HARDING ASSOCIATES, INC.
September 25, 1995
To the Stockholders of
Harding Associates, Inc.
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Harding Associates, Inc., which will be held on Wednesday, November 1, 1995
at 10:00 A.M. at the offices of Harding Lawson Associates, Inc., 105 Digital
Drive, Novato, California. Official Notice of the Annual Meeting, a Proxy
Statement, a Proxy Card, and Harding Associates, Inc.'s 1995 Annual Report
accompany this letter.
Whether or not you can be present at the meeting, please mark, date,
sign, and return the proxy in the enclosed envelope so that your shares may be
represented.
Sincerely,
Richard D. Puntillo
Chairman of the Board
<PAGE>
HARDING ASSOCIATES, INC.
7655 REDWOOD BOULEVARD
NOVATO, CALIFORNIA 94945
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, NOVEMBER 1, 1995
10:00 A.M.
To the Stockholders of
Harding Associates, Inc.:
The Annual Meeting of Stockholders (the "Meeting") of Harding
Associates, Inc., a Delaware corporation (the "Company"), will be held at the
offices of Harding Lawson Associates, Inc., 105 Digital Drive, Novato,
California, on Wednesday, November 1, 1995, at 10:00 A.M., for the following
purposes:
1. To elect Richard P. Puntillo as the sole Class II director to
hold office until the 1998 Annual Meeting or until his
successor has been duly elected and qualified;
2. To approve an amendment to the Company's Restated Certificate
of Incorporation to change the name of the Company from
Harding Associates, Inc. to Harding Lawson Associates Group,
Inc.
3. To approve the 1995 Executive Stock Incentive Plan.
4. To approve an amendment to the 1991 Employee Stock Purchase
Plan to increase the number of shares authorized thereunder
from 150,000 to 250,000 shares.
5. To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors; and
6. To transact such other business as may properly come before
the Meeting or any adjournment or postponement thereof.
Article II, Section 1 of the Bylaws of the Company currently provides
for the nomination of directors in the following manner:
Nomination for the election of directors may be made by the
Board of Directors or a committee appointed by the Board of Directors
authorized to make such nominations, or by any stockholder entitled to
vote in the election of Directors generally. However, stockholders may
nominate one or more persons for election as Directors at a meeting
only if written notice of such stockholders' intent to make such
nomination or nominations has been given, either by personal delivery
or by United States mail, postage prepaid, to the Secretary of the
Corporation not later than (i) with respect to an election to be held
at an annual meeting of stockholders, sixty (60) days in advance of
such meeting, and (ii) with respect to an election to be held at a
special meeting of stockholders for the election of Directors, the
close of business on the tenth day following the date on which notice
of such meeting is first given to stockholders. Each such notice shall
set forth: (a) the name and address of the stockholder who intends to
make the nomination and of the person or persons to be nominated; (b) a
representation that the stockholder is a holder of record of stock of
the Corporation entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or
<PAGE>
understandings between the stockholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d) such
other information regarding each nominee proposed by such stockholder
as would be required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board of
Directors; and (e) the consent of each nominee to serve as a Director
of the Corporation if so elected. The chairman of the meeting may
refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
The Board of Directors has fixed the close of business on September 6,
1995 as the record date for the determination of stockholders entitled to notice
of and to vote at the Meeting or any adjournment or postponement thereof.
By Order of the Board of Directors
Patricia A. England
Secretary
Novato, California
September 25, 1995
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE MARK, DATE,
SIGN, AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES. YOUR PROXY MAY BE REVOKED BY YOU IN
THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME BEFORE IT
HAS BEEN VOTED AT THE MEETING.
<PAGE>
HARDING ASSOCIATES, INC.
7655 REDWOOD BOULEVARD
NOVATO, CALIFORNIA 94945
(415) 892-0821
----------------------------------
PROXY STATEMENT
INFORMATION CONCERNING THE SOLICITATION
The enclosed Proxy is solicited by the Board of Directors on behalf of
Harding Associates, Inc., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held at the offices of Harding Lawson
Associates, Inc., 105 Digital Drive, Novato, California, at 10:00 A.M. on
Wednesday, November 1, 1995 and at any postponement or adjournment thereof (the
"Meeting"). Only stockholders of record on September 6, 1995 (the "Record Date")
will be entitled to vote at the Meeting. Stockholders are entitled to cast one
vote for each share held. There is no cumulative voting. At the close of
business on August 25, 1995, the Company had outstanding 4,844,554 shares of its
$.01 par value Common Stock (the "Common Stock").
This Proxy Statement and form of proxy was first sent to stockholders
on approximately September 27, 1995.
The presence in person or by proxy of a majority of the shares entitled
to vote is necessary to constitute a quorum at the Meeting. Abstentions and
broker nonvotes will be counted for purposes of determining the presence or
absence of a quorum. Broker nonvotes occur when shares held by brokers which are
present in person or represented by proxy, are voted on some matters but not on
other matters, because under applicable stock exchange rules, the broker has no
discretionary authority to vote on such other matters in the absence of
instructions from the beneficial owners of the shares. The treatment of
abstentions and broker nonvotes on the required vote on each proposal to be
presented at the Meeting is discussed under each proposal, where applicable.
When a proxy in the form enclosed with this Proxy Statement is returned
properly executed, the shares represented thereby will be voted at the Meeting
in accordance with the directions indicated thereon or, if no direction is
indicated, the shares will be voted FOR Mr. Puntillo as the nominee for Class II
director set forth in the Notice of Annual Meeting, FOR Proposal No. 2 to amend
the Certificate of Incorporation changing the name of the Company from Harding
Associates, Inc. to Harding Lawson Associates Group, Inc., FOR Proposal No. 3 to
approve the 1995 Executive Stock Incentive Plan, FOR Proposal No. 4 to approve
an amendment to the 1991 Employee Stock Purchase Plan increasing the number of
shares issuable thereunder from 150,000 to 250,000 shares, FOR Proposal No. 5 to
ratify the appointment of Ernst & Young LLP as the Company's independent
auditors, and according to the discretion of the proxy holders on any other
matters that properly come before the Meeting.
Any person giving a proxy in the form accompanying this Proxy Statement
has the power to revoke or suspend it prior to its exercise. It is revocable
prior to the Meeting by an instrument revoking it, or by a duly executed proxy
bearing a later date, delivered to the Secretary of the Company. It is also
revoked if the stockholder is present at the Meeting and votes in person.
The Company will bear the entire cost of preparing, assembling,
printing, and mailing the proxy materials furnished by the Board of Directors to
stockholders. Copies of proxy materials will be furnished to brokerage houses,
fiduciaries, and custodians, to be forwarded to the beneficial owners of the
Common Stock. In addition to the solicitation of proxies by use of the mail,
some of the officers,
1
<PAGE>
directors, and regular employees of the Company may (without additional
compensation) solicit proxies by telephone or personal interview, the costs of
which will be borne by the Company.
A copy of the Annual Report of the Company for the fiscal year ended
May 31, 1995, including audited financial statements, is enclosed. THE COMPANY'S
1995 ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K
WITHOUT EXHIBITS MAY ALSO BE OBTAINED WITHOUT COST BY WRITING TO MS. PATRICIA A.
ENGLAND, VICE PRESIDENT - INVESTOR RELATIONS, HARDING ASSOCIATES, INC., 7655
REDWOOD BOULEVARD, NOVATO, CALIFORNIA 94945.
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
On August 22, 1995 the Board of Directors approved a reduction in the
authorized number of directors from six to five after accepting the resignation
of Tamara L. Williams who had been a Class II director since 1993 and whose term
was due to expire on the date of this Meeting.
The Company's Board of Directors is divided into three classes,
pursuant to the terms of the Company's Certificate of Incorporation and Bylaws.
Currently the authorized number of directors for Class I is two (2), Class II is
one (1), and Class III is two (2). The term of each class is three years, with
the different classes staggered so that the term of one class expires each year.
The terms of the Class I directors expire in 1997 and each third year
thereafter, those of Class II directors expire in 1995 and each third year
thereafter, and those of Class III directors expire in 1996 and each third year
thereafter. Accordingly, it is the Class II director who is to be elected at the
Annual Meeting. The Class II director so elected will hold office until the 1998
Annual Meeting of Stockholders and until his successor is elected and qualified.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy and entitled to vote on the election of
directors.
The Board of Directors has nominated Richard D. Puntillo as a Class II
director. Mr. Puntillo is the incumbent Class II director and Chairman of the
Board. He has consented to be named as a nominee and to serve as a director if
elected. All proxies will be voted for the election of Mr. Puntillo unless
authority to vote for him is withheld. If Mr. Puntillo should unexpectedly
decline or be unable to act as a director, the proxies may be voted for a
substitute nominee to be designated by the Board of Directors. The Board of
Directors has no reason to believe that the nominee will become unavailable to
serve and has no present intention to nominate a person in addition to or in
lieu of Mr. Puntillo.
