-----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, Hm0pQ/0sm9DpJs68+JQXGbujwaAHIbIA7TnPgOvYXHpcvTehLC1YHPc0/GSXJqGv omPiDbOPvHxVG9B2OFUPNg== 0000009263-98-000009.txt : 19980626 0000009263-98-000009.hdr.sgml : 19980626 ACCESSION NUMBER: 0000009263-98-000009 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980625 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAKER MICHAEL CORP CENTRAL INDEX KEY: 0000009263 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 250927646 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-06627 FILM NUMBER: 98653997 BUSINESS ADDRESS: STREET 1: 420 ROUSE ROAD STREET 2: AIRPORT OFFICE PARK BLDG 3 CITY: CORAOPOLIS STATE: PA ZIP: 15108 BUSINESS PHONE: 4122696300 MAIL ADDRESS: STREET 1: P O BOX 12259 CITY: PITTSBURGH STATE: PA ZIP: 15231-0259 FORMER COMPANY: FORMER CONFORMED NAME: EUTHENICS SYSTEMS CORP DATE OF NAME CHANGE: 19750527 FORMER COMPANY: FORMER CONFORMED NAME: BAKER MICHAEL JR INC DATE OF NAME CHANGE: 19720526 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 11-K Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1997 Commission file number 1-6627 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Michael Baker Corporation Employee Stock Ownership Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Michael Baker Corporation Airport Office Park, Building 3 420 Rouser Road Coraopolis, PA 15108 Michael Baker Corporation Employee Stock Ownership Plan Financial Statements and Additional Information December 31, 1997 and 1996 Michael Baker Corporation Employee Stock Ownership Plan Financial Statements December 31, 1997 and 1996 - ------------------------------------------------------- Index Report of Independent Accountants Financial Statements: Statements of Net Assets Available for Benefits - December 31, 1997 and 1996 Statement of Changes in Net Assets Available for Benefits With Fund Information - Year Ended December 31, 1997 Statement of Changes in Net Assets Available for Benefits With Fund Information - Year Ended December 31, 1996 Notes to Financial Statements Additional Information:* Schedule of Assets Held for Investment Purposes - Form 5500, Item 27(a) Schedule of Reportable Transactions - Form 5500, Item 27(d) * Other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable. Report of Independent Accountants April 30, 1998 To the Participants and Administrator of the Michael Baker Employee Stock Ownership Plan In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Michael Baker Employee Stock Ownership Plan (the Plan) at December 31, 1997 and 1996, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information included in Schedules I and II is presented for purposes of additional analysis and is not a required part of the basic financial statements but is additional information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the statement of changes in net assets available for benefits. Schedules I and II and the Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Price Waterhouse LLP - ------------------------ Price Waterhouse LLP Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1997
- ----------------------------------------------------------------------------- Michael Putnam Baker Growth & Common Stock Income Fund Fund Additions: Contributions: Participants' $ 304,808 $ 1,109,350 Employer's 2,448,866 155,227 Dividends/interest income -- 1,972,919 Net appreciation (depreciation) in fair value of investments 13,026,758 912,037 Interfund transfers - net (871,309) 517,786 ------------ ----------- Total additions 14,909,123 4,667,319 ------------ ----------- Deductions: Distributions to participants 2,243,478 1,119,148 Fees 549 1,755 ------------ ----------- Total deductions 2,244,027 1,120,903 ------------ ----------- Net increase (decrease) 12,665,096 3,546,416 Net assets available for benefits: Beginning of year 24,478,713 11,791,338 ------------ ----------- End of year $37,143,809 $15,337,754 ============ ============ The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1997
- ----------------------------------------------------------------------------- George Putnam Putnam New Fund of Opportunities Boston Fund Additions: Contributions: Participants' $ 474,177 $ 1,827,420 Employer's 69,209 246,460 Dividends/interest income 945,804 137,414 Net appreciation (depreciation) in fair value of investments 855,433 835,863 Interfund transfers - net (345,029) 220,158 ----------- ------------ Total additions 1,999,594 3,267,315 ----------- ------------ Deductions: Distributions to participants 948,591 218,205 Fees 3,358 295 ----------- ------------ Total deductions 951,949 218,500 ----------- ------------ Net increase (decrease) 1,047,645 3,048,815 Net assets available for benefits: Beginning of year 8,974,703 3,338,982 ----------- ------------ End of year $10,022,348 $ 6,387,797 ============ ============ The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1997
