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