SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
HARDING LAWSON ASSOCIATES GROUP, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
HARDING LAWSON ASSOCIATES GROUP, INC.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) or Schedule 14A
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
- ----------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- ----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
- ----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ----------------------------------------------------------------------------
(5) Total fee paid:
- ----------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- ----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- ----------------------------------------------------------------------------
(3) Filing party:
- ----------------------------------------------------------------------------
(4) Date filed:
- ----------------------------------------------------------------------------
<PAGE>
HARDING LAWSON ASSOCIATES GROUP, INC.
7655 Redwood Boulevard
Novato, California 94945
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Wednesday, October 30, 1996
10:00 A.M.
To the Stockholders of
Harding Lawson Associates Group, Inc.:
The Annual Meeting of Stockholders (the "Meeting") of Harding Lawson
Associates Group, Inc., a Delaware corporation (the "Company"), will be held at
the offices of Harding Lawson Associates, Inc., 90 Digital Drive, Novato,
California, on Wednesday, October 30, 1996, at 10:00 A.M., for the following
purposes:
1. To elect Richard S. Harding and Donald L. Schreuder as Class II
directors to hold office until the 1999 Annual Meeting or until
their successors have been duly elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending May 31, 1997; and
3. 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
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
<PAGE>
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 5,
1996 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
/s/ Patricia A. England
Patricia A. England
Secretary
Novato, California
September 24, 1996
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 LAWSON ASSOCIATES GROUP, 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 Lawson Associates Group, 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., 90 Digital Drive, Novato, California, at 10:00
A.M. on Wednesday, October 30, 1996 and at any postponement or adjournment
thereof (the "Meeting"). Only stockholders of record on September 5, 1996 (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 September 5, 1996, the Company had outstanding
4,986,960 shares of its $.01 par value Common Stock (the "Common Stock").
This Proxy Statement and form of proxy were first sent to stockholders
on approximately September 24, 1996.
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 Messrs. Harding and Schreuder as the
nominees for Class III directors set forth in the Notice of Annual Meeting, FOR
Proposal No. 2 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 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, 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.
1
<PAGE>
A copy of the Annual Report of the Company for the fiscal year ended
May 31, 1996, including audited financial statements, is enclosed. THE COMPANY'S
1996 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 LAWSON ASSOCIATES GROUP,
INC., 7655 REDWOOD BOULEVARD, NOVATO, CALIFORNIA 94945.
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
General
On April 30, 1996, the Board of Directors approved a resolution to
increase the number of authorized directors from five to seven, which increase
became effective upon the acceptance of the appointment to the Board of James M.
Edgar and Donald K. Stager on May 1, 1996 and May 16, 1996, respectively.
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 three (3), Class II
is two (2), 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, the terms of Class II directors expire in 1998 and each third year
thereafter, and the terms of Class III directors expire in 1996 and each third
year thereafter. Accordingly, it is the Class III directors who are to be
elected at the Annual Meeting. The Class III directors so elected will hold
office until the 1999 Annual Meeting of Stockholders and until their successors
are 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 S. Harding and Donald L.
Schreuder as Class III directors. Messrs. Harding and Schreuder are incumbent
Class III directors. They have consented to be named as nominees and to serve as
directors if elected. All proxies will be voted for the election of Messrs.
Harding and Schreuder unless authority to vote for either or both of them is
withheld. If Messrs. Harding or Schreuder should unexpectedly decline or be
unable to act as directors, 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 nominees will become unavailable to serve and has no present
intention to nominate a person in addition to or in lieu of Messrs. Harding and
Schreuder.
