SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11 or Section 240.14a-12 GUY F ATKINSON COMPANY OF CALIFORNIA (Name of Registrant as Specified in its Charter) THERESE AMBRUSKO (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2). [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration number, or the Form or Schedule and the date of its filing. GUY F. ATKINSON COMPANY OF CALIFORNIA 1001 Bayhill Drive San Bruno, California 94066 ________________ NOTICE OF ANNUAL MEETING OF SHAREHOLDERS __________ San Bruno, California March 28, 1996 The Annual Meeting of Shareholders of Guy F. Atkinson Company of California (the "Company") will be held at the South San Francisco Conference Center, 255 South Airport Boulevard, South San Francisco, California, on Thursday, April 18, 1996, at 10:30 A.M. for the following purposes: 1. To elect directors to serve until the 1997 Annual Meeting of Shareholders and thereafter until their respective successors are elected or appointed. 2. To transact such other business as may properly come before the meeting or any adjournment thereof. All of the above matters are more fully described in the accompanying Proxy Statement. Only shareholders of record on the books of the Company at the close of business on March 5, 1996 will be entitled to vote at the meeting or any postponement or adjournment thereof. To assure your representation at the meeting, it would be appreciated if you would sign and return the enclosed proxy. The giving of such proxy will not affect your right to vote in person should you decide to attend the meeting. Therese Ambrusko Secretary ############################################################################# IMAGE OMITTED (SEE NARRATIVE DESCRIPTION BELOW OR IN "APPENDIX FOR GRAPHICS AND IMAGES".) PICKUP: "P1" ============================================================================= IMAGE: "ATKINSON" ============================================================================= ############################################################################# 1001 Bayhill Drive San Bruno, California 94066 ________________ PROXY STATEMENT __________ Mailing date: March 28, 1996 Your proxy in the form enclosed is solicited by the Board of Directors of Guy F. Atkinson Company of California (the "Company") in connection with the Annual Meeting of Shareholders to be held on April 18, 1996 and any adjournment thereof. A proxy may be revoked at any time before it is exercised by voting in person at the meeting, by giving written notice to the Secretary of the Company or by giving a later dated proxy. The shares represented by the proxies received which have been properly dated and signed and not revoked will be voted at the Annual Meeting. Only shareholders of record on the books of the Company at the close of business on March 5, 1996 will be entitled to vote at the meeting. As of March 5, 1996, the outstanding voting securities of the Company consisted of 8,926,154 shares of Common Stock, par value $0.01 per share. Each shareholder entitled to vote at the meeting is entitled to one vote for each share held as of the record date. With respect to the election of directors, the candidates elected are those receiving the highest number of affirmative votes up to the number of directors to be elected. Any other matter submitted for shareholder approval at the Annual Meeting will require the affirmative vote of a majority of the shares of the Company's Common Stock represented and entitled to vote at the meeting, assuming that shares constituting more than 50% of the total number of shares entitled to vote are represented at the meeting. The number of abstentions and broker non-votes with respect to any matter being voted on are not counted either for or against the matter. All expenses in connection with the solicitation of proxies will be paid by the Company. In addition to solicitation by mail, officers, directors, and regular employees of the Company who will receive no extra compensation for their services may solicit proxies by telephone, telegraph or personal call. A copy of the Company's Annual Report to Shareholders containing financial statements for the fiscal year ended December 31, 1995 accompanies this Proxy Statement. ELECTION OF DIRECTORS Eight directors are to be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their respective successors are elected or appointed and qualified. All of the nominees are presently