- ----------------------------------------------------------------------------- Putnam Money Putnam Market Voyager Fund Fund Additions: Contributions: Participants' $ 279,602 $ 1,280,366 Employer's 33,280 164,750 Dividends/interest income 166,782 263,856 Net appreciation (depreciation) in fair value of investments -- 449,361 Interfund transfers - net (196,833) 427,775 ----------- ------------ Total additions 282,831 2,586,108 ----------- ------------ Deductions: Distributions to participants 491,564 147,004 Fees 523 344 ----------- ------------ Total deductions 492,087 147,348 ----------- ------------ Net increase (decrease) (209,256) 2,438,760 Net assets available for benefits: Beginning of year 3,284,128 2,069,616 ----------- ------------ End of year $ 3,074,872 $ 4,508,376 ============ ============ The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1997
- ----------------------------------------------------------------------------- Putnam Putnam International Income Growth Fund Fund Additions: Contributions: Participants' $ 230,734 $ 412,350 Employer's 30,936 55,875 Dividends/interest income 63,942 88,033 Net appreciation (depreciation) in fair value of investments 14,988 50,407 Interfund transfers - net 169,387 397,435 ----------- ------------ Total additions 509,987 1,004,100 ----------- ------------ Deductions: Distributions to participants 61,879 68,805 Fees 126 20 ----------- ------------ Total deductions 62,005 68,825 ----------- ------------ Net increase (decrease) 447,982 935,275 Net assets available for benefits: Beginning of year 746,635 614,208 ----------- ------------ End of year $ 1,194,617 $ 1,549,483 ============ ============== The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1997
- ----------------------------------------------------------------------------- Participant Loans Other Total Additions: Contributions: Participants' $ -- $ 193,981 $ 6,112,788 Employer's -- 117,015 3,321,618 Dividends/interest income 3,785 -- 3,642,535 Net appreciation (depreciation) in fair value of investments -- -- 16,144,847 Interfund transfers - net (19,271) (300,099) -- ----------- ----------- ------------ Total additions (15,486) 10,897 29,221,788 ----------- ----------- ------------ Deductions: Distributions to participants -- -- 5,298,674 Fees -- -- 6,970 ----------- ----------- ------------ Total deductions -- -- 5,305,644 ----------- ----------- ------------ Net increase (decrease) (15,486) 10,897 23,916,144 Net assets available for benefits: Beginning of year 44,782 300,099 55,643,204 ----------- ----------- ------------ End of year $ 29,296 $ 310,996 $79,559,348 ============ =========== ============ The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1996
- ----------------------------------------------------------------------------- Michael Dreyfus/Laurel Baker Prime Money Common Stock Market Fund Fund Additions: Contributions: Participants' $ 513,196 $ 119,472 Employer's 3,208,781 -- Dividends/interest income 276 41,979 Net appreciation (depreciation) in market value of investments 4,610,960 -- Interfund transfers - net (303,416) 102,309 ------------ ------------ Total additions 8,029,797 263,760 ------------ ------------ Deductions: Distributions to participants 1,011,910 213,895 Fees 235 -- ----------- ------------ Total deductions 1,012,145 213,895 ----------- ------------ Net increase (decrease) 7,017,652 49,865 Transfer from Mellon to Putnam (Note 1) -- (3,527,151) Net assets available for benefits: Beginning of year 17,461,061 3,477,286 ------------ ------------ End of year $24,478,713 $ -- ============ ============= The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1996
- ----------------------------------------------------------------------------- Dreyfus Premier Disciplined Balanced Stock Fund Fund Additions: Contributions: Participants' $ 335,999 $ 486,900 Employer's -- -- Dividends/interest income 434,097 443,089 Net appreciation (depreciation) in market value of investments -- -- Interfund transfers - net (239,141) 180,106 ------------ ------------ Total additions 530,955 1,110,095 ------------ ------------ Deductions: Distributions to participants 290,512 322,437 Fees -- -- ------------ ------------ Total deductions 290,512 322,437 ------------ ------------ Net increase (decrease) 240,443 787,658 Transfer from Mellon to Putnam (Note 1) (9,011,200) (11,566,592) Net assets available for benefits: Beginning of year 8,770,757 10,778,934 ------------ ------------- End of year $ -- $ -- ============ ============= The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1996
- ----------------------------------------------------------------------------- Dreyfus Putnam Bond Growth & Market Index Income Fund Fund Additions: Contributions: Participants' $ 58,271 $ 827,363 Employer's -- -- Dividends/interest income (12,582) 945,122 Net appreciation (depreciation) in market value of investments -- 499,701 Interfund transfers - net 70,050 (1,595,842) ----------- ------------ Total additions 115,739 676,344 ----------- ------------ Deductions: Distributions to participants 12,848 451,512 Fees -- 86 ----------- ------------ Total deductions 12,848 451,598 ----------- ------------ Net increase (decrease) 102,891 224,746 Transfer from Mellon to Putnam (Note 1) (557,456) 11,566,592 Net assets available for benefits: Beginning of year 454,565 -- ----------- ------------ End of year $ -- $11,791,338 =========== ============ The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1996
