-----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, MXWe2Q/FJ8jAdWpma1EBIzypb3hicnhVti1MpxWAUQV/DFNtJb6N3NsR91Qj0Su4 bcUEt9zbz7tDfrcyIoOkmA== 0000950128-99-000794.txt : 19990603 0000950128-99-000794.hdr.sgml : 19990603 ACCESSION NUMBER: 0000950128-99-000794 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990701 FILED AS OF DATE: 19990602 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: DEF 14A SEC ACT: SEC FILE NUMBER: 001-06627 FILM NUMBER: 99638941 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 DEF 14A 1 NOTICE AND PROXY STATEMENT 1 SCHEDULE 14A (RULE 14A) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [ X ] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(e)(2)) [ X ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MICHAEL BAKER CORPORATION - -------------------------------------------------------------------------------- (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) - -------------------------------------------------------------------------------- (NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT) Payment of filing fee (Check the appropriate box): [ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: --------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: --------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): --------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: --------------- (5) Total fee paid: ------------------------------------------------ [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ---------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------ (3) Filing Party: -------------------------------------------------- (4) Date Filed: ---------------------------------------------------- [ X ] No fee required 2 MICHAEL BAKER CORPORATION P.O. BOX 12259 PITTSBURGH, PENNSYLVANIA 15231-0259 June 1, 1999 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS JULY 1, 1999 TO THE SHAREHOLDERS OF MICHAEL BAKER CORPORATION: Notice is hereby given that the Annual Meeting of Shareholders of MICHAEL BAKER CORPORATION (the "Company") will be held at Robert Morris College, Charles L. Sewall Center--Center For Leadership, Narrows Run Road, Coraopolis, Pennsylvania 15108 on Thursday, July 1, 1999 at 10:00 a.m., local time, for the purpose of considering and acting upon the following: 1. The election by the holders of the Common Capital Stock of the Company of nine directors as follows to serve for a one-year term or until their respective successors shall have been elected and shall have qualified: A. The election by the holders of Common Stock and Series B Common Stock (voting together) of six directors; and B. The election by the holders of Common Stock of three directors. 2. Such other matters as may properly be brought before the Annual Meeting. The close of business on May 7, 1999 has been fixed by the Board of Directors as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting, or any adjournments thereof, and only shareholders of record on such date are entitled to notice of and to vote at said Annual Meeting. If you hold both Common Stock and Series B Common Stock of the Company directly, you will find enclosed two proxy cards, both of which must be fully completed and returned in order to vote all Common Stock and Series B Common Stock which you hold. If you hold both Common Stock and Series B Common Stock of the Company through the Michael Baker Corporation Employee Stock Ownership Plan and Trust (the "ESOP"), you will find enclosed two proxy cards, both of which must be fully completed and returned in order to vote all Common Stock and Series B Common Stock which you hold indirectly through the ESOP. The Company's 1998 Annual Report to Shareholders is also enclosed. You are cordially invited to attend the Annual Meeting of Shareholders. Whether or not you plan to attend the Annual Meeting, we urge you to please vote by telephone, by internet or by signing, dating and promptly returning the enclosed proxy card(s) in the enclosed postage-paid envelope. By Order of the Board of Directors, H. JAMES MCKNIGHT Secretary 3 MICHAEL BAKER CORPORATION PITTSBURGH, PENNSYLVANIA PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS-JULY 1, 1999 GENERAL INFORMATION The solicitation of the proxy or proxies enclosed with this proxy statement is made on behalf of the Board of Directors of Michael Baker Corporation (the "Company"), P.O. Box 12259, Pittsburgh, Pennsylvania 15231-0259, for the Annual Meeting of Shareholders to be held on Thursday, July 1, 1999 at 10:00 a.m. at Robert Morris College, Charles L. Sewall--Center For Leadership, Narrows Run Road, Coraopolis, Pennsylvania 15108. It is expected that this Proxy Statement and proxies will be mailed to shareholders on or about June 1, 1999. The Company's Common Capital Stock is divided into two series, denominated Common Stock and Series B Common Stock. Each share of Common Stock entitles the holder thereof to one vote on all matters submitted to the shareholders and each share of Series B Common Stock entitles the holder thereof to ten votes on all such matters. All matters submitted to a vote of shareholders are voted upon by holders of Common Stock and Series B Common Stock voting together, except that (i) holders of Common Stock and holders of Series B Common Stock are each entitled to vote separately as a series on certain extraordinary transactions involving the Company or on certain amendments to the Company's Articles of Incorporation, and (ii) holders of Common Stock, voting separately as a class, are entitled to elect one-fourth of the directors to be elected at a meeting (other than those electable by holders of Cumulative Preferred Stock if any is issued in the future), rounded, if necessary, to the next higher whole number. Holders of Common Stock vote together with the holders of Series B Common Stock on the election of the remaining directors (other than