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SCHEDULE14AINFORMATIONProxyStatementPursuanttoSection14(a)ofthe
SecuritiesExchangeActof1934
FiledbytheRegistrant☒FiledbyaPartyotherthantheRegistrant☐
Checktheappropriatebox:☐ PreliminaryProxyStatement
☐ ConfidentialforUseoftheCommissionOnly(aspermittedbyRule14a-6(e)(2))☒ DefinitiveProxyStatement
☐ DefinitiveAdditionalMaterials
☐ SolicitingMaterialUnder§240.14a-12
JacobsEngineeringGroupInc.(NameofRegistrantasSpecifiedInItsCharter)
N/A(NameofPerson(s)FilingProxyStatement,ifotherthantheRegistrant)
PaymentofFilingFee(Checktheappropriatebox):☒ Nofeerequired.
☐ FeecomputedontablebelowperExchangeActRules14a-6(i)(1)and0-11.
(1) Titleofeachclassofsecuritiestowhichtransactionapplies:
(2) Aggregatenumberofsecuritiestowhichtransactionapplies:
(3)
PerunitpriceorotherunderlyingvalueoftransactioncomputedpursuanttoExchangeActRule0-11(setforththeamountonwhichthefilingfeeiscalculatedandstatehowitwasdetermined):
(4) Proposedmaximumaggregatevalueoftransaction:
(5) Totalfeepaid:
☐ Feepaidpreviouslywithpreliminarymaterials:
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CheckboxifanypartofthefeeisoffsetasprovidedbyExchangeActRule01-11(a)(2)andidentifythefilingforwhichtheoffsettingfeewaspaidpreviously.Identifythepreviousfilingbyregistrationstatementnumber,ortheFormorScheduleandthedateofitsfiling.
(1) AmountPreviouslyPaid:
(2) Form,ScheduleorRegistrationStatementNo.:
(3) FilingParty:
(4) DateFiled:
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Noticeof2019
AnnualMeetingofShareholdersandProxyStatement
JacobsEngineeringGroupInc.
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LETTERTOSHAREHOLDERSFROMOURCHAIR&CEODearFellowShareholder,
Fiscal2018hasbeenatremendousyearatJacobs.WecontinuetosuccessfullyexecuteourstrategytotransformJacobs’culture,capabilitiesandbusinessportfoliotobecomeamoreinnovationandtechnology-drivensolutionscompany–tacklingsomeoftheworld’smostcriticalchallenges.Ourstrongperformancehascreatedsubstantialvalueforouremployees,ourcustomersandourshareholders,andprovidesasolidfoundationforcontinuingourfocusonbecomingacompanyunlikeanyother.
Overaoneandthree-yearperiodwehavedeliveredtotalshareholderreturnof33%and108%.ThesereturnstoourshareholdersplaceusinthetopquartileofourpeergroupandwellabovetheS&P500of18%and61%,respectively.
GovernanceandCompensationPractices
Comprehensivecorporategovernanceoversight,combinedwithhighlytalentedpeopleexecutingourprofitablegrowthstrategy,isfundamentaltobuildinglong-termshareholdervalue.Underpinningourperformanceisourstrongfocusonintegrityandcorporategovernance,whichincludesacontinuousreviewandrefinementofourcompanypractices.
BoardStructure–TheBoardiscomprisedof11membersfromdiversegeographic,industry,technicalandbusinessbackgrounds.Thesedifferentexperiencesandviewpointsprovideforarobustgovernancestructurewhichalignswithourstrongemphasisoninclusion.Infact,45%ofourboardisfemaleorethnicallydiverse.Electedonanannualbasisunderamajorityvotingstandard,theaveragetenureofourBoardisnineyears,withfournewlyappointeddirectorswithinthelast5years,includingBarryL.WilliamswhojoinedtheBoardinDecember2017fromouracquisitionofCH2MHILLCompanies,Ltd.
GovernanceandOversightStructures–WebenefitfromahighlyengagedBoard,facilitatedbyfrequentformalandinformalmeetingswithExecutiveleadership.TheBoard’sengagementhasexpandedandevolvedoverthepastseveralyearsindirectalignmentwithcriticalareasofimportanceinthebusiness,includingactiveparticipationanddiligenceonacquisitionanddivestitureopportunitiesandtheformationofaBusinessResilienceSteeringGroupfocusedonEnterpriseRiskreportingtotheAuditCommittee.OurcybersecurityleadershipprovidesquarterlyupdatestotheBoardonourcorporatewidecyberriskposture.WecontinuetobenefitfromourleadindependentdirectorLindaFayneLevinson,ensuringindependentleadershipintheboardroom.
ExecutiveCompensation–WebelieveinpayforperformanceExecutivecompensationthatincentivizescreationandsustainmentoflong-termshareholdervalue.Infact,76%ofcompensationforournamedexecutiveofficersisperformance-based.Inlastyear’sannualshareholderadvisoryvoteon“say-on-pay”wereceiveda96%approval.Wealsocontinuetoevolveourperformance-basedcompensationapproachandwillintroducenon-financialbasedmetricsforexecutivesinfiscal2019.Theseincludeperformanceandculturalbasedleadershipbehaviorssuchassafety,inclusionanddiversity,innovationandtalentmanagement.
2019 Proxy Statement |
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ValueCreationStrategy
WecontinuetoexecuteagainstourCorporateStrategylaunchedin2016,andourperformancethroughfiscal2018hasexceededexpectations.
BuildaHigh-PerformanceCulture–Weareexcitedabouttheadvancementofourhigh-performanceculturethispastyear–anachievementthatwe’reparticularlyproudofgiventheglobalintegrationactivitiesofbringingJacobsandCH2Mtogether.Webelievecultureisfundamentaltodrivingsuperiorlong-termperformance,andthereareseveralhighlightsworthnoting:
• ProgressonInclusion–ThediversityofourExecutiveLeadershipTeamisnowat50%overall–40%womenand20%ofdiverseethnicbackground–includingthecompany’sfirstfemaleExecutiveVicePresident.
• StrongOrganizationalHealth–WecompletedoursecondOrganizationalHealthAssessmentwithresultsshowingan
improvementofeightpointsoverthepasttwoyearsandelevatingfromthe3rdto2ndquartile.Wewillberelentlessindrivingtoachieve1stquartileculturalperformance.
• EmbeddedCultureofCaring–BuildingonourBeyondZero®foundation,wehaveextendedourfocusbeyondsafetytoastrong
culture of caring ,includingsustainability,inclusion,securityandmentalhealth.WelaunchedPlanBeyond ,oursustainabilityframeworktodeliveronourcorporatevisionto“providesolutionsforamoreconnected,sustainableworld”andachieveourGlobalSustainabilityCommitment.
• EngagedEmployeeNetworkGroups–AkeypartoftheintegrationstrategywithCH2MwastheengagementandempowermentofourJacobsemployeenetworksthatembraceandreflectcommunitiesofgender,ethnicity,sexualorientation,veteransandcareerstages.Thesenetworksofmorethan10,000employeesaredrivinginclusionandchangeonseverallevels.InMayweheldourfirstglobalsummitwhereleadersofournetworkgroupsandexecutivescollaboratedonwaystofurtheroureffortsinthiscrucialarea.
TransformtheCore–Wecontinuetoevolveouroperatingmodeltoimprovebusinessexcellence,projectdeliveryandsaleseffectiveness,withseveralcriticalenhancementsinfiscal2018:
• Accountability–Appointmentoftwochiefoperatingofficersprovidedfocusfordrivingaccountability,furthersupportingourprofitablegrowthstrategy.
• TechnologyModernization–Significantinvestmentsinprojectdeliveryandbusinessinfrastructureimprovedefficiencyandconnectivityofoursystems,supportingouremployees’productivityandworkenvironment.
• PerformanceExcellence–Continuedfocusonstep-changeimprovementinprojectdeliveryresultedinayear-over-yearreductioninprojectwrite-offsof22%(or2-yearreductionof44%).
GrowProfitably–Fiscal2018markedstrongperformanceagainstourbalancedstrategyofimprovingourexistingbusinessesandactiveportfoliomanagement.WeareontracktoexceedthemetricsoutlinedinourStrategyinDecember2016.
• StrongFinancialPerformance–Proformarevenuegrowthof9%anddoubledigitproformaoperatinggrowthacrossalllinesofbusiness.
• SuccessfulCH2MIntegration–Leadershipondeliveringkeymetricsprovidedtoourshareholders: ✓ Costsynergiesexceedinginitialoutlook ✓ Attainingrevenuesynergies ✓ SurpassingEPSaccretiontargets ✓ Ontracktooutperformreturn/IRRtarget
• FocusonInnovation–OngoingincrementalinvestmenthasresultedinJacobs Connected Enterprise gainingstrongtractionin
customersolutionsoverthepasttwoyears.Recognizingthecriticalimportanceoftechnologyandinnovationindrivingthoughtleadershipandinnovationintothecoreofourbusiness–aswellasincreasedmargins–wenamedourfirstChiefTechnology&InnovationOfficertoensuresingularfocusandprioritizationglobally.
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OurrecentannouncementofthedivestitureofourEnergy,Chemicals&Resourcesbusinessdemonstratesourcommitmenttoshiftingthebusinesstohigher-margin,sustainedmarkets,providinggreaterfocusonareaswherewecanaccelerateprofitablegrowth.
Insummary,fiscal2018wasanotherstrongyearofdeliveringagainstourgrowthstrategyandcreatingexceptionalshareholdervalue.WeappreciateyourcontinuedinvestmentinJacobsandremainconfidentinourabilitytoexecuteagainstplanwhilemaintainingourhighstandardsoftransparencyandcorporategovernance.
WelookforwardtoyourattendanceatourannualshareholdermeetingonJanuary16,2019inDallas.
StevenJ.DemetriouChair and Chief Executive Officer
RememberingNoelWatson
Along with his family, we honor the memory of former Jacobs Chairman and CEO Noel Watson, who passed away in August at the ageof 82. A great mentor and friend to many, Noel was a larger-than-life leader; a man of character who brought tireless passion, perspective andwisdom to his work. During his tenure as CEO, Noel steered the company’s growth seven-fold, from $1 billion to more than $7 billion inrevenues, with corresponding profit increases.
Recruited by company founder Dr. Joseph Jacobs, Noel served the firm for more than 50 years, including more than 25 years at thehelm of the company. He became President in 1987, CEO in 1992, was elected Chairman of the Board in 2006 and retired from the board inJanuary 2017.
Foremost, Noel was a dedicated and loving husband, father and grandfather. He is survived by his wife, Phyllis, their two children andfive grandchildren.
2019 Proxy Statement | iii
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NOTICEOF2019ANNUALMEETINGOFSHAREHOLDERSWhen:Wednesday,January16,2019,at4:30p.m.,localtimeWhere:1999BryanStreet,FirstFloor,Dallas,Texas75201WearepleasedtoinviteyoutojoinourBoardofDirectorsandseniorleadershipatJacobsEngineeringGroupInc.’s2019AnnualMeetingofShareholders.
ByorderoftheBoardofDirectors,
Michael R. TylerSeniorVicePresident,GeneralCounselandCorporateSecretary
ImportantNoticeRegardingtheAvailabilityofProxyMaterialsfortheAnnualShareholderMeetingtobeHeldonJanuary16,2019
TheProxyStatementandaccompanying2018AnnualReporttoShareholdersareavailableathttp://materials.proxyvote.com/469814
iv |2019 Proxy Statement
ItemsofBusiness: 1. ElectionofthedirectorsnamedintheProxyStatement
toholdofficeuntilthe2020annualmeeting; 2. AnadvisoryvotetoapprovetheCompany’sexecutive
compensation;
3. RatificationoftheappointmentofErnst&YoungLLP
astheCompany’sindependentregisteredpublicaccountingfirmforthefiscalyearendingSeptember27,2019;and
4. AnyotherbusinessthatmayproperlycomebeforetheAnnualMeeting.
RecordDate:Theshareholdersofrecordatthecloseofbusinesson
November23,2018willbeentitledtovoteattheAnnualMeetingandanyadjournmentorpostponementthereof.
ProxyVoting:Itisimportantthatyoursharesberepresentedandvotedat
theAnnualMeeting.Youcanvoteyoursharesbycompletingandreturningtheproxycardorvotinginstructioncardsenttoyou.YoualsohavetheoptionofvotingyourshareselectronicallyontheInternetorbytelephone.Votinginstructionsareprintedonyourproxycard,votinginstructioncardorNoticeofInternetAvailabilityofProxyMaterials.Toensureyoursharesarerepresentedatthemeeting,pleasecastyourvotebymail,telephoneorInternetassoonaspossible,evenifyouplantoattendthemeetinginperson.
HowtoCastyourVoteYourvoteisimportant.AllshareholderswhoownedcommonstockoftheCompanyatthecloseofbusinessontheRecordDateofNovember23,2018mayvote.Youmayvoteinoneofthefollowingways:
VotebyInternet
www.proxyvote.com
VotebyTelephone1(800)690-6903
Orthetelephonenumberonyourproxycard
VotebyMailSign,dateandreturnyour
proxyorvotinginstructioncard
VoteinPersonAttendthemeetinginDallas,
TexasonJanuary16,2019
Ifyoursharesareheldinastockbrokerageaccountorbyabankorotherrecordholder,pleaserefertotheinstructionsfromyourbank,brokerageaccount,or
otherrecordholder.
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2019 Proxy Statement | v
TABLEOFCONTENTS LETTERTOOURSHAREHOLDERS i
NOTICEOFTHE2019ANNUALMEETINGANDHOWTOVOTE iv
PROXYSTATEMENT 1
General 1
AbouttheAnnualMeeting 1
PROPOSALNO.1–ELECTIONOFDIRECTORS 4
MEMBERSOFTHEBOARDOFDIRECTORS 4
DirectorExperienceMatrix 5
DirectorBiographies 6
CORPORATEGOVERNANCE 17
Highlights 17
TheBoard’sRoleinRiskOversight 18
BoardLeadershipStructure 18
BoardComposition 19
IndependenceofDirectors 20
DirectorNominations 20
CommitteesoftheBoardofDirectors 21
CorporateGovernanceGuidelines 22
DirectorEducation 23
AnnualPerformanceEvaluations 23
AttendanceatMeetingsoftheBoardanditsCommitteesandtheShareholderMeeting 23
CodeofEthics 23
StockOwnershipGuidelines 24
ContactingtheBoardofDirectors 24
AvailabilityofDocuments 25
CompensationofDirectorsforFiscal2018 25
Forward-LookingStatements 27
PROPOSALNO.2–ADVISORYVOTETOAPPROVEEXECUTIVECOMPENSATION 28
COMPENSATIONCOMMITTEEREPORT 29
COMPENSATIONDISCUSSIONANDANALYSIS(“CD&A”) 30
ExecutiveSummary 30
OurExecutiveCompensationPhilosophy 31
OurExecutiveCompensationProgramandPractices 31
TheCompensationDecisionProcess 33
AssessingCompensationCompetitiveness 33
ShareholderEngagementandSay-on-Pay 34
CompensationElements 34
OtherBenefitsandPolicies 44
EXECUTIVECOMPENSATION 48
SummaryCompensationTable 48
NarrativeDisclosuretoSummaryCompensationTable 49
2018GrantsofPlan-BasedAwards 50
OutstandingEquityAwardsofNEOsat2018FiscalYear-End 51
OptionExercisesandStockVestedinFiscal2018 52
Non-qualifiedDeferredCompensation 52
CompensationUnderVariousTerminationScenarios 54
EquityCompensationPlanInformation 55
PayRatio 55
PROPOSALNO.3–RATIFICATIONOFTHEAPPOINTMENTOFERNST&YOUNGLLP 57
REPORTOFTHEAUDITCOMMITTEE 58
AUDITANDNON-AUDITFEES 59
SECURITYOWNERSHIP 60
SecurityOwnershipofCertainBeneficialOwners 60
SecurityOwnershipofDirectors,NomineesandManagement 61
SECTION16(a)BENEFICIALOWNERSHIPREPORTINGCOMPLIANCE 62
EXECUTIVEOFFICERS 62
SHAREHOLDERS’PROPOSALS 62
CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONS 62
HOUSEHOLDINGOFPROXYMATERIALS 63
ANNUALREPORT,FINANCIALANDADDITIONALINFORMATION 64
OTHERBUSINESS 64
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PROXYSTATEMENTWeareprovidingtheseproxymaterialsinconnectionwiththe2019AnnualMeetingofShareholdersofJacobsEngineeringGroupInc.
(the“Company”or“Jacobs”).ThisProxyStatementandtheCompany’s2018AnnualReportonForm10-KwerefirstmadeavailabletoshareholdersandtheNoticeofInternetAvailabilityofProxyMaterials,proxycardorvotinginstructioncardwerefirstmailedtoshareholdersonoraboutDecember5,2018.ThisProxyStatementcontainsimportantinformationforyoutoconsiderwhendecidinghowtovoteonthematterstobebroughtbeforetheAnnualMeeting.Pleasereaditcarefully.
GENERAL
The2019AnnualMeetingofShareholders(the“AnnualMeeting”)willbeheldonWednesday,January16,2019,at4:30p.m.,localtime,inthebuildingwhereourprincipalofficesarelocated,1999BryanStreet,FirstFloor,Dallas,Texas75201,andatanyadjournmentorpostponementthereof.
ABOUTTHEANNUALMEETING
Who is soliciting my vote?
TheBoardofDirectorsoftheCompany(the“BoardofDirectors”or“Board”)issolicitingyourvoteinconnectionwiththeAnnualMeeting.
What is the purpose of the Annual Meeting?
TheAnnualMeetingwillbetheCompany’sregular,annualmeetingofshareholders.YouwillbevotingonthefollowingmattersattheAnnualMeeting: ProposalNumber Description BoardRecommendation
PageReference
1
ElectionofthedirectorsnamedinthisProxyStatementtoholdofficeuntilthe2020annualmeeting;
FOReachnominee
4
2
AnadvisoryvotetoapprovetheCompany’sexecutivecompensation;and
FOR
28
3
RatificationoftheappointmentofErnst&YoungLLPastheCompany’sindependentregisteredpublicaccountingfirmforthefiscalyearendingSeptember27,2019.
FOR
57
How many votes can be cast by shareholders?
Eachshareofcommonstockisentitledtoonevote.Thereisnocumulativevoting.Therewere142,335,347sharesofcommonstockoutstandingandentitledtovoteonNovember23,2018(the“RecordDate”).
How many votes must be present to hold the Annual Meeting?
AmajorityoftheoutstandingsharesofcommonstockasoftheRecordDatemustbepresentattheAnnualMeetinginordertoholdtheAnnualMeetingandconductbusiness.Thisiscalleda“quorum.”YoursharesarecountedaspresentattheAnnualMeetingifyouarepresentattheAnnualMeetingandvoteinperson,aproxycardorvotinginstructioncardhasbeenproperlysubmittedbyyouoronyourbehalf,oryouhavevotedelectronicallyontheInternetorbytelephone.Bothabstentionsandbrokernon-votesarecountedaspresentforthepurposeofdeterminingthepresenceofaquorum.A“brokernon-vote”isashareofcommonstockthatisbeneficiallyownedbyapersonorentityandheldbyabrokerorothernomineebutforwhichthebrokerorothernominee(1)lacksthediscretionaryauthoritytovoteoncertainmatters,and(2)hasnotreceivedvotinginstructionsfromthebeneficialownerinrespectofthosespecificmatters.
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How many votes are required to elect directors and approve the other proposals?
ProposalNo.1(ElectionofDirectors):Eachdirectoriselectedbyamajorityofthevotescastwithrespecttosuchnomineeinuncontestedelections(thenumberofsharesvoted“for”adirectornomineemustexceedthenumberofsharesvoted“against”thatnominee).Abstentionsandbrokernon-votesarenotcountedforpurposesoftheelectionofdirectorsand,therefore,willhavenoeffectontheoutcomeofsuchelection.
ProposalNo.2(AdvisoryVotetoApproveExecutiveCompensation):TheapprovaloftheadvisoryresolutionontheCompany’sexecutivecompensationrequirestheaffirmativevoteofamajorityofthesharesofcommonstockpresent,inpersonorbyproxy,attheAnnualMeetingandentitledtovote.Abstentionshavethesameeffectasavoteagainsttheadvisoryresolution.Brokernon-voteswillhavenoeffectontheoutcomeoftheadvisoryvotes.TheresultsofadvisoryvotesarenotbindingontheBoardofDirectors.
ProposalNo.3(RatificationoftheAppointmentofErnst&YoungLLPasAuditors):TheratificationoftheselectionofErnst&YoungLLPastheCompany’sindependentregisteredpublicaccountingfirmrequirestheaffirmativevoteofamajorityofthesharesofcommonstockpresent,inpersonorbyproxy,attheAnnualMeetingandentitledtovote.Abstentionshavethesameeffectasavoteagainsttheproposal.Thisproposalisconsideredaroutinematterwithrespecttowhichabrokerorothernomineecangenerallyvoteintheirdiscretion.Therefore,nobrokernon-votesareexpectedinconnectionwiththisproposal.
How do I vote by proxy?
YoucanvoteyoursharesbycompletingandreturningtheproxycardorvotinginstructioncardthatwassenttoyouorbyvotingyourshareselectronicallyontheInternetorbytelephone.YourInternetortelephonevoteauthorizesthenamedproxiestovoteyoursharesinthesamemannerasifyoumarked,signed,andreturnedyourproxycardorvotinginstructioncard.Votinginstructionsareprintedonyourproxycard,votinginstructioncardorNoticeofInternetAvailabilityofProxyMaterials.Youareencouragedtovotebyproxyassoonaspossible,evenifyouplantoattendtheAnnualMeetinginperson.
What if I don’t vote on some of the proposals?
Ifyoureturnyoursignedproxycardorvotinginstructioncardintheenvelopeprovidedtoyoubutdonotmarkselections,yourshareswillbevotedinaccordancewiththerecommendationsoftheBoardofDirectorswithrespecttosuchselections.Similarly,whenyouvoteelectronicallyontheInternetanddonotvoteonallmatters,yourshareswillbevotedinaccordancewiththerecommendationsoftheBoardofDirectorswithrespecttothemattersonwhichyoudidnotvote.Inconnectiontherewith,theBoardofDirectorshasdesignatedMr.StevenJ.Demetriou,Mr.KevinC.BerrymanandMr.MichaelR.Tylerasproxies.Shareholdersthatvotebytelephonemustvoteoneachmatter.Ifyouindicateachoicewithrespecttoanymattertobeactedupononyourproxycardorvotinginstructioncard,orbyInternetortelephone,yourshareswillbevotedinaccordancewithyourinstructions.
What if I hold my shares in a brokerage account or through a bank or other nominee?
Ifyouareabeneficialownerandholdyoursharesinstreetnamethroughabroker,bankorothernomineeanddonotreturnthevotinginstructioncard,thebroker,bankorothernomineewillvoteyoursharesoneachmatterattheAnnualMeetingforwhichheorshehastherequisitediscretionaryauthority.Underapplicablerules,brokershavethediscretiontovoteonroutinematters,suchastheratificationoftheselectionofindependentregisteredpublicaccountingfirms,butdonothavediscretiontovoteontheelectionofdirectorsoronanyadvisoryvoteregardingtheCompany’sexecutivecompensation.YoumayreceivemultiplesetsofproxymaterialsifyouholdyoursharesofCompanycommonstockinmultipleways,suchasdirectlyasaholderofrecordorindirectlythroughabroker,bankorothernomineeorthroughtheCH2M401(k)Plan(asdefinedbelow).Youareencouragedtovoteallproxycardsandvotinginstructioncardsyoureceiveassoonaspossible.
What if I hold my shares in the CH2M HILL Retirement and Tax-Deferred Savings Plan?
IfyoursharesofCompanycommonstockareheldintheCH2MHILLRetirementandTax-DeferredSavingsPlan(the“CH2M401(k)Plan”),youwillreceiveavotinginstructioncardallowingyoutoinstructthetrusteeofthe 2 |2019 Proxy Statement
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CH2M401(k)Planhowtovotesuchshares.Thetrusteewillvotethesharescreditedtoyouraccountinaccordancewithyourinstructions,providedthetrusteedeterminesitcandosoinaccordancewiththeEmployeeRetirementIncomeSecurityActof1974(“ERISA”).PursuanttoERISA,thetrusteewouldonlybepreventedfromvotingthesharescreditedtoyouraccountinaccordancewithyourinstructionsiftheindependentfiduciaryoftheCH2M401(k)Plan,StateStreetGlobalAdvisors(“SSGA”),deemsthatfollowingtheinstructionswouldbeaviolationofthetrustee’sfiduciaryduties.ToallowsufficienttimeforvotingbythetrusteeoftheCH2M401(k)Plan,yourvotinginstructionsmustbereceivedbyJanuary11,2018at11:59p.m.easterntime.IfyoudonotsendinstructionsregardingthevotingofsharesinyourCH2M401(k)Planaccount,orifyourinstructionsarenotreceivedinatimelymanner,SSGAwilldirectthetrustee,inSSGA’sdiscretion,howtovoteyourshares.Pleasefollowtheinstructionsonyourvotinginstructioncard,whichmaybedifferentfromthoseprovidedtootherstockholders.Fortheavoidanceofdoubt,ifyouareaparticipantintheCH2M401(k)Plan,youmaynotvotedirectlyattheAnnualMeeting.YoumayreceivemultiplesetsofproxymaterialsifyouholdyoursharesofCompanycommonstockinmultipleways,suchasdirectlyasaholderofrecordorindirectlythroughabroker,bankorothernomineeorthroughtheCH2M401(k)Plan.Youareencouragedtovoteallproxycardsandvotinginstructioncardsyoureceiveassoonaspossible.
Who pays for the proxy solicitation and how will the Company solicit votes?
TheCompanybearstheexpenseofprintingandmailingproxymaterialsandsolicitingproxies.Inadditiontothissolicitationofproxiesbymail,theCompany’sdirectors,officers,andotheremployeesmaysolicitproxiesbypersonalinterview,telephone,facsimile,orelectroniccommunication.Theseindividualswillnotbepaidanyadditionalcompensationabovetheirregularsalariesandwagesforanysuchsolicitation.TheCompanywillrequestbrokersandothernomineeswhoholdsharesofcommonstockintheirnamestofurnishproxymaterialstothebeneficialownersofsuchshares.TheCompanywillreimbursesuchbrokersandothernomineesfortheirreasonableexpensesincurredinforwardingsolicitationmaterialstosuchbeneficialowners.Inaddition,wehaveretainedMacKenziePartners,Inc.toassistinthesolicitationofproxiesforatotalfeeofupto$20,000plusreimbursementofexpenses.MacKenziePartners,Inc.maysolicitproxiesinperson,bytelephoneorelectroniccommunication.
Can I change or revoke my vote?
Yes.Evenifyousignandreturntheproxycardorvotinginstructioncardintheformprovidedtoyou,votebytelephone,orvoteelectronicallyontheInternet,youretainthepowertorevokeyourproxyorchangeyourvoteatanytimebeforeitisexercisedattheAnnualMeeting.YoucanrevokeyourproxyorchangeyourvoteatanytimebeforethatdeadlinebygivingwrittennoticetotheSecretaryoftheCompany,specifyingsuchrevocation.Youmayalsochangeyourvotebytimelydeliveringavalid,later-datedproxyorvotinginstructioncardorbysubmittingalater-datedvotebytelephoneorelectronicallyontheInternetorbyvotinginpersonattheAnnualMeeting.However,pleasenotethatifyouwouldliketovoteattheAnnualMeetingandyouarenottheshareholderofrecord,youmustrequest,complete,anddeliveraproxyfromyourbroker,bankorothernominee.
Whom can I contact if I have questions or need assistance in voting my shares?
PleasecontactMacKenziePartners,Inc.,thefirmassistingusinthesolicitationofproxies,at:
MacKenziePartners,Inc.105MadisonAvenue
NewYork,NewYork10016proxy@mackenziepartners.comCallToll-Free:(800)322-2885
orCollect:(212)929-5500
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PROPOSALNO.1—ELECTIONOFDIRECTORS
The Board of Directors unanimously recommends that you vote FOR the election of each nominee.