<TABLE>
Set forth below is certain information regarding Messrs. Harding and
Schreuder and the continuing directors:
<CAPTION>
Director
Name Age Positions Held with Company Since
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nominees for Election as Class III Directors
Richard S. Harding 73 Chairman Emeritus and Director 1959
Donald L. Schreuder 53 President, Chief Executive Officer, and 1975
Director
Continuing Directors
Richard D. Puntillo (Class II) 52 Chairman 1989
James M. Edgar (Class II) 60 Director 1996
Rear Admiral Stuart F. Platt (Ret.) 62 Director 1988
(Class I)
Barton W. Shackelford (Class I) 75 Director 1988
Donald K. Stager (Class I) 65 Director 1996
</TABLE>
3
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
<TABLE>
The following table sets forth certain information regarding the
ownership of the Common Stock of the Company as of September 5, 1996 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 director of the
Company (including the current nominees), (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>
Heartland Advisors, Inc. (2)........................................... 562,600 11.3
FMR Corp. (3).......................................................... 431,900 8.7
Fiduciary Management Inc. (4).......................................... 352,793 7.1
The TCW Group, Inc. (5)................................................ 343,800 6.9
Dimensional Fund Advisors (6).......................................... 306,450 6.1
Alliance Global Environment Fund (7)................................... 270,000 5.4
Directors and Executive Officers
Donald L. Schreuder (nominee) (8) (9) ................................. 146,301 2.9
Claude Corvino (8) (9)................................................. 58,051 1.2
Eric G. Lappala (8) (9) (10) .......................................... 49,857 1.0
Richard S. Harding (nominee) (8)...................................... 43,222 0.9
Victor R. Johnson, Jr. (8) (9)......................................... 39,224 0.8
Arthur C. Riese (8) (9)................................................ 38,960 0.8
Richard D. Puntillo (8)................................................ 10,500 0.2
Stuart F. Platt (8).................................................... 7,500 0.2
Barton W. Shackelford (8).............................................. 5,000 0.1
James M. Edgar......................................................... 4,800 0.1
Donald K. Stager....................................................... 500 --
All directors and executive officers as a group (13 persons) (11)...... 870,863 17.5
<FN>
(1) Percentages of ownership have been calculated on outstanding shares as
of September 5, 1996 plus options exercisable on or before November 4,
1996.
(2) As reported in a Schedule 13G received on August 9, 1996 filed by
Heartland Advisors, Inc., whose business address is 790 North
Milwaukee Street, Milwaukee, WI 53202. Heartland Advisors, Inc.
reports sole voting power of 530,100 shares.
(3) As reported in a Schedule 13G as of December 31, 1995 filed on February
14, 1996 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 the shares. The ownership of one such fund, Fidelity Low-Priced
Stock Fund, amounted to 275,600 shares or 5.5%. 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
4
<PAGE>
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.
(4) As reported in a Schedule 13G as of December 31, 1995 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 259,793 of the shares, and shared dispositive power as to 93,000
shares. Subsequent information from other sources indicates a total
holding as of March 31, 1996 of 305,318 shares or 6.1%.
(5) As reported in a Schedule 13G as of December 31, 1995 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, 1995 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 205,550 shares.
(7) The Company has not received a copy of a Schedule 13G filed by Alliance
Global Environment Fund, whose business address is 1345 Avenue of the
Americas, New York, NY 10105. Alliance Global Environment Fund is
managed by the Equitable Companies. Information from other sources
indicates a total holding as of March 31, 1996 of 270,000 shares, or
5.4%.
(8) Includes shares subject to options that are exercisable on or before
November 4, 1996 in the amounts of 55,000; 37,250; 44,000; 13,500;
33,000; 37,250; 5,000; 5,000; and 5,000 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 3,824; 1,831; 2,917; 3,354; and 644 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) Includes 207,250 shares subject to options that are exercisable on or
before November 4, 1996 and 425,980 shares held in trust in a company
retirement savings plan, for which the directors exercise voting power.
</FN>
</TABLE>
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., 42, is Chief Technical Officer of the Company and
a Vice President of 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, 44, 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.
James M. Edgar accepted an appointment to the Board as a Class II
director on May 1, 1996. Mr. Edgar is founder and senior partner of Edgar Dunn &
Company, a management consulting firm in San Francisco, California, specializing
in the strategy, organization, and management issues of professional services
firms.
5
<PAGE>
Richard S. Harding, P.E., a current nominee for election as 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.