members of the Board of Directors of the Company. Unless marked to the contrary, the proxies received will be voted FOR the election of the nominees named below. In the event any nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for the balance of those named and for such other nominee as the Board may select, or the size of the Board may be reduced accordingly. Information With Respect to Nominees Listed below are the names and ages of the nominees, their principal employment for the past five years and the year in which each nominee became a director of the Company. Principal Employment for Director Name Age the Past Five Years Since ---- --- ------------------------ -------- Jack J. Agresti........58 Chief Executive Officer and 1990 President of the Company since April, 1994; President and Chief Operating Officer of the Company from April, 1991 to April, 1994; Executive Vice President from April, 1990 to April, 1991; Group Vice President from February, 1985 to April, 1990; Director of American Ecology Corpora- tion. Duane E. Atkinson......68 Vice President of the Company 1979 since 1980. Ray N. Atkinson .......67 Vice Chairman of the Company 1979 from May, 1982 to May, 1991, when he retired. William E. Burch.......71 Director of Kuhlman Industrial 1988 Corporation and Central PreMix Concrete Company; Director, President and Chief Executive Officer of Fred S. James and Company from June, 1975 to January, 1981. -2- Principal Employment for Director Name Age the Past Five Years Since ---- --- ------------------------ -------- J. Phillip Frazier... 57 Operating Partner, Stonebridge 1987 Partners since January, 1995; Chairman and Chief Executive Officer of Hyster-Yale Materials Handling, Inc. from June, 1989 to September, 1992; President and Chief Executive Officer from August, 1988 to June, 1989; President and Chief Operating Officer from June, 1985 to August, 1988. Donald R. Kayser...... 65 Interim Chairman and Chief 1992 Executive Officer of Louisiana Pacific Corporation from August, 1995 to January, 1996; Principal, Kayser Partners, Ltd. since June, 1988; Execu- tive Vice President and Chief Financial Officer of Morrison Knudsen Corp. from September, 1988 to February, 1990; Senior Vice President and Chief Finan- cial Officer of Allied Signal Corporation from April, 1984 to June, 1988. Ross J. Turner........ 65 Director of Rio Algom Limited, 1988 The Great-West Assurance Com- pany and Wolverine Tube, Inc.; Chairman of Genstar Investment Corporation since 1986; Chief Executive Officer and Presi- dent or Chairman of Genstar Corporation for more than five years preceding December, 1986. John F. Whitsett...... 55 Chairman of the Board of 1979 Directors of the Company since February, 1995; President of Standard Brass Foundry for more than the past five years. John F. Whitsett is the first cousin of Duane E. Atkinson and Ray N. Atkinson, who are brothers. -3- Stock Ownership of Executive Officers and Directors The following table sets forth information as of January 31, 1996 as to shares of Common Stock of the Company beneficially owned by each of the present directors and nominees for election as directors, and by each of the executive officers named in the Summary Compensation Table beginning on page 6 and all directors and executive officers of the Company as a group. Except as otherwise indicated and subject to applicable community property laws, each person has sole investment and voting power with respect to the shares shown. Number of shares of Common Stock and Nature of Beneficial Footnote Percent Name Ownership (1) Number of Class ---- -------------------- -------- -------- Jack J. Agresti 120,849 1.35 Duane E. Atkinson 75,894 (2) * Ray N. Atkinson 122,754 (2)(3)(6) 1.37 William E. Burch 9,000 * William J. Carlson 51,302 * J. Phillip Frazier 1,000 * John F. Huguet 23,946 * Donald R. Kayser 1,000 * Herbert D. Montgomery 3,768 * Ross J. Turner 3,000 * Thomas J. Walsh, III 13,621 * John F. Whitsett 112,141 (4)(5) 1.25 All directors and executive officers as a group (14 persons including those named above) 569,460 (7) 6.36 - ------------- * Less than 1% (1) Includes shares allocated under the Company's Retirement Stock and Investment Plan, as follows: Jack J. Agresti, 33,071 shares; Duane E. Atkinson, 18,471 shares; Ray N. Atkinson, 19,817 shares; William J. Carlson, 16,818 shares; Herbert D. Montgomery, 187 shares; Thomas J. Walsh, III, 8,758 shares; and all directors and