those electable by holders of Cumulative Preferred Stock if any is issued in the future). Holders of Common Stock and Series B Common Stock have cumulative voting rights in the election of directors, including, in the case of the holders of Common Stock, directors elected by such holders voting separately as a class. Cumulative voting entitles each shareholder to that number of votes in the election of directors as is equal to the number of shares which he holds of record (multiplied by ten, in the case of Series B Common Stock) multiplied by the total number of directors to be elected, and to cast the whole number of such votes for one nominee or distribute them among any two or more nominees as he chooses. Shares represented by proxies, unless otherwise indicated on the proxy card, will be voted cumulatively in such manner that the number of shares so voted for each nominee (and for any substitute nominated by the Board of Directors if any nominee listed becomes unable or is unwilling to serve) will be as nearly equal as possible. The six nominees receiving the highest number of affirmative votes cast at the Annual Meeting by the holders of Common Stock and Series B Common Stock, voting together, and the three nominees receiving the highest number of affirmative votes cast at the Annual Meeting by the holders of the Common Stock, voting in person or by proxy, a quorum being present, will be elected as directors. On May 7, 1999, the Company had outstanding 7,159,684 shares of Common Stock (entitling holders to 7,159,684 votes) and 1,315,922 shares of Series B Common Stock (entitling holders to 13,159,220 votes). Holders of Common Stock and Series B Common Stock of record at the close of business on May 7, 1999 are entitled to notice of and to vote on all matters that may properly come before the Annual Meeting, except that holders of Series B Common Stock may not vote for the election of directors electable solely by the holders of Common Stock. The proxy solicited hereby may be revoked at any time before its exercise by giving notice of revocation to the Secretary of the Company or by delivering a proxy bearing a later date or by attending and voting at the Annual Meeting of Shareholders or any adjournment thereof. Unrevoked proxies will be voted at the Annual Meeting in accordance with the specifications made thereon, but in the absence of such specifications will be voted FOR each proposal. Votes with respect to the election of directors will be counted as set forth above. With respect to all other matters brought before the Annual Meeting, the affirmative vote of the holders of shares representing the majority of the votes cast at the Annual Meeting (in person or by proxy) will be required to approve such matter. 1 4 The Board of Directors does not know of any other business that may be presented for consideration at the 1999 Annual Meeting. If any other business should properly come before the Annual Meeting, it is the intention of those named in the Proxies solicited hereby to vote the shares represented by such Proxies in accordance with their judgment on such matters. SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING A proposal submitted by a shareholder for the regular annual meeting of shareholders to be held in 2000 must be received by the Secretary, Michael Baker Corporation on or prior to February 1, 2000 in order to be eligible for inclusion in the Company's Proxy Statement for that annual meeting. In connection with the 2000 Annual Meeting of Shareholders, if the Company does not receive notice of a matter or proposal to be considered, on or before April 17, 2000, then the persons appointed by the Board of Directors to act as proxies for such annual meeting will be allowed to use their discretionary voting authority with respect to any such matter or proposal raised at such annual meeting. Section 2.01.1 of the Company's By-Laws sets forth procedures by which shareholders may nominate candidates for election as directors. STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information as to the beneficial ownership of the Company's Common Stock and Series B Common Stock as of May 7, 1999 held by each person known by the Board of Directors of the Company to own beneficially more than 5% of the outstanding shares of Common Stock or Series B Common Stock of the Company, by each director and nominee, by each of the executive officers named in the Summary Compensation Table included elsewhere in this Proxy Statement (the "Summary Compensation Table"), and by all directors and executive officers as a group. The Michael Baker Corporation Employee Stock Ownership Plan and Trust (the "ESOP") holds 72.1% of the voting power of the Company's outstanding Common Capital Stock. The information in the table concerning beneficial ownership is based upon information furnished to the Company by or on behalf of the persons named in the table.
COMMON STOCK SERIES B COMMON STOCK ----------------------------- --------------------------- NUMBER OF NUMBER OF SHARES AND SHARES AND NATURE OF NATURE OF BENEFICIAL BENEFICIAL NAME OWNERSHIP(1) PERCENT OWNERSHIP(1) PERCENT ---- ------------ ------- ------------ ------- Michael Baker Corporation 2,415,622 33.7 1,223,473 93.0 Employee Stock Ownership Plan and Trust(1) Michael Baker Corporation P.O. Box 12259 Pittsburgh, PA 15231-0259 Goldman Sachs(2) 882,800 12.3 None -- 85 Broad Street New York, New York 10004 Lord, Abbett & Co. 787,690 11.0 None -- 767 Fifth Avenue New York, New York 10153 Dimensional Fund Advisors Inc.(3) 456,114 6.4 None -- 1299 Ocean Avenue 11th Floor Santa Monica, CA 90401 Robert N. Bontempo 3,000(7) * None -- William J. Copeland 5,500(7) * None -- Donald P. Fusilli, Jr. 40,547(5)(7) * 8,385(6) * Roy V. Gavert, Jr. 4,500(7) * None -- John C. Hayward 39,713(5)(7) * 10,167(6) *