Victor R. Johnson, Jr., P.E., 52, joined the Company in 1980 and became
a Vice President in 1983. He currently manages the Company's Latin America
operations and serves as the President of GRIECO, a Mexican subsidiary of the
Company in which the Company holds a 51% interest. Prior to assuming his current
responsibilities, Mr. Johnson managed the Company's corporate marketing
programs.
Eric G. Lappala, 50, 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, 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., 41, 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 current nominee for election as 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.
Donald K. Stager accepted an appointment to the Board as a Class I
director on May 16, 1996. Mr. Stager is President and Chief Financial Officer of
Dillingham Construction Holding, Inc., a major international construction firm
based in Pleasanton, California.
6
<PAGE>
Gregory A. Thornton, 43, 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 1996 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 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
1996 met twice, 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.
Executive Committee: The Executive Committee was formed in fiscal 1996
and consists of Richard D. Puntillo (Chairman), Richard S. Harding, and Donald
L. Schreuder. Its functions include matters of a routine nature that occur
between regular meetings of the Board.
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 eight (8) times
during the 1996 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.
Beneficial Ownership Reporting Compliance
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.
7
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
<TABLE>
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 and each of the four other most highly
compensated executive officers of the Company whose salary and bonus for the
year ended May 31, 1996 exceeded $100,000 (hereafter referred to as the named
executive officers) for fiscal years ended May 31, 1994, 1995, and 1996:
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long-Term Compensation
----------------------------------------------------------------------
Awards Payouts
-----------------------------------
Securities
Other Restricted Under-lying
Annual Stock Options/ LTIP All Other
Name and Fiscal Salary Bonus Compensation Award(s) SARs (#) Payouts Compensation
Principal Position Year ($) (1)($) ($) ($) ($) ($)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald L. Schreuder 1996 228,000 0 N/A N/A 0 N/A 1,005 (3)
President and CEO (2) 1995 210,385 75,000 N/A N/A 10,000 N/A 1,005 (3)
1994 164,308 20,000 N/A N/A 14,000 N/A 651 (3)
Eric G. Lappala 1996 153,923 0 N/A N/A 0 N/A 1,005 (3)
Senior Vice President 1995 146,872 37,000 N/A N/A 6,000 N/A 1,005 (3)
1994 144,846 14,000 N/A N/A 8,000 N/A 651 (3)
Victor R. Johnson, Jr. 1996 153,000 0 N/A N/A 0 N/A 1,005 (3)
Senior Vice President 1995 151,385 35,000 N/A N/A 6,000 N/A 1,005 (3)
1994 147,846 14,000 N/A N/A 6,000 N/A 651 (3)
Claude Corvino 1996 143,692 0 N/A N/A 0 N/A 1,005 (3)
Senior Vice President 1995 134,039 55,000 N/A N/A 6,000 N/A 1,005 (3)
1994 131,539 20,000 N/A N/A 10,000 N/A 651 (3)
Arthur C. Riese 1996 143,231 0 N/A N/A 0 N/A 1,005 (3)
Senior Vice President 1995 135,154 52,000 N/A N/A 6,000 N/A 1,005 (3)
1994 132,577 20,000 N/A N/A 13,000 N/A 651 (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. No
executive bonuses were accrued for services during fiscal 1996.
(2) Mr. Schreuder received a salary increase in December 1994 at which time
his salary was raised from $200,000 to $228,000. No increases have been
made since then.
(3) Represents matching contributions by the Company for the named
executive officers under the Company's 401(k) plan, paid in Common
Stock of the Company and valued at fair market value on the
contribution date.