<TABLE>
Set forth below is certain information regarding Mr. Puntillo and the
continuing directors:
<CAPTION>
Name Age Positions Held with Company Director Since
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nominee for Election as Class II Director
Richard D. Puntillo 51 Chairman 1989
Continuing Directors
Richard S. Harding (Class III) 72 Chairman Emeritus 1959
Rear Admiral Stuart F. Platt (Ret.) 61 Director 1988
(Class I)
Donald L. Schreuder (Class III) 52 President, Chief Executive Officer, and 1975
Director
Barton W. Shackelford (Class I) 74 Director 1988
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of the Common Stock of the Company as of August 25, 1995 by (i) all
persons to the knowledge of the Company who beneficially own five percent or
more of the outstanding shares of the Common Stock, (ii) each
3
<PAGE>
<TABLE>
director of the Company (including the current nominee), (iii) the Chief
Executive Officer and the four other most highly compensated executive officers
of the Company, and (iv) all the Company's directors and executive officers as a
group. There are no family relationships among the directors and/or executive
officers of the Company. To the Company's knowledge, each person has sole
investment and voting powers with respect to the shares shown as beneficially
owned, except as otherwise indicated. The Common Stock of the Company is the
only class of equity securities of the Company outstanding.
<CAPTION>
Amount and Nature of
Beneficial Ownership
--------------- ----------------
Number of Percent of
Name and Address of Beneficial Owners Shares Class (1)
----------------------------------------------------------------------------------- --------------- ----------------
<S> <C> <C>
J. P. Morgan & Co., Inc. (2)............................................... 480,000 9.9
FMR Corp. (3).............................................................. 470,500 9.7
Fiduciary Management Inc. (4).............................................. 367,815 7.6
The TCW Group, Inc. (5).................................................... 303,800 6.3
Dimensional Fund Advisors (6).............................................. 296,750 6.1
The Capital Group Companies, Inc. (7)...................................... 235,000 4.8
Directors and Named Executives
------------------------------
Donald L. Schreuder (8) (9) ............................................... 136,668 2.8
Claude Corvino (8) (9)..................................................... 51,355 1.1
Eric G. Lappala (8) (9) (10) .............................................. 43,349 0.9
Richard S. Harding (8)..................................................... 43,222 0.9
Victor R. Johnson, Jr. (8) (9)............................................. 33,591 0.7
Arthur C. Riese (8) (9).................................................... 30,764 0.6
Richard D. Puntillo (nominee) (8).......................................... 7,500 0.2
Stuart F. Platt (8)........................................................ 6,500 0.1
Barton W. Shackelford (8).................................................. 4,000 0.1
Richard P. Prezio (11).....................................................
All directors and executive officers as a group (12 persons) (12).......... 741,956 14.6
<FN>
(1) Percentages of ownership have been calculated on outstanding shares as
of August 25, 1995 plus options exercisable on or before October 24,
1995.
(2) As reported in a Schedule 13G as of December 31, 1994 filed by J. P.
Morgan & Co., Inc., whose business address is 60 Wall Street, New York,
NY 10260. J. P. Morgan is the parent company of Morgan Guaranty Trust
Company of New York and J. P. Morgan Investment Management Inc. J. P.
Morgan & Co., Inc. reports sole voting power as to 418,600 shares.
Subsequent information from other sources indicates a total holding as
of June 30, 1995 of 252,800 shares or 5.2%.
(3) As reported in a Schedule 13G as of January 31, 1995 jointly filed by
FMR Corp. and Edward C. Johnson 3d, Chairman of FMR Corp., whose
business address is 82 Devonshire Street, Boston, MA 02109. Fidelity
Management & Research Company ("Fidelity"), a wholly owned subsidiary
of FMR Corp. that acts as investment advisor to several investment
companies (the "Funds"), claims beneficial ownership of 343,100 shares
or 7.1%. The ownership of one such fund, Fidelity Low-Priced Stock
Fund, amounted to 274,600 shares or 5.7%. Edward C. Johnson 3d, FMR
Corp., through its control of Fidelity, and the Funds each has sole
power to dispose of the 343,100 shares owned by the Funds. Neither FMR
Corp. nor Edward C. Johnson 3rd has the sole power to vote or direct
the voting of the shares owned directly by the Fidelity Funds. Fidelity
Management Trust Company, a wholly owned subsidiary of FMR Corp. is the
beneficial owner of 127,400 shares or 2.6%. Edward C. Johnson 3rd and
FMR Corp., through its control of Fidelity Management Trust Company,
has sole voting and dispositive power over 127,400 shares.
</FN>
</TABLE>
4
<PAGE>
(4) As reported in a Schedule 13G as of December 31, 1994 filed by
Fiduciary Management, Inc., whose business address is 225 East Mason
Street, Milwaukee, WI 53202. Fiduciary Management, Inc. reports that it
has sole voting power as to none of the shares, sole dispositive power
as to 274,815 of the shares, and shared dispositive power as to 93,000
shares. Subsequent information from other sources indicates a total
holding as of June 30, 1995 of 362,605 shares or 7.5%.
(5) As reported in a Schedule 13G as of December 31, 1994 filed by The TCW
Group, Inc., whose business address is 865 Figueroa Street, Los
Angeles, CA 90017. The TCW Group, Inc. is the parent company of Trust
Company of the West, TCW Asset Management Company, and TCW Funds
Management, Inc.
(6) As reported in a Schedule 13G as of December 31, 1994 filed by
Dimensional Fund Advisors, Inc., whose business address is 1299 Ocean
Avenue, 11th Floor, Santa Monica, CA 90401. Dimensional Fund Advisors,
Inc. also holds shares of the Company in a series of DFA Investment
Trust Company portfolios. Dimensional Fund Advisors, Inc. reports sole
voting power as to 204,850 shares.
(7) As reported in a Schedule 13G as of December 31, 1994 filed by The
Capital Group Companies, Inc., whose business address is 333 South Hope
Street, Los Angeles, CA 90071. The Capital Group Companies, Inc. is the
parent company of numerous subsidiaries including Capital Research and
Management Company and reports sole voting power as to none of the
shares.
(8) Includes shares subject to options that are exercisable on or before
October 24, 1995 in the amounts of 45,563; 30,750; 37,688; 13,500;
27,563; 29,250; 3,000; 4,000; and 4,000 for Schreuder, Corvino,
Lappala, Harding, Johnson, Riese, Puntillo, Platt, and Shackelford,
respectively.
(9) Includes shares held in trust in a company retirement savings plan in
the amounts of 3,628; 1,635; 2,721; 3,158; and 448 for Schreuder,
Corvino, Lappala, Johnson, and Riese, respectively.
(10) Does not include 1,814 shares beneficially owned by his spouse, Roberta
Jones. Mr. Lappala disclaims beneficial ownership of Ms. Jones' shares.
(11) Mr. Prezio resigned his position as President, Chief Executive Officer,
and Director of the Company on June 17, 1994, and terminated his
employment with the Company on July 21, 1994.
(12) Includes 225,314 shares subject to options that are exercisable on or
before October 24, 1995 and 341,380 shares held in trust in a company
retirement savings plan, for which the directors exercise voting power.
THE DIRECTORS AND EXECUTIVE OFFICERS
The following information regarding the executive officers and
directors of the Company has been furnished to the Company by the respectively
named individuals:
John G. Catts, Ph.D., 41, is Chief Technical Officer of the Company and
a Vice President of Harding Lawson Associates, a subsidiary of the Company. Dr.
Catts was employed by the Company from 1983 until 1991 and rejoined the firm in
1992. From 1991 to 1992, Dr. Catts was with Kennecott Corporation as Vice
President - Environmental Affairs.
Claude Corvino, 43, joined the Company in 1984 and became a Vice
President in 1988. Mr. Corvino currently manages the Company's Western Region
which includes offices in California, Nevada, Oregon, Washington and Alaska.
Prior to assuming these responsibilities, Mr. Corvino co-developed the Company's
operations on the East Coast and managed the Northeastern Region until 1992.
Richard S. Harding, P.E., a Class III director, was the Chairman of the
Board of Directors from the Company's incorporation in 1959 until August 1991,
when he became Chairman Emeritus. He is the founder of the Company and he served
as President and Chief Executive Officer from 1959 to March 1988.
5
<PAGE>
Victor R. Johnson, Jr., P.E., 51, joined the Company in 1980 and became
a Vice President in 1983. He currently manages the Company's corporate
development/acquisition activities. Prior to assuming his current
responsibilities, Mr. Johnson managed the Company's corporate marketing
programs.
Eric G. Lappala, 49, joined the Company in 1983 and became a Vice
President in 1986. He currently leads the Company's Strategic Environmental
Management Practice with large industrial and commercial clients. Prior to
assuming his current responsibilities, Mr. Lappala led the Company's Federal
Programs group for three years, co-developed the Company's operations on the
East Coast, and provided business development and technical expertise for the
Company's environmental consulting practice.
