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Jacobs Engineering Group Inc.

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LOGO

 

 

LOGO

Notice of 20172019

Annual Meeting of

Shareholders

and

Proxy Statement

Jacobs Engineering Group Inc.

LOGO


LOGO

JACOBS ENGINEERING GROUP INC.LETTER TO SHAREHOLDERS

1999 Bryan Street, Suite 1200FROM OUR CHAIR & CEO

Dear Fellow Shareholder,

Fiscal 2018 has been a tremendous year at Jacobs. We continue to successfully execute our strategy to transform Jacobs’ culture, capabilities and business portfolio to become a more innovation and technology-driven solutions company – tackling some of the world’s most critical challenges. Our strong performance has created substantial value for our employees, our customers and our shareholders, and provides a solid foundation for continuing our focus on becoming a company unlike any other.

Over a one and three-year period we have delivered total shareholder return of 33% and 108%. These returns to our shareholders place us in the top quartile of our peer group and well above the S&P 500 of 18% and 61%, respectively.

Governance and Compensation Practices

Comprehensive corporate governance oversight, combined with highly talented people executing our profitable growth strategy, is fundamental to building long-term shareholder value. Underpinning our performance is our strong focus on integrity and corporate governance, which includes a continuous review and refinement of our company practices.

Board Structure – The Board is comprised of 11 members from diverse geographic, industry, technical and business backgrounds. These different experiences and viewpoints provide for a robust governance structure which aligns with our strong emphasis on inclusion. In fact, 45% of our board is female or ethnically diverse. Elected on an annual basis under a majority voting standard, the average tenure of our Board is nine years, with four newly appointed directors within the last 5 years, including Barry L. Williams who joined the Board in December 2017 from our acquisition of CH2M HILL Companies, Ltd.

Dallas, Texas 75201Governance and Oversight Structures – We benefit from a highly engaged Board, facilitated by frequent formal and informal meetings with Executive leadership. The Board’s engagement has expanded and evolved over the past several years in direct alignment with critical areas of importance in the business, including active participation and diligence on acquisition and divestiture opportunities and the formation of a Business Resilience Steering Group focused on Enterprise Risk reporting to the Audit Committee. Our cybersecurity leadership provides quarterly updates to the Board on our corporate wide cyber risk posture. We continue to benefit from our lead independent director Linda Fayne Levinson, ensuring independent leadership in the boardroom.

Executive Compensation – We believe in pay for performance Executive compensation that incentivizes creation and sustainment of long-term shareholder value. In fact, 76% of compensation for our named executive officers is performance-based. In last year’s annual shareholder advisory vote on“say-on-pay” we received a 96% approval. We also continue to evolve our performance-based compensation approach and will introducenon-financial based metrics for executives in fiscal 2019. These include performance and cultural based leadership behaviors such as safety, inclusion and diversity, innovation and talent management.

 

December 9, 20162019 Proxy StatementLOGO


To Our Shareholders:

 

YouValue Creation Strategy

We continue to execute against our Corporate Strategy launched in 2016, and our performance through fiscal 2018 has exceeded expectations.

Build a High-Performance Culture – We are cordially invitedexcited about the advancement of our high-performance culture this past year – an achievement that we’re particularly proud of given the global integration activities of bringing Jacobs and CH2M together. We believe culture is fundamental to attenddriving superior long-term performance, and there are several highlights worth noting:

Progress on Inclusion – The diversity of our Executive Leadership Team is now at 50% overall – 40% women and 20% of diverse ethnic background – including the 2017 Annual Meetingcompany’s first female Executive Vice President.

Strong Organizational Health – We completed our second Organizational Health Assessment with results showing an improvement of Shareholders of Jacobs Engineering Group Inc. The Annual Meetingeight points over the past two years and elevating from the 3rd to 2nd quartile. We will be relentless in driving to achieve 1st quartile cultural performance.

Embedded Culture of Caring – Building on our BeyondZero® foundation, we have extended our focus beyond safety to a strongculture of caring, including sustainability, inclusion, security and mental health. We launchedPlanBeyond, our sustainability framework to deliver on our corporate vision to “provide solutions for a more connected, sustainable world” and achieve our Global Sustainability Commitment.

Engaged Employee Network Groups – A key part of the integration strategy with CH2M was the engagement and empowerment of our Jacobs employee networks that embrace and reflect communities of gender, ethnicity, sexual orientation, veterans and career stages. These networks of more than 10,000 employees are driving inclusion and change on several levels. In May we held our first global summit where leaders of our network groups and executives collaborated on Thursday, January 19, 2017, at 12:00 p.m., local time, at 1999 Bryan Street, 1ways to further our efforts in this crucial area.

stTransform the Core – Floor, Dallas, Texas 75201.We continue to evolve our operating model to improve business excellence, project delivery and sales effectiveness, with several critical enhancements in fiscal 2018:

 

Accountability – Appointment of two chief operating officers provided focus for driving accountability, further supporting our profitable growth strategy.

Technology Modernization – Significant investments in project delivery and business infrastructure improved efficiency and connectivity of our systems, supporting our employees’ productivity and work environment.

Performance Excellence – Continued focus on step-change improvement in project delivery resulted in a year-over-year reduction in project write-offs of 22% (or2-year reduction of 44%).

Grow Profitably – Fiscal 2018 marked strong performance against our balanced strategy of improving our existing businesses and active portfolio management. We describeare on track to exceed the metrics outlined in detail the actions we expectour Strategy in December 2016.

Strong Financial Performance– Pro forma revenue growth of 9% and double digit pro forma operating growth across all lines of business.

Successful CH2M Integration – Leadership on delivering key metrics provided to take at our Annual Meeting in the attached Notice of 2017 Annual Meeting of Shareholdersshareholders:

Cost synergies exceeding initial outlook

Attaining revenue synergies

Surpassing EPS accretion targets

On track to outperform return/IRR target

Focus on Innovation – Ongoing incremental investment has resulted inJacobs Connected Enterprise gaining strong traction in customer solutions over the past two years. Recognizing the critical importance of technology and innovation in driving thought leadership and innovation into the core of our business – as well as increased margins – we named our first Chief Technology & Innovation Officer to ensure singular focus and prioritization globally.

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A copyOur recent announcement of the divestiture of our Annual Report on Form 10-K for fiscal year 2016 is being made availableEnergy, Chemicals & Resources business demonstrates our commitment to you at the same time as the Proxy Statement. The 2016 Annual Report on Form 10-K includes information about our operations as well as our audited, consolidated financial statements. You can access a copy of our 2016 Annual Report on Form 10-K on the secure website disclosed in both the Notice of Internet Availability of Proxy Materials and in the Proxy Statement as well as on the Company’s website at www.jacobs.com.

Please use this opportunity to take part in the affairs of our company by voting onshifting the business to come before the Annual Meeting. Whether or not youhigher-margin, sustained markets, providing greater focus on areas where we can accelerate profitable growth.

In summary, fiscal 2018 was another strong year of delivering against our growth strategy and creating exceptional shareholder value. We appreciate your continued investment in Jacobs and remain confident in our ability to execute against plan to attend the Annual Meeting, please complete, sign, date,while maintaining our high standards of transparency and return the proxy card or voting instruction card mailed to you or vote electronically on the Internet or by telephone. See “About the Annual Meeting — How Do I Vote by Proxy?” in the Proxy Statement for more details. Returning the proxy card or voting instruction card or voting electronically doesnot deprive you of your right to attend the Annual Meeting and to vote your shares in person for the matters to be acted upon at the Annual Meeting.

corporate governance.

We look forward to seeing youyour attendance at the Annual Meeting.

Sincerely,

Michael J. Tyler

Senior Vice President, General Counsel

and Corporate Secretary


JACOBS ENGINEERING GROUP INC.

1999 Bryan Street, Suite 1200

Dallas, Texas 75201

NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS

Important Notice Regarding the Availability of Proxy Materials for the Shareholder

Meeting to be Heldour annual shareholder meeting on January 19, 2017

The Proxy Statement and accompanying Annual Report to Shareholders

are available at http://materials.proxyvote.com/46981416, 2019 in Dallas.

 

LOGO

TIME AND DATESteven J. Demetriou

Chair and Chief Executive Officer

Remembering Noel Watson

Along with his family, we honor the memory of former Jacobs Chairman and CEO Noel Watson, who passed away in August at the age of 82. A great mentor and friend to many, Noel was a larger-than-life leader; a man of character who brought tireless passion, perspective and wisdom to his work. During his tenure as CEO, Noel steered the company’s growth seven-fold, from $1 billion to more than $7 billion in revenues, 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 the helm of the company. He became President in 1987, CEO in 1992, was elected Chairman of the Board in 2006 and retired from the board in January 2017.

Foremost, Noel was a dedicated and loving husband, father and grandfather. He is survived by his wife, Phyllis, their two children and five grandchildren.

2019 Proxy StatementLOGO    iii


LOGO

NOTICE OF 2019

ANNUAL MEETING OF SHAREHOLDERS

When:Wednesday, January 16, 2019, at 4:30 p.m., local time

Where:1999 Bryan Street, First Floor, Dallas, Texas 75201

We are pleased to invite you to join our Board of Directors and senior leadership at Jacobs Engineering Group Inc.’s 2019 Annual Meeting of Shareholders.

Items of Business:

 12:00 p.m., local time, on Thursday, January 19, 2017

LOCATION

1999 Bryan Street, 1st Floor, Dallas, Texas 75201

ITEMS OF BUSINESS

1.

1.      Election of the directors named in the Proxy Statement to hold office until the 20182020 annual meeting;

 2.

2.      Approval of an amendmentAn advisory vote to and restatement ofapprove the Company’s 1989 Employee Stock Purchase Plan;executive compensation;

 

3.      Approval of an amendment to and restatement of the Company’s Global Employee Stock Purchase Plan;

4.      Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 29, 2017;27, 2019; and

 

5.      An advisory vote to approve the Company’s executive compensation;

4.

6.      An advisory vote on the frequency of shareholder advisory votes on the Company’s executive compensation; and

7.      Any other business that may properly come before the Annual Meeting.

Record Date:

The shareholders of record at the close of business on November 23, 2018 will be entitled to vote at the Annual Meeting and any adjournment or postponement thereof.

Proxy Voting:

It is important that your shares be represented and voted at the Annual Meeting. You can vote your shares by completing and returning the proxy card or voting instruction card sent to you. You also have the option of voting your shares electronically on the Internet or by telephone. Voting instructions are printed on your proxy card, voting instruction card or Notice of Internet Availability of Proxy Materials. To ensure your shares are represented at the meeting, please cast your vote by mail, telephone or Internet as soon as possible, even if you plan to attend the meeting in person.

RECORD DATEHow to Cast your Vote

The

Your vote is important.All shareholders who owned common stock of recordthe Company at the close of business on the Record Date of November 23, 2016 will be entitled2018 may vote. You may vote in one of the following ways:

LOGO

Vote by Internet

www.proxyvote.com

LOGO

Vote by Telephone

1 (800)690-6903

Or the telephone number on

your proxy card

LOGO

Vote by Mail

Sign, date and return your

proxy or voting instruction card

LOGO

Vote in Person

Attend the meeting in Dallas, Texas on January

16, 2019

If your shares are held in a stock brokerage account or by a bank or other record holder, please refer to vote at the Annual Meeting and any adjournmentinstructions from your bank, brokerage account, or postponement thereof.other record holder.

By order of the Board of Directors,

LOGO

Michael R. Tyler

Senior Vice President, General Counsel and Corporate Secretary

  Important Notice Regarding the Availability of Proxy Materials

  for the Annual Shareholder Meeting to be Held on January 16, 2019

  The Proxy Statement and accompanying 2018 Annual Report to Shareholders are available athttp://materials.proxyvote.com/469814

iv    LOGO|2019 Proxy Statement


 

2019 Proxy StatementLOGO    v


JACOBS ENGINEERING GROUP INC.

1999 Bryan Street, Suite 1200

Dallas, Texas 75201

 

 

PROXY STATEMENT

We are providing these proxy materials in connection with the 20172019 Annual Meeting of Shareholders of Jacobs Engineering Group Inc. (the “Company” or “Jacobs”). This Proxy Statement and the Company’s 20162018 Annual Report on Form10-K were first made available to shareholders and the Notice of Internet Availability of Proxy Materials, proxy card or voting instruction card were first mailed to shareholders on or about December 9, 2016.5, 2018. This Proxy Statement contains important information for you to consider when deciding how to vote on the matters to be brought before the Annual Meeting. Please read it carefully.

GENERAL

 

The 2019 Annual Meeting of Shareholders (the “Annual Meeting”) will be held on Wednesday, January 16, 2019, at 4:30 p.m., local time, in the building where our principal offices are located, 1999 Bryan Street, First Floor, Dallas, Texas 75201, and at any adjournment or postponement thereof.

ABOUT THE ANNUAL MEETING

 

Who is soliciting my vote?

The Board of Directors of the Company (the “Board of Directors” or “Board”) is soliciting your vote in connection with the 2017 Annual Meeting of Shareholders.

Meeting.

What is the purpose of the Annual Meeting?

The Annual Meeting will be the Company’s regular, annual meeting of shareholders. You will be voting on the following matters at the Annual Meeting:

 

1.Election of the directors named in the Proxy Statement to hold office until the 2018 annual meeting;

2.Approval of an amendment to and restatement of the Company’s 1989 Employee Stock Purchase Plan (the “ESPP”);

3.Approval of an amendment to and restatement of the Company’s Global Employee Stock Purchase Plan (the “Global ESPP”);

4.Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 29, 2017;

5.An advisory vote to approve the Company’s executive compensation;

6.An advisory vote on the frequency of shareholder advisory votes on the Company’s executive compensation; and

7.Any other business that may properly come before the Annual Meeting.

How does the Board of Directors recommend I vote?

The Board of Directors recommends a vote:

1.For the election of Joseph R. Bronson, Juan José Suárez Coppel, Robert C. Davidson, Jr., Steven J. Demetriou, Ralph E. Eberhart, Dawne S. Hickton, Linda Fayne Levinson, Peter J. Robertson, and Christopher M.T. Thompson as directors;

2.For approval of an amendment to and restatement of the ESPP;

3.For approval of an amendment to and restatement of the Global ESPP;

4.For the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 29, 2017;

5.For the advisory resolution approving the Company’s executive compensation; and

6.For holding the advisory vote on the Company’s executive compensation every year.


Who is entitled to vote at the Annual Meeting?

The Board of Directors set November 23, 2016 as the record date for the Annual Meeting (the “Record Date”). All shareholders who owned common stock of the Company at the close of business on the Record Date may attend and vote at the Annual Meeting.

Proposal

Number

 

Description

  

Board Recommendation

  

Page

Reference 

 

1

 

 

Election of the directors named in this Proxy Statement to hold office until the 2020 annual meeting;

  

 

FOR each nominee

  4

 

2

 An advisory vote to approve the Company’s executive compensation; and  FOR  28

3

 

Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 27, 2019.

 

  FOR  57

How many votes can be cast by shareholders?

Each share of common stock is entitled to one vote. There is no cumulative voting. There were 120,830,099142,335,347 shares of common stock outstanding and entitled to vote on the Record Date.

November 23, 2018 (the “Record Date”).

How many votes must be present to hold the Annual Meeting?

A majority of the outstanding shares of common stock as of the Record Date must be present at the Annual Meeting in order to hold the Annual Meeting and conduct business. This is called a “quorum.” Your shares are counted as present at the Annual Meeting if you are present at the Annual Meeting and vote in person, a proxy card or voting instruction card has been properly submitted by you or on your behalf, or you have voted electronically on the Internet or by telephone. Both abstentions and brokernon-votes are counted as present for the purpose of determining the presence of a quorum. A “brokernon-vote” is a share of common stock that is beneficially owned by a person or entity and held by a broker or other nominee but for which the broker or other nominee (1) lacks the discretionary authority to vote on certain matters, and (2) has not received voting instructions from the beneficial owner in respect of those specific matters.

 

2019 Proxy StatementLOGO    1


How many votes are required to elect directors and approve the other proposals?

Proposal No. 1 (Election of Directors): Each director is elected by a majority of the votes cast with respect to such nominee in uncontested elections (the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that nominee). Abstentions and brokernon-votes are not counted for purposes of the election of directors and, therefore, will have no effect on the outcome of such election.

Proposal No. 2 (Advisory Vote to Approve Executive Compensation): The approval of the amendments to and restatements ofadvisory resolution on the ESPP and Global ESPPCompany’s executive compensation requires the affirmative vote of a majority of the shares of common stock present, in person or by proxy, at the Annual Meeting and entitled to vote, provided that the total votes cast on the proposal, whether in favor, against, or in abstention, represent a majority of the shares entitled to vote. Abstentions have the same effect as a vote against the proposal.advisory resolution. Brokernon-votes will have no effect on the outcome of the proposal.advisory votes. The results of advisory votes are not binding on the Board of Directors.

Proposal No. 3 (Ratification of the Appointment of Ernst & Young LLP as Auditors): The ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm requires the affirmative vote of a majority of the shares of common stock present, in person or by proxy, at the Annual Meeting and entitled to vote. Abstentions have the same effect as a vote against the proposal.

The approval of the advisory resolution on the Company’s executive compensation and the advisory resolution on the frequency of advisory votes on the Company’s executive compensation requires the affirmative This proposal is considered a routine matter with respect to which a broker or other nominee can generally vote of a majority of the shares of common stock present, in person or by proxy, at the Annual Meeting and entitled to vote. Abstentions have the same effect as a vote against the advisory resolution. Broker non-votes will havetheir discretion. Therefore, no effect on the outcome of the advisory votes. The results of advisory votesbrokernon-votes are not binding on the Board of Directors.

expected in connection with this proposal.

How do I vote by proxy?

You can vote your shares by completing and returning the proxy card or voting instruction card that was sent to you or by voting your shares electronically on the Internet or by telephone. Your Internet or telephone

vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, and returned your proxy card or voting instruction card. Voting instructions are printed on your proxy card, voting instruction card or Notice of Internet Availability of Proxy Materials.

You are encouraged to vote by proxy as soon as possible, even if you plan to attend the Annual Meeting in person.

What if I don’t vote on some of the proposals?

If you return your signed proxy card or voting instruction card in the envelope provided to you but do not mark selections, your shares will be voted in accordance with the recommendations of the Board of Directors with respect to such selections. Similarly, when you vote electronically on the Internet and do not vote on all matters, your shares will be voted in accordance with the recommendations of the Board of Directors with respect to the matters on which you did not vote. Shareholders that vote by telephone must vote on each matter. In connection therewith, the Board of Directors has designated Mr. SteveSteven J. Demetriou, Mr. Kevin C. Berryman and Mr. Kevin BerrymanMichael R. Tyler as proxies. Shareholders that vote by telephone must vote on each matter. If you indicate a choice with respect to any matter to be acted upon on your proxy card or voting instruction card, or by Internet or telephone, your shares will be voted in accordance with your instructions.

What if I hold my shares in a brokerage account or through a bank or other nominee?

If you are a beneficial owner and hold your shares in street name through a broker, bank or other nominee and do not return the voting instruction card, the broker, bank or other nominee will vote your shares on each matter at the Annual Meeting for which he or she has the requisite discretionary authority. Under applicable rules, brokers have the discretion to vote on routine matters, such as the ratification of the selection of independent registered public accounting firms, but do not have discretion to vote on the election of directors the approval of employee stock purchase plans, or on any advisory vote regarding the Company’s executive compensationcompensation. You may receive multiple sets of proxy materials if you hold your shares of Company common stock in multiple ways, such as directly as a holder of record or frequencyindirectly through a broker, bank or other nominee or through the CH2M 401(k) Plan (as defined below). You are encouraged to vote all proxy cards and voting instruction cards you receive as soon as possible.

What if I hold my shares in the CH2M HILL Retirement andTax-Deferred Savings Plan?

If your shares of advisory votesCompany common stock are held in the CH2M HILL Retirement andTax-Deferred Savings Plan (the “CH2M 401(k) Plan”), you will receive a voting instruction card allowing you to instruct the trustee of the

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CH2M 401(k) Plan how to vote such shares. The trustee will vote the shares credited to your account in accordance with your instructions, provided the trustee determines it can do so in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”). Pursuant to ERISA, the trustee would only be prevented from voting the shares credited to your account in accordance with your instructions if the independent fiduciary of the CH2M 401(k) Plan, State Street Global Advisors (“SSGA”), deems that following the instructions would be a violation of the trustee’s fiduciary duties. To allow sufficient time for voting by the trustee of the CH2M 401(k) Plan, your voting instructions must be received by January 11, 2018 at 11:59p.m. eastern time. If you do not send instructions regarding the voting of shares in your CH2M 401(k) Plan account, or if your instructions are not received in a timely manner, SSGA will direct the trustee, in SSGA’s discretion, how to vote your shares. Please follow the instructions on executive compensation.

your voting instruction card, which may be different from those provided to other stockholders. For the avoidance of doubt, if you are a participant in the CH2M 401(k) Plan, you may not vote directly at the Annual Meeting. You may receive multiple sets of proxy materials if you hold your shares of Company common stock in multiple ways, such as directly as a holder of record or indirectly through a broker, bank or other nominee or through the CH2M 401(k) Plan. You are encouraged to vote all proxy cards and voting instruction cards you receive as soon as possible.

Who pays for the proxy solicitation and how will the Company solicit votes?

The Company bears the expense of printing and mailing proxy materials and soliciting proxies. In addition to this solicitation of proxies by mail, the Company’s directors, officers, and other employees may solicit proxies by personal interview, telephone, facsimile, or email.electronic communication. These individuals will not be paid any additional compensation above their regular salaries and wages for any such solicitation. The Company will request brokers and other nominees who hold shares of common stock in their names to furnish proxy materials to the beneficial owners of such shares. The Company will reimburse such brokers and other nominees for their reasonable expenses incurred in forwarding solicitation materials to such beneficial owners. In addition, we have retained MacKenzie Partners, Inc. to assist in the solicitation of proxies for a total fee of up to $20,000 plus reimbursement of expenses.

MacKenzie Partners, Inc. may solicit proxies in person, by telephone or electronic communication.

Can I change or revoke my vote?

Yes. Even if you sign and return the proxy card or voting instruction card in the form provided to you, vote by telephone, or vote electronically on the Internet, you retain the power to revoke your proxy or change your vote at any time before it is exercised at the Annual Meeting. You can revoke your proxy or change your vote at any time before that deadline by giving written notice to the Secretary of the Company, specifying such revocation. You may also change your vote by timely delivering a valid, later-dated proxy or voting instruction card or by submitting a later-dated vote by telephone or electronically on the Internet or by voting in person at the Annual Meeting. However, please note that if you would like to vote at the Annual Meeting and you are not the shareholder of record, you must request, complete, and deliver a proxy from your broker, bank or other nominee.

Whom can I contact if I have questions or need assistance in voting my shares?

Please contact MacKenzie Partners, Inc., the firm assisting us in the solicitation of proxies, at:

MacKenzie Partners, Inc.

105 Madison Avenue

New York, New York 10016

proxy@mackenziepartners.com

Call Collect: (212) 929-5500Toll-Free: (800)322-2885

or

Toll-Free: (800) 322-2885

Collect: (212)TABLE OF CONTENTS929-5500

 

Page No.

Discussion of the Various Proposals

6

Proposal No. 1 — Election of Directors

6

Proposal No. 2 —  Approval of Amendment to and Restatement of the 1989 Employee Stock Purchase Plan

7

Proposal No. 3 —  Approval of Amendment to and Restatement of the Global Employee Stock Purchase Plan

11

Proposal No. 4 — Ratification of the Appointment of Ernst & Young LLP

15

Proposal No. 5 — Advisory Vote to Approve Executive Compensation

16

Proposal No. 6 —  Advisory Vote on the Frequency of Advisory Votes on Executive Compensation

18

Corporate Governance

19

The Board of Directors and Its Committees

22

Report of the Audit Committee

32

Audit and Non-Audit Fees

33

Compensation Committee Report

34

Compensation Discussion and Analysis

34

Executive Compensation

47

Compensation under Various Termination Scenarios

54

Security Ownership

59

Section 16(a) Beneficial Ownership Reporting Compliance

60

Executive Officers

61

Shareholders’ Proposals

61

Certain Relationships and Related Transactions

61

Householding of Proxy Materials

62

Annual Report, Financial and Additional Information

62

Other Business

63

2019 Proxy StatementLOGO    3


DISCUSSION OF THE VARIOUS PROPOSALS

 

PROPOSAL NO. 1 — ELECTION OF DIRECTORS

 

What are you voting on?

At the Annual Meeting, shareholders will be asked to elect nineeleven directors to serve on the Board of Directors. The Board of Directors has nominated Steven J. Demetriou, Linda Fayne Levinson, Joseph R. Bronson, Juan José Suárez Coppel, Robert C. Davidson, Jr., Steven J. Demetriou,General Ralph E. Eberhart, Dawne S. Hickton, Linda Fayne Levinson,Robert A. McNamara, Peter J. Robertson, and Christopher M.T. Thompson and Barry L. Williams for election as directors forone-year terms expiring at the 20182020 annual meeting.meeting of shareholders. When elected, directors serve until their successors have been duly elected and qualified or until any such director’s earlier resignation or removal.

Mr. Noel G. Watson and Mr. John F. Coyne, both of whom are currently directors whose terms are expiring on the date of the Annual Meeting, are not standing for re-election at the Annual Meeting. It is expected that, following the Annual Meeting, the size of the Board of Directors will be reduced from eleven to nine directors.

Proxies cannot be voted for a greater number of persons than the number of nominees named. If you sign and return the proxy card or voting instruction card provided to you or vote electronically, your shares will be voted for the election of the nominees recommended by the Board of Directors unless you choose to abstain or vote against any of the nominees. If any nominee for any reason is unable to serve or will not serve, proxies may be voted for such substitute nominee as the proxy holder may determine. The Company is not aware of any nominee who will be unable to or will not serve as a director.

Please see “The Board of Directors and Its Committees” below for information aboutWhat is the nominees for election as director, their business experience, and other pertinent information.

Vote Required?

Each director is elected by a majority of the votes cast with respect to such director in uncontested elections (the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that nominee). The Company did not receive any shareholder nominations for any director and thus the election of directors at the Annual Meeting will be an uncontested election.

Abstentions and brokernon-votes are not counted for purposes of the election of directors and, therefore, will have no effect on the outcome of the election.

The Board of Directors unanimously recommends that you vote FOR the election of all nominees.

PROPOSAL NO. 2 — APPROVAL OF AMENDMENT TO AND RESTATEMENT OF THE 1989 EMPLOYEE STOCK PURCHASE PLAN

At the Annual Meeting, shareholders will be presented with a proposal to approve an amendment to and restatement of the Jacobs Engineering Group Inc. 1989 Employee Stock Purchase Plan, as amended and restated to date (the “ESPP”), to effect the following changes:

To increase the number of shares of common stock authorized for issuance under the ESPP by 4,350,000 shares;

To extend the term of the ESPP to January 19, 2027;

To add a component facilitating the potential participation of employees outside of the United States; and

To make certain other ministerial changes.

On November 17, 2016, the Board of Directors unanimously approved the amendment to and restatement of the ESPP, subject to the approval by the Company’s shareholders at the Annual Meeting. In order for the amendment to and restatement of the ESPP to take effect, it must be approved by the Company’s shareholders.

As of the end of fiscal 2016, 26,627,108 shares of common stock were authorized for issuance, and approximately 600,000 shares of common stock remained available for issuance, under the ESPP. The proposed increase in the number of shares authorized for issuance under the ESPP represents less than four percent of the Company’s outstanding common stock as of the Record Date.

The complete text of the ESPP reflecting all amendments approved by the Board of Directors is attached hereto as Annex A to this Proxy Statement. The following discussion is qualified in all respects by reference to Annex A.

Purpose of the ESPP

The Board of Directors believes that the opportunity for all eligible, full-time employees to acquire shares of common stock of the Company through participation in the ESPP encourages stock ownership and provides an important incentive to employees of the Company. The ESPP also assists the Company in attracting new employees. The ESPP is intended to qualify as an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder (the “Code”). See discussion of “U.S. Federal Income Tax Consequences” below. As part of the amendment and restatement, we have proposed adding a non-Section 423 component to the ESPP to facilitate potential participation by certain employee groups based outside the United States.

Administration

The ESPP is administered by the Human Resource and Compensation Committee of the Board of Directors (the “Compensation Committee”). The Compensation Committee is authorized to construe and interpret the ESPP, to prescribe rules and regulations for its administration, and to take any other necessary action in relation to the ESPP.

Eligibility

All employees of the Company and certain subsidiaries and affiliates designated from time to time by the Compensation Committee are eligible to participate in the ESPP unless they are excluded from participation by the provisions summarized below.

The following employees are not eligible to participate in the ESPP: (i) employees who normally work fewer than 20 hours each week or five or fewer months during any fiscal year; (ii) employees who have

completed less than one year of service with the Company or a participating subsidiary or who are not employed by the Company at the beginning of the Offering Period; (iii) certain employees who are members of a collective bargaining unit that has not agreed to participate in the ESPP; and (iv) employees who would own five percent or more of the common stock immediately after a purchase right is granted to any such employee.

Unless otherwise determined by the Board of Directors, employees of corporations that are acquired by the Company and become 50% or more owned subsidiaries are eligible to participate in the ESPP, subject to the aforementioned conditions. In the discretion of the Compensation Committee, such employees may receive credit for time worked for the acquired corporation for the purpose of determining eligibility.

The Company estimates that, at November 23, 2016, there were approximately 22,348 employees eligible to participate in the ESPP.

Purchase Rights

The ESPP permits eligible employees of the Company to purchase shares of common stock from the Company by electing to exercise purchase rights on shares of common stock at the end of each month. Employees may exercise a purchase right in amounts based upon a percentage of their salary or wages (up to 15% of base compensation). An employee may elect to participate or not to participate on each January 1 and July 1 commencement date of a six-month offering period (each, an “offering period”). The Company will deduct contributions from the employee’s salary or wages during the offering period, and the employee’s purchases of the shares are effected at each month-end within each six-month offering period without any further action on the part of the employee.

Purchase Price

The price at which shares may be purchased is 95% of the fair market value of the common stock on the date of purchase (the last day of each month). The Compensation Committee may adjust the price for future Offering Periods but such price needs to comply with the pricing requirements set forth in Section 423 of the Code. The fair market value for this purpose is the closing price of the common stock as reported in the New York Stock Exchange Composite Transactions report for the relevant date. On November 23, 2016, the closing price for the Company’s common stock was $61.69 per share.

Maximum Amount of Stock

The maximum fair market value of common stock that an employee may purchase under the ESPP (or any other employee stock purchase plan intended to meet the requirements of Section 423 of the Code) in any calendar year is $25,000 (based on the fair market value of the common stock on the first day of the six-month offering period). The maximum number of shares that a participant may purchase during any six-month offering period is 2,400 shares.

Cessation of Employment

If an employee ceases to be an employee for any reason during any offering period then that employee’s purchase rights will immediately terminate, and the Company will refund to the employee, or the employee’s designated beneficiary in the case of the employee’s death, the full amount of all withholdings without interest. An employee may not transfer a purchase right other than by will or the laws of descent and distribution, and during an employee’s lifetime, a purchase right is exercisable only by the employee.

Amendment and Termination

If this proposal is approved by the shareholders at the Annual Meeting, the Board of Directors may at any time amend or terminate the ESPP, except that no such amendment may be made without the approval of the

shareholders where such approval is required under Section 423 of the Code or other applicable laws or regulations, including the rules and regulations of any applicable securities exchange. No amendment or termination may affect any outstanding purchase right without the consent of the participant unless the Compensation Committee finds that it is in the best interests of the affected participants.

If this proposal is approved by the shareholders at the Annual Meeting, the ESPP will terminate on January 19, 2027, unless the Board of Directors terminates the ESPP at an earlier date or the shares reserved for the ESPP are exhausted, and the shareholders do not vote to reserve additional shares for it.

Adjustments of Purchase Rights

In the event of a stock split, stock dividend, merger, recapitalization, consolidation, reorganization or other similar event, the Board of Directors is required to make appropriate and proportionate adjustments, including adjustments in the maximum number of shares subject to the ESPP and the price per share subject to outstanding purchase rights, or, in the event of a merger or reorganization, the substitution of shares in any successor corporation for common stock of the Company.

Change of Control of the Company

If the Company were to be acquired by merger or sale of all or substantially all of its assets or outstanding voting stock (a “change of control”), then all outstanding purchase rights under the ESPP would be automatically exercised immediately prior to the effective date of the change of control. All of the contributions of participants who had exercised purchase rights under the ESPP would be used to purchase shares of common stock at a price equal to 95% of the lower of (i) the fair market value of the shares on the first day of the offering period during which the change of control occurs or (ii) the fair market value of the shares immediately prior to the effective date of the change of control.

ESPP Benefits

Participation in the ESPP is voluntary. Each eligible employee elects whether to participate in the ESPP and the extent to which he or she will participate. It is, therefore, not possible to determine the benefit or amounts that will be received in the future by individual employees or groups of employees under the ESPP.

U.S. Federal Income Tax Consequences

The ESPP is intended to be an “employee stock purchase plan” as defined in Section 423 of the Code, which provides that an employee does not have to pay any federal income tax either when he or she elects to exercise a purchase right under such a stock purchase plan, or when the six-month offering period ends and the employee receives shares of common stock of the Company. The employee is, however, required to pay federal income tax on any gain realized on the sale of the shares, as described below.

The following discussion summarizes the material U.S. federal income tax consequences to the Company and the participating employees in connection with the ESPP under existing applicable provisions of the Code and the accompanying regulations. The discussion is general in nature and does not address issues relating to the income tax circumstances of any individual employee. The discussion is based on federal income tax laws in effect on the date of this Proxy Statement and is, therefore, subject to possible future changes in the law. The discussion does not address the consequences of state, local or foreign tax laws.

If an employee has owned shares purchased through the ESPP for more than one year and disposes of them at least two years after the commencement date of the six-month offering period of the purchase rights pursuant to which they were purchased, then the employee will be taxed as follows:

If the sale price is greater than the price paid under the ESPP, then the employee will recognize ordinary income in an amount equal to the lesser of (i) the excess of the market price of the shares on the date the offering

commenced over the price paid or (ii) the excess of the sale price over the price paid. Any further gain is treated as a long-term capital gain. If the market price of the shares on the date they are sold is less than the price paid for the shares under the ESPP, then the employee will incur a long-term capital loss in the amount equal to the price paid over the sale price.

If an employee sells the shares before he has owned them for more than one year or before the expiration of the two-year period commencing on the date the offering period commenced, then the employee will recognize ordinary income on the amount of the difference between the actual purchase price and the market price of the shares on the date of purchase, and the Company will receive a deduction for federal income tax purposes for the same amount. The employee will recognize a long-term capital gain or loss on the difference between the sale price and the fair market value on the date of purchase.

If an employee still owns shares purchased under the ESPP at the time of death, the employee’s estate will recognize ordinary income in the year of death equal to the lower of the amount by which (i) the fair market value of the shares on the date of death exceeds the purchase price, or (ii) the fair market value of the shares on the commencement date of the six-month Offering Period during which the shares were acquired exceeds the purchase price.

Vote Required; Recommendation of the Board of Directors

The affirmative vote of a majority of the shares of common stock present, in person or by proxy, at the Annual Meeting and entitled to vote is necessary to approve the amendment to and restatement of the ESPP. Abstentions have the same effect as a vote against the proposal. Broker non-votes will have no effect on the outcome of the proposal.

The Board of Directors unanimously recommends that you voteFOR the approval of the amendment to and restatement of the 1989 Employee Stock Purchase Plan.

PROPOSAL NO. 3 — APPROVAL OF AMENDMENT TO AND RESTATEMENT OF THE GLOBAL EMPLOYEE STOCK PURCHASE PLAN

At the Annual Meeting, shareholders will be presented with a proposal to approve an amendment to and restatement of the Company’s Global Employee Stock Purchase Plan, as amended and restated to date (the “Global ESPP”), to effect the following changes:

To increase the number of shares of common stock authorized for issuance under the Global ESPP by 150,000 shares;

To extend the term of the Global ESPP to January 19, 2020; and

To make certain other ministerial changes.

On November 17, 2016, the Board of Directors unanimously approved the amendment to and restatement of the Global ESPP, subject to the approval by the Company’s shareholders at the Annual Meeting. In order for the amendment to and restatement of the Global ESPP to take effect, it must be approved by the Company’s shareholders. As of the end of fiscal 2016, 1,200,000 shares of common stock were authorized for issuance, and approximately 65,000 shares of common stock remained available for issuance, under the Global ESPP.

The complete text of the Global ESPP reflecting all amendments approved by the Board of Directors is attached hereto as Annex B to this Proxy Statement. The following discussion is qualified in all respects by reference to Annex B.

Purpose of the Global ESPP

The purpose of the Global ESPP is to advance the interests of the Company by encouraging stock ownership by employees of the Company and certain designated foreign subsidiaries. The Board of Directors believes that the opportunity for employees of the Company to acquire an equity interest in the Company through participation in broad-based employee stock purchase plans such as the Global ESPP is beneficial to both the Company and its employees. Such plans provide an important incentive to the employees of the Company as well as assist the Company in attracting new employees.

Employees of the Company within the United States are eligible, subject to certain requirements, to participate in the ESPP. For more information regarding the ESPP, please see “Proposal No. 2 — Approval of Amendment to and Restatement of The 1989 Employee Stock Purchase Plan” above. The Global ESPP, on the other hand, provides employees of certain designated subsidiaries of the Company organized in countries outside the United States with a similar approach to acquire an equity interest in the Company as is currently enjoyed by the Company’s U.S. employees. The Global ESPP is not intended to be an “employee stock purchase plan” as defined in Section 423 of the Code. Following shareholder approval of the amendment of the ESPP (as provided in Proposal No. 2 above), the Company may transition some or all of the Global ESPP participants into the non-Section 423 component of the ESPP during the next few years.

Administration

The Global ESPP is administered by the Compensation Committee. The Compensation Committee is authorized to construe and interpret the Global ESPP, to prescribe rules and regulations for its administration, and to take any other necessary action in relation to the Global ESPP.

Eligibility

In general, and subject to local law, all employees of those subsidiaries of the Company designated by the Board of Directors to participate in the Global ESPP (a “Designated Subsidiary”) are eligible to participate in the

Global ESPP provided they have completed one (1) year of service as of the relevant enrollment date. However, the Compensation Committee in its sole discretion may determine that the following employees shall not be eligible to participate:

 

(i)
Unless otherwise required by local law, employees whose customary employment is less than 20 hours per week or who are employed for less than five months in any calendar year;

The Board of Directors unanimously recommends that you vote FOR the election of each nominee.

(ii)Unless otherwise required by local law, employees who are not actively employed by a Designated Subsidiary at the beginning of a six-month “election period” (described below), including employees who are on disability or a leave of absence;

(iii)Any employee who would own more than five (5) percent of the common stock of the Company immediately after the stock purchase opportunity is granted to them under the Global ESPP (for purposes of this condition, shares of common stock that the employee may purchase under any and all outstanding stock option agreements shall be treated as stock owned by the employee even though the stock option may not be exercisable at the time such opportunity to participate in the Global ESPP is granted);

(iv)Employees who are subject to Section 16(a) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

(v)Employees who are eligible to participate in the ESPP.

The Company estimates that, at November 23, 2016, there were approximately 12,691 employees eligible to receive purchase rights under the Global ESPP.

Exercise of Purchase Right

Participation in the Global ESPP is completely voluntary. The Global ESPP permits participants to purchase shares of common stock from the Company by electing to exercise purchase rights to purchase common stock. These purchase rights are granted to eligible employees at the beginning of each election period, the duration of which is designated by the Compensation Committee. In order to exercise a purchase right and purchase shares of the common stock of the Company, participants must elect to contribute amounts ranging from 2% to 15% of their “compensation” (as defined in the Global ESPP). Such contributions generally occur through payroll deductions from the participant’s salary or wages (although alternative methods of contribution may be permitted by the Compensation Committee). An eligible employee may elect to participate by enrolling in the Global ESPP in accordance with procedures established by the Compensation Committee during an enrollment period. Once an eligible employee is enrolled in the Global ESPP, such eligible employee will continue to participate in the Global ESPP for each successive election period until such eligible employee terminates his or her participation. Purchases of common stock by participants are affected without any further action on the part of the participant.

Purchase Price

The price at which shares may be purchased is generally equal to 95% of the closing value of a share of common stock of the Company on the last trading day in a purchase period. The closing value of a share of common stock of the Company for this purpose is equal to the closing sale price for such a share as quoted on the New York Stock Exchange or such other established stock exchange or national market system on which the share is listed or traded for the day for which the closing value is to be determined. On November 23, 2016, the closing price for the Company’s common stock was $61.69 per share.

Maximum Amount of Stock

The maximum fair market value of common stock that a participant may purchase under the Global ESPP, in any calendar year is $25,000 (based on the fair market value of the common stock when the purchase right is granted). Local tax laws and regulations may also further limit the maximum number or value of shares that may be purchased.

Cessation of Employment

If a participant ceases to be employed by the Company or a designated subsidiary for any reason or ceases to be an eligible employee, then the participant’s rights under the Global ESPP shall, subject to local law, immediately terminate, and the Company will refund to the employee, or the employee’s personal representative, the full amount of all contributions without interest or with interest where required by law. A participant may not transfer a purchase right other than by will or the laws of descent and distribution, and during a Participant’s lifetime, a purchase right is exercisable only by the participant.

Amendment, Modification and Termination

If this proposal is approved by the shareholders at the Annual Meeting, the Board of Directors may at any time amend, modify or terminate the Global ESPP; provided, however, that no participant’s existing rights may be adversely affected by any such amendment, modification or termination, except to comply with law, stock exchange rules or accounting rules.

If this proposal is approved by the shareholders at the Annual Meeting, the Global ESPP will terminate on January 19, 2020, unless the Board of Directors terminates the Global ESPP at an earlier date or the shares reserved for the Global ESPP are exhausted, and the shareholders do not vote to reserve additional shares for it.

Adjustments of Shares; Change of Control

In the event that the Company shall subdivide or reclassify the shares of common stock of the Company with respect to which a purchase right has been or may be granted under the Global ESPP, or shall declare thereon any stock split or dividend, or shall alter the capital structure of the shares or the Company in any similar manner, then the number and class of shares held in the Global ESPP and which may thereafter be subject to the share purchase right granted under the Global ESPP shall be adjusted accordingly, and in the case of each right outstanding at the time of any such action, the number and class of shares which may thereafter be purchased pursuant to such right and the purchase price shall be adjusted accordingly, as necessary to preserve the rights of the holder(s) of such purchase rights. If the Company is acquired by merger, or if substantially all of its assets or outstanding voting stock is acquired, then immediately prior to the effective date of the corporate transaction, each outstanding purchase right will be automatically exercised by applying all amounts contributed by each participant during the election period to the purchase of whole shares at the purchase price for such election period by treating the day immediately prior to the effective date of any such corporate transaction as the last trading day of the election period, unless the Board of Directors determines in its sole discretion to establish an earlier date as the last trading day of the election period, or to provide that purchase rights will be assumed by a successor entity that is a party to the corporate transaction or terminate the Global ESPP.

Global ESPP Benefits

Each eligible employee elects whether to participate in the Global ESPP and the extent to which he or she will participate. It is, therefore, not possible to determine the benefit or amounts that will be received in the future by individual employees or groups of employees under the Global ESPP.

No Other Rights Conferred to Employees or Participants

Nothing in the Global ESPP shall be construed to be a contract of employment between the Company or any subsidiary of the Company and any employee or any group or category of employee (whether for a definite or

specific duration or otherwise), or to prevent the Company or the employer of any Participant from terminating any employee’s employment at any time, in accordance with applicable local law. Nothing in the Global ESPP shall be construed as conferring to any employee any right to participate in any other benefit plan sponsored by the Company or any subsidiary of the Company, or to any compensation in the event the Global ESPP ends or the Company terminates the Global ESPP.

Income Tax Consequences

The income tax implications of participation in the Global ESPP differ depending on the particular laws applicable in the country in which a Designated Subsidiary is located and the country in which the participant is located. Each participant in the Global ESPP should consult a tax advisor regarding the tax consequences of participating in the Global ESPP. The Global ESPP is not intended to be an “employee stock purchase plan” as defined in Section 423 of the Code.

Vote Required; Recommendation of the Board of Directors

The affirmative vote of a majority of the shares of common stock present, in person or by proxy, at the Annual Meeting is necessary to approve the amendment to and restatement of the Global ESPP. Abstentions have the same effect as a vote against the proposal. Broker non-votes will have no effect on the outcome of the proposal

The Board of Directors unanimously recommends that you vote FOR the approval of the amendment to and restatement of the Global Employee Stock Purchase Plan.

PROPOSAL NO. 4 — RATIFICATIONMEMBERS OF THE APPOINTMENTBOARD OF DIRECTORS

ERNST & YOUNG LLP

The Audit Committee has appointed Ernst & Young LLP (“Ernst & Young”) to audit the consolidated financial statements of the Company as of September 29, 2017, and for the fiscal year then ending. At the Annual Meeting, shareholders will be asked to ratify the appointment of Ernst & Young.

The Company has been advised by Ernst & Young that the firm has no relationship with the Company or its subsidiaries other than that arising from the firm’s engagement as auditors and tax advisors.

The Company has also been advised that representatives of Ernst & Young will be present at the Annual Meeting where they will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

The Company is not required to submit the selection of the independent registered public accounting firm to the shareholders for approval, but is doing so as a matter of good corporate governance. If the appointment of Ernst & Young is not ratified by a majority of the shares of common stock present, in person or by proxy, at the Annual Meeting, then the Audit Committee will consider the appointment of other independent auditors whose selection for any period subsequent to the Annual Meeting will be subject to ratification by the shareholders at the 2018 annual meeting.

The affirmative vote of a majority of the shares of common stock present, in person or by proxy, at the Annual Meeting and entitled to vote is necessary to ratify the appointment of Ernst & Young as the Company’s independent registered public accounting firm for the fiscal year ending September 29, 2017. Abstentions have the same effect as a vote against the proposal.

The Board of Directors unanimously recommends that you voteFOR the ratification of the appointment of Ernst & Young as the Company’s independent registered public accounting firm for the fiscal year ending September 29, 2017.

PROPOSAL NO. 5 — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

The Board of Directors of the Company is committed to excellence in governance. As part of that commitment, and as required by Section 14A(a)(1) of the Exchange Act, the Board of Directors is providing the Company’s shareholders with an opportunity to provide an advisory vote related to executive compensation.

The Compensation Committee establishes, recommends and governs all of the compensation and benefits policies and actions for the Company’s named executive officers (or NEOs) as identified below under “Compensation Discussion and Analysis.” Additional information regarding the Compensation Committee and its role is described below under the “The Board of Directors and its Committees” and “Compensation Discussion and Analysis” sections of this Proxy Statement.

The Company’s executive compensation program is intended to provide superior customer value through a long-term, relationship-based approach and solid returns to our shareholders through growth. The Compensation Committee has a compensation philosophy that drives this vision by attracting and retaining highly qualified employees and motivating them to deliver value to our customers and shareholders. Accordingly, our executive compensation program is intended to:

Reward executives for superior annual Company performance through a short-term cash incentive program that places a substantial component of pay at risk;

Retain senior management through the use of long-term equity-based and other incentives; and

Encourage executives to have an equity stake in the Company.

