-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KWR1DIPk6UufjbIFm6nqqO0q0qcjpeCZR7MDnWtyVTu3P33LIXtDITpVnFMZMk1s HDTRU6bMotK5hzYV5H2xEg== 0000950005-96-000010.txt : 19960116 0000950005-96-000010.hdr.sgml : 19960116 ACCESSION NUMBER: 0000950005-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19951130 FILED AS OF DATE: 19960112 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARDING ASSOCIATES INC CENTRAL INDEX KEY: 0000818968 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 680132062 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16169 FILM NUMBER: 96503119 BUSINESS ADDRESS: STREET 1: 7655 REDWOOD BLVD CITY: NOVATO STATE: CA ZIP: 94945 BUSINESS PHONE: 4158920821 MAIL ADDRESS: STREET 1: 7655 REDWOOD BLVD CITY: NOVATO STATE: CA ZIP: 94945 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities ----- Exchange Act of 1934 For the quarterly period ended November 30, 1995 or ----- Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ------------- ------------- Commission file number 0-16169 HARDING LAWSON ASSOCIATES GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 68-0132062 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7655 Redwood Boulevard Novato, California 94945 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (415) 892-0821 HARDING ASSOCIATES, INC. (Former name, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- At January 3, 1996 the registrant had issued and outstanding an aggregate of 4,845,090 shares of its common stock. INDEX HARDING LAWSON ASSOCIATES GROUP, INC. Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets - November 30, 1995 (Unaudited) and May 31, 1995............................................ 3 Condensed Consolidated Statements of Income - Three and Six Months Ended November 30, 1995 and November 30, 1994 (Unaudited)........................... 4 Condensed Consolidated Statements of Cash Flows - Six Months Ended November 30, 1995 and November 30, 1994....................................... 5 Notes to Condensed Consolidated Financial Statements November 30, 1995 (Unaudited)........................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................... 7-9 Part II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders..... 10 Item 6. Exhibits and Reports on Form 8-K........................ 11 SIGNATURES ........................................................ 12 EXHIBIT INDEX ........................................................ 13 -2- PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS HARDING LAWSON ASSOCIATES GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) - -------------------------------------------------------------------------------- November 30, 1995 May 31, 1995 - -------------------------------------------------------------------------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $13,831 $12,648 Accounts receivable 31,685 28,343 Unbilled work in progress 5,359 6,935 Less allowances for receivables and unbilled work (1,562) (1,553) Prepaid expenses 1,453 925 Deferred income taxes 1,165 2,235 - -------------------------------------------------------------------------------- Total current assets 51,931 49,533 - -------------------------------------------------------------------------------- Equipment 21,840 21,208 Less accumulated depreciation (17,387) (16,766) - -------------------------------------------------------------------------------- Net equipment 4,453 4,442 - -------------------------------------------------------------------------------- Deposits and other assets 6,766 6,813 - -------------------------------------------------------------------------------- Total assets $63,150 $60,788 - -------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $5,032 $3,383 Accrued expenses 4,548 5,642 Accrued compensation 5,698 6,518 Income taxes payable 326 621 - -------------------------------------------------------------------------------- Total current liabilities 15,604 16,164 - -------------------------------------------------------------------------------- Other liabilities 1,960 1,715 - -------------------------------------------------------------------------------- Total liabilities 17,564 17,879 - -------------------------------------------------------------------------------- Commitments and Contingencies -- -- Minority interest in subsidiary 288 224 - -------------------------------------------------------------------------------- Shareholders' equity: Preferred stock--$.01 par value; authorized shares 1,000,000; issued and outstanding--none Common stock--$.01 par value; authorized shares 10,000,000; issued and outstanding--4,845,090 and 4,719,320 at November 30, 1995 and May 31, 1995, respectively 48 47 Additional paid-in capital 18,142 17,424 Retained earnings 27,108 25,214 - -------------------------------------------------------------------------------- Total shareholders' equity 45,298 42,685 - -------------------------------------------------------------------------------- Total liabilities and shareholders' equity $63,150 $60,788 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. -3- HARDING LAWSON ASSOCIATES GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) - -------------------------------------------------------------------------------- Three Months Ended Six Months Ended November 30, November 30, 1995 1994 1995 1994 - -------------------------------------------------------------------------------- Gross revenue $35,554 $34,445 $67,302 $67,825 Less: Cost of outside services 12,853 10,346 21,893 20,715 - -------------------------------------------------------------------------------- Net revenue 22,701 24,099 45,409 47,110 - -------------------------------------------------------------------------------- Costs and expenses: Payroll and benefits 15,044 16,400 30,354 31,792 General expenses 6,282 6,249 12,324 12,416 - -------------------------------------------------------------------------------- Total costs and expenses 21,326 22,649 42,678 44,208 - -------------------------------------------------------------------------------- Operating income 1,375 1,450 2,731 2,902 Interest income, net 194 51 370 70 - -------------------------------------------------------------------------------- Income before provision for income taxes and minority interest 1,569 1,501 3,101 2,972 Provision for income taxes 621 593 1,223 1,174 Minority interest (11) -- (16) -- - -------------------------------------------------------------------------------- Net income $ 959 $ 908 $ 1,894 $ 1,798 - -------------------------------------------------------------------------------- Net income per common share $ .20 $ .19 $ .39 $ .37 - -------------------------------------------------------------------------------- Shares used in per share calculation 4,871 4,793 4,837 4,809 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. -4- HARDING LAWSON ASSOCIATES GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) - -------------------------------------------------------------------------------- Six Months Ended November 30, 1995 1994 - -------------------------------------------------------------------------------- OPERATING