Rear Admiral Stuart F. Platt (USN Retired), a Class I director, is
currently President of Precision Echo, Inc., a company designing and
manufacturing data recording systems. Prior to this, he was founding principal
of both Stuart Platt and Partners, a consulting company, and FPBSM Industries,
Inc., the holding company of Sigma Power, Inc. and Axel Electronics, Inc.,
defense electronics and power supply manufacturers. Earlier, he served as
President of Foundation Health Corporation's Government Division from 1988 to
1990. He was a Rear Admiral with the U.S. Navy from 1979 to 1987 and Competitor
Advocate General of the Navy from 1983 to 1986. Adm. Platt currently serves on
the boards of Diagnostic Retrieval Systems Inc., a publicly traded company, and
SPD Technologies, Inc.
Richard D. Puntillo, the current nominee for election as a Class II
director, was elected Chairman of the Board on June 17, 1994. He is a finance
professor at the University of San Francisco School of Business. He has been an
independent investment banker since 1985 and was Executive Vice President and
Chief Financial Officer of Sutro & Co., Inc. from 1982 to 1984. Prior to that
Mr. Puntillo was Vice Chairman and Chief Operating Officer for Redwood Bank, San
Francisco, from 1969 to 1980. He currently serves on the board of Surety Bank.
Arthur C. Riese, Ph.D., 40, joined the Company in 1987 and became a
Vice President in 1989. Dr. Riese currently manages the Company's Central Region
which includes offices in Colorado, New Mexico, Arizona, and Texas.
Donald L. Schreuder, P.E., a Class III director, joined the Company in
1965, became a Vice President in 1976 and Executive Vice President and Chief
Operations Officer in early 1992. Mr. Schreuder was named President and Chief
Executive Officer by the Board of Directors on June 17, 1994.
Barton W. Shackelford, a Class I director, is a retired past President
of Pacific Gas & Electric Company, a San Francisco-based utility company. He
held that office between 1979 and 1985. He served on the board of California
Energy Company, Inc., a publicly traded company, until May of 1995.
Gregory A. Thornton, 42, joined the Company in 1990 as Controller. He
became a Vice President in 1992 and Chief Financial Officer and Treasurer in
1994. Prior to joining the Company, Mr. Thornton was Controller and Treasurer
for URS Corporation from 1988 to 1990.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has established the following
standing committees, with membership as noted:
Audit Committee: The Audit Committee, which during fiscal 1995 met
twice, consists of Adm. Stuart F. Platt (Chairman), Richard D. Puntillo, and
Barton W. Shackelford. Its functions include the review of internal controls of
the Company and sufficiency of financial reporting, and legal and
6
<PAGE>
accounting compliance generally. In connection with these reviews, the Committee
meets with appropriate Company financial personnel. The Committee recommends to
the Board for its approval the engagement of the independent certified
accountants to serve as auditors for the following year in examining the
accounts of the Company. The Committee meets separately with the Company's
independent auditors, and the auditors have free access to the Committee at any
time.
Compensation Committee: The Compensation Committee, which during fiscal
1994 met four times, consists of Barton W. Shackelford (Chairman), Richard D.
Puntillo, and Adm. Stuart F. Platt. Its functions include the review and
approval of compensation levels for the Chief Executive Officer and the
Company's senior officers, administration of the Company's plans and policies
relating to executive compensation, and administration of the Company's stock
option plans.
The Board of Directors does not have a standing nominating committee.
The full Board of Directors considers and approves nominations for election of
directors. Stockholders may nominate candidates for election to the Board in
accordance with the provisions of the Company's Bylaws which are described in
the notice of meeting.
The Board of Directors of the Company formally met five times during
the 1995 fiscal year. During the respective periods in which they served, all
directors attended at least 75% of the meetings of the Board of Directors and of
the committees on which they served.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who beneficially own more than ten
percent of Company's Common Stock to file reports of their initial ownership of
the Company's Common Stock and subsequent changes in such ownership with the
Securities and Exchange Commission (the "SEC") within prescribed time periods.
Officers, directors and greater than ten percent shareholders are required by
SEC regulations to furnish the Company copies of all Section 16(a) forms filed.
Based solely on review of copies of SEC Forms 3, 4, and 5, and any
amendments to such forms furnished to the Company, or written representations
that no Forms 5 were required, the Company believes that with respect to the
Company's most recent fiscal year all Section 16(a) filing obligations were met
on a timely basis.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table provides certain summary information concerning the
compensation paid or accrued by the Company and its subsidiaries to or on behalf
of the Company's Chief Executive Officer, former Chief Executive Officer, and
each of the four other most highly compensated executive officers of the Company
whose salary and bonus for the year ended May 31, 1995 exceeded $100,000
(hereafter referred to as the named executive officers) for fiscal years ended
May 31, 1993, 1994, and 1995:
7
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------------------- -----------------------------------
Awards Payouts
------------------------ ----------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Fiscal Salary Bonus Compensation Award(s) Options/ Payouts Compensation
Principal Position Year ($) (1) ($) ($) ($) SARs (#) ($) ($)
----------------------- ------- ------------- -------- ----------- ------------ ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald L. Schreuder 1995 210,385 75,000 N/A N/A 10,000 N/A 1,005 (3)
President and CEO (2) 1994 164,308 20,000 N/A N/A 14,000 N/A 651 (3)
1993 162,000 0 N/A N/A 0 N/A 1,008 (3)
Claude Corvino 1995 134,039 55,000 N/A N/A 6,000 N/A 1,005 (3)
Senior Vice President 1994 131,539 20,000 N/A N/A 10,000 N/A 651 (3)
1993 110,000 0 N/A N/A 0 N/A 1,008 (3)
Arthur C. Riese 1995 135,154 52,000 N/A N/A 6,000 N/A 1,005 (3)
Senior Vice President 1994 132,577 20,000 N/A N/A 13,000 N/A 651 (3)
1993 125,000 0 N/A N/A 0 N/A 1,008 (3)
Eric G. Lappala 1995 146,872 37,000 N/A N/A 6,000 N/A 1,005 (3)
Senior Vice President 1994 144,846 14,000 N/A N/A 8,000 N/A 651 (3)
1993 143,000 0 N/A N/A 0 N/A 1,008 (3)
Victor R. Johnson, Jr. 1995 151,385 35,000 N/A N/A 6,000 N/A 1,005 (3)
Senior Vice President 1994 147,846 14,000 N/A N/A 6,000 N/A 651 (3)
1993 146,000 0 N/A N/A 0 N/A 1,008 (3)
Richard P. Prezio 1995 72,146 (5) 0 N/A N/A 0 N/A 352,500 (6)
Former CEO (4) 1994 229,615 0 N/A N/A 16,000 N/A 651 (3)
1993 225,000 0 N/A N/A 0 N/A 1,008 (3)
<FN>
(1) Bonuses are based on service during the fiscal year although paid
during the first quarter following the end of the fiscal year.
(2) Mr. Schreuder was named President and Chief Executive Officer on June
17, 1994.
(3) Represents matching contributions by the Company for the named
executive officers under the Company's 401(k) plan, paid in Common
Stock of the Company and valued at fair market value on the
contribution date.
(4) Mr. Prezio resigned his positions as President, Chief Executive
Officer, and Director on June 17, 1994 and terminated his employment
with the Company on July 21, 1994.
(5) Includes the payment of $35,992 of accrued Personal Time Off at
termination.
(6) Represents the total amount of severance payments payable to Mr. Prezio
pursuant to his termination agreement with the Company which was
accrued in fiscal year 1994. The severance compensation is payable over
an 18 month period ending January 1996. The amount actually paid in
fiscal year 1995 was $235,000.
</FN>
</TABLE>
8
<PAGE>
<TABLE>
The following table provides information related to grants of stock
options to the named executive officers to purchase the Company's Common Stock
pursuant to the Company's 1988 Stock Option and Restricted Stock Option Plan
(the "Plan").
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term (1)
-------------------------------- --------------------------
Number of % of Total
Securities Options Exercise
Underlying Granted to Price per Expiration
Options Granted Employees in Share Date 5% 10%
(2) Fiscal 1995
------------------------- ----------------- -------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Schreuder 10,000 6.2% $5.50 07/22/04 $34,589 $87,656
Claude Corvino 6,000 3.7 5.50 07/22/04 20,754 52,594
Arthur C. Riese 6,000 3.7 5.50 07/22/04 20,754 52,594
Eric G. Lappala 6,000 3.7 5.50 07/22/04 20,754 52,594
Victor R. Johnson, Jr. 6,000 3.7 5.50 07/22/04 20,754 52,594
Richard P. Prezio (3) 0 0
<FN>
(1) The potential realizable value shown represents a hypothetical gain
that would be realized based on an assumed 5% and 10% annual compound
rate of stock price appreciation over the full ten-year term of the
option. These assumed rates of return would result in a stock price on
July 22, 2004 of $8.96 and $14.27, respectively. These assumed
realizable values are not intended to forecast possible future
appreciation of the Company's Common Stock.