As one of the world’s largest and most diverse providers of technical professional and construction services, we operate with a pay-for-performance philosophy in a challenging, highly competitive, and rapidly evolving global environment. During fiscal 2016, we continued to implement our initiatives intended to improve operational efficiency and reduce costs, which are expected to result in savings of approximately $260 million to $270 million per year. The Company also continued to deliver strong cash flow, which allowed us to repurchase $153 million of shares during fiscal 2016.

For fiscal 2016, we redesigned our short-term incentive plan to reinforce our commitment to profitable growth and effective cash management with specific measures and targets assigned to each participant based on their respective role in the organization. In line with our financial results for fiscal 2016 and consistent with our pay-for-performance philosophy, payouts to the NEOs under our Management Incentive Plan ranged from 47.5% of target to 102.5% of target depending on the participant’s role in the Company.

We are committed to executive compensation practices that drive performance and align the interests of our leadership team with the interests of our shareholders. In furtherance of the foregoing, we have adopted certain best practices, and avoid certain practices, with respect to the compensation of our NEOs, as set forth below:

A significant majority of our executives’ target compensation is performance based and tied to pre-established performance goals aligned with our short- and long-term objectives;

The Company has a clawback policy that applies when inaccurate financial statements have affected incentive award payments to executive officers;

Our Board has established robust stock ownership guidelines applicable to our executives;

The Compensation Committee reviews publicly available information to evaluate how our NEOs’ compensation compares to that of executives in comparable positions at other companies;

The Compensation Committee benefits from its use of an independent compensation consultant, which performs no services for the Company other than those that support the needs of the Compensation Committee;

With the help of its independent compensation consultant, the Compensation Committee annually analyzes the difficulty of meeting our performance goals and the alignment of realizable pay and performance to ensure that our incentive programs are working as intended;

The Company does not maintain any of the following for NEOs:

tax reimbursements or gross-ups (other than for tax equalization for expatriates, normal relocation expenses or spousal travel for approved business purposes),

pension plans or supplemental retirement plans, or

executive perquisite programs such as Company-provided autos or auto allowances (except for expatriates), or payment of club dues;

Executive officers are prohibited from short-selling our stock, and buying or selling puts and calls of our stock;

Executive officers are prohibited from engaging in hedging transactions that could eliminate or limit the risks and rewards of owning our stock; and

Executive officers are prohibited from using our stock as collateral for any margin loan.

Our relationships with our shareholders are an important part of the Company’s success. In addition to our regular investor relations engagements, we regularly meet with many of our institutional stockholders to discuss our corporate strategy, executive compensation programs, corporate governance and other topics of interest to our shareholders. These engagement efforts allow us to better understand our shareholders’ priorities and perspectives, and provide us with useful input concerning our corporate strategy and our compensation and corporate governance practices. At our 2016 annual meeting of shareholders, over 80% of the shares voted were in favor of the advisory resolution concerning executive compensation.

After carefully considering input from our meetings with shareholders and the voting results from recent shareholder meetings, the Compensation Committee decided on the executive compensation program described under “Compensation Discussion and Analysis” below. The Company will continue to engage in dialogue with shareholders and take into account the results of the Company’s say-on-pay votes when making compensation decisions with respect to our NEOs in the future.

For these and the other reasons discussed under “Compensation Discussion and Analysis” below, the Board of Directors unanimously recommends that shareholders vote in favor of the following resolution:

“Resolved, that the shareholders approve, on an advisory basis, the compensation paid to the NEOs, as disclosed in this Proxy Statement pursuant to the SEC’s executive compensation disclosure rules (which includes the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables and narrative disclosures).”

As an advisory vote, this proposal is not binding on the Company, the Board of Directors, or the Compensation Committee, and will not be construed as overruling a decision by the Company, the Board, or the Compensation Committee or creating or implying any additional fiduciary duty for the Company, the Board, or the Compensation Committee. However, the Board of Directors values the opinions that shareholders express in their votes and will consider the outcome of the vote when making future compensation decisions.

The approval of the advisory resolution on the Company’s executive compensation requires the affirmative vote of a majority of shares of common stock present, in person or by proxy, at the Annual Meeting and entitled to vote. Abstentions have the same effect as a vote against the advisory resolution. Broker non-votes will have no effect of the outcome of the advisory vote.

The Board of Directors unanimously recommends that you voteFOR

the advisory resolution approving the Company’s executive compensation.

PROPOSAL NO. 6 — ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES ON

EXECUTIVE COMPENSATION

We are providing shareholders with the opportunity to cast an advisory vote regarding the frequency of advisory votes on executive compensation, commonly known as “say-on-pay” votes. Shareholders may vote on whether the advisory vote on executive compensation should occur every one, two or three years.

We are required to hold an advisory vote regarding the frequency of “say-on-pay” votes every six years. The Company’s shareholders were provided with the opportunity to vote on the frequency of “say-on-pay” votes in 2011. The shareholders voted in favor of holding “say-on-pay” votes annually and the Board of Directors adopted this standard.

Although we recognize the potential benefits of having less frequent advisory votes on executive compensation (including allowing the Company additional time to conduct a more detailed review of its pay practices in response to the outcome of shareholder advisory votes), we recognize that the widely adopted standard, both among Jacobs’ peer companies as well as outside our industry, is to hold “say-on-pay” votes annually. We also acknowledge current shareholder expectations regarding having the opportunity to express their views on the Company’s compensation of its executive officers on an annual basis. In light of investor expectations and prevailing market practice, the Board of Directors recommends that the advisory vote on executive compensation occur every year.

The proxy card provides for four choices and shareholders are entitled to vote on whether the advisory vote on executive compensation should be held every year, every two years or every three years, or to abstain from voting.

The result of this advisory vote on the frequency of the vote on executive compensation is not binding on the Company, the Board of Directors or the Compensation Committee, and will not be construed as overruling a decision by the Company, the Board of Directors or the Compensation Committee or creating or implying any additional fiduciary duty for the Company, the Board of Directors or the Compensation Committee. However, the Board of Directors values the opinions that shareholders express in their votes and in dialogue that the Company has with its shareholders. The Board of Directors will consider the outcome of the vote and shareholder feedback when deciding how frequently to conduct the advisory vote on executive compensation. Notwithstanding the Board’s recommendation and the outcome of the shareholder vote, the Board may in the future decide to conduct “say-on-pay” votes on a more or less frequent basis and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to its executive compensation programs.

The Board of Directors unanimously recommends that you vote

to hold the advisory vote on executive compensationEVERY YEAR.

CORPORATE GOVERNANCE

Corporate Governance Guidelines

The Company monitors developments in the area of corporate governance and routinely reviews its processes and procedures in light of such developments. Accordingly, the Company reviews federal laws affecting corporate governance, such as the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as various rules promulgated by the Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange (the “NYSE”). The Company believes that it has procedures and practices in place which are designed to enhance and protect the interests of its shareholders.

The Board of Directors has approved Corporate Governance Guidelines for the Company. The Corporate Governance Guidelines address the following matters:

The mission of the Board of Directors;

The size of the Board of Directors;

Frequency of meetings of the Board of Directors;

Committees of the Board of Directors;

The requirement that the Board of Directors be comprised of a majority of independent directors;

The requirement that the Audit, Compensation, and Nominating and Corporate Governance Committees of the Board of Directors be comprised entirely of independent directors;

Guidelines for determining director independence;

Majority voting in uncontested elections of directors;

Limits on the number of other public company boards on which non-management directors (i.e., a director who is not employed by the Company) may serve;

Executive sessions of the Board of Directors wherein non-management directors meet as a group without the presence of management directors;

Conflicts of interests;

The roles and responsibilities of the Chairman and Chief Executive Officer and the Lead Independent Director;

The requirement that the performance of the Chairman and Chief Executive Officer be evaluated annually and reviewed by the non-management directors;

Significant change in professional occupation or employment of a director;

Review of the performance of individual directors; and

Other matters uniquely germane to the work and responsibilities of the Board of Directors.

Director Education

The Board recognizes the importance of director continuing education and is committed to provide such education in order to enhance both Board and committee performance. Accordingly, as noted in the Company’s Corporate Governance Guidelines, the Company regularly provides the Board with education programs, presentations and briefings on topics relevant to the Company, its business and risk profile. In addition, each year the Board schedules a third-party provided educational program to be provided to the Board on matters relevant to the Company or relating to duties and responsibilities of directors. Directors are also encouraged to attend at least one outside educational program every other year on any subjects pertaining to the Directors’ responsibilities such as “directors’ colleges”.

Codes of Ethics

In addition to the Corporate Governance Guidelines, the Board of Directors has adopted the following other codes, guidelines, and policies:

Code of Business Conduct and Ethics for Members of the Board of Directors;

Code of Ethics for the Chief Executive Officer and Senior Financial Officers; and

Code of Conduct.

These documents, along with the Corporate Governance Guidelines, serve as the foundation for the Company’s system of corporate governance. They provide guidance for maintaining ethical behavior, require that directors and employees comply with applicable laws and regulations, prohibit conflicts of interest, and provide mechanisms for reporting violations of the Company’s policies and procedures.

In the event the Company makes any amendment to, or grants any waiver from, a provision of the code of ethics that applies to the principal executive officer, principal financial officer, or principal accounting officer that requires disclosure under applicable SEC rules, the Company will disclose such amendment or waiver and the reasons therefore on its website atwww.jacobs.com.

Stock Ownership Guidelines

In an effort to more closely align the Company’s non-management directors’ financial interests with those of our shareholders, the Board of Directors has established stock ownership guidelines for non-management directors. Under these guidelines, the Company’s non-management directors are expected to own equity in the Company valued at a minimum of three times their annual cash retainer. Non-management directors are expected to meet or exceed these guidelines within five years of joining the Board of Directors.

Similarly, the Company has established stock ownership guidelines under which the Company’s senior management is expected to own Company common stock as follows:

 

Committee Memberships
Director NomineesIndependent


Position
    Director    

Since

 Multiple of
Salary
        Audit        
 Human
Resource and
Compensation
Nominating and
Corporate
Governance

Chairman and  Steven J. Demetriou(1)

Chair & CEO

  6x2015 

EVP/Presidents of Lines of Business  Linda Fayne Levinson(2)

Lead Independent Director

1996  3x 

Other Senior Management  Joseph R. Bronson

2003Chair  2x

  Juan José Suárez Coppel

2013

  Robert C. Davidson, Jr.

2001Chair

  General Ralph E. Eberhart

2012

  Dawne S. Hickton

2015

  Robert A. McNamara

2017

  Peter J. Robertson

2009Chair

  Christopher M.T. Thompson

2012

  Barry L. Williams

2017 

 

(1)

As Chair, Mr. Demetriou is invited to attend each Committee meeting, except to the extent that a Committee requests to meet without Mr. Demetriou present.

(2)

Ms. Fayne Levinson serves as Lead Independent Director and presides over meetings of the independent directors and is invited to attend each Committee meeting.

As of the Record Date, the NEOs either exceeded their respective guidelines or were within the five-year period from their hire or promotion date at the end of which they are expected to meet the guidelines.

Committee Charters

The Board of Directors has adopted formal charters for each ofSummarized in the following standing Committees:

The Audit Committee;

The Compensation Committee; and

The Nominating and Corporate Governance Committee.

These charters establishpages are the missions of the respective Committees as well as Committee membership guidelines. They also define the purpose, duties, and responsibilities of each Committee in relation to the Committee’s role in supporting the Board of Directors, and assisting the Board in discharging its duties in supervising and governing the Company.

Availability of Documents

The full text of the Corporate Governance Guidelines, the Code of Business Conduct and Ethics for Members of the Board of Directors, the Code of Ethics for the Chief Executive Officer and Senior Financial Officers, the Code of Conduct, the Committee Charters, the Board of Directors Guidelines for Determining the Independence of its Members, and the other corporate governance materials described in this Proxy Statement are accessible by following the link to “Corporate Governance” on the Company’s website atwww.jacobs.com.

The Company will furnish without charge a copy of any of the foregoing documents to any person making such a request in writing and stating that he or she is a beneficial owner of common stock of the Company. Requests should be addressed to: Jacobs Engineering Group Inc., 1999 Bryan Street, Suite 1200, Dallas Texas 75201, Attention: Corporate Secretary.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

The Board of Directors believes the Board, as a whole, should possess the requisite combination of skills, professionalspecific experience, and diversity of backgrounds to oversee the Company’s business. The Board of Directors also believes there are certain attributes each individual director should possess, as reflected in the Board of Directors’ membership criteria. Accordingly, the Board of Directors and the Nominating and Corporate Governance Committee consider the qualifications of directors and director candidates individually as well as in the broader context of the Board’s overall composition and the Company’s current and future needs.

The Nominating and Corporate Governance Committee is responsible for reviewing with the Board on an annual basis the appropriate skills and characteristics required of Board members in the context of the current make-up of the Board. This annual assessment enables the Board to update the skills and experience it seeks in the Board as a whole, and in individual directors, as the Company’s needs evolve. This assessment takes into consideration all factors deemed relevant by the Nominating and Corporate Governance Committee, including the matters described under “— Committees of the Board of Directors — Nominating and Corporate Governance Committee.” For incumbent directors, past performance on the Board of Directors and its Committees is also a factor taken into consideration.

The following table sets forth the names, ages and background information of the nominees for election as directors, as well as each individual’s specific experience, qualifications and skillsdirector nominee that led the Board of Directors to conclude that each such person should serve on the Board of Directors.

 

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Director Experience Matrix

LOGO

Competencies / Attributes Joseph Bronson Juan Jose Suarez Coppel Robert C. Davidson, Jr. Steven J. Demetriou General Ralph E. Eberhart Dawne S. Hickton Linda Fayne Levinson Robert A. McNamara Peter J. Robertson Christopher M.T. Thompson COMPLIANCE CONSIDERATIONS Independent Director Audit Committee Financial Expert (SEC Rules) Financially Literate (NYSE Rules) Security Clearance EXPERIENCE CEO Public Company CEO Private Company CFO Government / Military International Operations STRATEGIC COMPETENCIES Financial (Reporting, Auditing, Internal Controls) Strategy / Business Development / M&A Human Resources / Organizational Development Project Delivery Legal Risk Management / Compliance Public Company / Governance Technology

Our Directors have lived and worked around the world

The Board has a Good Balance of Industry and Sector Experience

LOGO

Infrastructure

Government

Aerospace

Military

Oil & Gas

Specialty Chemical

Mining & Metals

Financial

Banking

Manufacturing

Environmental

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Director Biographies

LOGO

Director Since 2015 Age 60 Chairman of the Board

Steven J. Demetriou, Chairman

Chair and Chief Executive Officer and Director. Mr. Demetriou, age 58, joined the Company in August 2015. Prior to joining the Company, he served as Chairman and Chief Executive Officer of Aleris Corporation, a global downstream aluminum producer based in Cleveland, Ohio. Mr. Demetriou was Chief Executive Officer of Aleris when it filed for Chapter 11 in 2009 and when it successfully emerged from Chapter 11 in June 2010. Mr. Demetriou was appointed President and Chief Executive Officer of Commonwealth Industries, Inc. (a predecessor by merger to Aleris) in June 2004, after serving as a member of that company’s board of directors from 2002. Before joining Commonwealth in 2004, Mr. Demetriou was Chief Executive Officer of Noveon, Inc. Prior to that, from 1999 to 2001, he was Executive Vice President of IMC Global Inc. and, from 1981 to 1999, he held various management positions with Cytec Industries Inc. and ExxonMobil Corporation. Mr. Demetriou currently serves on the board of Kraton Performance Polymers and is the chair of its Compensation Committee and a member of its Nominating and Corporate Governance Committee. Mr. Demetriou previously served on the board of Foster-Wheeler AG starting in 2008 and was Non-Executive Chairman of Foster-Wheeler from 2011 to 2014. Mr. Demetriou also previously served on the board of OM Group where he served as chair of the Compensation Committee and a member of the Nominating / Corporate Governance Committee. Mr. Demetriou holds a Bachelor of Science degree in chemical engineering from Tufts University.

 

Mr. Demetriou who has been a Director of the Company since 2015, brings international business perspectives and more than 3035 years of experience in leadership and senior management roles to the Board, including over 15 years in the role of chief executive officer. In addition, heHe brings experience in a variety of industries, including metals, specialty chemicals, oil & gas, manufacturing and fertilizers, which he has gained over the course of his career, whichcareer. His breadth of experience is particularly valuable, given the variety of industries in which the Company’s clients operate.

 

Business Experience

Joseph R. Bronson, Director. Mr. Bronson, age 68, is the Principal  Chairman and CEO of The Bronson Group, LLC, a consulting firm primarily engaged in the area of financial and operational consulting. In March 2014, he started serving as Strategic Advisor to Cowen and Company, a New York-based investment bank. In May 2011, he was appointed an Advisory Director to GCA/Savvian, LLC, a financial advisory firm based in San Francisco, California. From January 2009 to March 2010, he was the Chief Executive Officer of SVTC (Silicon Valley Technology Corporation), a provider of semiconductor wafer fabrication services to customers requiring product development manufacturing services. From August 2007 to October 2008, he was the

Aleris Corporation (2004-2015)

President and  Chief OperatingExecutive Officer of Sanmina-SCI, a global electronics manufacturer. From 2004 to 2007, he was the co-ChiefAleris when it filed for Chapter 11 in 2009 and when it successfully emerged from Chapter 11 in June 2010 (2004-2015)

  Chief Executive Officer and Director of Form Factor, a global leader in advanced semiconductor wafer probe card technology for semiconductor product testing. Mr. Bronson was previously theNoveon, Inc. (2001-2004)

  Executive Vice President and Chief Financial Officer of Applied Materials,IMC Global Inc., the global leader in semiconductor capital equipment. Mr. Bronson had a number of general (1999-2001)

  Various management and executive positions with Applied Materials spanningCytec Industries Inc. and ExxonMobil Corporation (1981-1999)

Education

  BS in chemical engineering from Tufts University

Public Company Boards

  Director and member of the Compensation and Finance Committees of FirstEnergy Corp. (2017-present)

  Chair of Kraton Performance Polymers’ Compensation Committee and a careermember of 22 years. Mr. Bronson also currently serves onits Nominating and Corporate Governance Committee (2009-2017)

  Non-Executive Chairman of Foster- Wheeler (2011-2014)

  Chair of the board of directors of Maxim Integrated Products, Inc., a leading supplier of analog devices to the semiconductor industry, and PDF Solutions, Inc., a company involved in the semiconductor diagnostic business. He is a Certified Public AccountantCompensation Committee and a member of the American InstituteNominating / Corporate Governance Committee of CPAs, serves as TrusteeOM Group (2005-2015)

Private Boards & Community Involvement

  Co-Chairman of Fairfield University and isUS-Saudi Arabian Business Council

  Board Member of US Chamber of Commerce

  Board Member of Cuyahoga Community College Foundation

  Member of Dallas Citizen’s Council

  Member of Dallas Regional Chamber

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LOGO

Director Since 2015 Age 60 Chairman of the LeaveyBoard

Linda Fayne Levinson

Lead Independent Director

Ms. Fayne Levinson’s diverse experience as a consultant, a line executive and a venture investor across a range of industries bringsin-depth knowledge of strategy, innovation, technology and operations to the Board of Directors. Her service on the boards of many global companies, including her service as a Chair of a board, a lead director and as Chair of Compensation and Nominating and Governance committees, provides the Board insight regarding compensation strategies and other corporate governance matters, both of which are key areas of focus in today’s corporate environment.

Business Experience

  Partner of GRP Partners, a venture capital firm (1997-2004)

  President of Fayne Levinson Associates (1994-1997)

  Executive at Creative Artists Agency (1993)

  Partner at Wings Partners (1989-1992)

  Senior Vice President of American Express Travel Related Services Co., Inc. (1984-1987)

  McKinsey & Company (1972-1981; Elected Partner 1978)

Education

  BA from Barnard College

  MA from Harvard University

  MBA from New York University, Leonard N. Stern School of Business

Public Company Boards

  NCR Corporation (Chair of the Compensation Committee) (1997-present)

  Hertz (2012-2017); Chair of the Board (2014-2016); Chair of Nominating and Governance Committee (2014); Chair of the Compensation Committee (2015-2016)

  Member of the Board of Ingram Micro, Inc. (2004-2016); Chair of the Compensation Committee

  Western Union (2006-2016); Chair of Compensation Committee (2006-2012); member of the Audit Committee

  DemandTec (2005-2008)

  Lastminute.com, plc (1999-2002)

  Overture Services Inc. (1998-2003)

  CyberSource Inc. (1997-2001)

  Genentech (1991-1998)

Private Boards & Community Involvement

  Director, Kount, Inc. (Fintech)

  Director, ClearPath Robotics, Canada

  Director, Knotel, Inc.

  Director, BitPesa

  Member, McKinsey New Venture Advisory Council

  Member of the U.S. Advisory Board Santa Clara University, California. He is also a director of two private companies.CVC Capital Partners

  Senior Advisor, RRE Ventures, NY

  Former Trustee at Barnard College and chairs the Investment Committee

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LOGO

Independent Director Since 2003 Age 70 Board Committee: Audit (Chair)

Joseph R. Bronson

Principal and Chief Executive Officer of The Bronson Group, LLC., Strategic Advisor of Cowen and Company

 

Mr. Bronson who has been a Director of the Company since 2003, brings accounting expertise and familiarity with financial statements, financial disclosures, auditing and internal controls to the Board from his prior service as Chief Financial Officer.Officer of Applied Materials, Inc. His senior management level experience at large publicly traded companies also brings to the Board additional perspective regarding theday-to-day operations of large organizations as well as corporate best practices.

 

Business Experience

  Principal and Chief Executive Officer of The Bronson Group, LLC

  Strategic Advisor of Cowen and Company (2014-present)

  Advisory Director to GCA/Savvian, LLC (2011-2014)

  Chief Executive Officer of Silicon Valley Technology Corporation (2009-2010)

  President and Chief Operating Officer ofSanmina-SCI (2007-2008)

  Co-Chief Executive Officer and Director of Form Factor (2004-2007)

  Executive Vice President and Chief Financial Officer of Applied Materials, Inc. (1998-2005)

  Various executive management and general management positions at Applied Materials, Inc. (1984-1998)

Education

  BS from Fairfield University

  MBA from University of Connecticut

  Certified Public Accountant and a member of the American Institute of CPAs

  Registered Investment Advisor and holder of Series 63 and Series 7 credentials from the Financial Industry Regulatory Authority (FINRA) from 2011 to present

Public Company Boards

  Director of Maxim Integrated Products, Inc. (2007-present)

  Director of PDF Solutions, Inc. (2014- present)

Private Boards & Community Involvement

  Trustee of Fairfield University, Fairfield, Connecticut

  Regent of Santa Clara University, Santa Clara, California

  Regent of Loyola Marymount University, Los Angeles, California

  Chair of the Advisory Board at the Leavey School of Business at Santa Clara University, Santa Clara, California

  Trustee of Bellarmine College Preparatory School, San Jose, California and past Chair of the Board of Trustees

  Director of Siltectra, Dresden, Germany

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LOGO

Independent Director Since 2013 Age 59 Board Committee: Human Resource and Compensation Nominating and Corporate Governance

Juan José Suárez Coppel, Director. Mr. Suárez, age 57, was

Former General Director (Chief Executive Officer) of Petróleos Mexicanos (“PEMEX”), the national oil company of Mexico, from 2009 to 2012. Prior to his tenure as General Director, Mr. Suárez held other positions at PEMEX, including Chief Financial Officer from 2001 to 2006. He also served as Chief of Staff of Mexico’s Secretary of Finance and Public Credit in 2000 and 2001. In the private sector, Mr. Suárez was Co-Head of Equity Derivative Trading at Banamex from 1991 to 1995 and has held senior leadership positions at Grupo Televisa and Grupo Modelo; Mexico’s largest media company and largest brewer, respectively. Mr. Suárez also taught economics at several leading universities in Mexico, Europe and the United States. He currently serves as a consultant for Petroleos Ebano, a pre-operational oil and gas start up in Mexico. He is a graduate of the Instituto Tecnológico Autónomo in Mexico City, and earned his Ph.D. in economics from the University of Chicago.

 

Mr. Suárez who has been a Director of the Company since 2013,Coppel provides strongsolid expertise in the oil and gas industry, which is particularly valuable given the Company’s customers in this industry. He also brings extensive knowledge and experience in finance matters and his experience as an executive brings perspective on management and operational matters to the Board. His background in international operations also assists the Board in light of our growing international presence.

Business Experience

  General Director (Chief Executive Officer) of Petróleos Mexicanos (2009- 2012)

  Chief Financial Officer of Petróleos Mexicanos (2001-2006)

  Chief of Staff of Mexico’s Secretary of Finance and Public Credit (2000-2001)

  Co-Head of Equity Derivative Trading at Banamex (1991-1995)

  Senior leadership positions at Grupo Televisa and Grupo Modelo (1991-1995)

  Consultant for Petroleos Ebano

 

Other Professional Experience

  Served as a professor of economics at Brown University and the Universitat Autónoma de Barcelona

Education

  Graduate of the Instituto Tecnológico Autónomo in Mexico City

  Ph.D. in economics from the University of Chicago

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LOGO

Independent Director Since 2001 Age 73Board Committee:Nominating and CorporateGovernance (Chair)

Robert C. Davidson, Jr., Director. Mr. Davidson, age 71, is retired. Mr. Davidson served as the

Former Director, Chairman and Chief Executive Officer of Surface Protection Industries, Inc., a company that provided surface protection products and services worldwide from 1978 to October 2007. He serves as a member of the boards of Morehouse College (Chairman), Art Center College of Design (Chairman), Cedars-Sinai Medical Center (Vice Chair of Audit Committee), Broadway Federal Bank, f.s.b. (Chairman of Compensation Committee and Internal Asset Review Committee), and the University of Chicago Graduate School of Business Advisory Council. He received a Bachelor of Arts degree from Morehouse College and an MBA in Marketing and Finance from the University of Chicago.

 

Mr. Davidson who has been a Director of the Company since 2001, brings strong leadership, and knowledge and experience of strategic and financial matters to the Board from his experienceexpertise founding and building private companies serving national and international markets during his almost 30-year career at Surface Protection Industries, Inc., andincluding his prior service as a chief executive officer and chairman. He also brings to the Board important knowledge of public company governance through his service on multiple public company boards, including service on compensation committees.

Business Experience

  Chairman and Chief Executive Officer of Surface Protection Industries, Inc. (1977-2007)

  President of R Davidson and Associates (2007 to Present)

  Vice President of Urban National Corporation (1972-1974)

  Management Consultant at Cresap, McCormick & Paget (1969-1972)

Education

  BA from Morehouse College

  MBA in Marketing and Finance from the University of Chicago

  Honorary Doctorate of Laws from Morehouse College

Public Company Boards

  Broadway Financial Corporation (2003-present)

  Chair of Compensation Committee

  Chair of Internal Asset Review Committee

  Member of Governance Committee

  Member of Risk & Compliance Committee

Private Boards & Community Involvement

  Chairman of the Board of Trustees of the Art Center College of Design, Pasadena, California

  Board of Directors of Cedars-Sinai Medical Center, Los Angeles, California

  Board member of the Smithsonian American Art Museum, Washington, DC

  Board member of The Ray Charles Foundation, Los Angeles, California

  Chairman Emeritus of the Board of Trustees of Morehouse College

  Member of the Advisory Council at the University of Chicago Graduate School of Business

  Previously served on boards of numerous other organizations, including Children’s Hospital, Los Angeles; LA Chamber of Commerce; Weingart Center for the Homeless, L.A.; among others

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LOGO

Independent Director Since 2012 Age 71Board Committees:Human Resource and CompensationNominating and Corporate Governance

General Ralph E. Eberhart (USAF, Retired), Director. General Eberhart, age 69, currently serves as

Director, Chairman and President of the Armed Forces Benefit Association a 400,000 member organization. He is a former General Officer of the United States Air Force. A graduate of the United States Air Force Academy, General Eberhart held numerous high-level command and staff positions within the Air Force over his 36-year career. He served as Commander

of the North American Aerospace Defense Command (NORAD) on 9/11, and in the aftermath of 9/11, he was selected as the first Commander of the U.S. Northern Command. He also served as Commander of Air Combat Command and U.S. Space Command. He serves on the boards of Rockwell Collins, Triumph Group, Inc. and VSE Corporation.

 

General Ralph E. Eberhart who has been a Director of the Company since 2012, brings valuable leadership and management skills developed through his military service. His36-year military career provides the Board with valuable experience and knowledge of government and the military, which is particularly valuable given the Company’s government and military contracts.

Business & Military Experience

  Former General Officer of the United States Air Force (1997-2005)

  Numerous high-level command and staff positions within the Air Force (1968-2005)

  Former Commander of the North American Aerospace Defense Command (NORAD) (2002-2005)

  Former Commander of Air Combat Command and U.S. Space Command (1999-2002)

Education

  United States Air Force Academy

Public Company Boards

  Director of Rockwell Collins
(2007-2018)

  Director of Triumph Group, Inc.
(2010-present)

  Director of VSE Corporation
(2007-present)

Private Boards & Community Involvement

  Trustee, Air Force Academy Endowment

  Director, Segs4Vets

  Director, Terma North America Inc.

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LOGO

Independent Director Since 2015 Age 61Board Committees:AuditNominating and Corporate Governance

Dawne S. Hickton, Director. Ms. Hickton, age 59, was

Former Director, Vice Chair, President and Chief Executive Officer of RTI International Metals, Inc. (“RTI”) from 2007 until RTI’s acquisition by Alcoa in July 2015. Under her leadership, Ms. Hickton guided RTI’s transformation and expansion from a titanium mill products producer to a fully integrated specialty metals manufacturer of integrated titanium and aluminum fabricated structures and components for the aerospace, defense, energy and medical industries. Ms. Hickton is currently President of Cumberland Highstreet Partners, a strategic consulting business founded in October 2016. She also serves as a director of the Federal Reserve Bank of Cleveland. Additionally, she serves on the board of Triumph Group, and the Audit Committee, Nominating & Corporate Governance Committee and Compensation & Management Development Committee of that board. She also serves on the board of Norsk Titanium, AS. She is on the board of directors of the Smithsonian’s National Air and Space Museum, serves on the board of The Wings Club, and is a Director of Corporate Angel Network. In addition, she is a member of the University of Pittsburgh’s Board of Trustees, serving on the Student Affairs and Property and Facilities Committees. Prior to beginning her career at RTI in 1997, Ms. Hickton was employed at USX Corporation, where she worked with the parent organization and its subsidiaries: U.S. Steel, American Bridge Company and U.S. Steel Mining Company. She also previously served as a public company director of FNB Corporation from 2006 until 2013. Ms. Hickton is a graduate of the University of Rochester and earned a J.D. degree from the University of Pittsburgh School of Law.

 

Ms. Hickton who has been a Director of the Company since 2015, provides a wealth of proven business leadership experience with a CEO’s perspective, and advanced strengths in project management and engineering expertise. Her background as a senior officer in a publicly traded company for nearly two decades is particularly valuable to the Board, as it lends a contemporary understanding of how to engage with the Company’s stakeholders, in addition to driving a strong growth agenda.

Business Experience

Linda Fayne Levinson, Lead Independent Director. Ms. Fayne Levinson, age 74, is an experienced executive and corporate director. From 1997 until 2004, Ms. Fayne Levinson was a Partner of GRP Partners, a venture capital firm that invests in early stage technology companies. Prior to that, Ms. Fayne Levinson was an executive at Creative Artists Agency, Inc.; a Partner at Wings Partners, a Los Angeles based private equity firm;  President of Fayne Levinson Associates, an independent consulting firm; a Senior Vice PresidentCumberland Highstreet Partners (2016-present)

  Chairman of American Express Travel Related Services Co.,the Federal Reserve Bank of Cleveland (January 2018-present)

  Deputy Chair of the Federal Reserve Bank of Cleveland (2012 to January 2018)

  Chief Executive Officer of RTI International Metals, Inc.;
(2007- 2015)

Education

  Graduate of the University of Rochester

  JD from the University of Pittsburgh School of Law

Public Company Boards

  Board member, Chair of the Audit Committee and a Partner of McKinsey & Company, where she became the first woman partner in 1978. Ms. Fayne Levinson also serves as a member of the boards of Hertz, Ingram Micro, Inc. and NCR Corporation. At Hertz, Ms. Fayne Levinson is the Chair of the Board and previously served as Chair of its Nominating and& Corporate Governance Committee and at NCR is ChairExecutive Committee of the Compensation Committee. Ms. Fayne Levinson is also aTriumph Group (2015-present)

  Board member and member of the U.S. AdvisoryRisk Committee, Strategic Committee and Audit Committee of Haynes International Inc. (2017-present)

  Director of FNB Corporation
(2006-2013)

Private Boards & Community Involvement

  Board member of Smithsonian’s National Air and Space Museum

  Board member of The Wings Club

  Director of Corporate Angel Network

  Member of the University of Pittsburgh’s Board of CVC Capital PartnersTrustees, serving on the Student Affairs, Technology & Innovation, and a trustee at Barnard College, where she chairs the Investment Committee.Property & Facilities Committees

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Independent Director Since 2017 Age 64Board Committees:AuditNominating and Corporate Governance

Robert A. McNamara

 

Ms. Fayne LevinsonRetired Group Chief Risk Officer of Lendlease Corporation (ASX)

Mr. McNamara has over 35 years of experience managing global businesses in the development, design and delivery of projects in the government, institutional, infrastructure and industrial sectors in senior management positions. He has been responsible for ensuring Lendlease achieves world’s best practices in risk management and operational excellence. He also oversaw Lendlease’s Building, Engineering, and Services businesses in Australia. Prior to this, Mr. McNamara was Chief Executive Officer Americas of Lendlease.

Business Experience

  Group Chief Risk Officer, Lendlease Corporation (2014-2017)

  Chief Executive Officer, Americas of Leadlease (2010-2014)

  Chairman and Chief Executive Officer of Penhall/LVI International (PLI) (2006-2010)

  Senior Group President of Fluor Corporation (1996-2006)

  President and Chief Operating Officer of Marshall Contractors (1977-1996)

Education

  Bachelor’s degree in Economics from Brown University

  Completed the Consortia 1 Program at Thunderbird International Business School

  Certification as a Public Board Director from the UCLA Anderson School of Management

Public Company Boards

  Board member of UDR, Inc.
(2014-present)

Private Boards & Community Involvement

  Past Board member of the Company since 1996. Her executive, consulting and investment career brings in-depth knowledge of business operations, strategy and technology toUS China Business Council

  Past Chairman for the Board of Directors. Her service on the boards of a number of global companies, including her service as a Chair of a board, a lead director and as chair of compensation and nominating and governance committees, provides the Board insight regarding compensation strategies and other corporate governance matters, both of which are key areas of focus in today’s corporate environment.Construction Industry Institute’s Technology Implementation Task Force

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Independent Director Since 2009 Age 71Board Committees:Human Resource and Compensation (Chair)

Peter J. Robertson, Director. Mr. Robertson, age 68, is retired. Mr. Robertson was

Former Director and Vice Chairman of the Board forof Directors of Chevron Corporation one of the world’s largest energy companies, until April 1, 2009. He joined Chevron in 1973 and over his 36-year career he had a wide variety of responsibilities including directing Chevron’s worldwide exploration and production and global gas businesses, corporate strategic planning, policy, government and public affairs. He was also Chief Financial Officer of Chevron USA. He is a non-executive director of SASOL Limited and an advisory director of Campbell-Lutyens. He is co-chairman of the US Saudi Arabian Business Council and chairman of the World Affairs Council of Northern California. He is a past chairman of the US Energy Association. A native of Edinburgh, Scotland, he holds a Bachelor of Science degree in Mechanical Engineering from the University of Edinburgh and an MBA from the University of Pennsylvania, Wharton School, where he was a Thouron Scholar.

 

Mr. Robertson who has been a Director of the Company since 2009, brings vital knowledge and experience to the Board in the oil and gas industry from his over 36-year career at Chevron Corporation, which is particularly important given the number of Companythe Company’s customers in the energy and refining sector. He also brings valuable international experience in developed and developing countries, including interactions with governments at the highest levels, from his executive experience and the multiple chairmanship and director positions he has held and currently holds. Mr. Robertson also has extensive experience on the boards of not-for-profit entities with global reach and public company boards as well as important accounting know-how and experience with public company financial statements, disclosures and accounting rules from his service as Chief Financial Officer of Chevron USA.

Business Experience

  Executive Vice President, Director and Vice Chairman of Chevron Board (2002-2009)

  President of Chevron’s worldwide exploration, production and global gas businesses (2002-2004)

  President of Chevron’s overseas exploration and production businesses (2000-2002)

  President of Chevron’s North America exploration and production businesses (1996-2000)

  President of Chevron’s natural gas processing business (1990-1994)

  Chief Financial Officer of Chevron USA (1985-1990)

Education

  BS in Mechanical Engineering from the University of Edinburgh

  MBA from the University of Pennsylvania, Wharton School, where he was a Thouron Scholar

Public Company Boards

  Vice Chairman of the Board for Chevron Corporation (2002-2009)

  Director of Sasol Limited, chair of Capital Investment Committee, and member of Nomination and Governance Committee and Remuneration Committee (2012-present)

  Director, Dynegy Inc. (1996-2000)

Private Boards & Community Involvement

  Director, Sylvan Source, Inc. (2016-present)

  Co-chairman of the US Saudi Arabian Business Council (2009-2018)

  Chairman of the World Affairs Council of Northern California (2009-2018)

  Chairman of the US Energy Association (2006-2008)

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Independent Director Since 2012 Age 70Board Committees:AuditHuman Resource and Compensation

Christopher M.T. Thompson, Director. Mr. Thompson, age 68, was

Former Chairman and Chief Executive Officer of Gold Fields Ltd., an international gold producer with over 50,000 employees and operations on five continents from 1998 to 2002, and continued as Chairman of that company through 2005. He was also Chairman of the World Gold Council from 2002 to 2005. He founded and was Chief Executive Officer of Castle Group Ltd., an international investment company that helped support the development of new mines. He served on the board of Teck Resources Limited from 2003 to 2015 and on the board of Golden Star Resources Ltd. from 2010 to 2015. He currently serves on the board of Royal Gold, Inc., a company that acquires and manages precious metal royalties and streams. Mr. Thompson holds a master’s degree in management studies from Bradford University, U.K., and a bachelor’s degree in law and economics from Rhodes University, South Africa. He is a member of the The Colorado School of Mines Foundation Board.

 

Mr. Thompson who has been a Director of the Company since 2012, has an extensive background in the mining industry, providing strong knowledge of and management and operational experience in this area to the Board, which is particularly valuable given the Company’s customers in this industry. Mr. Thompson also provides knowledge of the biotechnology industry, which is also important given the Company’s customers in that industry. His senior management levelinternational experience also brings to the Board additional perspective regarding the day to day operations of large organizations as well as corporate best practices.

Business Experience

  Director, Chairman and Chief Executive Officer of Gold Fields Ltd. (1998-2005)

  Chairman of the World Gold Council (2002-2005)

  Founder and Chief Executive Officer of Castle Group Ltd. (1992-1998)

Education

  Bachelor’s degree in law and economics from Rhodes University, South Africa

  Master’s degree in management studies from Bradford University, U.K.

Public Company Boards

  Board member of Royal Gold, Inc. (2013-present)

  Board member of Teck Resources Limited (2003-2015)

  Board member of Golden Star Resources Ltd. (2010-2015)

  Board member of various portfolio companies of Castle Group
(1985-1999)

Private Boards & Community Involvement

  Board member of The Colorado School of Mines Foundation (2013-2017)

 

Meetings of the Board of Directors2019 Proxy StatementLOGO    15


 

The

LOGO

Independent Director Since 2017 Age 74Board Committees:Audit

Barry L. Williams

Retired Managing General Partner of Williams Pacific Ventures, Inc.

Mr. Williams brings valuable business and leadership skills to the Board from his career leading an investment and consulting company. He has accounting expertise and experience serving as a member of public and private company boards, including service on audit committees. Mr. Williams understands the engineering industry and provides the Board with a valuable perspective, having served as a board member of recently acquired CH2M HILL Companies, Ltd. for more than 20 years.

Business Experience

  Managing General Partner of Williams Pacific Ventures (1986-2014)

  President and CEO of American Management Association International (2000-2001)

  Senior Mediator for JAMS/Endispute (1993-2002)

  Visiting Lecturer, University of California (1993-2000)

Education

  BA from Harvard University

  MBA from Harvard Business School

  JD from Harvard Law School

Public Company Boards

  Navient (2000-present)

  PG&E Corporation (1996-2017)

  Simpson Manufacturing Co. (1994-2015)

  R.H. Donnelly Corp. (1998-2010)

  Ameron International Corporation (2010-2011)

Private Boards & Community Involvement

  Director, CH2M HILL Companies, Ltd. (1995-2017)

  Trustee, Sutter Health (1992-present)

  Trustee, Northwestern Mutual Life Insurance Company (1986-2016)

  Management Leadership for Tomorrow

16    LOGO|2019 Proxy Statement


CORPORATE GOVERNANCE

Highlights

Jacobs has a strong track record of integrity and corporate governance practices that promote thoughtful management by its officers and Board of Directors held seven regularly scheduled meetings in fiscal 2016. All directors attended at least 75%to facilitate profitable growth while strategically balancing risk to maximize long-term shareholder value. Below is a summary of all meetings of thecertain information about our Board of Directors and ofgovernance best practices employed by the Committees thereof on which they served during fiscal 2016. The Board of Directors has a policy that directors are expected to attend the annual meetings of shareholders. All directors attended the 2016 annual meeting of shareholders.Company:

During fiscal 2016, the non-management members of the Board of Directors met in executive sessions without management present at all of its regularly held meetings. The Board of Directors expects to continue this practice in fiscal 2017. The director serving as the Lead Independent Director, currently Ms. Levinson, chairs these executive sessions. See “— Board Leadership Structure” for a further discussion of the responsibilities of the Lead Independent Director.

Compensation of Directors for Fiscal 2016

The Company paid non-management directors a cash retainer of $88,000 per year through April 2016 and $100,000 per year thereafter. In an effort to align the Company’s compensation practices with those of its peers, during fiscal 2016 the Company moved from granting annual awards of a fixed number of restricted stock units and options to a value-based approach. Jacobs also eliminated the appointment grant awarded to new directors. For fiscal 2016, the Board set the annual equity value to be awarded to non-management directors at approximately $135,000 and, accordingly, granted each non-management director an award of 2,309 restricted stock units and an option to purchase 3,500 shares of the Company’s common stock.

Each of the equity grants described above is made pursuant to the Jacobs Engineering Group Inc. 1999 Outside Director Stock Plan, as amended and restated (the “1999 Outside Director Plan”). Each director option grant vests and becomes exercisable in four equal annual installments commencing on the first anniversary of the grant date. Each director restricted stock unit grant vests in full six months after the grant date; however the award is not settled by issuance of the underlying shares until the director’s retirement from the Board of Directors. In accordance with the terms and conditions of the 1999 Outside Director Plan, the option prices for both the annual grants and the appointment grants are equal to the average of the Fair Market Values (as defined in the 1999 Outside Director Plan) of a share of common stock for the ten trading days ending on the second trading day prior to the date for which the grant price is being determined, but in no event less than eighty-five percent (85%) of the Fair Market Value of a share of common stock on the date the grant price is being determined. The table below sets forth the compensation paid (or credited) to each of the Company’s non-management directors during fiscal 2016.

Name

  Fees
Earned
or Paid
in Cash
($) (1)
  Stock
Awards
($) (3)
   Option
Awards
($) (4)
   Total
($)
 

Joseph R. Bronson

   93,000    94,495     42,482     229,977  

Juan José Suárez Coppel

   93,000    94,495     42,482     229,977  

John F. Coyne

   93,000    94,495     42,482     229,977  

Robert C. Davidson, Jr.

   93,000    94,495     42,482     229,977  

Ralph E. Eberhart

   93,000    94,495     42,482     229,977  

Edward V. Fritzky

   36,828(2)   —      —      36,828  

Dawne S. Hickton

   93,000    94,495     42,482     229,977  

Linda Fayne Levinson

   93,000    94,495     42,482     229,977  

Peter J. Robertson

   93,000    94,495     42,482     229,977  

Christopher M.T. Thompson

   93,000    94,495     42,482     229,977  

Noel Watson

   63,667    94,495     42,482     200,644  

 

(1)
 Represents fees earned during fiscal 2016.
(2)

SIZE OF BOARD  

11  

 Mr. Fritzky did not stand for re-election at the 2016 annual meeting of shareholders.
(3) Represents the grant date fair value of the grants of restricted stock units under the 1999 Outside Director Plan during the fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718,Stock Compensation (“FASB ASC Topic 718”). A grant of restricted stock units relating to 1,500 shares and 809 shares of common stock was made to each then-sitting non-management director on March 1, 2016 and March 24, 2016 respectively, which were based on a grant date fair value of $39.66 and $43.27, respectively, per share (market price on the date of grant of March 1, 2016 and March 24, 2016, respectively), with a total fair value of $94,495. The aggregate number of shares of restricted stock and restricted stock units outstanding at September 30, 2016 for each non-management director was as follows: J. Bronson — 20,809; J. Suárez — 5,309, J. Coyne — 11,809; R. Davidson — 24,809; R. Eberhart — 6,809; D. Hickton — 2,309; L. Levinson — 26,809; P. Robertson — 9,809; C. Thompson —6,809; and N. Watson — 7,309.

(4)AVERAGE  

DIRECTOR  

TENURE IN  

YEARS  

9  

 Represents the grant date fair value

BOARD  

MEETINGS  

HELD IN FISCAL  

2018  

5  

NUMBER OF  

INDEPENDENT  

DIRECTORS  

10  

PERCENT  

FEMALE OR  

ETHNICALLY  

DIVERSE  

45%  

NEW  

DIRECTORS IN  

THE LAST FIVE  

YEARS  

4  

Corporate Governance Best Practices

     BoardComprised of options granted under the 1999 Outside91% Independent Directors

     Commitmentto Board Refreshment (Four New Directors in Past Five Years)

     HighlyEngaged Lead Independent Director Plan during fiscal 2016 in accordance with FASB ASC Topic 718. Please refer to Note 2, Significant Accounting Policies,

     AnnualElection of Notes to Consolidated Financial Statements included in the Company’s 2016 Annual Report on Form 10-KDirectors

     MajorityVoting for a discussionDirectors

     MandatoryAnti-Corruption Compliance Training for Directors

     Codeof Ethics for Directors, Officers & Employees

     AnnualSelf-Evaluations by Board and each Committee

     RigorousDirector Selection Process

     SubstantialBoard oversight of the assumptions used to calculate these amounts. A grant of options relating to 3,500 shares of common stock was made to each then-sitting non-management director on March 1, 2016strategic objectives, including mergers and was based on a grant date fair value of $12.1376 per share, with a total fair value of $42,482. The aggregate number of options outstandingacquisition activity

     DirectorAttendance at September 30, 2016Board & Committee Meetings >99%

     FullyIndependent Committees

     ComprehensiveRisk Oversight by Full Board and Committees

     ExtensiveStockholder Engagement Efforts

     StockOwnership Guidelines for each non-management director was as follows: J. Bronson — 31,000; J. Suárez — 14,500; J. Coyne — 33,500; R. Davidson — 32,000; R. Eberhart —18,000; D. Hickton — 7,500; L. Levinson — 34,500; P. Robertson 28,500; C. Thompson — 18,000;Directors and N. Watson — 17,500.Executive Officers

     RegularEnterprise Risk Management Reviews by Board and Committees

 

Independence of Directors2019 Proxy StatementLOGO    17


 

The Board of Directors has adopted Board of Directors Guidelines for Determining the Independence of its Members, which are accessible by following the link to “Corporate Governance” on the Company’s website atwww.jacobs.com. The Board of Directors has affirmatively determined that each of Mesdames Fayne Levinson and Hickton, Messrs. Bronson, Coyne, Davidson, Robertson, Suárez and Thompson, and General Eberhart is independent under Section 303A.02 of the NYSE listed company manual and the Company’s Independence Guidelines. The NYSE’s independence definition includes a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings involving the Company, which would prevent a director from being independent. None of the Company’s independent directors had any relationship that violated the NYSE’s tests.