executive officers as a group, 116,891 -4- shares. Also includes options that are currently exercisable as follows: Jack J. Agresti, 78,948 shares; William J. Carlson, 34,304 shares; John F. Huguet, 23,946 shares; Herbert D. Montgomery, 2,581 shares; Thomas J. Walsh, III, 4,863 shares; and all directors and executive officers as a group, 155,478 shares. (2) Does not include 641,910 shares held by the Atkinson Foundation of which Duane E. Atkinson and Ray N. Atkinson are directors. The directors have no beneficial interest in such shares. (3) Includes 1,125 shares held in custodial accounts for three grandchildren of Ray N. Atkinson, as to which he has sole voting and investment power and as to which he disclaims beneficial ownership. Does not include 3,000 shares held by Mr. Atkinson's wife, as to which he has neither voting nor investment power and as to which Mr. Atkinson disclaims beneficial ownership. (4) Does not include 861,620 shares held by the Myrtle L. Atkinson Foundation, of which John F. Whitsett is a director. Mr. Whitsett has no beneficial interest in such shares. (5) Includes 20,610 shares held in trust or in custodial accounts of which Mr. Whitsett is the sole trustee or custodian and as to which he has sole investment and voting power. Does not include 4,723 shares held by Mr. Whitsett's wife, as to which Mr. Whitsett disclaims beneficial ownership. (6) Does not include 817,517 shares held by Willamette University. Ray N. Atkinson is one of eight members of a committee of the Board of Trustees of Willamette University which has voting power with respect to such shares. Mr. Atkinson disclaims beneficial ownership thereof. (7) Excludes shares excluded in notes (2), (3), (4), (5), and (6) above. Includes shares included in notes (3) and (5) above. -5- Compensation of Directors and Executive Officers Executive Officers' Compensation The following table sets forth the compensation earned during the three fiscal years ended December 31, 1995 by the Company's Chief Executive Officer and the other four most highly compensated executive officers of the Company. SUMMARY COMPENSATION TABLE LONG-TERM COMPENSATION ------------------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS ------------------------------------ --------------------------- --------- (A) (B) (C) (D) (E)(1) (F)(2) (G) (H) (I)(3) RESTRICTED OTHER ANNUAL STOCK LTIP ALL OTHER NAME AND SALARY BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($) - ------------------------ ------ ---------- ---------- -------------- ------------ -------------- --------- -------------- J. J. Agresti ...........1995 $375,000 $187,500 65,000 $14,544 President and Chief 1994 $358,271 $50,000 51,613 $13,048 Executive Officer 1993 $295,000 $0 31,200 $11,997 W. J. Carlson ...........1995 $250,000 $65,000 30,000 $9,564 Senior Vice President 1994 $250,000 $0 18,065 $9,517 of the Company, 1993 $235,000 $0 18,200 $11,750 President, Atkinson Construction Company H. D. Montgomery* .......1995 $175,000 $70,000 25,000 $5,676 Senior Vice President, 1994 $88,513 $25,000 10,323 $598 Chief Financial Officer 1993 -- -- -- -- and Treasurer J. F. Huguet** ..........1995 $174,456 $100,000 30,000 $20,228 Senior Vice President 1994 $141,218 $21,951 12,903 $14,527 of the Company, Presi- 1993 $139,194 $90,476 10,400 $14,278 dent Commonwealth Con- struction Company T. J. Walsh, III ........1995 $170,000 $40,000 25,000 $8,747 Vice President of the 1994 $150,000 $0 6,452 $8,497 Company, President, 1993 $130,000 $0 6,500 $7,000 Walsh Construction Company -6- * Mr. Montgomery joined the Company in June, 1994. His salary on an annualized basis in 1994 was $160,000. ** Compensation figures converted from Canadian dollars. *** The number of options granted in 1993 and 1994 has been adjusted to account for the extraordinary dividend declared in February, 1995. (1) No named executive officer received perquisites or personal benefits, the aggregate value of which exceeded the lesser of $50,000 or 10% of salary and bonus. No other value was received that required reporting in this column. (2) As of December 31, 1995, the named executive officers held performance restricted stock in the following amounts: J. J. Agresti: 8,500 shares; W. J. Carlson: 5,500 shares; H. D. Montgomery: 0 shares; J. F. Huguet: 3,500 shares; T. J. Walsh, III: 2,500 shares. The restricted stock is subject to vesting provisions based upon the achievement of certain earnings per share