAL MEETING OF SHAREHOLDERS - AUGUST 12, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder hereby appoints George D. Leal and Robert M.
Perry, and each of them, as proxies for the undersigned, each with the power
to appoint his substitute, to represent and to vote, as designated on the
reverse side of this proxy, all of the shares of the common stock of Dames &
Moore, Inc. (the "Company") held of record by the undersigned on June 17,
1996 at the annual meeting of shareholders to be held on August 12, 1996 and
at any adjournment thereof.
The undersigned shareholder hereby revokes any proxy heretofore given to vote
at said meeting and any adjournment thereof. Receipt of the Notice of Annual
Meeting of Shareholders, the Proxy Statement accompanying said Notice and the
Annual Report to Shareholders for the fiscal year ended March 29, 1996 hereby
is acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE PERSONS NOMINATED AS DIRECTORS BY THE BOARD OF
DIRECTORS ON THE REVERSE SIDE OF THIS PROXY.
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<S><C>
Please mark
your votes as / X /
indicated in
this example
1. ELECTION OF DIRECTORS.
For all nominees (except WITHHOLD INSTRUCTION: To withhold authority to vote for I plan to attend
as marked to the contrary) AUTHORITY any individual nominee(s), strike a line through the the meeting
Discretionary authority to to vote for all name(s) of the nominee(s) in the list below:
cumulate votes is granted. nominees listed / X /
Norman A Barkeley Harald Peipers
/ X / / X / Arthur C. Darrow Robert M. Perry
George D. Leal James E. Seitz
Robert J. Lynch, Jr. John P. Trudinger
Anthony R. Moore Richard C. Tucker
Michael R. Peevey
2. IN THEIR DISCRETION, the proxies are
authorized to vote upon such other business
as may properly come before the meeting or
any adjournment thereof.
Please sign exactly as the name or names appear on this proxy. When
shares are held by joint tenants, both should sign. When signing as an
attorney, executor, administrator, trustee or guardian, please give your full
title as such. If a corporation, please sign in full corporate name by the
President or another authorized officer. If a partnership, please sign in
partnership name by authorized person.
DATED: , 1996
---------------------------------------------------------------
-----------------------------------------------------------------------------
(Signature)
-----------------------------------------------------------------------------
(Signature)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
PLEASE MARK INSIDE RED BOXES SO THAT DATA USING THE ENCLOSED ENVELOPE.
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES
FOLD AND DETACH HERE
</TABLE>