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COMMON STOCK SERIES B COMMON STOCK ----------------------------- --------------------------- NUMBER OF NUMBER OF SHARES AND SHARES AND NATURE OF NATURE OF BENEFICIAL BENEFICIAL NAME OWNERSHIP(1) PERCENT OWNERSHIP(1) PERCENT ---- ------------ ------- ------------ ------- Charles I. Homan 95,623(4)(5)(7) 1.3 21,692(4)(6) 1.6 Thomas D. Larson 6,425(4)(7) * None -- John E. Murray, Jr. 3,000(7) * None -- Richard L. Shaw 12,705(7) * None -- Konrad M. Weis 12,000(4)(7) * None -- J. Robert White 18,130(5)(7) * 1,614(6) -- Edward L. Wiley 48,637(5)(7) * 15,703(6) 1.2 All Directors and 339,056(4)(5)(7) 4.7 64,612(6) 4.9 Executive Officers as a group (17 persons)
- --------- *Less than 1% (1) Under regulations of the Securities and Exchange Commission, a person who has or shares voting or investment power with respect to a security is considered a beneficial owner of the security. Voting power is the power to vote or direct the voting of shares, and investment power is the power to dispose of or direct the disposition of shares. Unless otherwise indicated in the other footnotes below, each person has sole voting power and sole investment power as to all shares listed opposite his name. The ESOP requires the trustee to vote the shares held by the trust in accordance with the instructions from the ESOP participants for all shares allocated to such participants' accounts. Allocated shares for which no such instructions are given and shares not allocated to the account of any employee are voted by the trustee in the same proportion as the votes for which participant instructions are given. In the case of a tender offer, allocated shares for which no instructions are given are not voted or tendered, and shares not allocated to the account of any employee are voted by the trustee in the same proportion as the votes for which participant instructions are given. (2) Shares held as a group by Goldman, Sachs & Co. and the Goldman Sachs Group, L.P., each of which disclaim beneficial ownership of all such shares. This information has been taken from Schedule 13G dated as of February 14, 1999 filed by Goldman, Sachs & Co. and the Goldman Sachs Group, L.P. (3) Dimensional Fund Advisors Inc. ("Dimensional"), an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Registrant Act of 1940, and serves as investment manager to certain other investment vehicles, including commingled group trusts (these investment companies and investment vehicles are the "Portfolios") according to the Schedule 13G, dated as of February 11, 1999 filed by Dimensional. In its role as investment advisor and investment manager, Dimensional possesses both voting and investment power over the securities of the Company described in the Schedule 13G that are owned by the Portfolios. Dimensional disclaims beneficial ownership of such securities. (4) Some or all of such shares are jointly owned by such person and his spouse. Voting and investment power as to such shares is shared by the nominee and his spouse. (5) Includes the number of shares of Common Stock indicated for each of the following persons or group which are allocated to their respective accounts as participants in the ESOP and as to which they are entitled to give binding voting instructions to the trustee of the ESOP: Mr. Fusilli (12,382 shares); Mr. Hayward (12,248 shares); Mr. Homan (23,648); Mr. White (6,400 shares); Mr. Wiley (18,430 shares); and directors and executive officers as a group (87,915 shares). ESOP holdings have been rounded to the nearest full share. (6) Includes the number of shares of Series B Common Stock indicated for each of the following persons or group which are allocated to their respective accounts as participants in the ESOP and as to which they are entitled to give binding voting instructions to the trustee of the ESOP: Mr. Fusilli (8,385 shares); Mr. Hayward (10,167 shares); Mr. Homan (20,614 shares); Mr. White (1,614 shares); Mr. Wiley 3 6 (15,703 shares); and directors and executive officers as a group (63,534 shares). ESOP holdings have been rounded to the nearest full share. (7) Includes indicated number of shares of Common Stock issuable pursuant to stock options which may be exercised within 60 days of the date of this Proxy Statement: Mr. Bontempo (2,000 shares); Mr. Copeland (3,000 shares); Mr. Fusilli (28,165 shares); Mr. Gavert (3,000 shares); Mr. Hayward (27,465); Mr. Homan (66,897 shares); Mr. Larson (2,000 shares); Mr. Murray (2,000 shares); Mr. Shaw (3,000 shares); Mr. Weis (3,000 shares); Mr. White (11,730 shares); Mr. Wiley (27,207 shares); and all directors and executive officers as a group (213,783 shares). 4 7 PROXY PROPOSAL NO. 1 ELECTION OF DIRECTORS Nine directors will be elected for a one-year term expiring on the date of the next Annual Meeting of Shareholders or until their respective successors shall have been elected and shall have qualified. Six directors are to be elected by the holders of Common Stock and Series B Common Stock voting together, and three directors are to be elected solely by the holders of Common Stock. The persons named in the enclosed proxies intend to vote for the nominees whose names appear below. Although it is expected that all such nominees will be available for election, if any of them becomes unable or is unwilling to serve at the time the election occurs, it is intended that shares represented by proxies will be voted for the election of the other nominees named and such substituted nominees, if any, as shall be designated by the Company's Board of Directors. The following table sets forth certain information regarding the nominees as of May 7, 1999. All of the nominees were elected directors by the Company's shareholders at the 1998 Annual Meeting. Except as otherwise indicated, each nominee has held the principal occupation listed or another executive position with the same entity for at least the past five years.