goals. Such goals have not been achieved and none of the stock has vested. The number and value of the aggregate restricted stock holdings for the named executives at the end of the 1995 fiscal year was 20,000 shares and $207,600, respectively. (3) The amounts disclosed in this column include: (a) Company contributions made in fiscal year 1995 to the Stock Plan and Investment Plan portions of the Atkinson Retirement Stock and Investment Plan on behalf of the named executive officers as follows: Investment Plan portion: J. J. Agresti, $3,000; W. J. Carlson, $3,000; H. D. Montgomery, $1,750; T. J. Walsh, III, $3,000. Stock Plan portion: J. J. Agresti, $4,500; W. J. Carlson, $4,500; H. D. Montgomery, $2,625; T. J. Walsh, III, $4,500. (b) Company contributions made in fiscal year 1995 to the Guy F. Atkinson Holdings Ltd. Employees' Money Purchase Pension Plan on behalf of John F. Huguet in the amount of $19,338. Guy F. Atkinson Holdings Ltd. is a Canadian subsidiary of Guy F. Atkinson Company. (c) Payment by the Company in fiscal year 1995 of premiums for term life insurance on behalf of the named executive officers as follows: J. J. Agresti, $7,044; W. J. Carlson, $2,064; J. F. Huguet, $890; H. D. Montgomery, $1,301; T. J. Walsh, III, $1,247. Directors' Compensation During 1995 directors who were not employees were entitled to receive an annual director's fee of $15,000, plus $1,500 for each Board meeting attended. Directors who were not employees of the Company further were entitled to receive, if serving as chairman of any committee of the Board, an annual fee of $1,500, plus $500 for each committee meeting attended or, if serving as a member of such committee, an annual fee of $1,000, plus $500 for each committee meeting attended. Effective January 1, 1996, the director's fees will be as follows: annual fee, $16,000; Board meeting fee, $1,500 per meeting; committee chair annual fee, $3,000; committee member annual fee, $2,000; committee meeting fee, $1,000 per meeting. Mr. Whitsett receives a fee of $5,000 per month to serve as the Chairman of the Board of Directors. This is in addition to the other fees he receives as a director. -7- OPTION/SAR GRANTS IN LAST FISCAL YEAR The following table sets forth the option grants made to the executive officers named in the Summary Compensation Table above during the 1995 fiscal year. No stock appreciation rights were granted in the 1995 fiscal year. GRANT INDIVIDUAL GRANTS VALUE DATE - ----------------------------------------------------------------------- ------------ (A) (B) (C) (D) (E) (F) % OF TOTAL OPTIONS OPTIONS GRANTED EXERCISE OR GRANT DATE GRANTED TO EMPLOYEES BASE PRICE EXPIRATION PRESENT NAME (# SHARES)(1) IN FISCAL YEAR ($/SHARE) DATE VALUE ($)(2) - ---------------- ----------- --------------- ------------- ------------ ------------ J. J. Agresti 65,000 24.8% 7.81 4/20/05 293,605 W. J. Carlson 30,000 11.5% 7.81 4/20/05 135,510 H. D. Montgomery 25,000 9.5% 7.81 4/20/05 112,925 J. F. Huguet 30,000 11.5% 7.81 4/20/05 135,510 T. J. Walsh, III 25,000 9.5% 7.81 4/20/05 112,925 (1) Options were granted on April 20, 1995. The options are exercisable with respect to 25% of the shares on the four anniversary dates following the date of grant. Each option is exercisable over a period of up to ten years from the date of grant, subject to continued employment. Payment of the option purchase price may be made in cash, or shares of the Company's Common Stock owned by the optionee for a period of six (6) months, or in any combination of cash and shares of the Company's Common Stock. (2) Present value was calculated using the Black-Scholes pricing model which involves an extrapolation of future pricing levels based solely on past performance. Use of this model should not be viewed in any way as a forecast of the future performance of the Company's stock which will be determined by future events and unknown factors. The inputs used in deriving present value were as follows: o April 20, 1995 grant date fair market value $7.81 o April 20, 1995 grant date exercise price $7.81 o Expected dividend yield 0.00% o Expected time to expiration calculated using 100% of grant term (10 years) o Expected volatility equal to the standard deviation of Atkinson quarterly closing stock prices over the period starting first quarter 1986 and ending fourth quarter 1995 o Risk-free rate of return determined using the U.S. Treasury constant maturity yield on the date