(2) These options were granted at fair market value on the date of grant
and vest at 0%, 50%, 75% and 100% on the first, second, third, and
fourth anniversary of the grant date respectively.
(3) Mr. Prezio resigned his positions as President, CEO, and Director on
June 17, 1994 and terminated his employment with the Company on July
21, 1994.
</FN>
</TABLE>
9
<PAGE>
<TABLE>
The following table provides information with respect to the named
executive officers' stock option exercises during the fiscal year and
unexercised options held at the end of the fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options at
Options at Fiscal Year End(#) Fiscal Year End ($) (1)
------------------------------ -------------------------------
Shares Value
Name Acquired on Realized Exercisable Unexercisable Exercisable Unexercisable
Exercise (#) ($)
-------------------------- ------------- ------------ -------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Schreuder 0 0 38,563 25,437 10,000 5,000
Claude Corvino 0 0 25,750 17,000 5,000 3,000
Arthur C. Riese 0 0 22,750 20,750 0 3,000
Eric G. Lappala 0 0 33,688 15,312 0 3,000
Victor R. Johnson, Jr. 0 0 25,563 12,937 5,000 3,000
Richard P. Prezio (2) 2,000 10,250 0 0 0 0
<FN>
(1) On May 31, 1995, the fair market value of the Company's Common Stock
was $6.00, based on closing price on Nasdaq National Market. Values are
calculated by subtracting the exercise price from the fair market value
of the stock as of the fiscal year end.
(2) Mr. Prezio resigned his positions as President, CEO, and Director on
June 17, 1994 and terminated his employment with the Company on July
21, 1994. Pursuant to the Plan, Mr. Prezio's stock options expired 30
days from his date of termination from the Company.
</FN>
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
Employment Agreement. On June 29, 1994, the Company entered into an
employment agreement with Mr. Donald L. Schreuder, President and Chief Executive
Officer. The agreement is for a period of three years unless terminated by the
employee's death, disability, or by written mutual agreement with the Company.
The agreement provides for a base annual salary of $200,000, subject to increase
but not decrease as determined by the Board of Directors. In November 1994 the
Compensation Committee increased his annual salary to $228,000. The employment
agreement allows for participation by the employee in all Company benefit plans
and programs available to the Company's principal officers. The employee may
receive bonuses at the discretion of the Board of Directors and is also eligible
to participate in the stock option plans of the Company. The agreement provides
that if the employee's employment is terminated by the Company without cause or
by the employee in response to a material reduction in his duties or
responsibilities under the agreement, the employee would be entitled to receive,
as severance pay, an amount equal to all compensation that would have been due
him during the remainder of the agreement, or twelve (12) months compensation,
whichever is greater. Such compensation would include annual base salary, health
and life insurance benefits and benefits under other employee benefit plans
including stock options and bonuses. The agreement requires the employee to
devote his entire time and attention to the business of the Company and to
maintain the confidentiality of information proprietary to the Company. Upon any
termination of the employee's employment, the employee would be prohibited from
soliciting clients of the Company for a period of one (1) year following the
termination of the original three-year employment term, or any renewal term
thereafter, and from soliciting employees of the Company for a period of one (1)
year following the termination of employment.
Termination Arrangement. On June 30, 1994, the Company entered into a
severance agreement with Mr. Richard P. Prezio who resigned as CEO and director
on June 17, 1994. Pursuant to this agreement the Company agreed to pay Mr.
Prezio severance compensation for eighteen (18) months following his resignation
in amounts equal to his base salary on a monthly basis. The
10
<PAGE>
aggregate amount of severance compensation which the Company is obligated to pay
to Mr. Prezio during this period is $352,500. The agreement contains mutual
general releases between the Company and Mr. Prezio, a provision obligating Mr.
Prezio to maintain the confidentiality of information proprietary to the
Company, an agreement by Mr. Prezio not to solicit clients of the Company during
the one (1) year period following July 20, 1994, and an agreement by Mr. Prezio
not to solicit employees of the Company for a period of one (1) year following
his termination date. The agreement obligates the Company to indemnify Mr.
Prezio and hold Mr. Prezio harmless, to the maximum extent permitted by law,
with respect to any proceeding which may be brought against him which arises in
whole or in part by reason of his employment with the Company while performing
services on behalf of the Company.
COMPENSATION OF DIRECTORS
Each director who is not an officer or employee of the Company received
director fees of $16,750 in fiscal year 1995. Richard D. Puntillo, who has
served as Chairman of the Board since June of 1994, received an additional
$11,250. Directors who are also officers or employees of the Company receive no
fees for their services as such.
On April 19, 1994, the Board of Directors approved an amendment to the
1988 Stock Option and Restricted Stock Option Plan, which established a formula
provision by which non-employee directors of the Company would each receive a
grant of options to purchase 3,000 shares of Common Stock at fair market value
on the date of grant upon their election or re-election to a three-year term as
a director vesting in three equal installments on the first, second, and third
anniversaries of the grant. The formula also provided for an initial grant of
options to purchase 1,000 shares of Common Stock to each director for each year
or portion of a year remaining in their respective terms. Under the initial
grant, Messrs. Platt, Shackelford, and Puntillo were granted options to purchase
1,000, 1,000, and 2,000 shares, respectively, on April 19, 1994, at an exercise
price of $6.50. These options vest as to 1,000 shares on the first anniversary
of the grant and the balance, if any, vest on November 10, 1995. Upon their
re-election to a three-year term on November 2, 1994, Messrs. Platt and
Shackelford were each granted options to purchase an additional 3,000 shares of
Common Stock.
11
<PAGE>
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH
THAT APPEARS IMMEDIATELY AFTER SUCH REPORT SHALL NOT BE DEEMED TO BE SOLICITING
MATERIAL OR TO BE FILED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934 OR INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, comprised of
three independent outside directors, (the "Committee") has been empowered to set
the level of compensation for the Chief Executive Officer and other senior
executive officers, to administer the Company's plans and policies relating to
executive compensation, and to administer the Company's stock plans.
The Committee believes that executive compensation should 1) be
competitive with similar positions and levels of responsibilities in other
comparable companies, 2) align the interests of the executives with the
long-term interest of the Company's stockholders, and 3) be evaluated with a
view to motivating individual and Company performance. The total compensation
package should attract, retain, reward and motivate key executives to maximize
Company performance and enhance stockholder value.
The cash compensation of executive officers is comprised of two
elements: base salary and incentive compensation as discussed below. Incentive
compensation primarily consists of cash bonuses, if earned, and equity-based
compensation awards in the form of stock options. The Committee also uses
Company stock awards to provide a matching contribution element to the Company's
401(k) plan. It is the intention of the Committee to substitute a portion of
future cash bonuses, if earned, with Common Stock of the Company which shall be
recorded at fair market value on the books of the Company. In order to implement
this change to the incentive compensation practices of the Company, the
stockholders are being asked at the Meeting to approve the 1995 Executive Stock
Incentive Plan to establish another method for providing equity-based
compensation to executives to further tie senior executives' compensation to the
performance of the Company's stock price, which the Committee believes will
promote the long-term interests of the stockholders. The Committee is currently
working on a recommendation to the Board regarding the establishment of stock
ownership guidelines for executives of the Company.
Base Salary. Base salaries for senior executive officers are reviewed
annually by considering salaries for comparable positions and responsibility
levels at other similar companies and by evaluating individual executive
performance. This review uses published executive salary surveys and peer
company proxy information to determine if base salary adjustments are warranted
to maintain the Company's base salaries at a competitive level. During fiscal
1995, as part of the annual base salary review process, the Committee reviewed
executive compensation survey information provided by a nationally known salary
survey resource, both for companies in the same industry group (some of which
are included in the customized index that appears in the performance graph) and
companies of a similar size and geographic orientation in other industries. The
Committee set fiscal 1995 base salaries for senior officers, other than the
Chief Executive Officer, at levels in a range between 2% and 7.7% above fiscal
1994 base salaries. Although the Committee relied on the above-mentioned survey
data to determine trends in compensation for similar positions, direct matches
to position descriptions and levels of responsibility within different firms is
difficult to determine and becomes somewhat subjective.
Incentive Compensation. Senior executive officers can earn incentive
compensation awards which in the past have ranged from zero up to approximately
one-third of base salary, which subjects a considerable portion of total
potential cash compensation to risk. Incentive compensation is dependent not
only on an executive's performance, but on attainment of the Company's
performance goals established at the beginning of the fiscal year and approved
by the Board of Directors. Company performance goals relate to attainment of
certain financial goals (e.g., operating income and cash flow) and certain
non-financial goals (e.g., risk management, business and program development).