In addition, as further required by the NYSE’s listed company manual and the Company’s independence guidelines, the Board of Directors has made an affirmative determination that no relationship, whether immaterial or material, exists between any independent director and the Company that would prevent a director from being independent. In making this determination, the Board considered the facts described below. Mr. Robertson is on the board of directors of the US-Saudi Arabian Business Council, an organization of business leaders to which the Company currently makes annual cash contributions of $15,000. During fiscal 2015, Ms. Hickton served as Vice Chair, President, Chief Executive Officer and a director of RTI International Metals, Inc. (“RTI”), which has been a client of the Company. The payments by RTI to the Company for any fiscal year have been substantially less than one percent of the consolidated gross revenues of RTI. After a review of the facts, using its business judgment, the Board of Directors determined that these relationships did not compromise Mr. Robertson’s or Ms. Hickton’s independence.

Board Leadership Structure

The Company’s Corporate Governance Guidelines provide that the Board is free to select its Chairman and Chief Executive Officer in any manner after consideration of relevant factors at the time of the decision. Currently, the Board is led by Mr. Demetriou as Chairman, a position he has held since July 2016, and Ms. Levinson as Lead Independent Director.

The Board has determined that having Mr. Demetriou serve as Chairman provides significant advantages to the Board, as it allows the Board to benefit from his knowledge of the Company’s business and market opportunities and risks and also facilitates communications and relations with other senior management.

Because the Board believes that strong independent Board leadership is a critical aspect of effective corporate governance, the Board has established the position of Lead Independent Director. The Board also believes that a Lead Independent Director who has the responsibilities set forth in the Corporate Governance Guidelines provides comparable independent leadership, oversight and benefits for the Company and Board that would be provided by an independent Chairman. Some of the specific responsibilities of the Lead Independent Director when acting as such include the following:

Serving as the independent directors’ central point of communication with the Chairman and Chief Executive Officer and working with the Chairman and Chief Executive Officer to support appropriate compliance with Board policies;

Proactively engaging with the Chairman and Chief Executive Officer as a key advisor on emerging issues and alternative courses of action;

Setting and approving the schedule of Board meetings, meeting agendas and the information sent to the Board, while keeping the Chairman and Chief Executive Officer advised;

Calling meetings of the independent directors; and

Meeting with various Company constituencies on behalf of the Board.

The Board’s Role in Risk Oversight

The Board of Directors oversees the Company’s risk management process. The Boardfunction. It oversees a Company-wide approach to risk management, designed to enhance long-term shareholder value, support the achievement of strategic objectives and improve long-term organizational performance. The Board determines the appropriate level of risk for the Company, generally, assesses the specific risks faced by the Company and reviews the steps taken by management to manage those risks. The Board’s involvement in setting the Company’s business strategy also facilitates these assessments and reviews, culminating in the development of a strategy that reflects both the Board’sconsensus of the Board and management’s consensusmanagement as to appropriate levels of risk and the appropriate measures to manage those risks. Pursuant to

Through this structure,framework, risk is assessed throughout the enterprise, focusing on risks arising out of various aspects of the Company’s strategy and the implementation of that strategy, including financial, legal/compliance, operational/strategic, health and safety, and compensation risks. The Board also considers risk when evaluating proposed transactions and other matters presented to the Board, including acquisitions and financial matters. For example, in fiscal 2017, the Board held six special Board meetings in connection with the acquisition of CH2M Hill Companies, Ltd. (“CH2M”) that was completed in the first fiscal quarter of 2018. Following fiscal 2018, the Board held two special meetings and an additional executive session in connection with the pending sale of the Company’s Energy, Chemicals and Resources business announced in the first fiscal quarter of 2019. In addition, the independent directors discuss risk management during executive sessions without management present.

While the Board maintains the ultimate oversight responsibility for the risk management process, its committeesCommittees oversee risk in certain specified areas. In particular, the areas:

Audit Committee focuses on: Addresses financial risk, including internal controls, and discusses the Company’s risk profile with the Company’s independent registered public accounting firm. The Audit Committee also reviews potential violations of the Company’s various codes of ethics and related corporate policies. The

Human Resource and Compensation Committee periodically: Periodically reviews compensation practices and policies to determineconsider whether they encourage excessive risk taking, including an annual review of management’s assessment of the risk associated with the Company’s compensation programs covering its employees, including executives, and discusses the concept of risk as it relates to the Company’s compensation programs, as discussed in greater detail under “Compensation Discussion and Analysis — Compensation Risk Assessment” below. Finally, the programs.

Nominating and Corporate Governance Committee oversees: Oversees risks associated with the independence of directors and Board nominees and assists the Board in overseeing the activities with respect to compliance and business practice matters. matters, including the Company’s corporate governance policies.

Pursuant to the Board’s instruction, management regularly reports on applicable risks to the relevant Committee or the Board, as appropriate, including regular reports on significant Company projects, with additional review or reporting on risks being conducted as needed or as requested by the Board and its Committees.

Board Leadership Structure

The Board’s leadership is comprised of:

CommitteesChair of the Board of Directorsand CEO: Steven J. Demetriou

Lead Independent Director: Linda Fayne Levinson

Audit, Committee — The Audit Committee advises the Board of Directors on internal and external audit matters affecting the Company and is responsible for the appointment of the independent auditors of the Company. In addition, the Audit Committee reviews with such auditors the scope and results of their examination of the financial statements of the Company and any investigations by such auditors, and reviews and approves the worldwide audit fee and all non-audit services.

The Audit Committee is governed by a charter which is available by following the links to “Corporate Governance” on the Company’s website atwww.jacobs.com or upon written request, as described above under “Corporate Governance — Availability of Documents.” The members of the Audit Committee are Mr. Bronson (Chair), Ms. Hickton and Mr. Thompson. Mr. Robertson served on the Audit Committee until July 2016. The Board of Directors has affirmatively determined that all of the members of the Audit Committee meet or met the Company’s Independence Guidelines, the independence standards of Section 303A.02 of the NYSE listed company manual and Rule 10A-3 under the 1934 Act and are (or were during their term of service) “financially literate” as required by Section 303A.07(a) of the NYSE listed company manual, as such qualification is interpreted by the Company’s Board of Directors in its business judgment. In addition, the Board of Directors has affirmatively determined that all of the members of the Audit Committee are (or were during their term of service) “audit committee financial experts” under Item 407(d)(5) of Regulation S-K. The Board of Directors made this determination based on the respective qualifications and business experience of each of the members, as briefly described above. During fiscal 2016, the Audit Committee held nine meetings. Further information regarding the Audit Committee is set out in the “Report of the Audit Committee” below.

Human Resource and Compensation Committee — The Compensation Committee establishes, recommends, and governs all compensationNominating and benefits policies for executive officers, including individual componentsCorporate Governance Committees: Composed entirely of total remuneration, goals,independent directors

Currently, the Board is led by Mr. Demetriou as Chair, a position he has held since July 2016, and performance criteria for incentive compensation plans, short- and long-term incentive plan design, and key benefit plans established for employees. The Compensation Committee is responsible for the policy and protocol involved in the granting of all equity compensation and approves directly or through its subcommittee all equity-based grants made to employees. The Compensation CommitteeMs. Fayne Levinson as Lead Independent Director, a position she has also oversees the administration of employee benefit plans for the Company.held since July 2016.

 

The Compensation Committee is governed18    LOGO|2019 Proxy Statement


In a process led by a charter which is available by following the link to “Corporate Governance” onLead Independent Director and the Company’s website atwww.jacobs.com or upon written request, as described above under “Corporate Governance — Availability of Documents.” The members of the Compensation Committee are Mr. Robertson (Chair), Mr. Coyne, and General Eberhart. Ms. Levinson served as Chair of the Compensation Committee until July 2016. The Board of Directors has affirmatively determined that all of the members of the Compensation Committee meet (or met during their term of service) the Company’s Independence Guidelines and the independence standards of Section 303A.02 of the NYSE listed company manual. During fiscal 2016, the Compensation Committee held seven meetings.

Compensation Committee Interlocks and Insider Participation — During the last completed fiscal year, no member of the Compensation Committee was an officer or employee of the Company, was a former officer of the Company, nor had a relationship with the Company requiring disclosure as a related party transaction under Item 404 of Regulation S-K. None of the Company’s executive officers served on the compensation committee or board of directors of another entity whose executive officer(s) served as a member of the Company’s Board of Directors or on the Compensation Committee.

Nominating and Corporate Governance Committee, —  the Board evaluates the appointment and role of the Chair on an annual basis. The Board has determined that having Mr. Demetriou serve as Chair provides significant advantages to the Board and the Company, as it allows the Board to benefit from his knowledge of the Company’s business and market opportunities and risks and also facilitates communications and relations with other members of senior management. The Board also believes that having Mr. Demetriou serve as Chair is advantageous to the Company when working with clients in certain areas of the world in which the title of Chair is significant.

Because the Board believes that strong independent Board leadership is a critical aspect of effective corporate governance, the Board has established the position of Lead Independent Director. The Board also believes that a Lead Independent Director, who has the responsibilities set forth in the Company’s Corporate Governance Guidelines, provides independent leadership, oversight and benefits for the Company and Board that would be provided by an independent Chair. Responsibilities of the Lead Independent Director include:

     Servingas the independent directors’ central point of communication with the Chair and CEO;

     Presidingat meetings of the Board at which the Chair and CEO is not present, including executive sessions of independent directors;

     Approvingthe schedule of Board meetings and meeting agendas, working with the Chair and CEO;

     Attendingmeetings of all Committees of the Board;

     Workingwith the Chair of the Nominating and Corporate Governance Committee and Chair and CEO on the Board succession and refreshment process;

     Workingwith the Chair of the Nominating and Corporate Governance Committee to conduct the annual Board self-evaluation;

     Workingwith the Chair and CEO to support appropriate compliance with Board policies;

     Proactivelyengaging with the Chair and CEO as a key advisor on emerging issues and alternative courses of action;

     Callingspecial meetings of the Board and/or meetings of the independent directors;

     Togetherwith the Chair of the Human Resource and Compensation Committee and Chair of the Nominating and Corporate Governance Committee, evaluating the performance and compensation of the Chair and CEO;

     Participatingin shareholder outreach and communications; and

     Meetingwith various Company constituencies on behalf of the Board or the Company.

The Nominating and Corporate Governance Committee assistsleads the process of the Board’s evaluation of the selection, role and term of the Lead Independent Director on an annual basis.

Board Composition

The Nominating and Corporate Governance Committee is responsible for reviewing with the Board on an annual basis the appropriate skills and characteristics required of members in the context of the currentmake-up of the Board. This process enables them to update the skills and experience it seeks in the Board as a whole, and in individual directors, as the Company’s needs evolve. This assessment takes into consideration all factors deemed relevant by the Nominating and Corporate Governance Committee, including the following factors:

Independence: The Board must be comprised of a majority of independent directors.

Relevant Skills and Experience: The assessment of skills and characteristics of Board members takes into account all skills and experience deemed relevant by the Committee, including those summarized in the Director Experience Matrix on page 5, among others. For incumbent directors, past performance on the Board of Directors in identifying, screening and recommending qualifiedits Committees is also taken into consideration. For new director candidates, the assessment also takes into account the ability and willingness of the director candidate to serve as directors of the Company and for considering and making recommendations toon the Board concerning the Company’s corporate governance policies, principles, and guidelines, including, but not limitedfor five to the appropriate size, function, and needs of the Board. The qualifications that the Nominating and Corporateseven years.

2019 Proxy StatementLOGO    19

Governance Committee and Board of Directors consider in identifying qualified candidates to serve as directors include age, skills, financial background, international background, education, professional and academic affiliations, industries served, length of service, positions held, and geographies served.


 

Diversity: The Company’s Corporate Governance Guidelines provide that the Board believes it should encompass individuals with diverse backgrounds and perspectives. In accordance with this guideline, the Nominating and Corporate Governance Committee’s policy is to considerCommittee considers the diversity of viewpoints, backgrounds, experience and other demographics in evaluating and considering potential director candidates. Diversity is a significantan important consideration in the director nomination process because the Board believes that men and womenpeople of different genders, experiences, ages, races and ethnic backgrounds can contribute different, useful perspectives, and can workwhile collaborating effectively together to further the Company’s mission. This policy is included in the Company’s Corporate Governance Guidelines.

The Board of Directors and the Nominating and Corporate Governance Committee consider the qualifications and attributes of directors and director candidates individually, as well as in the broader context of the Board’s overall composition and the Company’s current and future needs, to ensure that the Board as a whole possesses the requisite combination of skills, professional experience and diversity of backgrounds and perspectives.

Independence of Directors

The Board of Directors has adopted Board of Directors Guidelines for Determining the Independence of its Members, which are accessible by following the link to “Corporate Governance” on the Company’s website at www.jacobs.com. The Board of Directors has affirmatively determined that each person who served as a member of the Board of Directors during fiscal 2018, other than Mr. Demetriou, is independent under Section 303A.02 of the NYSE listed company manual and the Company’s independence guidelines. Each member of each Committee of the Board is also independent (as defined by the applicable NYSE rules).

In addition, as further required by the NYSE’s listed company manual and the Company’s Independence Guidelines, the Board of Directors has made an affirmative determination that no relationship, whether immaterial or material, exists between any independent director and the Company that would prevent a director from being independent. In making this determination, the Board considered the facts described below.

Mr. Davidson is an officer of Gamma Zeta Boulé Foundation and Sigma Pi Phi Professional Fraternity. The Company has made annual contributions to these organizations during the last three fiscal years. Such amounts did not exceed $7,500 in any fiscal year. During fiscal 2015, Ms. Hickton was Vice Chair, President and CEO of RTI International Metals, Inc. (“RTI”), which has been a client of the Company. The payments by RTI to the Company for any fiscal year were substantially less than two percent of the consolidated gross revenues of RTI. Mr. McNamara was previously Global Chief Risk Officer & COO — Australia businesses of Building, Engineering, and Services of Lendlease Corporation Limited (“Lendlease”), which has been a client of the Company. The payments by Lendlease to the Company for any fiscal year were substantially less than two percent of the consolidated gross revenues of Lendlease.

Until February 2018, Mr. Robertson served as the U.S.co-chairman of theUS-Saudi Arabian Business Council, an organization to which the Company makes $20,000 in annual cash contributions and also supports conferences. In February 2018, Mr. Demetriou succeeded Mr. Robertson in this role as theco-chairman. The total amount contributed by the Company to theUS-Saudi Arabian Business Counsel over the last five years is approximately $70,000. Mr. Robertson is also on the Board of Sasol Ltd., which is a client of the Company. After a review of the facts, using its business judgment, the Board of Directors determined that these relationships did not compromise the independence of Mssrs. Davidson, McNamara and Robertson or Ms. Hickton.

Director Nominations

The Nominating and Corporate Governance Committee may also consult with outside advisors or retain search firmsis responsible for recommending the selection of director nominees to assist in the search for qualified candidates.Board. Once potential candidates are identified, including those candidates nominated by shareholders and/or identified by outside advisors or search firms, the Chair of the Nominating and Corporate Governance Committee, the Lead Independent Director and the ChairmanChair and CEO review the backgrounds of those candidates with the Nominating and Corporate Governance Committee. Final candidates are then chosen and interviewed bynon-management directors and executive management of the Company.

20    LOGO|2019 Proxy Statement


Based on the interviews, the Nominating and Corporate Governance Committee then makes its recommendation to the Board of Directors. If the Board of Directors approves the recommendation, the candidate is nominated for election. With regard to procedures for shareholder nominations of directors for election, please see the requirements described below under “Shareholders’ Proposals.” The Nominating and Corporate Governance Committee will consider director candidates recommended by shareholders in accordance with these procedures.

Mr. Williams was appointed to the Board in December 2017 in connection with the Company’s acquisition of CH2M. Prior to the acquisition, Mr. Williams served on the Board of CH2M and was the chair of its audit committee.

Committees of the Board of Directors

The Board of Directors has three standing committees: the Audit Committee, the Human Resource and Compensation Committee and the Nominating and Corporate Governance Committee.

  Audit Committee

  Members:*

  - Joseph R. Bronson (Chair)

  - Dawne S. Hickton

  - Robert A. McNamara

  - Christopher M.T. Thompson

  - Barry L. Williams+

* Each member is independent and financially literate and qualifies as an audit committee financial expert

+ New member appointed to Committee in January 2018

Primary responsibilities include monitoring and overseeing the:

•       Integrityof the Company’s financial statements

•       Independentauditor’s qualifications and independence

•       Performanceof the Company’s internal audit function and independent auditors

•       Complianceby the Company with legal and regulatory requirements

Meetings in

Fiscal 2018: 9

Committee

Member

Attendance: 98%

Committee is governed by aCharter: The Audit Committee’s current charter which is available by following the linklinks to “Corporate Governance” on the Company’s website atwww.jacobs.com or upon written request, as described abovebelow under “Corporate Governance — Availability of Documents”.Documents.”

  Human Resource and Compensation Committee

  Members:*

  - Peter J. Robertson (Chair)

  - General Ralph E. Eberhart

  - Juan José Suárez Coppel

  - Christopher M.T. Thompson

* Each member is independent

Primary responsibilities include:

•       Establishing,recommending, and governing all compensation and benefits policies for executive officers

•       Establishingand overseeing policy and protocol involved in the granting of all equity compensation

•       Overseeingthe design and administration of the Company’s employee benefit plans

•       Overseeingthe adoption and administration of key human resources processes and programs

Meetings in

Fiscal 2018: 5

Committee

Member

Attendance: 100%

Committee Charter: The Human Resource and Compensation Committee’s current memberscharter is available by following the links to “Corporate Governance” on the Company’s website at www.jacobs.com or upon written request, as described below under “Corporate Governance — Availability of Documents.”

2019 Proxy StatementLOGO    21


Compensation Committee Interlocks and Insider Participation: During the last completed fiscal year, no member of the Compensation Committee was an officer or employee of the Company, was a former officer of the Company, nor had a relationship with the Company requiring disclosure as a related party transaction under Item 404 of RegulationS-K. None of the Company’s executive officers served on the compensation committee or board of directors of another entity whose executive officer(s) served as a member of the Company’s Board of Directors or on the Compensation Committee.

  Nominating and Corporate Governance Committee

  Members:*

  -Robert C. Davidson, Jr. (Chair)

  - Juan José Suárez Coppel

  - General Ralph E. Eberhart

  - Dawne S. Hickton

  - Robert A. McNamara+

* Each member is independent

+ New member appointed to Committee in January 2018

Primary responsibilities include:

•     Identifying for the Board of Directors qualified candidates to serve as directors of the Company

•     Establishing for the Board corporate governance policies, principles and guidelines

•     Overseeing the Annual Self-Evaluation of the Board

•     Establishing and recommending to the Board outside director compensation

•     Overseeing the Company’s compliance programs

Meetings in

Fiscal 2018: 5

Committee Member Attendance: 100%

Committee Charter: The Nominating and Corporate Governance Committee are Mr. Davidson (Chair), Ms. Hickton and Mr. Suárez. Mr. Fritzky servedCommittee’s current charter is available by following the links to “Corporate Governance” on the Nominating and Company’s website at www.jacobs.com or upon written request, as described below under “Corporate Governance — Availability of Documents.”

Corporate Governance Committee until he leftGuidelines

The Company monitors developments in the Boardarea of corporate governance and routinely reviews its processes and procedures in January 2016. light of such developments. The Company believes that it has procedures and practices in place which are designed to enhance and protect the interests of its shareholders.

The Board of Directors has affirmatively determined that allapproved Corporate Governance Guidelines for the Company, which are reviewed and updated on an annual basis. The Corporate Governance Guidelines are available by following the links to “Corporate Governance” on the Company’s website at www.jacobs.com or upon written request, as described below under “Corporate Governance — Availability of Documents.” The Corporate Governance Guidelines address the following matters:

The role of the Board to provide oversight, counseling and direction to the Company’s management in the interest of the Company and its shareholders;

Frequency of meetings of the Board(5-6 regular meetings per year);

The requirement that the Board of Directors be comprised of a majority of independent directors;

Guidelines for evaluating and nominating director nominees, including relevant skills, experience and diversity;
Guidelines for determining director independence;

Director and executive officer stock ownership guidelines;

Conflicts of interests;

Majority voting in uncontested elections of directors;

Limits the number of public company boards on whichnon-management directors may serve to four;

Committees of the Board, including assignment of directors to committees and appointment of committee chairs;

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The requirement that the Audit, Human Resource and Compensation, and Nominating and Corporate Governance Committees of the Board of Directors be comprised entirely of independent directors;

The requirement that directors attend in person all regularly scheduled Board and Committee meetings unless required by illness or other extenuating circumstances;

Executive sessions of the Board of Directors whereinnon-management directors meet as a group without the presence of management directors;

Orientation for new directors and continuing education for Board members;
The selection, roles and responsibilities of the Chair and Chief Executive Officer and the Lead Independent Director;

The requirement that the performance of the Chair and Chief Executive Officer be evaluated annually and reviewed by thenon-management directors;

Succession planning;

Annual Board self-evaluation; and

Other matters uniquely germane to the work and responsibilities of the Board of Directors.

Director Education

The Board recognizes the importance of director continuing education and is committed to provide such education in order to enhance both Board and Committee performance. Accordingly, as noted in the Company’s Corporate Governance Guidelines, the Company regularly provides the Board with education programs, presentations and briefings on topics relevant to the Company, its business and risk profile. In addition, each year the Board engages a third-party provider to host an educational program for members of the NominatingBoard on matters relevant to the Company or relating to duties and Corporate Governance Committee meet (or met during their termresponsibilities of service)directors. Directors are also encouraged to attend at least one outside educational program each year on any subjects pertaining to the directors’ responsibilities such as “directors’ colleges.” Additionally, new directors must participate in the Company’s Independence Guidelines and the independence standards of Section 303A.02 of the NYSE listed company manual. During fiscal 2016, the Nominating and Corporate Governance Committee held six meetings.

orientation program for new directors.

Annual Performance Evaluations

The Nominating and Corporate Governance Committee, together with the Lead Independent Director, coordinates annual Board self-evaluationsperformance evaluations and periodic individual director reviews. The Chairs of each of the committeesCommittees coordinate annual self-evaluationsperformance evaluations of their respective committees.Committees.

Attendance at Meetings of the Board and its Committees and the Shareholder Meeting

Overall director attendance at meetings of the Board and its Committees was 99% during fiscal 2018. Each individual director attended at least 75% of all meetings of the Board and all Committees on which they serve during fiscal 2018. Board members are expected to attend annual meetings of shareholders. All of the members of our Board attended the 2018 annual meeting of shareholders.

Code of Ethics

In addition to the Corporate Governance Guidelines, the Board of Directors has adopted the following other codes, guidelines, and policies:

Code of Business Conduct and Ethics for Members of the Board of Directors;

Code of Ethics for the Chief Executive Officer and Senior Financial Officers; and

Code of Conduct.

These documents, along with the Corporate Governance Guidelines, serve as the foundation for the Company’s system of corporate governance. They provide guidance for maintaining ethical behavior, require that directors and employees comply with applicable laws and regulations, prohibit conflicts of interest, and provide mechanisms for reporting violations of the Company’s policies and procedures.

 

2019 Proxy StatementLOGO    23


In the event the Company makes any amendment to, or grants any waiver from, a provision of the code of ethics that applies to the principal executive officer, principal financial officer, or principal accounting officer that requires disclosure under applicable SEC rules, the Company will disclose such amendment or waiver and the reasons therefore on its website at www.jacobs.com.

Stock Ownership Guidelines

In an effort to more closely align the Company’snon-management directors’ financial interests with those of our shareholders, the Board of Directors has established stock ownership guidelines fornon-management directors. Under these guidelines, the Company’snon-management directors are expected to own equity in the Company (including common stock, restricted stock or restricted stock units) valued at a minimum of five times their annual cash retainer.Non-management directors are restricted from selling any shares of common stock during any period in which they have not met these ownership guidelines. As of the end of fiscal 2018, allnon-management directors exceeded these guidelines or were within the five-year period from their appointment date, at the time of which they are expected to meet the guidelines.

Similarly, the Company has established stock ownership guidelines for senior management. Under these guidelines, the Company’s senior management is expected to own equity in the Company (including common stock, restricted stock or restricted stock units, but excluding unvested performance share units or unexcised options) within3-5 years of entering their respective positions valued as follows:

Position

    Multiple of    

  Base Salary  

Chair and CEO

6x

EVP/Presidents of Lines of Business

3x

Other Senior Management (SVPs)

2x

Members of senior management are not required to purchase shares of common stock to reach the applicable threshold, but are restricted from selling any shares of common stock during any period in which they have not met these ownership guidelines. This restriction does not apply to the withholding of shares to satisfy tax withholding requirements. As of the end of fiscal 2018, all named executive officers (or NEOs) exceeded their respective guidelines.

Contacting the Board of Directors

Generally — All communications required by law or regulation to be relayed to the Board of Directors are relayed immediatelypromptly after receipt.receipt by the Company. Any communications received by management from shareholders which have not also been sent directly to the Board of Directors will be processed as follows: (1) if the shareholder specifically requests that the communication be sent to the Board, the communication will then be promptly relayed to the Board of Directors; and (2) if the shareholder does not request that the communication be sent to the Board of Directors, then management will promptly relay to the Board all communications that the management of the Company, using its best business judgment, determines should be relayed to the Board.

Contacting the Full Board of Directors — Any shareholder, employee or interested party who desires to communicate with the Board of Directors may do so by writing to The Board of Directors, c/o Corporate Secretary, Jacobs Engineering Group Inc., 600 Wilshire Boulevard,1999 Bryan Street, Suite 1000, Los Angeles, California, 90017,1200, Dallas, Texas, 75201, in an envelope marked confidential.

ContactingContacting Non-Management Directors — Any shareholder, employee or interested party who desires to communicate with the Company’snon-management directors may do so as follows:

 

Confidentially or anonymously through the Company’s Integrity Hotline, 1 (877) 522-6272;

Confidentially or anonymously through the Company’s Integrity Hotline, +1 (844)543-8351;

 

By writing to Lead Independent Director, c/o Corporate Secretary, Jacobs Engineering Group Inc., 600 Wilshire Boulevard, Suite 1000, Los Angeles, California, 90017, in an envelope marked confidential; or

By writing to Lead Independent Director, c/o Corporate Secretary, Jacobs Engineering Group Inc., 1999 Bryan Street, Suite 1200, Dallas, Texas, 75201, in an envelope marked confidential; or

 

By sending an email to LeadIndependent.Director@Jacobs.com.

By sending an email to LeadIndependent.Director@Jacobs.com.

 

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Contacting the Audit Committee — Any shareholder, employee or interested party may submit at any time a good faith complaint regarding any questionable accounting, internal accounting controls, or auditing matters concerning the Company without fear of dismissal or retaliation of any kind. Employees are encouraged to report their concerns and complaints to the Company’s senior management, to the Vice President, Internal Audit, or to the Audit Committee of the Board of Directors. Confidential, anonymous reports may be made as follows:

 

Through the Company’s Integrity Hotline, 1 (877) 522-6272;

Through the Company’s Integrity Hotline, +1 (844)543-8351;

 

By writing to the Chair of the Audit Committee, c/o Corporate Secretary, Jacobs Engineering Group Inc., 1999 Bryan Street, Suite 1200, Dallas, Texas, 75201, in an envelope marked confidential; or

By sending an email to Audit.Committee@Jacobs.com.

Availability of Documents

The full text of the Corporate Governance Guidelines, the Code of Business Conduct and Ethics for Members of the Board of Directors, the Code of Ethics for the Chief Executive Officer and Senior Financial Officers, the Code of Conduct, the Committee Charters, the Board of Directors Guidelines for Determining the Independence of its Members, and the other corporate governance materials described in this Proxy Statement are accessible by following the link to “Corporate Governance” on the Company’s website at www.jacobs.com.

The Company will furnish without charge a copy of any of the foregoing documents to any person making such a request in writing and stating that he or she is a beneficial owner of common stock of the Company. Requests should be addressed to: Jacobs Engineering Group Inc., 600 Wilshire Boulevard,1999 Bryan Street, Suite 1000, Los Angeles, California, 90017,1200, Dallas Texas 75201, Attention: Corporate Secretary.

Compensation of Directors

Determination ofNon-Employee Director Compensation

Each year, the Board determinesnon-employee director compensation based upon the recommendation of the Nominating and Corporate Governance Committee. In making a recommendation, the Nominating and Corporate Governance Committee considers market data for the Company’s peer group, which is the same peer group used for the Company’s executive compensation benchmarking, and input from FW Cook, the independent consultant retained by the Nominating and Corporate Governance Committee regarding market practices for director compensation.

The Nominating and Corporate Governance Committee intends to setnon-employee director compensation levels at or near the market median relative to directors at companies of comparable size, industry, and scope of operations. This ensures directors are paid competitively for their time, commitment and responsibilities, which enables us to attract and retain highly qualified directors. During fiscal 2018, the independent consultant conducted a review of director compensation levels relative to the Company’s peer group and recommended certain changes to ensure the program remains aligned with median competitive practices, including increasing the cash retainer from $110,000 to $115,000 and the annual equity value from $135,000 to $150,000. The Board approved these changes effective January 2018. Directors who are employees of the Company or its affiliates do not receive separate compensation for their board activities.

Additional Director Compensation for Periods of Unusually High Activity

Based on the recommendation of the independent consultant, during fiscal 2018 the Board adopted a policy under whichnon-employee directors may be compensated for periods of unusually high Board or committee activity. The intention of this policy is to provide additional compensation for periods of unusual activity only and not for ordinary course of business. The Corporate Governance Guidelines state that the number of regularly scheduled Board meetings per year will be five or six and the new policy provides that beginning with the ninth meeting in a fiscal year, the Company will pay an envelope marked confidential; or

By sending an emailadditional $2,000 special fee for each additional meeting to Audit.Committee@Jacobs.com.thenon-employee directors. In the event the Board forms a special committee, the Company will pay the additional

 

2019 Proxy StatementLOGO    25


$2,000 special fee beginning with the fifth special committee meeting. During fiscal 2018, the Company did not pay any special fees under this new policy, as the Board and all committees except the Audit Committee held fewer than nine meetings.

Director Compensation During Fiscal 2018

Cash Retainers. The Company paidnon-management directors a cash retainer of $110,000 per year through the first fiscal quarter of 2018 and $115,000 per year thereafter. In addition, the Lead Independent Director receives an additional cash retainer of $100,000 per year, and the Chair of each Committee receives an additional cash retainer of $20,000 per year.

Equity. For fiscal 2018, the Board set the annual equity value to be awarded tonon-management directors at approximately $150,000 and, accordingly, granted eachnon-management director an award of 2,162 restricted stock units (“RSUs”) on January 18, 2018. Such grants were made pursuant to the Jacobs Engineering Group Inc. 1999 Outside Director Stock Plan, as amended and restated (the “1999 Outside Director Plan”). Each RSU grant vests upon the earlier of (i) the next annual shareholder meeting or (ii) theone-year anniversary of the grant date. If the Company pays a cash dividend on its outstanding common stock, RSUs will be credited with cash dividend equivalent rights (“Dividend Equivalents”) which are paid to such director upon the vesting of the RSU and distribution of the underlying share of common stock as described below in the section entitled “Executive Compensation—Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table—Payment of Dividends and Dividend Equivalent Rights”. Each director also receives cash dividends with respect to each outstanding restricted stock award (“RSA”) as and when paid to shareholders of common stock. Additionally,non-management directors are eligible to participate in the Jacobs Director Deferral Plan, pursuant to which each director may defer all or a portion of such director’s cash retainer or RSUs.

The table below sets forth the compensation earned by each of the Company’snon-management directors during fiscal 2018.

Name 

Fees Earned or    

Paid in Cash ($)(1)    

 

Stock Awards    

($)(2)    

 

Option    

Awards ($)(3)    

 

All Other    

Compensation    

($)(4)    

 

Total ($)  

  Joseph R. Bronson 133,750     150,021     —     5,856     289,627  
  Juan José Suárez Coppel 113,750     150,021     —     1,056     264,827  
  Robert C. Davidson, Jr. 133,750     150,021     —     8,256     292,027  
  General Ralph E. Eberhart 113,750     150,021     —     1,056     264,827  
  Dawne S. Hickton 113,750     150,021     —     1,056     264,827  
  Linda Fayne Levinson 213,750     150,021     —     9,456     373,227  
  Robert A. McNamara 113,750     150,021     —     1,056     264,827  
  Peter J. Robertson 133,750     150,021     —     1,056     284,827  
  Christopher M.T. Thompson 113,750     150,021     —     1,056     264,827  
  Barry Williams (5)   90,435     150,021     —     —     240,456  

(1) Represents fees earned during fiscal 2018.

(2) Represents the grant date fair value of the grants of RSUs under the 1999 Outside Director Plan during fiscal 2018 in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (“FASB ASC Topic 718”). The aggregate number of shares of restricted stock and restricted stock units outstanding at September 28, 2018, for eachnon-management director was as follows: J. Bronson — 22,971; J. Suárez Coppel — 7,471, R. Davidson — 26,971; R. Eberhart — 8,971; D. Hickton — 4,471; L. Fayne Levinson — 28,971; R. McNamara — 2,162; P. Robertson — 11,971; C. Thompson — 8,971; and B. Williams — 2,162.

(3) The Company has not granted options tonon-management directors since fiscal 2016. The aggregate number of options outstanding at September 28, 2018, for eachnon-management director was as follows: J. Bronson —

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7,875; J. Suárez Coppel — 14,500; R. Davidson — 24,500; R. Eberhart — 18,000; D. Hickton — 7,500; L. Fayne Levinson — 27,000; R. McNamara — 0; P. Robertson — 28,500; C. Thompson — 18,000; and B. Williams — 0.

(4) Represents dividend payments on restricted stock awards (“RSAs”) during fiscal 2018 as well as dividend payments on restricted stock units (“RSUs”) that vested during the fiscal year. These amounts do not include accumulated dividend equivalent rights on vested RSUs, as applicable, that have not yet been distributed for eachnon-management director as follows: J. Bronson — $11,528; J. Suárez Coppel — $4,778; R. Davidson —$11,528; R. Eberhart — $6,128; D. Hickton — $2,078; L. Fayne Levinson — $11,528; R. McNamara — $0; P. Robertson — $8,828; C. Thompson — $6,128; and B. Williams — $0.

(5) Mr. Williams was appointed to the Board in December 2017.

Forward-Looking Statements

This Proxy Statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as “estimates”, “intends”, and “will” and similar words are intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although such statements are based on management’s current estimates and expectations and/or currently available data, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those listed in Item 1A — Risk Factors in the Company’s 20162018 Annual Report on Form10-K. The Company does not undertake any obligation to release publicly any revisions or updates to any forward-looking statements.

2019 Proxy StatementLOGO    27


PROPOSAL NO. 2 — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

What are you voting on?

As required by Section 14A of the Securities Exchange Act of 1934, as amended, this proposal seeks a shareholder advisory vote to approve the compensation of our named executive officers as disclosed pursuant to Item 402 of RegulationS-K through the following resolution:

“Resolved, that the shareholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in this Proxy Statement pursuant to the SEC’s executive compensation disclosure rules (which includes the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables and narrative disclosures).”

As an advisory vote, this proposal is not binding on the Company, the Board of Directors, or the Human Resource and Compensation Committee (the “Compensation Committee”), and will not be construed as overruling a decision by the Company, the Board, or the Compensation Committee or creating or implying any additional fiduciary duty for the Company, the Board, or the Compensation Committee. However, the Board of Directors and the Compensation Committee value the opinions that shareholders express in their votes and will consider the outcome of the vote when making future compensation decisions.

At our 2017 annual meeting of shareholders, our shareholders approved, on an advisory basis, a frequency of every year for casting advisory votes approving our executive compensation. After the Annual Meeting, our next advisory vote on executive compensation will occur at our 2020 annual meeting of shareholders.

What is the Vote Required?

The approval of the advisory resolution on the Company’s executive compensation requires the affirmative vote of a majority of shares of common stock present, in person or by proxy, at the Annual Meeting and entitled to vote. Abstentions have the same effect as a vote against the advisory resolution. Brokernon-votes will have no effect of the outcome of the advisory vote.

The Board of Directors unanimously recommends that you voteFOR the advisory resolution
approving the Company’s executive compensation.

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COMPENSATION COMMITTEE REPORT

The Human Resource and Compensation Committee of the Board of Directors reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of RegulationS-K with the Company’s management. Based on such review and discussion, the Human Resource and Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement. The Board has approved that recommendation.

December 5, 2018

Peter J. Robertson, Chair
General Ralph E. Eberhart
Juan José Suárez Coppel
Christopher M.T. Thompson

2019 Proxy StatementLOGO    29


Compensation Discussion and Analysis (“CD&A”)

Executive Summary

As one of the world’s largest and most diverse providers of technical professional and construction services, we operate with apay-for-performance philosophy in a challenging, highly competitive, and rapidly evolving global environment. Our named executive officers (“NEOs”) for fiscal 2018 were:

Name

2018 Position

Mr. Steven J. Demetriou

Chair and Chief Executive Officer (“CEO”)

Mr. Kevin C. Berryman

Chief Financial Officer (“CFO”)

Mr. Terence D. Hagen*

President, Aerospace, Technology, Environmental and Nuclear (ATEN)

Mr. Joseph G. (“Gary”) Mandel**

Executive Vice President, Integration Management Office

Mr. Robert V. Pragada*

President, Buildings, Infrastructure and Advanced Facilities (BIAF)

* Mr. Hagen and Mr. Pragada were each promoted to Chief Operating Officer effective October 1, 2018.

** Mr. Mandel’s position changed to Special Advisor to the Chair and CEO effective October 1, 2018.

How did we
perform?

Our 2018 revenue grew 9% on a pro forma basis and gross margin increased over 100 basis points

Successful CH2M integration, exceeding synergy targets

Global commitment to Inclusion and Diversity to drive shareholder value

Announced sale of ECR business to focus on higher margin, higher growth businesses

LOGO

What did we

change for 2018?

Increased base salaries for NEOs (other than the CEO and CFO) between 3% and 5%, consistent with market data from our peer group and other market survey information

Adopted an Executive Severance Plan that provides severance benefits to certain key executives

Implemented variable compensation metrics tied to the achievement of cost synergy targets for the NEO overseeing the integration of the CH2M acquisition

Fiscal 2018 equity grants provide for accelerated vesting in the event the holder is involuntarily terminated without cause to incentivize senior management during periods of uncertainty leading up to the CH2M acquisition and subsequent integration

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How do we

determine pay?

Design pay programs to reward executives for positive Company and business unit results, mitigate material risks and align with stockholder interests equity-based long-term incentive awards

Set pay levels commensurate with performance and the need to attract and retain high quality talent

Consider many factors, including the advice of the Compensation Committee’s independent compensation consultant, internal pay equity among executives and the alignment of total pay opportunity and pay outcomes with performance and with external market data

LOGO

How did we pay

our NEOs?

Payouts aligned with our fiscal 2018 performance

Base salaries reflect each NEO’s role, responsibility and experience and the market conditions

Annual cash incentive payouts ranged from 119% to 154% of target based on achievement of Company and business area performance objectives; two NEOs earned additional cash incentive payouts for performance related to the acquisition of CH2M

Long-term equity incentives granted at target levels using a portfolio of performance-based restricted stock units (“PSUs”) and time-based restricted stock units (“RSUs”). PSUs vest based on our EPS Growth and 50% based on our ROIC over a three-year performance period

Nooff-cycle equity awards or excessive perquisites for any of our NEOs

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How do we address

risk and governance?

Provide an appropriate balance of short- and long-term compensation, with payouts based on the Company’s achievement of certain financial metrics and specific business area objectives

Follow practices that promote good governance and serve the interests of our stockholders, with maximum payout caps for annual cash incentives and long-term performance awards, and policies on clawbacks, anti-pledging, anti-hedging, insider trading and stock ownership

Solicit“say-on-pay” shareholder vote annually at shareholder meeting

Our Board, through the Human Resource and Compensation Committee, periodically conducts a risk assessment of our compensation policies and practices with the assistance of an independent compensation consultant

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Why you should

approve the

say-on-pay

proposal

Fiscal 2018 performance continued to support long-term stockholder value
Fiscal 2018 incentive payouts for our NEOs aligned with Company performance
Our pay program is aligned with stockholder interests, emphasizing achievement of strategic objectives over the long term

Our pay practices are tied to robust risk management and corporate governance

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Our Executive Compensation Philosophy

Our vision is to provide superior customer value through a long-term, relationship-based approach and solid returns to our shareholders through profitable growth. The Compensation Committee has a compensation philosophy that drives this vision by attracting and retaining highly qualified employees and motivating them to deliver value to our customers and shareholders. Accordingly, our executive compensation program ispay-for-performance based, intending to:

Provide executives with base salary compensation that is competitive with the market;

Reward executives for superior annual Company performance through our Management Incentive Plan (“MIP”), a short-term cash incentive program that places a substantial component of pay at risk, with specific measures and targets assigned to each participant based on their role in the Company; and

Incentivize senior management through the use of long-term equity-based awards that align our executives’ interests with those of our shareholders.

Our Executive Compensation Program and Practices

Our Compensation Committee believes that our executive compensation program is appropriately designed to advance shareholder interests. The key components and associated purposes of our compensation program are as follows:

LOGO

Component Purpose Performance Metric and Description Short-Term/Annual Base Salary Provides the security of a competitive fixed cash payment Reviewed annually by the Compensation Committee and adjusted based on competitive practices and individual performance Management Incentive Plan ("MIP") Encourages superior performance and accountability by tying payouts to achievement of pre-established metrics assigned to participants based on their role in the Company Metrics used for fiscal 2018 include: "Consolidated/Line of Business Operating Profit "DSO* "GM in Backlog* "Achievement of cost synergy targets in connection with the CH2M integration (for one NEO) Long-Term Performance-Based Restricted Stock Units ("PSUs") Aligns interests of executives with long-term shareholder interests. Retains executives and motivates them to build shareholder value over the life of the grants For fiscal 2017 and fiscal 2018 grants, metrics used: "Earnings Per Share ("EPS") Growth - focuses on profitability and financial disciplines "Return on Invested Capital ("ROIC") - aligns with our strategy by motivating managers to focus on increasing efficiency and capturing whether magnitude of profitability is appropriate for investments made Metrics for performance-based awards in fiscal 2016 were EPS Growth and relative total shareholder return ("TSR") compared to the Company's peer group. Awards vest and distribute after three years of performance, if performance targets are met. Time Based Restricted Stock Units ("RSUs") Retains executives and motivates them to build shareholder value over the life of the grants Awards vest ratably, generally over four years.

*See page 38 for DSO and GM in Backlog definitions.

2019 Proxy StatementLOGO    31


We remain committed to executive compensation practices that drive performance and that align the interests of our leadership team with the interests of our shareholders. Below is a summary of best practices that we have implemented and practices we avoid with respect to the compensation of our NEOs.

WHAT WE DO

WHAT WE DO NOT DO

 Pay-for-Performance — A significant majority of our executives’ target compensation is at risk, including compensation that is stock based and/or performance based, tied topre-established performance goals aligned with our short- and long-term objectives.

 No TaxGross-Ups — We do not have tax reimbursements orgross-ups on severance payments. See “— Other Benefits and Policies — Perquisites” below.

 Compensation Recoupment Policies — We have a clawback policy that applies when inaccurate financial statements have affected incentive award payments to executive officers. This policy is further described under “—Clawback Policy” below.

 No Pension Plans or Special Retirement Programs for Executive Officers — We do not have a pension plan or supplemental retirement plan for executive officers.

Stock Ownership Guidelines — Our Board has established robust stock ownership guidelines applicable to our Board members and executives as described under “—Stock Ownership Guidelines” below.

 No Excessive Perquisites — We do not offer excessive executive perquisites such as personal use of airplanes at the Company expense, Company-provided autos or auto allowances (except for expatriates) or payment of club dues.

Thorough Compensation Benchmarking — The Compensation Committee reviews publicly available information to evaluate how our NEOs’ compensation compares to that of executives in comparable positions at other companies as described under “— Assessing Compensation Competitiveness” below.

 No Speculative Trading — Board members and executive officers are prohibited from short-selling our stock and buying or selling puts and calls of our stock. See “—Insider Trading and Policy on Hedging or Pledging of Stock” below.

 Independent Compensation Consultant — The Compensation Committee benefits from its use of an independent compensation consulting firm, which provides no other services to the Company.

 No Hedging — Board members and executive officers are prohibited from engaging in hedging transactions that could eliminate or limit the risks and rewards of owning our stock. See “—Insider Trading and Policy on Hedging or Pledging of Stock” below.

 AnnualPay-for-Performance Review — With the help of its independent compensation consultant, the Compensation Committee annually analyzes the difficulty of meeting our performance goals and the alignment of realizable pay and performance to ensure that our incentive programs are working as intended.

 No Use of Jacobs Stock as Collateral for Margin Loans — Board members and executive officers are prohibited from using our stock as collateral for any margin loan. See “—Insider Trading and Policy on Hedging or Pledging of Stock” below.

 Vesting Conditions on Dividend Equivalents — We impose the same vesting conditions on dividend equivalents as on the underlying RSUs.

 Executive Severance Planwith “Double Trigger” Change in Control BenefitsRecognizing the prevalence of severance plans among our peers and the need to attract and retain talented executives, in fiscal 2018 we adopted an Executive Severance Plan that provides severance benefits to certain key executives in the event of either (i) a qualifying involuntary termination of employment unrelated to a change in control or (ii) a qualifying termination of employment during thetwo-year period following a change in control.

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The Compensation Decision Process

The Compensation Committee directly retains the services of independent consultants and other experts to assist in fulfilling its responsibilities. The Compensation Committee currently engages the services of FW Cook (the “Independent Consultant”), a national executive compensation consulting firm, to review and provide recommendations concerning all of the components of the Company’s compensation programs. The Independent Consultant performs services on behalf of the Compensation Committee and has no relationship with the Company or management except as it may relate to performing such services. the Independent Consultant also advises the Nominating and Corporate Governance Committee on outside director compensation. The Compensation Committee has assessed the independence of the Independent Consultant, pursuant to the rules of the SEC and the NYSE and concluded that the Independent Consultant is independent and no conflict of interest exists with respect to the services provided by the Independent Consultant to the Compensation Committee.