- ----------------------------------------------------------------------------- George Putnam Putnam New Fund of Opportunities Boston Fund Additions: Contributions: Participants' $ 416,460 $ 1,386,648 Employer's -- -- Dividends/interest income 744,618 25,595 Net appreciation (depreciation) in market value of investments 242,783 (103,031) Interfund transfers - net (1,037,678) 2,125,032 ------------ ------------ Total additions 366,183 3,434,244 ------------ ------------ Deductions: Distributions to participants 402,629 95,196 Fees 51 66 ------------ ------------ Total deductions 402,680 95,262 ------------ ------------ Net increase (decrease) (36,497) 3,338,982 Transfer from Mellon to Putnam (Note 1) 9,011,200 -- Net assets available for benefits: Beginning of year -- -- ------------ ------------ End of year $ 8,974,703 $ 3,338,982 ============ ============ The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1996
- ----------------------------------------------------------------------------- Putnam Money Putnam Market Voyager Fund Fund Additions: Contributions: Participants' $ 333,200 $ 965,526 Employer's -- -- Dividends/interest income 133,673 128,401 Net appreciation (depreciation) in market value of investments -- (99,125) Interfund transfers - net (448,463) 1,085,514 ------------ ------------ Total additions 18,410 2,080,316 ------------ ------------ Deductions: Distributions to participants 261,298 10,677 Fees 135 23 ------------ ------------ Total deductions 261,433 10,700 ------------ ------------ Net increase (decrease) (243,023) 2,069,616 Transfer from Mellon to Putnam (Note 1) 3,527,151 -- Net assets available for benefits: Beginning of year -- -- ------------ ------------ End of year $ 3,284,128 $ 2,069,616 ============ ============ The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1996
- ----------------------------------------------------------------------------- Putnam Putnam International Income Growth Fund Fund Additions: Contributions: Participants' $ 169,146 $ 260,009 Employer's -- -- Dividends/interest income 33,956 8,064 Net appreciation (depreciation) in market value of investments 10,783 32,430 Interfund transfers - net (14,086) 316,803 ---------- ------------ Total additions 199,799 617,306 ---------- ------------ Deductions: Distributions to participants 10,618 3,091 Fees 2 7 ---------- ------------ Total deductions 10,620 3,098 ---------- ------------ Net increase (decrease) 189,179 614,208 Transfer from Mellon to Putnam (Note 1) 557,456 -- Net assets available for benefits: Beginning of year -- -- ----------- ------------ End of year $ 746,635 $ 614,208 =========== ============ The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits With Fund Information Year Ended December 31, 1996
- ----------------------------------------------------------------------------- Participant Loans Other Total Additions: Contributions: Participants' $ -- $ 184,130 $ 6,056,320 Employer's -- 115,969 3,324,750 Dividends/interest income 3,876 -- 2,930,164 Net appreciation (depreciation) in market value of investments -- -- 5,194,501 Interfund transfers - net (7,534) (233,654) -- -------- ---------- ------------ Total additions (3,658) 66,445 17,505,735 -------- ---------- ------------ Deductions: Distributions to participants -- -- 3,086,623 Fees -- -- 605 -------- ---------- ------------ Total deductions -- -- 3,087,228 -------- ---------- ------------ Net increase (decrease) (3,658) 66,445 14,418,507 Transfer from Mellon to Putnam (Note 1) -- -- -- Net assets available for benefits: Beginning of year 48,440 233,654 41,224,697 -------- ---------- ------------ End of year $44,782 $ 300,099 $55,643,204 ======== ========== ============ The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation Employee Stock Ownership Plan December 31, 1997 and 1996 Notes to Financial Statements - ----------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN GENERAL The following description of the Michael Baker Employee Stock Ownership Plan (the ESOP, or the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. The ESOP is a defined contribution plan under which a participant's distributions are based on the amount contributed to that participant's account, including any transferred amounts from the prior retirement plan, and any gains or losses and income and expenses that may be allocated to the participant's account. The Plan is subject to provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). COMMON STOCK The ESOP enables participating employees to acquire an equity interest in Michael Baker Corporation (the Company); as such, contributions to the ESOP can be invested in