12
<PAGE>
At the beginning of fiscal 1995, the Board of Directors approved a
business plan for the Company that contained a provision for an incentive
compensation pool. The plan provided that incentive compensation would accrue
during the year based on the Company's attainment of planned financial
milestones and would be payable after the end of the fiscal year. The incentive
compensation pool was subject to increases or decreases based on the degree to
which the Company exceeded or fell short of its pre-established financial goals.
The Company exceeded its planned operating income and cash flow goals in fiscal
1995. The amount of the incentive pool was calculated based on a formula
established at the beginning of the fiscal year. Each of the four named
executive were granted incentive compensation awards in a range from 23-39% of
base salary. In additon to the achievement of the Company's performance goals,
individual awards for the four named executives were based on their achievement
of personal performance of both quantitative and qualitative goals established
at the beginning of the fiscal year.
Long-term Incentives. In administering the Company's stock option
plans, the Committee determines the amount and terms of stock option grants to
the Chief Executive Officer and other senior executive officers, in order to
align the interests of the Company's senior executives with that of its
stockholders. The stock options granted are usually incentive stock options,
exercisable at a price equal to the fair market value of the underlying stock on
the date of grant, and vest over four years in order to provide an added
incentive for key individuals to remain with the Company. During fiscal 1995 the
Committee granted incentive stock options to the four named executives covering
6,000 shares each and to Mr. Schreuder of 10,000 shares.
Additionally, the Committee approved a matching contribution, payable
in Common Stock of the Company, under the Company's 401(k) plan to the Chief
Executive Officer, the four other most highly compensated officers and all
eligible employees in the Company's 401(k) plan. The maximum number of shares
contributed as an individual award given under the plan for 1995 had a fair
market value of $1,005 on the date of contribution.
Chief Executive Officer. When Donald L. Schreuder assumed the position
of Chief Executive Officer in 1994, the Company entered into an employment
agreement with him that provides for an initial base salary of $200,000, subject
to an annual review and an upward adjustment, if warranted. In the November 1994
annual review process, Mr. Schreuder's base salary was set at $228,000, an
increase of 14%. In determining Mr. Schreuder's base salary, survey data was
reviewed comprised of information related to the Company's industry and size.
Mr. Schreuder's salary was set at a level comparable to the average based on
seven of the twelve companies used in the peer group index, which appears in the
performance graph on page 15, and approximately 2% below the average of the
survey data for companies of similar size in various industries. Mr. Schreuder
received an incentive compensation award for fiscal 1995 of 33% of his annual
base salary.
Former Chief Executive Officer. In June of 1994, Richard P. Prezio, the
Company's former Chief Executive Officer, resigned his position and terminated
employment with the Company. Concurrent with Mr. Prezio's resignation, the Board
of Directors, upon a recommendation from the Committee, entered into a severance
arrangement with Mr. Prezio to continue his salary for a period of 18 months in
return for a severance agreement and release obtained by the Company. The
severance package was accrued in fiscal 1994 and will continue for approximately
three more months.
13
<PAGE>
Compliance with Internal Revenue Code Changes. In 1993, the Internal
Revenue Service enacted Section 162(m) of the Internal Revenue Code that, in
general, precludes publicly traded corporations from taking a tax deduction in
1994 or in subsequent years for compensation in excess of $1,000,000 paid to the
chief executive officer or any of the four other highest paid officers. The
Committee is aware of the requirements of Section 162(m) and believes that the
Company's compensation payable to each of such persons is currently below, and
is expected to remain below, the limitation established by Section 162(m) and
consequently would be fully deductible by the Company.
Stuart F. Platt
Richard D. Puntillo
Barton W. Shackelford (Chairman)
14
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of the
Company's Common Stock (Nasdaq National Market: HRDG) with the NASDAQ Stock
Market-U.S. Index and an index of peer companies selected by the Company. A
group of 12 other environmental companies, providing similar services to those
provided by the Company, comprise the peer group index.(1)
<TABLE>
[GRAPHIC OMMITTED]
<CAPTION>
Cumulative Total Return
---------- ---------- ---------- ---------- ---------- ----------
5/90 5/91 5/92 5/93 5/94 5/95
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Harding Associates, Inc. 100 50 68 42 30 27
Peer Group 100 102 80 73 68 58
NASDAQ Stock Market-U.S. 100 114 133 160 169 201
<FN>
(1) Companies included in the peer group index are Dames & Moore Inc. (DM),
EA Engineering Science & Technology (EACO), Earth Technology Corp USA
(ETCO), Ecology & Environment, Inc. (EEI), EMCON Associates (MCON), GZA
Geoenvironmental Tech, Inc. (GZEA), Groundwater Technology, Inc.
(GWTI), International Technology Corp. (ITX), TRC Companies, Inc.
(TRR), Tetra Tech, Inc. (WATR), Versar, Inc. (VSR), and Weston Roy F,
Inc. (WSTNA).
(2) Assumes that $100 was invested on May 31, 1990 at the closing sales
price of the Company's Common Stock and in each index, and that all
dividends, if any, were reinvested. Returns are measured through the
last trading day of each of the Company's fiscal years. No cash
dividends have been declared on the Company's Common Stock.
</FN>
</TABLE>
15
<PAGE>
PROPOSAL NO. 2
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors has adopted a resolution to amend Article FIRST
of the Company's Restated Certificate of Incorporation (the "Certificate") to
change the name of the Company to "Harding Lawson Associates Group, Inc."
REASONS FOR AMENDMENT
Harding Associates, Inc. (originally incorporated in California in 1956
and reincorporated in Delaware in 1987) operated under the fictitious business
name of "Harding Lawson Associates" from about 1975 until a wholly owned
operating subsidiary of Harding Associates, Inc. was incorporated as Harding
Lawson Associates, Inc. Over the years, the Company's excellent reputation among
its clients, vendors, the communities in which it operates, and the industry as
a whole, has been identified with the name "Harding Lawson Associates." The
Company's stockholders and the general public recognize the name "Harding
Associates, Inc." To eliminate confusion between the name generally recognized
by industry insiders and the name known after the Company's initial public
offering in 1987, the Board of Directors has determined it is in the best
interests of the Company and its stockholders to change the name of the Company
to "Harding Lawson Associates Group, Inc." The Board of Directors believes that
the new name will enable the Company to obtain the benefits of the excellent
national reputation and name recognition of Harding Lawson Associates and will
encourage industry insiders and the public to identify the Company with its
nationally known operating subsidiary.
EFFECT OF AMENDMENT
Currently, Article FIRST of the Certificate states:
FIRST: The name of this Corporation is HARDING ASSOCIATES, INC.
-----
The resolution adopted by the Board of Directors would amend Article FIRST to
state:
FIRST: The name of this Corporation is HARDING LAWSON ASSOCIATES
----- GROUP, INC.
Section 242 of the Delaware General Corporation Law requires that the
amendment to the Certificate be approved by the holders of a majority of the
outstanding shares of the Common Stock. If so approved, the proposed amendment
to the Certificate will be effective upon filing with the Delaware Secretary of
State's office a certificate setting forth the amendment and certifying that it
was duly adopted by the Board of Directors and the stockholders.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the outstanding
Common Stock is required to approve the amendment to the Certificate.
Abstentions will have the effect of a vote cast against the amendment to the
Certificate. If there are any broker nonvotes with respect to this proposal,
such broker nonvotes will also have the effect of a vote cast against the
amendment to the Certificate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE `FOR' PROPOSAL NO. 2 TO AMEND
THE CERTIFICATE OF INCORPORATION TO CHANGE THE COMPANY'S NAME TO HARDING LAWSON
ASSOCIATES GROUP, INC.
16
<PAGE>
PROPOSAL NO. 3
1995 EXECUTIVE STOCK INCENTIVE PLAN
The Board of Directors has approved the 1995 Executive Stock Incentive
Plan (the "Incentive Plan") as a method to further align the interests of the
senior executives of the Company with the long term interests of the Company's
stockholders through the award of shares of Common Stock to senior executives
selected for participation in the Plan. The Compensation Committee is currently
working on a recommendation to the Board of Directors regarding the
establishment of executive stock ownership guidelines. The Board anticipates
that the establishment of these guidelines will encourage executives to retain
stock awarded under the Incentive Plan in order to achieve the stock ownership
objectives. The Incentive Plan will become effective only if the Incentive Plan
is approved by stockholders at the Meeting. Subject to such approval, the
Incentive Plan will be administered by the Compensation Committee (the
"Committee").
The Incentive Plan permits an award of stock to be made in lieu of
regular or bonus compensation or in addition thereto. The current intention of
the Committee is to award stock only in lieu of a portion of the annual cash
incentive bonus that an executive would otherwise receive, if any, under the
Company's incentive bonus program. The number of shares that would be awarded in
lieu of bonus would be determined by dividing the portion of the bonus to be
paid in the form of stock by the fair market value per share of the Common Stock
on the date the Committee approves the amount of the total bonus, if any.