MEMBERSOFTHEBOARDOFDIRECTORS CommitteeMemberships
DirectorNominees IndependentDirector
Since Audit
HumanResourceandCompensation
NominatingandCorporateGovernance
StevenJ.Demetriou(1)Chair&CEO
2015
LindaFayneLevinson(2)LeadIndependentDirector
●
1996
JosephR.Bronson ● 2003 Chair JuanJoséSuárezCoppel ● 2013 ● ●RobertC.Davidson,Jr. ● 2001 ChairGeneralRalphE.Eberhart ● 2012 ● ●DawneS.Hickton ● 2015 ● ●RobertA.McNamara ● 2017 ● ●PeterJ.Robertson ● 2009 Chair ChristopherM.T.Thompson ● 2012 ● ● BarryL.Williams ● 2017 ● (1) AsChair,Mr.DemetriouisinvitedtoattendeachCommitteemeeting,excepttotheextentthataCommitteerequeststomeetwithoutMr.Demetrioupresent.(2) Ms.FayneLevinsonservesasLeadIndependentDirectorandpresidesovermeetingsoftheindependentdirectorsandisinvitedtoattendeachCommittee
meeting.
Summarizedinthefollowingpagesarethespecificexperience,qualificationsandbackgroundinformationofeachdirectornomineethatledtheBoardofDirectorstoconcludethateachsuchpersonshouldserveontheBoardofDirectors. 4 |2019 Proxy Statement
Whatareyouvotingon?
AttheAnnualMeeting,shareholderswillbeaskedtoelectelevendirectorstoserveontheBoardofDirectors.TheBoardofDirectorshasnominatedStevenJ.Demetriou,LindaFayneLevinson,JosephR.Bronson,JuanJoséSuárezCoppel,RobertC.Davidson,Jr.,GeneralRalphE.Eberhart,DawneS.Hickton,RobertA.McNamara,PeterJ.Robertson,ChristopherM.T.ThompsonandBarryL.Williamsforelectionasdirectorsforone-yeartermsexpiringatthe2020annualmeetingofshareholders.Whenelected,directorsserveuntiltheirsuccessorshavebeendulyelectedandqualifiedoruntilanysuchdirector’searlierresignationorremoval.
Ifanynomineeforanyreasonisunabletoserveorwillnotserve,proxiesmaybevotedforsuchsubstitutenomineeastheproxyholdermaydetermine.TheCompanyisnotawareofanynomineewhowillbeunabletoorwillnotserveasadirector.
WhatistheVoteRequired?
Eachdirectoriselectedbyamajorityofthevotescastwithrespecttosuchdirectorinuncontestedelections(thenumberofsharesvoted“for”adirectornomineemustexceedthenumberofsharesvoted“against”thatnominee).TheCompanydidnotreceiveanyshareholdernominationsforanydirectorandthustheelectionofdirectorsattheAnnualMeetingwillbeanuncontestedelection.
Abstentionsandbrokernon-votesarenotcountedforpurposesoftheelectionofdirectorsand,therefore,willhavenoeffectontheoutcomeoftheelection.
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DirectorExperienceMatrix
Competencies/AttributesJosephBronsonJuanJoseSuarezCoppelRobertC.Davidson,Jr.StevenJ.DemetriouGeneralRalphE.EberhartDawneS.HicktonLindaFayneLevinsonRobertA.McNamaraPeterJ.RobertsonChristopherM.T.ThompsonCOMPLIANCECONSIDERATIONSIndependentDirectorAuditCommitteeFinancialExpert(SECRules)FinanciallyLiterate(NYSERules)SecurityClearanceEXPERIENCECEOPublicCompanyCEOPrivateCompanyCFOGovernment/MilitaryInternationalOperationsSTRATEGICCOMPETENCIESFinancial(Reporting,Auditing,InternalControls)Strategy/BusinessDevelopment/M&AHumanResources/OrganizationalDevelopmentProjectDeliveryLegalRiskManagement/CompliancePublicCompany/GovernanceTechnology
Our Directors have lived and worked around the world
TheBoardhasaGoodBalanceofIndustryandSectorExperience
✓ Infrastructure ✓ Government ✓ Aerospace ✓ Military ✓ Oil&Gas ✓ SpecialtyChemical ✓ Mining&Metals ✓ Financial ✓ Banking ✓ Manufacturing ✓ Environmental
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DirectorBiographies
DirectorSince2015Age60ChairmanoftheBoard
StevenJ.Demetriou
ChairandChiefExecutiveOfficer
Mr.Demetrioubringsinternationalbusinessperspectivesandmorethan35yearsofexperienceinleadershipandseniormanagementrolestotheBoard,includingover15yearsintheroleofchiefexecutiveofficer.Hebringsexperienceinavarietyofindustries,includingmetals,specialtychemicals,oil&gas,manufacturingandfertilizers,whichhehasgainedoverthecourseofhiscareer.Hisbreadthofexperienceisparticularlyvaluable,giventhevarietyofindustriesinwhichtheCompany’sclientsoperate.
Business Experience• ChairmanandChiefExecutiveOfficerofAlerisCorporation(2004-2015)
• ChiefExecutiveOfficerofAleriswhenitfiledforChapter11in2009andwhenitsuccessfullyemergedfromChapter11inJune2010(2004-2015)
• ChiefExecutiveOfficerofNoveon,Inc.(2001-2004)
• ExecutiveVicePresidentofIMCGlobalInc.(1999-2001)
• VariousmanagementpositionswithCytecIndustriesInc.andExxonMobilCorporation(1981-1999)
Education• BSinchemicalengineeringfromTuftsUniversity
Public Company Boards• DirectorandmemberoftheCompensationandFinanceCommitteesofFirstEnergyCorp.(2017-present)
• ChairofKratonPerformancePolymers’CompensationCommitteeandamemberofitsNominatingandCorporateGovernanceCommittee(2009-2017)
• Non-ExecutiveChairmanofFoster-Wheeler(2011-2014)
• ChairoftheCompensationCommitteeandamemberoftheNominating/CorporateGovernanceCommitteeofOMGroup(2005-2015)
Private Boards & Community Involvement• Co-ChairmanofUS-SaudiArabianBusinessCouncil
• BoardMemberofUSChamberofCommerce• BoardMemberofCuyahogaCommunityCollegeFoundation
• MemberofDallasCitizen’sCouncil• MemberofDallasRegionalChamber
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DirectorSince2015Age60ChairmanoftheBoard
LindaFayneLevinson
LeadIndependentDirector
Ms.FayneLevinson’sdiverseexperienceasaconsultant,alineexecutiveandaventureinvestoracrossarangeofindustriesbringsin-depthknowledgeofstrategy,innovation,technologyandoperationstotheBoardofDirectors.Herserviceontheboardsofmanyglobalcompanies,includingherserviceasaChairofaboard,aleaddirectorandasChairofCompensationandNominatingandGovernancecommittees,providestheBoardinsightregardingcompensationstrategiesandothercorporategovernancematters,bothofwhicharekeyareasoffocusintoday’scorporateenvironment.
Business Experience• PartnerofGRPPartners,aventurecapitalfirm(1997-2004)
• PresidentofFayneLevinsonAssociates(1994-1997)
• ExecutiveatCreativeArtistsAgency(1993)• PartneratWingsPartners(1989-1992)• SeniorVicePresidentofAmericanExpressTravelRelatedServicesCo.,Inc.(1984-1987)
• McKinsey&Company(1972-1981;ElectedPartner1978)
Education• BAfromBarnardCollege• MAfromHarvardUniversity• MBAfromNewYorkUniversity,LeonardN.SternSchoolofBusiness
Public Company Boards• NCRCorporation(ChairoftheCompensationCommittee)(1997-present)
• Hertz(2012-2017);ChairoftheBoard(2014-2016);ChairofNominatingandGovernanceCommittee(2014);ChairoftheCompensationCommittee(2015-2016)
• MemberoftheBoardofIngramMicro,Inc.(2004-2016);ChairoftheCompensationCommittee
• WesternUnion(2006-2016);ChairofCompensationCommittee(2006-2012);memberoftheAuditCommittee
• DemandTec(2005-2008)• Lastminute.com,plc(1999-2002)• OvertureServicesInc.(1998-2003)• CyberSourceInc.(1997-2001)• Genentech(1991-1998)Private Boards & Community Involvement• Director,Kount,Inc.(Fintech)• Director,ClearPathRobotics,Canada• Director,Knotel,Inc.• Director,BitPesa• Member,McKinseyNewVentureAdvisoryCouncil
• MemberoftheU.S.AdvisoryBoardofCVCCapitalPartners
• SeniorAdvisor,RREVentures,NY• FormerTrusteeatBarnardCollegeandchairstheInvestmentCommittee
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IndependentDirectorSince2003Age70BoardCommittee:Audit(Chair)
JosephR.Bronson
PrincipalandChiefExecutiveOfficerofTheBronsonGroup,LLC.,StrategicAdvisorofCowenandCompany
Mr.Bronsonbringsaccountingexpertiseandfamiliaritywithfinancialstatements,financialdisclosures,auditingandinternalcontrolstotheBoardfromhispriorserviceasChiefFinancialOfficerofAppliedMaterials,Inc.HisseniormanagementlevelexperienceatlargepubliclytradedcompaniesalsobringstotheBoardadditionalperspectiveregardingtheday-to-dayoperationsoflargeorganizationsaswellascorporatebestpractices.
Business Experience• PrincipalandChiefExecutiveOfficerofTheBronsonGroup,LLC
• StrategicAdvisorofCowenandCompany(2014-present)
• AdvisoryDirectortoGCA/Savvian,LLC(2011-2014)
• ChiefExecutiveOfficerofSiliconValleyTechnologyCorporation(2009-2010)
• PresidentandChiefOperatingOfficerofSanmina-SCI(2007-2008)
• Co-ChiefExecutiveOfficerandDirectorofFormFactor(2004-2007)
• ExecutiveVicePresidentandChiefFinancialOfficerofAppliedMaterials,Inc.(1998-2005)
• VariousexecutivemanagementandgeneralmanagementpositionsatAppliedMaterials,Inc.(1984-1998)
Education• BSfromFairfieldUniversity• MBAfromUniversityofConnecticut• CertifiedPublicAccountantandamemberoftheAmericanInstituteofCPAs
• RegisteredInvestmentAdvisorandholderofSeries63andSeries7credentialsfromtheFinancialIndustryRegulatoryAuthority(FINRA)from2011topresent
Public Company Boards• DirectorofMaximIntegratedProducts,Inc.(2007-present)
• DirectorofPDFSolutions,Inc.(2014-present)Private Boards & Community Involvement• TrusteeofFairfieldUniversity,Fairfield,Connecticut
• RegentofSantaClaraUniversity,SantaClara,California
• RegentofLoyolaMarymountUniversity,LosAngeles,California
• ChairoftheAdvisoryBoardattheLeaveySchoolofBusinessatSantaClaraUniversity,SantaClara,California
• TrusteeofBellarmineCollegePreparatorySchool,SanJose,CaliforniaandpastChairoftheBoardofTrustees
• DirectorofSiltectra,Dresden,Germany
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IndependentDirectorSince2013Age59BoardCommittee:HumanResourceandCompensationNominatingandCorporateGovernance
JuanJoséSuárezCoppel
FormerGeneralDirector(ChiefExecutiveOfficer)ofPetróleosMexicanos
Mr.SuárezCoppelprovidessolidexpertiseintheoilandgasindustry,whichisparticularlyvaluablegiventheCompany’scustomersinthisindustry.HealsobringsextensiveknowledgeandexperienceinfinancemattersandhisexperienceasanexecutivebringsperspectiveonmanagementandoperationalmatterstotheBoard.HisbackgroundininternationaloperationsalsoassiststheBoardinlightofourgrowinginternationalpresence.
Business Experience• GeneralDirector(ChiefExecutiveOfficer)ofPetróleosMexicanos(2009-2012)
• ChiefFinancialOfficerofPetróleosMexicanos(2001-2006)
• ChiefofStaffofMexico’sSecretaryofFinanceandPublicCredit(2000-2001)
• Co-HeadofEquityDerivativeTradingatBanamex(1991-1995)
• SeniorleadershippositionsatGrupoTelevisaandGrupoModelo(1991-1995)
• ConsultantforPetroleosEbano
Other Professional Experience• ServedasaprofessorofeconomicsatBrownUniversityandtheUniversitatAutónomadeBarcelona
Education• GraduateoftheInstitutoTecnológicoAutónomoinMexicoCity
• Ph.D.ineconomicsfromtheUniversityofChicago
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IndependentDirectorSince2001Age73BoardCommittee:NominatingandCorporateGovernance(Chair)
RobertC.Davidson,Jr.
FormerDirector,ChairmanandChiefExecutiveOfficerofSurfaceProtectionIndustries,Inc.
Mr.Davidsonbringsstrongleadership,knowledgeandexperienceofstrategicandfinancialmatterstotheBoardfromhisexpertisefoundingandbuildingprivatecompaniesservingnationalandinternationalmarketsduringhis30-yearcareeratSurfaceProtectionIndustries,Inc.,includinghisserviceaschiefexecutiveofficerandchairman.HealsobringstotheBoardimportantknowledgeofpubliccompanygovernancethroughhisserviceonmultiplepubliccompanyboards,includingserviceoncompensationcommittees.
Business Experience• ChairmanandChiefExecutiveOfficerofSurfaceProtectionIndustries,Inc.(1977-2007)
• PresidentofRDavidsonandAssociates(2007toPresent)
• VicePresidentofUrbanNationalCorporation(1972-1974)
• ManagementConsultantatCresap,McCormick&Paget(1969-1972)
Education• BAfromMorehouseCollege• MBAinMarketingandFinancefromtheUniversityofChicago
• HonoraryDoctorateofLawsfromMorehouseCollege
Public Company Boards• BroadwayFinancialCorporation(2003-present)• ChairofCompensationCommittee• ChairofInternalAssetReviewCommittee• MemberofGovernanceCommittee• MemberofRisk&ComplianceCommittee
Private Boards & Community Involvement• ChairmanoftheBoardofTrusteesoftheArtCenterCollegeofDesign,Pasadena,California
• BoardofDirectorsofCedars-SinaiMedicalCenter,LosAngeles,California
• BoardmemberoftheSmithsonianAmericanArtMuseum,Washington,DC
• BoardmemberofTheRayCharlesFoundation,LosAngeles,California
• ChairmanEmeritusoftheBoardofTrusteesofMorehouseCollege
• MemberoftheAdvisoryCouncilattheUniversityofChicagoGraduateSchoolofBusiness
• Previouslyservedonboardsofnumerousotherorganizations,includingChildren’sHospital,LosAngeles;LAChamberofCommerce;WeingartCenterfortheHomeless,L.A.;amongothers
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IndependentDirectorSince2012Age71BoardCommittees:HumanResourceandCompensationNominatingandCorporateGovernance
GeneralRalphE.Eberhart(USAF,Retired)
Director,ChairmanandPresidentofArmedForcesBenefitAssociation
GeneralRalphE.Eberhartbringsvaluableleadershipandmanagementskillsdevelopedthroughhismilitaryservice.His36-yearmilitarycareerprovidestheBoardwithvaluableexperienceandknowledgeofgovernmentandthemilitary,whichisparticularlyvaluablegiventheCompany’sgovernmentandmilitarycontracts.
Business & Military Experience• FormerGeneralOfficeroftheUnitedStatesAirForce(1997-2005)
• Numeroushigh-levelcommandandstaffpositionswithintheAirForce(1968-2005)
• FormerCommanderoftheNorthAmericanAerospaceDefenseCommand(NORAD)(2002-2005)
• FormerCommanderofAirCombatCommandandU.S.SpaceCommand(1999-2002)
Education• UnitedStatesAirForceAcademy
Public Company Boards• DirectorofRockwellCollins(2007-2018)
• DirectorofTriumphGroup,Inc.(2010-present)
• DirectorofVSECorporation(2007-present)
Private Boards & Community Involvement• Trustee,AirForceAcademyEndowment• Director,Segs4Vets• Director,TermaNorthAmericaInc.
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IndependentDirectorSince2015Age61BoardCommittees:AuditNominatingandCorporateGovernance
DawneS.Hickton
FormerDirector,ViceChair,PresidentandChiefExecutiveOfficerofRTIInternationalMetals,Inc.
Ms.HicktonprovidesawealthofprovenbusinessleadershipexperiencewithaCEO’sperspective,andadvancedstrengthsinprojectmanagementandengineeringexpertise.HerbackgroundasaseniorofficerinapubliclytradedcompanyfornearlytwodecadesisparticularlyvaluabletotheBoard,asitlendsacontemporaryunderstandingofhowtoengagewiththeCompany’sstakeholders,inadditiontodrivingastronggrowthagenda.
Business Experience• PresidentofCumberlandHighstreetPartners(2016-present)
• ChairmanoftheFederalReserveBankofCleveland(January2018-present)
• DeputyChairoftheFederalReserveBankofCleveland(2012toJanuary2018)
• ChiefExecutiveOfficerofRTIInternationalMetals,Inc.(2007-2015)
Education• GraduateoftheUniversityofRochester• JDfromtheUniversityofPittsburghSchoolofLaw
Public Company Boards• Boardmember,ChairoftheAuditCommitteeandmemberoftheNominating&CorporateGovernanceCommitteeandExecutiveCommitteeofTriumphGroup(2015-present)
• BoardmemberandmemberoftheRiskCommittee,StrategicCommitteeandAuditCommitteeofHaynesInternationalInc.(2017-present)
• DirectorofFNBCorporation(2006-2013)
Private Boards & Community Involvement• BoardmemberofSmithsonian’sNationalAirandSpaceMuseum
• BoardmemberofTheWingsClub• DirectorofCorporateAngelNetwork• MemberoftheUniversityofPittsburgh’sBoardofTrustees,servingontheStudentAffairs,Technology&Innovation,andProperty&FacilitiesCommittees
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IndependentDirectorSince2017Age64BoardCommittees:AuditNominatingandCorporateGovernance
RobertA.McNamara
RetiredGroupChiefRiskOfficerofLendleaseCorporation(ASX)
Mr.McNamarahasover35yearsofexperiencemanagingglobalbusinessesinthedevelopment,designanddeliveryofprojectsinthegovernment,institutional,infrastructureandindustrialsectorsinseniormanagementpositions.HehasbeenresponsibleforensuringLendleaseachievesworld’sbestpracticesinriskmanagementandoperationalexcellence.HealsooversawLendlease’sBuilding,Engineering,andServicesbusinessesinAustralia.Priortothis,Mr.McNamarawasChiefExecutiveOfficerAmericasofLendlease.
Business Experience• GroupChiefRiskOfficer,LendleaseCorporation(2014-2017)
• ChiefExecutiveOfficer,AmericasofLeadlease(2010-2014)
• ChairmanandChiefExecutiveOfficerofPenhall/LVIInternational(PLI)(2006-2010)
• SeniorGroupPresidentofFluorCorporation(1996-2006)
• PresidentandChiefOperatingOfficerofMarshallContractors(1977-1996)
Education• Bachelor’sdegreeinEconomicsfromBrownUniversity
• CompletedtheConsortia1ProgramatThunderbirdInternationalBusinessSchool
• CertificationasaPublicBoardDirectorfromtheUCLAAndersonSchoolofManagement
Public Company Boards• BoardmemberofUDR,Inc.(2014-present)
Private Boards & Community Involvement• PastBoardmemberoftheUSChinaBusinessCouncil
• PastChairmanfortheConstructionIndustryInstitute’sTechnologyImplementationTaskForce
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IndependentDirectorSince2009Age71BoardCommittees:HumanResourceandCompensation(Chair)
PeterJ.Robertson
FormerDirectorandViceChairmanoftheBoardofDirectorsofChevronCorporation
Mr.RobertsonbringsvitalknowledgeandexperiencetotheBoardintheoilandgasindustryfromhis36-yearcareeratChevronCorporation,whichisparticularlyimportantgiventhenumberoftheCompany’scustomersintheenergyandrefiningsector.Healsobringsvaluableinternationalexperienceindevelopedanddevelopingcountries,includinginteractionswithgovernmentsatthehighestlevels,fromhisexecutiveexperienceandthemultiplechairmanshipanddirectorpositionshehasheldandcurrentlyholds.Mr.Robertsonalsohasextensiveexperienceontheboardsofnot-for-profitentitieswithglobalreachandpubliccompanyboardsaswellasimportantaccountingknow-howandexperiencewithpubliccompanyfinancialstatements,disclosuresandaccountingrulesfromhisserviceasChiefFinancialOfficerofChevronUSA.
Business Experience• ExecutiveVicePresident,DirectorandViceChairmanofChevronBoard(2002-2009)
• PresidentofChevron’sworldwideexploration,productionandglobalgasbusinesses(2002-2004)
• PresidentofChevron’soverseasexplorationandproductionbusinesses(2000-2002)
• PresidentofChevron’sNorthAmericaexplorationandproductionbusinesses(1996-2000)
• PresidentofChevron’snaturalgasprocessingbusiness(1990-1994)
• ChiefFinancialOfficerofChevronUSA(1985-1990)
Education• BSinMechanicalEngineeringfromtheUniversityofEdinburgh
• MBAfromtheUniversityofPennsylvania,WhartonSchool,wherehewasaThouronScholar
Public Company Boards• ViceChairmanoftheBoardforChevronCorporation(2002-2009)
• DirectorofSasolLimited,chairofCapitalInvestmentCommittee,andmemberofNominationandGovernanceCommitteeandRemunerationCommittee(2012-present)
• Director,DynegyInc.(1996-2000)Private Boards & Community Involvement• Director,SylvanSource,Inc.(2016-present)• Co-chairmanoftheUSSaudiArabianBusinessCouncil(2009-2018)
• ChairmanoftheWorldAffairsCouncilofNorthernCalifornia(2009-2018)
• ChairmanoftheUSEnergyAssociation(2006-2008)
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IndependentDirectorSince2012Age70BoardCommittees:AuditHumanResourceandCompensation
ChristopherM.T.Thompson
FormerChairmanandChiefExecutiveOfficerofGoldFieldsLtd.
Mr.Thompsonhasanextensivebackgroundintheminingindustry,providingstrongknowledgeofandmanagementandoperationalexperienceinthisareatotheBoard,whichisparticularlyvaluablegiventheCompany’scustomersinthisindustry.Mr.Thompsonalsoprovidesknowledgeofthebiotechnologyindustry,whichisalsoimportantgiventheCompany’scustomersinthatindustry.HisinternationalexperiencebringstotheBoardadditionalperspectiveregardingthedaytodayoperationsoflargeorganizationsaswellascorporatebestpractices.
Business Experience• Director,ChairmanandChiefExecutiveOfficerofGoldFieldsLtd.(1998-2005)
• ChairmanoftheWorldGoldCouncil(2002-2005)• FounderandChiefExecutiveOfficerofCastleGroupLtd.(1992-1998)
Education• Bachelor’sdegreeinlawandeconomicsfromRhodesUniversity,SouthAfrica
• Master’sdegreeinmanagementstudiesfromBradfordUniversity,U.K.
Public Company Boards• BoardmemberofRoyalGold,Inc.(2013-present)
• BoardmemberofTeckResourcesLimited(2003-2015)
• BoardmemberofGoldenStarResourcesLtd.(2010-2015)
• BoardmemberofvariousportfoliocompaniesofCastleGroup(1985-1999)
Private Boards & Community Involvement• BoardmemberofTheColoradoSchoolofMinesFoundation(2013-2017)
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IndependentDirectorSince2017Age74BoardCommittees:Audit
BarryL.Williams
RetiredManagingGeneralPartnerofWilliamsPacificVentures,Inc.
Mr.WilliamsbringsvaluablebusinessandleadershipskillstotheBoardfromhiscareerleadinganinvestmentandconsultingcompany.Hehasaccountingexpertiseandexperienceservingasamemberofpublicandprivatecompanyboards,includingserviceonauditcommittees.Mr.WilliamsunderstandstheengineeringindustryandprovidestheBoardwithavaluableperspective,havingservedasaboardmemberofrecentlyacquiredCH2MHILLCompanies,Ltd.formorethan20years.
Business Experience• ManagingGeneralPartnerofWilliamsPacificVentures(1986-2014)
• PresidentandCEOofAmericanManagementAssociationInternational(2000-2001)
• SeniorMediatorforJAMS/Endispute(1993-2002)
• VisitingLecturer,UniversityofCalifornia(1993-2000)
Education• BAfromHarvardUniversity• MBAfromHarvardBusinessSchool• JDfromHarvardLawSchool
Public Company Boards• Navient(2000-present)• PG&ECorporation(1996-2017)• SimpsonManufacturingCo.(1994-2015)• R.H.DonnellyCorp.(1998-2010)• AmeronInternationalCorporation(2010-2011)Private Boards & Community Involvement• Director,CH2MHILLCompanies,Ltd.(1995-2017)
• Trustee,SutterHealth(1992-present)• Trustee,NorthwesternMutualLifeInsuranceCompany(1986-2016)
• ManagementLeadershipforTomorrow 16 |2019 Proxy Statement
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CORPORATEGOVERNANCE
HighlightsJacobshasastrongtrackrecordofintegrityandcorporategovernancepracticesthatpromotethoughtfulmanagementbyitsofficersandBoardofDirectorstofacilitateprofitablegrowthwhilestrategicallybalancingrisktomaximizelong-termshareholdervalue.BelowisasummaryofcertaininformationaboutourBoardofDirectorsandgovernancebestpracticesemployedbytheCompany:
SIZEOFBOARD
11
AVERAGEDIRECTORTENUREINYEARS
9
BOARD
MEETINGSHELDINFISCAL
2018
5
NUMBEROFINDEPENDENTDIRECTORS
10
PERCENTFEMALEORETHNICALLYDIVERSE
45%
NEW
DIRECTORSINTHELASTFIVE
YEARS
4
CorporateGovernanceBestPractices
✓ BoardComprisedof91%IndependentDirectors✓ CommitmenttoBoardRefreshment(FourNew
DirectorsinPastFiveYears)✓ HighlyEngagedLeadIndependentDirector✓ AnnualElectionofDirectors✓ MajorityVotingforDirectors✓ MandatoryAnti-CorruptionComplianceTrainingfor
Directors✓ CodeofEthicsforDirectors,Officers&Employees✓ AnnualSelf-EvaluationsbyBoardandeachCommittee
✓ RigorousDirectorSelectionProcess✓ SubstantialBoardoversightofstrategicobjectives,
includingmergersandacquisitionactivity✓ DirectorAttendanceatBoard&Committee
Meetings>99%✓ FullyIndependentCommittees✓ ComprehensiveRiskOversightbyFullBoardand
Committees✓ ExtensiveStockholderEngagementEfforts✓ StockOwnershipGuidelinesforDirectorsand
ExecutiveOfficers✓ RegularEnterpriseRiskManagementReviewsby
BoardandCommittees
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TheBoard’sRoleinRiskOversight
TheBoardofDirectorsoverseestheCompany’sriskmanagementfunction.ItoverseesaCompany-wideapproachtoriskmanagement,designedtoenhancelong-termshareholdervalue,supporttheachievementofstrategicobjectivesandimproveorganizationalperformance.TheBoarddeterminestheappropriatelevelofriskfortheCompany,assessesthespecificrisksfacedbytheCompanyandreviewsthestepstakenbymanagementtomanagethoserisks.TheBoard’sinvolvementinsettingtheCompany’sbusinessstrategyalsofacilitatestheseassessmentsandreviews,culminatinginthedevelopmentofastrategythatreflectstheconsensusoftheBoardandmanagementastoappropriatelevelsofriskandtheappropriatemeasurestomanagethoserisks.
Throughthisframework,riskisassessedthroughouttheenterprise,focusingonrisksarisingoutofvariousaspectsoftheCompany’sstrategyandtheimplementationofthatstrategy,includingfinancial,legal/compliance,operational/strategic,healthandsafety,andcompensationrisks.TheBoardalsoconsidersriskwhenevaluatingproposedtransactionsandothermatterspresentedtotheBoard,includingacquisitionsandfinancialmatters.Forexample,infiscal2017,theBoardheldsixspecialBoardmeetingsinconnectionwiththeacquisitionofCH2MHillCompanies,Ltd.(“CH2M”)thatwascompletedinthefirstfiscalquarterof2018.Followingfiscal2018,theBoardheldtwospecialmeetingsandanadditionalexecutivesessioninconnectionwiththependingsaleoftheCompany’sEnergy,ChemicalsandResourcesbusinessannouncedinthefirstfiscalquarterof2019.Inaddition,theindependentdirectorsdiscussriskmanagementduringexecutivesessionswithoutmanagementpresent.