</FN>
</TABLE>
8
<PAGE>
The following table provides information with respect to the named
executive officers' stock option exercises during the fiscal year and
unexercised options held at the end of the fiscal year. No options were granted
to the named executives during fiscal 1996.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year End Fiscal Year End ($) (1)
(#)
--------------------------------------------------------------
Shares Value
Acquired on Realized
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Schreuder 0 0 47,000 17,000 10,250 6,250
Eric G. Lappala 0 0 39,000 10,000 0 3,750
Victor R. Johnson, Jr. 1,000 4,375 28,500 9,000 0 3,750
Claude Corvino 0 0 31,750 11,000 5,125 3,750
Arthur C. Riese 0 0 31,000 12,500 0 3,750
<FN>
(1) On May 31, 1996, the fair market value of the Company's Common Stock
was $6.125, based on the closing price on Nasdaq Stock Market. Values
are calculated by subtracting the exercise price from the fair market
value of the stock as of the fiscal year end.
</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 Mr.
Schreuder'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 Mr. Schreuder in all Company benefit plans
and programs available to the Company's principal officers. Mr. Schreuder 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 Mr. Schreuder's employment is terminated by the Company without cause or
by Mr. Schreuder in response to a material reduction in his duties or
responsibilities under the agreement, Mr. Schreuder 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 Mr.
Schreuder 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 his employment, he 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.
Compensation of Directors
Each director who is not an officer or employee of the Company received
director fees of $16,500 in fiscal year 1996. Richard D. Puntillo, who is
Chairman of the Board, received an additional $13,500. Directors who are also
officers or employees of the Company receive no fees for their services as such.
9
<PAGE>
On April 19, 1994, the Board of Directors approved an amendment to the
1988 Stock Option and Restricted Stock Option Plan (the "1988 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. Upon his re-election to a three-year term on November 1,
1995, Mr. Puntillo was granted options to purchase an additional 3,000 shares of
Common Stock. Upon their appointments to the Board, Mr. James M. Edgar and Mr.
Donald K. Stager were granted options in the amounts of 3,000 and 2,000,
respectively.
10
<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 during fiscal 1996, (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
evaluated with a view to motivating individual and Company performance, 2) align
the interests of the executives with the long-term interest of the Company's
stockholders, and 3) be competitive with similar positions and levels of
responsibilities in other comparable companies. The total compensation package
should attract, retain, reward and motivate key executives to achieve desired
Company performance and enhance stockholder value.
The 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.
Base Salary. Base salaries for senior executive officers are reviewed
by evaluating individual executive performance and considering salaries for
comparable positions and responsibility levels at other similar companies. 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 1996, 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
annual review process was changed from the fall of each year to the end of the
fiscal year (May 31) in order to align annual business plan performance and
achievement of individual goals to the salary review process. As part of the
transition to a May-June review beginning at the end of fiscal 1996, small
transition adjustments were made in the fall of 1995 rather than delaying salary
adjustments for an eighteen-month period. The Committee approved increases for
the "named executive officers" in a range of between 0-5.7% based on the
above-mentioned salary survey data and the individual executive's
responsibilities. No increases were granted during the May-June 1996 salary
review process for senior executives.
Incentive Compensation. Senior executive officers can earn incentive
compensation awards that 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).
The Board of Directors approved the 1996 business plan for the Company
containing 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
11
<PAGE>
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. In fiscal 1996,
the Company did not achieve its business plan and as a result no incentive
compensation awards were granted to senior executive officers.
Long-term Incentives. In administering the Company's stock option
plans, the Committee may determine 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. 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 1996 no
stock options were awarded to senior executives.
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 named executive officers and all eligible employees in the Company's
401(k) plan. The maximum number of shares contributed as an individual matching
contribution under the plan for 1996 had a fair market value of $1,005 on the
date of contribution.
Chief Executive Officer. As described in the proxy statement, the
Company entered into an employment agreement with Mr. Schreuder on June 29, 1994
that provides that the Board, at its discretion, may increase Mr. Schreuder's
base salary. During the fall 1995 salary review process, Mr. Schreuder
recommended and the Board concurred that no increase to his base salary be
granted at that time. Similarly, as stated above, no year-end salary adjustment
was granted to the Chief Executive Officer nor was an incentive compensation
award granted for fiscal 1996.