ACTIVITIES Net income $1,894 $1,798 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,236 1,646 Net increase in current assets (1,215) (2,037) Net increase in current liabilities 158 74 Other increase (decrease) 153 (58) - -------------------------------------------------------------------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 2,226 1,423 - -------------------------------------------------------------------------------- INVESTING ACTIVITIES Net purchase of equipment (1,043) (600) Investment in acquisition (net of acquired cash) -- (1,683) - -------------------------------------------------------------------------------- NET CASH USED IN INVESTING ACTIVITIES (1,043) (2,283) - -------------------------------------------------------------------------------- FINANCING ACTIVITIES Repayment of debt -- (2,015) Proceeds from sale of common stock -- 116 - -------------------------------------------------------------------------------- NET CASH USED IN FINANCING ACTIVITIES -- (1,899) - -------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,183 (2,759) Cash and cash equivalents at beginning of period 2,648 8,896 - -------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $13,831 $6,137 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. -5- HARDING LAWSON ASSOCIATES GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) November 30, 1995 NOTE 1: BASIS OF PRESENTATION The accompanying condensed consolidated financial statements have been prepared without audit by Harding Lawson Associates Group, Inc., formerly Harding Associates, Inc., (the "Company") in accordance with generally accepted accounting principles for interim financial statements and pursuant to the rules of the Securities and Exchange Commission for Form 10-Q. Certain information and footnotes required by generally accepted accounting principles for complete financial statements have been omitted. It is the opinion of management that all adjustments considered necessary for a fair presentation have been included, and that all such adjustments are of a normal and recurring nature. For further information, refer to the audited financial statements and footnotes included in the Company's Annual Report on Form 10-K dated May 31, 1995. Reclassification of certain balances for the fiscal year ended May 31, 1995 have been made to conform to the November 30, 1995 presentation. NOTE 2: COMMITMENTS AND CONTINGENCIES On May 19, 1995, the Company filed a lawsuit in Texas State Court, Harris County, Texas, entitled Harding Lawson Associates, Inc., a wholly owned subsidiary of Harding Associates, Inc., vs. Bailey Site Settlors Committee, an unincorporated association, seeking collection of approximately $1.0 million in fees billed for engineering services performed. On June 21, 1995, a lawsuit was filed against the Company in Federal District Court, Jefferson County, Texas, and in Texas State Court, Orange County, Texas, entitled Bailey Site Settlors Committee vs. Harding Lawson Associates. The suit seeks monetary damages in the amount of $7.9 million for alleged breach of contract and negligence in the performance of certain engineering services. The Company believes it has meritorious defenses to this suit. The Company is currently subject to certain other claims and lawsuits arising in the ordinary course of its business. In the opinion of management, adequate provision has been made for all known liabilities that are currently expected to result from these claims and lawsuits, and in the aggregate such claims are not expected to have a material effect on the financial position of the Company. -6- HARDING LAWSON ASSOCIATES GROUP, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (In thousands, except share data) The following table sets forth, for the periods indicated, (i) the percentage that certain items in the condensed consolidated income statements of the Company bear to net revenue, and (ii) the percentage increase (decrease) in dollar amount of such items from year to year.
Percentage of Net Revenue Percentage Three Months Ended Six Months Ended Increase/(Decrease) November 30, November 30, November 30, Three Months Six Months 1995 1994 1995 1994 1995 vs 1994 1995 vs 1994 ---- ---- ---- ---- ------------ ------------ Gross revenue 156.6% 142.9% 148.2% 144.0% 3.2% (.8)% Net revenue 100.0 100.0 100.0 100.0 (5.8) (3.6) Costs and expenses Payroll and benefits 66.3 68.1 66.9 67.5 (8.3) (4.5) General expenses 27.7 25.9 27.1 26.3 .5 (.7) Operating income/margin 6.0 6.0 6.0 6.2 (5.2) (5.9) Net interest income .9 .2 .8 .1 280.4 428.6 Income before income taxes and minority interest 6.9 6.2 6.8 6.3 4.5 4.3 Provision for taxes 2.7 2.5 2.7 2.5 4.7 4.2 Net income 4.2 3.8 4.1 3.8 5.6 5.3
Second Quarter Comparison for Fiscal Years 1996 and 1995 Gross revenue includes, as an adjunct to the Company's labor services, the revenue on services subcontracted to third parties that will be reimbursed under terms of the Company's contracts, and revenue from the utilization of certain company owned equipment. The contribution to net revenue derived from the sale of subcontracted services and company owned equipment was essentially unchanged at 6.7 percent of net revenue in the second quarter of fiscal 1996 and 6.6 percent in fiscal 1995. Net revenue, which is a more accurate measure of revenue earned for services provided directly by the Company, is recorded by deducting from gross revenue the costs of services contracted to third parties. Outside services revenue as a percent of total gross revenue was 37.5 percent and 31.4 percent for the second quarter of fiscal 1996 and 1995, respectively. Net revenue for the fiscal quarter ended November 30, 1995 totaled $22,701, a decrease of six percent from net revenue of $24,099 for the second quarter of the prior fiscal year. The decrease in net revenue was primarily due to the impact of an additional week's activity in the second quarter of the prior year. After adjusting for this impact, net revenue was essentially unchanged from fiscal 1995. In domestic operations, the Company experienced lower demand for its services, partially offset by slightly improved pricing compared to the second quarter of fiscal 1995. The lower demand was in the public sector and was attributed primarily to a slowdown in federal funding for environmental contracts and reduced infrastructure spending in the California, Hawaii and Washington markets. On a comparable basis to the prior year, net revenue from such public sector clients decreased by approximately 14 percent from the same period in the prior year. Overall, net revenue from public sector clients accounted for 48 percent of total net revenue compared to 56 percent in the prior year. Net revenue from industrial sector clients continued to show improvement with an increase of approximately -7- nine percent over the prior year. International operations accounted for five percent of net revenue in the second fiscal quarter of 1996. There were no international sales reported in the second quarter of the prior year. Operating income amounted to $1,375, a decrease of 5.2 percent