of grant (10 year rate) -8- AGGREGATED OPTION EXERCISES IN 1994 AND FISCAL YEAR-END OPTION VALUES* EXERCISES DURING YEAR FISCAL YEAR END ------------------------------ ---------------------------------- (A) (B) (C) (D) (E) NUMBER OF SECURITIES VALUE OF UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY OPTIONS (#) OPTIONS** SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/ NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE - ---------------- --------------- -------------- --------------- ------------------ J. J. AGRESTI NONE NONE 78,948/119,310 $207,282/$364,448 W. J. CARLSON NONE NONE 34,304/52,649 $95,381/$157,657 H. D. MONTGOMERY NONE NONE 2,580/32,743 $5,884/$81,902 J. F. HUGUET NONE NONE 23,945/44,878 $63,327/$130,544 T. J. WALSH, III NONE NONE 4,863/33,089 $16,415/$93,021 * Option Terms: Option price is market at grant; term is ten years, subject to continued employment. Right to exercise vests for 25% of each award's shares per year; full vesting occurs in four years. Optionees may purchase optioned shares with payment in cash or shares of the Company's common stock. **Based upon stock closing price of $10.38 on December 31, 1995 -9- PENSION PLANS The following table sets forth the estimated annual benefits payable upon retirement to Company employees under the Atkinson 1987 Pension Plan and the Company's Excess-Benefit Plan ("the Pension Plans"). PENSION PLAN TABLE YEARS OF SERVICE --------------------------------------------------------------------- REMUNERATION 15 20 25 30 35 40 45 - -------------- --------- --------- --------- --------- --------- --------- --------- $125,000 $28,022 $36,265 $44,509 $52,753 $60,997 $69,241 $77,485 $150,000 33,972 43,965 53,959 63,953 73,947 83,941 93,935 $175,000 39,922 51,665 63,409 75,153 86,897 98,641 110,385 $200,000 45,872 59,365 72,859 86,353 99,847 113,341 126,835 $225,000 51,822 67,065 82,309 97,553 112,797 128,041 143,285 $250,000 57,772 74,765 91,759 108,753 125,747 142,741 159,735 $275,000 63,722 82,465 101,209 119,953 138,697 157,441 176,185 $300,000 69,672 90,165 110,659 131,153 151,647 172,141 192,635 $325,000 75,622 97,865 120,109 142,353 164,597 186,841 209,085 $350,000 81,572 105,565 129,559 153,553 177,547 201,541 225,535 $375,000 87,522 113,265 139,009 164,753 190,497 216,241 241,985 $400,000 93,472 120,965 148,459 175,953 203,447 230,941 258,435 $425,000 99,422 128,665 157,909 187,153 216,397 245,641 274,885 $450,000 105,372 136,365 167,359 198,353 229,347 260,341 291,335 $475,000 111,322 144,065 176,809 209,553 242,297 275,041 307,785 $500,000 117,272 151,765 186,259 220,753 255,247 289,741 324,235 $525,000 123,222 159,465 195,709 231,953 268,197 304,441 340,685 $550,000 129,172 167,165 205,159 243,153 281,147 319,141 357,135 $575,000 135,122 174,865 214,609 254,353 294,097 333,841 373,585 -10- The compensation covered for purposes of the Pension Plans is salary and bonus. In 1995, the named executive officers received covered compensation as follows: J. J. Agresti, $562,500; W. J. Carlson, $315,000; J. F. Huguet, not applicable; H. D. Montgomery, $245,000; T. J. Walsh, III, $210,000. Mr. Huguet does not participate in the Pension Plan. The estimated credited years of service for the named executive officers are as follows: J. J. Agresti, 36; W. J. Carlson, 24; J. F. Huguet, not applicable; H. D. Montgomery, 1; T. J. Walsh, III, 15. The calculations are straight-life annuity amounts based upon current plan formulae and are not subject to Social Security offsets. Employment Agreements In 1994, the Company entered into an employment agreement with J. J. Agresti, under which Mr. Agresti's employment will continue for a period of three years from April 21, 1994 and will renew automatically for additional periods of one year each, unless either party gives three months' written notice of intent to terminate, up until Mr. Agresti's 65th birthday. The agreement also provides that if Mr. Agresti voluntarily resigns or the Company terminates his employment for any reason other than cause following a change in control of the Company, he will be entitled to receive his salary and benefits for three years after the termination. Report on Executive Compensation The Board of Directors determined all of the Company's Executive Compensation policies during 1995, managed policy decisions on executive pay programs and established the compensation of the President and Chief Executive Officer. The Executive Compensation