WhiletheBoardmaintainstheultimateoversightresponsibilityfortheriskmanagementprocess,itsCommitteesoverseeriskincertainspecifiedareas:
• AuditCommittee:Addressesfinancialrisk,includinginternalcontrols,anddiscussestheCompany’sriskprofilewiththe
Company’sindependentregisteredpublicaccountingfirm.TheAuditCommitteealsoreviewspotentialviolationsoftheCompany’svariouscodesofethicsandrelatedcorporatepolicies.
• HumanResourceandCompensationCommittee:Periodicallyreviewscompensationpracticesandpoliciestoconsider
whethertheyencourageexcessiverisktaking,includinganannualreviewofmanagement’sassessmentoftheriskassociatedwiththeCompany’scompensationprogramscoveringitsemployees,includingexecutives,anddiscussestheconceptofriskasitrelatestotheCompany’scompensationprograms.
• NominatingandCorporateGovernanceCommittee:Overseesrisksassociatedwiththeindependenceofdirectorsand
BoardnomineesandassiststheBoardinoverseeingtheactivitieswithrespecttocomplianceandbusinesspracticematters,includingtheCompany’scorporategovernancepolicies.
PursuanttotheBoard’sinstruction,managementregularlyreportsonapplicableriskstotherelevantCommitteeortheBoard,asappropriate,includingregularreportsonsignificantCompanyprojects,withadditionalrevieworreportingonrisksbeingconductedasneededorasrequestedbytheBoardanditsCommittees.
BoardLeadershipStructure
TheBoard’sleadershipiscomprisedof: • ChairoftheBoardandCEO:StevenJ.Demetriou • LeadIndependentDirector:LindaFayneLevinson
• Audit,HumanResourceandCompensationandNominatingandCorporateGovernanceCommittees:Composedentirelyofindependentdirectors
Currently,theBoardisledbyMr.DemetriouasChair,apositionhehasheldsinceJuly2016,andMs.FayneLevinsonasLeadIndependentDirector,apositionshehasalsoheldsinceJuly2016. 18 |2019 Proxy Statement
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InaprocessledbytheLeadIndependentDirectorandtheChairoftheNominatingandCorporateGovernanceCommittee,theBoardevaluatestheappointmentandroleoftheChaironanannualbasis.TheBoardhasdeterminedthathavingMr.DemetriouserveasChairprovidessignificantadvantagestotheBoardandtheCompany,asitallowstheBoardtobenefitfromhisknowledgeoftheCompany’sbusinessandmarketopportunitiesandrisksandalsofacilitatescommunicationsandrelationswithothermembersofseniormanagement.TheBoardalsobelievesthathavingMr.DemetriouserveasChairisadvantageoustotheCompanywhenworkingwithclientsincertainareasoftheworldinwhichthetitleofChairissignificant.
BecausetheBoardbelievesthatstrongindependentBoardleadershipisacriticalaspectofeffectivecorporategovernance,theBoardhasestablishedthepositionofLeadIndependentDirector.TheBoardalsobelievesthataLeadIndependentDirector,whohastheresponsibilitiessetforthintheCompany’sCorporateGovernanceGuidelines,providesindependentleadership,oversightandbenefitsfortheCompanyandBoardthatwouldbeprovidedbyanindependentChair.ResponsibilitiesoftheLeadIndependentDirectorinclude: ✓ Servingastheindependentdirectors’centralpointof
communicationwiththeChairandCEO;
✓ PresidingatmeetingsoftheBoardatwhichtheChairandCEOisnotpresent,includingexecutivesessionsofindependentdirectors;
✓ ApprovingthescheduleofBoardmeetingsandmeetingagendas,workingwiththeChairandCEO;
✓ AttendingmeetingsofallCommitteesoftheBoard;
✓ WorkingwiththeChairoftheNominatingandCorporateGovernanceCommitteeandChairandCEOontheBoardsuccessionandrefreshmentprocess;
✓ WorkingwiththeChairoftheNominatingandCorporateGovernanceCommitteetoconducttheannualBoardself-evaluation;
✓ WorkingwiththeChairandCEOtosupportappropriatecompliancewithBoardpolicies;
✓ ProactivelyengagingwiththeChairandCEOasakeyadvisoronemergingissuesandalternativecoursesofaction;
✓ CallingspecialmeetingsoftheBoardand/ormeetingsoftheindependentdirectors;
✓ TogetherwiththeChairoftheHumanResourceandCompensationCommitteeandChairoftheNominatingandCorporateGovernanceCommittee,evaluatingtheperformanceandcompensationoftheChairandCEO;
✓ Participatinginshareholderoutreachandcommunications;and
✓ MeetingwithvariousCompanyconstituenciesonbehalfoftheBoardortheCompany.
TheNominatingandCorporateGovernanceCommitteeleadstheprocessoftheBoard’sevaluationoftheselection,roleandtermoftheLeadIndependentDirectoronanannualbasis.
BoardComposition
TheNominatingandCorporateGovernanceCommitteeisresponsibleforreviewingwiththeBoardonanannualbasistheappropriateskillsandcharacteristicsrequiredofmembersinthecontextofthecurrentmake-upoftheBoard.ThisprocessenablesthemtoupdatetheskillsandexperienceitseeksintheBoardasawhole,andinindividualdirectors,astheCompany’sneedsevolve.ThisassessmenttakesintoconsiderationallfactorsdeemedrelevantbytheNominatingandCorporateGovernanceCommittee,includingthefollowingfactors: • Independence:TheBoardmustbecomprisedofamajorityofindependentdirectors.
• RelevantSkillsandExperience:TheassessmentofskillsandcharacteristicsofBoardmemberstakesintoaccountallskillsandexperiencedeemedrelevantbytheCommittee,includingthosesummarizedintheDirectorExperienceMatrixonpage5,amongothers.Forincumbentdirectors,pastperformanceontheBoardofDirectorsanditsCommitteesisalsotakenintoconsideration.Fornewdirectorcandidates,theassessmentalsotakesintoaccounttheabilityandwillingnessofthedirectorcandidatetoserveontheBoardforfivetosevenyears.
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• Diversity:TheBoardbelievesitshouldencompassindividualswithdiversebackgroundsandperspectives.Inaccordancewiththisguideline,theNominatingandCorporateGovernanceCommitteeconsidersthediversityofviewpoints,backgrounds,experienceandotherdemographicsinevaluatingandconsideringpotentialdirectorcandidates.DiversityisanimportantconsiderationinthedirectornominationprocessbecausetheBoardbelievesthatpeopleofdifferentgenders,experiences,ages,racesandethnicbackgroundscancontributedifferent,usefulperspectives,whilecollaboratingeffectivelytofurthertheCompany’smission.ThispolicyisincludedintheCompany’sCorporateGovernanceGuidelines.
TheBoardofDirectorsandtheNominatingandCorporateGovernanceCommitteeconsiderthequalificationsandattributesofdirectorsanddirectorcandidatesindividually,aswellasinthebroadercontextoftheBoard’soverallcompositionandtheCompany’scurrentandfutureneeds,toensurethattheBoardasawholepossessestherequisitecombinationofskills,professionalexperienceanddiversityofbackgroundsandperspectives.
IndependenceofDirectors
TheBoardofDirectorshasadoptedBoardofDirectorsGuidelinesforDeterminingtheIndependenceofitsMembers,whichareaccessiblebyfollowingthelinkto“CorporateGovernance”ontheCompany’swebsiteatwww.jacobs.com.TheBoardofDirectorshasaffirmativelydeterminedthateachpersonwhoservedasamemberoftheBoardofDirectorsduringfiscal2018,otherthanMr.Demetriou,isindependentunderSection303A.02oftheNYSElistedcompanymanualandtheCompany’sindependenceguidelines.EachmemberofeachCommitteeoftheBoardisalsoindependent(asdefinedbytheapplicableNYSErules).
Inaddition,asfurtherrequiredbytheNYSE’slistedcompanymanualandtheCompany’sIndependenceGuidelines,theBoardofDirectorshasmadeanaffirmativedeterminationthatnorelationship,whetherimmaterialormaterial,existsbetweenanyindependentdirectorandtheCompanythatwouldpreventadirectorfrombeingindependent.Inmakingthisdetermination,theBoardconsideredthefactsdescribedbelow.
Mr.DavidsonisanofficerofGammaZetaBouléFoundationandSigmaPiPhiProfessionalFraternity.TheCompanyhasmadeannualcontributionstotheseorganizationsduringthelastthreefiscalyears.Suchamountsdidnotexceed$7,500inanyfiscalyear.Duringfiscal2015,Ms.HicktonwasViceChair,PresidentandCEOofRTIInternationalMetals,Inc.(“RTI”),whichhasbeenaclientoftheCompany.ThepaymentsbyRTItotheCompanyforanyfiscalyearweresubstantiallylessthantwopercentoftheconsolidatedgrossrevenuesofRTI.Mr.McNamarawaspreviouslyGlobalChiefRiskOfficer&COO—AustraliabusinessesofBuilding,Engineering,andServicesofLendleaseCorporationLimited(“Lendlease”),whichhasbeenaclientoftheCompany.ThepaymentsbyLendleasetotheCompanyforanyfiscalyearweresubstantiallylessthantwopercentoftheconsolidatedgrossrevenuesofLendlease.
UntilFebruary2018,Mr.RobertsonservedastheU.S.co-chairmanoftheUS-SaudiArabianBusinessCouncil,anorganizationtowhichtheCompanymakes$20,000inannualcashcontributionsandalsosupportsconferences.InFebruary2018,Mr.DemetriousucceededMr.Robertsoninthisroleastheco-chairman.ThetotalamountcontributedbytheCompanytotheUS-SaudiArabianBusinessCounseloverthelastfiveyearsisapproximately$70,000.Mr.RobertsonisalsoontheBoardofSasolLtd.,whichisaclientoftheCompany.Afterareviewofthefacts,usingitsbusinessjudgment,theBoardofDirectorsdeterminedthattheserelationshipsdidnotcompromisetheindependenceofMssrs.Davidson,McNamaraandRobertsonorMs.Hickton.
DirectorNominations
TheNominatingandCorporateGovernanceCommitteeisresponsibleforrecommendingtheselectionofdirectornomineestotheBoard.Oncepotentialcandidatesareidentified,includingthosecandidatesnominatedbyshareholdersand/oridentifiedbyoutsideadvisorsorsearchfirms,theChairoftheNominatingandCorporateGovernanceCommittee,theLeadIndependentDirectorandtheChairandCEOreviewthebackgroundsofthosecandidateswiththeNominatingandCorporateGovernanceCommittee.Finalcandidatesarethenchosenandinterviewedbynon-managementdirectorsandexecutivemanagementoftheCompany. 20 |2019 Proxy Statement
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Basedontheinterviews,theNominatingandCorporateGovernanceCommitteethenmakesitsrecommendationtotheBoardofDirectors.IftheBoardofDirectorsapprovestherecommendation,thecandidateisnominatedforelection.Withregardtoproceduresforshareholdernominationsofdirectorsforelection,pleaseseetherequirementsdescribedbelowunder“Shareholders’Proposals.”TheNominatingandCorporateGovernanceCommitteewillconsiderdirectorcandidatesrecommendedbyshareholdersinaccordancewiththeseprocedures.
Mr.WilliamswasappointedtotheBoardinDecember2017inconnectionwiththeCompany’sacquisitionofCH2M.Priortotheacquisition,Mr.WilliamsservedontheBoardofCH2Mandwasthechairofitsauditcommittee.
CommitteesoftheBoardofDirectors
TheBoardofDirectorshasthreestandingcommittees:theAuditCommittee,theHumanResourceandCompensationCommitteeandtheNominatingandCorporateGovernanceCommittee. AuditCommitteeMembers:*-JosephR.Bronson(Chair)-DawneS.Hickton-RobertA.McNamara-ChristopherM.T.Thompson-BarryL.Williams+
*Eachmemberisindependentandfinanciallyliterateandqualifiesasanauditcommitteefinancialexpert+NewmemberappointedtoCommitteeinJanuary2018
Primary responsibilities include monitoring and overseeing the:•IntegrityoftheCompany’sfinancialstatements•Independentauditor’squalificationsandindependence•PerformanceoftheCompany’sinternalauditfunctionand
independentauditors•CompliancebytheCompanywithlegalandregulatory
requirements
MeetingsinFiscal2018:9CommitteeMemberAttendance:98%
CommitteeCharter:TheAuditCommittee’scurrentcharterisavailablebyfollowingthelinksto“CorporateGovernance”ontheCompany’swebsiteatwww.jacobs.comoruponwrittenrequest,asdescribedbelowunder“CorporateGovernance—AvailabilityofDocuments.”
HumanResourceandCompensationCommitteeMembers:*-PeterJ.Robertson(Chair)-GeneralRalphE.Eberhart-JuanJoséSuárezCoppel-ChristopherM.T.Thompson
*Eachmemberisindependent
Primary responsibilities include:•Establishing,recommending,andgoverningallcompensationand
benefitspoliciesforexecutiveofficers•Establishingandoverseeingpolicyandprotocolinvolvedinthe
grantingofallequitycompensation•OverseeingthedesignandadministrationoftheCompany’s
employeebenefitplans•Overseeingtheadoptionandadministrationofkeyhuman
resourcesprocessesandprograms
MeetingsinFiscal2018:5CommitteeMemberAttendance:100%
CommitteeCharter:TheHumanResourceandCompensationCommittee’scurrentcharterisavailablebyfollowingthelinksto“CorporateGovernance”ontheCompany’swebsiteatwww.jacobs.comoruponwrittenrequest,asdescribedbelowunder“CorporateGovernance—AvailabilityofDocuments.”
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CompensationCommitteeInterlocksandInsiderParticipation:Duringthelastcompletedfiscalyear,nomemberoftheCompensationCommitteewasanofficeroremployeeoftheCompany,wasaformerofficeroftheCompany,norhadarelationshipwiththeCompanyrequiringdisclosureasarelatedpartytransactionunderItem404ofRegulationS-K.NoneoftheCompany’sexecutiveofficersservedonthecompensationcommitteeorboardofdirectorsofanotherentitywhoseexecutiveofficer(s)servedasamemberoftheCompany’sBoardofDirectorsorontheCompensationCommittee.
NominatingandCorporateGovernanceCommitteeMembers:*-RobertC.Davidson,Jr.(Chair)-JuanJoséSuárezCoppel-GeneralRalphE.Eberhart-DawneS.Hickton-RobertA.McNamara+
*Eachmemberisindependent+NewmemberappointedtoCommitteeinJanuary2018
Primary responsibilities include:•IdentifyingfortheBoardofDirectorsqualifiedcandidatestoserve
asdirectorsoftheCompany•EstablishingfortheBoardcorporategovernancepolicies,
principlesandguidelines•OverseeingtheAnnualSelf-EvaluationoftheBoard•EstablishingandrecommendingtotheBoardoutsidedirector
compensation•OverseeingtheCompany’scomplianceprograms
MeetingsinFiscal2018:5CommitteeMemberAttendance:100%
CommitteeCharter:TheNominatingandCorporateGovernanceCommittee’scurrentcharterisavailablebyfollowingthelinksto“CorporateGovernance”ontheCompany’swebsiteatwww.jacobs.comoruponwrittenrequest,asdescribedbelowunder“CorporateGovernance—AvailabilityofDocuments.”
CorporateGovernanceGuidelines
TheCompanymonitorsdevelopmentsintheareaofcorporategovernanceandroutinelyreviewsitsprocessesandproceduresinlightofsuchdevelopments.TheCompanybelievesthatithasproceduresandpracticesinplacewhicharedesignedtoenhanceandprotecttheinterestsofitsshareholders.
TheBoardofDirectorshasapprovedCorporateGovernanceGuidelinesfortheCompany,whicharereviewedandupdatedonanannualbasis.TheCorporateGovernanceGuidelinesareavailablebyfollowingthelinksto“CorporateGovernance”ontheCompany’swebsiteatwww.jacobs.comoruponwrittenrequest,asdescribedbelowunder“CorporateGovernance—AvailabilityofDocuments.”TheCorporateGovernanceGuidelinesaddressthefollowingmatters:
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✓ TheroleoftheBoardtoprovideoversight,counseling
anddirectiontotheCompany’smanagementintheinterestoftheCompanyanditsshareholders;
✓ FrequencyofmeetingsoftheBoard(5-6regularmeetingsperyear);
✓ TherequirementthattheBoardofDirectorsbecomprisedofamajorityofindependentdirectors;
✓ Guidelinesforevaluatingandnominatingdirector
nominees,includingrelevantskills,experienceanddiversity;
✓ Guidelinesfordeterminingdirectorindependence;
✓ Directorandexecutiveofficerstockownershipguidelines;
✓ Conflictsofinterests;
✓ Majorityvotinginuncontestedelectionsofdirectors;
✓ Limitsthenumberofpubliccompanyboardsonwhichnon-managementdirectorsmayservetofour;
✓ CommitteesoftheBoard,includingassignmentofdirectorstocommitteesandappointmentofcommitteechairs;
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DirectorEducation
TheBoardrecognizestheimportanceofdirectorcontinuingeducationandiscommittedtoprovidesucheducationinordertoenhancebothBoardandCommitteeperformance.Accordingly,asnotedintheCompany’sCorporateGovernanceGuidelines,theCompanyregularlyprovidestheBoardwitheducationprograms,presentationsandbriefingsontopicsrelevanttotheCompany,itsbusinessandriskprofile.Inaddition,eachyeartheBoardengagesathird-partyprovidertohostaneducationalprogramformembersoftheBoardonmattersrelevanttotheCompanyorrelatingtodutiesandresponsibilitiesofdirectors.Directorsarealsoencouragedtoattendatleastoneoutsideeducationalprogrameachyearonanysubjectspertainingtothedirectors’responsibilitiessuchas“directors’colleges.”Additionally,newdirectorsmustparticipateintheCompany’sorientationprogramfornewdirectors.
AnnualPerformanceEvaluations
TheNominatingandCorporateGovernanceCommittee,togetherwiththeLeadIndependentDirector,coordinatesannualBoardperformanceevaluationsandperiodicindividualdirectorreviews.TheChairsofeachoftheCommitteescoordinateannualperformanceevaluationsoftheirrespectiveCommittees.
AttendanceatMeetingsoftheBoardanditsCommitteesandtheShareholderMeeting
OveralldirectorattendanceatmeetingsoftheBoardanditsCommitteeswas99%duringfiscal2018.Eachindividualdirectorattendedatleast75%ofallmeetingsoftheBoardandallCommitteesonwhichtheyserveduringfiscal2018.Boardmembersareexpectedtoattendannualmeetingsofshareholders.AllofthemembersofourBoardattendedthe2018annualmeetingofshareholders.
CodeofEthics
InadditiontotheCorporateGovernanceGuidelines,theBoardofDirectorshasadoptedthefollowingothercodes,guidelines,andpolicies:
✓ CodeofBusinessConductandEthicsforMembersoftheBoardofDirectors;
✓ CodeofEthicsfortheChiefExecutiveOfficerandSeniorFinancialOfficers;and
✓ CodeofConduct.
Thesedocuments,alongwiththeCorporateGovernanceGuidelines,serveasthefoundationfortheCompany’ssystemofcorporategovernance.Theyprovideguidanceformaintainingethicalbehavior,requirethatdirectorsandemployeescomplywithapplicablelawsandregulations,prohibitconflictsofinterest,andprovidemechanismsforreportingviolationsoftheCompany’spoliciesandprocedures.
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✓ TherequirementthattheAudit,HumanResourceand
Compensation,andNominatingandCorporateGovernanceCommitteesoftheBoardofDirectorsbecomprisedentirelyofindependentdirectors;
✓ Therequirementthatdirectorsattendinpersonall
regularlyscheduledBoardandCommitteemeetingsunlessrequiredbyillnessorotherextenuatingcircumstances;
✓ ExecutivesessionsoftheBoardofDirectorswherein
non-managementdirectorsmeetasagroupwithoutthepresenceofmanagementdirectors;
✓ OrientationfornewdirectorsandcontinuingeducationforBoardmembers;
✓ Theselection,rolesandresponsibilitiesoftheChairandChiefExecutiveOfficerandtheLeadIndependentDirector;
✓ TherequirementthattheperformanceoftheChairand
ChiefExecutiveOfficerbeevaluatedannuallyandreviewedbythenon-managementdirectors;
✓ Successionplanning;
✓ AnnualBoardself-evaluation;and
✓ OthermattersuniquelygermanetotheworkandresponsibilitiesoftheBoardofDirectors.
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IntheeventtheCompanymakesanyamendmentto,orgrantsanywaiverfrom,aprovisionofthecodeofethicsthatappliestotheprincipalexecutiveofficer,principalfinancialofficer,orprincipalaccountingofficerthatrequiresdisclosureunderapplicableSECrules,theCompanywilldisclosesuchamendmentorwaiverandthereasonsthereforeonitswebsiteatwww.jacobs.com.
StockOwnershipGuidelines
InanefforttomorecloselyaligntheCompany’snon-managementdirectors’financialinterestswiththoseofourshareholders,theBoardofDirectorshasestablishedstockownershipguidelinesfornon-managementdirectors.Undertheseguidelines,theCompany’snon-managementdirectorsareexpectedtoownequityintheCompany(includingcommonstock,restrictedstockorrestrictedstockunits)valuedataminimumoffivetimestheirannualcashretainer.Non-managementdirectorsarerestrictedfromsellinganysharesofcommonstockduringanyperiodinwhichtheyhavenotmettheseownershipguidelines.Asoftheendoffiscal2018,allnon-managementdirectorsexceededtheseguidelinesorwerewithinthefive-yearperiodfromtheirappointmentdate,atthetimeofwhichtheyareexpectedtomeettheguidelines.
Similarly,theCompanyhasestablishedstockownershipguidelinesforseniormanagement.Undertheseguidelines,theCompany’sseniormanagementisexpectedtoownequityintheCompany(includingcommonstock,restrictedstockorrestrictedstockunits,butexcludingunvestedperformanceshareunitsorunexcisedoptions)within3-5yearsofenteringtheirrespectivepositionsvaluedasfollows:
Position
MultipleofBaseSalary
ChairandCEO 6xEVP/PresidentsofLinesofBusiness 3xOtherSeniorManagement(SVPs) 2x
Membersofseniormanagementarenotrequiredtopurchasesharesofcommonstocktoreachtheapplicablethreshold,butarerestrictedfromsellinganysharesofcommonstockduringanyperiodinwhichtheyhavenotmettheseownershipguidelines.Thisrestrictiondoesnotapplytothewithholdingofsharestosatisfytaxwithholdingrequirements.Asoftheendoffiscal2018,allnamedexecutiveofficers(orNEOs)exceededtheirrespectiveguidelines.
ContactingtheBoardofDirectors
Generally—AllcommunicationsrequiredbylaworregulationtoberelayedtotheBoardofDirectorsarerelayedpromptlyafterreceiptbytheCompany.AnycommunicationsreceivedbymanagementfromshareholderswhichhavenotalsobeensentdirectlytotheBoardofDirectorswillbeprocessedasfollows:(1)iftheshareholderspecificallyrequeststhatthecommunicationbesenttotheBoard,thecommunicationwillthenbepromptlyrelayedtotheBoardofDirectors;and(2)iftheshareholderdoesnotrequestthatthecommunicationbesenttotheBoardofDirectors,thenmanagementwillpromptlyrelaytotheBoardallcommunicationsthatthemanagementoftheCompany,usingitsbestbusinessjudgment,determinesshouldberelayedtotheBoard.
ContactingtheFullBoardofDirectors—Anyshareholder,employeeorinterestedpartywhodesirestocommunicatewiththeBoardofDirectorsmaydosobywritingtoTheBoardofDirectors,c/oCorporateSecretary,JacobsEngineeringGroupInc.,1999BryanStreet,Suite1200,Dallas,Texas,75201,inanenvelopemarkedconfidential.
ContactingNon-ManagementDirectors—Anyshareholder,employeeorinterestedpartywhodesirestocommunicatewiththeCompany’snon-managementdirectorsmaydosoasfollows: ✓ ConfidentiallyoranonymouslythroughtheCompany’sIntegrityHotline,+1(844)543-8351;
✓ BywritingtoLeadIndependentDirector,c/oCorporateSecretary,JacobsEngineeringGroupInc.,1999BryanStreet,Suite1200,Dallas,Texas,75201,inanenvelopemarkedconfidential;or
✓ BysendinganemailtoLeadIndependent.Director@Jacobs.com. 24 |2019 Proxy Statement
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ContactingtheAuditCommittee—Anyshareholder,employeeorinterestedpartymaysubmitatanytimeagoodfaithcomplaintregardinganyquestionableaccounting,internalaccountingcontrols,orauditingmattersconcerningtheCompanywithoutfearofdismissalorretaliationofanykind.EmployeesareencouragedtoreporttheirconcernsandcomplaintstotheCompany’sseniormanagement,totheVicePresident,InternalAudit,ortotheAuditCommitteeoftheBoardofDirectors.Confidential,anonymousreportsmaybemadeasfollows: ✓ ThroughtheCompany’sIntegrityHotline,+1(844)543-8351;
✓ BywritingtotheChairoftheAuditCommittee,c/oCorporateSecretary,JacobsEngineeringGroupInc.,1999BryanStreet,Suite1200,Dallas,Texas,75201,inanenvelopemarkedconfidential;or
✓ BysendinganemailtoAudit.Committee@Jacobs.com.
AvailabilityofDocuments
ThefulltextoftheCorporateGovernanceGuidelines,theCodeofBusinessConductandEthicsforMembersoftheBoardofDirectors,theCodeofEthicsfortheChiefExecutiveOfficerandSeniorFinancialOfficers,theCodeofConduct,theCommitteeCharters,theBoardofDirectorsGuidelinesforDeterminingtheIndependenceofitsMembers,andtheothercorporategovernancematerialsdescribedinthisProxyStatementareaccessiblebyfollowingthelinkto“CorporateGovernance”ontheCompany’swebsiteatwww.jacobs.com.
TheCompanywillfurnishwithoutchargeacopyofanyoftheforegoingdocumentstoanypersonmakingsucharequestinwritingandstatingthatheorsheisabeneficialownerofcommonstockoftheCompany.Requestsshouldbeaddressedto:JacobsEngineeringGroupInc.,1999BryanStreet,Suite1200,DallasTexas75201,Attention:CorporateSecretary.
CompensationofDirectors
Determination of Non-Employee Director Compensation
Eachyear,theBoarddeterminesnon-employeedirectorcompensationbasedupontherecommendationoftheNominatingandCorporateGovernanceCommittee.Inmakingarecommendation,theNominatingandCorporateGovernanceCommitteeconsidersmarketdatafortheCompany’speergroup,whichisthesamepeergroupusedfortheCompany’sexecutivecompensationbenchmarking,andinputfromFWCook,theindependentconsultantretainedbytheNominatingandCorporateGovernanceCommitteeregardingmarketpracticesfordirectorcompensation.
TheNominatingandCorporateGovernanceCommitteeintendstosetnon-employeedirectorcompensationlevelsatornearthemarketmedianrelativetodirectorsatcompaniesofcomparablesize,industry,andscopeofoperations.Thisensuresdirectorsarepaidcompetitivelyfortheirtime,commitmentandresponsibilities,whichenablesustoattractandretainhighlyqualifieddirectors.Duringfiscal2018,theindependentconsultantconductedareviewofdirectorcompensationlevelsrelativetotheCompany’speergroupandrecommendedcertainchangestoensuretheprogramremainsalignedwithmediancompetitivepractices,includingincreasingthecashretainerfrom$110,000to$115,000andtheannualequityvaluefrom$135,000to$150,000.TheBoardapprovedthesechangeseffectiveJanuary2018.DirectorswhoareemployeesoftheCompanyoritsaffiliatesdonotreceiveseparatecompensationfortheirboardactivities.