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)
12
<PAGE>
<TABLE>
PERFORMANCE GRAPH
The following performance graph compares the performance of the
Company's Common Stock (Nasdaq Stock Market: HRDG) with the NASDAQ Stock
Market-U.S. Index and an index of peer companies selected by the Company. A
group of 11 other environmental companies, providing similar services to those
provided by the Company, comprise the peer group index.(1)
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
<CAPTION>
Cumulative Total Return
--------------------------------------------------------------
5/91 5/92 5/93 5/94 5/95 5/96
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Harding Lawson Associates Group, Inc. 100 136 84 59 55 56
Peer Group 100 77 70 64 56 59
NASDAQ Stock Market-U.S. 100 117 141 149 177 257
<FN>
(1) Companies included in the peer group index are Dames & Moore Inc.
(DM), EA Engineering Science & Technology (EACO), Ecology &
Environment, Inc. (EEI), EMCON Associates (MCON), Fluor Daniel/GTI
(FDGT), GZA Geoenvironmental Tech, Inc. (GZEA), International
Technology Corp. (ITX), TRC Companies, Inc. (TRR), Tetra Tech, Inc.
(WATR), Versar, Inc. (VSR), and Weston Roy F, Inc. (WSTNA). One
company, Earth Technology (ETCO), that appeared in the performance
graph peer index in 1995 has been omitted from the index this year as
the company was purchased by another company and is no longer listed.
(2) Assumes that $100 was invested on May 31, 1991 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>
13
<PAGE>
PROPOSAL NO. 2
INDEPENDENT AUDITORS
Ernst & Young LLP has been appointed by the Board of Directors as the
Company's independent auditors for the fiscal year ending May 31, 1997. The firm
of Ernst & Young LLP served the Company as independent auditors for the fiscal
year ended May 31, 1996. Ernst & Young LLP has no interest, financial or
otherwise, in the Company. The services rendered by Ernst & Young LLP during the
fiscal year 1996 were audit services and included consultation in connection
with various accounting, income tax, and general business matters.
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.
Unless marked to the contrary, all proxies received will be voted "FOR"
ratification of the appointment 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. 2 TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING MAY 31, 1997.
STOCKHOLDERS' PROPOSALS
Subject to Securities and Exchange Commission regulations, proposals of
stockholders intended to be presented at the 1997 Annual Meeting of Stockholders
must be received by the Company not later than May 27, 1997 to be included in
the 1997 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 16, 1996
14
<PAGE>
APPENDIX A
PROXY
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
OCTOBER 30, 1996
HARDING LAWSON ASSOCIATES GROUP, INC.
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 Lawson Associates Group,
Inc., a Delaware corporation (the "Company"), and the accompanying Proxy
Statement dated September 16, 1996, 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 Lawson Associates Group, Inc.,
standing in the name of the undersigned which the undersigned could vote if
personally present and acting at the 1996 Annual Meeting of the Stockholders of
Harding Lawson Associates Group, Inc. to be held at 90 Digital Drive, Novato,
California, on October 30, 1996 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.
-------------
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
-------------
<PAGE>
Harding Lawson Associates Group, Inc. has decided to discontinue printing
quarterly shareholder reports. However, shareholders may request to be added to
our mailing list for copies of the Form 10-Q filed with the Securities and
Exchange Commission by calling Investor Relations at (415) 892-0821. You may
also visit the company's internet web site at http://www.harding.com after
November 1, 1996 for quarterly earnings information.
DETACH HERE
- --- Please mark
X votes as in
- --- this example. -----
THE 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.
1. Election of Directors
Nominees: Richard S. Harding, Donald L. Schreuder
----- -----
FOR WITHHELD
BOTH FROM BOTH
NOMINEES NOMINEES
----- -----
-----
-----__________________________________
For both nominees except as noted above
FOR AGAINST ABSTAIN
2. To ratify the appointment of ------- ------- -------
Ernst & Young LLP as indepen-
dent auditors of the Company. ------- ------- -------
MARK HERE MARK HERE
FOR ADDRESS ----- IF YOU PLAN -----
CHANGE AND TO ATTEND
NOTE AT LEFT ----- 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:_________Signature:________________Date:_________