During fiscal 2018, the CEO and other members of our senior executive team worked with the Compensation Committee to help ensure that our executive compensation programs are competitive, ethical, and aligned with the Company’s values. For fiscal 2018, compensation decisions for the NEOs (other than our CEO) were made by the Compensation Committee after consultation with the CEO, and the compensation decision with respect to our CEO was approved by the full Board upon recommendation from the Compensation Committee.

Assessing Compensation Competitiveness

The Compensation Committee, with the help of the Independent Consultant, annually compares each element of compensation to that of an industry peer group. For fiscal 2018, as part of its annual review, the Compensation Committee determined that the peer group should be comprised of (1) construction and engineering firms that are direct competitors with the Company for business and executive management talent or (2) companies that provide consulting or technical services to government and large commercial clients. In addition, to be included, a company would need to be generally withinone-third to three times the size of the Company in terms of revenue and market capitalization, evaluated annually.

Similar to prior years, in order to assess compensation competitiveness compared to the peer group, the Independent Consultant utilized comparative data disclosed in publicly available proxy statements, other documents filed with the SEC, and data from a comprehensive database of pay information developed by Willis Towers Watson regarding the industry specific and general industry group in which the Company competes for talent.

The following chart shows our fiscal 2018 industry peer group, including relevant size and performance data to illustrate the Company’s relative position.

Most Recently Available Four Quarters ($M)

 

      

Employees

 

  

Market Capitalization

as of 9/30/18 ($M)

 

 

Revenues

 

      

Net Income

 

 

 Northrop Grumman

 

  

 

$26,774

 

 

 

  

 Raytheon

 

  

 

$2,398

 

 

 

   

 

 DXC Technology

 

 

 

  

 

150,000

 

 

 

  

 Raytheon

 

  

 

$58,952

 

 

 

  

 Raytheon

 

  

 

$25,959

 

 

 

  

 Northrop Grumman

 

  

 

$2,238

 

 

 

   

 

 AECOM Tech

 

 

 

  

 

87,000

 

 

 

  

 Northrop Grumman

 

  

 

$55,262

 

 

 

  

 DXC Technology

 

  

 

$24,602

 

 

 

  

 DXC Technology

 

  

 

$1,851

 

 

 

   

 

 Jacobs

 

 

 

  

 

80,000

 

 

 

  

 Hallliburton

 

  

 

$35,662

 

 

 

  

 Hallliburton

 

  

 

$23,271

 

 

 

  

 L-3 Communications

 

  

 

$889

 

 

 

   

 

 Northrop Grumman

 

 

 

  

 

70,000

 

 

 

  

 DXC Technology

 

  

 

$26,294

 

 

 

  

 AECOM Tech

 

  

 

$19,706

 

 

 

  

 Textron

 

  

 

$870

 

 

 

   

 

 Raytheon

 

 

 

  

 

64,000

 

 

 

  

 Textron

 

  

 

$17,754

 

 

 

  

 Fluor

 

  

 

$19,677

 

 

 

  

 KBR

 

  

 

$500

 

 

 

   

 

 Fluor

 

 

 

  

 

56,706

 

 

 

  

 L-3 Communications

 

  

 

$16,654

 

 

 

  

 Textron 

 

  

 

$14,239

 

 

 

  

 Leidos

 

  

 

$442

 

 

 

   

 

 Hallliburton

 

 

 

  

 

55,000

 

 

 

  

 Jacobs

 

  

 

$10,856

 

 

 

  

 Jacobs

 

  

 

$14,985

 

 

 

  

 Booz Allen Hamilton

 

  

 

$339

 

 

 

   

 

 SNC-Lavalin

 

 

 

  

 

52,448

 

 

 

  

 Leidos

 

  

 

$10,408

 

 

 

  

 Quanta Services

 

  

 

$10,162

 

 

 

  

 Quanta Services

 

  

 

$315

 

 

 

   

 

 Textron

 

 

 

  

 

37,000

 

 

 

  

 Fluor

 

  

 

$8,170

 

 

 

  

 Leidos

 

  

 

$9,991

 

 

 

  

 Jacobs

 

  

 

$163

 

 

 

   

 

 Quanta Services

 

 

 

  

 

32,800

 

 

 

  

 SNC-Lavalin

 

  

 

$7,153

 

 

 

  

 L-3 Communications

 

  

 

$9,821

 

 

 

  

 Fluor

 

  

 

$252

 

 

 

   

 

 EMCOR

 

 

 

  

 

32,000

 

 

 

  

 Booz Allen Hamilton

 

  

 

$7,073

 

 

 

  

 SNC-Lavalin

 

  

 

$7,990

 

 

 

  

 EMCOR

 

  

 

$244

 

 

 

   

 

 Leidos

 

 

 

  

 

31,000

 

 

 

  

 AECOM Tech

 

  

 

$5,251

 

 

 

  

 EMCOR

 

  

 

$7,754

 

 

 

  

 SNC-Lavalin

 

  

 

$241

 

 

 

   

 

 L-3 Communications

 

 

 

  

 

31,000

 

 

 

  

 Quanta Services

 

  

 

$4,983

 

 

 

  

 Booz Allen Hamilton

 

  

 

$6,296

 

 

 

  

 AECOM Tech

 

  

 

$141

 

 

 

   

 

 Booz Allen Hamilton

 

 

 

  

 

24,639

 

 

 

  

 EMCOR

 

  

 

$4,370

 

 

 

  

 KBR

 

  

 

$4,276

 

 

 

  

 Hallliburton

 

  

 

$98

 

 

 

   

 

 KBR

 

 

 

  

 

20,000

 

 

 

  

 KBR

 

  

 

$2,973

 

 

 

  

 75th Percentile

 

  

 

$22,380

 

 

 

  

 

 

  

 

$884

 

 

 

   

 

 

 

 

 

  

 

62,177

 

 

 

  

 

 

  

 

$24,159

 

 

 

  

 Median

 

  

 

$12,200

 

 

 

  

 

 

  

 

$390

 

 

 

    

 

44,724

 

 

 

    

 

$9,289

 

 

 

  

 25th Percentile

 

  

 

$8,448

 

 

 

        

 

$246

 

 

 

          

 

31,250

 

 

 

        

 

$5,707

 

 

 

    

 Jacobs Percentile*

 

  

 

50%

 

 

 

    

 

36%

 

 

 

    

 

86%

 

 

 

    

 

50%

 

 

 

 

2019 Proxy StatementLOGO    33


* Percentile rank calculation includes Jacobs.

Source: Standard & Poor’s Capital IQ.

For fiscal 2018, as part of its annual review, the Compensation Committee, in consultation with the Independent Consultant, added Halliburton to the peer group and removed CH2M due to its acquisition by Jacobs. For fiscal 2019, the Compensation Committee, in consultation with the Independent Consultant, maintained the current peer selection criteria and group size used in fiscal 2018. Based on that criteria, Cognizant Technology Solutions and Parker-Hannifin were added to the peer group and Chicago Bridge & Iron was removed from the peer group due to its acquisition by McDermott International.

Shareholder Engagement andSay-on-Pay

In evaluating the Company’s executive compensation program, the Compensation Committee considers the results of the advisory vote on the“say-on-pay” proposal. At the Company’s 2018 annual meeting, 95.9% of the voting shares approved the proposal. This followed similar results from the Company’s 2017 annual meeting, where 96.4% of the voting shares approved the proposal. The Compensation Committee believes these results, which show a significant improvement over the 80.9% approval received at the Company’s 2016 annual meeting, were due to positive changes made to the Company’s executive compensation program in fiscal 2016 and carried forward.

Members of executive leadership and our Board frequently engage with shareholders and host open, ongoing dialogues around corporate governance matters, including executive compensation. Taking into account the positive support received in both 2017 and 2018 after instituting changes to the compensation program in 2016, the Compensation Committee believes the Company provides a competitivepay-for-performance package that effectively incentivizes and retains executives.

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Compensation Elements

During fiscal 2018, the Compensation Committee utilized findings by the Independent Consultant to determine that the Company’s executive compensation program continued to be both reasonable in relation to competitive pay levels and appropriate in supporting business objectives and a positive performance-based culture. As reflected in the charts below, variable/at risk compensation represents the majority of the total target direct compensation of our CEO and other NEOs.

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34    LOGO|2019 Proxy Statement


Total target direct compensation refers to base salary, short-term incentive compensation (measured at target for the fiscal year) and long-term equity incentive compensation based on grant date fair values (measured at target for PSUs and RSUs). In determining the executive’s overall compensation, the Compensation Committee takes into account the absolute and relative value of each component and the overall mix. As with prior years, the Compensation Committee generally allocated the long-term incentive awards with 60% of the values as PSUs and 40% of the values as RSUs.

The above charts represent our fiscal 2018 total target direct compensation arrangements for our CEO and our other NEOs, including Mr. Mandel’s additional bonus opportunity tied to achieving cost synergy targets related to the integration of the CH2M acquisition, but excluding Mr. Pragada’s additional cash incentive payment received in recognition of his leadership role in the due diligence process, negotiations in connection with the CH2M acquisition and its successful closure, as Mr. Pragada’s payment was a special cash bonus and not part of his fiscal 2018 target direct compensation.

Base Salary

In setting the base salaries of our NEOs, the Compensation Committee utilizes information provided by its Independent Consultant to determine the competitiveness of base salaries compared to the industry peer group and market survey data.

The Compensation Committee also considers the fact that the Company provides limited perquisites. This stems from the Compensation Committee’s belief that focusing on the three core elements of compensation (base salary and short- and long-term incentive compensation) results in a more transparent andeasier-to-administer pay system and is more consistent with the Company’s culture. For example, the Company’s currently available retirement program in the U.S. consists solely of atax-qualified 401(k) plan with matching contributions and anon-qualified salary and bonus (including equity compensation) deferral plan that providesnon-enhanced market returns. Perquisites are generally limited to financial planning and annual health assessments.

After considering market data from our peer group and other market survey information, the Compensation Committee determined that the base salaries of our CEO and CFO for fiscal 2018 would remain at the same levels as fiscal 2017. Effective December 23, 2017, Messrs. Hagen, Mandel and Pragada received base salary increases of 3.8%, 4.2% and 3.6%, respectively, to reflect their successful performance in fiscal 2017 and increased job responsibilities as a result of the CH2M acquisition.

The following table sets forth the base salaries of each of our NEOs for fiscal 2017 and fiscal 2018.

Named Executive  

Officer  

 

 

Fiscal 2017      

Base Salary      

 

 

Fiscal 2018      

Base Salary (1)      

 

 

Percentage      

Increase      

 

Steven J. Demetriou

 

 $1,300,000      

 

 $1,300,000      

 

 0.0%      

 

Kevin C. Berryman

 

 $750,000      

 

 $750,000      

 

 0.0%      

 

Terence D. Hagen

 

 $650,000      

 

 $675,000      

 

 3.8%      

 

Joseph G. Mandel

 

 $720,000      

 

 $750,000      

 

 4.2%      

 

Robert V. Pragada

 

 $695,000      

 

 $720,000      

 

 3.6%      

 

(1)

Salary increases effective December 23, 2017

Short-Term Incentives

The Management Incentive Plan (MIP) continues to reinforce our commitment to profitable growth and effective cash management with specific measures and targets assigned to each participant based on his or her respective role in the organization. As described below, this plan provides for bonus payouts to eligible employees when certain Company-wide and business unit-specific target goals are achieved.

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For fiscal 2018, select officers and managers of the Company, including the NEOs, were eligible to participate in the MIP. As shown in the following chart, an employee’s target MIP award is calculated by multiplying (i) the employee’s annual base salary as of July 1 of the applicable fiscal year by (ii) his or her target percentage of salary. An employee’s actual MIP award amount is calculated by multiplying (i) the employee’s annual base salary as of July 1 of the applicable fiscal year, by (ii) his or her target percentage of salary, and then by (iii) the performance achievement factor.

Base Salary  

as of July 1,  

2018  

  X  

Target  

Percentage  

of Salary  

  =  

2018 Target  

MIP Award  

Base Salary  

as of July 1,  

2018  

  X  

Target  

Percentage  

of Salary  

  X  

Performance  

Achievement  

Factor  

  =  

2018 Actual  

MIP Award  

Each year, the Company establishes performance achievement factors for each participant based on his or her role in the Company. For those participants with exclusively corporate level responsibilities, such as the CEO and the CFO, their bonus opportunity for fiscal 2018 was tied entirely to company-wide metrics. For our Executive Vice President, Integration Management Office, his bonus opportunity for fiscal 2018 was tied to Company-wide metrics, with an additional bonus opportunity tied to achieving cost synergy targets related to the integration of the CH2M acquisition. For those participants who are aligned with a business unit or line of business, such as Messrs. Hagen and Pragada, 45% of their bonus opportunity for fiscal 2018 was tied to the operating metrics defined for their business unit or line of business, as applicable. These operational metrics reinforce the direct link between each leader’s contribution to the success of their business unit or line of business and their compensation. The remaining 55% of those participants’ bonus opportunity for fiscal 2018 was tied to Company-wide metrics to encourage collaboration across business unit lines to drive the Company’s overall results. During fiscal 2018, Mr. Pragada received an additional cash incentive payment in recognition of his leadership role in the due diligence process, negotiations in connection with the CH2M acquisition and its successful closure. Refer to the Summary Compensation Table for information on this additional cash incentive payment.

MIP Awards to CEO, the CFO and the Executive Vice President, Integration Management Office

For fiscal 2018, the Compensation Committee established the minimum, target and maximum performance levels under the MIP for Messrs. Demetriou, Berryman and Mandel based on the Company-wide metrics of Consolidated Operating Profit, DSO and GM in Backlog. The corresponding fiscal 2018 actual results, performance levels, relative weighting and actual performance achievement percentages are shown in the chart below. Refer to page 38 for descriptions of how the metrics are calculated.

Performance Metrics    

Performance Levels

 

 

2018 Actual
  Performance Level  

Achievement

(% of Payout)

 

 

Relative
  Weighting  

(%)

   
 

  2018 Actual  

Results

 

Minimum

  (25% Payout)  

 

Target

  (100% Payout)  

 

Maximum

  (200% Payout)  

 

  2018 Actual Performance  

Achievement

(% of Target)

 

 

Consolidated Operating Profit

 

 

$906.5M

 

 

$704M

 

 

$829M

 

 

$953M

 

 

162.3%

 

 

70%

 

 

113.6%

 

Consolidated DSO

 

 

62.5

 

 

65.3

 

 

61.3

 

 

59.3

 

 

77.5%

 

 

15%

 

 

11.6%

 

Consolidated GM in Backlog

 

 

$5,123M

 

 

$4,940M

 

 

$5,200M

 

 

$5,460M

 

 

77.8%

 

 

15%

 

 

11.7%

 

Total

           

 

100.0%

 

 

136.9%

The calculation of Messrs. Demetriou’s Berryman’s and Mandel’s target MIP award and actual MIP award for fiscal 2018 is shown below, based on their target percentage of salaries of 150%, 100% and 100%, respectively.

Named Executive

Officer

     Base Salary as of    
July 1,  2018
   Target %   

  2018 Target MIP  

Award

 

 

Performance
Achievement
  Factor (% of Target)  

 

 

    2018 Actual MIP    

Award

 

Steven J. Demetriou

 

 

$1,300,000

 

 

150%

 

 

$1,950,000

 

 

136.9%

 

 

$2,669,990

 

Kevin C. Berryman

 

 

$750,000

 

 

100%

 

 

$750,000

 

 

136.9%

 

 

$1,026,919

 

Gary Mandel

 

 

$750,000

 

 

100%

 

 

$750,000

 

 

136.9%

 

 

$1,026,919

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Additional Award to the Executive Vice President, Integration Management Office

For fiscal 2018, the Compensation Committee also established minimum, target and maximum performance levels for Mr. Mandel’s additional bonus opportunity tied to achieving cost synergy targets related to the integration of the CH2M acquisition. The corresponding fiscal 2018 actual results, performance levels, relative weighting and actual performance achievement percentages are shown in the chart below.

Performance Metrics 

Performance Levels

 

 

2018 Actual
  Performance Level  

Achievement
(% of Payout)

 

 Relative
  Weighting  
(%)
   
 Minimum
  (25% Payout)  
 Target
  (100% Payout)  
 Maximum
  (200% Payout)  
 

  2018 Actual Performance  
Achievement
(% of  Target)

 

CH2M Net Cost Synergies

 

 

 

$50M

 

 

 

$65M

 

 

 

$80M

 

 

 

200.0%

 

 

 

100%

 

 

 

200.0%

 

The calculation of Mr. Mandel’s additional cost synergies award for fiscal 2018 is shown below. Based upon achieving cost synergies of over $80 million related to the integration of the CH2M acquisition, the maximum payout performance level, he received an additional award of $2,000,000.

Named Executive Officer 

Target Cost      

Synergies Award      

 Target %       

 

Performance Level        

Achievement        

(% of Target)        

 

 

  2018 Actual Cost  

  Synergies  

  Award  

 

Joseph G. Mandel

 

 

 

$1,000,000      

 

 

 

100%      

 

 

 

200%        

 

 

 

$2,000,000      

 

Awards to Other NEOs

In light of Mr. Hagen’s oversight of the Company’s Aerospace, Technology, Environmental and Nuclear (ATEN) line of business, as well as his executive role at the Company, the Compensation Committee established the minimum, target and maximum performance levels under the MIP for Mr. Hagen for fiscal 2018 based on the metrics Consolidated Operating Profit and Consolidated DSOs, as well as Operating Profit and GM in Backlog for the ATEN line of business as set forth in the chart below. The corresponding fiscal 2018 actual results, performance levels, relative weighting and actual achievement percentages are shown in the chart below.

Performance Metrics    

Performance Levels

 

 

2018 Actual
  Performance Level  

Achievement
(% of Payout)

 

Relative
  Weighting

(%)

   
 

  2018 Actual  

Results

 

Minimum

  (25% Payout)  

 

Target

  (100% Payout)  

 

Maximum

  (200% Payout)  

 

  2018 Actual Performance  

Achievement

(% of Target)

 

Consolidated Operating Profit

 

 

 

$906.5M

 

 

 

$704M

 

 

 

$829M

 

 

 

$953M

 

 

 

162.3%

 

 

 

40%

 

 

 

64.9%

 

 

ATEN Operating Profit

 

 

 

$323.8M

 

 

 

$263M

 

 

 

$309M

 

 

 

$356M

 

 

 

131.9%

 

 

 

30%

 

 

 

39.6%

 

 

Consolidated DSO

 

 

 

62.5

 

 

 

65.3

 

 

 

61.3

 

 

 

59.3

 

 

 

77.5%

 

 

 

15%

 

 

 

11.6%

 

 

ATEN GM in Backlog

 

 

 

$1,306M

 

 

 

$1,216M

 

 

 

$1,280M

 

 

 

$1,344M

 

 

 

140.0%

 

 

 

15%

 

 

 

21.1%

 

 

Total

 

           

 

100.0%

 

 

 

137.2%

 

The calculation of Mr. Hagen’s target MIP award and actual MIP award for fiscal 2018 is shown below, based on his target incentive percentage of salary of 100%.

Named Executive
Officer
 

Base Salary as      

of July 1, 2018      

 Target %       

2018 Target MIP      

Award

 

 

Performance      

Achievement      

Factor (% of Target)      

 

 

2018 Actual MIP      

Award      

 

Terence D. Hagen

 

 

 

$675,000      

 

 

 

100%      

 

 

 

$675,000      

 

 

 

137.2%      

 

 

 

$926,303      

 

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In light of Mr. Pragada’s oversight of the Company’s Buildings, Infrastructure and Advanced Facilities (BIAF) line of business, as well as his executive role at the Company, the Compensation Committee established the minimum, target and maximum performance levels under the MIP for Mr. Pragada for fiscal 2018 based on the metrics Consolidated Operating Profit and Consolidated DSOs, as well as Operating Profit and GM in Backlog for the BIAF line of business as set forth in the chart below. The corresponding fiscal 2018 actual results, performance levels, relative weighting and actual achievement percentages are shown in the chart below.

Performance Metrics    

Performance Levels

 

 

2018 Actual
  Performance Level  

Achievement

(% of Payout)

 

 

Relative

  Weighting  

(%)

   
 

  2018 Actual  

Results

 

Minimum

  (25% Payout)  

 

Target

  (100% Payout)  

 

Maximum

  (200% Payout)  

 

  2018 Actual Performance  

Achievement

(% of Target)

 

 

Consolidated Operating Profit

 

 

 

$906.5M

 

 

 

$704M

 

 

 

$829M

 

 

 

$953M

 

 

 

162.3%

 

 

 

40%

 

 

 

64.9%

 

 

BIAF Operating Profit

 

 

 

$505.4M

 

 

 

$399M

 

 

 

$470M

 

 

 

$540M

 

 

 

150.2%

 

 

 

30%

 

 

 

45.1%

 

 

Consolidated DSO

 

 

 

62.5

 

 

 

65.3

 

 

 

61.3

 

 

 

59.3

 

 

 

77.5%

 

 

 

15%

 

 

 

11.6%

 

 

BIAF GM in Backlog

 

 

 

$2,933M

 

 

 

$2,787M

 

 

 

$2,934M

 

 

 

$3,080M

 

 

 

99.5%

 

 

 

15%

 

 

 

14.9%

 

 

Total

 

           

 

100.0%

 

 

 

136.5%

 

The calculation of Mr. Pragada’s target MIP award and actual MIP award for fiscal 2018 is shown below, based on his target incentive percentage of salary of 100%. In addition to this MIP award, Mr. Pragada also received a separate cash incentive payment of $300,000 for his leadership role in the due diligence process, negotiations in connection with the CH2M acquisition and its successful closure.

Named Executive

Officer

 

Base Salary as      

of July 1, 2018      

 Target %       

2018 Target MIP      

Award      

 

 

Performance      

Achievement      

Factor (% of Target)      

 

 

2018 Actual MIP      

Award      

 

Robert V. Pragada

 

 

 

 

$720,000      

 

 

 

 

100%      

 

 

 

 

$720,000      

 

 

 

 

136.5%      

 

 

 

 

$983,118      

 

 

For purposes of calculating the payouts for the 2018 MIP awards:

Consolidated Operating Profit means total gross margin less selling, general and administrative expenses (“SG&A”) of the Company, as adjusted for special items that are unusual,non-recurring or otherwise not indicative of the Company’s normal operations and which were not anticipated in setting the original targets. Any such adjustments must be approved by the Compensation Committee. For example, such adjustments include, without limitation: (i) charges for restructurings; (ii) gains or losses on the disposal of a segment of the business or in connection with discontinued operations; (iii) charges for the impairment of goodwill or other long-lived assets; (iv) gains / losses on the sale of assets; (v) major litigation settlements and/or other judgments; (vi) the effects of changes in accounting principles, laws or regulations affecting reported results; and (vii) costs and expenses relating to acquisitions.

Consolidated DSO (Days Sales Outstanding) means the average of the four quarters ended September 28, 2018 of (i) accounts receivable of the Company at the end of each quarter divided by (ii) the daily sales for each quarter.

Operating Profit means for each line of business, total gross margin earned by such applicable line of business, as adjusted for unusual ornon-recurring items as set forth above, less the SG&A for the applicable line of business and less allocated corporate SG&A expenses, including cash and equity incentive compensation.

GM in Backlogmeans for each line of business, starting Gross Margin in Backlog for such applicable line of business as adjusted for (1) new awards, (2) scope increases of new and existing work, (3) cancellations and corrections of understatements/overstatements, (4) acquisitions, and (5) the foreign exchange effect, less the Gross Margin burn for the fiscal year. Gross Margin in Backlog must follow Jacobs’ backlog rules for various contract types.

In fiscal 2018, the Compensation Committee used its discretion to approve adjustments to the levels of performance metric results to reflect the exclusion of (i) charges associated with an ATEN legal matter initiated in 2013, (ii) benefits associated with a BIAF legal matter initiated in 2009 and (iii) CH2M’s operating profit associated with the “stub period” of CH2M ownership from the date of acquisition on December 18, 2017 through the end of CH2M’s fiscal year on December 31, 2017.

Achieving minimum performance levels result in a payout of 25% of target; target performance levels result in a payout of 100% of target; and maximum performance levels result in a payout of 200% of target. Actual award payments are calculated by linear interpolation for achievement of goals other than those specified.

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The payment of bonuses for fiscal 2018 to the NEOs was conditioned upon the Company achieving a performance goal of $100 million of net earnings in an effort to be fully deductible as performance-based compensation under Section 162(m) of the Internal Revenue Code (the “Code”). This goal was met, thus the participating NEOs became entitled to receive a bonus payment equal to 200% of their target bonus, subject to the complete discretion of the Compensation Committee to reduce the bonus payment to a lesser amount. The Compensation Committee exercised its discretion to reduce bonus amounts in accordance with the methodology described above.

Equity-Based Compensation

The Compensation Committee believes that long-term equity incentives should comprise the majority of compensation for the Company’s senior management, including the NEOs. In deciding upon the design and magnitude of long-term incentives, the Compensation Committee is guided by several factors, including alignment with shareholder interests, ease of understanding by participants, and retentiveness. The Compensation Committee also takes into account market data, information and recommendations from the Independent Consultant, and information provided by management, including recommendations by the CEO with respect to the magnitude of equity incentives for executive officers other than himself. Other thanoff-cycle awards for new hires, promotions or retention grants, the Compensation Committee generally awards equity incentives to NEOs and senior management in the first 90 days of each fiscal year.

To determine the dollar value of awards to be granted to the NEOs and consistent with its prior process for determining the magnitude of awards, the Compensation Committee examined data with respect to competitive grant values at the industry peer group companies. It also considered the size of the awards previously granted to the NEOs, which reflected the Compensation Committee’s previous evaluation of the magnitude of awards considered necessary in order to align the awards with competitive levels. The determination of award levels in fiscal 2018 also took into account the Compensation Committee’s review of the CEO’s performance and that of the other NEOs (and the CEO’s recommendations with respect to the other NEOs), as well as the Company’s overall performance. The Compensation Committee also took into account the increased job responsibilities of the NEOs resulting from the acquisition of CH2M.

In fiscal 2018, our NEOs’ equity-based compensation consisted of the following awards, other than Mr. Mandel who received 100% of his fiscal 2018 equity grant in RSUs:

Forms of 2018 Long-Term Incentive Grants

Weight    

Performance Metrics and Vesting Period             

Performance Based Restricted Stock Units (PSUs)60%

Performance Metrics:

-  50% EPS Growth over three-year period

-  50% ROIC over three-year period

Time-Based Restricted Stock Units (RSUs)

40%

25% annual vesting over four-year period

A summary of the equity awards granted in fiscal 2018 to each NEO is provided below:

Named Executive Officer Grant Date   PSUs Awarded (1)   

PSU  

Value  

Awarded  

 

RSUs  

Awarded  

 

RSU Value  

Awarded  

 

 

Total  

Value  

Awarded  

 

Steven J. Demetriou

 

 

11/29/2017  

 

 83,296  

 

 $5,400,080  

 

 55,529  

 

 $3,599,945  

 

 $9,000,025  

 

Kevin C. Berryman

 

 

11/29/2017  

 

 18,510  

 

 $1,200,003  

 

 12,340  

 

 $800,002  

 

 $2,000,006  

 

Terence D. Hagen

 

 

11/29/2017  

 

 15,502  

 

 $1,004,995  

 

 10,335  

 

 $670,018  

 

 $1,675,013  

 

Joseph G. Mandel

 

 

11/29/2017  

 

 0  

 

 $0  

 

 26,223  

 

 $1,700,037  

 

 $1,700,037  

 

Robert V. Pragada

 

 

11/29/2017  

 

 15,734  

 

 $1,020,035  

 

 10,489  

 

 $680,002  

 

 $1,700,037  

 

(1)

Represents the target payout shares as described under “Executive Compensation—2018 Grants of Plan Based Awards” below.

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Fiscal 2018 Equity Awards

Performance Stock Units (PSUs)

Fiscal 2018 PSU awards will vest, following a three-year performance period (starting on the first day of fiscal 2018 and ending on the last day of fiscal 2020), based on the following performance metrics:

-

50% of the PSUs will vest based on the Company’s achievement of a certain EPS Growth Rate over a three-year performance period (the “EPS Based PSU Awards”); and

-

50% of the PSUs will vest based on the Company’s achievement of a certain ROIC during the same three-year performance period (the “ROIC Based PSU Awards”).

Earnings Per Share (EPS) Based PSU Awards:

The Compensation Committee believes that EPS is a key indicator of a company’s performance for shareholders. It is the predominant metric used in performance-based equity awards of the Company’s peers and its use is intended to improve the focus on profitability, growth and financial discipline, while aligning the interests of the Company’s senior executives with the long-term interests of shareholders.

The number of EPS Based PSU Awards that will vest (and the corresponding number of shares that will be issued at the end of the three-year performance period) is based on the Company’s EPS Growth Rate measured at the end of each of fiscal 2018, 2019 and 2020, in each case measured from fiscal 2017 EPS. Amounts are locked in annually but not distributed until after the three-year performance period. This calculation is shown in the following charts:

1/3 of Target

EPS Based

PSUs

    X    

EPS Growth Performance

Multiplier for EPS

Growth Rate in fiscal

2018 over fiscal 2017

    =    

First Year EPS

Locked-In

 

Average Adjusted

EPS

Growth - Fiscal Year

2017-2018

 

 

EPS Growth Performance

Multiplier

 

  
 

 

Less than 10.7%

 

 

 

0%

 

  
 

10.7%

 

 

50%

 

  
 

15.7%

 

 

100%

 

  
 

20.7%

 

 

200%

 

  

2/3 of Target

EPS Based PSUs

    X    

EPS Growth Performance

Multiplier for Compound

EPS Annual Growth Rate

for fiscal 2019 over fiscal

2017

    -    

Number

of First

Year EPS

Shares

Locked-In

    =    

Second Year

EPS Shares

Locked-In

 

Average Adjusted

Compound EPS

Growth - Fiscal Year

2017-2019

 

 

EPS Growth

Performance

Multiplier

 

  
 

Less than 12.1%

 

 

0%

 

  
 

12.1%

 

 

50%

 

  
 

15.6%

 

 

100%

 

  
 

19.1%

 

 

200%

 

  

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Target EPS

PSUs

  X  

EPS Growth Performance Multiplier for Compound EPS Annual Growth Rate for

fiscal 2020 over fiscal 2017

  -  

Number of First

Year EPS Shares

Locked-In and number

of Second Year

EPS Shares

Locked-In

  =  

Total number

of Shares

Earned and

to be issued

 

Average Adjusted

Compound EPS

Growth - Fiscal Year

2017-2020

 

 

EPS Growth

Performance

Multiplier

 

  
 

Less than 11.7%

 

 

0%

 

  
 

11.7%

 

 

50%

 

  
 

13.7%

 

 

100%

 

  
 

15.7%

 

 

200%

 

  

The “EPS Growth Performance Multiplier” is determined by reference to the tables above based upon the Company’s EPS Growth Rate or Compound Annual EPS Growth Rate over the relevant fiscal periods. The Compensation Committee set these metrics based on the Company’s plan at the time of grant.

EPS” for any fiscal period is computed by dividing Adjusted Net Earnings by the weighted average number of shares of the Company’s common stock outstanding during the period.

Adjusted Net Earnings” means the net earnings attributable to the Company as reported in its consolidated financial statements for such period determined in accordance with GAAP (A) as may be adjusted to eliminate the effects of (i) costs associated with restructuring and integration activities, regardless of whether the Company discloses publicly the amount of such restructuring and integration costs or the fact that the Company engaged in restructuring and integration activities during the periods restructuring costs were incurred; and (ii) gains or losses associated with discontinued operations, as determined in accordance with GAAP, but limited to the first reporting period an operation is determined to be discontinued and all subsequent periods (i.e., there will be no retroactive application of the adjustment); and (B) as adjusted for all gains or losses associated with events or transactions that the Compensation Committee has determined are unusual in nature, infrequently occurring and otherwise not indicative of the Company’s normal operations, and therefore, not indicative of the underlying Company performance. For these purposes, such events or transactions could include: (i) settlements of claims and litigation, (ii) disposals of operations including a disposition of a significant amount of the Company’s assets, (iii) losses on sales of investments, (iv) changes in laws and/or regulations, and (v) acquisitions.

Return on Invested Capital (ROIC) Based PSU Awards:

The Compensation Committee believes that ROIC is an effective means of linking executive compensation to value creation that holds management accountable for the efficient use of capital, and has used this performance metric for fiscal 2017 and 2018 awards. Prior to fiscal 2017, the Company granted awards that vested based on the Company’s total shareholder return (or TSR) compared to that of its peer group over a three-year period.

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The number of ROIC Based PSU Awards that will vest (and the corresponding number of shares to be issued) is based on the Company’s average ROIC measured at the end of the three-year performance period. The calculation is shown in the following charts:

    Target ROIC         

Based    

Awards    

  X  

ROIC

Performance

Multiplier for ROIC

  from fiscal 2018 to  

fiscal 2020

  =  

3-Year ROIC

Shares

  

Average ROIC - Fiscal        

Year 2018-2020        

 

  

ROIC    

Performance    

Multiplier    

 

   
 

 

Less than 7.8%        

 

  

 

0%    

 

  
 

 

7.8%        

 

  

 

50%    

 

  
 

 

8.8%        

 

  

 

100%    

 

  
 

 

9.8%        

 

  

 

200%    

 

  

The “Return on Invested Capital” (or ROIC) for any fiscal period is computed by dividing Adjusted Net Earnings by the average invested capital on the first day of fiscal 2018 and on the last day of fiscal 2020. Invested capital is the sum of equity plus long-term debt less cash and cash equivalents.

Adjusted Net Earnings” means the net earnings attributable to the Company as reported in its consolidated financial statements for such period determined in accordance with GAAP (A) as may be adjusted to eliminate the effects of (i) costs associated with restructuring and integration activities, regardless of whether the Company discloses publicly the amount of such restructuring and integration costs or the fact that the Company engaged in restructuring and integration activities during the periods restructuring costs were incurred; and (ii) gains or losses associated with discontinued operations, as determined in accordance with GAAP, but limited to the first reporting period an operation is determined to be discontinued and all subsequent periods (i.e., there will be no retroactive application of the adjustment); and (B) as adjusted for all gains or losses associated with events or transactions that the Compensation Committee has determined are unusual in nature, infrequently occurring and otherwise not indicative of the Company’s normal operations, and therefore, not indicative of the underlying Company performance. For these purposes, such events or transactions could include: (i) settlements of claims and litigation, (ii) disposals of operations including a disposition of a significant amount of the Company’s assets, (iii) losses on sales of investments, (iv) changes in laws and/or regulations, and (v) acquisitions.

Restricted Stock Unit (RSU) Grants:

The 2018 RSU awards vest ratably over a four-year period, other than RSUs granted to Mr. Mandel, which vest ratably over atwo-year period due to the short-term nature of Mr. Mandel’s role overseeing the integration of the CH2M acquisition.

Vesting Provisions Applicable to Fiscal 2018 Equity Grants:

To incentivize senior management during periods of uncertainty leading up to the CH2M acquisition and subsequent integration, all equity awards granted in fiscal 2018, including equity awards granted to the NEOs, provide for accelerated vesting in the event of an involuntarily termination of employment without cause as follows:

For the RSUs, upon an involuntary termination of employment without cause prior to the first annual vesting date, 50% of the RSUs will vest at the time of separation, and upon an involuntary termination of employment without cause on or after the first vesting date, the remaining outstanding and unvested RSUs will vest at the time of separation. For the PSUs, upon an involuntary termination of employment without cause prior to the final vesting date, apro-rated portion of PSUs (based on the number of days during the performance period that the

42    LOGO|2019 Proxy Statement


employee was employed by the Company) shall remain outstanding and eligible to vest based on the performance vesting criteria through the end of the applicable performance period, and the remainder of the award will be forfeited at the time of separation for no consideration.

Dividend Equivalent Rights

All RSU awards are entitled to accumulated dividend equivalent rights that are subject to the same vesting, payment and other terms and conditions as the underlying award to which the dividend equivalent relates. The crediting of dividend equivalents is intended to treat the equity award holders consistently with shareholders and preserve the equity-based incentives intended by the Company when the awards were granted. The dividend equivalents pay in cash upon the vesting and settlement of the underlying RSUs.

Long-Term Incentive Plan Metrics and Performance Attainment – PSU with Performance Periods Ending in Fiscal 2018

Four of our NEOs served as executive officers of the Company in fiscal 2015 and received grants of PSUs at that time: Messrs. Demetriou, Berryman, Hagen and Mandel (Mr. Pragada was not employed by the Company in fiscal 2015). These awards were based on a three-year performance period that leveraged both short- and long-term goals. If certain thresholds of performance were not attained, then no payout was earned for the award. The performance metrics associated with these PSUs were weighted at 100% Net Earnings Growth (“NEG”), with the performance period beginning on the first day of the third quarter of fiscal 2015 and ending on the last day of the second quarter of fiscal 2018.

2015 Net Earnings Growth (NEG) Based PSU Awards

The method of calculating the number of shares underlying the PSUs based on NEG (the “NEG Based Awards”) granted in fiscal 2015 that vested is summarized below.

The total number of units awarded accumulated over the three-year performance period in three segments:

One-third of award is based on NEG in Year 1 (Q3 FY2015 – Q2 FY2016);

One-third of award is based on average NEG in Years 1 – 2 (Q3 FY2015 – Q2 FY2017); and

One-third of award is based on average NEG in Years 1 – 3 (Q3 FY2015 – Q2 FY2018).

The first two years of the program are considered a “lock in” period, meaning it was possible to “lock in” vesting of up totwo-thirds of the total potential award based on performance during that period. The following NEG performance vesting schedule was approved by the Compensation Committee in fiscal 2015:

 

Average NEG

in Each Segment

of Performance Period

  

NEG Performance    

Multiplier    

 

Less than 5%

 

  

 

0%    

 

 

5.0%

 

  

 

50%    

 

 

10.0%

 

  

 

100%    

 

 

15.0%

 

  

 

150%    

 

 

20% or greater

 

  

 

200%    

 

The NEG Performance Multiplier was determined by linear interpolation for growth rates between 5% and 10%, between 10% and 15% and between 15% and 20%.

2019 Proxy StatementLOGO    43


The following chart summarizes the Company’s NEG during the performance period and the resulting vesting under the approved performance criteria:

   

 

Performance Period

 

  

 

Net Earnings

(in thousands)

 

  

 

Cumulative

Avg. NEG
Growth

 

  

 

NEG Performance

Multiplier

 

 

 

 Baseline Earnings

 

 

 

Q3 FY14 - Q2 FY15

 

  

 

$419,960

 

    

 

 Year 1

 

 

 

Q3 FY15 - Q2 FY16

 

  

 

$329,915

 

  

 

 

 

 

-21.4%

 

 

 

 

 

 

 

 

 

0.00%

 

 

 

 

 

 Year 2

 

 

 

Q3 FY16 - Q2 FY17

 

  

 

$366,520

 

  

 

 

 

 

-5.2%

 

 

 

 

 

 

 

 

 

0.00%

 

 

 

 

 

 Year 3

 

 

 

Q3 FY17 - Q2 FY18

 

  

 

$462,469

 

  

 

 

 

 

5.3%

 

 

 

 

 

 

 

 

 

52.8%

 

 

 

 

Total NEG   

Based Awards  

Granted   

 X  

3 Year Avg. 

NEG 

Performance 

Multiplier 

 =  

52.8% of Shares to

be Distributed

As a result of the NEG performance over the three-year performance period, Messrs. Demetriou, Berryman, Hagen and Mandel received 52.8% of the shares underlying the NEG Based Awards, as shown in the following table:

 

Participant Name

 

 

 

Vesting Date  

 

 

 

NEG Based
Awards Granted  

 

 

 

% Target Earned  

 

 

 

Shares Earned  

 

 

 

Shares Not Earned  

 

 Steven J. Demetriou

 06/08/2018   16,065 52.8% 8,482 7,583

 Kevin C. Berryman

 06/08/2018   9,500 52.8% 5,016 4,484

 Terence D. Hagen

 06/08/2018   9,500 52.8% 5,016 4,484

 Joseph G. Mandel

 06/08/2018   9,500 52.8% 5,016 4,484

Grant Process

The Compensation Committee has delegated certain limited authority to the CEO to make equity grants in accordance with the rules established by the Compensation Committee fornon-executive officers throughout the year. As soon as administratively practicable after a new hire, promotion, or retention warrants an equity grant, the CEO reviews and approves the award. All awards are granted when the CEO takes action. The Compensation Committee periodically receives reports of the CEO’s actions. In fiscal 2018, no awards were made on a date other than when the Compensation Committee met or following approval by the CEO pursuant to delegated authority.

Other Benefits and Policies

Benefits Programs

With the exception of the Company’s Executive Severance Plan, Executive Deferral Plan (“EDP”), which is generally available to most of senior management, and certain expatriate arrangements, the Company provides executives with the same benefit plans offered to U.S. staff employees.

401(k) Plan: During fiscal 2018, the CEO and other NEOs were eligible to participate in the Company’s 401(k) plan, the same plan offered to the Company’s full-time employees in the United States. The plan provides a match by the Company equal to 50% of the first 6% of eligible pay (currently $275,000). None of the NEOs participated in any defined benefit retirement or supplemental retirement benefit plan.

Employee Stock Purchase Plans: The Company has qualified employee stock purchase plans in which all employees meeting certain minimum eligibility requirements in certain countries are eligible to participate. The Company adopted a safe-harbor plan design in 2006 that provides for a 5% discount from the closing price of a share of common stock at the end of each purchase period. The safe-harbor plan results in no accounting cost to the Company.

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Non-qualified Executive Deferral Plan (EDP): Select employees, including the NEOs, meeting certain compensation minimums may elect to participate in the Company’s EDP whereby a portion of salary and bonus (including equity compensation) is deferred and paid to the employees at some future date including upon retirement or death. Participant deferrals are credited with earnings and losses based upon the actual experience of the deemed investments selected by participants with equity compensation deferrals generally being credited with earnings and losses based on the actual experience of the Company’s common stock. See “ExecutiveCompensation—Non-qualified Deferred Compensation” below for a further description of the EDP.

Executive Severance Plan: Recognizing the prevalence of severance plans among our peers and the need to attract and retain talented executives, in fiscal 2018 the Company adopted an Executive Severance Plan that provides severance benefits to certain key executives, including the NEOS, designated by the Compensation Committee from time to time in the event of either (i) a termination of employment by the Company other than for cause that is unrelated to a change of control or (ii) a termination of employment by the Company other than for cause or by the participant for good reason, in each case during thetwo-year period following a change of control.

Perquisites

Our NEOs are eligible for the same benefits as those offered to staff employees, including relocation benefits. Executives may have spousal travel paid for by the Company only when it is for an approved business purpose, in which case a related taxgross-up is provided. NEOs are also provided with financial planning assistance and annual health assessment benefits.

The Company leases a private aircraft to allow certain executive officers, primarily the CEO, to safely and efficiently travel for business purposes around the world. Use of a private aircraft provides a confidential and highly productive environment for executive officers to conduct business while traveling. We do not allow personal usage of the private aircraft at the Company’s expense. Incidental travel by family members of an executive officer in connection with such executive’s business travel is permitted so long as the executive reimburses the Company for the cost of such travel.

Payments Upon Termination or Change in Control

Executive Severance Plan: As described above, the Company adopted an Executive Severance Plan in fiscal 2018 that provides the following severance benefits to certain key executives, including the NEOs (with certain exceptions for Mr. Mandel, as described below), in the event of either (i) a qualifying involuntary termination of employment that is unrelated to a change in control or (ii) a qualifying termination of employment during thetwo-year period following a change of control. Payments under this plan are conditioned upon the receipt of a customary waiver and general release of claims from the executive. In addition, the executives will be subject to restrictive covenants, includingnon-disclosure of confidential information,non-disparagement restrictions and12-monthnon-competition andnon-solicitation obligations. Payments under this plan do not include any taxgross-ups.

Non-Change in Control Severance Benefits—In the event of a termination of the participant’s employment by the Company other than for cause (as defined in the plan), the participant will be entitled to receive the following benefits: (i) a cash payment equal to 1.5 times (for the CEO) or 1 times (for the other NEOs with the exception of Mr. Mandel as described below, and covered executives) the sum of the participant’s (x) base salary and (y) target annual incentive award; and (ii) a cash payment equal to 1.5 times (for the CEO) or 1 times (for the other NEOs and covered executives) the sum of (x) the annual COBRA premium for continued participation in the Company’s group health plans and (y) the annual fee for continued receipt of financial advisory services. In addition, the participant’s unvested and outstanding equity awards that are scheduled to vest within the nine month period following the date of termination will continue to vest in accordance with their original vesting schedule.

Change in Control Severance Benefits—In the event of a termination of the participant’s employment by the Company other than for cause or by the participant for good reason (as defined in the Plan), in each case within the two year period after a change in control (as defined in the Executive Severance Plan), the participant will be entitled to receive the following benefits: (i) a cash payment equal to 2 times (for the CEO) or 1 times (for the other NEOs and covered executives) the sum of the participant’s (x) base

2019 Proxy StatementLOGO    45


salary and (y) target annual incentive award; and (ii) a cash payment equal to the participant’s target annual incentive award, prorated based on the number of days the participant was employed during the fiscal year of termination; and (iii) a cash payment equal to 2 times (for the CEO) or 1 times (for the other NEOs and covered executives) the sum of (x) the annual COBRA premium for continued participation in the Company’s group health plans and (y) the annual fee for continued receipt of financial advisory services. In the event such termination occurs, unvested and outstanding equity awards are governed by the Stock Incentive Plan as described below.

Employment Agreements: During fiscal 2018, the Company was party to an employment agreement with Mr. Mandel, which was entered into in connection with the completion of a transaction pursuant to which the Company acquired Mr. Mandel’s former employer. This employment agreement provided for benefits in the event of termination of employment that is not in connection with a change in control. Under this employment agreement, Mr. Mandel was entitled to a severance payment equal to 12 months of base salary and the continuation costs of 12 months of COBRA premiums upon a termination by the Company without cause (as defined in the employment agreement), conditioned upon his execution andnon-revocation of a general release in favor of the Company. Mr. Mandel participated in the Executive Severance Plan for benefits in the event of termination of employment in connection with a change in control, as described above.

On November 20, 2018, the Company entered into a Retirement Transition Agreement with Mr. Mandel. The Retirement Transition Agreement supersedes and replaces Mr. Mandel’s employment agreement with the Company and terminates his participation in the Executive Severance Plan for benefits in the event of a termination of employment in connection with a change in control. The Retirement Transition Agreement, which contains a general release in favor of the Company, provides that effective April 1, 2019, Mr. Mandel will begin transitioning to his retirement from the Company effective December 31, 2019 (the “Transition Period”). During the Transition Period, Mr. Mandel will continue to serve as a special advisor to Jacobs’ Chief Executive Officer on a modified, full-time basis. During this Transition Period, Mr. Mandel will receive the equivalent of 12 months base salary, plus he will maintain his health and welfare benefits. Provided Mr. Mandel is not involuntarily terminated with cause, as defined in the Retirement Transition Agreement, and he executes a supplemental general release agreement upon his retirement date, Mr. Mandel will also receive a termination payment of $250,000. The Retirement Transition Agreement provides discretion to the Company to increase the termination payment if determined appropriate by the Company, in its sole discretion, based on an evaluation of the services performed by Mr. Mandel during the Transition Period. Under the Retirement Transition Agreement, Mr. Mandel is not eligible to participate in the Company’s fiscal 2019 long term incentive plans or Management Incentive Plan.