Additional Director Compensation for Periods of Unusually High Activity
Basedontherecommendationoftheindependentconsultant,duringfiscal2018theBoardadoptedapolicyunderwhichnon-employeedirectorsmaybecompensatedforperiodsofunusuallyhighBoardorcommitteeactivity.Theintentionofthispolicyistoprovideadditionalcompensationforperiodsofunusualactivityonlyandnotforordinarycourseofbusiness.TheCorporateGovernanceGuidelinesstatethatthenumberofregularlyscheduledBoardmeetingsperyearwillbefiveorsixandthenewpolicyprovidesthatbeginningwiththeninthmeetinginafiscalyear,theCompanywillpayanadditional$2,000specialfeeforeachadditionalmeetingtothenon-employeedirectors.IntheeventtheBoardformsaspecialcommittee,theCompanywillpaytheadditional
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$2,000specialfeebeginningwiththefifthspecialcommitteemeeting.Duringfiscal2018,theCompanydidnotpayanyspecialfeesunderthisnewpolicy,astheBoardandallcommitteesexcepttheAuditCommitteeheldfewerthanninemeetings.
Director Compensation During Fiscal 2018
CashRetainers.TheCompanypaidnon-managementdirectorsacashretainerof$110,000peryearthroughthefirstfiscalquarterof2018and$115,000peryearthereafter.Inaddition,theLeadIndependentDirectorreceivesanadditionalcashretainerof$100,000peryear,andtheChairofeachCommitteereceivesanadditionalcashretainerof$20,000peryear.
Equity.Forfiscal2018,theBoardsettheannualequityvaluetobeawardedtonon-managementdirectorsatapproximately$150,000and,accordingly,grantedeachnon-managementdirectoranawardof2,162restrictedstockunits(“RSUs”)onJanuary18,2018.SuchgrantsweremadepursuanttotheJacobsEngineeringGroupInc.1999OutsideDirectorStockPlan,asamendedandrestated(the“1999OutsideDirectorPlan”).EachRSUgrantvestsupontheearlierof(i)thenextannualshareholdermeetingor(ii)theone-yearanniversaryofthegrantdate.IftheCompanypaysacashdividendonitsoutstandingcommonstock,RSUswillbecreditedwithcashdividendequivalentrights(“DividendEquivalents”)whicharepaidtosuchdirectoruponthevestingoftheRSUanddistributionoftheunderlyingshareofcommonstockasdescribedbelowinthesectionentitled“ExecutiveCompensation—NarrativeDisclosuretoSummaryCompensationTableandGrantsofPlanBasedAwardsTable—PaymentofDividendsandDividendEquivalentRights”.Eachdirectoralsoreceivescashdividendswithrespecttoeachoutstandingrestrictedstockaward(“RSA”)asandwhenpaidtoshareholdersofcommonstock.Additionally,non-managementdirectorsareeligibletoparticipateintheJacobsDirectorDeferralPlan,pursuanttowhicheachdirectormaydeferalloraportionofsuchdirector’scashretainerorRSUs.
ThetablebelowsetsforththecompensationearnedbyeachoftheCompany’snon-managementdirectorsduringfiscal2018.
Name
FeesEarnedorPaidinCash($)(1)
StockAwards($)(2)
OptionAwards($)(3)
AllOtherCompensation
($)(4) Total($)
JosephR.Bronson 133,750 150,021 — 5,856 289,627JuanJoséSuárezCoppel 113,750 150,021 — 1,056 264,827RobertC.Davidson,Jr. 133,750 150,021 — 8,256 292,027GeneralRalphE.Eberhart 113,750 150,021 — 1,056 264,827DawneS.Hickton 113,750 150,021 — 1,056 264,827LindaFayneLevinson 213,750 150,021 — 9,456 373,227RobertA.McNamara 113,750 150,021 — 1,056 264,827PeterJ.Robertson 133,750 150,021 — 1,056 284,827ChristopherM.T.Thompson 113,750 150,021 — 1,056 264,827BarryWilliams(5) 90,435 150,021 — — 240,456
(1)Representsfeesearnedduringfiscal2018.(2)RepresentsthegrantdatefairvalueofthegrantsofRSUsunderthe1999OutsideDirectorPlanduringfiscal2018inaccordancewithFinancialAccountingStandardsBoardAccountingStandardsCodificationTopic718,StockCompensation(“FASBASCTopic718”).TheaggregatenumberofsharesofrestrictedstockandrestrictedstockunitsoutstandingatSeptember28,2018,foreachnon-managementdirectorwasasfollows:J.Bronson—22,971;J.SuárezCoppel—7,471,R.Davidson—26,971;R.Eberhart—8,971;D.Hickton—4,471;L.FayneLevinson—28,971;R.McNamara—2,162;P.Robertson—11,971;C.Thompson—8,971;andB.Williams—2,162.(3)TheCompanyhasnotgrantedoptionstonon-managementdirectorssincefiscal2016.TheaggregatenumberofoptionsoutstandingatSeptember28,2018,foreachnon-managementdirectorwasasfollows:J.Bronson— 26 |2019 Proxy Statement
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7,875;J.SuárezCoppel—14,500;R.Davidson—24,500;R.Eberhart—18,000;D.Hickton—7,500;L.FayneLevinson—27,000;R.McNamara—0;P.Robertson—28,500;C.Thompson—18,000;andB.Williams—0.(4)Representsdividendpaymentsonrestrictedstockawards(“RSAs”)duringfiscal2018aswellasdividendpaymentsonrestrictedstockunits(“RSUs”)thatvestedduringthefiscalyear.TheseamountsdonotincludeaccumulateddividendequivalentrightsonvestedRSUs,asapplicable,thathavenotyetbeendistributedforeachnon-managementdirectorasfollows:J.Bronson—$11,528;J.SuárezCoppel—$4,778;R.Davidson—$11,528;R.Eberhart—$6,128;D.Hickton—$2,078;L.FayneLevinson—$11,528;R.McNamara—$0;P.Robertson—$8,828;C.Thompson—$6,128;andB.Williams—$0.(5)Mr.WilliamswasappointedtotheBoardinDecember2017.
Forward-LookingStatements
ThisProxyStatementcontainsforward-lookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Forward-lookingstatementsarestatementsthatdonotdirectlyrelatetoanyhistoricalorcurrentfact.Whenusedherein,wordssuchas“estimates”,“intends”,and“will”andsimilarwordsareintendedtoidentifyforward-lookingstatements.Youshouldnotplaceunduerelianceontheseforward-lookingstatements.Althoughsuchstatementsarebasedonmanagement’scurrentestimatesandexpectationsand/orcurrentlyavailabledata,forward-lookingstatementsareinherentlyuncertainandinvolverisksanduncertaintiesthatcouldcauseouractualresultstodiffermateriallyfromwhatmaybeinferredfromtheforward-lookingstatements.Factorsthatcouldcauseorcontributetosuchdifferencesinclude,butarenotlimitedto,thoselistedinItem1A—RiskFactorsintheCompany’s2018AnnualReportonForm10-K.TheCompanydoesnotundertakeanyobligationtoreleasepubliclyanyrevisionsorupdatestoanyforward-lookingstatements.
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PROPOSALNO.2—ADVISORYVOTETOAPPROVEEXECUTIVECOMPENSATION
The Board of Directors unanimously recommends that you vote FOR the advisory resolution approving the Company’s executive compensation.
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Whatareyouvotingon?
AsrequiredbySection14AoftheSecuritiesExchangeActof1934,asamended,thisproposalseeksashareholderadvisoryvotetoapprovethecompensationofournamedexecutiveofficersasdisclosedpursuanttoItem402ofRegulationS-Kthroughthefollowingresolution:
“Resolved,thattheshareholdersapprove,onanadvisorybasis,thecompensationpaidtotheCompany’snamedexecutiveofficers,asdisclosedinthisProxyStatementpursuanttotheSEC’sexecutivecompensationdisclosurerules(whichincludestheCompensationDiscussionandAnalysis,theSummaryCompensationTable,andtherelatedcompensationtablesandnarrativedisclosures).”
Asanadvisoryvote,thisproposalisnotbindingontheCompany,theBoardofDirectors,ortheHumanResourceandCompensationCommittee(the“CompensationCommittee”),andwillnotbeconstruedasoverrulingadecisionbytheCompany,theBoard,ortheCompensationCommitteeorcreatingorimplyinganyadditionalfiduciarydutyfortheCompany,theBoard,ortheCompensationCommittee.However,theBoardofDirectorsandtheCompensationCommitteevaluetheopinionsthatshareholdersexpressintheirvotesandwillconsidertheoutcomeofthevotewhenmakingfuturecompensationdecisions.
Atour2017annualmeetingofshareholders,ourshareholdersapproved,onanadvisorybasis,afrequencyofeveryyearforcastingadvisoryvotesapprovingourexecutivecompensation.AftertheAnnualMeeting,ournextadvisoryvoteonexecutivecompensationwilloccuratour2020annualmeetingofshareholders.
WhatistheVoteRequired?
TheapprovaloftheadvisoryresolutionontheCompany’sexecutivecompensationrequirestheaffirmativevoteofamajorityofsharesofcommonstockpresent,inpersonorbyproxy,attheAnnualMeetingandentitledtovote.Abstentionshavethesameeffectasavoteagainsttheadvisoryresolution.Brokernon-voteswillhavenoeffectoftheoutcomeoftheadvisoryvote.
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COMPENSATIONCOMMITTEEREPORTTheHumanResourceandCompensationCommitteeoftheBoardofDirectorsreviewedanddiscussedtheCompensationDiscussionandAnalysisrequiredbyItem402(b)ofRegulationS-KwiththeCompany’smanagement.Basedonsuchreviewanddiscussion,theHumanResourceandCompensationCommitteerecommendedtotheBoardofDirectorsthattheCompensationDiscussionandAnalysisbeincludedintheProxyStatement.TheBoardhasapprovedthatrecommendation. December5,2018 PeterJ.Robertson,Chair
GeneralRalphE.EberhartJuanJoséSuárezCoppelChristopherM.T.Thompson
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CompensationDiscussionandAnalysis(“CD&A”)ExecutiveSummary Asoneoftheworld’slargestandmostdiverseprovidersoftechnicalprofessionalandconstructionservices,weoperatewithapay-for-performancephilosophyinachallenging,highlycompetitive,andrapidlyevolvingglobalenvironment.Ournamedexecutiveofficers(“NEOs”)forfiscal2018were: Name 2018PositionMr.StevenJ.Demetriou ChairandChiefExecutiveOfficer(“CEO”)Mr.KevinC.Berryman ChiefFinancialOfficer(“CFO”)Mr.TerenceD.Hagen* President,Aerospace,Technology,EnvironmentalandNuclear(ATEN)Mr.JosephG.(“Gary”)Mandel** ExecutiveVicePresident,IntegrationManagementOfficeMr.RobertV.Pragada* President,Buildings,InfrastructureandAdvancedFacilities(BIAF)
*Mr.HagenandMr.PragadawereeachpromotedtoChiefOperatingOfficereffectiveOctober1,2018.**Mr.Mandel’spositionchangedtoSpecialAdvisortotheChairandCEOeffectiveOctober1,2018.
Howdidweperform?
✓ Our2018revenuegrew9%onaproformabasisandgrossmarginincreasedover100basispoints
✓
SuccessfulCH2Mintegration,exceedingsynergytargets
✓
GlobalcommitmenttoInclusionandDiversitytodriveshareholdervalue
✓
AnnouncedsaleofECRbusinesstofocusonhighermargin,highergrowthbusinesses
Whatdidwechangefor2018?
✓
IncreasedbasesalariesforNEOs(otherthantheCEOandCFO)between3%and5%,consistentwithmarketdatafromourpeergroupandothermarketsurveyinformation
✓
AdoptedanExecutiveSeverancePlanthatprovidesseverancebenefitstocertainkeyexecutives
✓
ImplementedvariablecompensationmetricstiedtotheachievementofcostsynergytargetsfortheNEOoverseeingtheintegrationoftheCH2Macquisition
✓
Fiscal2018equitygrantsprovideforacceleratedvestingintheeventtheholderisinvoluntarilyterminatedwithoutcausetoincentivizeseniormanagementduringperiodsofuncertaintyleadinguptotheCH2Macquisitionandsubsequentintegration
Howdowedeterminepay?
✓
DesignpayprogramstorewardexecutivesforpositiveCompanyandbusinessunitresults,mitigatematerialrisksandalignwithstockholderinterestsequity-basedlong-termincentiveawards
✓
Setpaylevelscommensuratewithperformanceandtheneedtoattractandretainhighqualitytalent
✓
Considermanyfactors,includingtheadviceoftheCompensationCommittee’sindependentcompensationconsultant,internalpayequityamongexecutivesandthealignmentoftotalpayopportunityandpayoutcomeswithperformanceandwithexternalmarketdata
HowdidwepayourNEOs?
✓ Payoutsalignedwithourfiscal2018performance
✓
BasesalariesreflecteachNEO’srole,responsibilityandexperienceandthemarketconditions
✓
Annualcashincentivepayoutsrangedfrom119%to154%oftargetbasedonachievementofCompanyandbusinessareaperformanceobjectives;twoNEOsearnedadditionalcashincentivepayoutsforperformancerelatedtotheacquisitionofCH2M
✓
Long-termequityincentivesgrantedattargetlevelsusingaportfolioofperformance-basedrestrictedstockunits(“PSUs”)andtime-basedrestrictedstockunits(“RSUs”).PSUsvestbasedonourEPSGrowthand50%basedonourROICoverathree-yearperformanceperiod
✓
Nooff-cycleequityawardsorexcessiveperquisitesforanyofourNEOs
Howdoweaddressriskandgovernance?
✓
Provideanappropriatebalanceofshort-andlong-termcompensation,withpayoutsbasedontheCompany’sachievementofcertainfinancialmetricsandspecificbusinessareaobjectives
✓
Followpracticesthatpromotegoodgovernanceandservetheinterestsofourstockholders,withmaximumpayoutcapsforannualcashincentivesandlong-termperformanceawards,andpoliciesonclawbacks,anti-pledging,anti-hedging,insidertradingandstockownership
✓
✓
Solicit“say-on-pay”shareholdervoteannuallyatshareholdermeeting
OurBoard,throughtheHumanResourceandCompensationCommittee,periodicallyconductsariskassessmentofourcompensationpoliciesandpracticeswiththeassistanceofanindependentcompensationconsultant
Whyyoushouldapprovethesay-on-payproposal
✓ Fiscal2018performancecontinuedtosupportlong-termstockholdervalue ✓ Fiscal2018incentivepayoutsforourNEOsalignedwithCompanyperformance
✓
Ourpayprogramisalignedwithstockholderinterests,emphasizingachievementofstrategicobjectivesoverthelongterm
✓
Ourpaypracticesaretiedtorobustriskmanagementandcorporategovernance
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OurExecutiveCompensationPhilosophy
Ourvisionistoprovidesuperiorcustomervaluethroughalong-term,relationship-basedapproachandsolidreturnstoourshareholdersthroughprofitablegrowth.TheCompensationCommitteehasacompensationphilosophythatdrivesthisvisionbyattractingandretaininghighlyqualifiedemployeesandmotivatingthemtodelivervaluetoourcustomersandshareholders.Accordingly,ourexecutivecompensationprogramispay-for-performancebased,intendingto:
✓ Provideexecutiveswithbasesalarycompensationthatiscompetitivewiththemarket;
✓ RewardexecutivesforsuperiorannualCompanyperformancethroughourManagementIncentivePlan(“MIP”),ashort-termcash
incentiveprogramthatplacesasubstantialcomponentofpayatrisk,withspecificmeasuresandtargetsassignedtoeachparticipantbasedontheirroleintheCompany;and
✓ Incentivizeseniormanagementthroughtheuseoflong-termequity-basedawardsthatalignourexecutives’interestswiththoseofourshareholders.
OurExecutiveCompensationProgramandPractices
OurCompensationCommitteebelievesthatourexecutivecompensationprogramisappropriatelydesignedtoadvanceshareholderinterests.Thekeycomponentsandassociatedpurposesofourcompensationprogramareasfollows:
ComponentPurposePerformanceMetricandDescriptionShort-Term/AnnualBaseSalaryProvidesthesecurityofacompetitivefixedcashpaymentReviewedannuallybytheCompensationCommitteeandadjustedbasedoncompetitivepracticesandindividualperformanceManagementIncentivePlan("MIP")Encouragessuperiorperformanceandaccountabilitybytyingpayoutstoachievementofpre-establishedmetricsassignedtoparticipantsbasedontheirroleintheCompanyMetricsusedforfiscal2018include:"Consolidated/LineofBusinessOperatingProfit"DSO*"GMinBacklog*"AchievementofcostsynergytargetsinconnectionwiththeCH2Mintegration(foroneNEO)Long-TermPerformance-BasedRestrictedStockUnits("PSUs")Alignsinterestsofexecutiveswithlong-termshareholderinterests.RetainsexecutivesandmotivatesthemtobuildshareholdervalueoverthelifeofthegrantsForfiscal2017andfiscal2018grants,metricsused:"EarningsPerShare("EPS")Growth-focusesonprofitabilityandfinancialdisciplines"ReturnonInvestedCapital("ROIC")-alignswithourstrategybymotivatingmanagerstofocusonincreasingefficiencyandcapturingwhethermagnitudeofprofitabilityisappropriateforinvestmentsmadeMetricsforperformance-basedawardsinfiscal2016wereEPSGrowthandrelativetotalshareholderreturn("TSR")comparedtotheCompany'speergroup.Awardsvestanddistributeafterthreeyearsofperformance,ifperformancetargetsaremet.TimeBasedRestrictedStockUnits("RSUs")RetainsexecutivesandmotivatesthemtobuildshareholdervalueoverthelifeofthegrantsAwardsvestratably,generallyoverfouryears.
*Seepage38forDSOandGMinBacklogdefinitions.
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Weremaincommittedtoexecutivecompensationpracticesthatdriveperformanceandthataligntheinterestsofourleadershipteamwiththeinterestsofourshareholders.BelowisasummaryofbestpracticesthatwehaveimplementedandpracticesweavoidwithrespecttothecompensationofourNEOs. WHATWEDO
WHATWEDONOTDO
☑ Pay-for-Performance—Asignificantmajorityofourexecutives’targetcompensationisatrisk,includingcompensationthatisstockbasedand/orperformancebased,tiedtopre-establishedperformancegoalsalignedwithourshort-andlong-termobjectives.
☒ NoTaxGross-Ups—Wedonothavetaxreimbursementsorgross-upsonseverancepayments.See“—OtherBenefitsandPolicies—Perquisites”below.
☑ CompensationRecoupmentPolicies—Wehaveaclawbackpolicythatapplieswheninaccuratefinancialstatementshaveaffectedincentiveawardpaymentstoexecutiveofficers.Thispolicyisfurtherdescribedunder“—ClawbackPolicy”below.
☒ NoPensionPlansorSpecialRetirementProgramsforExecutiveOfficers—Wedonothaveapensionplanorsupplementalretirementplanforexecutiveofficers.
☑ StockOwnershipGuidelines—OurBoardhasestablishedrobuststockownershipguidelinesapplicabletoourBoardmembersandexecutivesasdescribedunder“—StockOwnershipGuidelines”below.
☒ NoExcessivePerquisites—WedonotofferexcessiveexecutiveperquisitessuchaspersonaluseofairplanesattheCompanyexpense,Company-providedautosorautoallowances(exceptforexpatriates)orpaymentofclubdues.
☑ ThoroughCompensationBenchmarking—TheCompensationCommitteereviewspubliclyavailableinformationtoevaluatehowourNEOs’compensationcomparestothatofexecutivesincomparablepositionsatothercompaniesasdescribedunder“—AssessingCompensationCompetitiveness”below.
☒ NoSpeculativeTrading—Boardmembersandexecutiveofficersareprohibitedfromshort-sellingourstockandbuyingorsellingputsandcallsofourstock.See“—InsiderTradingandPolicyonHedgingorPledgingofStock”below.
☑ IndependentCompensationConsultant—TheCompensationCommitteebenefitsfromitsuseofanindependentcompensationconsultingfirm,whichprovidesnootherservicestotheCompany.
☒ NoHedging—Boardmembersandexecutiveofficersareprohibitedfromengaginginhedgingtransactionsthatcouldeliminateorlimittherisksandrewardsofowningourstock.See“—InsiderTradingandPolicyonHedgingorPledgingofStock”below.
☑ AnnualPay-for-PerformanceReview—Withthehelpofitsindependentcompensationconsultant,theCompensationCommitteeannuallyanalyzesthedifficultyofmeetingourperformancegoalsandthealignmentofrealizablepayandperformancetoensurethatourincentiveprogramsareworkingasintended.
☒ NoUseofJacobsStockasCollateralforMarginLoans—Boardmembersandexecutiveofficersareprohibitedfromusingourstockascollateralforanymarginloan.See“—InsiderTradingandPolicyonHedgingorPledgingofStock”below.
☑ VestingConditionsonDividendEquivalents—WeimposethesamevestingconditionsondividendequivalentsasontheunderlyingRSUs. ☑ ExecutiveSeverancePlanwith“DoubleTrigger”ChangeinControlBenefits—Recognizingtheprevalenceofseveranceplansamongourpeersandtheneedtoattractandretaintalentedexecutives,infiscal2018weadoptedanExecutiveSeverancePlanthatprovidesseverancebenefitstocertainkeyexecutivesintheeventofeither(i)aqualifyinginvoluntaryterminationofemploymentunrelatedtoachangeincontrolor(ii)aqualifyingterminationofemploymentduringthetwo-yearperiodfollowingachangeincontrol. 32 |2019 Proxy Statement
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TheCompensationDecisionProcess
TheCompensationCommitteedirectlyretainstheservicesofindependentconsultantsandotherexpertstoassistinfulfillingitsresponsibilities.TheCompensationCommitteecurrentlyengagestheservicesofFWCook(the“IndependentConsultant”),anationalexecutivecompensationconsultingfirm,toreviewandproviderecommendationsconcerningallofthecomponentsoftheCompany’scompensationprograms.TheIndependentConsultantperformsservicesonbehalfoftheCompensationCommitteeandhasnorelationshipwiththeCompanyormanagementexceptasitmayrelatetoperformingsuchservices.theIndependentConsultantalsoadvisestheNominatingandCorporateGovernanceCommitteeonoutsidedirectorcompensation.TheCompensationCommitteehasassessedtheindependenceoftheIndependentConsultant,pursuanttotherulesoftheSECandtheNYSEandconcludedthattheIndependentConsultantisindependentandnoconflictofinterestexistswithrespecttotheservicesprovidedbytheIndependentConsultanttotheCompensationCommittee.
Duringfiscal2018,theCEOandothermembersofourseniorexecutiveteamworkedwiththeCompensationCommitteetohelpensurethatourexecutivecompensationprogramsarecompetitive,ethical,andalignedwiththeCompany’svalues.Forfiscal2018,compensationdecisionsfortheNEOs(otherthanourCEO)weremadebytheCompensationCommitteeafterconsultationwiththeCEO,andthecompensationdecisionwithrespecttoourCEOwasapprovedbythefullBoarduponrecommendationfromtheCompensationCommittee.
AssessingCompensationCompetitiveness
TheCompensationCommittee,withthehelpoftheIndependentConsultant,annuallycompareseachelementofcompensationtothatofanindustrypeergroup.Forfiscal2018,aspartofitsannualreview,theCompensationCommitteedeterminedthatthepeergroupshouldbecomprisedof(1)constructionandengineeringfirmsthataredirectcompetitorswiththeCompanyforbusinessandexecutivemanagementtalentor(2)companiesthatprovideconsultingortechnicalservicestogovernmentandlargecommercialclients.Inaddition,tobeincluded,acompanywouldneedtobegenerallywithinone-thirdtothreetimesthesizeoftheCompanyintermsofrevenueandmarketcapitalization,evaluatedannually.
Similartoprioryears,inordertoassesscompensationcompetitivenesscomparedtothepeergroup,theIndependentConsultantutilizedcomparativedatadisclosedinpubliclyavailableproxystatements,otherdocumentsfiledwiththeSEC,anddatafromacomprehensivedatabaseofpayinformationdevelopedbyWillisTowersWatsonregardingtheindustryspecificandgeneralindustrygroupinwhichtheCompanycompetesfortalent.
Thefollowingchartshowsourfiscal2018industrypeergroup,includingrelevantsizeandperformancedatatoillustratetheCompany’srelativeposition.
MostRecentlyAvailableFourQuarters($M)
Employees
MarketCapitalizationasof9/30/18($M)
Revenues
NetIncome
NorthropGrumman $26,774
Raytheon $2,398
DXCTechnology
150,000
Raytheon $58,952
Raytheon $25,959
NorthropGrumman $2,238
AECOMTech
87,000
NorthropGrumman $55,262
DXCTechnology $24,602
DXCTechnology $1,851
Jacobs
80,000
Hallliburton $35,662
Hallliburton $23,271
L-3Communications $889
NorthropGrumman
70,000
DXCTechnology $26,294
AECOMTech $19,706
Textron $870
Raytheon
64,000
Textron $17,754
Fluor $19,677
KBR $500
Fluor
56,706
L-3Communications $16,654
Textron $14,239
Leidos $442
Hallliburton
55,000
Jacobs $10,856
Jacobs $14,985
BoozAllenHamilton $339
SNC-Lavalin
52,448
Leidos $10,408
QuantaServices $10,162
QuantaServices $315
Textron
37,000
Fluor $8,170
Leidos $9,991
Jacobs $163
QuantaServices
32,800
SNC-Lavalin $7,153
L-3Communications $9,821
Fluor $252
EMCOR
32,000
BoozAllenHamilton $7,073
SNC-Lavalin $7,990
EMCOR $244
Leidos
31,000
AECOMTech $5,251
EMCOR $7,754
SNC-Lavalin $241
L-3Communications
31,000
QuantaServices $4,983
BoozAllenHamilton $6,296
AECOMTech $141
BoozAllenHamilton
24,639
EMCOR $4,370
KBR $4,276
Hallliburton $98
KBR
20,000
KBR $2,973
75thPercentile $22,380
$884
62,177
$24,159
Median $12,200
$390
44,724
$9,289
25thPercentile $8,448
$246
31,250
$5,707
JacobsPercentile* 50%
36%
86%
50%
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* Percentile rank calculation includes Jacobs.Source: Standard & Poor’s Capital IQ.
Forfiscal2018,aspartofitsannualreview,theCompensationCommittee,inconsultationwiththeIndependentConsultant,addedHalliburtontothepeergroupandremovedCH2MduetoitsacquisitionbyJacobs.Forfiscal2019,theCompensationCommittee,inconsultationwiththeIndependentConsultant,maintainedthecurrentpeerselectioncriteriaandgroupsizeusedinfiscal2018.Basedonthatcriteria,CognizantTechnologySolutionsandParker-HannifinwereaddedtothepeergroupandChicagoBridge&IronwasremovedfromthepeergroupduetoitsacquisitionbyMcDermottInternational.
ShareholderEngagementandSay-on-Pay
InevaluatingtheCompany’sexecutivecompensationprogram,theCompensationCommitteeconsiderstheresultsoftheadvisoryvoteonthe“say-on-pay”proposal.AttheCompany’s2018annualmeeting,95.9%ofthevotingsharesapprovedtheproposal.ThisfollowedsimilarresultsfromtheCompany’s2017annualmeeting,where96.4%ofthevotingsharesapprovedtheproposal.TheCompensationCommitteebelievestheseresults,whichshowasignificantimprovementoverthe80.9%approvalreceivedattheCompany’s2016annualmeeting,wereduetopositivechangesmadetotheCompany’sexecutivecompensationprograminfiscal2016andcarriedforward.
MembersofexecutiveleadershipandourBoardfrequentlyengagewithshareholdersandhostopen,ongoingdialoguesaroundcorporategovernancematters,includingexecutivecompensation.Takingintoaccountthepositivesupportreceivedinboth2017and2018afterinstitutingchangestothecompensationprogramin2016,theCompensationCommitteebelievestheCompanyprovidesacompetitivepay-for-performancepackagethateffectivelyincentivizesandretainsexecutives.
CompensationElements
Duringfiscal2018,theCompensationCommitteeutilizedfindingsbytheIndependentConsultanttodeterminethattheCompany’sexecutivecompensationprogramcontinuedtobebothreasonableinrelationtocompetitivepaylevelsandappropriateinsupportingbusinessobjectivesandapositiveperformance-basedculture.Asreflectedinthechartsbelow,variable/atriskcompensationrepresentsthemajorityofthetotaltargetdirectcompensationofourCEOandotherNEOs.