from $1,450 for the same period in fiscal 1995. Operating margin was unchanged at 6.0 percent of net revenue compared to the same period in the prior fiscal year. The lower operating income was primarily due to the lower net revenue discussed above, partially offset by lower labor related expenses. The lower labor expenses reflect both staff reductions and reduced incentive compensation expenses. As in the first quarter, operating margins in the fiscal 1996 second quarter also benefited from the favorable performance of several firm fixed price contracts in both private and public sectors. There can be no assurance that such contracts will continue to be available to the Company in the future or that the performance of such contracts will have a favorable outcome. Interest income for the second quarter of fiscal 1996 was $222 before interest expense of $28 and was higher compared to interest income of $63 before interest expense of $12 for the second quarter of the prior fiscal year. Net interest income was higher due to the Company's increased cash position that resulted in higher balances of invested cash, and to a lesser extent, improved interest rates. The effective tax rate was 39.5 percent for the second quarter of both fiscal 1996 and 1995. Net income for the quarter was $959 compared with $908 in the second quarter of 1995, an increase of 5.6 percent. Earnings per share were $0.20 on 4,871,000 weighted average shares outstanding compared to $0.19 per share on 4,793,000 weighted average shares outstanding in the same period last year. Six Month Comparison for Fiscal Years 1996 and 1995 Net revenue for the six months ended November 30, 1995 (26 weeks) amounted to $45,409 a decrease of 3.6 percent from net revenue of $47,110 for the six months ended November 30, 1994 (27 weeks). The decrease in net revenue was due primarily to lower public sector work and, to a lesser extent, the impact of the additional week in the prior fiscal year. On a comparable basis with the prior year, the Company experienced lower demand for its services that was partially offset by slightly improved pricing for those services. Operating income amounted to $2,731, a decrease of 5.9 percent from operating income of $2,902 for the first six months of the prior year. The operating margin decreased to 6.0 percent from 6.2 percent a year ago. While the Company continued to lower its operating costs, such reductions were not sufficient to offset the effect of lower revenue discussed above. Interest income for the six months was $399 before interest expense of $29, up from $108 before interest expense of $38 in the same period in the prior year. The increase in net interest income was due primarily to the Company's increased cash position that resulted in higher balances of invested cash and improved interest rates. The effective tax rate for the six months ended November 30, 1995 was 39.4 percent and for the six months ended November 30, 1994 was 39.5 percent. Net income for the six months was $1,894, up from net income of $1,798 for the six month period in the prior year, an increase of 5.3 percent. Earnings per share were $0.39 on 4,837,000 weighted average shares outstanding compared to $0.37 per share on 4,809,000 weighted average shares outstanding in the first six month period of the prior year. -8- Due to seasonal factors, operating results for the six month period ending November 30, 1995 are not necessarily indicative of the results that may be expected for the entire fiscal year ending May 31, 1996. Liquidity and Capital Resources For the six months ended November 30, 1995, net cash provided by operations was $2,226 compared with net cash provided by operations of $1,423 for the same period last year. The increase in cash provided by operations was primarily due to lower payments related to the settlement of legal claims compared to the prior year, and to a lesser extent, improved accounts receivable balances. Accounts receivable in the prior year were adversely affected by delays in invoicing certain public sector projects. The Company made net capital expenditures of $1,043 in the first six months of fiscal 1996 compared to net capital expenditures of $600 in the first six months of the prior year. The Company anticipates that its capital expenditures, excluding investments in acquisitions, for the current fiscal year will be at slightly higher levels than those incurred in the prior fiscal year. The Company is a consulting engineering services firm engaged in providing environmental, infrastructure and geotechnical related services, and encounters potential liability including claims for errors and omissions resulting from construction defects, construction cost overruns or environmental or other damage in the normal course of business. The Company is party to lawsuits and is aware of potential exposure related to certain claims. In the opinion of management, adequate provision has been made for all known liabilities that are currently expected to result from these matters and, in the aggregate, such claims are not expected to have a material adverse impact on the financial position and liquidity of the Company. Prior to May 1994, the Company was provided a professional liability insurance policy through a wholly owned subsidiary of the Company, and as such, was self insured for the liabilities covered by that policy. Currently, the Company is provided a $5 million professional liability insurance policy through an unrelated, rated carrier. At November 30, 1995, the Company had cash on hand and cash equivalents of $13,831. The Company has a $20 million revolving credit line agreement which expires in October 1997. At November 30, 1995, the Company had no borrowings outstanding under its line of credit leaving $20 million available to the Company. Borrowings were available to the Company at 6.0 percent at November 30, 1995, and at 6.1 percent at May 31, 1995. The Company is in compliance with all covenants pertaining to the credit line agreement. The Company believes that its available cash and cash equivalents, as well as cash generated from operations and its available credit line, will be sufficient to meet the Company's cash requirements for the balance of the fiscal year. The Company intends to actively continue its search for acquisitions to expand its geographical representation and to enhance its technical capabilities. The Company expects to utilize a portion of its liquidity over the next 12 to 18 months for capital expenditures, including investments in acquisitions. Forward-Looking Statements Except for the historical information contained herein, certain of the matters discussed in this report are forward-looking statements that involve risks and uncertainties, including the demand for the Company's services and the strength of the economy domestically and internationally, and such risks and uncertainties as are described in the registration statement, reports and other documents filed by the Company from time to time with the Securities and Exchange Commission. -9- HARDING LAWSON ASSOCIATES GROUP, INC. PART II OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of the Registrant was held on November 1, 1995 and five proposals were presented to security holders for a vote; election of one director, approval of an amendment to the Restated Certificate of Incorporation, approval of the Company's 1995 Executive Stock Incentive Plan, approval of an amendment to the 1991 Employee Stock Purchase Plan, and ratification of independent auditors. The five-member Board of Directors is divided into three classes. Each year one of the classes stands for election to a term of three years. The class standing for election at the 1995 annual meeting was Class II, consisting of one incumbent director: Richard D. Puntillo. The terms for Class III Directors, Richard S. Harding and Donald L. Schreuder, expire in 1996 and the terms of Class I Directors, Retired Rear Admiral Stuart F. Platt and Barton W. Shackelford expire in 1997. The following table lists the votes cast: For Withheld --- -------- Proposal 1 Election of Director Richard D. Puntillo 3,581,477 54,280 For Against Abstain Non-Votes --- ------- ------- --------- Proposal 2 Approval of an Amendment to the Restated Certificate of Incorporation changing the name of the corporation from Harding Associates, Inc. to Harding Lawson Associates Group, Inc. 3,572,437 49,192 14,128 -- Proposal 3 Approval of the Company's 1995 Executive Stock Incentive Plan 2,074,017 777,921 15,983 767,836 Proposal 4 Approval of an Amendment to the 1991 Employee Stock Purchase Plan increasing the shares under the plan from 150,000 to 250,000. 2,757,803 74,971 14,610 788,373 Proposal 5 Ratification of Ernst & Young, LLP Independent Auditors 3,602,933 19,501 13,323 -- -10- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits The following exhibits are furnished along with this Form 10-Q Quarterly Report for the period ended November 30, 1995: Exhibit No. 3.1 Restated Certificate of Incorporation Exhibit No. 3.2 Amendment to Restated Certificate of Incorporation Exhibit No. 10.1 1995 Executive Stock Plan Exhibit No. 11 Computation of Per Share Earnings Exhibit No. 27 Financial Data Schedule (Electronic Filing Only) b. Reports on Form 8-K None -11- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HARDING LAWSON ASSOCIATES GROUP, INC. Date: /s/ Donald L. Schreuder ---------------- ------------------------------------------ Donald L. Schreuder President and Chief Executive Officer (Principal Executive Officer) Date: /s/ Gregory A. Thornton ---------------- ------------------------------------------ Gregory A. Thornton Vice President and Chief Financial Officer (Principal Accounting Officer) -12- HARDING LAWSON ASSOCIATES GROUP, INC. EXHIBIT INDEX Exhibit No. 3.1 Restated Certificate of Incorporation 3.2 Amendment to Restated Certificate of Incorporation 10.1 1995 Executive Stock Plan 11 Computation of Per Share Earnings 27 Financial Data Schedule (Electronic Filing Only) -13- EX-3.1 2 RESTATED CERTIFICATE OF INCORPORATION RESTATED CERTIFICATE OF INCORPORATION OF HARDING ASSOCIATES, INC. Harding Associates, Inc. a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows: 1. The name of the corporation is Harding Associates, Inc. Harding Associates, Inc. was originally incorporated under the name Harding Merger Subsidiary, Inc., and the original Certificate of Incorporation of said corporation was filed with the Secretary of State of the State of Delaware on July 9, 1987. 2. This Restated Certificate of Incorporation only restates and integrates but does not further amend the provisions of the Certificate of Incorporation of this corporation, as heretofore amended or supplemented. 3. Pursuant to Section 245 of the General Corporation Law of the State of Delaware, this Restated Certificate of Incorporation was adopted by the Board of Directors of the corporation at a meeting on July 30, 1987, without of vote of the stockholders. 4. The text of the Certificate of Incorporation as heretofore amended or supplemented is hereby restated to read in its entirety as follows: FIRST: The name of this Corporation is HARDING ASSOCIATES, INC. SECOND: The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. -1- THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The corporation is authorized to issue two classes of shares, designated respectively `Common' and `Preferred.' The total number of Common shares authorized is ten million (10,000,000), and the total number of Preferred shares authorized is one million (1,000,000). Both Common and Preferred shares shall have a par value of one cent ($0.01) per share. The Preferred shares shall be issued in series, and the Board of Directors shall fix the designation and number of shares of each such series and shall determine or alter the rights, privileges, preferences and restrictions granted to or imposed on any wholly unissued series of such shares. As to any such series, the Board may increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series. FIFTH: The name and mailing address of the incorporator is as follows: Name Mailing Address ---- --------------- Philip S. Boone, Jr. 555 Montgomery Street Fifteenth Floor San Francisco, California 94111 SIXTH: This Corporation is to have perpetual existence. SEVENTH: Elections of the Directors need not be by written ballot unless the Bylaws of this Corporation shall so provide. EIGHTH: The Board of Directors of this Corporation shall have the power to amend its Bylaws by vote of a majority of the Directors of all classes in office. NINTH: Meetings of the stockholders of this Corporation may be held within or without the State of Delaware, as the Bylaws may provide. The books -2- of this Corporation may be kept (subject to any provisions contained in any applicable statutes) outside the State of Delaware, at such place or places as may be designated from time to time by the Board of Directors. TENTH: No action shall be taken by the stockholders of this Corporation except at an annual or special meeting of the stockholders. No action shall be taken by stockholders by written consent. ELEVENTH: Special meetings of the stockholders of this Corporation for any purpose or purposes may be called at any time by (a) the Board of Directors, (b) a committee of the Board of Directors which has been duly designated by the Board of Directors and whose powers and authority, as provided in a resolution of the Board of Directors or in the Bylaws of this Corporation, include the power to call such meetings, or (c) the holder or holders of not less than ten percent (10%) of the outstanding shares entitled to vote at such a meeting. TWELFTH: Advance notice of stockholder nominations for the election of Directors shall be given in the manner provided in the Bylaws of this Corporation. THIRTEENTH: Section 1. Number of Directors. The number of Directors of this Corporation shall not be less than five (5) nor more than eleven (11), with the exact number within that range to be determined by the Board of Directors from time to time in accordance with the Bylaws. Section 2. Classification of Directors. The Board of Directors shall be divided into three (3) classes, which shall