the Company's common stock (Common Stock and Series B Common Stock). At times, however, common stock may not be available at a price acceptable to the ESOP Committee (see Note 3), or it may be appropriate to retain some of the ESOP's funds in a more liquid form so that the funds may be available for the payment of benefits. In such cases, a portion of the ESOP's assets may be invested in short-term investment funds, such as short- term corporate obligations or short-term obligations of the U.S. government. The ESOP's investment in the Company's common stock comprises 2,588,477 (cost of $14,709,722) and 2,613,566 (cost of $14,016,656) shares of Common Stock and 1,225,689(cost of $7,448,445) and 1,225,689 (cost of $7,448,445) shares of Series B Common Stock at December 31, 1997 and 1996, respectively. CONTRIBUTIONS Participants contribute to the ESOP through a Section 401(k) Employee Salary Redirection Election, whereby the participants may choose to have a percentage of their salaries (including commissions) withheld and contributed to the ESOP. The maximum amount of a participant's salary which may be eligible for withholding for any Plan year can not exceed $160,000. Additionally, the percentage may not exceed 15 percent of the participant's salary. The ESOP also allows participants to roll over funds from a previous employer's tax- qualified plan or tax-qualified individual retirement account. INVESTMENT OPTIONS Each participant may direct Putnam Investments, Inc. (Putnam) to invest certain portions of his or her account in investment funds managed by Putnam. Effective April 1, 1996, the Plan agreement was amended as a result of a change in trustees from Mellon Bank N.A. (Mellon) to Putnam. Approximately $44,420,000 in Plan assets (including the Michael Baker Common Stock Fund) was transferred from Mellon to Putnam, which replaced Mellon as investment manager. Michael Baker Corporation Employee Stock Ownership Plan December 31, 1997 and 1996 Notes to Financial Statements - ----------------------------------------------------------------------------- As a result of this change, investment funds available to participants are the Michael Baker Common Stock Fund (invests exclusively in common stock of the Company), the Putnam New Opportunities Fund (invests in long-term growth stocks within emerging industries), Putnam International Growth Fund (invests in diversified corporate stocks outside of North America), Putnam Voyager Fund (invests in diversified corporate stocks), Putnam Growth and Income Fund (invests in long-term growth stocks), George Putnam Fund of Boston (invests in diversified capital growth and current income stocks and bonds), Putnam Income Fund (invests in corporate bonds) and the Putnam Money Market Fund (invests in short-term money market securities). Prior to April 1, 1996, the investment fund options available to employees included the Michael Baker Common Stock Fund (invested exclusively in common stock of the Company), managed by Mellon; the Dreyfus/Laurel Prime Money Market Fund (invested in short-term, income producing securities); the Premier Balanced Fund (invested in common stocks and bonds in proportions consistent with their expected returns and risks as determined by the portfolio's adviser); the Dreyfus Disciplined Stock Fund (invested in diversified corporate stocks); and the Dreyfus Bond Market Index Fund (investing in U.S. government and Securities and Exchange Commission (SEC)-registered obligations of domestic corporations, foreign governments and supranational organizations). During this time, Mellon served as the Adviser, Custodian, Fund Accountant and Transfer Agent for the aforementioned investment funds. Contributions by participants cannot be further directed within The Michael Baker Common Stock Fund. COMPANY MATCHING CONTRIBUTIONS AND VESTING OF BENEFITS Under the provisions of the Plan, the Company will make a matching contribution to the participants' accounts in an amount not less than 50 percent of the first 5 percent of the salary contributed by each participant. Salary amounts over the 5 percent limit will not be matched by the Company. Effective July 1, 1997, 50 percent of the matching contribution is invested in the Company's Common Stock or Series B Common Stock and 50 percent is invested in accordance with the participants investment election for employee contributions. Prior to July 1, 1997, matching contributions could be invested only in the Company's Common Stock or Series B Common Stock. During 1997 and 1996, the Company matched participants' contributions on a 100 percent basis for the first 5 percent of participants' salaries contributed to the Plan. The Board of Directors of the Company is authorized to make additional discretionary contributions to the ESOP from time to time. However, no discretionary contributions were made in 1997 or 1996. All amounts in the participants' ESOP accounts that are attributable to the transfer of funds from a previously terminated retirement plan, the