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Totaltargetdirectcompensationreferstobasesalary,short-termincentivecompensation(measuredattargetforthefiscalyear)andlong-termequityincentivecompensationbasedongrantdatefairvalues(measuredattargetforPSUsandRSUs).Indeterminingtheexecutive’soverallcompensation,theCompensationCommitteetakesintoaccounttheabsoluteandrelativevalueofeachcomponentandtheoverallmix.Aswithprioryears,theCompensationCommitteegenerallyallocatedthelong-termincentiveawardswith60%ofthevaluesasPSUsand40%ofthevaluesasRSUs.
Theabovechartsrepresentourfiscal2018totaltargetdirectcompensationarrangementsforourCEOandourotherNEOs,includingMr.Mandel’sadditionalbonusopportunitytiedtoachievingcostsynergytargetsrelatedtotheintegrationoftheCH2Macquisition,butexcludingMr.Pragada’sadditionalcashincentivepaymentreceivedinrecognitionofhisleadershiproleintheduediligenceprocess,negotiationsinconnectionwiththeCH2Macquisitionanditssuccessfulclosure,asMr.Pragada’spaymentwasaspecialcashbonusandnotpartofhisfiscal2018targetdirectcompensation.
BaseSalary
InsettingthebasesalariesofourNEOs,theCompensationCommitteeutilizesinformationprovidedbyitsIndependentConsultanttodeterminethecompetitivenessofbasesalariescomparedtotheindustrypeergroupandmarketsurveydata.
TheCompensationCommitteealsoconsidersthefactthattheCompanyprovideslimitedperquisites.ThisstemsfromtheCompensationCommittee’sbeliefthatfocusingonthethreecoreelementsofcompensation(basesalaryandshort-andlong-termincentivecompensation)resultsinamoretransparentandeasier-to-administerpaysystemandismoreconsistentwiththeCompany’sculture.Forexample,theCompany’scurrentlyavailableretirementprogramintheU.S.consistssolelyofatax-qualified401(k)planwithmatchingcontributionsandanon-qualifiedsalaryandbonus(includingequitycompensation)deferralplanthatprovidesnon-enhancedmarketreturns.Perquisitesaregenerallylimitedtofinancialplanningandannualhealthassessments.
Afterconsideringmarketdatafromourpeergroupandothermarketsurveyinformation,theCompensationCommitteedeterminedthatthebasesalariesofourCEOandCFOforfiscal2018wouldremainatthesamelevelsasfiscal2017.EffectiveDecember23,2017,Messrs.Hagen,MandelandPragadareceivedbasesalaryincreasesof3.8%,4.2%and3.6%,respectively,toreflecttheirsuccessfulperformanceinfiscal2017andincreasedjobresponsibilitiesasaresultoftheCH2Macquisition.
ThefollowingtablesetsforththebasesalariesofeachofourNEOsforfiscal2017andfiscal2018.
NamedExecutiveOfficer
Fiscal2017BaseSalary
Fiscal2018BaseSalary(1)
PercentageIncrease
StevenJ.Demetriou $1,300,000
$1,300,000 0.0%
KevinC.Berryman $750,000
$750,000 0.0%
TerenceD.Hagen $650,000
$675,000 3.8%
JosephG.Mandel $720,000
$750,000 4.2%
RobertV.Pragada $695,000
$720,000 3.6%
(1) SalaryincreaseseffectiveDecember23,2017
Short-TermIncentives
TheManagementIncentivePlan(MIP)continuestoreinforceourcommitmenttoprofitablegrowthandeffectivecashmanagementwithspecificmeasuresandtargetsassignedtoeachparticipantbasedonhisorherrespectiveroleintheorganization.Asdescribedbelow,thisplanprovidesforbonuspayoutstoeligibleemployeeswhencertainCompany-wideandbusinessunit-specifictargetgoalsareachieved.
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Forfiscal2018,selectofficersandmanagersoftheCompany,includingtheNEOs,wereeligibletoparticipateintheMIP.Asshowninthefollowingchart,anemployee’stargetMIPawardiscalculatedbymultiplying(i)theemployee’sannualbasesalaryasofJuly1oftheapplicablefiscalyearby(ii)hisorhertargetpercentageofsalary.Anemployee’sactualMIPawardamountiscalculatedbymultiplying(i)theemployee’sannualbasesalaryasofJuly1oftheapplicablefiscalyear,by(ii)hisorhertargetpercentageofsalary,andthenby(iii)theperformanceachievementfactor.
BaseSalaryasofJuly1,
2018
X
TargetPercentageofSalary
=
2018TargetMIPAward
BaseSalaryasofJuly1,
2018
X
TargetPercentageofSalary
X
PerformanceAchievement
Factor
=
2018ActualMIPAward
Eachyear,theCompanyestablishesperformanceachievementfactorsforeachparticipantbasedonhisorherroleintheCompany.Forthoseparticipantswithexclusivelycorporatelevelresponsibilities,suchastheCEOandtheCFO,theirbonusopportunityforfiscal2018wastiedentirelytocompany-widemetrics.ForourExecutiveVicePresident,IntegrationManagementOffice,hisbonusopportunityforfiscal2018wastiedtoCompany-widemetrics,withanadditionalbonusopportunitytiedtoachievingcostsynergytargetsrelatedtotheintegrationoftheCH2Macquisition.Forthoseparticipantswhoarealignedwithabusinessunitorlineofbusiness,suchasMessrs.HagenandPragada,45%oftheirbonusopportunityforfiscal2018wastiedtotheoperatingmetricsdefinedfortheirbusinessunitorlineofbusiness,asapplicable.Theseoperationalmetricsreinforcethedirectlinkbetweeneachleader’scontributiontothesuccessoftheirbusinessunitorlineofbusinessandtheircompensation.Theremaining55%ofthoseparticipants’bonusopportunityforfiscal2018wastiedtoCompany-widemetricstoencouragecollaborationacrossbusinessunitlinestodrivetheCompany’soverallresults.Duringfiscal2018,Mr.Pragadareceivedanadditionalcashincentivepaymentinrecognitionofhisleadershiproleintheduediligenceprocess,negotiationsinconnectionwiththeCH2Macquisitionanditssuccessfulclosure.RefertotheSummaryCompensationTableforinformationonthisadditionalcashincentivepayment.
MIP Awards to CEO, the CFO and the Executive Vice President, Integration Management Office
Forfiscal2018,theCompensationCommitteeestablishedtheminimum,targetandmaximumperformancelevelsundertheMIPforMessrs.Demetriou,BerrymanandMandelbasedontheCompany-widemetricsofConsolidatedOperatingProfit,DSOandGMinBacklog.Thecorrespondingfiscal2018actualresults,performancelevels,relativeweightingandactualperformanceachievementpercentagesareshowninthechartbelow.Refertopage38fordescriptionsofhowthemetricsarecalculated.
PerformanceMetrics PerformanceLevels
2018ActualPerformanceLevel
Achievement(%ofPayout)
RelativeWeighting
(%)
2018ActualResults
Minimum(25%Payout)
Target(100%Payout)
Maximum(200%Payout)
2018ActualPerformanceAchievement(%ofTarget)
ConsolidatedOperatingProfit
$906.5M
$704M
$829M
$953M
162.3%
70%
113.6%
ConsolidatedDSO
62.5
65.3
61.3
59.3
77.5%
15%
11.6%
ConsolidatedGMinBacklog
$5,123M
$4,940M
$5,200M
$5,460M
77.8%
15%
11.7%
Total
100.0%
136.9%
ThecalculationofMessrs.Demetriou’sBerryman’sandMandel’stargetMIPawardandactualMIPawardforfiscal2018isshownbelow,basedontheirtargetpercentageofsalariesof150%,100%and100%,respectively.
NamedExecutiveOfficer
BaseSalaryasofJuly1,2018
Target%
2018TargetMIPAward
PerformanceAchievement
Factor(%ofTarget)
2018ActualMIPAward
StevenJ.Demetriou
$1,300,000
150%
$1,950,000
136.9%
$2,669,990
KevinC.Berryman
$750,000
100%
$750,000
136.9%
$1,026,919
GaryMandel
$750,000
100%
$750,000
136.9%
$1,026,919 36 |2019 Proxy Statement
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Additional Award to the Executive Vice President, Integration Management Office
Forfiscal2018,theCompensationCommitteealsoestablishedminimum,targetandmaximumperformancelevelsforMr.Mandel’sadditionalbonusopportunitytiedtoachievingcostsynergytargetsrelatedtotheintegrationoftheCH2Macquisition.Thecorrespondingfiscal2018actualresults,performancelevels,relativeweightingandactualperformanceachievementpercentagesareshowninthechartbelow.
PerformanceMetrics PerformanceLevels
2018ActualPerformanceLevel
Achievement(%ofPayout)
RelativeWeighting
(%)
Minimum
(25%Payout) Target
(100%Payout) Maximum
(200%Payout)
2018ActualPerformanceAchievement(%ofTarget)
CH2MNetCostSynergies
$50M
$65M
$80M
200.0%
100%
200.0%
ThecalculationofMr.Mandel’sadditionalcostsynergiesawardforfiscal2018isshownbelow.Baseduponachievingcostsynergiesofover$80millionrelatedtotheintegrationoftheCH2Macquisition,themaximumpayoutperformancelevel,hereceivedanadditionalawardof$2,000,000.
NamedExecutiveOfficer
TargetCostSynergiesAward
Target%
PerformanceLevel
Achievement(%ofTarget)
2018ActualCostSynergiesAward
JosephG.Mandel
$1,000,000
100%
200%
$2,000,000
Awards to Other NEOs
InlightofMr.Hagen’soversightoftheCompany’sAerospace,Technology,EnvironmentalandNuclear(ATEN)lineofbusiness,aswellashisexecutiveroleattheCompany,theCompensationCommitteeestablishedtheminimum,targetandmaximumperformancelevelsundertheMIPforMr.Hagenforfiscal2018basedonthemetricsConsolidatedOperatingProfitandConsolidatedDSOs,aswellasOperatingProfitandGMinBacklogfortheATENlineofbusinessassetforthinthechartbelow.Thecorrespondingfiscal2018actualresults,performancelevels,relativeweightingandactualachievementpercentagesareshowninthechartbelow.
PerformanceMetrics PerformanceLevels
2018ActualPerformanceLevel
Achievement(%ofPayout)
RelativeWeighting
(%)
2018ActualResults
Minimum(25%Payout)
Target(100%Payout)
Maximum(200%Payout)
2018ActualPerformanceAchievement(%ofTarget)
ConsolidatedOperatingProfit
$906.5M
$704M
$829M
$953M
162.3%
40%
64.9%
ATENOperatingProfit
$323.8M
$263M
$309M
$356M
131.9%
30%
39.6%
ConsolidatedDSO
62.5
65.3
61.3
59.3
77.5%
15%
11.6%
ATENGMinBacklog
$1,306M
$1,216M
$1,280M
$1,344M
140.0%
15%
21.1%
Total
100.0%
137.2%
ThecalculationofMr.Hagen’stargetMIPawardandactualMIPawardforfiscal2018isshownbelow,basedonhistargetincentivepercentageofsalaryof100%.
NamedExecutiveOfficer
BaseSalaryasofJuly1,2018
Target%
2018TargetMIPAward
PerformanceAchievement
Factor(%ofTarget)
2018ActualMIPAward
TerenceD.Hagen
$675,000
100%
$675,000
137.2%
$926,303
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InlightofMr.Pragada’soversightoftheCompany’sBuildings,InfrastructureandAdvancedFacilities(BIAF)lineofbusiness,aswellashisexecutiveroleattheCompany,theCompensationCommitteeestablishedtheminimum,targetandmaximumperformancelevelsundertheMIPforMr.Pragadaforfiscal2018basedonthemetricsConsolidatedOperatingProfitandConsolidatedDSOs,aswellasOperatingProfitandGMinBacklogfortheBIAFlineofbusinessassetforthinthechartbelow.Thecorrespondingfiscal2018actualresults,performancelevels,relativeweightingandactualachievementpercentagesareshowninthechartbelow.
PerformanceMetrics PerformanceLevels
2018ActualPerformanceLevel
Achievement(%ofPayout)
RelativeWeighting
(%)
2018ActualResults
Minimum(25%Payout)
Target(100%Payout)
Maximum(200%Payout)
2018ActualPerformanceAchievement(%ofTarget)
ConsolidatedOperatingProfit
$906.5M
$704M
$829M
$953M
162.3%
40%
64.9%
BIAFOperatingProfit
$505.4M
$399M
$470M
$540M
150.2%
30%
45.1%
ConsolidatedDSO
62.5
65.3
61.3
59.3
77.5%
15%
11.6%
BIAFGMinBacklog
$2,933M
$2,787M
$2,934M
$3,080M
99.5%
15%
14.9%
Total
100.0%
136.5%
ThecalculationofMr.Pragada’stargetMIPawardandactualMIPawardforfiscal2018isshownbelow,basedonhistargetincentivepercentageofsalaryof100%.InadditiontothisMIPaward,Mr.Pragadaalsoreceivedaseparatecashincentivepaymentof$300,000forhisleadershiproleintheduediligenceprocess,negotiationsinconnectionwiththeCH2Macquisitionanditssuccessfulclosure.
NamedExecutiveOfficer
BaseSalaryasofJuly1,2018
Target%
2018TargetMIPAward
PerformanceAchievement
Factor(%ofTarget)
2018ActualMIPAward
RobertV.Pragada
$720,000
100%
$720,000
136.5%
$983,118
Forpurposesofcalculatingthepayoutsforthe2018MIPawards:
• ConsolidatedOperatingProfitmeanstotalgrossmarginlessselling,generalandadministrativeexpenses(“SG&A”)oftheCompany,asadjustedforspecialitemsthatareunusual,non-recurringorotherwisenotindicativeoftheCompany’snormaloperationsandwhichwerenotanticipatedinsettingtheoriginaltargets.AnysuchadjustmentsmustbeapprovedbytheCompensationCommittee.Forexample,suchadjustmentsinclude,withoutlimitation:(i)chargesforrestructurings;(ii)gainsorlossesonthedisposalofasegmentofthebusinessorinconnectionwithdiscontinuedoperations;(iii)chargesfortheimpairmentofgoodwillorotherlong-livedassets;(iv)gains/lossesonthesaleofassets;(v)majorlitigationsettlementsand/orotherjudgments;(vi)theeffectsofchangesinaccountingprinciples,lawsorregulationsaffectingreportedresults;and(vii)costsandexpensesrelatingtoacquisitions.
• ConsolidatedDSO(DaysSalesOutstanding)meanstheaverageofthefourquartersendedSeptember28,2018of(i)accountsreceivableoftheCompanyattheendofeachquarterdividedby(ii)thedailysalesforeachquarter.
• OperatingProfitmeansforeachlineofbusiness,totalgrossmarginearnedbysuchapplicablelineofbusiness,asadjusted
forunusualornon-recurringitemsassetforthabove,lesstheSG&AfortheapplicablelineofbusinessandlessallocatedcorporateSG&Aexpenses,includingcashandequityincentivecompensation.
• GMinBacklogmeansforeachlineofbusiness,startingGrossMargininBacklogforsuchapplicablelineofbusinessas
adjustedfor(1)newawards,(2)scopeincreasesofnewandexistingwork,(3)cancellationsandcorrectionsofunderstatements/overstatements,(4)acquisitions,and(5)theforeignexchangeeffect,lesstheGrossMarginburnforthefiscalyear.GrossMargininBacklogmustfollowJacobs’backlogrulesforvariouscontracttypes.
Infiscal2018,theCompensationCommitteeuseditsdiscretiontoapproveadjustmentstothelevelsofperformancemetricresultstoreflecttheexclusionof(i)chargesassociatedwithanATENlegalmatterinitiatedin2013,(ii)benefitsassociatedwithaBIAFlegalmatterinitiatedin2009and(iii)CH2M’soperatingprofitassociatedwiththe“stubperiod”ofCH2MownershipfromthedateofacquisitiononDecember18,2017throughtheendofCH2M’sfiscalyearonDecember31,2017.
Achievingminimumperformancelevelsresultinapayoutof25%oftarget;targetperformancelevelsresultinapayoutof100%oftarget;andmaximumperformancelevelsresultinapayoutof200%oftarget.Actualawardpaymentsarecalculatedbylinearinterpolationforachievementofgoalsotherthanthosespecified. 38 |2019 Proxy Statement
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Thepaymentofbonusesforfiscal2018totheNEOswasconditionedupontheCompanyachievingaperformancegoalof$100millionofnetearningsinanefforttobefullydeductibleasperformance-basedcompensationunderSection162(m)oftheInternalRevenueCode(the“Code”).Thisgoalwasmet,thustheparticipatingNEOsbecameentitledtoreceiveabonuspaymentequalto200%oftheirtargetbonus,subjecttothecompletediscretionoftheCompensationCommitteetoreducethebonuspaymenttoalesseramount.TheCompensationCommitteeexerciseditsdiscretiontoreducebonusamountsinaccordancewiththemethodologydescribedabove.
Equity-BasedCompensation
TheCompensationCommitteebelievesthatlong-termequityincentivesshouldcomprisethemajorityofcompensationfortheCompany’sseniormanagement,includingtheNEOs.Indecidinguponthedesignandmagnitudeoflong-termincentives,theCompensationCommitteeisguidedbyseveralfactors,includingalignmentwithshareholderinterests,easeofunderstandingbyparticipants,andretentiveness.TheCompensationCommitteealsotakesintoaccountmarketdata,informationandrecommendationsfromtheIndependentConsultant,andinformationprovidedbymanagement,includingrecommendationsbytheCEOwithrespecttothemagnitudeofequityincentivesforexecutiveofficersotherthanhimself.Otherthanoff-cycleawardsfornewhires,promotionsorretentiongrants,theCompensationCommitteegenerallyawardsequityincentivestoNEOsandseniormanagementinthefirst90daysofeachfiscalyear.
TodeterminethedollarvalueofawardstobegrantedtotheNEOsandconsistentwithitspriorprocessfordeterminingthemagnitudeofawards,theCompensationCommitteeexamineddatawithrespecttocompetitivegrantvaluesattheindustrypeergroupcompanies.ItalsoconsideredthesizeoftheawardspreviouslygrantedtotheNEOs,whichreflectedtheCompensationCommittee’spreviousevaluationofthemagnitudeofawardsconsiderednecessaryinordertoaligntheawardswithcompetitivelevels.Thedeterminationofawardlevelsinfiscal2018alsotookintoaccounttheCompensationCommittee’sreviewoftheCEO’sperformanceandthatoftheotherNEOs(andtheCEO’srecommendationswithrespecttotheotherNEOs),aswellastheCompany’soverallperformance.TheCompensationCommitteealsotookintoaccounttheincreasedjobresponsibilitiesoftheNEOsresultingfromtheacquisitionofCH2M.
Infiscal2018,ourNEOs’equity-basedcompensationconsistedofthefollowingawards,otherthanMr.Mandelwhoreceived100%ofhisfiscal2018equitygrantinRSUs:
Formsof2018Long-TermIncentiveGrants Weight
PerformanceMetricsandVestingPeriod
PerformanceBasedRestrictedStockUnits(PSUs)
60%
PerformanceMetrics:- 50%EPSGrowthoverthree-yearperiod- 50%ROICoverthree-yearperiod
Time-BasedRestrictedStockUnits(RSUs)
40%
25%annualvestingoverfour-yearperiod
Asummaryoftheequityawardsgrantedinfiscal2018toeachNEOisprovidedbelow:
NamedExecutiveOfficer
GrantDate
PSUsAwarded(1)
PSUValue
Awarded
RSUsAwarded
RSUValueAwarded
TotalValue
Awarded
StevenJ.Demetriou 11/29/2017
83,296 $5,400,080 55,529
$3,599,945 $9,000,025
KevinC.Berryman 11/29/2017
18,510 $1,200,003 12,340
$800,002 $2,000,006
TerenceD.Hagen 11/29/2017
15,502 $1,004,995 10,335
$670,018 $1,675,013
JosephG.Mandel 11/29/2017
0 $0
26,223 $1,700,037 $1,700,037
RobertV.Pragada 11/29/2017
15,734 $1,020,035 10,489
$680,002 $1,700,037
(1) Representsthetargetpayoutsharesasdescribedunder“ExecutiveCompensation—2018GrantsofPlanBasedAwards”below.
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Fiscal 2018 Equity Awards
Performance Stock Units (PSUs)
Fiscal2018PSUawardswillvest,followingathree-yearperformanceperiod(startingonthefirstdayoffiscal2018andendingonthelastdayoffiscal2020),basedonthefollowingperformancemetrics: - 50%ofthePSUswillvestbasedontheCompany’sachievementofacertainEPSGrowthRateoverathree-yearperformance
period(the“EPSBasedPSUAwards”);and - 50%ofthePSUswillvestbasedontheCompany’sachievementofacertainROICduringthesamethree-yearperformance
period(the“ROICBasedPSUAwards”).
EarningsPerShare(EPS)BasedPSUAwards:
TheCompensationCommitteebelievesthatEPSisakeyindicatorofacompany’sperformanceforshareholders.Itisthepredominantmetricusedinperformance-basedequityawardsoftheCompany’speersanditsuseisintendedtoimprovethefocusonprofitability,growthandfinancialdiscipline,whilealigningtheinterestsoftheCompany’sseniorexecutiveswiththelong-terminterestsofshareholders.
ThenumberofEPSBasedPSUAwardsthatwillvest(andthecorrespondingnumberofsharesthatwillbeissuedattheendofthethree-yearperformanceperiod)isbasedontheCompany’sEPSGrowthRatemeasuredattheendofeachoffiscal2018,2019and2020,ineachcasemeasuredfromfiscal2017EPS.Amountsarelockedinannuallybutnotdistributeduntilafterthethree-yearperformanceperiod.Thiscalculationisshowninthefollowingcharts:
1/3ofTargetEPSBased
PSUs
X
EPSGrowthPerformanceMultiplierforEPS
GrowthRateinfiscal2018overfiscal2017
=
FirstYearEPSLocked-In
AverageAdjustedEPS
Growth-FiscalYear2017-2018
EPSGrowthPerformanceMultiplier
Lessthan10.7%
0%
10.7% 50%
15.7% 100%
20.7% 200%
2/3ofTargetEPSBasedPSUs
X
EPSGrowthPerformanceMultiplierforCompoundEPSAnnualGrowthRateforfiscal2019overfiscal
2017
-
NumberofFirstYearEPSShares
Locked-In
=
SecondYearEPSSharesLocked-In
AverageAdjustedCompoundEPS
Growth-FiscalYear2017-2019
EPSGrowthPerformanceMultiplier
Lessthan12.1% 0%
12.1% 50%
15.6% 100%
19.1% 200%
40 |2019 Proxy Statement
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TargetEPSPSUs
X
EPSGrowthPerformanceMultiplierforCompound
EPSAnnualGrowthRateforfiscal2020overfiscal2017
-
NumberofFirstYearEPSShares
Locked-InandnumberofSecondYearEPSSharesLocked-In
=
TotalnumberofSharesEarnedandtobeissued
AverageAdjustedCompoundEPS
Growth-FiscalYear2017-2020
EPSGrowthPerformanceMultiplier
Lessthan11.7% 0%
11.7% 50%
13.7% 100%
15.7% 200%
The“EPSGrowthPerformanceMultiplier”isdeterminedbyreferencetothetablesabovebasedupontheCompany’sEPSGrowthRateorCompoundAnnualEPSGrowthRateovertherelevantfiscalperiods.TheCompensationCommitteesetthesemetricsbasedontheCompany’splanatthetimeofgrant.
“EPS”foranyfiscalperiodiscomputedbydividingAdjustedNetEarningsbytheweightedaveragenumberofsharesoftheCompany’scommonstockoutstandingduringtheperiod.
“AdjustedNetEarnings”meansthenetearningsattributabletotheCompanyasreportedinitsconsolidatedfinancialstatementsforsuchperioddeterminedinaccordancewithGAAP(A)asmaybeadjustedtoeliminatetheeffectsof(i)costsassociatedwithrestructuringandintegrationactivities,regardlessofwhethertheCompanydisclosespubliclytheamountofsuchrestructuringandintegrationcostsorthefactthattheCompanyengagedinrestructuringandintegrationactivitiesduringtheperiodsrestructuringcostswereincurred;and(ii)gainsorlossesassociatedwithdiscontinuedoperations,asdeterminedinaccordancewithGAAP,butlimitedtothefirstreportingperiodanoperationisdeterminedtobediscontinuedandallsubsequentperiods(i.e.,therewillbenoretroactiveapplicationoftheadjustment);and(B)asadjustedforallgainsorlossesassociatedwitheventsortransactionsthattheCompensationCommitteehasdeterminedareunusualinnature,infrequentlyoccurringandotherwisenotindicativeoftheCompany’snormaloperations,andtherefore,notindicativeoftheunderlyingCompanyperformance.Forthesepurposes,sucheventsortransactionscouldinclude:(i)settlementsofclaimsandlitigation,(ii)disposalsofoperationsincludingadispositionofasignificantamountoftheCompany’sassets,(iii)lossesonsalesofinvestments,(iv)changesinlawsand/orregulations,and(v)acquisitions.
ReturnonInvestedCapital(ROIC)BasedPSUAwards:
TheCompensationCommitteebelievesthatROICisaneffectivemeansoflinkingexecutivecompensationtovaluecreationthatholdsmanagementaccountablefortheefficientuseofcapital,andhasusedthisperformancemetricforfiscal2017and2018awards.Priortofiscal2017,theCompanygrantedawardsthatvestedbasedontheCompany’stotalshareholderreturn(orTSR)comparedtothatofitspeergroupoverathree-yearperiod.
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ThenumberofROICBasedPSUAwardsthatwillvest(andthecorrespondingnumberofsharestobeissued)isbasedontheCompany’saverageROICmeasuredattheendofthethree-yearperformanceperiod.Thecalculationisshowninthefollowingcharts:
TargetROIC
BasedAwards
X
ROICPerformance
MultiplierforROICfromfiscal2018to
fiscal2020
=
3-YearROICShares
AverageROIC-Fiscal
Year2018-2020
ROICPerformanceMultiplier
Lessthan7.8%
0%
7.8%
50%
8.8%
100%
9.8%
200%
The“ReturnonInvestedCapital”(orROIC)foranyfiscalperiodiscomputedbydividingAdjustedNetEarningsbytheaverageinvestedcapitalonthefirstdayoffiscal2018andonthelastdayoffiscal2020.Investedcapitalisthesumofequitypluslong-termdebtlesscashandcashequivalents.
“AdjustedNetEarnings”meansthenetearningsattributabletotheCompanyasreportedinitsconsolidatedfinancialstatementsforsuchperioddeterminedinaccordancewithGAAP(A)asmaybeadjustedtoeliminatetheeffectsof(i)costsassociatedwithrestructuringandintegrationactivities,regardlessofwhethertheCompanydisclosespubliclytheamountofsuchrestructuringandintegrationcostsorthefactthattheCompanyengagedinrestructuringandintegrationactivitiesduringtheperiodsrestructuringcostswereincurred;and(ii)gainsorlossesassociatedwithdiscontinuedoperations,asdeterminedinaccordancewithGAAP,butlimitedtothefirstreportingperiodanoperationisdeterminedtobediscontinuedandallsubsequentperiods(i.e.,therewillbenoretroactiveapplicationoftheadjustment);and(B)asadjustedforallgainsorlossesassociatedwitheventsortransactionsthattheCompensationCommitteehasdeterminedareunusualinnature,infrequentlyoccurringandotherwisenotindicativeoftheCompany’snormaloperations,andtherefore,notindicativeoftheunderlyingCompanyperformance.Forthesepurposes,sucheventsortransactionscouldinclude:(i)settlementsofclaimsandlitigation,(ii)disposalsofoperationsincludingadispositionofasignificantamountoftheCompany’sassets,(iii)lossesonsalesofinvestments,(iv)changesinlawsand/orregulations,and(v)acquisitions.
RestrictedStockUnit(RSU)Grants:
The2018RSUawardsvestratablyoverafour-yearperiod,otherthanRSUsgrantedtoMr.Mandel,whichvestratablyoveratwo-yearperiodduetotheshort-termnatureofMr.Mandel’sroleoverseeingtheintegrationoftheCH2Macquisition.