Stock Incentive Plan: Consistent with all participants in the 1999 Stock Incentive Plan, as amended, NEOs may be entitled to prorated vesting at retirement of PSUs granted during fiscal 2016 and thereafter. In the case of a participant whose employment is terminated in the event of death or Disability (as defined in the Jacobs Engineering Group Inc. 1999 Stock Incentive Plan), the terms of our stock options and RSA and RSU grants provide for accelerated vesting while PSUs would remain outstanding and eligible to vest, with the final determination of the payout, if any, generally determined at the end of the three-year performance period. Additionally, the terms of stock options, restricted stock, RSUs and PSUs provide for potential double trigger equity acceleration upon certain terminations following a Change in Control (as defined in the Stock Incentive Plan) as a means of focusing executive officers on shareholder interests when considering strategic alternatives. If a Change in Control occurs and certain options, restricted stock, RSUs and PSUs are not assumed and continued by the acquiring or surviving corporation in the transaction (or a parent corporation thereof), then all such awards will vest immediately, with awards of restricted stock that are subject to performance-based vesting criteria and/or PSUs paid at a level based upon the Company’s actual performance as of the date of the Change in Control.

The estimated payments and benefits provided in each of the covered circumstances may be found under “Executive Compensation—Compensation Under Various Termination Scenarios” below.

Stock Ownership Guidelines

The Company has established stock ownership guidelines for its executive officers. The ownership guidelines provide that the Chair and CEO is expected to own Company stock valued at six times his annual base salary and the CFO, Presidents of Lines of Business and Executive Vice Presidents are expected to own Company stock valued at three times their annual base salary. Other senior executives, including Senior Vice

46    LOGO|2019 Proxy Statement


Presidents, are expected to own Company stock valued at two times their annual base salary. Executive officers are restricted from selling any shares of common stock (other than the withholding of shares to satisfy tax withholding requirements) during any period in which they have not satisfied the guidelines. The Compensation Committee reviews each executive officer’s holdings with respect to these ownership guidelines each year. As of the end of fiscal 2018, all NEOs exceeded their respective guidelines. See the discussion under “Corporate Governance — Stock Ownership Guidelines” above for further information.

Insider Trading and Policy on Hedging or Pledging of Stock

The Company’s insider trading policy contains stringent restrictions on transactions in Company stock by executive officers and directors. All trades by executive officers and directors must bepre-cleared. The executive officers and directors are prohibited from any trading in puts or calls of Company stock, from engaging in short sales of Company stock, and from hedging or pledging Company stock or using it as loan collateral or as part of a margin account.

Clawback Policy

The Compensation Committee maintains a clawback policy with respect to incentive awards granted to executive officers. The Company is authorized to recover a portion of incentive awards paid within three years of a financial statement that is inaccurate due to material noncompliance with any financial reporting requirement under the securities laws. Recovery applies to the extent a lesser amount would have been paid under the restated financial statement.

Tax Considerations

Section 162(m) of the Code limits deductions for certain executive compensation in excess of $1,000,000 in any fiscal year, and prior to the recent enactment of the Tax Cuts and Jobs Act of 2017 (the “Act”), compensation that qualified as “performance-based compensation” under Section 162(m) was excluded from this limit. The Act repealed this “performance-based compensation” exclusion effective for fiscal years beginning on January 1, 2018 with limited transition relief. Prior to the Act, the Company structured its compensation arrangements to permit deductibility under Section 162(m) to the extent possible, unless the benefit of such deductibility was outweighed by the need for flexibility or the attainment of other corporate objectives in which case the Compensation Committee was prepared to enter into compensation arrangements under which payments may not be deductible under Section 162(m).

Following the Act, the Company will continue to consider tax deductibility as a factor in determining executive compensation but may not structure its compensation arrangements around deductibility. The Company believes the tax deduction limitation should not compromise its ability to design and maintain executive compensation arrangements that will attract and retain highly qualified employees and motivate them to deliver value to our customers and shareholders.

Compensation Risk Assessment

As part of its oversight, the Compensation Committee considers the impact of the Company’s executive compensation program, and the incentives created by the compensation awards that it administers, on the Company’s risk profile. The Compensation Committee also retains an independent consultant to conduct a risk assessment of the Company’s compensation policies and practices.

In addition, the Company reviews all of its compensation policies and practices, including incentive plan design and factors that may affect the likelihood of excessive risk taking, to determine whether they present a significant risk to the Company. The Company’s pay philosophy provides an effective balance in cash and equity mix, short- and long-term performance periods, financial andnon-financial performance, and allows for the Compensation Committee’s discretion to make negative adjustments to payouts under the Company’s compensation plans. Further, policies to mitigate compensation-related risk include stock ownership guidelines, vesting periods on equity, insider-trading prohibitions, and independent Compensation Committee oversight.

Based on this review, both for our executive officers and all other employees, the Company and the independent compensation consultant concluded that the risks arising from the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee reviewed and approved this conclusion.

2019 Proxy StatementLOGO    47


EXECUTIVE COMPENSATION

Summary Compensation Table

The table below summarizes the total compensation earned by the Company’s named executive officers (or NEOs) in fiscal 2018, 2017 and 2016.

Name & Principal

Position

 

  Fiscal  

  Year  

   Salary ($)
  (1)
   Bonus ($) 
(2)
  

Stock
 Awards ($) 

(3)

  Option
 Awards ($) (4) 
  

Non-Equity
Incentive Plan
 Compensation 

($) (5)

  

 Change in Pension 

Value and

Non-qualified
Deferred
Compensation
Earnings  ($)

 

  

All Other
 Compensation 

($) (6)

  Total ($) 

  Steven J. 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

 

 

 

  Kevin C. 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

 

 

 

  Terence D. 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 
          

  Joseph G. 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

 

 

 

  Robert V. 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)

Consists of base salary earned during the fiscal year including any time off with pay. Mr. Pragada began employment with the Company on February 1, 2016 with a starting annual salary of $675,000. In fiscal 2016, Mr. Pragada earned apro-rata portion of his salary based on his start date.

(2)

In fiscal 2018, the $300,000 for Mr. Pragada represents a bonus awarded in recognition of his leadership role in the due diligence process, negotiations in connection with the CH2M acquisition and its successful closure. In fiscal 2017, the $350,000 for Mr. Pragada represents a portion of his hiring bonus in addition to the $500,000 he received in fiscal 2016. In fiscal 2016, Messrs. Berryman, Mandel and Hagen received cash transition bonuses of $375,000, $375,000 and $425,000, respectively, to ensure ongoing stability and continuity of leadership during the CEO transition period that began in fiscal 2015. For Mr. Berryman, the $875,000 also consists of the portion of his hiring bonus received in fiscal 2016 in the amount of $500,000.

(3)

Represents the grant date fair value of stock awards granted under the Stock Incentive Plan in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (“FASB ASC Topic 718”). Please refer to Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements included in the Company’s 2018 Annual Report on Form10-K for a discussion of the assumptions used to calculate these amounts. For the fiscal 2018 amounts, this column reflects the combined value of RSUs and PSUs granted in November 2017 (except for Mr. Mandel, who received RSUs only). At the highest level of performance, the value of such fiscal 2018 PSUs on the grant date would be: $10,800,159 for Mr.Demetriou; $2,400,007 for Mr. Berryman; $2,009,989 for Mr. Hagen; and $2,040,070 for Mr. Pragada. At the highest level of performance, the value of such fiscal 2017 PSUs on the grant date would be: $9,000,174 for Mr.Demetriou; $2,040,089 for Mr. Berryman; $1,740,138 for Mr. Hagen; $2,040,089 for Mr. Mandel; and $1,740,138 for Mr. Pragada. At the highest level of performance, the value of such fiscal 2016 PSUs on the grant date would be: $6,918,816 for Mr.Demetriou; $1,729,742 for Mr. Berryman; $1,351,328 for Mr. Hagen; $1,729,742 for Mr. Mandel; and $1,407,491 for Mr. Pragada.

(4)

Represents the grant date fair value of options granted (adjusted, however, to exclude the effects of estimated forfeitures) under the Stock Incentive Plan in accordance with FASB ASC Topic 718. Please refer to Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements included in the Company’s 2018 Annual Report on Form10-K for a discussion of the assumptions used to calculate these amounts.

(5)

Represents the annual incentive awards earned in each fiscal year, as determined by the Compensation Committee. Also represents the additional incentive award earned by Mr. Mandel in 2018 for achieving the cost synergy target related to the integration of the CH2M acquisition. See “Compensation Discussion and Analysis—Compensation Elements—Short-Term Incentives” for a description ofnon-equity incentive plan compensation is determined for the NEOs.

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(6)

In fiscal 2018, all NEO’s received a 401(k) Company match of $7,950. Additionally, for fiscal 2018, Mr. Demetriou received $49,611 in dividend payments on unvested RSAs and RSUs at the time of vesting, $288 for basic life insurance premiums paid for by the Company, $2,140 for Mr. Demetriou’s spouse’s portion of airfare for a business trip and $884 for the associated taxgross-up, as well as $16,000 for financial planning assistance and $4,475 for an annual health assessment. For fiscal 2018, Mr. Berryman received $7,754 in dividend payments on unvested RSAs and RSUs at the time of vesting, $1,080 for basic life insurance premiums paid for by the Company, $12,299 for Mr. Berryman’s spouse’s portion of business travel and meals and $4,187 for the associated taxgross-up as well as $16,000 for financial planning assistance and $5,058 for an annual health assessment. For fiscal 2018, Mr. Hagen received $3,457 in dividend payments on unvested RSAs and RSUs at the time of vesting, $945 for basic life insurance premiums paid for by the Company, $897 for Mr. Hagen’s spouse’s portion of business travel and $289 for the associated taxgross-up, $16,000 for financial planning assistance and $4,000 for an annual health assessment and $80,110cash-pay-out of accrued time off in excess of the Company’s limit. For fiscal 2018, Mr. Mandel received $4,267 in dividend payments on unvested RSAs and RSUs at the time of vesting, $1,037 for basic life insurance premiums paid for by the Company, $16,000 for financial planning assistance, $752 for Mr. Mandel’s spouse’s portion of airfare for a business trip and $283 for the associated taxgross-up and $75,064cash-pay-out of accrued time off in excess of the Company’s limit, as well as $83,077 for selling unused paid time off. For fiscal 2018, Mr. Pragada, received $12,352 for dividend payments on unvested RSAs and RSUs at the time of vesting, $1,037 for basic life insurance premiums paid for by the Company, $1,904 for car rental and interim living related to his relocation to Dallas and $716 for the associated taxgross-up, and $16,000 for financial planning assistance and $4,835 for an annual health assessment.

Narrative Disclosure to Summary Compensation Table

Payment of Dividends and Dividend Equivalent Rights

In fiscal 2017, the Company commenced paying a quarterly cash dividend of $0.15 per share and continued this policy through fiscal 2018. Holders of RSAs are entitled to receive such cash dividends unless and until the holder forfeits the shares of common stock underlying the RSAs pursuant to the terms of the relevant award agreement.

With respect to RSUs, if the Company pays a cash dividend on its outstanding common stock, then each holder of RSUs is credited with a dollar amount equal to (i) theper-share cash dividend, multiplied by (ii) the total number of RSUs held by such individual on the record date for that dividend. These are referred to as Dividend Equivalents. Dividend Equivalents vest on the same schedule as the RSU to which they relate and will be paid to the award holder in cash at the same time the share of common stock (or, in the case of cash-settled RSUs, the cash) underlying the RSU is delivered to the award holder.

2019 Proxy StatementLOGO    49


2018 Grants of Plan Based Awards

The table below summarizes all grants of plan based awards to the NEOs in fiscal 2018:

       

 

 Estimated Future Payouts Under Non- 
Equity Incentive Plan Awards  (1)

 

 

 

Estimated Future Payouts Under
Equity Incentive Plan Awards (2)

 

  

All Other
Stock
Awards:
Number of
Shares of
Stock or Units
(#) (3)

 

 

 

All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)

 

 

Exercise
or Base
Price of
Option
Awards
($/sh)

 

 

Grant Date
Fair Value
of Stock
and
Option
Awards (6)

 

Name

 

 

Grant Date

 

  

Threshold
($)

 

 

Target ($)

 

 

Maximum ($)

 

 

Threshold
(#)

 

 

Target (#)

 

  

Maximum
(#)

 

 

 Steven J. 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

 

          

 Kevin C. 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

 

          

 Terence D. 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

 

          

 Joseph G. Mandel

  11/29/2017  - - - - -  -  26,223 - - 1,700,037
   187,500 750,000 1,500,000          
    1,000,000

 

 2,000,000

 

          

 Robert V. 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)

Amounts represent the 2018 projected award under the Management Incentive Plan (or MIP) based on the Company’s internal plan at the start of fiscal 2018. With respect to Mr. Mandel, the amount also includes an incentive arrangement based on the net cost synergies related to the CH2M acquisition. See “Compensation Discussion and Analysis—Compensation Elements—Short-Term Incentives” above for a description of the MIP and the manner in which bonuses are computed as well as Mr. Mandel’s additional incentive arrangement.

(2)

Amounts represent the threshold, target and maximum payout shares of awards of PSUs granted under the Stock Incentive Plan in fiscal 2018.

(3)

Represents the RSUs granted under the Stock Incentive Plan.

(4)

Represents the threshold, target and maximum payout shares of the grants of the EPS Based Awards that each NEO could earn under the Stock Incentive Plan. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions. Please refer to “Compensation Discussion and Analysis—Compensation Elements—Equity Based Compensation—Fiscal 2018 Equity Awards—EPS Based Awards” for a discussion of how the number of shares ultimately issued will be determined.

(5)

Represents the threshold, target and maximum payout shares of the grants of the ROIC Based Award that each NEO could earn under the Stock Incentive Plan. number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions. Please refer to “Compensation Discussion and Analysis—Compensation Elements—Equity Based Compensation—Fiscal 2018 Equity Awards” for a discussion of how the number of shares ultimately issued will be determined.

(6)

Represents the grant date fair value of RSUs and PSUs granted (assuming target level of shares) under the Stock Incentive Plan computed in accordance with FASB ASC Topic 718. The grant date fair value for the November 29, 2017, award was $64.83. Please refer to Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements included in the Company’s 2018 Annual Report on Form10-K for a discussion of the assumptions used to calculate these amounts. See “—Narrative Disclosure to Summary Compensation Table and 2018 Grants of Plan Based Awards Table—Payment of Dividends and Dividend Equivalent Rights” below and “Compensation Discussion and Analysis—Compensation Elements—Equity-Based Compensation—Dividend Equivalents” for more information regarding Dividend Equivalents.

50    LOGO|2019 Proxy Statement


Outstanding Equity Awards of NEOs at 2018 FiscalYear-End

       

Option Awards

 

      

Stock Awards

 

 

Name

 

    

 

Number of Securities
Underlying Unexercised
Options(1)

  

Option
Exercise
Price
($)(2)

 

  

Option
Expiration
Date

 

     

Number Of
Shares Or
Units Of
Stock That
Have Not
Vested
(#)(3)

 

  

Market Value
Of Shares Or
Units Of
Stock That
Have  Not
Vested
($)(4)

 

  

Equity Incentive
Plan Awards:
Number Of
Unearned
Shares, Units Or
Other  Rights
That Have Not
Vested
(#)(5)

 

  

Equity Incentive
Plan Awards:
Market Or Payout
Value Of Unearned
Shares, Units  Or
Other Rights That
Have Not Vested
(#)(6)

 

 
 

Grant
Date

 

  

Exercisable
#

 

  

Unexercisable

#

 

 

 Steven J. 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

 

 

 

 Kevin C. 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

 

 

 

 Terence D. 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

 

 

 

 Joseph G. 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

 

 

 

   

 Robert V. 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)

All stock options have a total term of ten years from the date of grant and all remaining unvested option grants vest at the rate of 25% per year beginning on the first anniversary of the grant date.

(2)

All outstanding stock options were granted under the Stock Incentive Plan with an exercise price equal to the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History on the grant date.

(3)

Represents the number of unvested shares of restricted stock and RSUs granted under the Stock Incentive Plan. The RSAs and RSUs vest ratably over four years, except for the RSUs granted to Mr. Mandel in 2018, which vest ratably over two years, beginning on the first anniversary of the grant date. RSU grants are accompanied by dividend equivalent rights, that accumulate and vest on the same schedule as the RSU to which they relate and will be paid to the award holder in cash at the same time the share of common stock underlying the RSU is delivered to the award holder. RSA grants are entitled to receive cash dividends unless and until the holder forfeits the shares of common stock underlying the RSAs, pursuant to the terms of the relevant award agreement.

2019 Proxy StatementLOGO    51


(4)

The market value of outstanding awards of restricted stock and RSUs is computed using the closing price of the Company’s common stock as quoted by the NYSE Composite Price History at September 28, 2018, which was $76.50.

(5)

Represents the number of unvested target shares of PSUs (TSR Based Awards, EPS Based Awards, and ROIC Based Awards) granted under the Stock Incentive Plan. The awards of PSUs vest based on performance at the expiration of three years from the grant date.

(6)

The market value of outstanding PSUs (TSR Based Awards, EPS Based Awards, Net Earnings Based Awards and ROIC Based Awards) was computed by using $76.50, the closing price of the Company’s common stock as quoted by the NYSE Composite Price History at September 28, 2018.

Option Exercises and Stock Vested in Fiscal 2018

The following table provides information on stock options that were exercised and on restricted stock that vested in fiscal 2018 for our NEOs:

Name 

Option Awards

 

  

Stock Awards

 

 
 Number of
Shares
Acquired on
Exercise
(#)
  Value
Realized on
Exercise
($)
  Number of
Shares
Acquired on
Vesting
(#)
  Value
Realized on
Vesting
($)(1)
 

    Steven J. Demetriou

 

  

 

-

 

 

 

  

 

-

 

 

 

  

 

81,808

 

 

 

  

 

5,612,869

 

 

 

    Kevin C. Berryman

 

  

 

-

 

 

 

  

 

-

 

 

 

  

 

33,038

 

 

 

  

 

2,154,600

 

 

 

    Terence D. Hagen

 

  

 

-

 

 

 

  

 

-

 

 

 

  

 

8,952

 

 

 

  

 

567,797

 

 

 

    Joseph G. Mandel

 

  

 

-

 

 

 

  

 

-

 

 

 

  

 

9,787

 

 

 

  

 

617,476

 

 

 

    Robert V. Pragada

 

  

 

-

 

 

 

  

 

-

 

 

 

  

 

10,523

 

 

 

  

 

720,510

 

 

 

(1)

Value is based on the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History on the vesting date. Includes the value of dividends paid in cash related to unvested shares of restricted stock and RSUs at the time of vesting.

Non-qualified Deferred Compensation

As described above, employees, including NEOs, meeting certain compensation minimums may elect to participate in the Company’s executive deferral plans (or EDPs) whereby a portion of salary and bonus (including equity compensation) is deferred and paid to the employee at some future date. The EDPs arenon-qualified deferred compensation programs that provide benefits payable to directors, officers, and certain key employees or their designated beneficiaries at specified future dates, and upon retirement or death. Participant contributions are credited with earnings and losses based upon the actual experience of the deemed investments selected by participants.

For the EDPs in which the NEOs participate (the “Variable Plans”), accounts are credited (or debited) based on the actual earnings (or losses) of the deemed investments selected by the individual participants. Participation in the EDPs is voluntary. All EDPs operate under a single trust. Although there are certain change in control features within the EDPs, no benefit enhancements occur upon a change in control. The investment options are notional and used for measurement purposes only. The NEOs do not own any units in the actual funds. In general, the investment options consist of a number of mutual and index funds comprising stocks, bonds, and money market accounts.

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The following table shows the EDP account activity during fiscal 2018 for the NEOs. Prior to fiscal 2018, executive officers were only permitted to defer salary and cash bonus amounts. Beginning in fiscal 2018, executive officers could also defer equity awards.

Name

 

 

Deferred
Compensation
Plan

 

 

Executive
Contributions
During Last
Fiscal Year
($)(1)

 

 

Registrant
Contributions
During Last
Fiscal Year
($)

 

 

Aggregate
Earnings
During
Last
Fiscal
Year ($)(2)

 

 

Aggregate
Withdrawals /
Distributions
During Last
Fiscal Year
($)

 

 

Aggregate
Balance
at Last
Fiscal
Year End
($)(3)

 

 

Steven J. Demetriou

 

 

 

Variable Plans

 

 

 

 

 

 

 

 

 

22,913

 

 

 

 

 

 

345,380

 

 

Kevin C. Berryman

 

 

 

Variable Plans

 

 

 

 

82,211

 

 

 

 

 

 

25,920

 

 

 

 

 

 

454,058

 

 

Terence D. Hagen

 

 

 

Variable Plans

 

 

 

 

  

 

1,052

 

 

 

 

 

 

45,322

 

 

 

Joseph G. Mandel

 

 

Variable Plans

 

 

 

 

 

 

 

 

 

208,027

 

 

 

(50,331)

 

 

 

2,352,142

 

 

Robert V. Pragada

 

 

 

Variable Plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

All executive contributions are included in the Summary Compensation Table under the “Salary” and“Non-Equity Incentive Plan Compensation” columns.

(2)

Earnings are included in the Summary Compensation Table to the extent they exceed 120% of the IRS prescribed applicable federal rate.

(3)

Balances at the end of the fiscal year consist of (i) salary and bonus deferrals made by the executive over time, beginning when the executive first joined the plan, plus (ii) all earnings and losses credited on all deferrals, less (iii) allpre-retirement distributions, if any, taken by the executive since the executive first joined the plan. Mr. Hagen’s aggregate balance includes a value of $19,296 under a deferral plan that was not reflected in last year’s proxy statement due to administrative oversight.

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Compensation Under Various Termination Scenarios

The following table quantifies the estimated severance and benefits payable to the NEOs as a result of the following terminations of employment in fiscal 2018: (i) termination in connection with a change in control, (ii) termination due to death or disability, (iii) retirement approved by the Compensation Committee, and (iv) involuntary termination without cause.

   

Change In
Control ($)

 

  

Death or
Disability
($)

 

  

Approved
Retirement
($)
(5)

 

  

Involuntary
Termination
Without
Cause ($)

 

 

 

 Steven J. Demetriou

     

Non-Equity Incentive Compensation(1)

  2,669,990   1,950,000     

Unvested In-The-Money Stock Options(2)

  2,499,128   2,499,128     

Unvested Stock Awards(3)

  8,329,397   8,329,397    2,123,984  

Unvested Performance Share Units(4)

  16,036,433   32,817,190    3,520,072  

Severance Benefits(6)

  8,513,514   -    6,864,635  

Total

 

  

 

38,048,461

 

 

 

  

 

45,595,714

 

 

 

   

 

12,508,692 

 

 

 

 

 Kevin C. Berryman

     

Non-Equity Incentive Compensation(1)

  1,026,919   750,000     

UnvestedIn-The-Money Stock Options(2)

  745,670   745,670     

Unvested Stock Awards(3)

  1,895,976   1,895,976    472,005  

Unvested Performance Share Units(4)

  3,858,775   7,615,265    782,229  

Severance Benefits(6)

  2,280,176   -    2,280,176  

Total

 

  

 

9,807,515

 

 

 

  

 

11,006,911

 

 

 

   

 

3,534,410 

 

 

 

 

 Terence Hagen

     

Non-Equity Incentive Compensation(1)

  926,303   675,000     

UnvestedIn-The-Money Stock Options(2)

  399,635   399,635     

Unvested Stock Awards(3)

  1,582,020   1,582,020    395,314  

Unvested Performance Share Units(4)

  3,104,778   6,272,465    655,111  

Severance Benefits(6)

  2,061,547   -    2,061,547  

Total

 

  

 

8,074,283

 

 

 

  

 

8,929,120

 

 

 

   

 

3,111,972 

 

 

 

 

 Joseph G. Mandel

     

Non-Equity Incentive Compensation(1)

  3,026,919   1,750,000    

UnvestedIn-The-Money Stock Options(2)

  557,630   557,630    

Unvested Stock Awards(3)

  2,958,026   2,958,026    1,003,030  

Unvested Performance Share Units(4)

  3,384,410   4,783,235    

Severance and COBRA Benefits(6)

  3,281,757   -    765,757  

Total

 

  

 

13,208,741

 

 

 

  

 

10,048,890

 

 

 

   

 

1,768,787 

 

 

 

 

 Robert V. Pragada

     

Non-Equity Incentive Compensation(1)

  983,118   720,000     

UnvestedIn-The-Money Stock Options(2)

  399,635   399,635     

Unvested Stock Awards(3)

  2,601,765   2,601,765    401,204  

Unvested Performance Share Units(4)

  3,376,212   6,573,449    664,916  

Severance Benefits(6)

  2,196,547   -    2,196,547  

Total

 

  

 

9,557,277

 

 

 

  

 

10,294,849

 

 

 

      

 

3,262,667 

 

 

 

(1)

The amount of unpaid incentive compensation that would be paid as of September 28, 2018.

(2)

The amount that would be earned related to unvestedin-the-money options as of September 28, 2018. Value is based on the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History at September 28, 2018 of $76.50, minus the cost of the option (i.e., the exercise price).

(3)

The amount that would be earned related to unvested restricted stock awards as of September 28, 2018. Value is computed by using the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History at September 28, 2018 of $76.50.

(4)

The amount that would be earned related to unvested shares of PSUs as of September 28, 2018. Upon a change in control, the target shares awarded is based on actual performance as of the last day of the fiscal year. Upon death or disability, the target shares awarded is based upon the projected payment at the end of the vesting period. Upon involuntary termination without cause, the target shares awarded is based upon projected payment at the end of the vesting period but prorated to the last day of the fiscal year. The amount reported is based on multiplying the relevant performance multiplier (described above) of each award by the target shares awarded, multiplied by the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History at September 28, 2018 of $76.50.

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(5)

None of the NEO’s qualify for “Retirement” benefits.

(6)

In the event of a qualifying involuntary termination of employment unrelated to a change in control, all NEO’s (with the exception of Mr. Mandel who is covered by an employment agreement) receive the following benefits under the Executive Severance Plan: (i) a cash payment equal to 1.5 times (for the CEO) or 1 times (for the other NEOs and covered executives) the sum of the participant’s (x) base salary and (y) target annual incentive award; and (ii) a cash payment equal to 1.5 times (for the CEO) or 1 times (for the other NEOs and covered executives) the sum of (x) the annual COBRA premium for continued participation in the Company’s group health plans and (y) the annual fee for continued receipt of financial advisory services. Their unvested and outstanding equity awards that are scheduled to vest within the nine month period following the date of termination will continue to vest in accordance with their original vesting schedule, but do not recognize any value for these at the time of separation.

Equity Compensation Plan Information

The following table presents certain information about our equity compensation plans as of September 28, 2018:

Plan Category

 

 

Number of securities
to be issued upon
exercise of
outstanding  options,
warrants, and rights
(Column A)

 

 

Weighted-average
exercise price of
outstanding
options, warrants,
and  rights
(Column B)

 

 

Number of securities
remaining available
for future issuance
under  equity
compensation plans
(excluding securities

reflected in

Column A)
(Column C)

 

    Equity compensation plans approved by shareholders (1)

 

 1,766,759

 

 $45.53

 

 5,631,371

 

    Equity compensation plans not approved by shareholders

 

 

 

 

 

 

 

    Total

 

 1,766,759

 

 $45.53

 

 5,631,371

 

(1)

The number in Column A excludes purchase rights accruing under our two, broad-based, shareholder-approved employee stock purchase plans: the Jacobs Engineering Group Inc. 1989 Employee Stock Purchase Plan, as amended and restated (the “ESPP”), and the Jacobs Engineering Group Inc. Global Employee Stock Purchase Plan, as amended and restated (the “Global ESPP”). These plans give employees the right to purchase shares at an amount and price that are not determinable until the end of the specified purchase periods, which occur monthly. Our shareholders have authorized a total of 32.3 million shares of common stock to be issued through the ESPP and the Global ESPP. From the inception of the ESPP and the Global ESPP through September 28, 2018, a total of 28.0 million shares have been issued, leaving 4.3 million shares of common stock available for future issuance at that date.

Pay Ratio

The following table sets forth the ratio of our CEO’s total compensation to that of our median employee for fiscal 2018.

CEO total annual compensation

$13,051,363

Median Employee total annual compensation

$82,898

Ratio of CEO to Median Employee total annual compensation

157 to 1

SEC rules for identifying the median employee and calculating the pay ratio allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported above may not be comparable to the pay ratio reported by other companies, as other companies may have utilized different methodologies and have different employment and compensation practices. The pay ratio above is a reasonable estimate calculated in a manner consistent with SEC rules as well as the methodology described below.

To determine the median employee, we used annual base compensation as the consistently applied compensation measure and selected July 1, 2018 as our measurement date. For full-time, salaried employees, annual base compensation was base salary, and for part-time, temporary and seasonal employees, it was hourly

2019 Proxy StatementLOGO    55


rate multiplied by hours worked. We annualized salaries and wages for our full and part-time employees who were not employed for the full year. For purposes of this disclosure, we used the U.S. dollar equivalent of the local currency, based on the average exchange rate for the three months period ended June 30, 2018 for each such foreign currency. Using this methodology, we determined that our median employee was a full-time, salaried employee located in Canada. After identifying the median employee, we calculated such median employee’s total annual compensation in the same manner as we calculated our CEO’s total annual compensation in the Summary Compensation Table on page 48.

As permitted by SEC rules, we excluded allnon-U.S. employees in each of the following countries in determining our median employee: Argentina (355), Armenia (16), Bahrain (31), Brazil (126), China (331), Columbia (1), Costa Rica (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, Republic of (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), Saint Helena (3), Saint Lucia (1), South Africa (220), Spain (140), Sweden (96), Switzerland (90), Taiwan (6), Thailand (49), Trinidad and Tobago (9) and Uganda (1). In aggregate, we excluded a total of 3,570 employees from 44 countries, representing less than 5% of the Company’s total workforce of approximately 74,750 people on July 1, 2018.

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PROPOSAL NO. 3 — RATIFICATION OF THE APPOINTMENT OF

ERNST & YOUNG LLP

What are you voting on?

The Audit Committee has appointed Ernst & Young LLP (“Ernst & Young” or “EY”) to audit the consolidated financial statements of the Company as of September 27, 2019, and for the fiscal year then ended. At the Annual Meeting, shareholders will be asked to ratify the appointment of Ernst & Young.

The Audit Committee’s decision tore-appoint our independent auditor was based on the following considerations:

•   The quality and performance of the lead audit partner and the overall engagement team;

•   Ernst & Young’s knowledge of the industries and markets in which the Company operates;

•   Ernst & Young’s knowledge of the Company’s operations;

•   Ernst & Young’s global capabilities and technical expertise;

•   Ernst & Young’s independence and objectivity; and

•   The potential impact of rotating to another independent audit firm.

The Company is not required to submit the selection of the independent registered public accounting firm to shareholders for approval, but is doing so as a matter of good corporate governance. If the appointment of Ernst & Young is not ratified by a majority of the shares of common stock present, in person or by proxy, at the Annual Meeting, then the Audit Committee will consider the appointment of other independent auditors whose selection for any period subsequent to the Annual Meeting will be subject to ratification by the shareholders at the 2020 annual meeting.

Representatives of EY are expected to attend the Annual Meeting, will have an opportunity to make a statement and are expected to be available to respond to appropriate questions.

What is the Vote Required?

The affirmative vote of a majority of the shares of common stock present, in person or by proxy, at the Annual Meeting and entitled to vote is necessary to ratify the appointment of Ernst & Young as the Company’s independent registered public accounting firm for the fiscal year ending September 27, 2019.

Abstentions have the same effect as a vote against the proposal.

The Board of Directors unanimously recommends that you voteFOR the ratification of the appointment of Ernst & Young as the Company’s independent registered public accounting firm for the fiscal year ending September 27, 2019.

2019 Proxy StatementLOGO    57


REPORT OF THE AUDIT COMMITTEE

The Audit Committee hereby reports as follows:

 

1.

Management has primary responsibility for the accuracy and fairness of the Company’s consolidated financial statements as well as the processes employed to prepare the financial statements, and the system of internal control over financial reporting.

 

2.

The Audit Committee represents the Board of Directors in discharging its responsibilities relating to the Company’s accounting, financial reporting, financial practices, and system of internal controls. As part of its oversight role, the Audit Committee has reviewed and discussed with the Company’s management the Company’s audited consolidated financial statements included in its 20162018 Annual Report on Form10-K.

 

3.

The Audit Committee has discussed with the Company’s internal auditors and the Company’s independent registered public accounting firm, Ernst & Young, the overall scope of and plans for their respective audits. The Audit Committee has met with the internal auditors and Ernst & Young, separately and together, with and without management present, to discuss the Company’s financial reporting processes and system of internal control over financial reporting in addition to those matters required to be discussed with the independent auditors under the rules adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T.

 

4.

The Audit Committee has received the written disclosures and the letter from Ernst & Young required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with Ernst & Young their independence.

 

5.

The Audit Committee has adoptedpre-approval policies and procedures for certain audit andnon-audit services which Ernst & Young provides. In developing these policies and procedures, the Audit Committee considered the need to ensure the independence of Ernst & Young while recognizing that in certain situations Ernst & Young may possess both the technical expertise and knowledge of the Company to best advise the Company on issues and matters in addition to accounting and auditing. The policies and procedures adopted by the Audit Committee allow the generalpre-approval by the Audit Committee of certain services, such as audit-related services (which include providing accounting and auditing consultation and due diligence services), and tax services (which include general tax compliance, tax research, and planning services), without a specific,case-by-case consideration of each of the services to be performed by Ernst & Young. The policies and procedures require that any other service, including the annual audit services and any other attestation service, be expressly and specifically approved by the Audit Committee prior to such services being performed by Ernst & Young. In addition, any proposed services exceeding the generalpre-approved cost levels or budgeted amounts require specificpre-approval by the Audit Committee. The Audit Committee considers whether allpre-approved services are consistent with the SEC’s rules and regulations on auditor independence.

 

6.

Based on the review and discussions referred to in paragraphs (1) through (5) above, the Audit Committee recommended to the Board of Directors and the Board of Directors has approved the inclusion of the audited financial statements in the Company’s Annual Report on Form10-K for the fiscal year ended September 30, 201628, 2018, for filing with the SEC.

Joseph R. Bronson, Chair

Dawne S. Hickton

Robert A. McNamara

Christopher M.T. Thompson

Barry L. Williams

58    LOGO|2019 Proxy Statement


AUDIT ANDNON-AUDIT FEES

Set forth below are the fees billed to the Companyfor services rendered by itsour independent registered public accounting firm, Ernst & Young, for the fiscal periods indicated, all of which were approved by the Audit Committee pursuant to the approval policies under “Report of the Audit Committee” described above.

 

Type of
Fees

 

Description

 

  

2018

 

  

2017

 

  2016   2015   

Audit Fees

  $6,977,300    $6,796,700   

Consist of fees for professional services provided in connection with the annual audit of the Company’s consolidated financial statements; the reviews of the Company’s quarterly financial statements included in the Company’s reports on Form10-Q; the rendering of an opinion pursuant to Section 404 of the Sarbanes-Oxley Act of 2002; and the services that an independent auditor would customarily provide in connection with audits of the Company’s subsidiaries, other regulatory filings, and similar engagements for each fiscal year shown, such as attest services, consents, and reviews of documents filed with the SEC.

 

  $10,652,144    $7,096,997  

Audit-related fees

   460,030     592,000  

Tax fees

   1,659,700     1,389,000  
  

Audit-Related Fees

 

Consist of fees for services that are reasonably related to the performance of the audit or review of the Company’s financial statements not reported under “Audit Fees” above, including fees for the performance of audits and attest services not required by statute or regulations; audits of the Company’s employee benefit plans; due diligence activities related to mergers, acquisitions, and investments; contractor’s license compliance procedures; and accounting consultations about future accounting standards to be adopted and the application of generally accepted accounting principles to proposed transactions.

 

  $973,648    $1,384,492  
  

Tax Fees

 

Consist of fees for tax compliance, tax planning, and tax advice. Corporate tax services provided encompass a variety of permissible services, including technical tax advice related to U.S. and international tax matters; assistance with foreign income and withholding tax matters; assistance with sales tax, value added tax, and equivalent tax related matters in local jurisdictions; preparation of reports to comply with local tax authority transfer pricing documentation requirements; and assistance with tax audits.

 

  $2,336,522    $1,932,029  
  

 

   

 

   

Total

  $9,097,030    $8,777,700      

$13,962,314  

 

  

$10,413,518  

 

  

 

   

 

 

What our Audit Fees — Consist of fees for professional services provided in connection with the annual audit of the Company’s consolidated financial statements; the reviews of the Company’s quarterly results of operations and reports on Form 10-Q; the rendering of an opinion pursuant to Section 404 of the Sarbanes-Oxley Act of 2002; and the services that an independent auditor would customarily provide in connection with audits of the Company’s subsidiaries, other regulatory filings, and similar engagements for each fiscal year shown, such as attest services, consents, and reviews of documents filed with the SEC.

Audit-Related Fees — Consist of fees for services that are reasonably related to the performance of the audit or review of the Company’s financial statements, including fees for the performance of audits and attest services not required by statute or regulations; audits of the Company’s employee benefit plans; contractor’s license compliance procedures; and accounting consultations about the application of generally accepted accounting principles to proposed transactions.

Tax Fees — Consist of fees for tax compliance, tax planning, and tax advice. Corporate tax services encompass a variety of permissible services, including technical tax advice related to U.S. and international tax matters; assistance with foreign income and withholding tax matters; assistance with sales tax, value added tax, and equivalent tax related matters in local jurisdictions; preparation of reports to comply with local tax authority transfer pricing documentation requirements; and assistance with tax audits.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company’s management. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement. The Board has approved that recommendation.

Peter J. Robertson, Chair

John F. Coyne

Ralph E. Eberhart

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

Introduction

This Compensation Discussion and Analysis (“CD&A”) describes the compensation of our named executive officers (“NEOs”) during fiscal 2016. Our NEOsconsidered when engaging Ernst & Young for fiscal 2016 were:2019:

Mr. Steven J. Demetriou, Chairman and Chief Executive Officer (“CEO”)

Mr. Kevin C. Berryman, Executive Vice President and Chief Financial Officer (“CFO”)

Mr. Joseph G. (“Gary”) Mandel, President, Petroleum & Chemicals

Mr. Terence D. Hagen, President, Aerospace & Technology

Mr. Robert V. Pragada, President, Buildings & Infrastructure

Fiscal 2016 Highlights

As one of the world’s largest and most diverse providers of technical professional and construction services, we operate with a pay-for-performance philosophy in a challenging, highly competitive, and rapidly evolving global environment. During fiscal 2016, we continued to implement our initiatives intended to improve operational efficiency and reduce costs, which are expected to result in savings of approximately $260 million to $270 million per year. The Company also continued to deliver strong cash flow, which allowed us to repurchase $153 million of shares during fiscal 2016.

For fiscal 2016, we redesigned our short-term incentive plan to reinforce our commitment to profitable growth and effective cash management with specific measures and targets assigned to each participant based on their respective role in the organization. In line with our financial results for fiscal 2016 and consistent with our pay-for-performance philosophy, payouts to the NEOs under our Management Incentive Plan ranged from 47.5% of target to 102.5% of target depending on the participant’s role in the Company.

Our Executive Compensation Philosophy

Our vision is to provide superior customer value through a long-term, relationship-based approach and solid returns to our shareholders through growth. The Compensation Committee has a compensation philosophy that drives this vision by attracting and retaining highly qualified employees and motivating them to deliver value to our customers and shareholders. Accordingly, our executive compensation program is intended to:

Reward executives for superior annual Company performance through a short-term cash incentive program that places a substantial component of pay at risk;

Retain senior management through the use of long-term equity-based and other incentives; and

Encourage executives to have an equity stake in the Company.

Our Executive Compensation Program and Practices

Our Compensation Committee believes that our executive compensation program is appropriately designed to advance shareholder interests through effective performance-based incentives with retention features. The key components and associated purposes of our compensation program are as follows:

Base Salary — Provides the security of a competitive fixed cash payment for services rendered.

Short-Term Incentives — Motivate superior annual performance by tying payout to achievement against pre-established goals.

Long-Term Equity Incentives — Retain executives and motivate them to build shareholder value over the life of the grants.

We remain committed to executive compensation practices that drive performance and that align the interests of our leadership team with the interests of our shareholders. Below is a summary of best practices that we have implemented and practices we avoid with respect to the compensation of our NEOs because we believe they are not in the best interests of our Company or our shareholders.

WHAT WE DO

WHAT WE DO NOT DO

Pay for Performance— A significant majority of our executives’ target compensation is performance based on and tied to pre-established performance goals aligned with our short- and long-term objectives.No Tax Gross-Ups— We do not have tax reimbursements or gross-ups (other than for tax equalization for expatriates, normal relocation expenses or spousal travel for approved business purposes). See “— Other Benefits and Policies —Perquisites” below.
Compensation Recoupment Policies— We have a clawback policy that applies when inaccurate financial statements have affected incentive award payments to executive officers. This policy is further described under “— Clawback Policy” below.No Pension Plans or Special Retirement Programs for Executive Officers— We do not have a pension plan or supplemental retirement plan for executive officers.
Stock Ownership Guidelines— Our Board has established robust stock ownership guidelines applicable to our Board members and executives as described under “— Stock Ownership Guidelines” below.No Perquisite Programs— We do not offer executive perquisite programs such as Company-provided autos or auto allowances (except for expatriates), or payment of club dues.
Thorough Compensation Benchmarking— The Compensation Committee reviews publicly available information to evaluate how our NEOs’ compensation compares to that of executives in comparable positions at other companies as described under “—Assessing Compensation Competitiveness” below.No Speculative Trading— Board members and executive officers are prohibited from short-selling our stock and buying or selling puts and calls of our stock.
Independent Compensation Consultant— The Compensation Committee benefits from its use of an independent compensation consulting firm, which provides no other services to the Company.No Hedging— Board members and executive officers are prohibited from engaging in hedging transactions that could eliminate or limit the risks and rewards of owning our stock.

WHAT WE DO

WHAT WE DO NOT DO

Annual Pay for Performance Review— With the help of its independent compensation consultant, the Compensation Committee annually analyzes the difficulty of meeting our performance goals and the alignment of realizable pay and performance to ensure that our incentive programs are working as intended.No Use of Jacobs Stock as Collateral for Margin Loans— Board members and executive officers are prohibited from using our stock as collateral for any margin loan.

Our Compensation Program Emphasizes Long-Term Incentives

As reflected in the charts below, performance-based equity continues to represent the majority of the total direct compensation earned by our CEO and other NEOs. Total direct compensation refers to base salary, short-term incentive compensation (measured by expected bonus opportunity for the fiscal year) and long-term equity incentive compensation.

LOGOLOGO

Shareholder Engagement and Say-on-Pay

Our relationship with our shareholders is an important part of the Company’s success. In addition to our regular investor relations engagements, we meet with many of our institutional stockholders to discuss our corporate strategy, executive compensation programs, corporate governance and other topics of interest to our shareholders. These engagement efforts allow us to better understand our shareholders’ priorities and perspectives, and provide us with useful input concerning our corporate strategy and our compensation and corporate governance practices. At our 2016 annual meeting of shareholders, over 80% of the shares voted were in favor of the advisory resolution concerning executive compensation.

The Compensation Decision Process

The Compensation Committee directly retains the services of independent consultants and other experts to assist in fulfilling its responsibilities. The Compensation Committee currently engages the services of Frederic W. Cook & Co., Inc. (the “Independent Consultant”), a national executive compensation consulting firm, to review and provide recommendations concerning all of the components of the Company’s compensation programs. The Independent Consultant performs services solely on behalf of the Compensation Committee and has no relationship with the Company or management except as it may relate to performing such services. The Compensation Committee has assessed the independence of the Independent Consultant pursuant to the rules of the SEC and the NYSE and concluded that the Independent Consultant is independent and no conflict of interest exists with respect to the services provided by the Independent Consultant to the Compensation Committee.

During fiscal 2016, our executive team, including Steve Demetriou, Kevin Berryman, and Lori Sundberg, our CEO, CFO and Senior Vice President, Global Human Resources, respectively, worked with the Compensation Committee to help ensure that the design of executive compensation is competitive, ethical, and

aligned with the Company’s values. The executive team also reviewed the compensation of the most highly compensated employees across the Company, except as to their own compensation, with the Compensation Committee to help ensure consistency of compensation, and provide information and make recommendations. For fiscal 2016, compensation decisions for the NEOs (other than our CEO) were made by the Compensation Committee after consultation with the CEO, and the compensation decision with respect to our CEO was approved by the full Board upon recommendation from the Compensation Committee.

Assessing Compensation Competitiveness

The Compensation Committee, with the help of the Independent Consultant, annually compares each element of compensation to that of an industry peer group. For fiscal 2016, as part of its annual review, the Compensation Committee determined that the peer group should be comprised of (1) construction and engineering firms that are direct competitors with the Company for business and executive management talent or (2) companies that provide consulting or technical services to government and large commercial clients. In addition, to be included, a company would need to be generally within one-third to three times the size of the Company in terms of revenue and market capitalization at the time of their original selection.

Similar to prior years, in order to assess compensation competitiveness compared to the peer group, the Independent Consultant utilized comparative data disclosed in publicly available proxy statements, other documents filed with the SEC, and data from a comprehensive database of pay information developed by Willis Towers Watson regarding the industry specific and general industry group in which the Company competes for talent.

The following chart shows the industry peer group used for benchmarking in fiscal 2016, including relevant size and performance data to illustrate the Company’s relative position.

Most Recently Available Four Quarters ($M)

       Market Capitalization 

Revenues

  

Net Income

  

Employees

  

as of 9/30/16 ($M)

 

Raytheon

  $23,909   Raytheon   $2,156   AECOM Tech  92,000   Raytheon  $40,171  

Northrop Grumman

  $23,629   Northrop Grumman   $2,048   Northrop Grumman  65,000   Northrop Grumman  $38,206  

Fluor

  $18,035   Fluor   $   326   Raytheon  61,000   L-3 Communications  $11,642  

AECOM Tech

  $17,811   Leidos   $   280   Computer Sciences  59,000   Computer Sciences  $  7,332  

Chicago Bridge & Iron

  $11,960   Quanta Services   $   248   Jacobs  54,900   Fluor  $  7,146  

Jacobs

  $10,964   Jacobs   $   210   Chicago Bridge & Iron  42,000   Leidos  $  6,482  

L-3 Communications

  $10,452   KBR   $   186   Fluor  38,758   Jacobs  $  6,256  

Quanta Services

  $  7,345   EMCOR   $   182   L-3 Communications  38,000   AECOM Tech  $  4,569  

Computer Sciences

  $  7,232   AECOM Tech   $     90   EMCOR  29,000   Quanta Services  $  4,228  

EMCOR

  $  7,155   Computer Sciences   $     67   Quanta Services  24,500   EMCOR  $  3,625  

CH2M Hill*

  $  5,367   CH2M Hill*   $       3   CH2M Hill*  22,000   Chicago Bridge & Iron  $  2,892  

Leidos

  $  5,237   L-3 Communications   $  (91 KBR  22,000   KBR  $  2,156  

KBR

  $  4,284   Chicago Bridge & Iron   $(575 Leidos  19,000   CH2M Hill*  $1,994  

75th Percentile

  $17,867      $   292     59,500     $  8,409  

Median

  $  8,898      $   184     38,379     $  5,525  

25th Percentile

  $  6,708      $     51     23,875     $  3,442  

Jacobs Percentile**

  58%     58%     67%     50%  

*CH2M Hill’s equity is not publicly traded. Represents internal company valuation as of 2/28/16.
**Percentile rank calculation includes Jacobs.
Source:Standard & Poor’s Capital IQ.