Committee (hereafter "Committee") is appointed annually to advise the Board of Directors on matters of executive compensation. The Committee makes compensation recommendations to the Board for the Chief Executive Officer position as well as the Chief Operating Officer position, if occupied, and proposes to the Board the terms of the programs and plans for managing executive pay. The Committee's members are William E. Burch (Chairman), Donald R. Kayser and Ross J. Turner. Each is an independent outside Director; none is a former employee of the Company. No one on the Committee participates in the compensation described here for executives, and the Committee retains its own consulting firm to advise it from time to time. In evaluating and voting on the Company's executive compensation awards, the Board seeks to achieve the following objectives: o To attract, motivate and retain outstanding executives by providing compensation opportunities consistent with those in the industry for similar positions. -11- o To offer incentive for business success by putting a significant portion of each executive's total pay at risk, based on Company performance (assessing in the short term desirable operating results and, in the long term, stock price growth and total shareholder return). o To encourage career service by providing retirement income for executive service consistent with industry practice. The Committee recommended to the Board the compensation for Jack J. Agresti as President and Chief Executive Officer. Mr. Agresti, who is also a member of the Board of Directors, did not participate in any Board discussions regarding his own pay nor did he vote on his own compensation. Base Salary The Committee annually reviews salary levels for the named executive officers in relation to information available about salary levels for comparable positions in the industry as well as annual rates of executive salary movement within the industry. It is the Committee's general policy to position the base salary of executive officers, including the Chief Executive Officer, approximately at mid-range (50th percentile) of salaries for comparable industry positions. Survey data for this analysis is provided by an independent, outside consulting firm retained by the Committee. In February, 1995, the Board, acting on the Committee's recommendation, approved the continuation of the base salary awarded to Mr. Agresti when he was promoted to the position of President & Chief Executive Officer on April 21, 1994. Available survey data confirmed that this action met the Board's objective to maintain salaries at a competitive level. When appointed President and Chief Executive Officer on April 21, 1994, the Company entered into an employment agreement with Mr. Agresti, and the terms of that employment agreement are described on page 11 of this Proxy Statement. The Chief Executive Officer recommends to the Executive Compensation Committee salary adjustments for the other executive officer positions. The Committee reviews these recommendations based on the same criteria used to evaluate the competitive base salary of the Chief Executive Officer position. During 1995, three of the other named executive officers were awarded base salary increases as recommended by the Chief Executive Officer. The Committee concurred with these recommendations on the basis of presented data on salary levels for comparable positions within the industry. Annual Incentive Awards The Board encourages executives to achieve desirable annual operating results by offering such executives opportunities to earn annual incentive awards. These incentive opportunities are designed to put a significant portion -12- of an executive's total pay "at risk," subject to the achievement of financial and operating goals at levels designed to be consistent with industry practice. The Chief Executive Officer and the Chief Operating Officer (when the position is occupied), participate in individual incentive opportunities funded on the basis of attainment of specific corporate financial goals set by the Board. The other named executive officers also participate in annual incentive compensation plans which fund when pre-established corporate financial goals are achieved relating to their positions and/or pre-established goals related to the operating plans of the businesses for which they are responsible are achieved. Target awards for the five named executive