Vesting Provisions Applicable to Fiscal 2018 Equity Grants:
ToincentivizeseniormanagementduringperiodsofuncertaintyleadinguptotheCH2Macquisitionandsubsequentintegration,allequityawardsgrantedinfiscal2018,includingequityawardsgrantedtotheNEOs,provideforacceleratedvestingintheeventofaninvoluntarilyterminationofemploymentwithoutcauseasfollows:
FortheRSUs,uponaninvoluntaryterminationofemploymentwithoutcausepriortothefirstannualvestingdate,50%oftheRSUswillvestatthetimeofseparation,anduponaninvoluntaryterminationofemploymentwithoutcauseonorafterthefirstvestingdate,theremainingoutstandingandunvestedRSUswillvestatthetimeofseparation.ForthePSUs,uponaninvoluntaryterminationofemploymentwithoutcausepriortothefinalvestingdate,apro-ratedportionofPSUs(basedonthenumberofdaysduringtheperformanceperiodthatthe 42 |2019 Proxy Statement
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employeewasemployedbytheCompany)shallremainoutstandingandeligibletovestbasedontheperformancevestingcriteriathroughtheendoftheapplicableperformanceperiod,andtheremainderoftheawardwillbeforfeitedatthetimeofseparationfornoconsideration.
Dividend Equivalent Rights
AllRSUawardsareentitledtoaccumulateddividendequivalentrightsthataresubjecttothesamevesting,paymentandothertermsandconditionsastheunderlyingawardtowhichthedividendequivalentrelates.Thecreditingofdividendequivalentsisintendedtotreattheequityawardholdersconsistentlywithshareholdersandpreservetheequity-basedincentivesintendedbytheCompanywhentheawardsweregranted.ThedividendequivalentspayincashuponthevestingandsettlementoftheunderlyingRSUs.
Long-Term Incentive Plan Metrics and Performance Attainment – PSU with Performance Periods Ending in Fiscal 2018
FourofourNEOsservedasexecutiveofficersoftheCompanyinfiscal2015andreceivedgrantsofPSUsatthattime:Messrs.Demetriou,Berryman,HagenandMandel(Mr.PragadawasnotemployedbytheCompanyinfiscal2015).Theseawardswerebasedonathree-yearperformanceperiodthatleveragedbothshort-andlong-termgoals.Ifcertainthresholdsofperformancewerenotattained,thennopayoutwasearnedfortheaward.TheperformancemetricsassociatedwiththesePSUswereweightedat100%NetEarningsGrowth(“NEG”),withtheperformanceperiodbeginningonthefirstdayofthethirdquarteroffiscal2015andendingonthelastdayofthesecondquarteroffiscal2018.
2015NetEarningsGrowth(NEG)BasedPSUAwards
ThemethodofcalculatingthenumberofsharesunderlyingthePSUsbasedonNEG(the“NEGBasedAwards”)grantedinfiscal2015thatvestedissummarizedbelow.
Thetotalnumberofunitsawardedaccumulatedoverthethree-yearperformanceperiodinthreesegments: • One-thirdofawardisbasedonNEGinYear1(Q3FY2015–Q2FY2016);
• One-thirdofawardisbasedonaverageNEGinYears1–2(Q3FY2015–Q2FY2017);and
• One-thirdofawardisbasedonaverageNEGinYears1–3(Q3FY2015–Q2FY2018).
Thefirsttwoyearsoftheprogramareconsidereda“lockin”period,meaningitwaspossibleto“lockin”vestingofuptotwo-thirdsofthetotalpotentialawardbasedonperformanceduringthatperiod.ThefollowingNEGperformancevestingschedulewasapprovedbytheCompensationCommitteeinfiscal2015:
AverageNEGinEachSegment
ofPerformancePeriod NEGPerformance
Multiplier
Lessthan5%
0%
5.0%
50%
10.0%
100%
15.0%
150%
20%orgreater
200%
TheNEGPerformanceMultiplierwasdeterminedbylinearinterpolationforgrowthratesbetween5%and10%,between10%and15%andbetween15%and20%.
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ThefollowingchartsummarizestheCompany’sNEGduringtheperformanceperiodandtheresultingvestingundertheapprovedperformancecriteria:
PerformancePeriod
NetEarnings(inthousands)
CumulativeAvg.NEGGrowth
NEGPerformanceMultiplier
BaselineEarnings
Q3FY14-Q2FY15
$419,960
Year1
Q3FY15-Q2FY16
$329,915
-21.4%
0.00%
Year2
Q3FY16-Q2FY17
$366,520
-5.2%
0.00%
Year3
Q3FY17-Q2FY18
$462,469
5.3%
52.8%
TotalNEG
BasedAwardsGranted
X
3YearAvg.NEG
PerformanceMultiplier
=
52.8%ofSharestobeDistributed
AsaresultoftheNEGperformanceoverthethree-yearperformanceperiod,Messrs.Demetriou,Berryman,HagenandMandelreceived52.8%ofthesharesunderlyingtheNEGBasedAwards,asshowninthefollowingtable:
ParticipantName
VestingDate
NEGBasedAwardsGranted
%TargetEarned
SharesEarned
SharesNotEarned
StevenJ.Demetriou 06/08/2018 16,065 52.8% 8,482 7,583KevinC.Berryman 06/08/2018 9,500 52.8% 5,016 4,484TerenceD.Hagen 06/08/2018 9,500 52.8% 5,016 4,484JosephG.Mandel 06/08/2018 9,500 52.8% 5,016 4,484
Grant Process
TheCompensationCommitteehasdelegatedcertainlimitedauthoritytotheCEOtomakeequitygrantsinaccordancewiththerulesestablishedbytheCompensationCommitteefornon-executiveofficersthroughouttheyear.Assoonasadministrativelypracticableafteranewhire,promotion,orretentionwarrantsanequitygrant,theCEOreviewsandapprovestheaward.AllawardsaregrantedwhentheCEOtakesaction.TheCompensationCommitteeperiodicallyreceivesreportsoftheCEO’sactions.Infiscal2018,noawardsweremadeonadateotherthanwhentheCompensationCommitteemetorfollowingapprovalbytheCEOpursuanttodelegatedauthority.
OtherBenefitsandPolicies
BenefitsPrograms
WiththeexceptionoftheCompany’sExecutiveSeverancePlan,ExecutiveDeferralPlan(“EDP”),whichisgenerallyavailabletomostofseniormanagement,andcertainexpatriatearrangements,theCompanyprovidesexecutiveswiththesamebenefitplansofferedtoU.S.staffemployees.
401(k)Plan:Duringfiscal2018,theCEOandotherNEOswereeligibletoparticipateintheCompany’s401(k)plan,thesameplanofferedtotheCompany’sfull-timeemployeesintheUnitedStates.TheplanprovidesamatchbytheCompanyequalto50%ofthefirst6%ofeligiblepay(currently$275,000).NoneoftheNEOsparticipatedinanydefinedbenefitretirementorsupplementalretirementbenefitplan.
EmployeeStockPurchasePlans:TheCompanyhasqualifiedemployeestockpurchaseplansinwhichallemployeesmeetingcertainminimumeligibilityrequirementsincertaincountriesareeligibletoparticipate.TheCompanyadoptedasafe-harborplandesignin2006thatprovidesfora5%discountfromtheclosingpriceofashareofcommonstockattheendofeachpurchaseperiod.Thesafe-harborplanresultsinnoaccountingcosttotheCompany. 44 |2019 Proxy Statement
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Non-qualifiedExecutiveDeferralPlan(EDP):Selectemployees,includingtheNEOs,meetingcertaincompensationminimumsmayelecttoparticipateintheCompany’sEDPwherebyaportionofsalaryandbonus(includingequitycompensation)isdeferredandpaidtotheemployeesatsomefuturedateincludinguponretirementordeath.ParticipantdeferralsarecreditedwithearningsandlossesbasedupontheactualexperienceofthedeemedinvestmentsselectedbyparticipantswithequitycompensationdeferralsgenerallybeingcreditedwithearningsandlossesbasedontheactualexperienceoftheCompany’scommonstock.See“ExecutiveCompensation—Non-qualifiedDeferredCompensation”belowforafurtherdescriptionoftheEDP.
ExecutiveSeverancePlan:Recognizingtheprevalenceofseveranceplansamongourpeersandtheneedtoattractandretaintalentedexecutives,infiscal2018theCompanyadoptedanExecutiveSeverancePlanthatprovidesseverancebenefitstocertainkeyexecutives,includingtheNEOS,designatedbytheCompensationCommitteefromtimetotimeintheeventofeither(i)aterminationofemploymentbytheCompanyotherthanforcausethatisunrelatedtoachangeofcontrolor(ii)aterminationofemploymentbytheCompanyotherthanforcauseorbytheparticipantforgoodreason,ineachcaseduringthetwo-yearperiodfollowingachangeofcontrol.
Perquisites
OurNEOsareeligibleforthesamebenefitsasthoseofferedtostaffemployees,includingrelocationbenefits.ExecutivesmayhavespousaltravelpaidforbytheCompanyonlywhenitisforanapprovedbusinesspurpose,inwhichcasearelatedtaxgross-upisprovided.NEOsarealsoprovidedwithfinancialplanningassistanceandannualhealthassessmentbenefits.
TheCompanyleasesaprivateaircrafttoallowcertainexecutiveofficers,primarilytheCEO,tosafelyandefficientlytravelforbusinesspurposesaroundtheworld.Useofaprivateaircraftprovidesaconfidentialandhighlyproductiveenvironmentforexecutiveofficerstoconductbusinesswhiletraveling.WedonotallowpersonalusageoftheprivateaircraftattheCompany’sexpense.Incidentaltravelbyfamilymembersofanexecutiveofficerinconnectionwithsuchexecutive’sbusinesstravelispermittedsolongastheexecutivereimbursestheCompanyforthecostofsuchtravel.
PaymentsUponTerminationorChangeinControl
Executive Severance Plan :Asdescribedabove,theCompanyadoptedanExecutiveSeverancePlaninfiscal2018thatprovidesthefollowingseverancebenefitstocertainkeyexecutives,includingtheNEOs(withcertainexceptionsforMr.Mandel,asdescribedbelow),intheeventofeither(i)aqualifyinginvoluntaryterminationofemploymentthatisunrelatedtoachangeincontrolor(ii)aqualifyingterminationofemploymentduringthetwo-yearperiodfollowingachangeofcontrol.Paymentsunderthisplanareconditioneduponthereceiptofacustomarywaiverandgeneralreleaseofclaimsfromtheexecutive.Inaddition,theexecutiveswillbesubjecttorestrictivecovenants,includingnon-disclosureofconfidentialinformation,non-disparagementrestrictionsand12-monthnon-competitionandnon-solicitationobligations.Paymentsunderthisplandonotincludeanytaxgross-ups.
• Non-Change in Control Severance Benefits —Intheeventofaterminationoftheparticipant’semploymentbytheCompanyotherthanforcause(asdefinedintheplan),theparticipantwillbeentitledtoreceivethefollowingbenefits:(i)acashpaymentequalto1.5times(fortheCEO)or1times(fortheotherNEOswiththeexceptionofMr.Mandelasdescribedbelow,andcoveredexecutives)thesumoftheparticipant’s(x)basesalaryand(y)targetannualincentiveaward;and(ii)acashpaymentequalto1.5times(fortheCEO)or1times(fortheotherNEOsandcoveredexecutives)thesumof(x)theannualCOBRApremiumforcontinuedparticipationintheCompany’sgrouphealthplansand(y)theannualfeeforcontinuedreceiptoffinancialadvisoryservices.Inaddition,theparticipant’sunvestedandoutstandingequityawardsthatarescheduledtovestwithintheninemonthperiodfollowingthedateofterminationwillcontinuetovestinaccordancewiththeiroriginalvestingschedule.
• Change in Control Severance Benefits —Intheeventofaterminationoftheparticipant’semploymentbytheCompanyotherthanforcauseorbytheparticipantforgoodreason(asdefinedinthePlan),ineachcasewithinthetwoyearperiodafterachangeincontrol(asdefinedintheExecutiveSeverancePlan),theparticipantwillbeentitledtoreceivethefollowingbenefits:(i)acashpaymentequalto2times(fortheCEO)or1times(fortheotherNEOsandcoveredexecutives)thesumoftheparticipant’s(x)base
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salaryand(y)targetannualincentiveaward;and(ii)acashpaymentequaltotheparticipant’stargetannualincentiveaward,proratedbasedonthenumberofdaystheparticipantwasemployedduringthefiscalyearoftermination;and(iii)acashpaymentequalto2times(fortheCEO)or1times(fortheotherNEOsandcoveredexecutives)thesumof(x)theannualCOBRApremiumforcontinuedparticipationintheCompany’sgrouphealthplansand(y)theannualfeeforcontinuedreceiptoffinancialadvisoryservices.Intheeventsuchterminationoccurs,unvestedandoutstandingequityawardsaregovernedbytheStockIncentivePlanasdescribedbelow.
Employment Agreements :Duringfiscal2018,theCompanywaspartytoanemploymentagreementwithMr.Mandel,whichwasenteredintoinconnectionwiththecompletionofatransactionpursuanttowhichtheCompanyacquiredMr.Mandel’sformeremployer.Thisemploymentagreementprovidedforbenefitsintheeventofterminationofemploymentthatisnotinconnectionwithachangeincontrol.Underthisemploymentagreement,Mr.Mandelwasentitledtoaseverancepaymentequalto12monthsofbasesalaryandthecontinuationcostsof12monthsofCOBRApremiumsuponaterminationbytheCompanywithoutcause(asdefinedintheemploymentagreement),conditioneduponhisexecutionandnon-revocationofageneralreleaseinfavoroftheCompany.Mr.MandelparticipatedintheExecutiveSeverancePlanforbenefitsintheeventofterminationofemploymentinconnectionwithachangeincontrol,asdescribedabove.
OnNovember20,2018,theCompanyenteredintoaRetirementTransitionAgreementwithMr.Mandel.TheRetirementTransitionAgreementsupersedesandreplacesMr.Mandel’semploymentagreementwiththeCompanyandterminateshisparticipationintheExecutiveSeverancePlanforbenefitsintheeventofaterminationofemploymentinconnectionwithachangeincontrol.TheRetirementTransitionAgreement,whichcontainsageneralreleaseinfavoroftheCompany,providesthateffectiveApril1,2019,Mr.MandelwillbegintransitioningtohisretirementfromtheCompanyeffectiveDecember31,2019(the“TransitionPeriod”).DuringtheTransitionPeriod,Mr.MandelwillcontinuetoserveasaspecialadvisortoJacobs’ChiefExecutiveOfficeronamodified,full-timebasis.DuringthisTransitionPeriod,Mr.Mandelwillreceivetheequivalentof12monthsbasesalary,plushewillmaintainhishealthandwelfarebenefits.ProvidedMr.Mandelisnotinvoluntarilyterminatedwithcause,asdefinedintheRetirementTransitionAgreement,andheexecutesasupplementalgeneralreleaseagreementuponhisretirementdate,Mr.Mandelwillalsoreceiveaterminationpaymentof$250,000.TheRetirementTransitionAgreementprovidesdiscretiontotheCompanytoincreasetheterminationpaymentifdeterminedappropriatebytheCompany,initssolediscretion,basedonanevaluationoftheservicesperformedbyMr.MandelduringtheTransitionPeriod.UndertheRetirementTransitionAgreement,Mr.MandelisnoteligibletoparticipateintheCompany’sfiscal2019longtermincentiveplansorManagementIncentivePlan.
Stock Incentive Plan :Consistentwithallparticipantsinthe1999StockIncentivePlan,asamended,NEOsmaybeentitledtoproratedvestingatretirementofPSUsgrantedduringfiscal2016andthereafter.InthecaseofaparticipantwhoseemploymentisterminatedintheeventofdeathorDisability(asdefinedintheJacobsEngineeringGroupInc.1999StockIncentivePlan),thetermsofourstockoptionsandRSAandRSUgrantsprovideforacceleratedvestingwhilePSUswouldremainoutstandingandeligibletovest,withthefinaldeterminationofthepayout,ifany,generallydeterminedattheendofthethree-yearperformanceperiod.Additionally,thetermsofstockoptions,restrictedstock,RSUsandPSUsprovideforpotentialdoubletriggerequityaccelerationuponcertainterminationsfollowingaChangeinControl(asdefinedintheStockIncentivePlan)asameansoffocusingexecutiveofficersonshareholderinterestswhenconsideringstrategicalternatives.IfaChangeinControloccursandcertainoptions,restrictedstock,RSUsandPSUsarenotassumedandcontinuedbytheacquiringorsurvivingcorporationinthetransaction(oraparentcorporationthereof),thenallsuchawardswillvestimmediately,withawardsofrestrictedstockthataresubjecttoperformance-basedvestingcriteriaand/orPSUspaidatalevelbasedupontheCompany’sactualperformanceasofthedateoftheChangeinControl.
Theestimatedpaymentsandbenefitsprovidedineachofthecoveredcircumstancesmaybefoundunder“ExecutiveCompensation—CompensationUnderVariousTerminationScenarios”below.
StockOwnershipGuidelines
TheCompanyhasestablishedstockownershipguidelinesforitsexecutiveofficers.TheownershipguidelinesprovidethattheChairandCEOisexpectedtoownCompanystockvaluedatsixtimeshisannualbasesalaryandtheCFO,PresidentsofLinesofBusinessandExecutiveVicePresidentsareexpectedtoownCompanystockvaluedatthreetimestheirannualbasesalary.Otherseniorexecutives,includingSeniorVice 46 |2019 Proxy Statement
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Presidents,areexpectedtoownCompanystockvaluedattwotimestheirannualbasesalary.Executiveofficersarerestrictedfromsellinganysharesofcommonstock(otherthanthewithholdingofsharestosatisfytaxwithholdingrequirements)duringanyperiodinwhichtheyhavenotsatisfiedtheguidelines.TheCompensationCommitteereviewseachexecutiveofficer’sholdingswithrespecttotheseownershipguidelineseachyear.Asoftheendoffiscal2018,allNEOsexceededtheirrespectiveguidelines.Seethediscussionunder“CorporateGovernance—StockOwnershipGuidelines”aboveforfurtherinformation.
InsiderTradingandPolicyonHedgingorPledgingofStock
TheCompany’sinsidertradingpolicycontainsstringentrestrictionsontransactionsinCompanystockbyexecutiveofficersanddirectors.Alltradesbyexecutiveofficersanddirectorsmustbepre-cleared.TheexecutiveofficersanddirectorsareprohibitedfromanytradinginputsorcallsofCompanystock,fromengaginginshortsalesofCompanystock,andfromhedgingorpledgingCompanystockorusingitasloancollateraloraspartofamarginaccount.
ClawbackPolicy
TheCompensationCommitteemaintainsaclawbackpolicywithrespecttoincentiveawardsgrantedtoexecutiveofficers.TheCompanyisauthorizedtorecoveraportionofincentiveawardspaidwithinthreeyearsofafinancialstatementthatisinaccurateduetomaterialnoncompliancewithanyfinancialreportingrequirementunderthesecuritieslaws.Recoveryappliestotheextentalesseramountwouldhavebeenpaidundertherestatedfinancialstatement.
TaxConsiderations
Section162(m)oftheCodelimitsdeductionsforcertainexecutivecompensationinexcessof$1,000,000inanyfiscalyear,andpriortotherecentenactmentoftheTaxCutsandJobsActof2017(the“Act”),compensationthatqualifiedas“performance-basedcompensation”underSection162(m)wasexcludedfromthislimit.TheActrepealedthis“performance-basedcompensation”exclusioneffectiveforfiscalyearsbeginningonJanuary1,2018withlimitedtransitionrelief.PriortotheAct,theCompanystructureditscompensationarrangementstopermitdeductibilityunderSection162(m)totheextentpossible,unlessthebenefitofsuchdeductibilitywasoutweighedbytheneedforflexibilityortheattainmentofothercorporateobjectivesinwhichcasetheCompensationCommitteewaspreparedtoenterintocompensationarrangementsunderwhichpaymentsmaynotbedeductibleunderSection162(m).
FollowingtheAct,theCompanywillcontinuetoconsidertaxdeductibilityasafactorindeterminingexecutivecompensationbutmaynotstructureitscompensationarrangementsarounddeductibility.TheCompanybelievesthetaxdeductionlimitationshouldnotcompromiseitsabilitytodesignandmaintainexecutivecompensationarrangementsthatwillattractandretainhighlyqualifiedemployeesandmotivatethemtodelivervaluetoourcustomersandshareholders.
CompensationRiskAssessment
Aspartofitsoversight,theCompensationCommitteeconsiderstheimpactoftheCompany’sexecutivecompensationprogram,andtheincentivescreatedbythecompensationawardsthatitadministers,ontheCompany’sriskprofile.TheCompensationCommitteealsoretainsanindependentconsultanttoconductariskassessmentoftheCompany’scompensationpoliciesandpractices.
Inaddition,theCompanyreviewsallofitscompensationpoliciesandpractices,includingincentiveplandesignandfactorsthatmayaffectthelikelihoodofexcessiverisktaking,todeterminewhethertheypresentasignificantrisktotheCompany.TheCompany’spayphilosophyprovidesaneffectivebalanceincashandequitymix,short-andlong-termperformanceperiods,financialandnon-financialperformance,andallowsfortheCompensationCommittee’sdiscretiontomakenegativeadjustmentstopayoutsundertheCompany’scompensationplans.Further,policiestomitigatecompensation-relatedriskincludestockownershipguidelines,vestingperiodsonequity,insider-tradingprohibitions,andindependentCompensationCommitteeoversight.
Basedonthisreview,bothforourexecutiveofficersandallotheremployees,theCompanyandtheindependentcompensationconsultantconcludedthattherisksarisingfromtheCompany’scompensationpoliciesandpracticesarenotreasonablylikelytohaveamaterialadverseeffectontheCompany.TheCompensationCommitteereviewedandapprovedthisconclusion.
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EXECUTIVECOMPENSATIONSummaryCompensationTable
ThetablebelowsummarizesthetotalcompensationearnedbytheCompany’snamedexecutiveofficers(orNEOs)infiscal2018,2017and2016.
Name&PrincipalPosition
FiscalYear
Salary($)(1)
Bonus($)(2)
StockAwards($)
(3)
OptionAwards($)(4)
Non-EquityIncentivePlanCompensation
($)(5)
ChangeinPensionValueand
Non-qualifiedDeferred
CompensationEarnings($)
AllOtherCompensation
($)(6)
Total($)
StevenJ.Demetriou Chair and Chief Executive Officer
2018 1,300,000 — 9,000,025 — 2,669,990 — 73,673 13,043,688 2017 1,300,000 — 7,571,763 — 2,160,202 — 113,946 11,145,911 2016
1,300,000
—
5,252,561
1,274,661
1,575,600
—
94,591
9,497,413
KevinC.Berryman Chief Financial Officer
2018 750,000 — 2,000,006 — 1,026,919 — 52,589 3,829,514 2017 750,000 — 1,716,332 — 830,847 — 104,479 3,401,658 2016
750,000
875,000
1,313,194
318,669
606,351
—
165,831
4,029,045
TerenceD.Hagen President, Aerospace, Technology, Environmental and Nuclear (ATEN)
2018 668,269 — 1,675,013 — 926,303 — 112,164 3,381,749 2017 637,711 — 1,463,947 — 684,633 — 19,552 2,805,843 2016 620,414 425,000 1,025,914 248,958 615,290 — 68,941 3,004,517
JosephG.Mandel Executive Vice President, Integration Management Office
2018 745,388 — 1,700,037 — 3,026,919 — 186,690 5,659,035 2017 710,988 — 1,716,332 — 747,494 — 12,842 3,187,656 2016
699,996
375,000
1,313,194
318,669
337,891
—
35,507
3,080,257
RobertV.Pragada President, Buildings, Infrastructure and Advanced Facilities (BIAF)
2018 713,269 300,000 1,700,037 — 983,118 — 43,310 3,739,735 2017 684,231 350,000 1,463,947 — 925,361 — 38,151 3,461,690 2016 428,365 500,000 2,068,349 260,000 566,743 — — 3,823,457
(1) Consistsofbasesalaryearnedduringthefiscalyearincludinganytimeoffwithpay.Mr.PragadabeganemploymentwiththeCompanyon
February1,2016withastartingannualsalaryof$675,000.Infiscal2016,Mr.Pragadaearnedapro-rataportionofhissalarybasedonhisstartdate.
(2) Infiscal2018,the$300,000forMr.Pragadarepresentsabonusawardedinrecognitionofhisleadershiproleintheduediligenceprocess,negotiationsinconnectionwiththeCH2Macquisitionanditssuccessfulclosure.Infiscal2017,the$350,000forMr.Pragadarepresentsaportionofhishiringbonusinadditiontothe$500,000hereceivedinfiscal2016.Infiscal2016,Messrs.Berryman,MandelandHagenreceivedcashtransitionbonusesof$375,000,$375,000and$425,000,respectively,toensureongoingstabilityandcontinuityofleadershipduringtheCEOtransitionperiodthatbeganinfiscal2015.ForMr.Berryman,the$875,000alsoconsistsoftheportionofhishiringbonusreceivedinfiscal2016intheamountof$500,000.
(3) RepresentsthegrantdatefairvalueofstockawardsgrantedundertheStockIncentivePlaninaccordancewithFinancialAccountingStandardsBoardAccountingStandardsCodificationTopic718,StockCompensation(“FASBASCTopic718”).PleaserefertoNote2,SignificantAccountingPolicies,ofNotestoConsolidatedFinancialStatementsincludedintheCompany’s2018AnnualReportonForm10-Kforadiscussionoftheassumptionsusedtocalculatetheseamounts.Forthefiscal2018amounts,thiscolumnreflectsthecombinedvalueofRSUsandPSUsgrantedinNovember2017(exceptforMr.Mandel,whoreceivedRSUsonly).Atthehighestlevelofperformance,thevalueofsuchfiscal2018PSUsonthegrantdatewouldbe:$10,800,159forMr.Demetriou;$2,400,007forMr.Berryman;$2,009,989forMr.Hagen;and$2,040,070forMr.Pragada.Atthehighestlevelofperformance,thevalueofsuchfiscal2017PSUsonthegrantdatewouldbe:$9,000,174forMr.Demetriou;$2,040,089forMr.Berryman;$1,740,138forMr.Hagen;$2,040,089forMr.Mandel;and$1,740,138forMr.Pragada.Atthehighestlevelofperformance,thevalueofsuchfiscal2016PSUsonthegrantdatewouldbe:$6,918,816forMr.Demetriou;$1,729,742forMr.Berryman;$1,351,328forMr.Hagen;$1,729,742forMr.Mandel;and$1,407,491forMr.Pragada.
(4) Representsthegrantdatefairvalueofoptionsgranted(adjusted,however,toexcludetheeffectsofestimatedforfeitures)undertheStockIncentivePlaninaccordancewithFASBASCTopic718.PleaserefertoNote2,SignificantAccountingPolicies,ofNotestoConsolidatedFinancialStatementsincludedintheCompany’s2018AnnualReportonForm10-Kforadiscussionoftheassumptionsusedtocalculatetheseamounts.
(5) Representstheannualincentiveawardsearnedineachfiscalyear,asdeterminedbytheCompensationCommittee.AlsorepresentstheadditionalincentiveawardearnedbyMr.Mandelin2018forachievingthecostsynergytargetrelatedtotheintegrationoftheCH2Macquisition.See“CompensationDiscussionandAnalysis—CompensationElements—Short-TermIncentives”foradescriptionofnon-equityincentiveplancompensationisdeterminedfortheNEOs.