For fiscal 2017, as part of its annual review, the Compensation Committee, in consultation with the Independent Consultant, determined to maintain the current peer selection criteria as used in fiscal 2016 and, based on that criteria, added the following companies to the peer group: Booz Allen Hamilton, SNC-Lavalin and Textron.

Compensation Elements

During fiscal 2016, the Compensation Committee utilized findings by the Independent Consultant to determine that the Company’s executive compensation program continued to be both reasonable in relation to competitive pay levels and appropriate in supporting business objectives and a positive performance-based culture.

As part of the review process supporting determination of fiscal 2016 compensation, the Compensation Committee reviewed data with respect to the position of the Company’s fiscal 2016 compensation program for its NEOs against the industry peer group and survey data described above. In addition, in order to evaluate the value of compensation and benefits received by the NEOs, the Compensation Committee’s evaluation took into account the aggregate equity holdings of each NEO. This review indicated that each of our NEO’s total direct compensation was within the ranges relative to our industry peers and was commensurate with the Company’s relative scope and complexity versus the peer group.

Base Salary

In setting the base salaries of our NEOs, the Compensation Committee utilizes information provided by its Independent Consultant to determine the competitiveness of base salaries compared to the industry peer group and market survey data.

The Compensation Committee also considers the fact that the Company continues to provide fewer ancillary benefits and other perquisites as compared to the Company’s industry peer group. This stems from the Compensation Committee’s belief that focusing on the three core elements of compensation (base salary and short- and long-term incentive compensation) results in a more transparent and easier-to-administer pay system, and is more consistent with the Company’s culture.

For example, the Company’s currently available retirement program in the U.S. consists solely of a tax-qualified 401(k) plan, with matching contributions, and a non-qualified salary deferral plan that provides non-enhanced market returns. More than half of the industry peer group provides additional retirement programs. Similarly, while most of the industry peer group provides some form of auto benefits, aircraft benefits, and/or club dues benefits, the Company provides none (except for an auto allowance as part of an expatriate expense allowance). Consistent with this approach, base pay levels for our NEOs have generally been higher than the median.

After considering market data from our peer group and from other market survey information, and in light of the Company’s fiscal 2015 financial performance, the Compensation Committee determined that the base salaries of our NEOs (other than Mr. Pragada who joined the Company in February 2016) for fiscal 2016 would remain at the same levels as fiscal 2015.

Short-Term Incentives

For fiscal 2016, we redesigned our short-term incentive plan to reinforce our commitment to profitable growth and effective cash management with specific measures and targets assigned to each participant based on their respective role in the organization. This new Management Incentive Plan provides for payouts to eligible employees when certain Company-wide and business unit-specific target goals are achieved. For fiscal 2016, select officers and managers of the Company, including the NEOs, were eligible to participate in the Management Incentive Plan, which covered approximately 360 employees.

The performance goals that apply to each NEO and the related payouts vary depending on the participant’s role within the Company and which line of business or business units the participant led throughout the performance year. For example, if an NEO takes on different management responsibilities during the fiscal year, the established line of business and business unit goals for those new responsibilities are aligned accordingly on a pro-rata basis to align with the time period the executive led that business. The bonus targets, weighting factors, payout amounts and actual results for the Management Incentive Plan for fiscal 2016 are shown in the following charts, as are the minimum thresholds and maximum payout amounts for each of these goals:

Named Executive Officer

  MIP Target as a % of Salary  MIP Target Amount 

Steven J. Demetriou

   150 $1,950,000  

Kevin C. Berryman

   100 $750,000  

Joseph G. Mandel

   100 $699,996  

Terence D. Hagen

   100 $600,000  

Robert V. Pragada

   100 $675,000  

For fiscal 2016, the Compensation Committee established the following relative weighting and performance metrics,which reflect Mr. Pragada taking on additional leadership responsibilities of the Building and Infrastructure business and Mr. Mandel taking on additional leadership responsibilities for the Mining and Minerals business beginning July 1, 2016.

Performance Measure

  Steven J.
Demetriou
  Kevin C.
Berryman
  Joseph G.
Mandel
  Terence D.
Hagen
  Robert V.
Pragada
 

Consolidated Operating Profit1

   80  80  50  50  50

Average Operational Working Capital2

   20  20   

Aerospace & Technology

      

Operating Profit3

      30 

DSO4

      20 

Buildings & Infrastructure

      

Operating Profit3

       2.50

DSO4

       1.70

Petroleum & Chemicals

      

Operating Profit3

     26.30  

DSO4

     17.50  

Industrial

      

Operating Profit3

       22.50

DSO4

       15

Industrial Field Services

      

Operating Profit3

       2.50

DSO4

       1.70

Life Sciences

      

Operating Profit3

       2.50

DSO4

       1.60

Mining and Minerals

      

Operating Profit3

     3.70  

DSO4

     2.50  

 

 (1)Consolidated operating profit means total gross margin less selling, general and administrative expenses (“SG&A”), as adjusted for acquisitions and special items as approved by the Compensation Committee.

(2) 

Average operational working capital is calculated by dividing (i) the average of the Company’s operational working capital for five quarters ended September 30, 2016 (as of the end of each quarter) by (ii) fiscal 2016 revenues. Operational working capital is defined as operational current assets less operational current liabilities. For these purposes, (i) operational current assets means total current

assets, less cashEY’s independence and cash equivalents and (ii) operational current liabilities means total current liabilities, less notes payable and the current portion of long-term debt.integrity

 

 (3) Line of business operating profit means total gross margin earned by the respective line of business less the SG&A for that line of business

EY’s competence and less allocated corporate SG&A expenses, including cash and equity incentive compensation.its compliance with regulations

 

 (4) 

The line of business DSO means, for each line of business,acumen, value-added benefit, continuity and consistency, and technical and core competency provided by the average accounts receivable for the five quarters ended September 30, 2016 (as of the end of each quarter) divided by its 12-month trailing revenues multiplied by 365 days.

engagement team

The following are the performance levels achieved in fiscal 2016 against the performance criteria established by the Compensation Committee:

      Performance Levels 5 
      Minimum  Target  Maximum 

Performance Measure

  2016
Actual
Results
  (25%
Payout)
  (100%
Payout)
  (200%
Payout)
 

Consolidated Operating Profit1

  $516.9M   $448.0M   $560.0M   $728.0M  

Average Operational Working Capital2

   7.06  7.60  7.10  6.10

Aerospace & Technology

     

Operating Profit3

  $205.4M   $149.3M   $186.6M   $242.6M  

DSO4

   56    62    58    50  

Buildings & Infrastructure

     

Operating Profit3

  $170.2M   $133.9M   $167.4M   $217.6M  

DSO4

   64    62    58    50  

Petroleum & Chemicals

     

Operating Profit3

  $124.3M   $121.0M   $151.3M   $196.6M  

DSO4

   77    73    68    58  

Industrial

     

Operating Profit3

  $55.6M   $47.4M   $59.2M   $77.0M  

DSO4

   59    62    58    50  

Industrial Field Services

     

Operating Profit3

  $53.3M   $34.4M   $43.0M   $55.9M  

DSO4

   59    62    58    50  

Life Sciences

     

Operating Profit3

  $34.4M   $19.6M   $24.5M   $31.9M  

DSO4

   42    52    49    42  

Mining and Minerals

     

Operating Profit3

  $6.6M   $19.3M   $24.2M   $31.4M  

DSO4

   59    62    58    50  

(1)Refer to footnote 1 in immediately preceding table.

 

 (2) Refer to footnote 2 in immediately preceding table.

The effectiveness of EY’s processes, including its quality control, timeliness and responsiveness, and communication and interaction with management

 

 (3) Refer

EY’s efforts toward efficiency, including with respect to footnote 3 in immediately preceding table.

(4)Refer to footnote 4 in immediately preceding table.

(5)Minimum pays out at 25% of target, Target pays out at 100% of target,process improvements and Maximum pays out at 200% of target, with the actual bonus payment being calculated by linear interpolation for achievement of goals other than those specified.
fees

Based on our actual performance and applying the bonus targets, weighting factors, and performance metrics established by the Compensation Committee, the actual Management Incentive Plan awards to the NEOs for fiscal 2016 were as follows:

   2016 Target
MIP Award
   2016 Actual
MIP Award
 

Named Executive Officer

    

Steven J. Demetriou

  $1,950,000    $1,575,600  

Kevin C. Berryman

  $750,000    $606,351  

Joseph G. Mandel

  $699,996    $337,891  

Terence D. Hagen

  $600,000    $615,290  

Robert V. Pragada

  $675,000    $566,743  

Award amounts under the Management Incentive Plan are calculated by taking the employee’s eligible earnings for the fiscal year times their target under the Management Incentive Plan times the payout factor of the performance group associated with their role. As an example, the amount of Mr. Berryman’s award ($606,351) was determined by taking his annual earnings of $750,000 times his Management Incentive Plan target of 100% times the payout factor for his performance group (Corporate), which was 80.8%.

Equity-Based Compensation

The Compensation Committee believes that long-term equity incentives should comprise the majority of compensation for the Company’s senior management. In deciding upon the design and magnitude of long-term incentives, the Compensation Committee is guided by several factors: (1) alignment with shareholder interests; (2) ease of understanding by participants; and (3) retentiveness. In applying these criteria, the Compensation Committee takes into account market data, information and recommendations from its Independent Consultant, and information provided by management, including recommendations by the CEO with respect to the magnitude of equity incentives for executive officers other than himself. Other than off-cycle awards for new hires, promotions or retention grants, the Compensation Committee awards equity incentives in November of each year.

2016 Equity Awards

The Compensation Committee approved fiscal 2016 awards of performance share units (“PSUs”), stock options, and restricted stock to our NEOs constituting 60%, 20% and 20%, respectively, of each NEO’s award. The fiscal 2016 grants were made by the Compensation Committee after its consideration of what the committee believed to be best practices, competitive market data, results of the Company’s recent say-on-pay votes, and discussions with shareholders.

Stock options vest ratably over a four-year period. Restricted stock are subject to certain restrictions on transfer and obligations to surrender the restricted stock to the Company, as set forth in the applicable award agreement (collectively, “forfeiture restrictions”). These forfeiture restrictions lapse ratably over a four-year period.

The PSUs are performance-based restricted stock units that are earned over a three-year performance period if the specified performance metrics are met. For fiscal 2016, the Compensation Committee used two different performance metrics, which correlate executive performance with increases in shareholder value. The first half of the PSUs vest based on the Company’s total shareholder return (“TSR”) compared to that of its industry peer group over a three-year period starting on November 19, 2015 (the “TSR Based Award”). Starting in fiscal 2016, the second half of the PSUs vest based on the Company’s earnings per share (“EPS”) growth over a three-year period (starting on the first day of fiscal 2016 and ending on the last day of fiscal 2018) (the “EPS Based Award”). Previously, the second half of the PSUs had vested based on the Company’s net earnings growth. Earnings per share is a key indicator of a company’s performance for stockholders and the predominant metric used in equity awards of the Company’s peers and its use is intended to improve the focus on profitability and financial discipline.

For the TSR Based Awards issued in fiscal 2016, the number of restricted stock units to be issued on the maturity date of November 19, 2018 is equal to the target number of restricted stock units multiplied by a TSR Performance Multiplier. TSR is a measure of the Company’s share price appreciation, taking into account reinvestment of any dividends paid during the performance period. The “TSR Performance Multiplier” is calculated based upon the Company’s TSR over a three-year period immediately following the TSR award date when ranked against the TSR of other companies in the industry peer group over the same period based on the following chart:

Company TSR Rank

TSR Performance Multiplier

Below 30th percentile

0

30th percentile

50

50th percentile

100

70th percentile

150

 

The TSR Performance Multiplier will be determined by linear interpolation for percentile rankings other than those listed in the chart. For purposes of computing TSR, the beginning stock price is the average stock price over the 30 calendar day period ending on the award date, and the ending stock price is the average stock price over the 30 calendar day period ending on the last day of the performance period.2019 Proxy StatementLOGO    59


 

For the EPS Based Awards issued in fiscal 2016, the number of restricted stock units to be issued on the maturity date of November 19, 2018 is based on the Company’s EPS growth over fiscal 2016, 2017 and 2018. The number of restricted stock units to be issued equals the sum of: (i) an amount, not less than zero, equal to one-third of the target number of restricted stock units multiplied by an EPS Performance Multiplier for that period determined based upon the growth in the Company’s EPS (“EPS Growth Rate”) from fiscal 2015 to fiscal 2016; (ii) an amount, not less than zero, equal to two-thirds of the target number of restricted stock units multiplied by an EPS Performance Multiplier determined based upon the Compound Annual EPS Growth Rate for fiscal 2017 as compared to fiscal 2015, minus the amount of shares earned pursuant to clause (i); and (iii) an amount, not less than zero, equal to the target number of restricted stock units multiplied by an EPS Performance Multiplier determined based upon the Compound Annual EPS Growth Rate for fiscal 2018 as compared to fiscal 2015, minus the amount of shares earned pursuant to clauses (i) and (ii).

The “Compound Annual EPS Growth Rate” for purposes of clauses (ii) and (iii) above means the EPS Growth Rate which when multiplied twice times fiscal 2015 EPS (in the case of clause (ii)) or three times fiscal 2015 EPS (in the case of clause (iii)) results in a number equal to fiscal 2017 EPS and fiscal 2018 EPS, respectively. The “EPS Performance Multiplier” is determined by reference to the following table based upon the Company’s EPS Growth Rate or Compound Annual EPS Growth Rate over the relevant fiscal periods. The Compensation Committee set these metrics based on the Company’s plan at the start of the fiscal year, which reflected the headwinds in client end markets, and the Company’s pro-active efforts to align its operations and reduce costs.

EPS Growth Rate or Compound Annual EPS Growth Rate

  EPS Performance Multiplier 

Less than 4%

   0

4%

   50

7.5%

   100

15%

   150

20% or greater

   200

The EPS Performance Multiplier will be determined by linear interpolation for EPS Growth Rates or Compound Annual EPS Growth Rates other than those listed in the chart.

For example, if the target number of shares of restricted stock to be issued as an EPS Based Award is 50,000 and the EPS Growth Rate from fiscal 2015 to fiscal 2016, and the Compound Annual EPS Growth Rate for fiscal 2017 as compared to fiscal 2015 and for fiscal 2018 as compared to fiscal 2015, are each 7.5%, then 50,000 restricted stock units would vest on the maturity date. This amount is calculated by adding the result of the calculation described in clause (i) above (50,000 shares x 1/3 x 100% = 16,666 shares), the result of the

calculation described in clause (ii) above (50,000 shares x 2/3 x 100% — 16,666 shares = 16,667 shares), and the result of the calculation described in clause (iii) above (50,000 shares x 100% — 16,666 shares — 16,667 shares = 16,667 shares).

“EPS” for any fiscal period is computed by dividing Net Earnings by the weighted average number of shares of the Company’s common stock outstanding during the period. “Net Earnings” means the net earnings attributable to the Company as reported in its consolidated financial statements for such period determined in accordance with accounting principles generally accepted in the United States (“GAAP”) (A) as may be adjusted to eliminate the effects of (i) costs associated with restructuring activities, as determined in accordance with GAAP, regardless of whether the Company discloses publicly the amount of such restructuring costs or the fact that the Company engaged in restructuring activities during the periods restructuring costs were incurred; and (ii) gains or losses associated with discontinued operations, as determined in accordance with GAAP, but limited to the first reporting period an operation is determined to be discontinued and all subsequent periods (i.e., there will be no retroactive application of the adjustment); and (B) as adjusted for all gains or losses associated with events or transactions that the Compensation Committee has made a finding are unusual in nature, infrequently occurring and otherwise not indicative of the Company’s normal operations, and therefore, not indicative of the underlying Company performance. For these purposes, such events or transactions could include: (i) settlements of claims and litigation; (ii) disposals of operations including a disposition of a significant amount of the Company’s assets, (iii) losses on sales of investments, and (iv) changes in laws and/or regulations.

To determine the dollar value of awards to be granted to the NEOs and consistent with its prior process for determining the magnitude of awards, the Compensation Committee examined data with respect to grant values at the 25th, 50th, and, 75th percentiles among industry peer group companies. It also considered the size of the awards previously granted to the NEOs, which reflected the Compensation Committee’s previous evaluation of the magnitude of awards considered necessary in order to align with competitive levels. The determination of award levels in fiscal 2016 also took into account the Compensation Committee’s review of the CEO’s performance and that of the other NEOs (and the CEO’s recommendations with respect to the other NEOs), as well as the Company’s overall performance in what continues to be challenging economic circumstances.

A summary of the equity awards granted in fiscal 2016 is provided below:

Named Executive Officer

  Grant Date  Performance
Share
Units (2)
     Stock
Options
   Restricted
Stock (3)
 

Steven J. Demetriou

   11/19/2015    89,846       98,739     29,949  

Kevin C. Berryman

   11/19/2015    22,462       24,685     7,488  

Joseph G. Mandel

   11/19/2015    22,462       24,685     7,488  

Terence D. Hagen

   11/19/2015    17,548       19,285     5,850  

Robert V. Pragada

   2/1/2016(1)   19,934       21,387     32,201  

(1)Mr. Pragada received these awards in connection with his joining the Company on February 1, 2016.
(2)Represents the target payout shares as described under “Executive Compensation — 2016 Grants of Plan Based Awards” below.
(3)Represents the time-vested restricted stock granted under the Company’s 1999 Stock Incentive Plan, as amended and restated (the “Stock Incentive Plan”).

Grant Process

As in previous years, the exercise price of stock option grants was set at 100% of the closing market price of a share of the Company’s common stock on the date the Compensation Committee met and determined the

grants. New hire awards and retention grants made to executive officers at other times are determined at the closest pre-established meeting date of the Compensation Committee. Additionally, the Compensation Committee has delegated certain limited authority to the CEO to make equity grants in accordance with the rules established by the Compensation Committee for non-executive officers throughout the year. As soon as administratively practicable after a new hire, promotion, or retention warrants an equity grant, the CEO reviews and approves the award. All awards are granted on the date the CEO takes action and, if in the form of stock options, awards are priced based upon the closing market price of a share of common stock on that date. The Compensation Committee periodically receives reports of the CEO’s actions. In fiscal 2016, no awards were made on a date other than when the Compensation Committee met or on the date the CEO approved an award.

Other Benefits and Policies

Benefits Programs

With the exception of its executive deferral plans, which are generally available to most of the Company’s senior management, and certain expatriate arrangements, the Company provides executives with the same benefit plans offered to staff employees. During fiscal 2016, the CEO and other NEOs were eligible to participate in the Company’s 401(k) plan. The plan provides a match equal to 50% of the first 6% of eligible pay (currently $265,000). This is the same plan the Company offers to all full-time employees in the United States. None of the NEOs participated in any defined benefit retirement or supplemental retirement benefit plan.

The Company has qualified employee stock purchase plans in which all employees meeting certain minimum eligibility requirements in certain countries are eligible to participate. The Company adopted a safe-harbor plan design in 2006 that provides for a 5% discount from the closing price of a share of common stock at the end of each purchase period. The safe-harbor plan results in no accounting cost to the Company. Several executive officers participate in the employee stock purchase plans.

Select employees, including NEOs, meeting certain compensation minimums may elect to participate in the Company’s executive deferral plans (“EDPs”) whereby a portion of salary and bonus is deferred and paid to the employee at some future date. The EDPs are nonqualified deferred compensation programs that provide benefits payable to directors, officers, and certain key employees or their designated beneficiaries at specified future dates, upon retirement, or death. Participant contributions are credited with earnings and losses based upon the actual experience of the deemed investments selected by participants. See “Executive Compensation —Nonqualified Deferred Compensation” below for further description of the EDPs.

Perquisites

Our NEOs are eligible to participate in the same benefits as those offered to staff employees including relocation benefits. Executives may have spousal travel paid for by the Company only when it is for an approved business purpose, in which case a related tax gross-up is provided.

In connection with the Company’s decision to move its corporate headquarters to Dallas, Texas, the Company provided relocation benefits to employees, including Mr. Demetriou and Mr. Berryman, who have relocated to Dallas. Mr. Hagen relocated to Tullahoma, Tennessee, where his key Aerospace and Technology leadership team is located. The standard relocation benefits include reimbursement for house-hunting trips, various expenses related to interim-living arrangements, the cost of moving household goods as well as home-sale and home-buying assistance, tax assistance, and relocation allowances to cover miscellaneous expenses.

Payments Upon Termination or Change in Control

Pursuant to Mr. Demetriou’s offer letter, upon a termination by the Company without “cause” or Mr. Demetriou’s resignation for “good reason,” in each case, during his first two years of employment, Mr. Demetriou is entitled to receive a lump-sum payment equal to 12 months of base salary and his target annual

bonus. Mr. Demetriou’s rights to receive severance payments cease after the second anniversary of his start date. If Mr. Demetriou is terminated by the Company without “cause” or Mr. Demetriou resigns for “good reason” during his first three years of employment, certain restricted stock units granted to Mr. Demetriou pursuant to his offer letter, to the extent unvested, will become subject to accelerated vesting.

Pursuant to the terms of Mr. Pragada’s offer letter, upon a termination by the Company without “cause” or Mr. Pragada’s resignation from the Company for “good reason”, in each case during the first year of his employment, Mr. Pragada is entitled to receive a lump-sum payment equal to 12 months of base salary. Mr. Pragada’s rights to receive severance payments cease after February 1, 2017, the first anniversary of his start date with the Company.

The Company is also party to an employment agreement with Mr. Mandel, which was entered into in connection with the completion of a transaction pursuant to which the Company acquired Mr. Mandel’s former employer, pursuant to which he may become entitled to a severance payment equal to 12 months of base salary and the continuation costs of 12 months of COBRA premiums upon a termination by the Company without “cause,” conditioned upon his execution and non-revocation of a general release in favor of the Company.

The only other benefits that NEOs may be entitled to upon termination of their employment, consistent with those offered to all participants, are a potential payout under the Management Incentive Plan upon retirement and prorated vesting at retirement of PSU awards granted during fiscal 2014 and thereafter. In the case of a participant whose employment is terminated in the event of death or Disability (as defined in the Stock Incentive Plan), the terms of our stock options and restricted stock grants provide for accelerated vesting while PSU awards would remain outstanding, with the final determination of the payout, if any, generally determined at the end of the three-year performance period as described in more detail below.

In addition to these provisions, the terms of stock options, restricted stock and PSUs provide for potential double trigger equity acceleration upon certain terminations following a Change in Control (as defined in the Stock Incentive Plan). The Company provides for this type of equity acceleration as a means of focusing executive officers on shareholder interests when considering strategic alternatives. These provisions only apply in the event a Change in Control is consummated, the equity is assumed by the acquiror and then only if the employee incurs a Qualifying Termination (as defined in the Stock Incentive Plan), generally a termination by the employee for “good reason” or by the Company other than for “cause” within two years of the Change in Control.

Further explanation of these provisions may be found under “Compensation Under Various Termination Scenarios” below.

Stock Ownership Guidelines

The Company has established stock ownership guidelines for its executive officers. The Compensation Committee reviews each executive’s holdings with respect to these ownership guidelines each year. As of the Record Date, the NEOs either exceeded their respective guidelines or were within the five-year period from their hire or promotion date at the end of which they are expected to meet the guidelines. See the discussion under “Corporate Governance — Stock Ownership Guidelines” above for further information.

Company Policy on Hedging or Pledge of Stock

The Company’s trading policies contain stringent restrictions on transactions in Company stock by executive officers and directors. All trades by executive officers and directors must be pre-cleared. The executive officers and directors are prohibited from any trading in puts or calls of Company stock, from engaging in short sales of Company stock, and from hedging or pledging Company stock or using it as loan collateral or as part of a margin account.

Clawback Policy

The Compensation Committee has approved a clawback policy with respect to incentive awards to executive officers. The Company is authorized to recover a portion of incentive awards paid within three years of a financial statement that is inaccurate due to material noncompliance with any financial reporting requirement under the securities laws. Recovery applies to the extent a lesser amount would have been paid under the restated financial statement.

Tax Considerations

Section 162(m) of the Code limits deductions for certain executive compensation in excess of $1,000,000 in any fiscal year, excluding from this limit compensation that qualifies as “performance-based compensation” under Section 162(m). Section 162(m) provides that performance-based compensation that meets the requirements of Section 162(m) is not subject to the deductibility limits described in the preceding sentence. The Company attempts to structure its compensation arrangements to permit deductibility under Section 162(m), unless the benefit of such deductibility is outweighed by the need for flexibility or the attainment of other corporate objectives. Since corporate objectives may not always be consistent with the requirements for full deductibility, the Compensation Committee is prepared, if it deems appropriate, to enter into compensation arrangements under which payments may not be deductible under Section 162(m). Thus, deductibility is not the sole factor used by the Compensation Committee in ascertaining appropriate levels or modes of compensation.

Compensation Risk Assessment

As part of its oversight, the Compensation Committee considers the impact of the Company’s executive compensation program, and the incentives created by the compensation awards that it administers, on the Company’s risk profile. The Compensation Committee also retained the Independent Consultant to conduct a risk assessment of the Company’s compensation policies and practices.

In addition, the Company reviews all of its compensation policies and practices, including incentive plan design and factors that may affect the likelihood of excessive risk taking, to determine whether they present a significant risk to the Company. The Company’s pay philosophy provides an effective balance in cash and equity mix, short- and longer-term performance periods, financial and non-financial performance, and allows for the Compensation Committee’s discretion. Further, policies to mitigate compensation-related risk include ownership guidelines, vesting periods on equity, insider-trading prohibitions, and independent Compensation Committee oversight.

Based on this review, both for our executive officers and all other employees, the Company and the Independent Consultant concluded that the risks arising from the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee reviewed and approved this conclusion.

EXECUTIVE COMPENSATION

Summary Compensation Table

The table below summarizes the total compensation earned in fiscal 2016, 2015 and 2014 for the Company’s named executive officers (or NEOs).

Name and

Principal Position

 Fiscal
Year
  Salary
($) (1)
  Bonus
($) (2)
  Stock
Awards
($) (3)
  Option
Awards
($) (4)
  Non-
Equity
Incentive
Plan
Compen-
sation
($) (5)
  Change in
Pension  Value
and  Non-
qualified
Deferred
Compen-
sation
Earnings
($)
  All
Other
Compen-
sation
($) (6)
  Total
($)
 

Steven J. Demetriou(7)

  2016    1,300,000     5,252,561    1,274,661    1,575,600    —     94,591    9,497,413  

Chairman and Chief Executive Officer

  2015    125,000    5,650,000    5,022,034    1,328,068    —     —     41,506    12,166,608  

Kevin C. Berryman(7)

  2016    750,000    875,000    1,313,194    318,669    606,351    —     165,831    4,029,045  

Executive Vice President
and Chief Financial
Officer

  2015    544,832    1,500,000    6,239,286    922,213    174,816    —     46,112    9,427,259  

Joseph G. Mandel

  2016    699,996    375,000    1,313,194    318,669    337,891    —     35,507    3,080,257  

President, Petroleum
and Chemicals

  2015    699,996    —     405,175    591,720    224,604    —     7,950    1,929,445  
  2014    699,996    —     830,820    454,296    118,244    —     7,950    2,111,306  

Terence D. Hagen(7)

  2016    620,414    425,000    1,025,914    248,958    615,290    —     68,941    3,004,517  

President — Aerospace and Technology

         

Robert V. Pragada(7)

  2016    428,365    500,000    2,068,349    260,000    566,743    —     —     3,823,457  

President — Building
and Infrastructure

         

(1)Consists of base salary earned during the fiscal year including any time off with pay and cash-pay-out of accrued time off in excess of the Company’s limit. Mr. Pragada began employment with the Company on February 1, 2016 with a starting annual salary of $675,000. In fiscal 2016, Mr. Pragada earned a pro-rata portion of his salary based on his start date.
(2)In fiscal 2016, Messrs. Berryman, Mandel and Hagen received cash transition bonuses of $375,000, $375,000 and $425,000, respectively, to ensure ongoing stability and continuity of leadership during the CEO transition period that began in fiscal 2015. For Mr. Berryman, the $875,000 also consists of a $500,000 hiring bonus necessary to recruit him from his prior employer. For Mr. Pragada, the $500,000 represents a hiring bonus he received upon starting with the Company in February 2016.
(3)Represents the grant date fair value of stock awards granted under the Stock Incentive Plan in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (“FASB ASC Topic 718”). Please refer to Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements included in the Company’s 2016 Annual Report on Form 10-K for a discussion of the assumptions used to calculate these amounts.
(4)Represents the grant date fair value of options granted (adjusted, however, to exclude the effects of estimated forfeitures) under the Stock Incentive Plan in accordance with FASB ASC Topic 718. Please refer to Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements included in the Company’s 2016 Annual Report on Form 10-K for a discussion of the assumptions used to calculate these amounts.
(5)Represents the annual incentive awards earned in fiscal 2016 as determined by the Compensation Committee.
(6)In fiscal 2016, Mr. Berryman received $7,950 and Messrs. Mandel and Hagen received $8,100 in 401(k) company matching contributions. Some of the NEOs also received relocation assistance in connection with various moves on behalf of the Company. For Mr. Demetriou, the relocation assistance totaled $93,661 in fiscal 2016 and totaled

$41,506 in fiscal 2015. The 2016 relocation expenses consist of $62,367 of non-taxable relocation items (e.g., movement of household goods, lodging, home sale), $17,288 for house hunting trips and interim living, $600 for miscellaneous relocation expenses and $13,406 for associated gross-up payments. The 2015 relocation expenses consist of $3,010 for movement of household goods, $12,951 for house hunting trips, $9,750 for miscellaneous relocation expenses and $15,795 for associated gross-up payments. Additionally, $930 was included for Mr. Demetriou’s spouse’s travel for business purposes in fiscal 2016. For fiscal 2016, Mr. Berryman received relocation assistance which totaled $157,474, including $141,994 for home purchase, $10,225 for house hunting trips and $5,255 for associated gross-up payments; and totaled $46,112 for fiscal 2015, consisting of $28,491 of non-taxable relocation items (e.g., movement of household goods, final move expenses), $3,569 for miscellaneous relocation expenses, $9,281 for home purchase assistance and $4,771 for an associated gross-up payment. Additionally, $407 was included for Mr. Berryman’s spouse’s travel for business purposes in fiscal 2016. For Mr. Mandel, $27,407 was included for company provided travel assistance for him and his family in connection with a family emergency. For Mr. Hagen, the relocation assistance totaled $60,841, which consisted of $10,568 for miscellaneous relocation expenses, $33,455 of non-taxable relocation items (e.g., movement of household goods, final move expenses), $8,922 for house hunting trips and interim living, and $7,896 for associated gross-up payments.

(7)Messrs. Demetriou and Berryman were named executive officers beginning in fiscal 2015. Messrs. Hagen and Pragada first became named executive officers in fiscal 2016.

2016 Grants of Plan Based Awards

The table below summarizes all grants of plan based awards to the NEOs in fiscal 2016:

Name

 Grant
Date
  Estimated
Future Payouts
Under
Non-equity Incentive
Plan
Awards (1)
  Estimated
Future Payouts
Under
Equity Incentive
Plan
Awards (2)
  All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#) (3)
  All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) (4)
  Exercise
or Base
Price of
Option
Awards
($)
  Grant
Date
Fair
Value of
Stock
and
Option
Awards
($) (5)
 
  Thres-
hold
($)
  Target
($)
  Max-
imum
(#)
  Thres-
hold
($)
  Target
(#)
  Max-
imum
(#)
     

Steven J. Demetriou

  11/19/2015           98,739    42.74    1,274,661  
  11/19/2015          29,949      1,280,020  
  11/19/2015        44,923(6)   89,846(6)      1,920,009  
  11/19/2015        44,923(7)   67,385(7)      2,052,532  
    1,950,000    3,900,000         

Kevin C. Berryman

  11/19/2015           24,685    42.74    318,669  
  11/19/2015          7,488      320,037  
  11/19/2015        11,231(6)   22,462(6)      480,013  
  11/19/2015        11,231(7)   16,847(7)      513,144  
    750,000    1,500,000         

Joseph G. Mandel

  11/19/2015           24,685    42.74    318,669  
  11/19/2015          7,488      320,037  
  11/19/2015        11,231(6)   22,462(6)      480,013  
  11/19/2015        11,231(7)   16,847(7)      513,144  
    699,996    1,399,992         

Terence D. Hagen

  11/19/2015           19,285    42.74    248,958  
  11/19/2015          5,850      250,029  
  11/19/2015        8,774(6)   17,548(6)      375,001  
  11/19/2015        8,774(7)   13,161(7)      400,884  
    600,000    1,200,000         

Robert V. Pragada

  02/01/2016           21,387    39.13    260,000  
  02/01/2016          6,645      260,019  
  02/01/2016          25,556      1,000,006  
  02/01/2016        9,967(6)   19,934(6)      390,009  
  02/01/2016        9,967(7)   14,951(7)      418,315  
    675,000    1,350,000         

(1)Amounts represent the 2016 projected award under the Management Incentive Plan based on the Company’s internal plan at the start of fiscal 2016. See “Compensation Discussion and Analysis —Compensation Elements — Short-Term Incentives” above for a description of the Incentive Bonus Plan and the manner in which bonuses are computed.
(2)Amounts represent the target and maximum payout shares of awards of PSUs granted under the Stock Incentive Plan.
(3)Represents the restricted stock granted under the Stock Incentive Plan. The November 19, 2015 award was based on a grant date fair value of $42.74 and the February 1, 2016 award was based on a grant date fair value of $39.13 (closing price of a share of the Company’s common stock as quoted by the NYSE Composite Transaction Report on the grant date).
(4)Represents options granted under the Stock Incentive Plan. The exercise price is equal to the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History on the grant date. The grant date fair value for the November 19, 2015 award and the February 1, 2016 award were $12.9094 and $12.1569, respectively.
(5)Represents the grant date fair value of options, restricted stock and PSUs granted (target shares) under the Stock Incentive Plan computed in accordance with FASB ASC Topic 718. Please refer to Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements included in the Company’s 2016 Annual Report on Form 10-K for a discussion of the assumptions used to calculate these amounts.
(6)Represents the target and maximum payout shares of the grants of the EPS Based Award (as defined above) that each NEO could earn under the Stock Incentive Plan. The grant date fair value for the November 19, 2015 award and the February 1, 2016 award were $42.74 and $39.13, respectively. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions. Please refer to “Compensation Discussion and Analysis — Compensation Elements — Equity Based Compensation —2016 Awards” for a discussion of how the number of shares ultimately issued will be determined.
(7)Represents the target and maximum payout shares of the grants of the TSR Based Award (as defined above) that each NEO could earn under the Stock Incentive Plan. The grant date fair value for the November 19, 2015 award and the February 1, 2016 award were $45.69 and $41.97 respectively. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions. Please refer to “Compensation Discussion and Analysis — Compensation Elements — Equity Based Compensation —2016 Awards” for a discussion of how the number of shares ultimately issued will be determined.

Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table

Employment Agreements

The Company entered into an offer letter with Mr. Demetriou in connection with him joining the Company, pursuant to which he received (i) a cash payment of $5,650,000 which must be repaid to the Company if Mr. Demetriou resigns without “good reason” or is terminated for “cause” prior to the second anniversary of his start date and (ii) a grant of RSUs with a grant value of $2,700,000, which vest in equal installments on each of the first three anniversaries of his start date, subject to Mr. Demetriou’s continued employment on the relevant vesting date and to accelerated vesting if Mr. Demetriou resigns with “good reason” or is terminated other than for “cause” prior to the third anniversary of his start date. In addition, if Mr. Demetriou is terminated by the Company without “cause” or he resigns for “good reason,” in each case, within two years following the Effective Date, he will be entitled to receive a lump sum payment equal to one year’s base salary and target bonus. For a description of “cause” and “good reason,” see “Compensation Under Various Termination Scenarios” below.

In addition, the Company entered into an employment agreement with Mr. Mandel in connection with the completion of a transaction pursuant to which the Company acquired the executive’s former employer. Mr. Mandel’s employment agreement entitles him to a base salary, eligibility to participate in the Management Incentive Plan and other benefits generally made available to the Company’s employees. In addition, if Mr. Mandel’s employment is terminated by the Company without Cause, the Company will pay Mr. Mandel a severance payment equal to 12

months of base salary and the continuation cost of 12 months of COBRA premiums, subject to his execution and non-revocation of a general release in favor of the Company. For a description of “Cause,” see “Compensation Under Various Termination Scenarios” below.

The Company entered into an offer letter with Mr. Pragada in connection with him joining the Company. His offer letter provides for him to receive an annual base salary of $675,000 and entitles him to participate in the Management Incentive Plan with a bonus target of 100% of his base salary. In addition, pursuant to his offer letter, Mr. Pragada received an equity award for fiscal year 2016 having an aggregate grant value equal to $1,300,000 (delivered in the form of 20% stock options, 20% restricted stock and 60% PSUs). To make Mr. Pragada whole for compensation that he forfeited from his prior employer, he received a cash bonus of $500,000 and $1,000,000 of RSUs and will receive an additional cash bonus of $350,000 following the first anniversary of his start date. If Mr. Pragada leaves without “good reason” or is terminated for “cause,” in each case within two years following his start date, Mr. Pragada must return the total amount of the cash bonus received to the Company. For a description of “cause” and “good reason” see “Compensation Under Various Termination Scenarios” below. Mr. Pragada is also entitled to severance benefits under certain circumstances if his employment terminates in the first year after his start date. See “Compensation Under Various Termination Scenarios.” Pursuant to the offer letter, Mr. Pragada is eligible for other benefits including participation in Jacobs’ Executive Deferral Plan, relocation assistance, five weeks of paid time off and healthcare benefits.

Outstanding Equity Awards at 2016 Fiscal Year End

Name

 Grant
Date
  Option Awards  Stock Awards 
  

 

 

 

 

 

 

 

Number of Securities
Underlying Unexercised
Options (1)

  Option
Exercise
Price
($) (2)
  Option
Expiration
Date
  Number Of
Shares Or
Units Of
Stock
That Have
Not
Vested
(#) (3)
  Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
($) (4)
  Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units
or Other
Rights
That Have
Not
Vested
(#) (5)
  Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights
That Have
Not
Vested
(#) (6)
 
  Exercisable  Unexercisable       
  #  #       

Steven J. Demetriou

  8/17/2015    25,564    76,695    43.94    8/17/2025    75,638    3,911,997    16,065    —   
  11/19/2015    —      98,739    42.74    11/19/2025    29,949    1,548,962    44,923    2,323,418  
  11/19/2015          44,923    3,485,126  

Kevin C. Berryman

  12/30/2014    14,333    34,667    45.16    12/30/2024    69,753    3,607,625    8,000    413,760  
  12/30/2014          8,000    413,760  
  5/28/2015    4,250    12,750    43.34    5/28/2025      
  6/8/2015          9,500    0  
  11/19/2015    —      24,685    42.74    11/19/2025    7,488    387,279    11,231    580,867  
  11/19/2015          11,231    871,301  

Joseph G. Mandel

  3/24/2011    40,000    —      48.56    3/24/2021      
  5/24/2012    36,000    —      37.03    5/24/2022      
  5/23/2013    27,000    9,000    55.00    5/23/2023      
  5/22/2014    12,000    12,000    53.17    5/22/2024      8,000    413,760  
  5/22/2014          8,000    413,760  
  12/19/2014    8,333    16,667    43.25    12/19/2024      
  5/28/2015    4,250    12,750    43.34    5/28/2025      
  6/8/2015          9,500    —   
  11/19/2015    —      24,685    42.74    11/19/2025    7,488    387,279    11,231    580,867  
         11,231    871,301  

Terence D. Hagen

  5/23/2013    9,000    3,000    55.00    5/23/2023     —      
  5/22/2014    4,500    4,500    53.17    5/22/2024      3,000    155,160  
  5/22/2014          3,000    155,160  
  6/8/2015    4,250    12,750    42.65    6/8/2025      9,500    —   
  11/19/2015    —      19,285    42.74    11/19/2025    5,850    302,562    8,774    453,791  
  11/19/2015          8,774    680,687  

Robert V. Pragada

  2/1/2016    —      21,387    39.13    2/1/2026    32,201    1,665,436    9,967    515,493  
  2/1/2016          9,967    773,240  

(1)All stock options vest or have vested at the rate of 25% per year beginning on the first anniversary of the grant date, with the exception of the 25,000 options granted on December 19, 2014 to Mr. Mandel and 25,000 options granted on December 30, 2014 to Mr. Berryman that vest in three equal installments beginning on the grant date.
(2)All outstanding stock options were granted under the Stock Incentive Plan and were made with an exercise price equal to the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History on the grant date. The awards have a total term of ten years.
(3)Represents the number of unvested shares of restricted stock granted under the Stock Incentive Plan. The awards of restricted stock vest at the expiration of four years from the grant date, with the exception of (i) stock grants to Mr. Berryman on December 30, 2014 that vest in 40%, 40% and 20% increments on the first, second and third anniversary of the award date, respectively, and (ii) stock grants to Mr. Demetriou on August 17, 2015 that 67,772 shares vest in three equal installments beginning on the first anniversary of the grant date and the other 30,456 shares vest at the expiration of three years from the grant date.
(4)The market value of outstanding awards of restricted stock is computed using the closing price of the Company’s common stock as quoted by the NYSE Composite Price History at September 30, 2016, which was $51.72.

(5)Represents the target number of unvested target shares of PSUs (TSR Based Awards, EPS Based Awards and PSUs that vest based on the Company’s net earnings growth (“Net Earnings Based Awards”)) granted under the Stock Incentive Plan. The awards of PSUs vest at the expiration of three years from the grant date.
(6)The market value of outstanding PSUs (TSR Based Awards, EPS Based Awards and Net Earnings Based Awards) is computed by using the closing price of the Company’s common stock as quoted by the NYSE Composite Price History at September 30, 2016, which was $51.72. For those awards where performance is currently forecasted to be below threshold, the associated multiplier of 0% has been applied. For those awards where performance is currently forecasted to be above threshold but below target, the target value is represented. For those awards where performance is currently forecasted to payout above target, the maximum multiplier, 150% for TSR Based Awards and 200% for EPS Based Awards, has been applied.

Option Exercises and Stock Vested in Fiscal 2016

The following table provides information on stock options that were exercised and on restricted stock that vested in fiscal 2016:

   Option Awards   Stock Awards 

Name

  Number
of Shares
Acquired
on
Exercise
(#)
   Value
Realized
on Exercise
($) (1)
   Number
of Shares
Acquired
on Vesting
(#)
   Value
Realized
on Vesting
($) (2)
 

Stephen J. Demetriou

   —      —      22,590     1,203,595  

Kevin C. Berryman

   —      —      46,501     1,972,572  

Joseph G. Mandel

   —      —      16,264     746,025  

Terence D. Hagen

   22,000     294,940     2,088     104,442  

Robert V. Pragada

   —       —       —       —    

(1)Value is based on the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History on the exercise date, minus the cost of the option (i.e., the exercise price).
(2)Value is based on the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History on the vesting date.

Equity Compensation Plan Information

The following table presents certain information about our equity compensation plans as of September 30, 2016:

   Column A   Column B   Column C 

Plan Category

  Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants, and
rights
   Weighted-
average
exercise price
of outstanding
options,
warrants, and
rights
   Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
Column A)
 

Equity compensation plans approved by shareholders(1)

   3,577,512    $45.70     7,552,708  

Equity compensation plans not approved by shareholders

   —      —      —   
  

 

 

   

 

 

   

 

 

 

Total

   3,577,512    $45.70     7,552,708  
  

 

 

   

 

 

   

 

 

 

(1)The number in Column A excludes purchase rights accruing under our two, broad-based, shareholder-approved employee stock purchase plans: the ESPP and the Global ESPP. These plans give employees the right to purchase shares at an amount and price that are not determinable until the end of the specified purchase periods, which occur monthly. Our shareholders have authorized a total of 27.8 million shares of common stock to be issued through the ESPP and the Global ESPP. From the inception of the ESPP and the Global ESPP through September 30, 2016, a total of 27.2 million shares have been issued, leaving 0.6 million shares of common stock available for future issuance at that date.

Nonqualified Deferred Compensation

As described above, employees, including NEOs, meeting certain compensation minimums may elect to participate in the Company’s executive deferral plans (“EDPs”) whereby a portion of salary and bonus is deferred and paid to the employee at some future date. The EDPs are nonqualified deferred compensation programs that provide benefits payable to directors, officers, and certain key employees or their designated beneficiaries at specified future dates, and upon retirement, or death. Participant contributions are credited with earnings and losses based upon the actual experience of the investments selected by participants.

For the EDPs in which the NEOs participate (the “Variable Plans”), accounts are credited (or debited) based on the actual earnings (or losses) of the deemed investments selected by the individual participants. Participation in the EDPs is voluntary. All EDPs operate under a single trust. Although there are certain change-in-control features within the EDPs, no benefit enhancements occur upon a change-in-control. Amounts deferred into the Variable Plans are credited or charged with the performance of investment options selected by the participants. The investment options are notional, and are used for measurement purposes only. The NEOs do not own any units in the actual funds. In general, the investment options consist of a number of mutual and index funds comprising stocks, bonds, and money market accounts.

The following table shows the executive deferral plan account activity during fiscal 2016 for the NEOs:

Name

  Deferred
Compensation  Plan
($)
  Executive
Contributions
During Last
Fiscal Year
($) (1)
   Aggregate
Earnings
During Last
Fiscal Year
($) (2)
   Aggregate
Withdrawals  /
Distributions
During Last
Fiscal Year
($)
   Aggregate
Balance at
Last Fiscal
Year End
($) (3)
 

Demetriou, Steven J

  Variable Plans   95,000     5,639     —      100,639  

Berryman, Kevin C

  Variable Plans   158,942     20,600     —      271,922  

Mandel, Joseph G

  Variable Plans   287,371     212,785     —      2,305,117  

Hagen, Terence D

  Variable Plans   —       2,301     —      21,758  

Pragada, Robert V

  Variable Plans   —       —       —      —    

(1)All executive contributions for fiscal 2016 are included in the Summary Compensation Table under the “Salary” and “Non Equity Incentive Plan Compensation” columns.
(2)Earnings are included in the Summary Compensation Table to the extent they exceed 120% of the AFR.
(3)Balances at the end of the fiscal year consist of (i) salary and bonus deferrals made by the executive over time, beginning when the executive first joined the plan, plus (ii) all earnings and losses credited on all deferrals, less (iii) all pre-retirement distributions, if any, taken by the executive since the executive first joined the plan.