officers were set from 35% to 50% of base salary, with maximum awards not to exceed 2.2 times these targets. As shown on the Summary Compensation Table, all five named executive officers were granted annual incentive awards for 1995 based on the level of attainment of pre-established financial goals and individual achievement factors. The specific 1995 corporate financial goals set by the Board for the Chief Executive Officer were attained slightly above 100% of the target level. Coupled with the evaluation of Mr. Agresti's individual achievements during the year, the Board awarded Mr. Agresti 100% of his target award amount. For the other named executives, attainment in 1995 of pre- established financial goals and individual achievement factors ranged from 40% to 200% of their target award amounts. Long-term Incentive Awards The Company offers incentive to management for contributions to stock price growth and total shareholder return through participation in the 1990 Executive Stock Plan. The Plan, which was amended and restated by shareholders in April, 1995, provides for awards of non-qualified and incentive stock options, restricted stock, and stock appreciation rights to officers and other key employees, and represents additional "at risk" compensation. All named executive officers were participants in the Plan and all named officers received stock option awards in 1995, which are shown in the Summary Compensation Table and the Option/SAR Grants Table. Most of the options granted to date have achieved some gain but the realization of meaningful compensation values from them depends on future stock price growth. No awards of restricted stock were made in 1995. Previous awards of restricted stock made in 1992 are described in the Summary Compensation Table footnote. The unqualified ownership of awarded shares of restricted stock were dependent upon attaining specific earnings per share goals for each of the three years following the grants; short of achieving each year's goal, a percentage of the awarded restricted shares were forfeited back to the Company. Earnings per share goals were not met in 1993, 1994 or 1995, and all remaining shares awarded were forfeited on March 5, 1996. The Board believes the amended and restated 1990 Executive Stock Plan is well designed to encourage management's effort in the shareholders' interests. Little value will be realized from the Plan unless those interests are well served. -13- The Company has not adopted a policy regarding how it will address section 162(m) of the Internal Revenue Code regarding the deductibility of certain compensation because no officer of the Company will earn compensation that approaches the million dollar limitation. The Board of Directors: Jack J. Agresti Duane E. Atkinson Ray N. Atkinson William E. Burch J. Phillip Frazier Donald R. Kayser Ross J. Turner John F. Whitsett -14- PERFORMANCE GRAPH* Note: The stock performance shown on the graph below is not necessarily indicative of future price performance. The following graph compares the percentage change in the cumulative total shareholder return of the Common Stock of Guy F. Atkinson Company of California ("Atkinson") over the last five fiscal years with the performance of the NASDAQ Stock Market - US Index and a Peer Group over the same period. The returns were calculated assuming the investment in Atkinson Common Stock, the NASDAQ Stock Market - US Index and the Peer Group on December 31, 1990, and reinvest- ment of all dividends. [TABLE FOR PERFORMANCE GRAPH IN EDGAR FORMAT] COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG GUY F. ATKINSON COMPANY, THE NASDAQ STOCK MARKET - US INDEX AND A PEER GROUP MEASUREMENT PERIOD NASDAQ STOCK (FISCAL YEAR COVERED) ATKINSON MARKET-US INDEX PEER GROUP - --------------------- -------- --------------- ---------- Measurement Pt -- 12/31/90 $100.00 $100.00 $100.00 FYE 12/31/91 90.00 161.00 122.00 FYE 12/31/92 129.00 187.00 112.00 FYE 12/31/93 114.00 215.00 121.00 FYE 12/31/94 138.00 210.00 74.00 FYE 12/31/95 174.00 296.00 68.00 * The Peer Group includes the following companies: Granite Construction Incorporated, Kasler Holding Company, Michael Baker Corporation, Morrison Knudsen Corporation, Perini Corporation and The Turner Corporation. These are the same companies which have made up the Peer Group since 1993, except Blount, Inc., which was deleted from the Peer Group in 1994 because it ceased operating as a