be designated as Class I, Class II and Class III, and which shall be as nearly equal in number as possible. Each class of Directors shall serve for a term of three (3) years, ending on the date of the third annual meeting of stockholders following the annual meeting at which the members of such class were elected; provided, however, that each initial Director in Class I shall hold office until the annual meeting of stockholders in 1988; each initial Director in Class II shall hold office until the annual -3- meeting of stockholders in 1989; and each initial Director in Class III shall hold office until the annual meeting of stockholders in 1990, so that after the expiration of each such initial term, the term of office of one class of Directors shall expire each year when their respective successors have been duly elected by the stockholders and qualified. At each annual meeting of stockholders held after 1987, the Directors elected to succeed those whose terms then expired shall be identified as being of the same class as the Directors they succeed. For the purpose of the annual meeting of stockholders held in 1988, Class I shall have three (3) Directors, Class II shall have three (3) Directors and Class III shall have three (3) Directors. Section 3. Change in Number of Directors. Notwithstanding any provision of the Bylaws to the contrary, any amendment thereof relating to an increase or decrease in the authorized number of Directors or to the manner in which the number of Directors is determined shall require the approval of a majority of the entire Board of Directors, or, if the amendment is made by the stockholders, by the affirmative vote of the stockholders of the Corporation representing at leas two-thirds (66-2/3%) of the shares then entitled to vote thereon. Section 4. Effect of Increase or Decrease in Size of Board. In the event of any increase or decrease in the authorized number of Directors, (a) each Director then serving as such shall nevertheless continue as a Director of the class of which he is a member until the expiration of his current term, or his prior death, retirement, resignation, or removal, and (b) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the three (3) classes of -4- Directors so that such classes shall remain as nearly equal in size as possible. Section 5. Term of Office and Removal of Directors; Vacancies. (a) Notwithstanding any of the foregoing provisions of this Article THIRTEENTH, each Director shall serve until his successor is elected and qualified or until his prior death, retirement, resignation, or removal. (b) No Director shall be removed from his office as a Director, by vote or other action by stockholders or otherwise, with or without cause, except by the affirmative vote of at least two-thirds (66-2/3%) of the outstanding stock entitled to vote generally in the election of Directors. (c) Should a vacancy occur or be created, whether arising through death, resignation, or removal of a Director or through an increase in the number of Directors of any class, such vacancy shall be filled by a majority vote of the remaining Directors of all classes. Stockholders shall have no right to take action to fill such vacancies. A Director so elected to fill a vacancy shall serve for the remainder of the then present term of office of the class to which he is elected. FOURTEENTH: Section 1. Vote Required for Certain Business Combinations. The affirmative vote of the holders of not less than two-thirds (66-2/3%) of the outstanding shares of "Voting Stock" (as hereinafter defined) shall be required for the approval or authorization of any "Business Combination" (as hereinafter defined) of this Corporation or any subsidiary of this Corporation with any "Interested Stockholder" (as hereinafter defined), notwithstanding the fact that no vote may be required or that a lesser percentage may be specified by law, in any agreement with any national securities exchange or otherwise; provided, however, that this two-thirds voting requirement shall not be applicable and such Business Combination shall require only such -5- affirmative vote as is required by law, any agreement with any national securities exchange or otherwise if: (a) The "Continuing Directors" (as hereinafter defined) of this Corporation by at least a majority vote have expressly approved such Business Combination either in advance of or subsequent to such Interested Stockholder becoming an Interested Stockholder; or (b) All of the following conditions are met: (i) The cash or "Fair Market Value" (as hereinafter defined) as of the date of the consummation of the Business Combination (the "Combination Date") of the property, securities or other consideration to be received (including, without limitation, capital stock retained by the stockholders) per share by holders of a particular class or series of capital stock, as the case may be, of this Corporation in the Business Combination is not less than the highest of: (A) the highest per share price (including brokerage commissions, transfer taxes and soliciting dealers' fees) paid by or on behalf of the Interested Stockholder in acquiring beneficial ownership of any of its holdings of such class or series of capital stock of this Corporation (i) within the two-year period immediately prior to the Combination Date or (ii) in the transaction or series of transactions in which in the Interested Stockholder became an Interested Stockholder, whichever is higher; or (B) the Fair Market Value per share of the shares of capital stock being acquired in the Business Combination as of (i) the Combination Date or (ii) the date on which the Interested Stockholder became an Interested Stockholder, whichever is higher; or -6- (C) in the case of Common Stock, the per share book value of the Common Stock as reported at the end of the fiscal quarter immediately prior to the Combination Date, and in the case of Preferred Stock, the highest preferential amount per share to which the holders of shares of such class or series of Preferred Stock would be entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, regardless of whether the Business Combination to be consummated constitutes such an event. The provisions of this sub-paragraph 1(b)(i) shall be required to be met with respect to every class or series of outstanding capital stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class or series of capital stock. In all of the above instances, appropriate adjustments shall be made for recapitalizations and for stock dividends, stock splits and like distributions; and (ii) The consideration to be received by holders of a particular class or series of capital stock shall be in cash or in the same form as previously has been paid by or on behalf of the Interested Stockholder in connection with its direct or indirect acquisition of beneficial ownership of shares of such class or series of stock. If the consideration so paid for any such shares varies as to form, the form of consideration for such shares shall be either cash or the form used to acquire beneficial ownership of the largest number of