COMPENSATION UNDER VARIOUS TERMINATION SCENARIOS

Mr. Demetriou’s offer letter provides that, if he is terminated by the Company without “Cause” or he resigns for “Good Reason” (each as defined in his offer letter and set forth below) during the two years following his hire date, he is entitled to receive 12-months base salary and an annual bonus paid at target. Mr. Mandel has an employment agreement that provides severance benefits including one year base salary and the cost of COBRA coverage for a period of 12 months. Mr. Pragada’s offer letter provides that, if he is terminated by the Company without “Cause” or he resigns for “Good Reason” (each as defined in his offer letter and set forth below) during the one year following his hire date, he is entitled to receive 12-months base salary. No other NEO has an employment agreement that provides for termination, severance or change-in-control benefits.

Some elements of executive compensation are affected either by an approved retirement, death or Disability or by a Change in Control (as these terms are defined in the Stock Incentive Plan). Pursuant to the Stock Incentive Plan:

in the case of options, if employment terminates (i) upon, or within two years following a Change in Control in a Qualifying Termination (as defined in the Stock Incentive Plan), or (ii) upon death or Disability, unless otherwise provided in the award agreement, all options are immediately vested;

in the case of restricted stock and restricted stock units granted on or after May 26, 2011, if employment terminates upon death or Disability, unless otherwise provided in the award agreement, all restricted stock and restricted stock units are immediately vested; provided, however, that any awards of restricted stock and/or restricted stock units that are subject to performance-based vesting criteria shall remain outstanding and continue to vest or become earned based upon the Company’s actual performance through the end of the applicable performance period;

in the case of restricted stock and restricted stock units, if employment terminates upon, or within two years following a Change in Control in a Qualifying Termination, all restricted stock and restricted stock units are immediately vested; provided, however, that any awards of restricted stock and/or restricted stock units that are subject to performance-based vesting criteria shall be paid at a level based upon the Company’s actual performance as of the Qualifying Termination, except with respect to the PSUs, where the following performance criteria apply:

in the case of Net Earnings Based Awards granted prior to fiscal 2016, the number of earned Net Earnings Based Awards will be determined based upon performance through the March 31 immediately preceding or coinciding with the date of the Change in Control, plus an additional number of shares, not less than zero, equal to (A) the target shares awarded multiplied by the Net Earnings Growth Performance Multiplier determined based upon the average annual growth in the Company’s Net Earnings through the end of the last fiscal quarter completed on or prior to the date of the Change in Control, minus (B) the amount determined based upon performance through the March 31 immediately preceding or coinciding with the date of the Change in Control;

in the case of TSR Based Awards granted prior to fiscal 2016, the TSR Performance Multiplier shall be determined based upon the Company’s TSR and the TSR of each of the companies in the industry peer group through the date of the Change in Control (and, with respect to the Company, taking into account the consideration per share to be paid in the Change in Control transaction);

in the case of EPS Based Awards granted in fiscal 2016, (a) if the Change in Control occurs prior to the last day of fiscal year 2016, the performance multiplier for such PSU grant will be 100%; and (b) if the Change in Control occurs upon or after the last day of fiscal year 2016, the number of EPS Based Awards will be determined based upon performance through the last day of the fiscal year immediately preceding or coinciding with the date of the Change in Control, plus an additional number of restricted stock units, not less than zero, equal to (A) the Target EPS Based Awards multiplied by the EPS Performance Multiplier determined based upon the applicable Compound Annual EPS Growth Rate in the Company’s EPS through the end of the last fiscal quarter completed on or prior to the date of the Change in Control, minus (B) the amount determined based upon performance through the last day of the fiscal year immediately preceding or coinciding with the date of the Change in Control;

in the case of TSR Based Awards granted in fiscal 2016, (a) if the Change in Control occurs prior to the last day of fiscal year 2016, the performance multiplier for such PSU grant will be 100%; and (b) if the Change in Control occurs upon or after the last day of fiscal year 2016, the Relative TSR Performance Multiplier shall be determined based upon the Company’s TSR and the TSR of each of the companies in the industry peer group through the date of the Change in Control (and, with respect to the Company, taking into account the consideration per share to be paid in the Change in Control transaction);

See “Compensation Discussion and Analysis—Compensation Elements—Equity-Based Compensation—2016 Equity Awards” for a discussion of the computation of the EPS and TSR Performance Multipliers;

in the case of PSUs granted on or after May 22, 2014, if employment terminates as a result of employee’s retirement, the award shall remain outstanding and continue to become earned based upon the Company’s actual performance through the end of the applicable performance period; provided, however, that only a pro-rated portion (based on the number of days during the performance period that employee was employed by the Company) of the award will become vested, with the remainder of the award forfeited at time of retirement; and

in the case of options, restricted stock and restricted stock units, if a Change in Control occurs and the awards are not assumed and continued by the acquiring or surviving corporation in the transaction (or a parent corporation thereof), all awards are immediately vested; provided, however, that any awards of restricted stock and/or restricted stock units (including PSUs) that are subject to performance-based vesting criteria shall be paid at a level based upon the Company’s actual performance as of the date of the Change in Control.

The following table provides information on executive compensation under (i) termination in connection with a Change in Control, (ii) termination due to death or Disability, (iii) retirement approved by the Compensation Committee, and (iv) with respect to Messrs. Demetriou, Mandel, and Pragada, termination by the Company without Cause, or resignation for Good Reason.

Name

       Change in
Control
($)
  Death or
Disability
($)
  Retirement
($)
  Termination
Without
Cause /
With Good
Reason ($)
 

Steven J. Demetriou

       
  Non-Equity Incentive Plan Compensation  (1)    1,575,600    1,950,000    —     —   
  Value of Unvested in-the-money Stock Options  (2)    1,483,363    1,483,363    —     —   
  Value of Unvested Stock Awards  (3)    5,460,960    5,460,960    —     2,336,813  
  Value of Unvested Performance Share Units  (4)    3,485,126    5,304,362    —     —   
  Severance Benefits  (5)    —     —     —     3,250,000  
  Total   12,005,049    14,198,685    —     5,586,813  

Kevin C. Berryman

       
  Non-Equity Incentive Plan Compensation  (1)    606,351    750,000    —     —   
  Value of Unvested in-the-money Stock Options  (2)    555,932    555,932    —     —   
  Value of Unvested Stock Awards  (3)    3,994,905    3,994,905    —     —   
  Value of Unvested Performance Share Units  (4)    1,253,574    1,708,393    —     —   
  Severance Benefits  (5)    —     —     —     —   
  Total   6,410,762    7,009,230    —     —   

Joseph G. Mandel

       
  Non-Equity Incentive Plan Compensation  (1)    337,891    699,996    —     —   
  Value of Unvested in-the-money Stock Options  (2)    469,686    469,686    —     —   
  Value of Unvested Stock Awards  (3)    387,279    387,279    —     —   
  Value of Unvested Performance Share Units  (4)    1,253,574    1,708,393    —     —   
  Severance Benefits  (5)    —     —     —     714,189  
  Total   2,448,430    3,265,354    —     714,189  

Name

       Change
in

Control
($)
  Death or
Disability
($)
  Retirement
($)
  Termination
Without
Cause /
With Good
Reason ($)
 

Terrence Hagen

       
  Non-Equity Incentive Plan Compensation  (1)    615,290    600,000    —     —   
  Value of Unvested in-the-money Stock Options  (2)    288,822    288,822    —     —   
  Value of Unvested Stock Awards  (3)    302,562    302,562    —     —   
  Value of Unvested Performance Share Units  (4)    824,039    1,179,358    —     —   
  Severance Benefits  (5)    —     —     —     —   
  Total   2,030,713    2,370,742    —     —   

Robert Pragada

       
  Non-Equity Incentive Plan Compensation  (1)    566,743    675,000    —     —   
  Value of Unvested in-the-money Stock Options  (2)    269,262    269,262    —     —   
  Value of Unvested Stock Awards  (3)    1,665,436    1,665,436    —     —   
  Value of Unvested Performance Share Units  (4)    773,240    1,176,871    —     —   
  Severance Benefits  (5)    —     —      —     675,000  
  Total   3,274,681    3,786,569    —     675,000  

(1)The amount of unpaid incentive compensation that would be paid as of September 30, 2016.
(2)The amount that would be earned related to unvested in-the-money options as of September 30, 2016. Value is based on the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History at September 30, 2016 of $51.72, minus the cost of the option (i.e., the exercise price).
(3)The amount that would be earned related to unvested restricted stock awards as of September 30, 2016. Value is computed by using the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History at September 30, 2016 of $51.72.
(4)The amount that would be earned related to unvested shares of PSUs as of September 30, 2016. The amount reported with respect to a Change in Control represents (i) the shares that would vest based on actual performance through September 30, 2016, multiplied by (ii) the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History at September 30, 2016 of $51.72. The amount reported with respect to Death or Disability represents (i) the shares that would vest if performance achieved is consistent with the Company’s internal forecasts of its performance through the end of the performance period, multiplied by (ii) the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History at September 30, 2016 of $51.72.
(5)For Mr. Demetriou, if he is discharged from the Company without Cause, or he resigns with Good Reason, in each case within two years following his start date, he would be eligible for 12 months current base salary and bonus at target. Upon a termination by the Company without cause, Mr. Mandel would become entitled to an amount equal to 12 months of his then current base salary and the cost of COBRA benefits for 12 months. For Mr. Pragada, if he is terminated by the Company without “Cause” or he resigns for “Good Reason” during the one year following his hire date, he is entitled to receive 12-months base salary.

For the purposes of the Management Incentive Plan and Stock Incentive Plan, “Retires” means a person’s voluntary resignation from employment (i) at age 65 or older or (ii) at age 60 or older with 10 or more years of service with the Company.

For the purposes of the Stock Incentive Plan, the following terms have the following definitions:

“Cause” means (unless otherwise expressly provided in an award agreement or another contract, including an employment agreement) the Company’s termination of the employee’s employment with the Company following the occurrence of any one or more of the following: (1) the employee is convicted of, or pleads guilty or nolo contendere to, a felony; (2) the employee willfully and continually fails to substantially perform the employee’s duties with the Company after written notification by the Company; (3) the employee willfully engages in conduct that is materially injurious to the Company, monetarily or otherwise; (4) the employee commits an act of gross misconduct in connection with the performance of the employee’s duties to the Company; or (5) the employee materially breaches any employment, confidentiality or other similar agreement between the Company and the employee.

“Change in Control” means, with respect to the Company, a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A under the Exchange Act, provided that such a change in control shall be deemed to have occurred at such time as (i) any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities representing 35% or more of the combined voting power for election of directors of the then outstanding securities of the Company or any successor of the Company; (ii) during any period of two (2) consecutive years or less, individuals who at the beginning of such period constituted the Board of Directors cease, for any reason, to constitute at least a majority of the Board of Directors, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; (iii) the consummation of any merger or consolidation as a result of which the Jacobs common stock shall be changed, converted or exchanged (other than by merger with a wholly owned subsidiary of the Company) or any liquidation of the Company or any sale or other disposition of 50% or more of the assets or earning power of the Company; or (iv) the consummation of any merger or consolidation to which the Company is a party as a result of which the persons who were shareholders of the Company immediately prior to the effective date of the merger or consolidation shall have beneficial ownership of less than 50% of the combined voting power for election of directors of the surviving corporation following the effective date of such merger or consolidation; provided, however, that no Change in Control shall be deemed to have occurred if, prior to such time as a Change in Control would otherwise be deemed to have occurred, the Board of Directors of the Company determines otherwise. Notwithstanding the foregoing, with respect to an Award that is (i) subject to Section 409A and (ii) if a Change in Control would accelerate the timing of payment thereunder, then the term “Change in Control” shall mean a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company as defined in Section 409A and the authoritative guidance issued thereunder, but only to the extent inconsistent with the above definition, and only to the minimum extent necessary to comply with Section 409A as determined by the Committee.

“Disability” means the employee meets the definition of “disabled” under the terms of the long term disability plan of the Company or related company by which the employee is employed in effect on the date in question, whether or not the employee is covered by such plan.

“Good Reason” means, without the employee’s consent (1) a material reduction in the position, duties or responsibilities of the employee from those in effect immediately prior to such change; (2) a reduction in the employee’s base salary; (3) a relocation of the employee’s primary work location to a distance of more than fifty (50) miles from its location as of immediately prior to such change; or (4) a material breach by the Company of any employment agreement between the Company and the employee.

“Qualifying Termination” means a termination of an employee’s employment with the Company (i) by the Company for any reason other than Cause or the employee’s death or Disability or (ii) by the employee for Good Reason.

For the purposes of Mr. Demetriou’s offer letter, “Cause” means (i) an intentional act of fraud, embezzlement, theft or any other material violation of law that occurs during or in the course of his employment with the Company; (ii) intentional damage to the Company’s assets; (iii) intentional engagement in any competitive activity which would constitute a breach of his duty of loyalty or of his contractual obligations; (iv) intentional breach of any of the Company’s written policies, including its confidentiality policy; (v) the willful and continued failure to substantially perform his duties for the Company (other than as a result of incapacity due to physical or mental illness); (vi) failure by him to cooperate in any investigation of Jacobs by any governmental or self-regulatory authority, or in any internal investigation; or (vii) willful conduct by him that is demonstrably and materially injurious to Jacobs, monetarily or otherwise. For purposes of this paragraph, and act, or a failure to act, shall not be deemed willful or intentional, as those terms are used herein, unless it is done, or omitted to be done, by him in bad faith or without a reasonable belief that his action or omission was in the best interest of Jacobs. Failure to meet performance standards or objectives, by itself, does not constitute

“Cause”. “Cause” includes any of the above grounds for dismissal regardless of whether Jacobs learns of the existence of such grounds before or after terminating his employment. “Good Reason” is defined as the Internal Revenue Code (“Code”) Section 409A “safe harbor” definition, as described in Treasury Regulation Section 1.409A-1(n)(2)(ii) and, in addition, him not being appointed as Chairman of the Board by the first anniversary of his start date shall be a Good Reason event. A resignation will not be considered for Good Reason unless it actually occurs not more than ninety (90) days following the initial existence of one or more of the applicable Good Reason conditions arising without his consent, and then only if he provides notice to Jacobs of the initial existence of such a condition, which describes such condition in detail, no less than ninety (90) days after the initial existence of the condition, and Jacobs does not remedy the condition within the thirty (30) days following its receipt of such notice.

For the purposes of Mr. Mandel’s employment agreement, “Cause” means (1) gross negligence or willful misconduct in respect to, or a material failure or refusal to continue the performance of, his duties and responsibilities as set forth in the agreement, which he fails to cure within twenty (20) days after having received written notice from the Company of the facts and circumstances that it contends constitute the above conduct; (2) material breach of any provision of the agreement or of his Employee Invention and Confidential Information Agreement, which he fails to cure within twenty (20) days after having received written notice from the Company of the facts and circumstances that it contends constitute a material breach; (3) the illness or incapacity (or other disability as defined in the Company’s disability plan in effect at the time of such disability) of Mr. Mandel of such a character so as to disable him from rendering services for a period of more than 90 days (whether or not consecutive) during any 12-month period; (4) death; (5) material breach of, or material failure to abide by, the Company’s Corporate Policy Concerning Business Conduct, Integrity and Ethics (USA); (6) civil fraud, breach of fiduciary duty involving personal profit, or willful violation of any law, rule or regulation (other than traffic violations or similar offenses); and/or (7) breach of or failure to abide by the Company’s Drug, Alcohol, and Contraband Policy.

For the purposes of Mr. Pragada’s employment agreement, “Cause” means: (i) an intentional act of fraud, embezzlement, theft or any other material violation of law that occurs during or in the course of his employment with the Company; (ii) intentional damage to the Company’s assets; (iii) intentional engagement in any competitive activity which would constitute a breach of his duty of loyalty or of his contractual obligations; (iv) intentional breach of any of the Company’s written policies, including its confidentiality policy; (v) the willful and continued failure to substantially perform his duties for the Company (other than as a result of incapacity due to physical or mental illness); (vi) failure by him to cooperate in any investigation of Jacobs by any governmental or self-regulatory authority, or in any internal investigation; or (vii) willful conduct by him that is demonstrably and materially injurious to Jacobs, monetarily or otherwise. For purposes of this paragraph, an act, or a failure to act, shall not be deemed willful or intentional, as those terms are used herein, unless it is done, or omitted to be done, by Mr. Pragada in bad faith or without a reasonable belief that his action or omission was in the best interest of Jacobs. Failure to meet performance standards or objectives, by itself, does not constitute “Cause”. “Cause” includes any of the above grounds for dismissal regardless of whether Jacobs learns of the existence of such grounds before or after terminating Mr. Pragada’s employment. “Good Reason” has the Internal Revenue Code (“Code) Section 409A “safe harbor” definition, as described in Treasury Regulation Section 1.409A-1(n)(2)(ii). A resignation will not be considered for Good Reason unless it actually occurs not more than ninety (90) days following the initial existence of one or more of the applicable Good Reason conditions arising without Mr. Pragada’s consent, and then only if he provides notice to Jacobs of the initial existence of such condition, which describes such condition in detail, no less than ninety (90) days after the initial existence of the condition, and Jacobs does not remedy the condition within the thirty (30) days following its receipt of such notice.

SECURITY OWNERSHIP

The following tables, based in part upon information supplied by officers and directors and certain shareholders, sets forth certain information regarding the ownership of the Company’s common stock as of the Record DateNovember 27, 2018 by (1) all those persons known by the Company to be beneficial owners of more than five percent of the outstanding shares of common stock, (2) each director and nominee for director, (3) each NEO, and (4) all directors and executive officers of the Company as a group. Unless otherwise indicated, each of these shareholders has sole voting and investment power with respect to the shares beneficially owned, subject to community property laws where applicable.

Security Ownership of Certain Beneficial Owners:Owners

 

Name and Address

  Amount and Nature
of Ownership of
Common Stock
  Percent of
Class (1)
 

The Vanguard Group Inc.

   

PO Box 2600

 �� 

Valley Forge, Pennsylvania 19482

   11,115,309(2)   9.20

PRIMECAP Management Company

   

177 East Colorado Blvd., 11th Floor

   

Pasadena, California 91105

   7,695,272(3)   6.37
Name and Address 

Amount and Nature of
Ownership of
Beneficial Ownership

 

  

Percentage of    
Class (1)    

 

State Street Corporation

  13,623,233 (2)  9.6%

State Street Financial Center

One Lincoln Street

Boston, MA 02111

 

   

 

The Vanguard Group

 

 

 

 

12,200,143 

 

(3) 

 

 

8.6%

100 Vanguard Blvd.

Malvern, PA 19355

 

   

PRIMECAP Management Company

  8,197,422 (4)  5.8%

177 E. Colorado Blvd., 11th Floor

Pasadena, CA 91105

 

   

Blackrock, Inc.

  8,139,258 (5)  5.7%

55 East 52nd Street

New York, NY 10055

 

 

      

 

(1)

Calculated based on 120,830,099142,335,347 shares of common stock outstanding as of the Record Date.

(2)

Based solely on the information set forth in a Schedule 13F13G/A filed by State Street on February 14, 2018. Based on such filing, State Street has shared voting power with respect to all of the shares.

(3)

Based solely on the information set forth in a Schedule 13G/A filed by The Vanguard Group Inc. with the SEC for the period ended September 30, 2016.on February 9, 2018. Based on such filing, The Vanguard Group Inc. has sole voting power with respect to 218,354168,553 shares, shared voting power with respect to 25,32326,836 shares, sole dispositive power with respect to 10,871,58912,010,364 shares, and shared dispositive power with respect to 243,720189,779 shares.

(3)(4)

Based solely on the information set forth in a Schedule 13F13G/A filed by PRIMECAP Management Company with the SEC for the period ended September 30, 2016.on February 27, 2018. Based on such filing, The PRIMECAP Management Company has sole voting power with respect to 3,699,5384,278,038 shares and sole dispositive power with respect to all of the shares.

(5)

Based solely on the information set forth in a Schedule 13G/A filed by Blackrock, Inc. on January 25, 2018. Based on such filing, Blackrock, Inc. has sole voting power with respect to 7,169,673 shares and sole dispositive power with respect to all of the shares.

60    LOGO|2019 Proxy Statement


Security Ownership of Directors, Nominees, and Management:Management

 

Name

  Number of Shares  of
Common Stock
Owned
 Number of Shares  of
Common Stock
Relating to
Unexercised Stock
Options (1)
   Total
Number of
Shares
Beneficially
Owned
   Percent of
Class (2)
  

Number of

Shares of

Common

Stock

 

 

 

Number of

Shares of

Common

Stock

Relating to
Unexercised

Stock

Options (1)

 

 

Total

Number of

Shares

Beneficially

Owned

 

 

  Percent of  

  Class (2)  

 

Non-Management Directors:(3)

            

Joseph R. Bronson

   11,840    22,250     34,090     —    

 

 

 

29,158

 

 

 

 

 

 

5,250

 

 

 

 

 

 

34,408

 

 

 

 

*

Juan Jose Suarez Coppel

   —      5,625     5,625     —   

John F. Coyne

   —      24,750     24,750     —   

Juan José Suárez Coppel

 

 

 

 

9,113

 

 

 

 

 

 

11,875

 

 

 

 

 

 

20,988

 

 

 

 

*

Robert C. Davidson, Jr.

   12,000    23,250     35,250     —    

 

 

 

28,618

 

 

 

 

 

 

21,875

 

 

 

 

 

 

50,493

 

 

 

 

*

Robert E. Eberhart

   —      9,250     9,250     —   

General Ralph E. Eberhart

 

 

 

 

11,318

 

 

 

 

 

 

15,375

 

 

 

 

 

 

26,693

 

 

 

 

*

Dawne S. Hickton

   2,800    1,000     3,800     —    

 

 

 

9,618

 

 

 

 

 

 

4,750

 

 

 

 

 

 

14,368

 

 

 

 

*

Linda Fayne Levinson

   31,000    25,750     56,750     —    

 

 

 

48,318

 

 

 

 

 

 

24,375

 

 

 

 

 

 

72,693

 

 

 

 

*

Robert A. McNamara

 

 

 

 

4,759

 

 

 

 

 

 

0

 

 

 

 

 

 

4,759

 

 

 

 

*

Peter J. Robertson(4)

   12,000(3)   19,750     31,750     —    

 

 

 

26,318

 

 

 

 

 

 

25,875

 

 

 

 

 

 

52,193

 

 

 

 

*

Christopher M.T. Thompson(5)

   10,000(4)   9,250     19,250     —    

 

 

 

25,318

 

 

 

 

 

 

15,375

 

 

 

 

 

 

40,693

 

 

 

 

*

Noel G. Watson

   959,865(5)   11,375     971,240     —   

Barry L. Williams

 

 

 

 

23,996

 

 

 

 

 

 

0

 

 

 

 

 

 

23,996

 

 

 

 

*

Named Executive Officers:

            

Steven J. Demetriou

   118,243    50,248     168,491     —    

 

 

 

181,386

 

 

 

 

 

 

150,748

 

 

 

 

 

 

332,134

 

 

 

 

*

Kevin C. Berryman

   98,766    39,087     137,853     —    

 

 

 

89,733

 

 

 

 

 

 

74,263

 

 

 

 

 

 

163,996

 

 

 

 

*

Terence D. Hagen

 

 

 

 

44,636

 

 

 

 

 

 

48,213

 

 

 

 

 

 

92,849

 

 

 

 

*

Joseph G. Mandel

   33,251    142,087     175,338     —    

 

 

 

63,366

 

 

 

 

 

 

192,263

 

 

 

 

 

 

255,629

 

 

 

 

*

Terence D. Hagen

   24,983    22,571     47,554     —   

Robert V. Pragada

   32,201    —      32,201     —    

 

 

 

49,398

 

 

 

 

 

 

10,693

 

 

 

 

 

 

60,091

 

 

 

 

*

All directors and executive officers as a group

   1,368,662    440,685     1,809,347     1.49 

 

 

 

678,569

 

 

 

 

 

 

635,986

 

 

 

 

 

 

1,314,555

 

 

 

 

*

 

* Less than 1%

(1)

Includes only those unexercised options that are exercisable, or will become exercisable within 60 days of the Record Date.

(2)

Calculated based on 120,830,099142,335,347 shares of common stock outstanding as of the Record Date and the relevant number of shares of common stock issuable upon exercise of stock options which are exercisable or will be exercisable within 60 days of the Record Date. Unless indicated otherwise, the percentage ownership is less than 1.0% of the number of shares of common stock outstanding.

(3)

For non-management directors, includes common stock that has vested but will not distribute until such director retires or otherwise leaves the Board.

(4)

Mr. Robertson shares voting and dispositive power with his spouse as to 12,000 shares that are held in a living trust.

(4)(5)

Mr. Thompson shares voting and dispositive power with his spouse as to 10,000 shares that are held in a living trust.

(5)Mr. Watson shares voting and dispositive power with his spouse as to 959,865 shares that are held in various trusts.

2019 Proxy StatementLOGO    61


 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who own beneficially more than ten percent of a registered class of the Company’s equity securities to file with the SEC and the NYSE initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater thanten-percent shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms filed by them.

To the Company’s knowledge, based solely on a review of the copies of such filings on file with the Company and written representations from its directors and executive officers, all Section 16(a) filing requirements applicable to the Company’s directors, officers andgreater-than-ten-percent beneficial owners were complied with on a timely basis during fiscal 2016.2018.

EXECUTIVE OFFICERS

For information about the executive officers of the Company, see Part I, Item 1 — Business in the Company’s 20162018 Annual Report on Form10-K.

SHAREHOLDERS’ PROPOSALS

Only shareholders meeting certain criteria outlined in the Company’s Bylaws are eligible to submit nominations for election to the Board of Directors or to bring other proper business before an annual meeting. Under the Company’s Bylaws, shareholders who wish to nominate persons for election to the Board of Directors or bring other proper business before an annual meeting must give proper notice to the Company not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting. Therefore, notices regarding nominations of persons for election to the Board of Directors and other proper business for consideration at the 20182020 annual meeting of shareholders must be submitted to the Company no earlier than September 21, 201718, 2019 and no later than October 21, 2017.18, 2019. Notices regarding nominations and other proper business must include certain information concerning the nominee or the proposal and the proponent’s ownership of common stock of the Company, in each case as set forth in the Company’s Bylaws. Nominations or other proposals not meeting these requirements will not be entertained at the annual meeting. The Secretary of the Company should be contacted in writing at the address on the first page of this Proxy Statement to submit a nomination or bring other proper business or to obtain additional information as to the proper form of a nomination.

In order to be included in the Company’s Proxy Statement and form of proxy relating to the 20182020 annual meeting, proposals of shareholders must be received by the Secretary of the Company no later than August 11, 2017.7, 2019. If timely notice of a shareholder proposal is not received by the Company, then the proxies named on the proxy cards distributed by the Company for the annual meeting may use the discretionary voting authority granted to them by the proxy cards if the proposal is raised at the annual meeting, whether or not there is any discussion of the matter in the Proxy Statement. The 20182020 annual meeting of shareholders is scheduledcurrently expected to be held on Thursday,Wednesday, January 18, 2018.

15, 2020.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Nominating and Corporate Governance Committee is responsible for the review, approval, or ratification of “related-person transactions” involving the Company or its subsidiaries and related persons. Under SEC rules, a related person is a director, executive officer, nominee for director, or 5% shareholder of the Company, and their immediate family members. The Company has adopted written policies and procedures that apply to any transaction or series of transactions in which the Company or a subsidiary is a participant, in which the amount involved exceeds $120,000,$100,000, and a related person has a direct or indirect material interest.

62    LOGO|2019 Proxy Statement


 

The Nominating and Corporate Governance Committee has determined that each of the following transactions shall be deemed to bepre-approved under the Company’s policies and procedures referenced above:

 

any transaction with another company for which a related person’s only relationship is as an employee (other than as an executive officer) if the amount involved does not exceed the greater of $1 million or 2% of that company’s total annual revenue;

any charitable contribution, grant, or endowment by the Company to a charitable organization, foundation, or university for which a related person’s only relationship is as an employee (other than as an executive officer) or a director, if the amount involved does not exceed the greater of $1 million or 2% of the charitable organization’s total annual receipts;

compensation to executive officers determined by the Compensation Committee;

compensation to directors as reported in the Company’s proxy statement;

transactions in which all security holders receive proportional benefits; and

transactions where the rates or charges involved are determined by competitive bids.

Any transaction involving related persons that exceeds $120,000$100,000 and that does not fall within the categories described above is presented to the Nominating and Corporate Governance Committee for review. The Committee determines whether the related person has a direct or indirect material interest in the transaction and may approve, ratify, rescind, or take other action with respect to the transaction in its discretion. In determining whether to approve or ratify the transaction, the Nominating and Corporate Governance Committee takes into account, among other factors it deems appropriate, whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction.

HOUSEHOLDING OF PROXY MATERIALS

The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and cost savings for companies. The Company and some brokers household proxy materials, delivering a single proxy statement, annual report or Notice of Internet Availability of Proxy Materials, as applicable to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders.

Once you have received notice from your broker or the Company that they or the Company will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent.provide us with contrary instructions. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, annual report or Notice of Internet Availability of Proxy Materials, as applicable, or if you are receiving multiple copies of thesuch proxy statementmaterials and wish to receive only one set, please notify your broker if your shares are held in a brokerage account or the Company if you hold common stock directly. Promptly upon receiving a written or oral request, a separate copy of the proxy statement, annual report or Notice of Internet Availability of Proxy Materials, as applicable, will be delivered to you. Requests in writing should be addressed to: Jacobs Engineering Group Inc., 1999 Bryan Street, Suite 1200, Dallas, Texas, 75201, Attention: Investor Relations.to the address below. Requests may also be made by calling (626) 578-3500.(214)638-0145.

Jacobs Engineering Group Inc.

Attention: Investor Relations

1999 Bryan Street, Suite 1200

Dallas, Texas, 75201

2019 Proxy StatementLOGO    63


 

ANNUAL REPORT, FINANCIAL AND ADDITIONAL INFORMATION

The Company’s annual audited financial statements and review of operations for fiscal 20162018 can be found in the Company’s Annual Report on Form10-K for the fiscal year ended September 30, 2016.28, 2018. A copy of the 20162018 Form10-K is being made available to each shareholder of record on the Record Date concurrently with this Proxy Statement. You can access a copy of our 20162018 Annual Report on Form10-K on the secure website disclosed in both the Notice of Internet Availability of Proxy Materials you received and in this Proxy Statement as well as on the Company’s website atwww.jacobs.com. www.jacobs.com. The Company will furnish without charge a copy of the 20162018 Form10-K, including the financial statements and any schedules thereto, to any person following the instructions for requesting written copies of the proxy materials as set forth in the Notice of Internet Availability of Proxy Materials or to any person requesting in writing and stating that he or she was the beneficial owner of the Company’s common stock on November 23, 2016.2018. The Company will also furnish copies of any exhibits to the 20162018 Form10-K to eligible persons requesting exhibits at a cost of $0.50 per page, paid in advance. The Company will indicate the number of pages to be charged for upon written inquiry. Requests should be addressed to:

Jacobs Engineering Group Inc.,

Attention: Investor Relations

1999 Bryan Street, Suite 1200

Dallas, Texas, 75201 Attention: Investor Relations.

OTHER BUSINESS

The Board of Directors does not intend to present any other business for action at the Annual Meeting and does not know of any business intended to be presented by others.

Michael J.R. Tyler

Senior Vice President, General Counsel and Secretary

Los Angeles, CaliforniaDallas, Texas

December 9, 2016

ANNEX A5, 2018

 

JACOBS ENGINEERING GROUP INC.64    LOGO|2019 Proxy Statement

1989 EMPLOYEE STOCK PURCHASE PLAN

(As amended and restated on January 20, 2017)

1.Purpose. The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries and Designated Affiliates with an opportunity to purchase Shares of the Company. This Plan includes two components: a Code Section 423 Component (the “423 Component”) and a non-Code Section 423 Component (the “Non-423 Component”). It is the intention of the Company to have the 423 Component qualify as an “employee stock purchase plan” under Section 423 of the Code. The provisions of the 423 Component, accordingly, shall be construed so as to extend and limit participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code. In addition, this Plan authorizes the grant of purchase rights under the Non-423 Component that does not qualify as an “employee stock purchase plan” under Section 423 of the Code; such purchase rights shall be granted pursuant to rules, procedures or subplans adopted by the Committee designed to achieve tax, securities laws or other objectives for Eligible Employees and the Company. Except as otherwise provided herein, the Non-423 Component will be operated and administered in the same manner as the 423 Component.

2.Definitions.

(a) “Administrator” means the Company’s Senior Vice President, Chief Human Resources Officer or one or more of the Company’s officers or management team appointed by the Board or Committee to administer the day-to-day operations of the Plan. Except as otherwise provided in the Plan, the Board or Committee may assign any of its administrative tasks to the Administrator.

(b) “Affiliate” means (a) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (b) any entity in which the Company has a significant equity interest, in either case as determined by the Committee, whether now or hereafter existing.

(c) “Board” means the Board of Directors of the Company.

(d) “Change in Control” means, with respect to the Company, a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A under the Exchange Act, provided that such a change in control shall be deemed to have occurred at such time as (i) any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities representing 35% or more of the combined voting power for election of Directors of the then outstanding securities of the Company or any successor of the Company; (ii) during any period of two (2) consecutive years or less, individuals who at the beginning of such period constituted the Board cease, for any reason, to constitute at least a majority of the Board, unless the election or nomination for election of each new Director was approved by a vote of at least two-thirds of the Directors then still in office who were Directors at the beginning of the period; (iii) the consummation of any merger or consolidation as a result of which the Shares shall be changed, converted or exchanged (other than by merger with a wholly owned subsidiary of the Company) or any liquidation of the Company or any sale or other disposition of 50% or more of the assets or earning power of the Company; or (iv) the consummation of any merger or consolidation to which the Company is a party as a result of which the persons who were shareholders of the Company immediately prior to the effective date of the merger or consolidation shall have beneficial ownership of less than 50% of the combined voting power for election of directors of the surviving corporation following the effective date of such merger or consolidation; provided, however, that no Change in Control shall be deemed to have occurred if, prior to such time as a Change in Control would otherwise be deemed to have occurred, the Board determines otherwise.

(e) “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto, and the regulations promulgated thereunder.

(f) “Committee” means the Human Resource & Compensation Committee of the Board or another committee designated by the Board, or the person(s) or entity delegated the responsibility of administering the Plan.

(g) “Company” means Jacobs Engineering Group Inc., including any successor thereto.

(h) “Compensation” means wages and salary but exclusive of overtime pay and regularly paid wage premiums (such as evening or shift premiums), commissions, income from equity compensation awards, bonuses, contributions to other plans, and other compensation, unless otherwise determined by the Administrator. The Committee shall have the discretion to determine the application of this definition to employees outside the United States.

(i) “Designated Affiliate” means any Affiliate selected by the Administrator as eligible to participate in the Non-423 Component.

(j) “Designated Subsidiary” means any Subsidiary selected by the Administrator as eligible to participate in the 423 Component.

(k) “Disability” means the Participant becoming unable to engage in any substantial gainful activity by reason of any medical determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months, within the meaning of Code Section 422(c)(6).

(l) “Director” means a member of the Board.

(m) “Effective Date” shall mean the date the Plan becomes effective in accordance with Section 25.

(n) “Eligible Employee” means (i) any individual who is treated as an active employee in the records of the Company or any Designated Subsidiary or (ii) any individual who is treated as an active employee in the records of the Company or any Designated Affiliate, in each case regardless of any subsequent reclassification by the Company or by any Designated Subsidiary or Designated Affiliate, any governmental agency, or any court;provided,however, in all cases, only following the completion of one year of service as an active employee of the Company, Designated Subsidiary, or Designated Affiliate. The Administrator, in its discretion, from time to time may, prior to an Offering Date for a particular Offering and for all purchase rights to be granted on such Offering Date under such Offering, determine that the definition of Eligible Employee will or will not include an individual if he or she customarily works not more than twenty (20) hours per week or not more than five (5) months in any calendar year (or, in each case, such lesser period of time as may be determined by the Administrator in its discretion), provided that any such exclusion is applied with respect to each Offering in a uniform manner to all similarly-situated employees who otherwise would be Eligible Employees for that Offering. The Administrator, in its discretion, may further modify this definition as applied to the Non-423 Component. For purposes of the 423 Component, the employment relationship shall be treated as continuing intact while the individual is on military or sick leave or other bona fide leave of absence approved by the Company or the Designated Subsidiary so long as the leave does not exceed three (3) months or if longer than three (3) months, the individual’s right to reemployment is provided by statute or has been agreed to by contract or in a written policy of the Company which provides for a right of reemployment following the leave of

absence. The employment relationship shall be treated as continuing intact where an Eligible Employee transfers employment between the Company, Designated Subsidiaries and/or Designated Affiliates;provided,however, that an individual who is not employed by the Company or a Designated Subsidiary on the Offering Date and through a date that is no more than three (3) months prior to the Purchase Date will participate only in the Non-423 Component unless the individual continues to have a right to reemployment with the Company or a Designated Subsidiary provided by statute or contract or in a written policy of the Company which provides for a right of reemployment following the leave of absence. The Administrator shall establish rules to govern other transfers into the 423 Component, and between any separate Offerings established thereunder, consistent with the applicable requirements of Section 423 of the Code.

(o) “Employer ” means, individually and collectively, the Company, a Designated Affiliate and the Designated Affiliates, a Designated Subsidiary and the Designated Subsidiaries.

(p) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, from time to time, or any successor law thereto, and the regulations promulgated thereunder.

(q) “Fair Market Value” means, with respect to the Shares, as of any date, (i) the closing per-share sales price of the Shares (A) as reported by the NYSE composite tape for such date or (B) if the Shares are no longer listed on the NYSE but are listed on any other national stock exchange or national market system, as reported on the stock exchange composite tape for securities traded on such exchange for such date, or, with respect to each of clauses (A) and (B), if there were no sales on such date, on the closest preceding date on which there were sales of Shares, or, (ii) in the event there shall be no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by the Committee upon the reasonable application of a reasonable valuation method.

(r) “NYSE” means the New York Stock Exchange.

(s) “Offering” means an offer under the Plan of a purchase right that may be exercised during an Offering Period as further described in Section 2(t). For purposes of this Plan, the Committee may designate separate Offerings under the Plan (the terms of which need not be identical) in which Eligible Employees of one or more Designated Subsidiaries or Designated Affiliates will participate, even if the dates of the applicable Offering Periods of each such Offering are identical.

(t) “Offering Date” means the first Trading Day of each Offering Period.

(u) “Offering Period” means a period of six months during which a purchase right granted pursuant to the Plan may be offered, or such different period for the offer of the purchase right as may be established by the Committee. In no event shall an Offering Period exceed 27 months. The duration and timing of Offering Periods may be changed pursuant to Section 4.

(v) “Parent” means a “parent corporation” of the Company whether now or hereinafter existing as defined in Section 424(e) of the Code.

(w) “Participant” means any Eligible Employee who participates in the Plan as described in Section 5.

(x) “Payroll Deduction Authorization Form” means any written agreement, enrollment form, contract or other instrument or document (in each case in paper or electronic form) evidencing that an Eligible Employee has elected to become a Participant in the Plan, which may, but need not, require execution by a Participant.

(y) “Plan” means the 1989 Jacobs Engineering Group Inc. Employee Stock Purchase Plan, as amended and restated on January 20, 2017, including both the 423 Component and the Non-423 Component.

(z)“Purchase Date” means the last Trading Day of each month during the Offering Period.

(aa) “Purchase Price” means a per-Share amount to be paid by a Participant to purchase a Share during the Offering Period. Such Purchase Price shall be established in the manner specified by the Committee and in effect thereafter unless otherwise changed by the Committee, for each Offering prior to an Offering Period, shall be ninety-five percent (95%) of the Fair Market Value of a Share on the relevant Purchase Date. Such Purchase Price may be established by the Committee by any manner or method the Committee determines, pursuant to Section 16, and subject to (i) with respect to the 423 Component, compliance with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule) or (ii) with respect to the Non-423 Component, pursuant to such manner or method as determined by the Committee to comply with applicable local law.

(bb) “Share” means a share of common stock of the Company, par value $1.00 per share, or such other security of the Company (i) into which such share shall be changed by reason of a recapitalization, merger, consolidation, split-up, combination, exchange of shares or other similar transaction or (ii) as may be determined by the Committee pursuant to Section 16.

(cc) “Subsidiary” means a “subsidiary corporation” of the Company whether now or hereafter existing, as defined in Section 424(f) of the Code.

(dd) “Trading Day” means a day on which the NYSE is open for trading.

3.Eligibility. Any Eligible Employee on a given Offering Date shall be eligible to participate in the Plan,provided,however, that employees who are citizens or residents of a non-U.S. jurisdiction may be excluded from participation in the Plan or an Offering if the participation of such Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering to violate Section 423 of the Code. Further, notwithstanding any provisions of the Plan to the contrary, no Eligible Employee may be granted a purchase right under the 423 Component of the Plan (i) to the extent that, immediately after the grant, such Eligible Employee (or any other person whose stock would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding purchase rights to purchase capital stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Subsidiary, or (ii) to the extent that his or her rights to purchase capital stock under all employee stock purchase plans of the Company and its subsidiaries accrues at a rate that exceeds Twenty-Five Thousand Dollars (US$25,000) worth of such stock (determined at the Fair Market Value of the shares of such stock at the time such purchase right is granted) for each calendar year in which such purchase right is both outstanding and exercisable.

4.Offering Periods. The Plan shall be implemented by consecutive six-month Offering Periods with a new Offering Period commencing on the first Trading Day in January and July or on such other date as the Committee shall determine, and continuing thereafter to the last Trading Day of the respective six-month period or until terminated in accordance with Section 20. Within the limitations set forth in Section 2(t), the Committee shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter.

5.Participation. An Eligible Employee may become a Participant in the Plan by completing, within any prescribed enrollment period prior to the applicable Offering Date, a Payroll Deduction Authorization Form (electronic or otherwise) and/or any other forms and following any procedures for enrollment in the Plan as may be established by the Administrator from time to time.

6.Payroll Deductions or Contributions.

(a) At the time a Participant completes any Payroll Deduction Authorization Form, enrollment form and/or procedure to enroll in the Plan, as provided in Section 5, he or she shall elect to have payroll deductions made on

each pay day during the Offering Period in an amount not exceeding 15% of the Compensation that he or she receives on each pay day during the Offering Period,provided, that should a pay day occur on a Purchase Date, a Participant shall have the payroll deductions made on such day applied to his or her account under the new Offering Period, unless otherwise provided by the Administrator and subject to withdrawal by the Participant as provided in Section 10. The Administrator may permit Eligible Employees participating in a specified Offering to contribute amounts to the Plan through payment by cash, check or other means to comply with non-U.S. requirements,provided, that such contributions shall not exceed 15% of the Compensation received each pay period, during the Offering Period. A Participant’s enrollment in the Plan shall remain in effect for successive Offering Periods unless terminated as provided in Section 10.

(b) Payroll deductions or contributions, as applicable, for a Participant shall commence on the first pay day following the Offering Date and shall end on the last pay day in the Offering Period to which such authorization is applicable (subject to subsection 6(a)), unless sooner terminated by the Participant as provided in Section 10.

(c) A Participant may discontinue his or her participation in the Plan as provided in Section 10 by completing any forms and following any procedures for withdrawal from the Plan as may be established by the Administrator from time to time. Further, the Participant may increase or decrease payroll deductions or contributions by completing any form or following any procedure established by the Administrator from time to time.

(d) At the time that Shares are purchased under the Plan, or at the time some or all of the Company’s Shares issued under the Plan are disposed of, the Participant must make adequate provision for the Company’s or its Subsidiary’s or Affiliate’s federal, state, or any other tax liability payable to any authority, national insurance, social security, payment-on-account or other tax obligations, if any, which arise as a result of participation in the Plan, including, for the avoidance of doubt, any liability of the Participant to pay an employer tax or social insurance contribution obligation, which liability has been shifted to the Participant as a matter of law or contract. At any time, the Company or its Subsidiary or Affiliate, as applicable, may, but shall not be obligated to, withhold from the Participant’s compensation the amount necessary for the Company or its Subsidiary or Affiliate, as applicable, to meet applicable withholding obligations, including any withholding required to make available to the Company or its Subsidiary or Affiliate, as applicable, any tax deductions or benefits attributable to sale or early disposition of Shares by the Eligible Employee. In addition, the Company or its Subsidiary or Affiliate, as applicable, (i) may withhold from the proceeds of the sale of Shares, (ii) may withhold a sufficient whole number of Shares otherwise issuable following purchase having an aggregate fair market value sufficient to pay applicable withholding obligations, or (iii) may withhold by any other means set forth in the applicable Payroll Deduction Authorization Form. Where necessary to avoid negative accounting treatment, the Company or its Subsidiary or Affiliate shall not withhold taxes in excess of the applicable maximum marginal tax rates.

7.Grant of Purchase Right. On the Offering Date of each Offering Period, each Eligible Employee participating in such Offering Period shall be granted a right to purchase on each Purchase Date during such Offering Period (at the applicable Purchase Price) up to a number of Shares determined by dividing such Eligible Employee’s payroll deductions or contributions accumulated prior to such Purchase Date by the applicable Purchase Price;provided,however, that in no event shall an Eligible Employee be permitted to purchase during each Offering Period more than 2,400 Shares subject to adjustment pursuant to Section 15, and provided further that such purchase shall be subject to the limitations set forth in Sections 3 and 14. The Committee may, for future Offering Periods, increase or decrease, in its discretion, the maximum number of Shares that an Eligible Employee may purchase during each Offering Period. The purchase of Shares pursuant to the purchase right shall occur as provided in Section 8, unless the Participant has withdrawn pursuant to Section 10. Each purchase right expires following the applicable Purchase Date.

8.Purchase of Shares.

(a) Unless a Participant withdraws from the Plan as provided in Section 10, on the Purchase Date, the maximum number of Shares, including fractional shares, as may be purchased with the accumulated payroll

deductions or contributions in the Participant’s account shall be purchased for such Participant at the applicable Purchase Price, subject to the limitations in Section 7 and Section 8(b). Unless specifically permitted by the Committee, fractional shares shall not be purchased under the Plan. In the absence of such permission by the Committee, any payroll deductions or contributions accumulated in a Participant’s account which are not sufficient to purchase a full Share shall, at the discretion of the Committee, be returned to the Participant or be retained in the Participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the Participant as provided in Section 10. During a Participant’s lifetime, Shares may be purchased pursuant to the Participant’s purchase right only by the Participant.

(b) No Participant in the 423 Component of the Plan is permitted to purchase shares under all employee stock purchase plans of the Company and its subsidiaries at a rate that exceeds $25,000 in Fair Market Value (determined at the time the purchase right is granted) for each calendar year in which any stock purchase right is both outstanding and exercisable.

(c) If the Company determines that, on a given Purchase Date, the number of Shares with respect to which purchase rights are to be exercised may exceed (i) the number of Shares that were available for sale under the Plan on the Offering Date of the applicable Offering Period, or (ii) the number of Shares available for sale under the Plan on such Purchase Date, the Company shall make a pro-rata allocation of the Shares available for purchase on such Purchase Date in as uniform a manner as shall be practicable to be equitable among all Participants exercising purchase rights on such Purchase Date. The Company may make a pro-rata allocation of the Shares available on the Offering Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company’s shareholders subsequent to such Offering Date. In such event, any residual payroll deductions or contributions accumulated in a Participant’s account which are not used to purchase Shares shall be promptly refunded to the relevant Participant or beneficiary, as applicable.