DIRECTOR PRINCIPAL OCCUPATION; OTHER NOMINEE SINCE DIRECTORSHIPS; AGE - ------------------------------- ---------- -------------------------------------------------- TO BE ELECTED BY HOLDERS OF COMMON STOCK AND SERIES B COMMON STOCK Robert N. Bontempo 1997 Associate Professor of International Business at Columbia University since July 1994; formerly Assistant Professor of International Business at Columbia University from July 1989 to July 1994; Fellow at the Center for Advanced Study at Stanford University, Summer 1992; formerly Personnel Research Analyst at IBM Corporate Headquarters; Age 40 Charles I. Homan 1994 President and Chief Executive Officer since October 1994; formerly Executive Vice President from January 1990 to September 1994; formerly Senior Vice President from April 1988 to December 1989; formerly President of Michael Baker, Jr., Inc. (a subsidiary) from May 1983 to September 1994; Director of Citizens Banking Company; Age 55 Thomas D. Larson 1993 Self employed (consultant); formerly Administrator, United States Federal Highway Administration until January 1992; formerly Secretary of the Pennsylvania Department of Transportation; formerly Professor of Engi- neering, The Pennsylvania State University; Age 70 Richard L. Shaw 1966 Chairman of the Board; formerly Chairman of the Board, President and Chief Executive Officer of the Company from September 1993 through September 1994; formerly President and Chief Executive Officer of the Company from April 1984 to May 1992; Director of L.B. Foster Company (manufacturing); Age 71 Konrad M. Weis 1991 Retired; formerly President and Chief Executive Officer of Bayer USA Inc. (chemicals, health care and imaging technologies); Director of PNC Equity Management Corporation, Titan Pharmaceuticals, Inc. and Dravo Corporation; Age 70 J. Robert White 1994 Executive Vice President, Chief Financial Officer and Treasurer since July 1994; formerly Assistant Director of Investor Relations for Westinghouse Electric Corporation from prior to 1990 through June 1994; formerly Adjunct Professor of Accounting and Finance at the University of Pittsburgh and Carnegie Mellon University; Age 56
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DIRECTOR PRINCIPAL OCCUPATION; OTHER NOMINEE SINCE DIRECTORSHIPS; AGE - ------------------------------- ---------- -------------------------------------------------- TO BE ELECTED SOLELY BY HOLDERS OF COMMON STOCK William J. Copeland 1983 Retired; formerly Chairman of the Board of the Company; formerly Vice Chairman of the Board of PNC Financial Corp. and Pittsburgh National Bank; Director or trustee of various investment companies affiliated with Federated Investors; Age 80 Roy V. Gavert, Jr. 1988 President and Chief Executive Officer of Kiplivit North America, Inc. (manufacturing) since July 1995; Managing Director of World Class Processing, Inc. (manufacturing); principal of the Horton Company (manufacturer of valves for household appliances); formerly Managing Director of Gavert Wennerholm & Co. (venture capital); formerly Managing Director of Eagle Capital, Inc. (investment bank and venture capital); formerly Executive Vice President, Westinghouse Electric Corporation; Age 65 John E. Murray, Jr. 1997 President and Professor of Duquesne University since July 1988; formerly University Distinguished Service Professor at University of Pittsburgh; formerly Dean of Villanova University School of Law; formerly Acting Dean and Professor at Duquesne University School of Law; Director of Federated Investors; Age 66
BOARD AND COMMITTEE MEETINGS Mr. Jack B. Hoey was a Director of the Company until his term expired on April 22, 1998, at which time he declined to seek reelection. Mr. Hoey served on the Compensation Committee and the Nominating Committee until April 22, 1998. During 1998 there were five meetings of the Company's Board of Directors. The Executive Committee of the Board of Directors, of which Messrs. Shaw, Copeland, Gavert and Homan are members, held ten meetings. The Audit Committee of the Board of Directors, of which Messrs. Gavert, Bontempo and Larson are members, held four meetings. The Compensation Committee, of which Messrs. Larson, Murray and Weis are currently members, held three meetings. The Governance Committee, of which Messrs. Bontempo, Murray and White are members, held no meetings. The Nominating Committee, of which Messrs. Copeland, Shaw and Weis are currently members, held no meetings. All directors attended at least 75% of the total number of meetings of the Board of Directors and of all committees of the Board of which they were members. The Executive Committee was established with all the powers and the right to exercise all the authority of the Board of Directors in the management of the business and affairs of the Company. The functions performed by the Audit Committee include recommending the independent accountants, reviewing with the independent accountants the plan for, and the results of, the auditing engagement, approving professional services provided by the independent accountants prior to the performance of such services, reviewing the independence of the independent accountants, and reviewing the Company's system of internal accounting controls. The Compensation Committee reviews and recommends to the Board the compensation of senior executive personnel and directors. The Governance Committee addresses corporate governance issues, including evaluation of the Board of Directors and development of criteria to select candidates to serve on the Board of Directors. The Nominating Committee interviews and recommends candidates to the Board to serve as executive officers and/or directors. 