An executive who participates in the Company's Nonqualified Deferred
Compensation Plan may elect to defer receipt of stock awarded under the
Incentive Plan pursuant to the terms of the Nonqualified Deferred Compensation
Plan. Any such election must be made by December 31 of the calendar year prior
to the year in which an award of stock under the Incentive Plan, if any, is
made. Any stock deferred by an executive will be issued by the Company and held
by the trustees of a "rabbi trust," which has been established by the Company in
connection with the Nonqualified Deferred Compensation Plan. Deferred stock held
by such trust will be voted by the trustees at the direction of the executives
for whose benefit the stock is held.
Approximately 35 executives would be eligible for participation in the
Incentive Plan. No director of the Company who is not also an executive would be
eligible for an award under the Incentive Plan. No awards under the Incentive
Plan have been made to any of the named executive officers or to any other
executive of the Company.
MATERIAL FEATURES OF THE PLAN
The material features of the plan are included in the full text of of
the Incentive Plan set forth below:
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
17
<PAGE>
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.
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.
18
<PAGE>
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.
REQUIRED VOTE
To be effective the Incentive Plan must be approved by the affimative
votes of the holders of a majority of the shares of Common Stock present in
person or represented by proxy and entitled to vote at the Meeting. Abstentions
will have the effect of a vote cast against the Incentive Plan. If there are any
broker nonvotes with respect to the Incentive Plan, such broker nonvotes will
not be counted as shares entitled to vote on the Incentive Plan and will have no
direct effect on the approval of the Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE `FOR' PROPOSAL NO. 3 TO
APPROVE THE 1995 EXECUTIVE STOCK INCENTIVE PLAN.
19
<PAGE>
PROPOSAL NO. 4
AMENDMENT TO THE 1991 EMPLOYEE STOCK PURCHASE PLAN
GENERAL
On August 15, 1991, the Board of Directors adopted the 1991 Employee
Stock Purchase Plan (the "Purchase Plan") under which employees of the Company
and participating subsidiaries could purchase Common Stock through payroll
deductions. The Company's stockholders approved the Purchase Plan on November 5,
1991. The Purchase Plan originally reserved 150,000 shares of Common Stock for
issuance, of which all but 568 shares have been issued.
On August 22, 1995, the Company's Board of Directors approved an
amendment to the Purchase Plan to increase the aggregate number of shares of
Common Stock issuable under the Purchase Plan from 150,000 shares to 250,000
shares of Common Stock (the "1995 Amendment"), subject to stockholder approval.
A full copy of the Purchase Plan, marked to show the proposed amendment, is
attached as an Appendix to this proxy statement.
PURPOSE
The purpose of the Purchase Plan is to provide employees (including
officers) of the Company and participating subsidiaries with an opportunity to
purchase Common Stock of the Company through payroll deductions. The Board of
Directors believes that such equity participation provides employees at all
levels with a greater incentive to contribute of the success of the Company.
ADMINISTRATION
The Purchase Plan is administered by the Compensation Committee of the
Board of Directors. Offering periods under the Purchase Plan have a duration of
six months and commence on the first business day on or after June 1 and
December 1 of each year, unless otherwise specified by the Board of Directors or
the Compensation Committee.
ELIGIBILITY AND PARTICIPATION
Any employee who is customarily employed for at least 20 hours per week
and more than five months per calendar year by the Company or its participating
subsidiaries is eligible to participate in the Purchase Plan during a particular
offering period, if the employee is employed by the Company on the first day of
such offering period and has been an employee continuously for the immediate
preceding six calendar month period. Employees become participants in the
Purchase Plan by delivering to the Company a subscription agreement at least 10
days prior to a new offering period. No employee who owns five percent or more
of the total combined voting power or value of all classes of stock of the
Company or its subsidiaries (including shares which may be purchased under the
Purchase Plan or pursuant to any other option) is permitted to purchase shares
under the Purchase Plan. In addition, no employee is entitled to purchase more
than $25,000 worth of shares under the Purchase Plan in any calendar year, based
on the fair market value of the shares at the time the option is granted. The
benefits to be received pursuant to the Purchase Plan by executives or employees
cannot be determined at this time.
PAYROLL DEDUCTIONS
The purchase price for the shares is accumulated by payroll deductions
over each offering period. The deductions may not be greater than ten percent of
a participant's compensation during the offering period, and must be a fixed
integral multiple of $5.00 each pay period. Compensation for purposes of the
Purchase Plan means annualized biweekly pay, including salary deferrals under a
401(k) plan. All payroll deductions of a participant are credited to his or her
account under the
20
<PAGE>
Purchase Plan and are deposited with the general funds of the Company. No
charges for administrative or other costs may be made by the Company against the
payroll deductions.
PURCHASE PRICE
The price at which shares will be sold under the Purchase Plan is the
lower of 85% of the fair market value of the Common Stock at the beginning of
the offering period or 85% of the fair market value of the Common Stock at the
end of the offering period.
NUMBER OF SHARES
At the beginning of each offering period, each participant is granted
an option to purchase a number of shares of the Company's Common Stock. Unless
the employee's participation is discontinued, his or her option will be
exercised automatically at the end of the offering period and the total of all
payroll deductions in the offering period will be divided by the option price.
If an employee's payroll deductions exceed the amount required to purchase the
shares subject to option, the excess is carried over to the next offering
period. To the extent that an employee's payroll deductions are insufficient to
purchase the full number of shares subject to option in each offering period,
the remaining portion of the option expires unexercised.
WITHDRAWAL FROM THE PURCHASE PLAN
A participant may terminate his or her interest in a given offering by
withdrawing all of the accumulated payroll deductions credited to his or her
account at any time prior to the end of the offering period. The withdrawal of
accumulated payroll deductions automatically terminates the employee's interest
in the offering. A participant's withdrawal from an offering does not prevent
him or her from participating in subsequent offerings, however.
TERMINATION OF EMPLOYMENT
Termination of a participant's employment for any reason, including
retirement, death, or failure to remain in the continuous employ of the Company
for at least 20 hours per week (except for certain leaves of absence), cancels
his or her participation in the Purchase Plan immediately. In such event, the
payroll deductions credited to the participant's account will be returned to the
participant, without interest.
CHANGES IN CAPITALIZATION
In the event of any stock dividend, stock split, merger, or other
change in capitalization of the Company, the number of shares then subject to
outstanding options and the number of authorized shares remaining available to
be sold shall be increased or decreased appropriately, with such other
adjustments as are deemed appropriate by the Board.
TRANSFERABILITY
No rights or accumulated payroll deductions of any employee under the
Purchase Plan may be transferred, pledged, assigned or otherwise disposed of in
any way (except as specified by the Purchase Plan) for any reason and any such
attempt may be treated by the Company as an election to withdraw from the
Purchase Plan.
AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors may at any time amend or terminate the Purchase
Plan, except that such termination cannot affect options previously granted nor
may any amendment make any change in an existing option which adversely affects
the rights of any participant without his or her consent.
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No amendment may be made to the Purchase Plan without prior or subsequent
approval of the stockholders, if such amendment would: materially (a) increase
the number of shares that may be issued (other than increases in shares due to
changes in capitalization), (b) modify the requirements as to eligibility, or
(c) increase the benefits accruing to participants.
TAX INFORMATION
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provision of Sections 421 and 423
of the of the Internal Revenue Code. Under these provisions, no income will be
taxable to a participant at the time of grant of the option or purchase of
shares. The Company is entitled to a deduction for amounts taxed as ordinary
income to a participant only to the extent that ordinary income must be reported
upon disposition of shares by the participant before the expiration of the
holding period described below. A participant may become liable for tax upon
disposition of the shares acquired, as summarized below.
If the shares are sold or disposed of (including by way of gift) at
least two years after the date the option was granted and at least one year from
the end of the offering period (the "date of option exercise"), the participant
will be deemed to have received, as ordinary income, the lesser of (a) the
excess of the fair market value of the shares at the time of such disposition
over the purchase price of the shares subject to the option (the "option price")
or (b) the excess of the fair market value of the shares at the time the option
was granted over an amount equal to the option price. Any further gain upon such
disposition will be treated as long-term capital gain. If the shares are sold
and the sale price is less than the option price, there is no ordinary income
and the participant has a capital loss for the difference. If the shares are
sold or disposed of before the expiration of the two-year holding period
described above, the excess of the fair market value of the shares on the date
of option exercise over the option price will be treated as ordinary income to
the participant. This excess will constitute ordinary income in the year of sale
or other disposition even if no gain is realized on the sale or a gratuitous
transfer of the shares is made. Even if the shares are sold for less than their
fair market value on the date of option exercise, the same amount of ordinary
income is attributed to a participant and a capital loss is recognized equal to
the difference between the sales price and the value of the shares on such date
of option exercise.
REQUIRED VOTE
An affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present or represented and entitled to vote on the
proposal at the Meeting is required for approval of the 1995 Amendment.