shares of such class or series of capital stock previously acquired by the Interested Stockholder; and (iii) After such Interested Stockholder as become an Interested Stockholder and prior to the consummation of such Business Combination: -7- (A) except as approved by a majority of the Continuing Directors, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on the outstanding Preferred Stock; (B) there shall have been (i) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Continuing Directors, and (ii) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure to so increase such annual rate is approved by a majority of the Continuing Directors; and (C) such Interested Stockholder shall not have become the beneficial owner of any additional shares of Voting Stock since the date of the transaction which results in such Interested Stockholder becoming an Interested Stockholder; and (iv) After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise; and (v) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder -8- (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to public stockholders of the Corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act, rules, regulations, or subsequent provisions). Section 2. Certain Definitions. For purposes of this Article FOURTEENTH: (a) The term "Business Combination" shall mean any: (i) merger or consolidation of this Corporation or a "Subsidiary" (as hereinafter defined) of this Corporation with or into an Interested Stockholder or any other corporation which is or after such merger or consolidation would be an "Affiliate" or "Associate" (as hereinafter defined) of an Interested Stockholder, or (ii) sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) with any Interested Stockholder, of all or any "Substantial Part" (as hereinafter defined) of the assets of this Corporation or of a Subsidiary of this Corporation to an Interested Stockholder or any Affiliate or Associate of any Interested Stockholder, or (iii) adoption of any plan or proposal for the liquidation or dissolution of this Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate or Associate of any Interested Stockholder, or (iv) sale, lease, exchange or other disposition (in one transaction or a series of transactions), including without limitation a mortgage or other security device, of all or any Substantial Part of the assets of an Interested Stockholder or any Affiliate or Associate of any -9- Interested Stockholder to this Corporation or a Subsidiary of this Corporation, or (v) issuance, pledge, or transfer of securities of this Corporation or a Subsidiary of this Corporation to or with an Interested Stockholder or any affiliate or Associate of any Interested Stockholder, or (vi) reclassification of securities (including any reverse stock split) or recapitalization of this Corporation, or any merger or consolidation of this Corporation with any of its Subsidiaries, or any other transaction that would have the effect, either directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of this Corporation or any Subsidiary of this Corporation which is directly or indirectly beneficially owned by any Interested Stockholder or any Affiliate or Associate of any Interested Stockholder, or (vii) agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination. (b) The term "person" shall mean any individual, firm, corporation or other entity and shall include any group comprised of any person and any other person with whom such person or any Affiliate or Associate of such person has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of Voting Stock of this Corporation. (c) The term "Interested Stockholder" shall mean any person (other than this Corporation or any Subsidiary, and other than any profit-sharing, employee stock ownership or other employee benefit plan of this Corporation or -10- any Subsidiary or any trustee of or fiduciary with respect to any such plan when acting in such capacity) who or which is: (i) the "Beneficial Owner" (as hereinafter defined) of ten percent (10%) or more of the Voting Stock; or (ii) an Affiliate or Associate of this Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner of ten percent (10%) or more of the Voting Stock; or (iii) an assignee of or has otherwise succeeded to the beneficial ownership of any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering with the meaning of the Securities Act of 1933. (d) For the purposes of this Article FOURTEENTH, a person shall be deemed to be a Beneficial Owner of any Voting Stock which: (i) such person or any of its Affiliates or Associates beneficially owns, directly or indirectly; or (ii) such person or any of its Affiliates or Associates has, directly or indirectly, (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (B) the right to vote pursuant to any agreement, arrangement or understanding; or (iii) which is beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or -11- Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposition of any shares of Voting Stock. (e) For the purposes of determining whether a person is an Interested Stockholder pursuant to paragraph (c) of this Section 2, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed to be Beneficially Owned through application of paragraph (d) of this Section 2 but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement, or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. (f) The terms "Affiliate" and "Associate" shall have the respective meaning ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as such Rule is in effect on June 1, 1987. (g) The term "Subsidiary" means any corporation of which a majority of any class of equity securities is owned, directly or indirectly, by this Corporation; provided, however, that for the purposes of the definition of "Interested Stockholder" set forth in paragraph (c) of this Section 2, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity securities is owned, directly or indirectly, by this Corporation. (h) The term "Continuing Director" means any member of the Board of Directors, while such person is a member of the Board of Directors, who is not an Affiliate, an Associate or a representative of the Interested Stockholder involved in a proposed Business Combination and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Continuing Director, while such successor is a member of the Board of Directors, who is not an Affiliate, an -12- Associate or representative of the Interested Stockholder and is recommended or elected to succeed a Continuing Director by a majority of Continuing Directors. Each director elected by the Incorporator of this Corporation shall be a Continuing Director for purposes of this Article FOURTEENTH. (i) The term "Substantial Part" shall mean more than twenty percent (20%) of the Fair Market Value, as determined by a majority of the Continuing Directors, of the total consolidated assets of this Corporation and its Subsidiaries taken as a whole, or of the assets of an Interested Stockholder, as of the end of its most recent fiscal year ended prior to the time the determination is being made. (j) The term "Voting