6 9 DIRECTORS AND OFFICERS COMPENSATION OF EXECUTIVE OFFICERS The following table sets forth certain information regarding compensation received by the Chief Executive Officer and the four remaining most highly compensated executive officers of the Company for the last three completed fiscal years. SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM COMPENSATION COMPENSATION -------------------- ------------ SHARES OF COMMON STOCK UNDERLYING ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) COMPENSATION(1) --------------------------- ---- ------ ----- ------------ --------------- Charles I. Homan 1998 $385,300 $ -- 58,362 $12,592 President and 1997 341,600 62,757 23,529 12,092 Chief Executive Officer 1996 319,400 54,412 12,571 11,455 Donald P. Fusilli, Jr. 1998 $201,200 $23,022 27,480 $10,000 Executive Vice President 1997 188,200 25,642 9,122 8,700 --Energy 1996 180,000 24,750 5,236 8,658 John C. Hayward 1998 $195,700 $22,569 26,738 $12,592 Executive Vice President 1997 188,200 15,643 9,122 10,578 --Transportation 1996 180,000 15,000 5,236 9,267 J. Robert White 1998 $209,100 $ -- 28,664 $10,827 Executive Vice President, 1997 192,300 31,923 9,122 8,030 Chief Financial Officer 1996 180,000 30,001 5,236 9,479 and Treasurer Edward L. Wiley 1998 $206,200 $11,068 28,161 $11,400 Executive Vice President 1997 192,300 36,314 9,122 10,075 --Civil 1996 180,000 35,776 5,236 9,351
- --------- (1) Includes matching contributions made by the Company under its 401(k) plan paid on behalf of the following individuals in 1998, 1997 and 1996, respectively: Mr. Homan, $10,000, $9,500 and $9,151; Mr. Fusilli, $10,000, $7,254 and $7,873; Mr. Hayward, $10,000, $9,012 and $7,962; Mr. White, $6,777, $5,438 and $7,860; and Mr. Wiley, $10,000, $8,802 and $8,211. Also includes group life insurance premiums paid by the Company on behalf of the following individuals in 1998, 1997 and 1996, respectively: Mr. Homan, $2,592, $2,592 and $2,304; Mr. Fusilli, $1,072, $1,446 and $785; Mr. Hayward $2,592, $1,566 and $1,305; Mr. White, $4,050, $2,592 and $1,619 and Mr. Wiley, $1,400, $1,273 and $1,140. (2) Stock options were granted February 27, 1996, February 27, 1997 and February 27, 1998, under the Company's 1995 Stock Incentive Plan. In addition the Company also granted certain performance based stock options to the executive officers on April 23, 1998, which will vest in the first quarter of 2001 if the Company achieves certain performance goals in the year 2000. 7 10 OPTIONS GRANTED IN 1998 The following table sets forth, as to the individuals named in the Summary Compensation Table, information with respect to stock options granted during 1988 under the 1995 Stock Incentive Plan. OPTIONS GRANTED IN 1998
POTENTIAL REALIZABLE VALUE AT ASSUMED % OF TOTAL ANNUAL RATES OF OPTIONS STOCK PRICE APPRECIATION NO. OF SHARES GRANTED TO EXERCISE FOR OPTION TERM(3) SUBJECT TO EMPLOYEES PRICE/ EXPIRATION ------------------------- NAME OPTIONS GRANTED IN 1998 SHARE DATE 5% 10% ---- --------------- ------- ----- ---- -- --- Charles I. Homan 18,361(1) 4.6 $ 9.5313 2/27/2008 $110,059 $278,912 40,001(2) 10.1 10.1250 4/23/2008 254,709 645,482 Donald P. Fusilli, Jr. 6,977(1) 1.8 $ 9.5313 2/27/2008 $ 41,821 $105,984 20,503(2) 5.2 10.1250 4/23/2008 130,554 330,850 John C. Hayward 6,977(1) 1.8 $ 9.5313 2/27/2008 $ 41,821 $105,984 19,761(2) 5.0 10.1250 4/23/2008 125,829 318,876 J. Robert White 7,163(1) 1.8 $ 9.5313 2/27/2008 $ 42,936 $108,809 21,501(2) 5.4 10.1250 4/23/2008 136,909 346,954 Edward L. Wiley 7,161(1) 1.8 $ 9.5313 2/27/2008 $ 42,924 $108,779 21,000(2) 5.3 10.1250 4/23/2008 133,719 338,869
- --------- (1) Options were granted pursuant to the 1995 Stock Incentive Plan and vest in four equal annual installments beginning on February 27, 1998, the date of grant. (2) Options were granted April 23, 1998, pursuant to the 1995 Stock Incentive Plan. The options become fully exercisable on April 23, 2006, but will vest in the first quarter of 2001 if certain performance goals are satisfied for the year 2000. (3) The dollar amounts under the potential realizable value columns are the result of calculations at assumed annually compounded rates of stock price appreciation over the ten-year life of the options in accordance with the proxy regulations of the Securities and Exchange Commission, and are not intended to forecast actual future appreciation, if any, of the Company's Common Stock. The actual value, if any, an executive may realize will depend on the excess of the market price of the shares over the exercise price on the date the option is exercised. The following table sets forth as to the persons named in the Summary Compensation Table information with respect to (i) the stock options exercised during 1998, (ii) the net value realized upon such exercises, (iii) the number of shares covered by unexercised stock options at December 31, 1998, and (iv) the value of such unexercised options at December 31, 1998. AGGREGATED OPTION EXERCISES IN 1998
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT ACQUIRED ON VALUE DECEMBER 31, 1998 DECEMBER 31, 1998 NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1) ---- ----------- -------- ------------------------------- ---------------------------- Charles I. Homan -- -- 53,282/68,680 $211,633/$51,986 Donald P. Fusilli, Jr. -- -- 22,832/31,606 $ 92,591/$20,578 John C. Hayward -- -- 22,132/30,864 $ 89,266/$20,578 J. Robert White 15,477 $67,525 6,351/32,742 $ 13,362/$20,608 Edward L. Wiley -- -- 21,828/32,241 $ 87,614/$20,608