Abstentions will have the effect of a vote cast against the Purchase Plan. If
there are any broker nonvotes with respect to the Purchase Plan, such broker
nonvotes will not be counted as shares entitled to vote on the Purchase Plan and
will have no direct effect on the approval of the Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE `FOR'
PROPOSAL NO. 4 TO APPROVE THE 1995 AMENDMENT TO THE PURCHASE PLAN.
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PROPOSAL NO. 5
INDEPENDENT AUDITORS
Ernst & Young LLP has been selected by the Board of Directors as the
Company's independent auditors for the fiscal year ending May 31, 1996. The firm
of Ernst & Young LLP served the Company as independent auditors for the fiscal
year ended May 31, 1995. Ernst & Young LLP has no interest, financial or
otherwise, in the Company. The services rendered by Ernst & Young LLP during the
fiscal year 1995 were audit services and included consultation in connection
with various accounting, income tax, and general business matters. The Audit
Committee of the Board of Directors of the Company has approved tax and audit
services rendered by Ernst & Young LLP during the 1995 fiscal year.
A representative from Ernst & Young LLP will be present at the Annual
Meeting of Stockholders, and will be afforded the opportunity to make a
statement if he or she desires to do so. Moreover, he or she will be available
to respond to appropriate questions from the stockholders.
The ratification of Ernst & Young LLP as the Company's independent
auditors requires the affirmative vote of a majority of the shares of the
Company's Common Stock present or represented and entitled to vote at the
Meeting. Shares, as to which the holders thereof have abstained from voting on
this proposal, will be counted in determining the number of shares present in
person or represented by proxy and entitled to vote. Abstentions will have the
effect of a vote against ratification. Unless marked to the contrary, all
proxies received will be voted "FOR" ratification of Ernst & Young LLP as the
Company's independent auditors for the current fiscal year.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE `FOR'
PROPOSAL NO. 5 TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING MAY 31, 1996.
STOCKHOLDERS' PROPOSALS
Subject to Securities and Exchange Commission regulations, proposals of
stockholders intended to be presented at the 1996 Annual Meeting of Stockholders
must be received by the Company not later than May 24, 1996 to be included in
the 1996 Proxy Statement.
OTHER MATTERS
The Board of Directors knows of no other matters which will be brought
before the Meeting, but if such matters are properly presented to the Meeting,
proxies solicited hereby will be voted in accordance with the judgment of the
proxy holders. All shares represented by duly executed proxies will be voted at
the Meeting.
Dated: September 25, 1995
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APPENDIX A
HARDING ASSOCIATES, INC.
1991 EMPLOYEE STOCK PURCHASE PLAN
The following constitutes the provisions of the Harding Associates,
Inc. 1991 Employee Stock Purchase Plan:
1. Purpose.
The purpose of the Plan is to foster continued cordial employee
relations by providing employees of Harding Associates, Inc. and Participating
Subsidiaries with an opportunity to purchase Common Stock of Harding Associates,
Inc. through payroll deductions. It is the intention of Harding Associates, Inc.
that the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of
the Internal Revenue Code of 1986, as amended. The provisions of the Plan shall
accordingly be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code and the regulations
promulgated thereunder.
2. Definitions.
(a) "Board" means the Board of Directors of the Corporation.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee designated by the Board to administer
this Plan.
(d) "Compensation" means the annualized biweekly pay of an Employee,
including salary deferrals under a 401(k) plan.
(e) "Corporation" means Harding Associates, Inc.
(f) "Employee" means any person, including an officer, customarily employed
for at least twenty hours per week and more than five months in a
calendar year by the Corporation or its Participating Subsidiaries.
(g) "Offering Period" shall have the meaning assigned in Section 4 hereof.
(h) "Option Grant Date" means the first business day of each Offering
Period under the Plan.
(i) "Participant" shall have the meaning assigned in Section 5 hereof.
(j) "Participating Subsidiary" means Harding Lawson Associates, Inc.,
Harding Construction Services, Inc., Yates & Auberle, Ltd. and any
other subsidiary of the Corporation (determined by reference to Section
424 of the Code) designated by the Board to be a participating
subsidiary.
(k) "Plan" means the Harding Associates, Inc. 1991 Employee Stock Purchase
Plan.
(l) "Purchase Date" means the last business day of each Offering Period
under the Plan.
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3. Eligibility.
Any employee who is employed by the Corporation or its Participating
Subsidiaries on the first day of an Offering Period and who has continuously
been an Employee throughout the immediately preceding six calendar month period
shall be eligible to participate in the Plan during such Offering Period,
subject to the requirements of Section 5 hereof and the limitations imposed by
Section 423(b) of the Code.
4. Offering Period.
Absent action by the Board, there shall be two Offering Periods in each
calendar year, commencing on the first business days on or after June 1 and
December 1 and ending on the last business day of such six-month period. The
Board of Directors of the Corporation shall have the power to change the
duration of Offering Periods with respect to future offerings without
stockholder approval if such change is announced at least seven days prior to
the scheduled beginning of the first offering Period to be affected. The initial
Offering Period under this Plan shall be a six-month period commencing on
December 2, 1991 and ending on May 29, 1992.
5. Participation.
(a) An eligible Employee may become a Participant in the Plan by
completing a subscription agreement authorizing payroll deduction in the form
provided by the Corporation and filing it with the Director of Human Resources
of the Corporation at the Corporation's principal offices located at 7655
Redwood Boulevard, Novato, California 94945 at least ten days prior to a new
Offering Period.
(b) Payroll deductions for a Participant shall commence with the first
payroll following the Option Grant Date and shall end with the Purchase Date of
the offering, unless sooner terminated by the Participant as provided in Section
10 hereof, or by the Corporation.
6. Payroll Deductions.
(a) At the time a Participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each payday during the
Offering Period in an amount equal to (i) five dollars ($5.00) each pay period
or (ii) a fixed integral multiple of five dollars ($5.00) each pay period,
provided that the aggregate of such payroll deductions during the Offering
Period shall not exceed ten percent (10%) of the aggregate Compensation which he
or she would otherwise have received during said Offering Period, or such lesser
percent as the Board may set from time to time.
(b) All payroll deductions authorized by a Participant shall be
credited to his or her account under the Plan. A Participant may not make any
additional payments into such account.
(c) No interest shall accrue for the benefit of a Participant on the
payroll deductions of a Participant.
(d) A Participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof.
7. Grant of Option.
(a) On each Option Grant Date, each Participant in the Plan shall be
granted an option to purchase (at the per share option price) the number of
shares of the Corporation's Common Stock determined by dividing (i) fifteen
percent (15%) of the Participant's Compensation by (ii) eighty-five percent
(85%) of the fair market value of a share of the Corporation's Common Stock on
such Option Grant Date; but in no event shall such number be greater than the
amount permitted under
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Section 7(b) of this Plan. Fair market value of a share of the Corporation's
Common Stock shall be determined as provided in Section 7(c) herein.
(b) Exceptions. Any provisions of the Plan to the contrary
notwithstanding, no option shall be granted to an Employee which:
(i) would cause such Employee (or any other person
whose stock ownership would be attributed to such Employee pursuant to
Section 424(d) of the Code), immediately after the grant, to own shares
and/or hold outstanding options to purchase shares (under this Plan or
any other plan maintained by the Corporation or a subsidiary of the
Corporation) possessing five percent (5%) or more of the total combined
voting power or value of all classes of shares of the Corporation or of
any subsidiary of the Corporation; or
(ii) permits the Employee's rights to purchase shares
under all such "employee stock purchase plans" (as defined in Section
423 of the Code) of the Corporation and its subsidiaries to accrue
(i.e., become exercisable) at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) of the fair market value of such shares (determined
at the time such option is granted) for each calendar year in which
such option is outstanding at any time.
(c) The option price per share of such shares shall be the lower of:
(i) 85% of the fair market value of a share of the Corporation's Common Stock at
the Option Grant Date; or (ii) 85% of the fair market value of a share of the
Corporation's Common Stock at the Purchase Date. The fair market value of the
Corporation's Common Stock on said dates shall be the closing price on the
National Association of Securities Dealers Automated Quotation System for such
date, or if no sale is made on such date, the corresponding closing price on the
first preceding date on which the Corporation's Common Stock was sold.
(d) Any excess contributions remaining in the Employee's account after
the purchase of the shares on the Purchase Date will be held by the Corporation
and combined with the Employee's contributions in his or her account under the
Plan to be used to purchase shares in the next Offering Period.
8. Exercise of Option.
Unless a Participant withdraws from the Plan as provided in Section 10
hereof, and except as provided in Section 7(b) hereof, his or her option for the
purchase of shares will be exercised automatically for the number of whole
shares which the accumulated payroll deductions in his or her account could
purchase at the applicable option price on the Purchase Date. During his or her
lifetime, a Participant's option to purchase shares hereunder is exercisable
only by him or her.