Stock" shall mean all of the outstanding shares of Common Stock and the outstanding shares of Preferred Stock entitled to vote on each matter on which the holders of record of Common Stock shall be entitled to vote, and each reference to a proportion of shares of Voting Stock shall refer to such proportion of the votes entitled to be cast by such shares voting as one class. (k) The term "Fair Market Value" means: (i) in case of capital stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for the New York Stock Exchange Listed Stock, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or -13- any successor system in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined in good faith by a majority of the Continuing Directors; and (ii) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined in good faith by a majority of the Continuing Directors. (l) An Interested Stockholder shall be deemed to have acquired a share of the Voting Stock of this Corporation at the time when such Interested Stockholder became the Beneficial Owner thereof. If a majority of the Continuing Directors is not able to determine the price at which an Interested Stockholder has acquired a share of Voting Stock of this Corporation, such price shall be deemed to be the Fair Market Value of the shares in question at the time when the Interested Stockholder became the Beneficial Owner thereof. With respect to shares owned by Affiliates, Associates or other persons whose ownership is attributed to an Interested Stockholder, the price deemed to be paid therefor by such Interested Stockholder shall be the price paid upon the acquisition thereof by such Affiliate, Associate or other person, or, if such price is not determinable by a majority of the Continuing Directors, the Fair Market Value of the shares in question at the time when the Affiliate, Associate or other such person became the Beneficial Owner thereof. Section 3. No Fiduciary Duty Imposed. The fact that any Business Combination complies with the provisions of paragraph 1(b) of this Article FOURTEENTH shall not be construed to impose any fiduciary duty, obligation or responsibility on the Board of Directors, or any member thereof, to approve such Business Combination or recommend its adoption or approval to the stockholders of this Corporation, nor shall such compliance limit, prohibit or otherwise restrict in any manner the Board of Directors, or any member -14- thereof, with respect to evaluations of, or actions and responses taken with respect to, such Business Combination. Section 4. Determinations by the Continuing Directors. A majority of the Continuing Directors of this Corporation shall have the power and duty to determine for the purposes of this Article FOURTEENTH, on the basis of information known to them after reasonable inquiry, whether a person is an Interested Stockholder, the number of shares of Voting Stock beneficially owned by any person, and whether a person is an Affiliate or Associate of another. A majority of the Continuing Directors of the Corporation shall have the further power to interpret all of the terms and provisions of this Article FOURTEENTH. FIFTEENTH: Section 1. Limitations on Liability of Directors. No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involved intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, as the same exists or hereafter may be amended, or any successor provision thereto, or (iv) for any transaction from which the director derived an improper personal benefit. Section 2. Indemnification and Insurance. (a) Right to Indemnification. Every person who is or has been a director of this Corporation may be indemnified by the Corporation to the fullest extent permitted by applicable law against expenses reasonably incurred by him or her in connection with any action, suit, or proceeding to which he or she may be a party defendant, or with which he or she may be threatened, by reason of being or having been a director or officer of the -15- Corporation. The term "expense," as used herein, shall include attorneys' fees, judgments, fines, and amounts paid in settlement. (b) Insurance. The Corporation may maintain insurance at its expense, to protect itself and any director or officer of the Corporation against any such expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against any such expense, liability, or loss under the Delaware General Corporation Law. Section 3. Non-Exclusivity of Rights. The rights conferred in this Article FIFTEENTH shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. Section 4. Amendment or Repeal. Any repeal or modification of this Article FIFTEENTH by the stockholders of the Corporation hereafter shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification. SIXTEENTH: This Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. Notwithstanding the foregoing, the provisions set forth in Articles TENTH, TWELFTH, THIRTEENTH, FOURTEENTH, FIFTEENTH, and this Article SIXTEENTH may not be repealed or amended in any respect unless such repeal or amendment is approved by the affirmative vote of not less than two-thirds (66-2/3%) of the total voting power of all outstanding shares of stock in this Corporation entitled to vote thereon. -16- IN WITNESS WHEREOF, Harding Associates, Inc. has caused this Restated Certificate of Incorporation to be signed by Richard S. Harding, its President, and Julia H. Slater, its Assistant Secretary, this 11th day of August 1987. By /s/ Richard S. Harding --------------------------------------- Richard S. Harding, President Attest: /s/ Julia H. Slater - --------------------------------------- Julia H. Slater Assistant Secretary -17- EX-3.2 3 CERTIFICATE OF AMENDMENT CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION * * * * * Harding Associates, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That the Board of Directors of Harding Associates, Inc. at a meeting duly held on August 22, 1995, adopted a resolution proposing and declaring advisable the following amendment to the Restated Certificate of Incorporation of said corporation: RESOLVED, that the Restated Certificate of Incorporation of HARDING ASSOCIATES, INC. be amended by changing the First Article thereof so that, as amended, said Article shall be and read as follows: THE NAME OF THIS CORPORATION IS HARDING LAWSON ASSOCIATES GROUP, INC. SECOND: That thereafter, pursuant to resolution of its Board of Directors, the annual meeting of the stockholders of said corporation was duly called and held on November 1, 1995 at which meeting the necessary number of shares as required by statute were voted in favor of the amendment. THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Harding Associates, Inc. has caused this certificate to be signed by Patricia A. England, its Secretary, this 2nd day of November, 1995. Harding Associates, Inc. By /s/ Patricia A. England ---------------------------------------- Secretary EX-10.1 4 1995 EXECUTIVE STOCK INCENTIVE PLAN 1995 EXECUTIVE STOCK INCENTIVE PLAN Section 1. Purpose This 1995 Executive Stock Incentive Plan (the "Plan") is intended as an employment incentive and to