- --------- (1) Based on the exercise price and fair market value of the Common Stock as of December 31, 1998. 8 11 COMPENSATION OF DIRECTORS Compensation for non-employee directors is as follows: Annual retainer--$15,000; Attendance at each regularly scheduled or special meeting of the Board of Directors--$1,000; Attendance at a Board of Directors committee meeting--$500; Telephonic attendance at a Board of Directors or committee meeting--$100; Additional annual retainer for chairman of the Board of Directors--$5,000; and Additional annual retainer for committee chairmen--$2,500. Notwithstanding anything to the contrary set forth in any of the Company's previous filings under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, as amended, that might incorporate future filings, including this Proxy Statement in whole or in part, the following report and the Stock Performance Graphs on page 11 shall not be incorporated by reference into any such filings. REPORT OF THE COMPENSATION COMMITTEE Introduction Decisions regarding compensation of the Company's executives generally are made by a three-member Compensation Committee of the Board. On April 22, 1998, Jack B. Hoey declined to seek reelection to the Board of Directors and accordingly, no longer serves on the Board of Directors or as Chairman of the Compensation Committee. To assist with the transition of Mr. Hoey stepping down from the Compensation Committee, Dr. Murray was appointed to the Compensation Committee on December 11, 1997, temporarily increasing the number of Compensation Committee members to four. Effective April 22, 1998, the number of Compensation Committee members returned to three with Dr. Larson succeeding Mr. Hoey as the Chairman of the Compensation Committee and with Drs. Murray and Weis serving as the remaining members of the Compensation Committee. All decisions of the Compensation Committee relating to compensation of the Company's executive officers are reviewed and approved by the full Board. Set forth below is a report submitted by Messrs. Larson, Murray and Weis in their capacity as the Board's Compensation Committee addressing the Company's compensation policies for 1998 as they affected executive officers of the Company, including Mr. Homan, the President and Chief Executive Officer, and Messrs. Fusilli, Hayward, White and Wiley, the four executive officers other than Mr. Homan who were, for 1998, the Company's most highly paid executive officers. Compensation Philosophy The Company applies a consistent philosophy toward compensation based upon the following objectives: (i) to attract and retain executive officers and other key employees of outstanding ability, and to motivate all employees to perform to the full extent of their abilities; (ii) to ensure that pay is competitive with other leading companies in the Company's industry; (iii) to reward executive officers for corporate, group and individual performance; and (iv) to ensure that total compensation to the executive officers as a group is not disproportionate when compared to the Company's total employee population. Compensation The Compensation Committee retains the services of Hewitt Associates, a compensation consulting firm, to assist the Committee in connection with performance of its duties. Hewitt Associates provides ongoing advice to the Committee with respect to the reasonableness of compensation paid to executive officers of the Company. The Company applies a compensation program consisting of base salary and annual incentive compensation. In determining Mr. Homan's salary as President and Chief Executive Officer and the remaining executive officers' base salaries for 1998, the Compensation Committee reviewed the relationship of Mr. Homan's compensation to that of other executive officers of the Company and the Company's current and projected growth and profitability performance. Incentive compensation for Mr. Homan and the other executive officers is determined based on the achievement of such predetermined corporate performance goals as profitability and earnings per share. Each such officer's annual performance is measured by reviewing contribution to overhead and profit, new work added, cash flow return on investment, human resources development and continuous improvement management goals. 9 12 The Chief Executive Officer recommends to the Compensation Committee salary adjustments for executive officers. The committee reviews these recommendations in light of the above factors and its knowledge of compensation paid to key executives at comparable companies. A final comparison is made to verify that the total percentage increase in compensation paid to the executive officers as a group is not disproportionate to the percentage increase applicable to other Company employee groups. All executive employees participate in an annual incentive program. The components of the plan are based upon corporate and individual performance. Measures of corporate performance may include, but are not limited to, one or more financial measures such as earnings per share and profitability. Individual performance is based on the performance rating received as part of the annual Performance Management Process. The Performance Management Process is a program which emphasizes performance planning (management/employee goal setting), progress reviews and management feedback to employees. Primary objectives of the program are to enhance the professional development of the individual employee and to align individual performance goals with those of the Company. The rating is based upon factors agreed to by the Chief Executive Officer and the individual executive employees. 