rollover from a previous employer's tax-qualified plan, and participant contributions under 401(k) and PAYSOP options are 100 percent vested and nonforfeitable at all times. All Company matching discretionary contributions will become 100 percent vested upon attainment of 3 years of service with the Company or, if earlier, Michael Baker Corporation Employee Stock Ownership Plan December 31, 1997 and 1996 Notes to Financial Statements - ------------------------------------------------------------------------------ upon attainment of normal retirement date, disability or death. If a participant leaves employment with the Company before attaining a vested interest in his or her Company contribution, the contributions are forfeited and will reduce future Company matching contributions. DISTRIBUTIONS The Plan provides for distribution of benefits upon retirement, total and permanent disability, death, or termination of employment for any other reason. The amount of distribution the participant or his or her beneficiary is entitled to, based on the vesting requirements, is discussed above. All distributions will be made in the form of a single lump-sum distribution or in substantially equal installments over a period not exceeding 5 years. Distributions may be made in cash and/or shares of common stock, at the discretion of the participant. PARTICIPANT LOANS A participant may borrow money from the portion of his or her account attributable to his or her own 401(k) plan contributions. Participant loans may be obtained in the sole event of immediate and heavy financial need, where the participant lacks other available resources. Loan amounts are limited to the lower of $50,000 or 50 percent of the employee's pre-tax and rollover contributions. All loans will be drawn against the participant's account among the respective investment options as directed, and are secured by the assets within the participant's accounts. Interest rates on outstanding notes receivable range from 7.0 percent to 13.5 percent. FORFEITED ACCOUNTS At December 31, 1997 and 1996, forfeited nonvested accounts totaled $260,064 and $105,878, respectively. These accounts will be used to reduce future employer contributions. Also, in 1997 and 1996, employer contributions were reduced by $96,046 and $38,672, respectively, from forfeited nonvested accounts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The Trustee performs the recordkeeping function for the ESOP and the records are maintained on a cash basis. The financial statements included herein include all material adjustments to record the financial statements on the accrual basis of accounting in accordance with generally accepted accounting principles. The investment in common stock of the Company is stated at publicly-traded closing market values as of December 31, 1997 and 1996. As of December 31, 1997 and 1996, the ESOP owns approximately 45 percent and 46 percent, respectively, of the outstanding shares of the Company's common stock; therefore, such valuation might be subject to significant fluctuation in the event of a substantial liquidation of such holdings by the ESOP. The accompanying financial statements should be read in conjunction with the consolidated financial statements of the Company, which are incorporated by reference as Exhibit 13.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997. Michael Baker Corporation Employee Stock Ownership Plan December 31, 1997 and 1996 Notes to Financial Statements - ----------------------------------------------------------------------------- INVESTMENTS The difference between the cost and current market value of investment purchases since the beginning of the period and the increase or decrease in such stated market value of investments held at the beginning of the period reported is included in the increase (decrease) in net appreciation (depreciation) fair market value of investments in the statements of changes in net assets available for benefits. DISTRIBUTIONS Distributions to participants are recorded when paid. 3. PLAN ADMINISTRATION AND FEES Prior to December 1997, the ESOP Committee was a named fiduciary responsible for Plan administration (via the benefits administrator). Effective December 11, 1997, the role of the ESOP Committee was revised to serve in an advisory capacity to the Board of Directors of the Company with respect to design and operation of the Plan while retaining no discretionary authority or responsibility with respect to such functions. The Committee retained the duty to establish the funding policy of the Plan and review the Plan's investment performance. The Company provides certain administrative and accounting services to the ESOP at no cost. In addition, the Company pays the cost of services provided to the ESOP by Putnam, legal counsel and independent accountants. Effective April 1, 1996, certain reasonable distribution and loan processing fees charged by Putnam are deducted from the respective participant account balances. 