construction company. -15- Certain Transactions In 1991, William J. Carlson, then President of Walsh Construction Company division, was relocated by the Company from Trumbull, Connecticut to its headquarters in South San Francisco, California. In connection with his relocation, Mr. Carlson received a loan which is guaranteed by Guy F. Atkinson Company, a Nevada corporation. The loan is in the amount of $156,000 and is secured by a deed of trust on Mr. Carlson's new residence. The entire principal amount of the loan is due on December 31, 1996 and annual interest payments are required on the outstanding principal at the rate of 6.00 percent per annum. Committees of the Board of Directors; Meetings The Company has standing audit, executive compensation and nominating committees of the Board of Directors. The Audit Committee consists of three directors appointed by the Board. The current members of the Audit Committee are William E. Burch, J. Phillip Frazier, and Donald R. Kayser. The Audit Committee recommends to the Board the appointment of an independent accounting firm, reviews the financial statements of the Company with such accounting firm, inquires into the effectiveness of the Company's internal auditing methods and procedures, and reports to the Board. The Audit Committee held three meetings during 1995. The Executive Compensation Committee consists of three directors appointed by the Board, none of whom may be the Chairman or the President of the Company. The current members of the Compensation Committee are William E. Burch, Donald R. Kayser, and Ross J. Turner. The Compensation Committee held four meetings in 1995. The Nominating Committee consists of three directors appointed by the Board. The current members of the Nominating Committee are Duane E. Atkinson, Ray N. Atkinson, and Ross J. Turner. The Nominating Committee recommends to the Board nominations of directors. The Nominating Committee held no meetings during 1995. The Committee will consider nominations recommended by shareholders, which should be directed to the Secretary of the Company. Ten meetings of the Board of Directors were held in 1995. Each of the directors attended no less than seventy-five percent of the meetings of the Board and the standing committees on which such director serves. -16- CERTAIN BENEFICIAL OWNERS OF SECURITIES The persons listed below are known to the Company to be beneficial owners as of January 31, 1996 of more than 5% of the Company's Capital Stock(1). Such persons have sole voting and investment power with respect to the shares set forth opposite their names below. AMOUNT AND NATURE PERCENT NAME AND ADDRESS OF OF BENEFICIAL OF BENEFICIAL OWNER OWNERSHIP CLASS - ------------------------------ --------------- --------- Myrtle L. Atkinson Foundation 861,620 9.6 5828 Las Positas Road Livermore, CA 94550 Willamette University .........817,517 9.1 Salem, OR 97301 Atkinson Foundation ...........641,910 7.2 1100 Grundy Lane San Bruno, CA 94066 David L. Babson & Co. .........613,300 6.9 One Memorial Drive Suite 1100 Cambridge, MA 02142 __________ (1) As of January 31, 1996, the trustee of the Atkinson Retirement Stock and Investment Plan was the owner of 1,642,377 shares of the Common Stock of the Company, constituting 18.3% of the Common Stock, held for the benefit of participants in the Plan. The trustee votes such shares only in accordance with instructions from such participants and disclaims beneficial ownership thereof. CERTIFIED PUBLIC ACCOUNTANTS The firm of Coopers & Lybrand L.L.P., Certified Public Accountants, has been the auditor for the Company for many years. A representative of that firm is expected to be present at the Annual Meeting. He or she will be available to respond to appropriate questions and will have an opportunity to make a statement if he or she desires to do so. SHAREHOLDER PROPOSALS To be considered for presentation to the Annual Meeting of Shareholders to be held in 1997 a shareholder proposal must be received at the offices of the Company, 1001 Bayhill Drive, San Bruno, California 94066, not later than November 28, 1996. -17- OTHER MATTERS The Board of Directors does not know of any other business that will be presented for consideration at the Annual Meeting. If any other business properly comes before the Annual Meeting or any adjournment thereof, the proxy holders will vote in regard thereto according to their best judgment. Therese Ambrusko Secretary