1995 Stock Incentive Plan On December 15, 1994, the Board of Directors approved the 1995 Stock Incentive Plan (the "Option Plan"), which was approved by the shareholders at the 1995 Annual Meeting and provides long-term incentive compensation to eligible employees. The Compensation Committee retains the services of Buck Consultants to assist the Committee in evaluating the Option Plan relative to practices of other publicly-traded companies engaging in one or more lines of business comparable to those of the Company. Stock options are awarded based on the Compensation Committee's judgment concerning the position and responsibilities of the employee being considered, the nature and value of his or her services, his or her current contribution to the success of the Company, and any other factors which the Compensation Committee may deem relevant. Stock option awards tie the interests of employees to the long-term performance of the Company, and provide an effective incentive for employees to create shareholder value over the long term since the full benefit of the compensation package cannot be realized unless an appreciation in the Company's stock price occurs over a number of years. In addition to it's annual consideration of stock option awards, on April 23, 1998, the Compensation Committee awarded a one-time grant of stock options (the "Vision 2000 Options") to certain employees the vesting of which will be based upon the Company achieving earnings for the year ended December 31, 2000 (the "Fiscal Year 2000") equal to or in excess of $1.25 per share of Common Stock. The Vision 2000 Options will vest and may be exercisable immediately upon the determination of the Board of Directors, based on the audited financial results of the Company for the Fiscal Year 2000, that the Company has achieved earnings of at least $1.25 per share for the Fiscal Year 2000. The exercise price of the options granted is $10.1250, the fair market value of the Common Stock on the date of the grant. In 1998, the Compensation Committee reviewed the Option Plan, and, based on its review, recommended to the Board of Directors that the Option Plan be amended to increase by 1,000,000 the number of shares available for grants thereunder and to increase the maximum number of shares as to which options may be granted to any one employee during any calendar year from 30,000 to 100,000 shares. The Board of Directors approved the amendment on February 27, 1998 and the Shareholders adopted the amendment on April 22, 1998 at the Annual Meeting of Shareholders. The Compensation Committee believes these changes are desirable in order to ensure that there are sufficient options available under the Option Plan to continue to motivate and reward employees and to ensure that the grants are significant enough to provide meaningful inducement and reward to key employees. 1996 Nonemployee Directors' Stock Incentive Plan On February 27, 1996, the Board of Directors approved the 1996 Nonemployee Directors' Stock Incentive Plan, which was approved by the shareholders at the 1996 Annual Meeting. This plan provides long-term incentive compensation to eligible directors. Under this plan, each member of the Board of Directors who is not an employee of the Company or any of its subsidiaries is granted 500 restricted shares and an option 10 13 to purchase 1,000 shares of Common Stock on the first business day following each Annual Meeting of Shareholders. This report is submitted by the Compensation Committee of the Company's Board of Directors. Thomas D. Larson John E. Murray, Jr. Konrad M. Weis COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPANTS The members of the Compensation Committee in 1998, Thomas D. Larson, John E. Murray, Jr. and M. Weis, are nonemployee directors. During 1998, no executive officer of the Company served on a compensation committee (or other board committee performing equivalent functions) or on the board of directors of any entity (other than the Company's Board of Directors) related to any member of the Company's Board of Directors. STOCK PERFORMANCE GRAPH The line graph below compares, for the five-year period commencing December 31, 1993, the yearly percentage change in the cumulative total shareholder return on the Company's Common Stock with the cumulative total return of the S&P 500 Index, the Russell 2000 Index and a peer group identified by the Company to best approximate the Company's diverse business groups. The peer group was selected to include publicly-traded companies engaging in one or more of the Company's lines of business: engineering, construction and operations and maintenance. The peer group consists of the following companies: Aqua Alliance, Inc. (f/k/a Air and Water Technologies Corp.), Dames & Moore Group, Granite Construction, Inc., Harding Lawson Associates Group, Inc., ICF Kaiser International Inc., Jacobs Engineering Group, Inc., Morrison Knudsen Corp., Perini Corp., Stone & Webster, Inc., STV Group, Inc., Tetra Tech, Inc., Turner Corp., URS Corp., and Roy F. Weston, Inc. The Company removed Guy F. Atkinson Company of California, from the peer group after it ceased operations during 1998. The following five year total shareholder return chart compares the Company's total shareholder return on the Company's Common Stock with that of the peer group, the S&P 500 Index and the Russell 2000 Index. COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS* AMONG MICHAEL BAKER CORPORATION, THE S&P 500 INDEX, THE RUSSELL 2000 INDEX AND A PEER GROUP
MICHAEL BAKER RUSSELL 2000 S&P 5000 PEER GROUP CORPORATION ------------ -------- ---------- ------------- '12/93' 100.00 100.00 100.00 100.00 '12/94' 98.00 101.00 80.00 34.00 '12/95' 126.00 139.00 97.00 45.00 '12/96' 147.00 171.00 96.00 58.00 '12/97' 180.00 229.00 111.00 89.00 '12/98' 179.00 294.00 152.00 89.00