9.Delivery. By enrolling and participating in the Plan, each Participant shall be deemed to have authorized the establishment of a brokerage account on his or her behalf at a securities brokerage firm selected by the Company. Alternatively, the Company may provide for Plan share accounts for each Participant to be established by the Company or by an outside entity selected by the Committee which is not a brokerage firm. As soon as reasonably practicable after each Purchase Date on which a purchase of Shares occurs, the Company shall arrange for the delivery to each Participant of the Shares purchased upon exercise of his or her purchase right to the Participant’s brokerage or Plan share account in a form determined by the Company. Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any applicable law, rule or regulation, the Company shall not deliver to any Participant certificates evidencing Shares issued in connection with any purchase under the Plan, and instead such Shares shall be recorded in the books of the brokerage firm or, as applicable, the Company, its transfer agent, stock plan administrator or such other outside entity which is not a brokerage firm.

10.Withdrawal.

(a) A Participant may decide not to purchase Shares on a given Purchase Date and opt to withdraw all, but not less than all, the payroll deductions or contributions credited to his or her account and not yet used to purchase Shares under the Plan at any time by giving notice in a form or manner prescribed by the Administrator from time to time, except that no withdrawals shall be permitted for the ten (10) day period immediately preceding each Purchase Date, or other time period specified by the Administrator in its discretion. All of the Participant’s payroll deductions or contributions credited to his or her account shall, at the discretion of the Administrator, (i) be retained in Participant’s account and used to purchase Shares at the next Purchase Date, or (ii) be paid to such Participant as soon as reasonably practicable after receipt of notice of withdrawal and such Participant’s purchase right for the Offering Period shall be terminated automatically, and no further payroll deductions or contributions for the purchase of Shares shall be made for such Offering Period. If a Participant withdraws from an Offering Period, payroll deductions or contributions shall not resume at the beginning of the succeeding Offering Period unless he or she satisfactorily completes the process to re-enroll in the Plan as prescribed by the Administrator from time to time.

(b) A Participant’s withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or in succeeding Offerings which commence after the termination of the Offering Period from which he or she has withdrawn.

11.No Right to Employment. Participation in the Plan by a Participant shall not be construed as giving a Participant the right to be retained as an employee of the Company, a Subsidiary, or an Affiliate, as applicable. Furthermore, the Company, a Subsidiary, or an Affiliate may dismiss a Participant from employment at any time, free from any liability or any claim under the Plan.

12.Termination of Employment. Unless otherwise determined by the Administrator, upon a Participant’s ceasing to be an Eligible Employee, due to termination of employment for any reason (other than death or Disability), he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions or contributions credited to such Participant’s account during the Offering Period but not yet used to purchase Shares under the Plan shall be returned to such Participant and such Participant’s purchase right shall be terminated automatically. Unless otherwise determined by the Administrator, upon a Participant’s ceasing to be an Eligible Employee, due to termination of employment on account of death or Disability, the Participant or, in the case of his or her death, the person or persons entitled thereto under Section 17 may elect to (i) purchase Shares on the next applicable Purchase Date, as may be purchased with the accumulated payroll deductions or contributions in the Participant’s account in accordance with the terms of the Plan and Section 8 or, (ii) elect to withdraw from the Plan as described in this Section 12.

13.Interest. No interest will accrue on the contributions of a Participant in the Plan, except as may be required by applicable law, as determined by the Administrator.

14.Shares Available for Purchase under the Plan.

(a)Basic Limitation. Subject to adjustment pursuant to Section 15 , the aggregate number of Shares authorized for sale under the Plan is 30,977,108 Shares. The limitation set forth in this section may be used to satisfy purchases of Shares under either the 423 Component or the Non-423 Component.

(b)Rights as an Unsecured Creditor. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly-authorized transfer agent or broker selected by the Company), a Participant shall only have the rights of an unsecured creditor with respect to such Shares, and no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to such Shares.

(c)Sources of Shares Deliverable at Purchase. Any Shares issued after purchase may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares.

15.Adjustments for Changes in Capitalization and Similar Events.

(a)Changes in Capitalization. Subject to any required action by the shareholders of the Company, the maximum number of Shares that shall be made available for sale under the Plan, the maximum number of Shares that each Participant may purchase during the Offering Period (pursuant to Section 7) or over a calendar year under the $25,000 limitation (pursuant to Section 8(b)) and the per Share price used to determine the Purchase Price shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from any nonreciprocal transaction between the Company and its shareholders, (such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend), that affects the Shares (or other securities of the Company) or the price of Shares (or other securities) and causes a change in the per share value of the Shares underlying outstanding purchase rights. Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. The Committee may not delegate its authority to make adjustments pursuant to this paragraph. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to a purchase right.

(b)Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Purchase Date (the “New Purchase Date”), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Company. The New Purchase Date shall be before the date of the Company’s proposed dissolution or liquidation. The Company shall notify each Participant, at least ten (10) U.S. business days prior to the New Purchase Date, that the Purchase Date for the Participant’s purchase right has been changed to the New Purchase Date and that Shares shall be purchased automatically for the Participant on the New Purchase Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10.

(c)Change in Control. In the event of a Change in Control, each outstanding purchase right shall be assumed or an equivalent purchase right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the purchase right, the Offering Period then in progress shall be shortened by setting a New Purchase Date and shall end on the New Purchase Date. The New Purchase Date shall be before the date of the Company’s proposed merger or Change in Control. The Company shall notify each Participant in writing, at least ten (10) U.S. business days prior to the New Purchase Date, that the Purchase Date for the Participant’s purchase right has been changed to the New Purchase Date and that Shares shall be purchased automatically for the Participant on the New Purchase Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10.

16.Administration.

(a)Authority of the Committee. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have sole and plenary authority to administer the Plan, including, without limitation, the authority to:

(i) construe, interpret, reconcile any inconsistency in, correct any default in and supply any omission in, and apply the terms of the Plan and any Payroll Deduction Authorization Form or other instrument or agreement relating to the Plan,

(ii) determine eligibility and adjudicate all disputed claims filed under the Plan, including whether Eligible Employees shall participate in the 423 Component or the Non-423 Component and which entities shall be Designated Subsidiaries or Designated Affiliates,

(iii) determine the terms and conditions of any purchase right to purchase Shares under the Plan,

(iv) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan,

(v) amend an outstanding purchase right or grant a replacement purchase right for a purchase right previously granted under the Plan if, in the Committee’s discretion, it determines that (A) the tax consequences of such purchase right to the Company or the Participant differ from those consequences that were expected to occur on the date the purchase right was granted, or (B) clarifications or interpretations of, or changes to, tax law or regulations permit purchase rights to be granted that have more favorable tax consequences other than initially anticipated, and

(vi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.

Notwithstanding any provision to the contrary in this Plan, the Committee may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures for jurisdictions outside of the United States. Without limiting the generality of the foregoing, the Committee specifically is authorized to adopt rules, procedures and subplans, which, for purposes of the Non-423

Component, may be outside the scope of Section 423 of the Code, regarding, without limitation, eligibility to participate, the definition of Compensation, handling of payroll deductions, making of contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold payroll deductions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary-designation requirements, withholding procedures and handling of Share issuances, which may vary according to local requirements. The Committee may assign any of its administrative tasks set forth in this paragraph to the Administrator, unless constrained by applicable law. However, the Committee may not delegate its authority to make adjustments pursuant to Section 15(a).

(b)Committee Decisions. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any right to purchase Shares granted under the Plan made by the Committee or its delegate, including, but not limited to decisions of the Administrator in fulfilling its duties under the Plan, shall be final, conclusive, and binding upon all persons, including the Company, Designated Subsidiary, Designated Affiliate, Participant, Eligible Employee, or any beneficiary of such person, as applicable.

(c)Indemnification. To the extent allowable pursuant to applicable law, each member of the Board, the Committee, the Administrator or any employee of the Company, a Designated Subsidiary, or a Designated Affiliate (each such person, a “Covered Person”) shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such Covered Person in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her;provided,however, that he or she has acted in accordance with his or her duties and responsibilities to the Company under applicable law, and provided that he or she gives the Company an opportunity, at its own expense, to handle and defend any claim, action, suit, or proceeding to which he or she is a party before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such Covered Persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

17.Death. Unless otherwise provided in an enrollment form or procedures established by the Administrator from time to time, in the event of the Participant’s death, any accumulated payroll deductions and other contributions not used to purchase Shares shall be paid to and any Shares credited to his or her brokerage or Plan share account shall be transferred to Participant’s heirs or estate as soon as reasonably practicable following the Participant’s death.

18.Transferability. Payroll deductions, contributions credited to a Participant’s account and any rights with regard to the purchase of Shares pursuant to a purchase right or to receive Shares under the Plan may not be assigned, alienated, pledged, attached, sold or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 17) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an Offering to withdraw funds from an Offering Period in accordance with Section 10.

19.Use of Funds. All payroll deductions or contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions or contributions except as may be required by applicable local law, as determined by the Administrator, and if so required by the laws of a particular jurisdiction, shall apply to all Participants in the relevant Offering except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f). Until Shares are issued, Participants shall only have the rights of an unsecured creditor, although Participants in specified Offerings may have additional rights where required under local law, as determined by the Administrator.

20.Amendment and Termination.

(a) Subject to any applicable law or government regulation and to the rules of the NYSE or any successor exchange or quotation system on which the Shares may be listed or quoted, the Plan may be amended, modified, suspended or terminated by the Board without the approval of the shareholders of the Company. This termination authority may not be delegated. Except as provided in Section 15, no amendment may make any change in any purchase right previously granted which adversely affects the rights of any Participant or any beneficiary (as applicable) without the consent of the affected Participant or beneficiary. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Company shall obtain shareholder approval of any amendment in such a manner and to such a degree as required.

(b) Without shareholder approval and without regard to whether any Participant rights may be considered to have been “adversely affected,” the Committee or its delegate, including the Administrator, in each case to the extent permitted under the terms of the Plan, applicable law, the by-laws of the Company and under the Committee charter, may change the Offering Periods, limit the frequency or number of changes in the amount withheld during an Offering Period, establish the exchange rate applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a Participant to adjust for delays or mistakes in the Company’s processing of properly completed Participant Offerings, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Shares for each Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such other limitations or procedures as the Committee deems appropriate.

21.Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form and manner specified by the Administrator at the location, or by the person, designated by the Administrator for the receipt thereof.

22.Conditions Upon Issuance of Shares.

(a) Shares shall not be issued with respect to a purchase right unless the purchase of Shares pursuant to such purchase right and the issuance and delivery of such Shares comply with all applicable law. This may include, without limitation U.S. and non-U.S. and state and local rules and regulations promulgated under U.S. securities laws, and the requirements of any stock exchange upon which the Shares may then be listed. Share issuance is subject to the approval of counsel for the Company with respect to such compliance. In the event that any payroll deductions or contributions cannot be used to purchase shares due to noncompliance with applicable rules and regulations, such payroll deductions or contributions shall be promptly refunded to the relevant Participant or beneficiary, as applicable.

(b) As a condition to the purchase of Shares pursuant to a purchase right, the Company may require the person on whose behalf Shares are purchased to represent and warrant at the time of any such purchase that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the applicable provisions of law described in subsection (a) above.

23.Share Issuance. All Shares delivered under the Plan pursuant to the exercise of a purchase right to purchase Shares shall be subject to such stop-transfer orders and other restrictions as the Company may deem advisable under the Plan or the rules, regulations, and other requirements of the U.S. Securities and Exchange Commission, the NYSE or any other stock exchange or quotation system upon which such Shares or other securities are then listed or reported and any applicable Federal or state laws, and the Company may take whatever steps are necessary to effect such restrictions.

24.Term of Plan. The Plan shall terminate on the earlier of (i) the date the Plan is terminated by the Board in accordance with Section 20 and (ii) the date on which all purchase rights are exercised in connection with a dissolution or liquidation pursuant to Section 15(b) or Change in Control pursuant to Section 15(c). No further purchase rights shall be granted or Shares purchased, and no further payroll deductions or contributions shall be collected under the Plan following such termination.

25.Shareholder Approval. The Plan, as amended and restated, will become effective on January 20, 2017 following approval by the shareholders of the Company. If the Company stockholders do not approve the amended and restated Plan, any amounts deducted from Participants will be administered based upon the terms of the Plan immediately prior to the amendment and restatement presented to the Company shareholders for approval.

26.Code Section 409A; Tax Qualification.

(a) Purchase rights granted under the 423 Component are exempt from the application of Section 409A of the Code. Purchase rights granted under the Non-423 Component to U.S. taxpayers are intended to be exempt from the application of Section 409A under the short-term deferral exception and any ambiguities shall be construed and interpreted in accordance with such intent. Subject to Section 26(b), purchase rights granted to U.S. taxpayers under the Non-423 Component are subject to such terms and conditions that will permit such purchase rights to satisfy the requirements of the short-term deferral exception available under Section 409A of the Code, including the requirement that the Shares subject to a purchase right be delivered within the short-term deferral period. Subject to Section 26(b), in the case of a Participant who would otherwise be subject to Section 409A of the Code, to the extent the Company determines that a purchase right or the exercise, payment, settlement or deferral is subject to Section 409A of the Code, the purchase right shall be granted, exercised, paid, settled or deferred in a manner that will comply with Section 409A of the Code, including Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date. Anything in the foregoing to the contrary notwithstanding, the Company shall have no liability to a Participant or any other party if the purchase right that is intended to be exempt from, or compliant with Section 409A of the Code is not so exempt or compliant or for any action taken by the Company with respect thereto.

(b) Although the Company may endeavor to (i) qualify a purchase right for favorable tax treatment under the laws of the U.S. or jurisdictions outside of the U.S. or (ii) avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment, notwithstanding anything to the contrary in this Plan, including Section 26(a). The Company is not constrained in its corporate activities by any potential negative tax impact on Participants under the Plan.

27.Severability. If any particular provision of this Plan is found to be invalid or otherwise unenforceable, such determination shall not affect the other provisions of the Plan, but the Plan shall be construed in all respects as if such invalid provision were omitted.

28.Governing Law and Jurisdiction. Except to the extent that provisions of this Plan are governed by applicable provisions of the Code or any other substantive provision of federal law, this Plan shall be construed in accordance with the laws of Delaware, without giving effect to the conflict of laws principles thereof. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to) this Plan shall be exclusively in the courts in Dallas County, Texas, including the Federal Courts located therein (should Federal jurisdiction exist).

29.Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan.

ANNEX B

Jacobs Engineering Group Inc.

Global Employee Stock Purchase Plan

(As Amended and Restated on January 20, 2017)

1. Purpose of the Plan

This 2001 Global Employee Stock Purchase Plan is intended to advance the interests of Jacobs Engineering Group Inc. by encouraging stock ownership by employees of Jacobs Engineering Group Inc. and certain subsidiaries of Jacobs Engineering Group Inc., who are located outside of the United States. Although this Plan incorporates certain Code Section 423 limitations, it is not intended to qualify as an “employee stock purchase plan” under Code Section 423.

2. Definitions

(a) “Act” shall mean the Securities Act of 1933, as amended.

(b) “Administrator” shall mean the bank, brokerage firm, financial institution, or other entity or person(s) engaged, retained or appointed by the Committee to act as the agent of the Employer and of the Participants under the Plan from time to time.

(c) “Addendum or Addenda” shall mean, individually and collectively, the appendices hereto and such other additional appendices as may be added to this Plan at the discretion of the Committee. Each appendix will govern the operation of the Plan in respect of the Designated Subsidiaries in the countries named in the appendix and will be considered part of the Plan. Unless otherwise stated, the applicable appendix for the country will govern the operation of the Plan in that country and to that extent the appendix will override other parts of this Plan in the event of a conflict.

(d) “Board” shall mean the Board of Directors of the Company.

(e) “Closing Value” shall mean, as of a particular date, the value of a Share determined by:

(i) the closing sales price for such Share (or the closing bid, if no sales were reported) as quoted on The New York Stock Exchange, or such other established stock exchange or national market system on which the Shares are listed or traded, for the day for which the Closing Value is to be determined.

(ii) such other valuation method as required under the applicable Local Law.

In the event that the foregoing valuation method is not practicable, the “Closing Value” shall be determined by such other reasonable valuation method as the Committee shall, in its discretion, select and apply in good faith as of such date.

(f) “Code” shall mean the United States Internal Revenue Code of 1986, as amended and currently in effect, or any successor body of federal tax law in the United States.

(g) “Committee” shall mean the Board, a designated committee thereof, or the person(s) or entity delegated the responsibility of administering the Plan.

(h) “Company” shall mean Jacobs Engineering Group Inc., including any successor thereto.

(i) “Compensation”, shall mean, unless otherwise required by the applicable Local Law, regular fixed basic gross compensation.

“Compensation” does not include, unless otherwise required by the applicable Local Law:

(i) any bonus, overtime payment, contribution to an employee benefit plan or other similar payment or contribution;

(ii) amounts realized from the exercise, sale, exchange or other disposition of a stock option or sale, exchange or other disposition of a stock acquired under a stock option;

(iii) amounts realized from restricted stock, restricted stock units or other equity compensation awards;

(iv) moving allowances, automobile allowances, tuition reimbursement, financial/tax planning reimbursement, lunch vouchers, house allowances, and other allowances that receive special tax benefits, other extraordinary compensation, including tax “gross-up” payments, and imputed income from other employer-provided benefits; and

(v) other amounts that receive special tax benefits, such as, but not limited to, premiums for group term life insurance or contributions made by the Employer (whether or not under salary reduction agreement) or mandatory payments made by the Employer to the Employee under Local Law.

(j) “Designated Subsidiaries” shall mean those Subsidiaries whose Employees have been designated in accordance with Section 18, as eligible to participate in the Plan.

(k) “Election Period” shall mean the period during which Participants in the Plan authorize payroll deductions or provide alternative contributions to fund the purchase of Shares on their behalf under the Plan pursuant to the right to purchase Shares granted to them hereunder. Alternative contributions for the purpose of this Plan shall mean payment of contributions to fund the purchase of Shares under the Plan pursuant to the right to purchase Shares granted to the Participants hereunder through such other means as authorized by the Committee, including, but not limited to, personal checks of the Participants. As determined by the Committee, Election Periods may vary from country to country, or from Designated Subsidiary to Designated Subsidiary.

(l) “Eligible Employee” shall mean, subject to the applicable Local Law, an Employee of a Designated Subsidiary with one (1) year service on an Enrollment Date. Employees of Designated Subsidiaries that have become Subsidiaries by reason of having been acquired by the Company or a Subsidiary and companies that have been merged with the Company or a Subsidiary may, at the discretion of the Committee, receive credit for the time they have worked for such acquired or merged company prior to its affiliation with the Company or the Designated Subsidiary.

The Committee in its sole discretion may determine that the following Employees shall not be Eligible Employees under the Plan:

(i) Unless otherwise required by the applicable Local Law, Employees whose customary employment is less than 20 hours per week or who are employed for less than five months in any calendar year;

(ii) Employees who are not actively employed by the Employer at the beginning of a six-month Election Period, including Employees who are on disability, or leave of absence;

(iii) Any Employee who would own more than five (5) percent of the common stock in the Company immediately after the Share purchase opportunity is granted to them under the Plan. Shares that the Employee may purchase under all outstanding stock options or such other share-based compensation plan of the Company shall be treated as stock owned by the Employee for such purposes, even though the option is not presently exercisable or the Shares are not presently receivable by the Employee;

(iv) Employees who are subject to Section 16(a) of the 1934 Act; and

(v) Employees who are eligible to participate or who participate in the Company’s 1989 Employee Stock Purchase Plan.

(m) “Employee” shall be limited to the following individuals, subject to the applicable Local Law:

(i) an individual who is a regular full time or part time employee of the Employer as defined under the applicable Local Law;

(ii) an individual whose work schedule is normally included in the authorized staffing targets and budget of the Employer; and

(iii) an individual who has been hired on a temporary contract but who is expected to fill a permanent staffing need.

Unless otherwise required by the applicable Local Law, Employee shall not include unionized employees as defined by the regular practices of the Employer.

(n) “Employer” means, individually and collectively, the Company, a Designated Subsidiary and the Designated Subsidiaries.

(o) “Enrollment Period” shall mean the period immediately preceding the Election Period that is designated by the Committee in its discretion as the period during which an Eligible Employee may elect to participate in the Plan.

(p) “Holding Period” shall mean the period during which the Participant is not permitted to transfer, sell, pledge or otherwise deal in the Shares credited to the Participant’s Plan Account. Unless otherwise required by the applicable Local Law or specified in the Addendum, there is no Holding Period for the purposes of this Plan.

(q) “Local Law” shall mean the laws of the jurisdiction in which the Employer is incorporated or located or where the Employee or Participant is employed or resides including but not limited to the securities regulatory body requirements and the taxation requirements of that same jurisdiction.

(r) “1934 Act” shall mean the United States Securities Exchange Act of 1934, as amended, and currently in effect, or any successor body of federal securities law in the United States.

(s) “Participant” shall mean any Eligible Employee who has elected to participate in the Plan for an Election Period by authorizing payroll deductions or by making alternative contributions and following all applicable procedures established by the Committee during the Enrollment Period for such Election Period.

(t) “Plan” shall mean this Jacobs Engineering Group 2001 Global Employee Stock Purchase Plan and Addenda hereof; as amended from time to time.

(u) “Plan Account” shall mean the individual account established for each Participant for purposes of accounting for and/or holding each Participant’s payroll deductions, alternative contributions, Shares, etc. The Plan Account may be a bookkeeping account or a brokerage account, or such other account as determined by the Committee.

(v) “Plan Year” shall mean the period of twelve (12) calendar months commencing on September 1 each year or such other period as determined by the Committee.

(w) “Purchase Period” shall mean a period within an Election Period of such duration and commencing on such date as the Committee may, in its absolute discretion, approve.

(x) “Purchase Price” shall mean, for each Share purchased in accordance with Paragraph 9 hereof, an amount equal to ninety-five percent (95%) of the Closing Value of a Share on the last Trading Day in a Purchase Period.

(y) “Shares” means shares of common stock, par value $1.00 per share, of the Company.

(z) “Subsidiary” shall mean a corporation or other entity, domestic or foreign, controlled directly or indirectly by the Company (except for the U.K. in which this term shall mean a corporation or other entity, domestic or foreign, of which more than fifty percent (50%) ownership of the voting shares are held by the Company or a Subsidiary) whether or not such corporation or other entity now exists or is hereafter organized or acquired by the Company or a Subsidiary.

(aa) “Trading Day” shall mean a day on which The New York Stock Exchange is open for trading.

3. Participation

Participation in the Plan is voluntary. All Eligible Employees of an Employer satisfying the applicable requirements of the Plan will be entitled to participate in the Plan.

4. Enrollment and Election Periods

(a) Enrolling in the Plan . To participate in the Plan, an Eligible Employee must enroll in the Plan. Enrollment for a given Election Period will take place during the Enrollment Period for such Election Period. The Committee shall designate the initial Enrollment Period and each subsequent Enrollment Periods and the Election Periods to which each Enrollment Period relates. Participation in the Plan with respect to any one or more of the Election Periods shall neither limit nor require participation in the Plan for any other Election Period.

(b) The Election Period . Any Employee who is an Eligible Employee and who desires to be granted rights to purchase Shares hereunder must enroll, in accordance with the procedures established by the Committee, during an Enrollment Period. Such authorization shall be effective for the Election Period immediately following such Enrollment Period.

The duration of an Election Period shall be determined by the Committee prior to the Enrollment Period; provided, however, that if the Committee terminates the Plan during an Election Period, pursuant to its authority in Paragraph 17 of the Plan, such Election Period and any associated Purchase Period shall be deemed to end on the date the Plan is terminated. The termination of the Plan and the Election Period shall end the Participant’s rights to contribute amounts to the Plan or continue participation in the Election Period. The date of termination of the Plan shall be deemed to be the final day of a Purchase Period for the purposes of determining the Purchase Price under the Purchase Period and all amounts contributed during the Purchase Period will be used as of such termination date to purchase Shares in accordance with the provisions of Paragraph 8 of this Plan or alternatively, at the sole discretion of the Committee, refunded in cash without interest or with interest where required under the applicable Local Law.

The Committee may designate one or more Election Periods during each Plan Year during the term of this Plan. Any such Election Period may commence and end in different Plan Years. On the first day or the first Trading Day of each Election Period, as determined by the Committee, each Participant shall be granted a right to purchase Shares under the Plan. Each right granted hereunder shall expire at the end of the Election Period for which it was granted. In no event may a right granted hereunder be exercised later than the period of time specified in section 423(b)(7)(B) of the Code. Except as otherwise provided in Paragraph 9, a right to purchase Shares granted under the Plan shall be treated as exercised on the last Trading Day of each Election Period.

(c) Changing Enrollment . The offering of Shares pursuant to rights granted under the Plan shall occur only during an Election Period and shall be made only to Participants.

Once enrolled, a Participant shall continue to participate in the Plan for each successive Election Period (s) until he or she terminates his or her participation by revoking his or her payroll deduction authorization or by revoking his or her alternative contribution authorization or not contributing his or her alternative contributions or ceases to be an Eligible Employee;

Once a Participant has elected to participate under the Plan, that Participant’s payroll deduction authorization or alternative contribution authorization shall apply to all subsequent Election Periods unless and until the Participant ceases to be an Eligible Employee or the Participant changes or terminates said authorization.

Unless otherwise required by the applicable Local Law, or otherwise determined by the Committee, if a Participant desires to change his or her rate of contribution during an Election Period such change shall be effective for the next Election Period and only if such change is made by the Participant by giving a notice to the Company in the manner established by the Committee.

5. Term of Plan

This Plan was established September 1, 2001, and will terminate on January 19, 2020.

6. Number and Type of Shares to Be Made Available Under The Plan

Subject to adjustment as provided in Paragraph 16 hereof, the total number of Shares made available for purchase by Participants granted rights which are exercised under Paragraph 9 hereof is one million three-hundred fifty thousand (1,350,000) Shares, which may consist of authorized but unissued shares, treasury shares, or shares purchased by the company in the open market. The provisions of Paragraph 9(d) shall control in the event the number of Shares covered by rights which are exercised for any Purchase Period exceeds the number of Shares available for sale under the Plan. If all of the Shares authorized for sale under the Plan have been sold, the Plan shall either be continued through additional authorizations of Shares made by the Board (such authorizations must, however, comply with Paragraph 17 hereof), or shall be terminated in accordance with Paragraph 17 hereof.

7. Use of Funds

All payroll deductions or alternative contributions received or held by an Employer under the Plan will be used to purchase Shares in accordance with the provisions of this Plan. Any amounts held by an Employer or other party holding amounts in connection with or as a result of payroll deductions or alternative contributions made pursuant to the Plan and pending the purchase of Shares hereunder shall be considered a non-interest-bearing, unsecured indebtedness extended to the Employer or other party by the Participants, unless otherwise required under the applicable Local Law. Administrative expenses of the Plan shall be allocated to each Participant’s Plan Account unless the Employer pays such expenses.

8. Amount of Contribution; Method of Payment

(a) Payroll Deduction or Alternative Contribution . Except as otherwise specifically provided herein, the Purchase Price will be payable by each Participant by means of payroll deduction or alternative contribution. Unless otherwise authorized by the Committee, the minimum payroll deduction or alternative contribution permitted shall be an amount equal to two percent (2%) of a Participant’s Compensation and the maximum payroll deduction or alternative contribution shall be an amount equal to fifteen percent (15%) of a Participant’s Compensation. In any event, the total payroll deduction or alternative contribution permitted to be made by any Participant in any calendar year shall be limited to the sum of legal currency equivalent of U.S. $25,000 as specified under Section 423(b)(8)(C), or such other amount as Section 423(b)(8)(C) of the Code, or any successor section, may hereafter allow. The actual percentage of Compensation to be deducted or contributed shall be specified by a Participant in his or her authorization to participate in the Plan. Unless otherwise authorized by the Committee, Participant may not deposit any separate cash payments into their Plan Accounts.

Payroll deductions will commence with the first payroll issued during the Election Period and will, except as otherwise provided herein, continue with each payroll throughout the entire Election Period, except for pay periods for which such Participant receives no Compensation. A pay period which ends at such time that it is administratively impracticable to credit any payroll for such pay period to the then current Election Period will be credited in its entirety to the immediately subsequent Election Period. A pay period that overlaps Election Periods will be credited in its entirety to the Election Period in which it is paid. Alternative contributions will be made in accordance with the procedure established by the Company.

(b) Application of Withholding Rules . Payroll deductions or alternative contributions shall be retained by the Employer or other party, designated by the Company or the Employer as the case may be, until applied to the purchase of Shares as described in Paragraph 9 hereof and the satisfaction of any related withholding obligations (including any employment tax obligations) under the applicable Local Law.

At the time the Shares are purchased, or at the time some or all of the Shares issued under the Plan are disposed of, Participants must make adequate provision for the Employer’s tax withholding obligations (including any employment tax obligations), if any, which arise in any applicable jurisdiction upon the purchase or disposition of the Shares. Subject to the applicable Local Law, and the Holding Period, if any, the Employer may instruct the Administrator to dispose or sell such number of Shares (credited to the Participant’s Plan Account) to raise the amount necessary, or may withhold from each Participant’s Compensation the amount necessary, to enable the Employer to meet applicable withholding obligations, including any withholding required to make available to the Employer any tax deductions or benefits attributable to the sale or early disposition of Shares by the Participant. Each Participant, as a condition of participating under the Plan, agrees to bear responsibility for all taxes required to be withheld in any applicable jurisdiction from his or her Compensation as well as the Participant’s portion of applicable social security, social insurance, or similar such taxes, with respect to any Compensation arising on account of the purchase or disposition of Shares. The Employer may increase income and/or employment tax withholding on a Participant’s Compensation after the purchase or disposition of Shares in order to comply with the applicable tax laws in any jurisdiction, and each Participant agrees to sign any and all appropriate documents to facilitate such withholding.

9. Purchasing, Transferring Shares

(a) Maintenance of Plan Account . Upon the exercise of a Participant’s initial right to purchase Shares under the Plan, the Administrator shall establish a Plan Account in the name of such Participant. At the close of each Purchase Period, the aggregate amount deducted during such Purchase Period by the Employer from a Participant’s Compensation by way of payroll deduction or alternative contributions made to the Plan by the Participant (and credited to an account maintained by the Employer or other party) and interest, if any, payable under the applicable Local Law will be communicated by the Employer to the Administrator. The Company shall convert the said payroll deductions or alternative contributions into US dollars in accordance with the process and at the rate established by the Company. The Administrator shall thereupon credit to the Participant’s Plan Account such US dollars. As of the last day of each Purchase Period, or as soon thereafter as is administratively practicable, each Participant’s right to purchase Shares will be exercised automatically for him or her by the Administrator with respect to those amounts reported to the Administrator by the Company as credited to that Participant’s Plan Account. On the date of exercise, the amount then credited to the Participant’s Plan Account for the purpose of purchasing Shares hereunder will be divided by the Purchase Price and there shall be credited to the Participant’s Plan Account by the Administrator the number of whole Shares which results.

The Administrator shall hold in its name, or in the name of its nominee, all Shares so purchased by Participants under the Plan. Participation in the Plan, purchase, ownership and sale of Shares under the Plan, is subject to risk of fluctuation in Shares’ price and currency exchange.

(c) Insufficient Funds for Whole Shares . In the event that the amount credited to Participant’s Plan Account is not exactly equal to the Purchase Price for a whole number of Shares, then any excess amount may be refunded

to the Participant without interest or where required by the applicable Local Law with interest, or may be used to purchase Shares in the subsequent Purchase Periods, as determined by the Committee.

(d) Insufficient Number of Available Shares . In the event the number of Shares covered by rights which are exercised for any Purchase Period exceeds the number of Shares available for sale under the Plan, the number of Shares actually available for sale hereunder shall be allocated by the Administrator among the Participants in proportion to the amount then credited to each Participant’s Plan Account over the total amount then credited to all Participant’s Plan Accounts. Any excess amounts withheld and credited to Participants’ Plan Accounts then shall be returned to the Participants as soon as is administratively practicable without interest or with interest where required by the applicable Local Law.

(e) Handling Excess Shares . In the event that the number of Shares which would be credited to any Participant’s Plan Account in any Purchase Period exceeds the limit specified in Paragraph 2(l)(iii) hereof, such Participant’s Plan Account shall be credited with the maximum number of Shares permissible, and the remaining amounts will be refunded in cash as soon as administratively practicable without interest or with interest where required by the applicable Local Law or used to purchase Shares in the subsequent Purchase Periods, as determined by the Committee.

10. Dividends and Other Distributions

(a) Subject to the applicable Local Law, cash dividends and other cash distributions and stock dividend or other non-cash distributions received by the Administrator on Shares held in custody hereunder will be credited to the Plan Account of an individual Participant in accordance with such Participant’s interest in the Shares with respect to which such dividends or distributions are paid.

(b) Cash dividends or cash distributions will be paid in cash to the Participant as soon as administratively possible, after receipt thereof by the Administrator.

(c) Stock dividend and other non-cash distribution of property will be subject to the similar Holding Period, if any applicable to the Shares with respect to which the same is declared.

(d) Tax Responsibilities. The Administrator shall report to each Participant (or Eligible Employee with a Plan Account) the amount of dividends credited to his or her Plan Account. Subjecting the stock dividend or other non-cash distributions to the Holding Period requirement will not relieve a Participant (or Eligible Employee with Plan Account) of any income or other tax that may be due on or with respect to such dividend or other non-cash distribution of property.

11. Voting of Shares

A Participant shall have no interest or voting rights in the Shares until such time as the Shares are credited to the Participant’s Plan Account. Shares held for a Participant (or Eligible Employee) in his or her Plan Account will be voted in accordance with the Participant’s (or the Eligible Employee’s) express direction. In the absence of any such directions such Shares will not be voted.

12. In-Service Distribution or Sale of Shares

(a) Sale of Shares . Subject to the provisions of Paragraph 20 hereof, a Participant may at any time after the end of the Holding Period, if any, and without withdrawing from the Plan, by giving notice to the Administrator, direct the Administrator to sell all or part of the Shares held on behalf of the Participant. Upon receipt of such a notice, the Administrator shall, as soon as practicable after receipt of such notice, sell such Shares and transmit the net proceeds of such sale (less any bank service fees, brokerage charges, transfer or withholding taxes, and any other transaction fee, expense or cost) to the Participant.

(b) In-Service Share Distributions . A Participant may after the end of the Holding Period, if any, and without withdrawing from the Plan, request that a certificate for all or part of the whole number of Shares held in his or her Plan Account be sent to him or her as described in Paragraph 9(a) above. All such requests must be submitted to the Administrator in accordance with the Administrator’s procedures. The Administrator may impose a reasonable charge, to be paid by the Participant, for each stock certificate so issued.

13. Cessation of Active Participation

A Participant may during the Enrollment Period, by giving notice to the Company, in the manner established by the Committee, revoke his or her authorization for payroll deduction or alternative contribution for the Election Period to which such Enrollment Period relates. Unless otherwise required by the applicable Local Law, a Participant may not terminate his or participation by revoking his or her authorization for payroll deduction or alternative contribution or not contributing his or her alternative contributions for the Election Period after such Election Period has commenced. If a Participant terminates his or her participation in the Plan during an Election Period, such termination shall be effective for the next Election Period, and only if such change is made by the Participant by giving notice to the Company in the manner established by the Committee.

14. Termination of Employment or Cessation on Eligible Employee

In the event that a Participant ceases to be employed by the Company or a Designated Subsidiary for any reason, including death, disability, retirement or voluntary or involuntary termination, or ceases to be an Eligible Employee, then the Participant’s rights under the Plan shall terminate. Except as provided in Paragraph 15, below, the Company shall as soon as administratively possible, refund to the Participant without interest or where required by the applicable Local Law with interest the payroll deductions or alternative contributions made by the Participant during the Purchase Period in which such termination of employment or cessation of eligibility occurs, unless such payroll deductions or alternative contributions have already been used to purchase Shares in respect of that Purchase Period.

15. Assignment

The payroll deductions, or alternative contributions or interest where payable under the applicable Local Law credited to a Participant’s Plan Account, or any rights to purchase Shares under the Plan may not be assigned, alienated, transferred, pledged, or otherwise disposed of in any way by a Participant other than by will or the laws of descent and distribution. Any such assignment, alienation, transfer, pledge, or other disposition shall be without effect, except that the Committee may treat such act as an election to withdraw from the Plan. A Participant’s right to purchase Shares under this Plan may be exercisable during the Participant’s lifetime only by the Participant. A Participant’s Plan Account shall be payable to the Participant’s estate upon his or her death in accordance with the applicable law of death and descent and distribution.

16. Adjustment of and Changes in Shares

If at any time after the effective date of the Plan the Company shall subdivide or reclassify the Shares with respect to which a purchase right has been or may be granted under the Plan, or shall declare thereon any stock split or dividend payable in Shares, or shall alter the capital structure of the Shares or the Company in any similar manner, then the number and class of Shares held in the Plan and which may thereafter be subject to the Share purchase right granted under the Plan (in the aggregate and to any Participant) shall be adjusted accordingly, and in the case of each right outstanding at the time of any such action, the number and class of Shares which may thereafter be purchased pursuant to such right and the Purchase Price shall be adjusted accordingly, as necessary to preserve the rights of the holder(s) of such Shares and right(s).

17. Amendment or Termination of the Plan

The Committee shall have the right, at any time, to amend, modify or terminate the Plan without notice; provided, however, that no Participant’s existing rights shall be adversely affected by any such amendment, modification or termination, except to comply with the applicable Local Law, stock exchange rules or accounting rules.

Notwithstanding the foregoing, the Committee shall have the right to terminate the Plan with respect to all future payroll deductions or alternative contributions and related purchases at any time.

Such termination of the Plan shall also terminate any current Election Period and any associated Purchase Period in accordance with Paragraph 4 of the Plan.

18. Designation of Subsidiaries

Subsidiaries may be added as Designated Subsidiaries by the Committee in its sole discretion from time to time.

19. Administration

(a) Administration . The Plan shall be administered by the Committee. The Committee shall be responsible for the administration of all matters under the Plan which have not been delegated to the Administrator. The Committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Any rule or regulation adopted by the Committee shall remain in full force and effect unless and until altered, amended or repealed by the Committee. The Committee specifically is authorized to adopt rules, procedures and subplans, regarding, without limitation, handling of payroll deductions, making of alternative contributions, establishment of bank or trust accounts to hold payroll deductions, payment of interest, conversion of local currency, obligations to pay payroll tax, and withholding procedures which may vary according to Local Law.

(b) Specific Responsibilities . The Committee’s responsibilities shall include, but shall not be limited to:

(i) interpreting the Plan (including issues relating to the definition and application of “Compensation”);

(ii) identifying and compiling a list of persons who are Eligible Employees for an Election Period;

(iii) identifying those Eligible Employees not entitled to be granted rights or other rights for an Election Period on account of the limitations described in Paragraph 2(l)(iii) hereof; and

(iv) providing to Participants upon request Company financial statements and other information which is publicly available.

Interpretation or construction of any provision of the Plan by the Committee shall be final and conclusive on all persons, absent specific and contrary action taken by the Board. Any interpretation or construction of any provision of the Plan by the Committee or the Board shall be final and conclusive. The Committee may assign or delegate any of the tasks set forth in this paragraph to one or more persons, including the designation of a Designated Subsidiary under the Plan, unless constrained by applicable law.

20. Securities Law and Other Restrictions

Notwithstanding any provision of the Plan to the contrary, no payroll deductions or alternative contributions shall take place and no Shares may be purchased or sold under the Plan until a registration statement has been filed and become effective with respect to the issuance of the Shares covered by the Plan under the Act and any other required action has been taken under any other applicable Local Law of the jurisdiction in which the Employer of the Employee is located or the Employee is employed or resides. Prior to the effectiveness of such registration statement, Shares subject to purchase under the Plan may be offered to Eligible Employees only pursuant to an exemption from the registration requirements of the Act and pursuant to any other action that is required under any applicable Local Law.

21. No Independent Employees’ Rights

Nothing in the Plan shall be construed to be a contract of employment between an Employer or its parent or any Subsidiary and any Employee, or any group or category of Employees (whether for a definite or specific duration or otherwise), or to prevent the Employer, the Company or any Subsidiary from terminating any Employee’s employment at any time, in accordance with the applicable Local Law. Nothing in this Plan shall be construed as conferring any rights of a shareholder in any Employee or any other person until the Shares are credited to the Plan Account.

22. Applicable Law

The Plan shall be construed, administered and governed in all respects under the laws of the State of Delaware, without giving effect to the conflict of laws principles thereof. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to) the Plan shall be exclusively in the courts in Dallas County, Texas, including the Federal Courts located therein (should Federal jurisdiction exist).

23. Merger or Consolidation

Each outstanding purchase right will automatically be exercised immediately prior to the effective date of any Corporate Transaction (as defined below), by applying the accumulated payroll deductions or alternative contributions and interest where payable under the applicable Local Law, of each Participant for the Purchase Period in which such Corporate Transaction occurs to the purchase of whole Shares at the Purchase Price for such Purchase Period by treating the day immediately prior to the effective date of any Corporate Transaction as the last Trading Day of the Purchase Period, unless the Committee determines, in the exercise of its sole discretion, to establish an earlier date as the last Trading Day of the Purchase Period, or to provide that purchase rights shall be assumed by a successor entity that is a party to the Corporate Transaction or terminate the Plan as of the end of the Purchase Period immediately preceding the effective date of the Corporate Transaction and promptly refund to Participants all payroll deductions or alternative contributions and interest where payable under the applicable Local Law accumulated through such effective date. The applicable limitation on the number of whole Shares purchasable per Participant will continue to apply to any purchase made hereunder. With respect to Shares acquired prior to or in connection with a Corporate Transaction, each Participant will thereafter be entitled to receive as soon as practicable following the effective date of such Corporate Transaction the securities or property which a holder of Shares of the Company was entitled to receive in connection with such Corporate Transaction. For purposes of this Paragraph 23, “Corporate Transaction” shall mean a transaction by which the Company is acquired by merger or sale of all or substantially all of the Company’s assets or outstanding voting stock.

Date of Shareholder Approval:                    


 

 

 

 

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JACOBS ENGINEERING GROUP INC.

1999 BRYAN STREET

SUITE 1200

DALLAS, 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 the shares held in this account in the same manner as if you marked, signed and returned your proxy card.

VOTE BY INTERNET -www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information up untilinformation. Vote by 11:59 p.m. Eastern Time (GMT-5) on Wednesday,Tuesday, January 18, 2017.15, 2019 for shares held directly and by 11:59 p.m. Eastern Time on Friday, January 11, 2019 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up untilinstructions. Vote by 11:59 p.m. Eastern Time (GMT-5) on Wednesday,Tuesday, January 18, 2017.15, 2019 for shares held directly and by 11:59 p.m. Eastern Time on Friday, January 11, 2019 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by our Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E15237-P83474

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

E53450-P15232

KEEP THIS PORTION FOR YOUR RECORDS

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DETACH AND RETURN THIS PORTION FOR YOUR RECORDS
ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
JACOBS ENGINEERING GROUP INC.
The Board of Directors recommends a vote FOR each Nominee for Director, FOR Proposals 2, 3, 4 and 5, and for “1 YEAR” on Proposal 6.
1. Election of Directors
Nominees: For Against Abstain
For Against Abstain
1a. Joseph R. Bronson
1b. Juan José Suárez Coppel
1c. Robert C. Davidson, Jr.
1d. Steven J. Demetriou
1e. Ralph E. Eberhart
1f. Dawne S. Hickton
1g. Linda Fayne Levinson
1h. Peter J. Robertson
1i. Christopher M.T. Thompson
For Against Abstain
2. To approve an amendment to and restatement of the Company’s 1989 Employee Stock Purchase Plan.
3. To approve an amendment to and restatement of the Company’s Global Employee Stock Purchase Plan.
4. To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm.
5. To approve, by non-binding vote, the Company’s executive compensation.
1 Year 2 Years 3 Years Abstain
6. Advisory vote on the frequency of the advisory vote on executive compensation.

JACOBS ENGINEERING GROUP INC.

The Board of Directors recommends a vote FOR each Nominee for Director and FOR Proposals 2 and 3.

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 executive compensation.

1d.     Steven J. Demetriou

1e.      General Ralph E. Eberhart

3.To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting 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

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH DIRECTOR NOMINEE AND FOR PROPOSALS 2 3, 4 AND 5, AND FOR “1 YEAR” ON PROPOSAL 6.
3.

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 their title 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

Signature [PLEASE SIGN WITHIN BOX]Date                                Signature (Joint Owners)   Date


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JACOBS ENGINEERING GROUP INC.

ANNUAL MEETING OF SHAREHOLDERS Thursday,

Wednesday, January 19, 2017 12:0016, 2019

4:30 PM
CT

1999 Bryan Street 1st

First Floor

Dallas, Texas 75201 U.S.A.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
E15238-P83474
Jacobs Engineering Group Inc. proxy 1999 Bryan Street, Suite 1200 Dallas, Texas 75201
This proxy is solicited by the Board of Directors for use at the Annual Meeting of Shareholders on January 19, 2017.
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, 3, 4 and 5, for “1 YEAR” on Proposal 6, and in the discretion of the proxies named below with respect to any other matters that may properly come before the Annual Meeting and all adjournments and postponements thereof.
By signing the proxy, you revoke all prior proxies and appoint Steven J. Demetriou and Kevin C. Berryman, 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 may properly come before the Annual Meeting and all adjournments or postponements thereof.
If you vote by Phone or Internet, please do not mail your Proxy Card.
See reverse for voting instructions.

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E53451-P15232

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Jacobs Engineering Group Inc.

1999 Bryan Street, Suite 1200                                                                                                                                                      proxy

Dallas, Texas 75201

This proxy is solicited by the Board of Directors for use at the Annual Meeting of Shareholders on January 16, 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 the discretion of the proxies named below with respect to any other matters that may properly come before the Annual Meeting and all adjournments and postponements 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 may properly come before the Annual Meeting and all adjournments or postponements thereof.

Retirement Savings Plan Participants.This card also constitutes voting instructions by the undersigned participant to the trustee of the CH2M HILL Retirement and Tax-Deferred Savings Plan (“Plan”) for all shares votable by the undersigned Plan participant. The undersigned on the reverse side of this card authorizes and instructs Fidelity, as trustee of the Plan (“Trustee”), to vote all shares of the common stock of Jacobs Engineering Group Inc. allocated to 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, in accordance with the instructions on the reverse side. The Trustee will vote the shares credited to your account in accordance with your instructions, provided the Trustee determines it can do so in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”). Pursuant to ERISA, the Trustee would only be prevented from voting the shares credited to your account in accordance with your instructions if the independent fiduciary of the Plan, State Street Global Advisors (“SSGA”), deems that following the instructions would be a violation of the trustee’s fiduciary duties. Your voting instructions must be 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 timely manner, SSGA will direct the Trustee, in SSGA’s discretion, how to vote your shares. All voting instructions for shares held in the Plan shall be confidential.

If you vote by Phone or Internet, please do not mail your Proxy Card.

See reverse for voting instructions.