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(6) Infiscal2018,allNEO’sreceiveda401(k)Companymatchof$7,950.Additionally,forfiscal2018,Mr.Demetrioureceived$49,611individendpaymentsonunvestedRSAsandRSUsatthetimeofvesting,$288forbasiclifeinsurancepremiumspaidforbytheCompany,$2,140forMr.Demetriou’sspouse’sportionofairfareforabusinesstripand$884fortheassociatedtaxgross-up,aswellas$16,000forfinancialplanningassistanceand$4,475foranannualhealthassessment.Forfiscal2018,Mr.Berrymanreceived$7,754individendpaymentsonunvestedRSAsandRSUsatthetimeofvesting,$1,080forbasiclifeinsurancepremiumspaidforbytheCompany,$12,299forMr.Berryman’sspouse’sportionofbusinesstravelandmealsand$4,187fortheassociatedtaxgross-upaswellas$16,000forfinancialplanningassistanceand$5,058foranannualhealthassessment.Forfiscal2018,Mr.Hagenreceived$3,457individendpaymentsonunvestedRSAsandRSUsatthetimeofvesting,$945forbasiclifeinsurancepremiumspaidforbytheCompany,$897forMr.Hagen’sspouse’sportionofbusinesstraveland$289fortheassociatedtaxgross-up,$16,000forfinancialplanningassistanceand$4,000foranannualhealthassessmentand$80,110cash-pay-outofaccruedtimeoffinexcessoftheCompany’slimit.Forfiscal2018,Mr.Mandelreceived$4,267individendpaymentsonunvestedRSAsandRSUsatthetimeofvesting,$1,037forbasiclifeinsurancepremiumspaidforbytheCompany,$16,000forfinancialplanningassistance,$752forMr.Mandel’sspouse’sportionofairfareforabusinesstripand$283fortheassociatedtaxgross-upand$75,064cash-pay-outofaccruedtimeoffinexcessoftheCompany’slimit,aswellas$83,077forsellingunusedpaidtimeoff.Forfiscal2018,Mr.Pragada,received$12,352fordividendpaymentsonunvestedRSAsandRSUsatthetimeofvesting,$1,037forbasiclifeinsurancepremiumspaidforbytheCompany,$1,904forcarrentalandinterimlivingrelatedtohisrelocationtoDallasand$716fortheassociatedtaxgross-up,and$16,000forfinancialplanningassistanceand$4,835foranannualhealthassessment.
NarrativeDisclosuretoSummaryCompensationTable
Payment of Dividends and Dividend Equivalent Rights
Infiscal2017,theCompanycommencedpayingaquarterlycashdividendof$0.15pershareandcontinuedthispolicythroughfiscal2018.HoldersofRSAsareentitledtoreceivesuchcashdividendsunlessanduntiltheholderforfeitsthesharesofcommonstockunderlyingtheRSAspursuanttothetermsoftherelevantawardagreement.
WithrespecttoRSUs,iftheCompanypaysacashdividendonitsoutstandingcommonstock,theneachholderofRSUsiscreditedwithadollaramountequalto(i)theper-sharecashdividend,multipliedby(ii)thetotalnumberofRSUsheldbysuchindividualontherecorddateforthatdividend.ThesearereferredtoasDividendEquivalents.DividendEquivalentsvestonthesamescheduleastheRSUtowhichtheyrelateandwillbepaidtotheawardholderincashatthesametimetheshareofcommonstock(or,inthecaseofcash-settledRSUs,thecash)underlyingtheRSUisdeliveredtotheawardholder.
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2018GrantsofPlanBasedAwards
ThetablebelowsummarizesallgrantsofplanbasedawardstotheNEOsinfiscal2018:
EstimatedFuturePayoutsUnderNon-
EquityIncentivePlanAwards(1)
EstimatedFuturePayoutsUnderEquityIncentivePlanAwards(2)
AllOtherStock
Awards:NumberofSharesof
StockorUnits(#)(3)
AllOtherOptionAwards:NumberofSecuritiesUnderlyingOptions(#)
ExerciseorBasePriceofOptionAwards($/sh)
GrantDateFairValueofStockand
OptionAwards(6)
Name GrantDate
Threshold
($) Target($)
Maximum($)
Threshold(#)
Target(#)
Maximum(#)
StevenJ.Demetriou 11/29/2017 - - - - - - 55,529 - - 3,599,945 11/29/2017 - - - 20,824 41,648 (4) 83,296 (4) - - - 2,700,040 11/29/2017 - - - 20,824 41,648 (5) 83,296 (5) - - - 2,700,040 487,500
1,950,000 3,900,000
KevinC.Berryman 11/29/2017 - - - - - - 12,340 - - 800,002 11/29/2017 - - - 4,627 9,255 (4) 18,510 (4) - - - 600,002 11/29/2017 - - - 4,627 9,255 (5) 18,510 (5) - - - 600,002 187,500
750,000 1,500,000
TerenceD.Hagen 11/29/2017 - - - - - - 10,335 - - 670,018 11/29/2017 - - - 3,875 7,751 (4) 15,502 (4) - - - 502,497 11/29/2017 - - - 3,875 7,751 (5) 15,502 (5) - - - 502,497 168,750
675,000 1,350,000
JosephG.Mandel 11/29/2017 - - - - - - 26,223 - - 1,700,037 187,500 750,000 1,500,000 1,000,000
2,000,000
RobertV.Pragada 11/29/2017 - - - - - - 10,489 - - 680,002 11/29/2017 - - - 3,933 7,867 (4) 15,734 (4) - - - 510,018 11/29/2017 - - - 3,933 7,867 (5) 15,734 (5) - - - 510,018 180,000
720,000 1,440,000
(1) Amountsrepresentthe2018projectedawardundertheManagementIncentivePlan(orMIP)basedontheCompany’sinternalplanatthestartoffiscal2018.WithrespecttoMr.Mandel,theamountalsoincludesanincentivearrangementbasedonthenetcostsynergiesrelatedtotheCH2Macquisition.See“CompensationDiscussionandAnalysis—CompensationElements—Short-TermIncentives”aboveforadescriptionoftheMIPandthemannerinwhichbonusesarecomputedaswellasMr.Mandel’sadditionalincentivearrangement.
(2) Amountsrepresentthethreshold,targetandmaximumpayoutsharesofawardsofPSUsgrantedundertheStockIncentivePlaninfiscal2018. (3) RepresentstheRSUsgrantedundertheStockIncentivePlan.
(4) Representsthethreshold,targetandmaximumpayoutsharesofthegrantsoftheEPSBasedAwardsthateachNEOcouldearnundertheStockIncentivePlan.Thenumberofsharesultimatelyissued,whichcouldbegreaterorlessthantarget,willbebasedonachievingspecificperformanceconditions.Pleasereferto“CompensationDiscussionandAnalysis—CompensationElements—EquityBasedCompensation—Fiscal2018EquityAwards—EPSBasedAwards”foradiscussionofhowthenumberofsharesultimatelyissuedwillbedetermined.
(5) Representsthethreshold,targetandmaximumpayoutsharesofthegrantsoftheROICBasedAwardthateachNEOcouldearnundertheStockIncentivePlan.numberofsharesultimatelyissued,whichcouldbegreaterorlessthantarget,willbebasedonachievingspecificperformanceconditions.Pleasereferto“CompensationDiscussionandAnalysis—CompensationElements—EquityBasedCompensation—Fiscal2018EquityAwards”foradiscussionofhowthenumberofsharesultimatelyissuedwillbedetermined.
(6) RepresentsthegrantdatefairvalueofRSUsandPSUsgranted(assumingtargetlevelofshares)undertheStockIncentivePlancomputedinaccordancewithFASBASCTopic718.ThegrantdatefairvaluefortheNovember29,2017,awardwas$64.83.PleaserefertoNote2,SignificantAccountingPolicies,ofNotestoConsolidatedFinancialStatementsincludedintheCompany’s2018AnnualReportonForm10-Kforadiscussionoftheassumptionsusedtocalculatetheseamounts.See“—NarrativeDisclosuretoSummaryCompensationTableand2018GrantsofPlanBasedAwardsTable—PaymentofDividendsandDividendEquivalentRights”belowand“CompensationDiscussionandAnalysis—CompensationElements—Equity-BasedCompensation—DividendEquivalents”formoreinformationregardingDividendEquivalents.
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OutstandingEquityAwardsofNEOsat2018FiscalYear-End
OptionAwards StockAwards
Name
NumberofSecurities
UnderlyingUnexercisedOptions(1)
OptionExercisePrice($)(2)
OptionExpiration
Date
NumberOfSharesOrUnitsOfStockThatHaveNotVested(#)(3)
MarketValueOfSharesOrUnitsOf
StockThatHaveNotVested($)(4)
EquityIncentivePlanAwards:NumberOfUnearned
Shares,UnitsOrOtherRightsThatHaveNot
Vested(#)(5)
EquityIncentivePlanAwards:
MarketOrPayoutValueOfUnearnedShares,UnitsOrOtherRightsThatHaveNotVested
(#)(6)
GrantDate
Exercisable
#
Unexercisable#
StevenJ.Demetriou 8/17/2015 76,694 25,565 43.94 8/17/2025 - 11/19/2015 49,369 49,370 42.74 11/19/2025 14,975 1,145,588 44,923 6,873,219 11/19/2015 44,923 5,154,914 11/16/2016 38,377 2,935,841 38,377 5,871,681 11/16/2016 38,377 5,871,681 11/29/2017 55,529 4,247,969 41,648 6,372,144
11/29/2017
41,648
6,372,144
KevinC.Berryman 12/30/2014 43,000 6,000 45.16 12/30/2024 - 5/28/2015 12,750 4,250 43.34 5/28/2025 11/19/2015 12,342 12,343 42.74 11/19/2025 3,744 286,416 11,231 1,718,343 11/19/2015 11,231 1,288,757 11/16/2016 8,700 665,550 8,699 1,330,947 11/16/2016 8,699 1,330,947 11/29/2017 12,340 944,010 9,255 1,416,015
11/29/2017
9,255
1,416,015
TerenceD.Hagen 5/23/2013 12,000 55.00 5/23/2023 - 5/22/2014 9,000 53.17 5/22/2024 6/8/2015 12,750 4,250 42.65 6/8/2025 11/19/2015 9,642 9,643 42.74 11/19/2025 2,925 223,763 8,774 1,342,422 11/19/2015 8,774 1,006,817 11/16/2016 7,420 567,630 7,420 1,135,260 11/16/2016 7,420 1,135,260 11/29/2017 10,335 790,628 7,751 1,185,903
11/29/2017
7,751
1,185,903
JosephG.Mandel 3/24/2011 40,000 48.56 3/24/2021 5/24/2012 36,000 37.03 5/24/2022 5/23/2013 36,000 55.00 5/23/2023 5/22/2014 24,000 53.17 5/22/2024 12/19/2014 25,000 43.25 12/19/2024 5/28/2015 12,750 4,250 43.34 5/28/2025 11/19/2015 12,342 12,343 42.74 11/19/2025 3,744 286,416 11,231 1,718,343 11/19/2015 11,231 1,288.757 11/16/2016 8,700 665,550 8,699 1,330,947 11/16/2016 8,699 1,330,947
11/29/2017
26,223
2,006,060
RobertV.Pragada 2/1/2016 10,693 10,694 39.13 2/1/2026 16,101 1,231,727 9,967 1,524,951 2/1/2016 9,967 1,143,713 11/16/2016 7,420 567,630 7,420 1,135,260 11/16/2016 7,420 1,135,260 11/29/2017 10,489 802,409 7,867 1,203,651
11/29/2017
7,867
1,203,651
(1) Allstockoptionshaveatotaltermoftenyearsfromthedateofgrantandallremainingunvestedoptiongrantsvestattherateof25%peryearbeginningonthefirstanniversaryofthegrantdate.
(2) AlloutstandingstockoptionsweregrantedundertheStockIncentivePlanwithanexercisepriceequaltotheclosingpriceofashareoftheCompany’scommonstockasquotedbytheNYSECompositePriceHistoryonthegrantdate.
(3) RepresentsthenumberofunvestedsharesofrestrictedstockandRSUsgrantedundertheStockIncentivePlan.TheRSAsandRSUsvestratablyoverfouryears,exceptfortheRSUsgrantedtoMr.Mandelin2018,whichvestratablyovertwoyears,beginningonthefirstanniversaryofthegrantdate.RSUgrantsareaccompaniedbydividendequivalentrights,thataccumulateandvestonthesamescheduleastheRSUtowhichtheyrelateandwillbepaidtotheawardholderincashatthesametimetheshareofcommonstockunderlyingtheRSUisdeliveredtotheawardholder.RSAgrantsareentitledtoreceivecashdividendsunlessanduntiltheholderforfeitsthesharesofcommonstockunderlyingtheRSAs,pursuanttothetermsoftherelevantawardagreement.
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(4) ThemarketvalueofoutstandingawardsofrestrictedstockandRSUsiscomputedusingtheclosingpriceoftheCompany’scommonstockasquotedbytheNYSECompositePriceHistoryatSeptember28,2018,whichwas$76.50.
(5) RepresentsthenumberofunvestedtargetsharesofPSUs(TSRBasedAwards,EPSBasedAwards,andROICBasedAwards)
grantedundertheStockIncentivePlan.TheawardsofPSUsvestbasedonperformanceattheexpirationofthreeyearsfromthegrantdate.
(6) ThemarketvalueofoutstandingPSUs(TSRBasedAwards,EPSBasedAwards,NetEarningsBasedAwardsandROICBased
Awards)wascomputedbyusing$76.50,theclosingpriceoftheCompany’scommonstockasquotedbytheNYSECompositePriceHistoryatSeptember28,2018.
OptionExercisesandStockVestedinFiscal2018
Thefollowingtableprovidesinformationonstockoptionsthatwereexercisedandonrestrictedstockthatvestedinfiscal2018forourNEOs:
Name
OptionAwards StockAwards
NumberofShares
AcquiredonExercise
(#)
ValueRealizedonExercise
($)
NumberofShares
AcquiredonVesting
(#)
ValueRealizedonVesting($)(1)
StevenJ.Demetriou
-
-
81,808
5,612,869
KevinC.Berryman
-
-
33,038
2,154,600
TerenceD.Hagen
-
-
8,952
567,797
JosephG.Mandel
-
-
9,787
617,476
RobertV.Pragada
-
-
10,523
720,510
(1) ValueisbasedontheclosingpriceofashareoftheCompany’scommonstockasquotedbytheNYSECompositePriceHistoryon
thevestingdate.IncludesthevalueofdividendspaidincashrelatedtounvestedsharesofrestrictedstockandRSUsatthetimeofvesting.
Non-qualifiedDeferredCompensation
Asdescribedabove,employees,includingNEOs,meetingcertaincompensationminimumsmayelecttoparticipateintheCompany’sexecutivedeferralplans(orEDPs)wherebyaportionofsalaryandbonus(includingequitycompensation)isdeferredandpaidtotheemployeeatsomefuturedate.TheEDPsarenon-qualifieddeferredcompensationprogramsthatprovidebenefitspayabletodirectors,officers,andcertainkeyemployeesortheirdesignatedbeneficiariesatspecifiedfuturedates,anduponretirementordeath.Participantcontributionsarecreditedwithearningsandlossesbasedupontheactualexperienceofthedeemedinvestmentsselectedbyparticipants.
FortheEDPsinwhichtheNEOsparticipate(the“VariablePlans”),accountsarecredited(ordebited)basedontheactualearnings(orlosses)ofthedeemedinvestmentsselectedbytheindividualparticipants.ParticipationintheEDPsisvoluntary.AllEDPsoperateunderasingletrust.AlthoughtherearecertainchangeincontrolfeatureswithintheEDPs,nobenefitenhancementsoccuruponachangeincontrol.Theinvestmentoptionsarenotionalandusedformeasurementpurposesonly.TheNEOsdonotownanyunitsintheactualfunds.Ingeneral,theinvestmentoptionsconsistofanumberofmutualandindexfundscomprisingstocks,bonds,andmoneymarketaccounts. 52 |2019 Proxy Statement
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ThefollowingtableshowstheEDPaccountactivityduringfiscal2018fortheNEOs.Priortofiscal2018,executiveofficerswereonlypermittedtodefersalaryandcashbonusamounts.Beginninginfiscal2018,executiveofficerscouldalsodeferequityawards.
Name
DeferredCompensation
Plan
ExecutiveContributionsDuringLastFiscalYear
($)(1)
RegistrantContributionsDuringLastFiscalYear
($)
AggregateEarningsDuringLastFiscal
Year($)(2)
AggregateWithdrawals/DistributionsDuringLastFiscalYear
($)
AggregateBalanceatLastFiscal
YearEnd($)(3)
StevenJ.Demetriou
VariablePlans
—
—
22,913
—
345,380
KevinC.Berryman
VariablePlans
82,211
—
25,920
—
454,058
TerenceD.Hagen
VariablePlans
—
—
1,052
—
45,322
JosephG.Mandel
VariablePlans
—
—
208,027
(50,331)
2,352,142
RobertV.Pragada
VariablePlans
—
—
—
—
—
(1) AllexecutivecontributionsareincludedintheSummaryCompensationTableunderthe“Salary”and“Non-EquityIncentivePlanCompensation”columns.
(2) EarningsareincludedintheSummaryCompensationTabletotheextenttheyexceed120%oftheIRSprescribedapplicablefederalrate.
(3) Balancesattheendofthefiscalyearconsistof(i)salaryandbonusdeferralsmadebytheexecutiveovertime,beginningwhenthe
executivefirstjoinedtheplan,plus(ii)allearningsandlossescreditedonalldeferrals,less(iii)allpre-retirementdistributions,ifany,takenbytheexecutivesincetheexecutivefirstjoinedtheplan.Mr.Hagen’saggregatebalanceincludesavalueof$19,296underadeferralplanthatwasnotreflectedinlastyear’sproxystatementduetoadministrativeoversight.
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CompensationUnderVariousTerminationScenarios
ThefollowingtablequantifiestheestimatedseveranceandbenefitspayabletotheNEOsasaresultofthefollowingterminationsofemploymentinfiscal2018:(i)terminationinconnectionwithachangeincontrol,(ii)terminationduetodeathordisability,(iii)retirementapprovedbytheCompensationCommittee,and(iv)involuntaryterminationwithoutcause.
ChangeInControl($)
DeathorDisability
($)
ApprovedRetirement
($)(5)
InvoluntaryTerminationWithoutCause($)
Steven J. Demetriou Non-EquityIncentiveCompensation(1) 2,669,990 1,950,000 -UnvestedIn-The-MoneyStockOptions(2) 2,499,128 2,499,128 -UnvestedStockAwards(3) 8,329,397 8,329,397 2,123,984UnvestedPerformanceShareUnits(4) 16,036,433 32,817,190 3,520,072SeveranceBenefits(6) 8,513,514 - 6,864,635Total
38,048,461
45,595,714
12,508,692
Kevin C. Berryman Non-EquityIncentiveCompensation(1) 1,026,919 750,000 -UnvestedIn-The-MoneyStockOptions(2) 745,670 745,670 -UnvestedStockAwards(3) 1,895,976 1,895,976 472,005UnvestedPerformanceShareUnits(4) 3,858,775 7,615,265 782,229SeveranceBenefits(6) 2,280,176 - 2,280,176Total
9,807,515
11,006,911
3,534,410
Terence Hagen Non-EquityIncentiveCompensation(1) 926,303 675,000 -UnvestedIn-The-MoneyStockOptions(2) 399,635 399,635 -UnvestedStockAwards(3) 1,582,020 1,582,020 395,314UnvestedPerformanceShareUnits(4) 3,104,778 6,272,465 655,111SeveranceBenefits(6) 2,061,547 - 2,061,547Total
8,074,283
8,929,120
3,111,972
Joseph G. Mandel Non-EquityIncentiveCompensation(1) 3,026,919 1,750,000 UnvestedIn-The-MoneyStockOptions(2) 557,630 557,630 UnvestedStockAwards(3) 2,958,026 2,958,026 1,003,030UnvestedPerformanceShareUnits(4) 3,384,410 4,783,235 SeveranceandCOBRABenefits(6) 3,281,757 - 765,757Total
13,208,741
10,048,890
1,768,787
Robert V. Pragada Non-EquityIncentiveCompensation(1) 983,118 720,000 -UnvestedIn-The-MoneyStockOptions(2) 399,635 399,635 -UnvestedStockAwards(3) 2,601,765 2,601,765 401,204UnvestedPerformanceShareUnits(4) 3,376,212 6,573,449 664,916SeveranceBenefits(6) 2,196,547 - 2,196,547Total
9,557,277
10,294,849
3,262,667
(1) TheamountofunpaidincentivecompensationthatwouldbepaidasofSeptember28,2018.(2) Theamountthatwouldbeearnedrelatedtounvestedin-the-moneyoptionsasofSeptember28,2018.Valueisbasedontheclosing
priceofashareoftheCompany’scommonstockasquotedbytheNYSECompositePriceHistoryatSeptember28,2018of$76.50,minusthecostoftheoption(i.e.,theexerciseprice).
(3) TheamountthatwouldbeearnedrelatedtounvestedrestrictedstockawardsasofSeptember28,2018.ValueiscomputedbyusingtheclosingpriceofashareoftheCompany’scommonstockasquotedbytheNYSECompositePriceHistoryatSeptember28,2018of$76.50.
(4) TheamountthatwouldbeearnedrelatedtounvestedsharesofPSUsasofSeptember28,2018.Uponachangeincontrol,thetargetsharesawardedisbasedonactualperformanceasofthelastdayofthefiscalyear.Upondeathordisability,thetargetsharesawardedisbasedupontheprojectedpaymentattheendofthevestingperiod.Uponinvoluntaryterminationwithoutcause,thetargetsharesawardedisbaseduponprojectedpaymentattheendofthevestingperiodbutproratedtothelastdayofthefiscalyear.Theamountreportedisbasedonmultiplyingtherelevantperformancemultiplier(describedabove)ofeachawardbythetargetsharesawarded,multipliedbytheclosingpriceofashareoftheCompany’scommonstockasquotedbytheNYSECompositePriceHistoryatSeptember28,2018of$76.50.
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(5) NoneoftheNEO’squalifyfor“Retirement”benefits.(6) Intheeventofaqualifyinginvoluntaryterminationofemploymentunrelatedtoachangeincontrol,allNEO’s(withtheexceptionof
Mr.Mandelwhoiscoveredbyanemploymentagreement)receivethefollowingbenefitsundertheExecutiveSeverancePlan:(i)acashpaymentequalto1.5times(fortheCEO)or1times(fortheotherNEOsandcoveredexecutives)thesumoftheparticipant’s(x)basesalaryand(y)targetannualincentiveaward;and(ii)acashpaymentequalto1.5times(fortheCEO)or1times(fortheotherNEOsandcoveredexecutives)thesumof(x)theannualCOBRApremiumforcontinuedparticipationintheCompany’sgrouphealthplansand(y)theannualfeeforcontinuedreceiptoffinancialadvisoryservices.Theirunvestedandoutstandingequityawardsthatarescheduledtovestwithintheninemonthperiodfollowingthedateofterminationwillcontinuetovestinaccordancewiththeiroriginalvestingschedule,butdonotrecognizeanyvaluefortheseatthetimeofseparation.
EquityCompensationPlanInformation
ThefollowingtablepresentscertaininformationaboutourequitycompensationplansasofSeptember28,2018:
PlanCategory
Numberofsecuritiestobeissuedupon
exerciseofoutstandingoptions,
warrants,andrights(ColumnA)
Weighted-averageexercisepriceofoutstanding
options,warrants,andrights(ColumnB)
Numberofsecuritiesremainingavailableforfutureissuance
underequitycompensationplans(excludingsecurities
reflectedinColumnA)(ColumnC)
Equitycompensationplansapprovedbyshareholders(1) 1,766,759
$45.53 5,631,371
Equitycompensationplansnotapprovedbyshareholders —
— —
Total 1,766,759
$45.53 5,631,371
(1) ThenumberinColumnAexcludespurchaserightsaccruingunderourtwo,broad-based,shareholder-approvedemployeestockpurchaseplans:theJacobsEngineeringGroupInc.1989EmployeeStockPurchasePlan,asamendedandrestated(the“ESPP”),andtheJacobsEngineeringGroupInc.GlobalEmployeeStockPurchasePlan,asamendedandrestated(the“GlobalESPP”).Theseplansgiveemployeestherighttopurchasesharesatanamountandpricethatarenotdeterminableuntiltheendofthespecifiedpurchaseperiods,whichoccurmonthly.Ourshareholdershaveauthorizedatotalof32.3millionsharesofcommonstocktobeissuedthroughtheESPPandtheGlobalESPP.FromtheinceptionoftheESPPandtheGlobalESPPthroughSeptember28,2018,atotalof28.0millionshareshavebeenissued,leaving4.3millionsharesofcommonstockavailableforfutureissuanceatthatdate.
PayRatio
ThefollowingtablesetsforththeratioofourCEO’stotalcompensationtothatofourmedianemployeeforfiscal2018.
CEOtotalannualcompensation
$13,051,363
MedianEmployeetotalannualcompensation
$82,898
RatioofCEOtoMedianEmployeetotalannualcompensation
157to1
SECrulesforidentifyingthemedianemployeeandcalculatingthepayratioallowcompaniestoadoptavarietyofmethodologies,toapplycertainexclusionsandtomakereasonableestimatesandassumptionsthatreflecttheiremployeepopulationsandcompensationpractices.Asaresult,thepayratioreportedabovemaynotbecomparabletothepayratioreportedbyothercompanies,asothercompaniesmayhaveutilizeddifferentmethodologiesandhavedifferentemploymentandcompensationpractices.ThepayratioaboveisareasonableestimatecalculatedinamannerconsistentwithSECrulesaswellasthemethodologydescribedbelow.
Todeterminethemedianemployee,weusedannualbasecompensationastheconsistentlyappliedcompensationmeasureandselectedJuly1,2018asourmeasurementdate.Forfull-time,salariedemployees,annualbasecompensationwasbasesalary,andforpart-time,temporaryandseasonalemployees,itwashourly
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ratemultipliedbyhoursworked.Weannualizedsalariesandwagesforourfullandpart-timeemployeeswhowerenotemployedforthefullyear.Forpurposesofthisdisclosure,weusedtheU.S.dollarequivalentofthelocalcurrency,basedontheaverageexchangerateforthethreemonthsperiodendedJune30,2018foreachsuchforeigncurrency.Usingthismethodology,wedeterminedthatourmedianemployeewasafull-time,salariedemployeelocatedinCanada.Afteridentifyingthemedianemployee,wecalculatedsuchmedianemployee’stotalannualcompensationinthesamemanneraswecalculatedourCEO’stotalannualcompensationintheSummaryCompensationTableonpage48.
AspermittedbySECrules,weexcludedallnon-U.S.employeesineachofthefollowingcountriesindeterminingourmedianemployee:Argentina(355),Armenia(16),Bahrain(31),Brazil(126),China(331),Columbia(1),CostaRica(4),Denmark(6),Finland(12),France(44),Greece(2),Guatemala(4),Indonesia(43),Iraq(2),Israel(2),Italy(251),Japan(2),Kazakhstan(23),Kenya(1),Korea,Republicof(69),Kuwait(13),Liberia(2),Luxembourg(2),Malaysia(324),Mexico(300),Morocco(58),Norway(5),Oman(116),Panama(7),Peru(30),Philippines(208),Qatar(270),Romania(25),Russia(270),SaintHelena(3),SaintLucia(1),SouthAfrica(220),Spain(140),Sweden(96),Switzerland(90),Taiwan(6),Thailand(49),TrinidadandTobago(9)andUganda(1).Inaggregate,weexcludedatotalof3,570employeesfrom44countries,representinglessthan5%oftheCompany’stotalworkforceofapproximately74,750peopleonJuly1,2018. 56 |2019 Proxy Statement
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PROPOSALNO.3—RATIFICATIONOFTHEAPPOINTMENTOFERNST&YOUNGLLP
Whatareyouvotingon?
TheAuditCommitteehasappointedErnst&YoungLLP(“Ernst&Young”or“EY”)toaudittheconsolidatedfinancialstatementsoftheCompanyasofSeptember27,2019,andforthefiscalyearthenended.AttheAnnualMeeting,shareholderswillbeaskedtoratifytheappointmentofErnst&Young.
TheAuditCommittee’sdecisiontore-appointourindependentauditorwasbasedonthefollowingconsiderations:
• Thequalityandperformanceoftheleadauditpartnerandtheoverallengagementteam;
• Ernst&Young’sknowledgeoftheindustriesandmarketsinwhichtheCompanyoperates;
• Ernst&Young’sknowledgeoftheCompany’soperations;
• Ernst&Young’sglobalcapabilitiesandtechnicalexpertise;
• Ernst&Young’sindependenceandobjectivity;and
• Thepotentialimpactofrotatingtoanotherindependentauditfirm.