* Assumes $100 invested at the close of trading on December 31, 1993 in the Company's Common Stock, the peer group, the S&P 500 Index and the Russell 2000 Index, and assumes reinvestment of dividends. 11 14 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act") requires the Company's directors and executive officers, and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission (the "Commission") initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Such persons are required by Commission regulation to furnish the Company with copies of all Section 16(a) forms which they file. The Company believes that all such filing requirements applicable to its executive officers and directors were complied with in 1998, except that a Form 5 filed by Philip A. Shucet, an officer of the Company, was deemed to be late because it inadvertently omitted certain information. In making this disclosure the Company has relied solely on written representations of its directors and executive officers and copies of the reports that they have filed with the Commission. TRANSACTIONS WITH MANAGEMENT The Company entered into an employment agreement with Richard L. Shaw (formerly President and Chief Executive Officer of the Company) in April 1988, which agreement was supplemented in March 1992, October 1994 and February 1998. At the time of his retirement as of the end of September 1994, Mr. Shaw was being compensated at an annual salary of approximately $400,000. The agreement provides for Mr. Shaw's performance of consulting services to the Company until May 31, 2000, with annual compensation equal to 20% of his salary prior to retirement. In addition, during this period, the Company will cover costs of health insurance, reimburse actual out-of-pocket expenses and maintain a life insurance policy for Mr. Shaw. This agreement also provides for a supplemental retirement benefit of $2,500 per month commencing after the expiration of such period. AUDITORS The Board of Directors of the Company has selected the independent accounting firm of PricewaterhouseCoopers LLP ("PwC") to examine the financial statements of the Company for 1999. PwC audited the financial statements of the Company for 1998. The Board of Directors expects that representatives of PwC will be present at the Annual Meeting of Shareholders and, while such representatives do not currently plan to make a statement at the Annual Meeting, they will be available to respond to appropriate questions. OTHER MATTERS The Board of Directors does not know at this time of any other or further business that may come before the Annual Meeting, but, if any such matters should hereafter become known or determined and be properly brought before such Annual Meeting for action, the proxy holders will vote upon the same according to their discretion and best judgment. The cost of soliciting proxies will be borne by the Company. In addition to solicitation by mail, in a limited number of instances, officers, directors and regular employees of the Company may, for no additional compensation, solicit proxies in person or by telephone to vote for all nominees. By Order of the Board of Directors, H. JAMES MCKNIGHT Secretary June 1, 1999 12 15 ANNUAL MEETING OF STOCKHOLDERS OF MICHAEL BAKER CORPORATION July 1, 1999 TO VOTE BY MAIL - --------------- Please date, sign and mail your proxy card in the envelope provided as soon as possible. TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY) - -------------------------------------------- Please call toll-free 1-800-PROXIES and follow the instructions. Have your control number and the proxy card available when you call. TO VOTE BY INTERNET - ------------------- Please access the web page at "www.voteproxy.com" and follow the on-screen instructions. Have your control number available when you access the web page. YOUR CONTROL NUMBER IS [ ] ---------------------------------------------------- NOTE: REFER TO REVERSE SIDE FOR VOTING INSTRUCTIONS DEPENDING UPON WHICH STOCK YOU OWN. ---------------------------------------------------- Please Detach and Mail In the Envelope Provided - --------------------------------------------------------------------------------------------------------------------------------- A [X] PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE. FOR WITHHELD Nominees: State 1 - Common Only State 2 - Series B Common Only 1. ELECTION OF [ ] [ ] --------------------- ------------------------------ DIRECTORS Robert N. Bontempo Robert N. Bontempo Charles I. Homan Charles I. Homan (INSTRUCTION: To withhold authority to vote for Thomas D. Larson Thomas D. Larson any individual nominees(s), write the name of Richard L. Shaw Richard L. Shaw each nominee(s) in the space below. Konrad M. Weis Konrad M. Weis J. Robert White J. Robert White William J. Copeland ----------------------------------------------- Ray V. Gavert. Jr. John E. Murray, Jr. PLEASE MARK, SIGN BELOW, DATE, AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE Signature_______________________________________ Signature if held jointly______________________________ DATED: ________________ NOTE: Please sign exactly as name appears above. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation please sign in full corporate name by president or other authorized officer. If a partnership please sign in partnership name by authorized person.
16 IF THE NAME ON YOUR PROXY CARD IS: Michael Baker Corp. Common OR Michael Baker Corp. Common ESOP YOU ARE VOTING FOR NOMINEES IN SLATE 1 ONLY IF THE NAME ON YOUR PROXY CARD IS: Michael Baker Corp. Ser B Common OR Michael Baker Corp. Ser B Common ESOP YOU ARE VOTING FOR NOMINEES IN SLATE 2 ONLY PROXY MICHAEL BAKER CORPORATION THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS - -------------------------------------------------------------------------------- The undersigned stockholder hereby appoints Richard L. Shaw and Charles I. Homan and each or any one of them, with full power of substitution, as Proxies to represent and to vote as designated on the reverse, all the shares of stock of Michael Baker Corp. (the "Company"), held of record by the undersigned on May 7, 1999, at the Annual Meeting of the Stockholders (the "Annual Meeting") to be held on July 1, 1999, or any adjournments thereof. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH PROPOSAL. (TO BE SIGNED ON THE REVERSE SIDE) -----END PRIVACY-ENHANCED MESSAGE-----