9. Delivery.
As promptly as practicable after the Purchase Date of each offering,
the Corporation shall arrange the delivery to each Participant, as appropriate,
of a certificate representing the number of whole shares purchased on exercise
of his or her option.
10. Withdrawal; Termination of Employment.
(a) A Participant may withdraw all, but not less than all, of the
payroll deductions credited to his or her account under the Plan at any time
prior to the Purchase Date by giving written notice to the Corporation on a form
provided for such purpose. After receipt of his or her notice of withdrawal, all
of the Participant's payroll deductions credited to his or her account will be
paid to him or her promptly, his or her option for the current period will be
automatically cancelled, and no further payroll deductions for the purchase of
shares will be made during the Offering Period.
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(b) Upon termination of the Participant's employment for any reason,
including retirement, permanent disability or death, the payroll deductions
credited to his or her account will be returned to him or her or, in the case of
his or her death, to the person or persons entitled thereto under Section 13
hereof, and his or her option will be automatically cancelled.
(c) A Participant's withdrawal from an offering will not have any
effect upon his or her eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Corporation.
11. Stock.
(a) The maximum number of shares of the Corporation's Common Stock
which may be sold pursuant to options exercised under the Plan shall be
(150,000) 250,000 shares, subject to adjustment upon changes in capitalization
-------
of the Corporation as provided in Section 16 hereof. The shares to be sold to
Participants in the Plan may be, at the election of the Corporation, either
treasury shares or shares authorized but unissued. In addition, the officers of
the Corporation are authorized to acquire shares of the Corporation's Common
Stock in the open market for resale under this Plan. If the total number of
shares which would otherwise be subject to options granted pursuant to Section
7(a) hereof at the Option Grant Date exceeds the number of shares then available
under the Plan (after deduction of all shares for which options have been
exercised or are then outstanding), the Corporation shall make a pro rata
allocation of the shares remaining available for option grant in a uniform and
equitable manner. In such event, the Corporation may reduce the rate of payroll
deductions as appropriate.
(b) The Participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or in the name of the Participant and
another person of legal age as joint tenants, with right of survivorship.
12. Administration.
(a) The Plan shall be administered by the Board. The Board, however,
may at any time appoint a Committee and delegate to such Committee some or all
of the administrative powers possessed by the Board under the provisions of the
Plan. Members of the Committee shall serve for such term as the Board may
determine and shall be subject to removal by the Board at any time. The Board
may also at any time terminate the functions of the Committee and reassume all
powers and authority previously delegated to the Committee. Acts approved in
writing by a majority of the members of the Committee shall be valid acts of the
Committee. The Plan shall be administered in a manner that assures all
Participants the same rights and privileges.
(b) The administration, interpretation or application of the Plan by
the Board or its Committee shall be final, conclusive and binding upon all
Participants. Members of the Board or its Committee who are eligible Employees
are permitted to participate in the Plan.
(c) No member of the Board or its Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
option granted under it. In addition to such other rights of indemnification as
they may have as directors or as members of the Committee, the members of the
Committee shall be indemnified by the Corporation against the reasonable
expenses, including attorneys' fees actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan or
any option granted thereunder, and against all amounts paid by them in
settlement thereof or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters
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as to which it shall be adjudged in such action, suit or proceeding that such
Committee member is liable to the Corporation.
(d) All costs and expenses incurred in administering the Plan shall be
paid by the Corporation. The Board or the Committee, if any is appointed, may
request advice or assistance or employ such other persons as are necessary for
proper administration of the Plan.
13. Designation of Beneficiary.
(a) A Participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the Participant's account under
the Plan in the event of such Participant's death after the Purchase Date but
prior to delivery to him or her of such shares and cash. In addition, a
Participant may file a written designation of a beneficiary who is to receive
any cash from the Participant's account under the Plan in the event of such
Participant's death before the Purchase Date.
(b) Such designation of beneficiary may be changed by the Participant
at any time by written notice. In the event of the death of a Participant in the
absence of a valid designation of a beneficiary who is living at the time of
such Participant's death, the Corporation shall deliver such shares and/or cash
to the executor or administrator of the estate of the Participant.
14. Transferability.
Neither the payroll deductions credited to a Participant's account nor
any rights with regard to the exercise of an option or to receive shares under
the Plan may be assigned, transferred, pledged or otherwise disposed of in any
way (other than by will, the laws of descent and distribution, or as provided in
Section 13 hereof) by the Participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be void and without effect, except that the
Board or its Committee may treat such act as an election to withdraw funds in
accordance with Section 10 hereof.
15. Use of Funds.
All payroll deductions received or held by the Corporation under the
Plan may be used by the Corporation for any corporate purpose.
16. Changes in Capitalization.
In the event of any stock dividend, stock split, spin-off,
recapitalization, merger, consolidation, exchange of shares or the like, the
number of shares then subject to options previously granted and the number of
authorized shares remaining available to be sold shall be increased or decreased
appropriately, with such other adjustment as may be deemed necessary or
equitable by the Board.
17. Amendment.
The Board may at any time amend the Plan. No such amendment may make
any change in any option previously granted which adversely affects the rights
of any Participant without such Participant's consent, nor may an amendment be
made without prior or subsequent approval of the stockholders if such amendment
would:
(a) Materially increase the number of shares that may be issued
under the Plan (other than as provided in Section 16 above); or
(b) Materially modify the requirements as to eligibility for
participation in the Plan; or
(c) Materially increase the benefits accruing to Participants under
the Plan.
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Approval of the stockholders may be obtained by the favorable vote of a
majority of the voting stock present or represented and entitled to vote at any
regular or special meeting of stockholders, or by the written consent of a
majority of the outstanding voting stock.
18. Termination.
The Board may at any time terminate the Plan. No such termination will
affect options previously granted.
19. Notices.
All notices or other communications by a Participant to the Corporation
in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Corporation at the location, or by the
person, designated by the Corporation for the receipt thereof.
20. Government and Other Regulations.
The Plan, and the grant and exercise of the rights to purchase shares
hereunder, and the Corporation's obligation to sell and deliver shares upon the
exercise of rights to purchase shares, shall be subject to all applicable
federal, state and foreign laws, rules and regulations, and to such approvals by
any regulatory or government agency as may, in the opinion of counsel for the
Corporation, be required. Any amendments requiring stockholder approval shall
take effect only subject to such approval.
21. Effective Date of Plan.
The Plan shall become effective when adopted by the Board, but no
option to purchase granted under it shall be exercisable until the Plan has been
approved by the stockholders of the Corporation. Approval of the stockholders
may be obtained by the favorable vote of a majority of the voting stock present
or represented and entitled to vote at any regular or special meeting of
stockholders, or by the written consent of a majority of the outstanding voting
stock.
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HARDING ASSOCIATES, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
NOVEMBER 1, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of common stock acknowledges receipt of a copy
of the Notice of Annual Meeting of Stockholders of Harding Associates, Inc., a
Delaware corporation (the "Company"), and the accompanying Proxy Statement dated
September 25, 1995, and revoking any proxy heretofore given, hereby constitutes
and appoints Donald L. Schreuder, President and Chief Executive Officer, and
Richard D. Puntillo, Chairman of the Board, and each of them, with full power of
substitution, as attorneys and proxies to appear and vote all of the shares of
common stock of Harding Associates, Inc., standing in the name of the
undersigned which the undersigned could vote if personally present and acting at
the 1995 Annual Meeting of the Stockholders of Harding Associates, Inc. to be
held at 105 Digital Drive, Novato, California, on November 1, 1995 at 10:00 A.M.
local time, upon the following items as set forth in the Notice of Annual
Meeting and Proxy Statement, and according to their discretion, upon all other
matters that may be properly presented for action at the meeting or any
adjournments or postponements thereof. The undersigned may revoke this proxy at
any time prior to its exercise.
<TABLE>
THIS PROXY WHEN PROPERLY EXECUTED AND RETURNED TO THE COMPANY WILL BE VOTED AS
DIRECTED OR, IF NO DIRECTION IS INDICATED IT WILL BE VOTED "FOR" THE PROPOSALS
LISTED ON THIS CARD.
<CAPTION>
<S> <C> <C> <C>
1. Election of Director
Nominee: Richard D. Puntillo [ ] FOR [ ] WITHHELD
2. To approve an amendment to the Restated
Certificate of Incorporation to change the name of
the Company to Harding Lawson Associates Group,
Inc. [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve the Company's 1995 Executive Stock
Incentive Plan. [ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve an amendment to the 1991 Employee
Stock Purchase Plan to increase the number of
shares thereunder from 150,000 to 250,000. [ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To ratify the appointment of Ernst & Young LLP as
independent auditors of the Company. [ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
<PAGE>
[ ] Mark here if you plan to attend the meeting.
Please sign exactly as your name(s) appear(s). When signing as attorney,
executor, administrator, trustee, officer, partner, or guardian, please give
full title. If more than one trustee, all should sign.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND RETURN
THIS PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE.
Signature: Date
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Signature: Date
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