encourage stock ownership by certain key officers and employees (collectively, "Key Persons") of Harding Associates, Inc., a Delaware corporation and its wholly owned domestic subsidiaries (collectively, the "Company") so that they may increase their proprietary interest in the success of the Company. In this way, the Company will be assisted in its efforts to attract and retain highly qualified personnel and to further align the executives' interest with that of the Company's stockholders. Section 2. Administration (a) The Plan shall be administered by the Compensation Committee (the "Committee"), appointed by the Board of Directors from among the Directors, consisting of not less than three members, each of whom shall be a "disinterested person" within the meaning of Rule 16b-3 promulgated by the Securities and Exchange Commission as in effect prior to May 1, 1991 ("Old Rule 16b-3"), and, effective upon the date when reliance on Old Rule 16b-3 is no longer permitted, each member of the Committee shall be a "disinterested person" within the meaning of Rule 16b-3, or such successor rule or regulation, as then in effect. (b) The Committee shall have full and complete authority in its discretion to determine, among other things, the Key Persons to whom, and the time or times at which, shares of the Company's common stock shall be awarded, the nature, timing, price and size of such awards, and whether the awards shall be made in lieu of regular compensation, bonus payments, or in addition thereto. The Committee shall have full and complete authority to interpret the Plan, to prescribe, amend, and rescind rules and regulations pertaining to it, and to make all other determinations deemed necessary or desirable for the administration of the Plan. Section 3. Participation in the Plan (a) Participation in the Plan shall be limited to such Key Persons as shall from time to time be selected by the Committee. (b) In determining the Key Persons to whom shares of the Company's common stock shall be granted and the number of shares to be covered by each award, the Committee shall take into consideration current position, current salary, value of the services rendered and expected to be rendered to the Company, recommendations of senior management, and other relevant factors. (c) No member of the Board of Directors who is not also an officer or employee of the Company shall be eligible to participate in the Plan. Section 4. Common Stock Subject to the Plan (a) The total number of shares of the authorized common stock of the Company that may be issued pursuant to the Plan shall be 200,000 shares, and such shares shall be reserved for that purpose. The stock to be awarded pursuant to the Plan may be unissued shares or treasury shares. (b) In the event of changes in the number of shares of common stock of the Company by reason of stock dividends, split ups, recapitalizations, mergers, consolidations, combinations or exchanges of shares and the like, the Board of Directors shall make such adjustments as shall be just and equitable in the number of kind of shares reserved for award to Key Persons under the Plan and in any other matters that relate to the stock awards and that are affected by the changes referred to above. -1- Section 5. Securities Law Considerations Neither the Plan nor the Company shall be obligated to issue any shares of common stock pursuant to the Plan at any time unless and until all applicable requirements imposed by any federal and state securities and other laws, rules and regulations, by any regulatory agencies, or by any stock exchange upon which the common stock may be listed, have been fully met. As a condition precedent to any issuance of shares of common stock and delivery of certificates evidencing such shares pursuant to the Plan, the Committee may require a Key Person to take such action and to make any such representation as the Committee in its discretion deems necessary or advisable to insure compliance with such requirements. Key Persons are responsible for complying with all applicable federal and state securities and other laws, rules and regulations in connection with any offer, sale or other transfer of the shares of the common stock issued pursuant to the Plan or any interest therein. Section 6. Amendment The Board of Directors has the right at any time and from time to time to amend or modify the Plan, except that (a) no such amendment or modification shall revoke or alter the terms of any stock award previously awarded in accordance with the Plan, without the consent of the holder of the stock, and (b) to the extent required for the Plan to comply or maintain compliance with Old Rule 16b-3 or any successor rule or regulation, such amendment or modification shall be subject to stockholder approval. Section 7. Withholding Taxes All taxes, if any, required to be withheld and payable with respect to the award of stock will be deducted from the Key Person's salary. If at any time such amounts are not adequate to cover taxes required to be withheld, the participant shall make adequate and timely arrangement with the Company for the payment of the excess as a condition of such award. Section 8. Effectiveness of the Plan The Plan shall become effective on the date the stockholders of the Company approve the Plan by the affirmative votes of holders of a majority of the shares present in person or represented by proxy and entitled to vote at a duly held meeting of stockholders. The Plan will terminate ten (10) years after the effective date unless sooner terminated by the Board. -2- EX-11 5 COMPUTATION OF PER SHARE EARNINGS Exhibit No. 11 HARDING LAWSON ASSOCIATES GROUP, INC. COMPUTATION OF PER SHARE EARNINGS (In thousands, except per share data) (Unaudited)
- ------------------------------------------------------------------------------------------------------------ Three Months Ended Six Months Ended November 30, November 30, 1995 1994 1995 1994 - ------------------------------------------------------------------------------------------------------------ PRIMARY Average shares outstanding 4,845 4,682 4,803 4,664 Net effect of dilutive stock options based on the modified treasury stock method using the average market price 26 111 34 145 - ------------------------------------------------------------------------------------------------------------ TOTAL COMMON SHARES USED IN PER SHARE CALCULATION 4,871 4,793 4,837 4,809 - ------------------------------------------------------------------------------------------------------------ Net income $959 $908 $1,894 $1,798 - ------------------------------------------------------------------------------------------------------------ Net income per common share $ .20 $ .19 $ .39 $ .37 - ------------------------------------------------------------------------------------------------------------
EX-27 6 FINANCIAL DATA SCHEDULE
5 1000 6-MOS MAY-31-1996 JUN-01-1995 NOV-30-1995 13,831 0 37,044 1,562 0 51,931 21,840 17,387 63,150 15,604 0 48 0 0 45,250 63,150 0 67,302 0 21,893 42,678 0 29 3,101 1,223 1,894 0 0 0 1,894 .39 .39
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