4. PLAN TERMINATION Although it has not expressed an intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. Michael Baker Corporation Employee Stock Ownership Plan December 31, 1997 and 1996 Notes to Financial Statements - ----------------------------------------------------------------------------- 5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31, 1997 1996 Net assets available for benefits per the financial statements $79,559,348 $55,643,204 ------------ ------------ Amounts allocated to withdrawing participants: Michael Baker Common Stock Fund (77,741) (94,277) Putnam Money Market Fund (8,751) (8,063) Putnam New Opportunities Fund (75,815) (894) George Putnam Fund of Boston (19,733) -- Putnam Growth and Income Fund (48,916) -- Putnam Income Fund (9,350) -- Putnam Voyager Fund (52,118) -- Putnam International Growth Fund (18,058) -- ----------- ------------ (310,482) (103,234) ----------- ------------ Net assets available for benefits per Form 5500 $79,248,866 $55,539,970 ============ ============
The following is a reconciliation of distributions to participants per the financial statements to the Form 5500:
December 31, 1997 Distributions to participants per the financial statements $5,298,674 Add -- Distributions to employees authorized but not paid as of December 31, 1997 310,482 Less -- Distributions to employees authorized but not paid as of December 31, 1996 (103,234) ---------- Distributions to employees per Form 5500 $5,505,922 ===========
6. TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated December 30, 1994, that the Plan and related trust are designed in accordance with the applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan Administrator and the Plan's counsel believe that the Plan is designed and is currently being operated in compliance with applicable requirements of the IRC. Michael Baker Corporation Employee Stock Ownership Plan Schedule of Assets Held for Investment Purposes - Form 5500, Item 27a December 31, 1997 Additional Information - Schedule I
- ---------------------------------------------------------------------------- Cost of Current Shares Description asset value *Michael Baker Corporation 2,588,477 Common Stock $14,709,722 $25,237,651 *Michael Baker Corporation 1,225,689 Common Stock - Series B 7,448,445 11,950,477 14,367 *Putnam Temporary Investments 14,367 14,367 557,416 *George Putnam Fund of Boston 9,092,302 10,022,348 784,941 *Putnam Growth & Income Fund 14,169,666 15,337,754 168,019 *Putnam Income Fund 1,170,741 1,194,617 236,660 *Putnam Voyager Fund 4,173,225 4,508,376 131,301 *Putnam New Opportunities Fund 5,692,826 6,387,797 92,950 *Putnam International Growth Fund 1,484,754 1,549,483 3,074,872 *Putnam Money Market Fund 3,074,872 3,074,872 N/A *Participant loans: 7.0% to 13.5%, due March 27, 1998 to March 22, 2002 29,296 29,296 ----------- ----------- $61,060,216 $79,307,038 ============ ===========
* Party-in-interest Michael Baker Corporation Employee Stock Ownership Plan Schedule of Reportable Transactions - Form 5500, Item 27(d) December 31, 1997 Additional Information - Schedule II
- ---------------------------------------------------------------------------- Number Net Party Description Of Purchase Selling Cost of Gain Involved Of asset Transactions Price Price Asset (Loss) - --------- --------- ------------- -------- ------- ------- ------ Putnam Michael Baker 218 $3,379,969 -- $3,379,969 -- Investments, Corporation 330 -- $3,743,285 $2,667,257 $1,076,028 Inc. Common Stock Putnam George Putnam 181 $1,782,301 -- $1,782,301 -- Investments, Fund of Boston 212 -- $1,590,089 $1,454,342 $ 135,747 Inc. Putnam Putnam Growth 250 $4,270,760 -- $4,270,760 -- Investments, and Income 204 -- $1,636,380 $1,446,903 $ 189,477 Inc. Fund Putnam Putnam 216 $2,423,225 -- $2,423,225 -- Investments, Voyager Fund 139 -- $ 433,827 $ 420,262 $ 13,565 Inc. Putnam Putnam 230 $2,938,252 -- $2,938,252 -- Investments, New 153 -- $ 725,301 $ 684,318 $ 40,983 Inc. Opportunities Fund Putnam Putnam Money 328 $1,519,635 -- $1,519,635 -- Investments, Market Fund 185 -- $1,728,891 $1,728,891 -- Inc.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Executive Vice President, Chief Financial Officer and Treasurer of Michael Baker Corporation, the plan sponsor, has duly caused this annual report to be signed by the undersigned thereunto duly authorized. MICHAEL BAKER CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN Date: June 24, 1998 By: /s/ J. Robert White ----------------------------------- J. Robert White Executive Vice President, Chief Financial Officer, and Treasurer of Michael Baker Corporation, the Plan Sponsor Consent of Independent Accountants We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 33-69306; No. 33-62887; and No. 33-05987) of Michael Baker Corporation of our report dated April 30, 1998, appearing within this Annual Report on Form 11-K. /s/ Price Waterhouse LLP - ------------------------ Price Waterhouse LLP Pittsburgh, Pennsylvania June 23, 1998 -----END PRIVACY-ENHANCED MESSAGE-----