TheCompanyisnotrequiredtosubmittheselectionofthe
independentregisteredpublicaccountingfirmtoshareholdersforapproval,butisdoingsoasamatterofgoodcorporategovernance.IftheappointmentofErnst&Youngisnotratifiedbyamajorityofthesharesofcommonstockpresent,inpersonorbyproxy,attheAnnualMeeting,thentheAuditCommitteewillconsidertheappointmentofotherindependentauditorswhoseselectionforanyperiodsubsequenttotheAnnualMeetingwillbesubjecttoratificationbytheshareholdersatthe2020annualmeeting.
RepresentativesofEYareexpectedtoattendtheAnnualMeeting,willhaveanopportunitytomakeastatementandareexpectedtobeavailabletorespondtoappropriatequestions.
WhatistheVoteRequired?
Theaffirmativevoteofamajorityofthesharesofcommonstockpresent,inpersonorbyproxy,attheAnnualMeetingandentitledtovoteisnecessarytoratifytheappointmentofErnst&YoungastheCompany’sindependentregisteredpublicaccountingfirmforthefiscalyearendingSeptember27,2019.
Abstentionshavethesameeffectasavoteagainsttheproposal.
The Board of Directors unanimously recommends that you vote FOR the ratification of the appointment of Ernst & Young as the Company’sindependent registered public accounting firm for the fiscal year ending September 27, 2019.
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REPORTOFTHEAUDITCOMMITTEETheAuditCommitteeherebyreportsasfollows: 1. ManagementhasprimaryresponsibilityfortheaccuracyandfairnessoftheCompany’sconsolidatedfinancialstatementsaswellas
theprocessesemployedtopreparethefinancialstatements,andthesystemofinternalcontroloverfinancialreporting.
2. TheAuditCommitteerepresentstheBoardofDirectorsindischargingitsresponsibilitiesrelatingtotheCompany’saccounting,
financialreporting,financialpractices,andsystemofinternalcontrols.Aspartofitsoversightrole,theAuditCommitteehasreviewedanddiscussedwiththeCompany’smanagementtheCompany’sauditedconsolidatedfinancialstatementsincludedinits2018AnnualReportonForm10-K.
3. TheAuditCommitteehasdiscussedwiththeCompany’sinternalauditorsandtheCompany’sindependentregisteredpublicaccountingfirm,Ernst&Young,theoverallscopeofandplansfortheirrespectiveaudits.TheAuditCommitteehasmetwiththeinternalauditorsandErnst&Young,separatelyandtogether,withandwithoutmanagementpresent,todiscusstheCompany’sfinancialreportingprocessesandsystemofinternalcontroloverfinancialreportinginadditiontothosemattersrequiredtobediscussedwiththeindependentauditorsundertherulesadoptedbythePublicCompanyAccountingOversightBoard(“PCAOB”)inRule3200T.
4. TheAuditCommitteehasreceivedthewrittendisclosuresandtheletterfromErnst&Youngrequiredbyapplicablerequirementsof
thePCAOBregardingtheindependentaccountant’scommunicationswiththeAuditCommitteeconcerningindependence,andhasdiscussedwithErnst&Youngtheirindependence.
5. TheAuditCommitteehasadoptedpre-approvalpoliciesandproceduresforcertainauditandnon-auditserviceswhichErnst&Youngprovides.Indevelopingthesepoliciesandprocedures,theAuditCommitteeconsideredtheneedtoensuretheindependenceofErnst&YoungwhilerecognizingthatincertainsituationsErnst&YoungmaypossessboththetechnicalexpertiseandknowledgeoftheCompanytobestadvisetheCompanyonissuesandmattersinadditiontoaccountingandauditing.ThepoliciesandproceduresadoptedbytheAuditCommitteeallowthegeneralpre-approvalbytheAuditCommitteeofcertainservices,suchasaudit-relatedservices(whichincludeprovidingaccountingandauditingconsultationandduediligenceservices),andtaxservices(whichincludegeneraltaxcompliance,taxresearch,andplanningservices),withoutaspecific,case-by-caseconsiderationofeachoftheservicestobeperformedbyErnst&Young.Thepoliciesandproceduresrequirethatanyotherservice,includingtheannualauditservicesandanyotherattestationservice,beexpresslyandspecificallyapprovedbytheAuditCommitteepriortosuchservicesbeingperformedbyErnst&Young.Inaddition,anyproposedservicesexceedingthegeneralpre-approvedcostlevelsorbudgetedamountsrequirespecificpre-approvalbytheAuditCommittee.TheAuditCommitteeconsiderswhetherallpre-approvedservicesareconsistentwiththeSEC’srulesandregulationsonauditorindependence.
6. Basedonthereviewanddiscussionsreferredtoinparagraphs(1)through(5)above,theAuditCommitteerecommendedtothe
BoardofDirectorsandtheBoardofDirectorshasapprovedtheinclusionoftheauditedfinancialstatementsintheCompany’sAnnualReportonForm10-KforthefiscalyearendedSeptember28,2018,forfilingwiththeSEC.
JosephR.Bronson,ChairDawneS.HicktonRobertA.McNamaraChristopherM.T.ThompsonBarryL.Williams 58 |2019 Proxy Statement
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AUDITANDNON-AUDITFEESSetforthbelowarethefeesforservicesrenderedbyourindependentregisteredpublicaccountingfirm,Ernst&Young,forthefiscalperiodsindicated,allofwhichwereapprovedbytheAuditCommitteepursuanttotheapprovalpoliciesunder“ReportoftheAuditCommittee”describedabove.
TypeofFees
Description
2018
2017
AuditFees
ConsistoffeesforprofessionalservicesprovidedinconnectionwiththeannualauditoftheCompany’sconsolidatedfinancialstatements;thereviewsoftheCompany’squarterlyfinancialstatementsincludedintheCompany’sreportsonForm10-Q;therenderingofanopinionpursuanttoSection404oftheSarbanes-OxleyActof2002;andtheservicesthatanindependentauditorwouldcustomarilyprovideinconnectionwithauditsoftheCompany’ssubsidiaries,otherregulatoryfilings,andsimilarengagementsforeachfiscalyearshown,suchasattestservices,consents,andreviewsofdocumentsfiledwiththeSEC.
$10,652,144
$7,096,997
Audit-RelatedFees
ConsistoffeesforservicesthatarereasonablyrelatedtotheperformanceoftheauditorreviewoftheCompany’sfinancialstatementsnotreportedunder“AuditFees”above,includingfeesfortheperformanceofauditsandattestservicesnotrequiredbystatuteorregulations;auditsoftheCompany’semployeebenefitplans;duediligenceactivitiesrelatedtomergers,acquisitions,andinvestments;contractor’slicensecomplianceprocedures;andaccountingconsultationsaboutfutureaccountingstandardstobeadoptedandtheapplicationofgenerallyacceptedaccountingprinciplestoproposedtransactions.
$973,648
$1,384,492
TaxFees
Consistoffeesfortaxcompliance,taxplanning,andtaxadvice.Corporatetaxservicesprovidedencompassavarietyofpermissibleservices,includingtechnicaltaxadvicerelatedtoU.S.andinternationaltaxmatters;assistancewithforeignincomeandwithholdingtaxmatters;assistancewithsalestax,valueaddedtax,andequivalenttaxrelatedmattersinlocaljurisdictions;preparationofreportstocomplywithlocaltaxauthoritytransferpricingdocumentationrequirements;andassistancewithtaxaudits.
$2,336,522
$1,932,029
Total $13,962,314 $10,413,518
WhatourAuditCommitteeconsideredwhenengagingErnst&Youngforfiscal2019:
✓ EY’sindependenceandintegrity
✓ EY’scompetenceanditscompliancewithregulations
✓ Thebusinessacumen,value-addedbenefit,continuityandconsistency,andtechnicalandcorecompetencyprovidedbytheengagementteam
✓ TheeffectivenessofEY’sprocesses,includingitsqualitycontrol,timelinessandresponsiveness,andcommunicationandinteractionwithmanagement
✓ EY’seffortstowardefficiency,includingwithrespecttoprocessimprovementsandfees
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SECURITYOWNERSHIPThefollowingtables,basedinpartuponinformationsuppliedbyofficersanddirectorsandcertainshareholders,setsforthcertain
informationregardingtheownershipoftheCompany’scommonstockasNovember27,2018by(1)allthosepersonsknownbytheCompanytobebeneficialownersofmorethanfivepercentoftheoutstandingsharesofcommonstock,(2)eachdirectorandnomineefordirector,(3)eachNEO,and(4)alldirectorsandexecutiveofficersoftheCompanyasagroup.Unlessotherwiseindicated,eachoftheseshareholdershassolevotingandinvestmentpowerwithrespecttothesharesbeneficiallyowned,subjecttocommunitypropertylawswhereapplicable.
SecurityOwnershipofCertainBeneficialOwners
NameandAddress
AmountandNatureofOwnershipof
BeneficialOwnership
PercentageofClass(1)
StateStreetCorporation 13,623,233(2) 9.6%StateStreetFinancialCenterOneLincolnStreetBoston,MA02111
TheVanguardGroup
12,200,143
(3)
8.6%100VanguardBlvd.Malvern,PA19355
PRIMECAPManagementCompany 8,197,422(4) 5.8%177E.ColoradoBlvd.,11thFloorPasadena,CA91105
Blackrock,Inc. 8,139,258(5) 5.7%55East52ndStreetNewYork,NY10055
(1) Calculatedbasedon142,335,347sharesofcommonstockoutstandingasoftheRecordDate. (2) BasedsolelyontheinformationsetforthinaSchedule13G/AfiledbyStateStreetonFebruary14,2018.Basedonsuchfiling,
StateStreethassharedvotingpowerwithrespecttoalloftheshares.
(3) BasedsolelyontheinformationsetforthinaSchedule13G/AfiledbyTheVanguardGroupInc.withtheSEConFebruary9,2018.
Basedonsuchfiling,TheVanguardGroupInc.hassolevotingpowerwithrespectto168,553shares,sharedvotingpowerwithrespectto26,836shares,soledispositivepowerwithrespectto12,010,364shares,andshareddispositivepowerwithrespectto189,779shares.
(4) BasedsolelyontheinformationsetforthinaSchedule13G/AfiledbyPRIMECAPManagementCompanywiththeSECon
February27,2018.Basedonsuchfiling,PRIMECAPManagementCompanyhassolevotingpowerwithrespectto4,278,038sharesandsoledispositivepowerwithrespecttoalloftheshares.
(5) BasedsolelyontheinformationsetforthinaSchedule13G/AfiledbyBlackrock,Inc.onJanuary25,2018.Basedonsuchfiling,Blackrock,Inc.hassolevotingpowerwithrespectto7,169,673sharesandsoledispositivepowerwithrespecttoalloftheshares.
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SecurityOwnershipofDirectors,Nominees,andManagement
Name
NumberofSharesofCommonStock
NumberofSharesofCommonStock
RelatingtoUnexercised
StockOptions(1)
TotalNumberofShares
BeneficiallyOwned
PercentofClass(2)
Non-ManagementDirectors:(3)
JosephR.Bronson
29,158
5,250
34,408
*
JuanJoséSuárezCoppel
9,113
11,875
20,988
*
RobertC.Davidson,Jr.
28,618
21,875
50,493
*
GeneralRalphE.Eberhart
11,318
15,375
26,693
*
DawneS.Hickton
9,618
4,750
14,368
*
LindaFayneLevinson
48,318
24,375
72,693
*
RobertA.McNamara
4,759
0
4,759
*
PeterJ.Robertson(4)
26,318
25,875
52,193
*
ChristopherM.T.Thompson(5)
25,318
15,375
40,693
*
BarryL.Williams
23,996
0
23,996
*
NamedExecutiveOfficers:
StevenJ.Demetriou
181,386
150,748
332,134
*
KevinC.Berryman
89,733
74,263
163,996
*
TerenceD.Hagen
44,636
48,213
92,849
*
JosephG.Mandel
63,366
192,263
255,629
*
RobertV.Pragada
49,398
10,693
60,091
*
Alldirectorsandexecutiveofficersasagroup
678,569
635,986
1,314,555
*
*Lessthan1%
(1) Includesonlythoseunexercisedoptionsthatareexercisable,orwillbecomeexercisablewithin60daysoftheRecordDate.(2) Calculatedbasedon142,335,347sharesofcommonstockoutstandingasoftheRecordDateandtherelevantnumberofsharesof
commonstockissuableuponexerciseofstockoptionswhichareexercisableorwillbeexercisablewithin60daysoftheRecordDate.(3) Fornon-managementdirectors,includescommonstockthathasvestedbutwillnotdistributeuntilsuchdirectorretiresorotherwise
leavestheBoard.(4) Mr.Robertsonsharesvotinganddispositivepowerwithhisspouseasto12,000sharesthatareheldinalivingtrust.(5) Mr.Thompsonsharesvotinganddispositivepowerwithhisspouseasto10,000sharesthatareheldinalivingtrust.
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SECTION16(a)BENEFICIALOWNERSHIPREPORTINGCOMPLIANCESection16(a)oftheExchangeActrequirestheCompany’sdirectorsandexecutiveofficersandpersonswhoownbeneficiallymore
thantenpercentofaregisteredclassoftheCompany’sequitysecuritiestofilewiththeSECandtheNYSEinitialreportsofownershipandreportsofchangesinownershipofcommonstockandotherequitysecuritiesoftheCompany.Officers,directorsandgreaterthanten-percentshareholdersarerequiredbySECregulationstofurnishtheCompanywithcopiesofallSection16(a)formsfiledbythem.
TotheCompany’sknowledge,basedsolelyonareviewofthecopiesofsuchfilingsonfilewiththeCompanyandwrittenrepresentationsfromitsdirectorsandexecutiveofficers,allSection16(a)filingrequirementsapplicabletotheCompany’sdirectors,officersandgreater-than-ten-percentbeneficialownerswerecompliedwithonatimelybasisduringfiscal2018.
EXECUTIVEOFFICERSForinformationabouttheexecutiveofficersoftheCompany,seePartI,Item1—BusinessintheCompany’s2018AnnualReporton
Form10-K.
SHAREHOLDERS’PROPOSALSOnlyshareholdersmeetingcertaincriteriaoutlinedintheCompany’sBylawsareeligibletosubmitnominationsforelectiontothe
BoardofDirectorsortobringotherproperbusinessbeforeanannualmeeting.UndertheCompany’sBylaws,shareholderswhowishtonominatepersonsforelectiontotheBoardofDirectorsorbringotherproperbusinessbeforeanannualmeetingmustgivepropernoticetotheCompanynotearlierthanthecloseofbusinessonthe120thdayandnotlaterthanthecloseofbusinessonthe90thdaypriortothefirstanniversaryoftheprecedingyear’sannualmeeting.Therefore,noticesregardingnominationsofpersonsforelectiontotheBoardofDirectorsandotherproperbusinessforconsiderationatthe2020annualmeetingofshareholdersmustbesubmittedtotheCompanynoearlierthanSeptember18,2019andnolaterthanOctober18,2019.Noticesregardingnominationsandotherproperbusinessmustincludecertaininformationconcerningthenomineeortheproposalandtheproponent’sownershipofcommonstockoftheCompany,ineachcaseassetforthintheCompany’sBylaws.Nominationsorotherproposalsnotmeetingtheserequirementswillnotbeentertainedattheannualmeeting.TheSecretaryoftheCompanyshouldbecontactedinwritingattheaddressonthefirstpageofthisProxyStatementtosubmitanominationorbringotherproperbusinessortoobtainadditionalinformationastotheproperformofanomination.
InordertobeincludedintheCompany’sProxyStatementandformofproxyrelatingtothe2020annualmeeting,proposalsofshareholdersmustbereceivedbytheSecretaryoftheCompanynolaterthanAugust7,2019.IftimelynoticeofashareholderproposalisnotreceivedbytheCompany,thentheproxiesnamedontheproxycardsdistributedbytheCompanyfortheannualmeetingmayusethediscretionaryvotingauthoritygrantedtothembytheproxycardsiftheproposalisraisedattheannualmeeting,whetherornotthereisanydiscussionofthematterintheProxyStatement.The2020annualmeetingofshareholdersiscurrentlyexpectedtobeheldonWednesday,January15,2020.
CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONSTheNominatingandCorporateGovernanceCommitteeisresponsibleforthereview,approval,orratificationof“related-person
transactions”involvingtheCompanyoritssubsidiariesandrelatedpersons.UnderSECrules,arelatedpersonisadirector,executiveofficer,nomineefordirector,or5%shareholderoftheCompany,andtheirimmediatefamilymembers.TheCompanyhasadoptedwrittenpoliciesandproceduresthatapplytoanytransactionorseriesoftransactionsinwhichtheCompanyorasubsidiaryisaparticipant,inwhichtheamountinvolvedexceeds$100,000,andarelatedpersonhasadirectorindirectmaterialinterest. 62 |2019 Proxy Statement
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TheNominatingandCorporateGovernanceCommitteehasdeterminedthateachofthefollowingtransactionsshallbedeemedtobepre-approvedundertheCompany’spoliciesandproceduresreferencedabove: • anytransactionwithanothercompanyforwhicharelatedperson’sonlyrelationshipisasanemployee(otherthanasanexecutive
officer)iftheamountinvolveddoesnotexceedthegreaterof$1millionor2%ofthatcompany’stotalannualrevenue;
• anycharitablecontribution,grant,orendowmentbytheCompanytoacharitableorganization,foundation,oruniversityforwhicha
relatedperson’sonlyrelationshipisasanemployee(otherthanasanexecutiveofficer)oradirector,iftheamountinvolveddoesnotexceedthegreaterof$1millionor2%ofthecharitableorganization’stotalannualreceipts;
• compensationtoexecutiveofficersdeterminedbytheCompensationCommittee; • compensationtodirectorsasreportedintheCompany’sproxystatement; • transactionsinwhichallsecurityholdersreceiveproportionalbenefits;and • transactionswheretheratesorchargesinvolvedaredeterminedbycompetitivebids.
Anytransactioninvolvingrelatedpersonsthatexceeds$100,000andthatdoesnotfallwithinthecategoriesdescribedaboveispresentedtotheNominatingandCorporateGovernanceCommitteeforreview.TheCommitteedetermineswhethertherelatedpersonhasadirectorindirectmaterialinterestinthetransactionandmayapprove,ratify,rescind,ortakeotheractionwithrespecttothetransactioninitsdiscretion.Indeterminingwhethertoapproveorratifythetransaction,theNominatingandCorporateGovernanceCommitteetakesintoaccount,amongotherfactorsitdeemsappropriate,whethertheinterestedtransactionisontermsnolessfavorablethantermsgenerallyavailabletoanunaffiliatedthird-partyunderthesameorsimilarcircumstancesandtheextentoftherelatedperson’sinterestinthetransaction.
HOUSEHOLDINGOFPROXYMATERIALSTheSEChasadoptedrulesthatpermitcompaniesandintermediariessuchasbrokerstosatisfydeliveryrequirementsforproxy
statementswithrespecttotwoormoreshareholderssharingthesameaddressbydeliveringasingleproxystatementaddressedtothoseshareholders.Thisprocess,whichiscommonlyreferredtoas“householding,”potentiallyprovidesextraconvenienceforshareholdersandcostsavingsforcompanies.TheCompanyandsomebrokershouseholdproxymaterials,deliveringasingleproxystatement,annualreportorNoticeofInternetAvailabilityofProxyMaterials,asapplicabletomultipleshareholderssharinganaddressunlesscontraryinstructionshavebeenreceivedfromtheaffectedshareholders.
OnceyouhavereceivednoticefromyourbrokerortheCompanythattheyortheCompanywillbehouseholdingmaterialstoyouraddress,householdingwillcontinueuntilyouarenotifiedotherwiseoruntilyouprovideuswithcontraryinstructions.If,atanytime,younolongerwishtoparticipateinhouseholdingandwouldprefertoreceiveaseparateproxystatement,annualreportorNoticeofInternetAvailabilityofProxyMaterials,asapplicable,orifyouarereceivingmultiplecopiesofsuchproxymaterialsandwishtoreceiveonlyoneset,pleasenotifyyourbrokerifyoursharesareheldinabrokerageaccountortheCompanyifyouholdcommonstockdirectly.Promptlyuponreceivingawrittenororalrequest,aseparatecopyoftheproxystatement,annualreportorNoticeofInternetAvailabilityofProxyMaterials,asapplicable,willbedeliveredtoyou.Requestsinwritingshouldbeaddressedtotheaddressbelow.Requestsmayalsobemadebycalling(214)638-0145.
JacobsEngineeringGroupInc.Attention:InvestorRelations1999BryanStreet,Suite1200
Dallas,Texas,75201
2019 Proxy Statement | 63
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ANNUALREPORT,FINANCIALANDADDITIONALINFORMATIONTheCompany’sannualauditedfinancialstatementsandreviewofoperationsforfiscal2018canbefoundintheCompany’sAnnual
ReportonForm10-KforthefiscalyearendedSeptember28,2018.Acopyofthe2018Form10-KisbeingmadeavailabletoeachshareholderofrecordontheRecordDateconcurrentlywiththisProxyStatement.Youcanaccessacopyofour2018AnnualReportonForm10-KonthesecurewebsitedisclosedinboththeNoticeofInternetAvailabilityofProxyMaterialsyoureceivedandinthisProxyStatementaswellasontheCompany’swebsiteatwww.jacobs.com.TheCompanywillfurnishwithoutchargeacopyofthe2018Form10-K,includingthefinancialstatementsandanyschedulesthereto,toanypersonfollowingtheinstructionsforrequestingwrittencopiesoftheproxymaterialsassetforthintheNoticeofInternetAvailabilityofProxyMaterialsortoanypersonrequestinginwritingandstatingthatheorshewasthebeneficialowneroftheCompany’scommonstockonNovember23,2018.TheCompanywillalsofurnishcopiesofanyexhibitstothe2018Form10-Ktoeligiblepersonsrequestingexhibitsatacostof$0.50perpage,paidinadvance.TheCompanywillindicatethenumberofpagestobechargedforuponwritteninquiry.Requestsshouldbeaddressedto:
JacobsEngineeringGroupInc.Attention:InvestorRelations1999BryanStreet,Suite1200
Dallas,Texas,75201
OTHERBUSINESSTheBoardofDirectorsdoesnotintendtopresentanyotherbusinessforactionattheAnnualMeetinganddoesnotknowofanybusinessintendedtobepresentedbyothers.
MichaelR.TylerSeniorVicePresident,GeneralCounselandSecretary
Dallas,TexasDecember5,2018
64 |2019 Proxy Statement
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E53450-P15232
KEEP THIS PORTION FOR YOUR RECORDS— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
DETACH AND RETURN THIS PORTION ONLYTHISPROXYCARDISVALIDONLYWHENSIGNEDANDDATED.
JACOBSENGINEERINGGROUPINC.
TheBoardofDirectorsrecommendsavoteFOReachNomineeforDirectorandFORProposals2and3.
1. Election of Directors
Nominees: For
Against
Abstain
1a. Joseph R. Bronson ☐ ☐ ☐
1b. Juan José Suárez Coppel ☐ ☐ ☐ For Against Abstain
1c. Robert C. Davidson, Jr.
☐
☐
☐
2.
Advisory vote to approve the Company’s executivecompensation.
☐
☐
☐
1d. Steven J. Demetriou
☐
☐
☐
1e. General Ralph E. Eberhart
☐
☐
☐
3.
To ratify the appointment of Ernst & Young LLP asthe Company’s independent registered publicaccounting firm.
☐
☐
☐
1f. Dawne S. Hickton
☐
☐
☐
1g. Linda Fayne Levinson ☐ ☐ ☐
1h. Robert A. McNamara ☐ ☐ ☐
1i. Peter J. Robertson ☐ ☐ ☐
1j. Christopher M.T. Thompson ☐ ☐ ☐
1k. Barry L. Williams ☐ ☐ ☐
THISPROXY,WHENPROPERLYEXECUTED,WILLBEVOTEDASDIRECTEDOR,IFNODIRECTIONISGIVEN,WILLBEVOTEDFOREACHDIRECTORNOMINEEANDFORPROPOSALS2AND3.
Please sign as your name(s) appear(s) on this proxy. If held in joint tenancy, all holders must sign. Trustees, administrators, etc. should include theirtitle and authority. Corporations should provide the full name of the corporation and of the authorized officer signing this proxy.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
JACOBS ENGINEERING GROUP INC.1999 BRYAN STREETSUITE 1200DALLAS, TX 75201
There are three ways to vote your proxy.
Your telephone or Internet vote authorizes the proxies named on the reverse side to vote theshares held in this account in the same manner as if you marked, signed and returned yourproxy card.
VOTEBYINTERNET-www.proxyvote.comUse the Internet to transmit your voting instructions and for electronic delivery of information.Vote by 11:59 p.m. Eastern Time on Tuesday, January 15, 2019 for shares held directly and by11:59 p.m. Eastern Time on Friday, January 11, 2019 for shares held in a Plan. Have yourproxy card in hand when you access the web site and follow the instructions to obtain yourrecords and to create an electronic voting instruction form.
VOTEBYPHONE-1-800-690-6903Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. EasternTime on Tuesday, January 15, 2019 for shares held directly and by 11:59 p.m. Eastern Timeon Friday, January 11, 2019 for shares held in a Plan. Have your proxy card in hand when youcall and then follow the instructions.
VOTEBYMAILMark, sign and date your proxy card and return it in the postage-paid envelope we haveprovided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY11717.
ELECTRONICDELIVERYOFFUTUREPROXYMATERIALSIf you would like to reduce the costs incurred by our Company in mailing proxy materials, youcan consent to receiving all future proxy statements, proxy cards and annual reportselectronically via e-mail or the Internet. To sign up for electronic delivery, please follow theinstructions above to vote using the Internet and, when prompted, indicate that you agree toreceive or access proxy materials electronically in future years.
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JACOBSENGINEERINGGROUPINC.ANNUALMEETINGOFSHAREHOLDERS
Wednesday,January16,20194:30PMCT
1999BryanStreetFirstFloor
Dallas,Texas75201
ImportantNoticeRegardingtheAvailabilityofProxyMaterialsfortheAnnualMeeting:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
E53451-P15232
JacobsEngineeringGroupInc.1999BryanStreet,Suite1200proxyDallas,Texas75201 ThisproxyissolicitedbytheBoardofDirectorsforuseattheAnnualMeetingofShareholdersonJanuary16,2019. The shares of stock held in this account will be voted as you specify on the reverse side. If no choice is specified, the proxy will be voted “FOR” the persons nominated as directors by the Board of Directors, “FOR” Proposals 2 and 3, and in thediscretion of the proxies named below with respect to any other matters that may properly come before the Annual Meeting and all adjournments andpostponements thereof. By signing the proxy, you revoke all prior proxies and appoint Steven J. Demetriou, Kevin C. Berryman and Michael R. Tyler, and each of them, as proxies,each with full power of substitution, to vote the shares held in this account on the matters shown on the reverse side and any other matters which mayproperly come before the Annual Meeting and all adjournments or postponements thereof. RetirementSavingsPlanParticipants.This card also constitutes voting instructions by the undersigned participant to the trustee of the CH2M HILLRetirement and Tax-Deferred Savings Plan (“Plan”) for all shares votable by the undersigned Plan participant. The undersigned on the reverse side of thiscard authorizes and instructs Fidelity, as trustee of the Plan (“Trustee”), to vote all shares of the common stock of Jacobs Engineering Group Inc. allocatedto the undersigned’s account under the Plan (as shown on the reverse side) at the 2019 annual meeting of shareholders, or at any adjournment thereof, inaccordance with the instructions on the reverse side. The Trustee will vote the shares credited to your account in accordance with your instructions, providedthe Trustee determines it can do so in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”). Pursuant to ERISA, the Trusteewould only be prevented from voting the shares credited to your account in accordance with your instructions if the independent fiduciary of the Plan, StateStreet Global Advisors (“SSGA”), deems that following the instructions would be a violation of the trustee’s fiduciary duties. Your voting instructions mustbe received by January 11, 2018 at 11:59 p.m. eastern time. If you do not provide voting instructions or if your instructions are not received in a timelymanner, SSGA will direct the Trustee, in SSGA’s discretion, how to vote your shares. All voting instructions for shares held in the Plan shall beconfidential.
IfyouvotebyPhoneorInternet,pleasedonotmailyourProxyCard.
Seereverseforvotinginstructions.
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