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
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 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)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
[ ] $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
PROXY RULES
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] 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:
Notes:
* * * * *
<PAGE>
HARDING LAWSON ASSOCIATES GROUP, INC.
September 24, 1997
To the Stockholders of
Harding Lawson Associates Group, Inc.
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Harding Lawson Associates Group, Inc., which will be held on Wednesday,
November 5, 1997 at 10:00 A.M. at the offices of Harding Lawson Associates,
Inc., 90 Digital Drive, Novato, California. Official Notice of the Annual
Meeting, a Proxy Statement, a Proxy Card, and Harding Lawson Associates Group,
Inc.'s 1997 Annual Report accompany this letter.
Whether or not you can be present at the meeting, please mark, date,
sign, and return the proxy in the enclosed envelope so that your shares may be
represented.
Sincerely,
Richard D. Puntillo
Chairman of the Board
<PAGE>
HARDING LAWSON ASSOCIATES GROUP, INC.
7655 Redwood Boulevard
Novato, California 94945
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Wednesday, November 5, 1997
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, November 5, 1997, at 10:00 A.M., for the following
purposes:
1. To elect two directors to hold office until the 2000 Annual
Meeting or until their successors have been duly elected and
qualified;
2. To approve the Non-employee Director Compensation Stock Plan;
3. To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending
May 31, 1998; and
4. To transact such other business as may properly come before
the Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on September 12,
1997 as the record date for the determination of stockholders entitled to notice
of and to vote at the Meeting or any adjournment or postponement thereof.
By Order of the Board of Directors
Patricia A. England
Secretary
Novato, California
September 24, 1997
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 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, November 5, 1997 and at any postponement or adjournment thereof (the
"Meeting"). Only stockholders of record on September 12, 1997 (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 12, 1997, the Company had outstanding 4,970,167 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 26, 1997.
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 the broker does not have authority to vote on such other
matters in the absence of instructions from the beneficial owners of the shares.
Except as otherwise stated, the affirmative vote of a majority of shares present
in person or represented by proxy at a duly held meeting at which a quorum is
present is required for approval of proposals presented to stockholders. With
respect to matters presented to stockholders, abstentions will be treated as
shares that are present and entitled to vote and not voted in favor of such
matter, and broker nonvotes will not be considered as present with respect to
that matter.
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. Platt and Stager as the nominees
for Class I directors set forth in the Notice of Annual Meeting, FOR Proposal
No. 2 to approve the Non-employee Director Compensation Stock Plan, FOR Proposal
No. 3 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, notifies the Secretary, 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.
A copy of the Annual Report of the Company for the fiscal year ended
May 31, 1997, including audited financial statements, is being mailed to
stockholders along with this proxy statement. THE COMPANY'S 1997 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, BY TELEPHONE REQUEST AT (415)899-8817, BY
FACSIMILE AT (415)892-0685, OR BY E-MAIL AT [email protected].
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
General
On September 20, 1997, the Board of Directors approved a resolution to
decrease the number of authorized directors from seven to six, which decrease
will become effective on November 5, 1997, at which time Mr. Shackelford will
retire from the Board.
The Company's Board of Directors is divided into three classes,
pursuant to the terms of the Company's Certificate of Incorporation and Bylaws.
Currently the authorized number of directors for Class I is two (2), Class II is
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 Class I directors are to be elected at the Annual Meeting and will hold
office until the 2000 Annual Meeting of Stockholders and until their successors
are elected and qualified. Directors shall be elected by a plurality of the
votes present in person or represented by proxy and entitled to vote on the
election of directors.
The Board of Directors has nominated Rear Admiral Stuart F. Platt
(Ret.) and Donald K. Stager as Class I directors. Messrs. Platt and Stager are
incumbent Class I 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. Platt and Stager unless authority to vote for either or both of them is
withheld. If Messrs. Platt or Stager 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.
Set forth below is certain information regarding Messrs. Platt and
Stager and the continuing directors:
<TABLE>
<CAPTION>
Name Age Positions Held with Company Director Since
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nominees for Election as Class I Directors
Rear Admiral Stuart F. Platt (Ret.) 63 Director 1988
Donald K. Stager 66 Director 1996
Continuing Directors
Richard D. Puntillo (Class II) 53 Chairman 1989
James M. Edgar (Class II) 61 Director 1996
Richard S. Harding (Class III) 74 Chairman Emeritus and Director 1959
Donald L. Schreuder (Class III) 54 President, Chief Executive Officer, and 1975
Director
</TABLE>
The Directors and Executive Officers
Class I Directors
Rear Admiral Stuart F. Platt (USN Retired), a current nominee for
election, 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. 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 board of Diagnostic
Retrieval Systems Inc., a publicly traded company.
Donald K. Stager, a current nominee for election, joined the Board in
1996. Mr. Stager is the Chairman of the Board of Dillingham Construction
Holdings, Inc., a major international construction firm based in Pleasanton,
California. Mr. Stager served as President and Chief Executive Officer of
Dillingham Construction Holdings, Inc. from 1982 to 1996.
Class II Directors
James M. Edgar joined the Board in 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.
Richard D. Puntillo was elected Chairman of the Board on June 17, 1994.
He is an Associate Professor of Finance at the McLaren School of Business at the
University of San Francisco. 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.
Class III Directors
Richard S. Harding, P.E., 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.
Donald L. Schreuder, P.E., joined the Company in 1965, became a Vice
President in 1976, a Senior Vice President in 1988, and Executive Vice President
and Chief Operations Officer in 1992. Mr. Schreuder was named President and
Chief Executive Officer by the Board of Directors in 1994.
Executive Officers
John G. Catts, Ph.D., 43, is Chief Technical Officer of the Company and
a Vice President 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, 45, joined the Company in 1984 and became a Vice
President in 1988. Mr. Corvino is currently a Senior Vice President and has
managed the Company's Western Region which includes offices in California,
Nevada, Washington, and Alaska since 1993. Prior to assuming these
responsibilities, Mr. Corvino co-developed the Company's operations on the East
Coast and managed the Northeastern Region until 1992.
Victor R. Johnson, Jr., P.E., 53, joined the Company in 1980 and became
a Vice President in 1983. He is currently a Senior Vice President and has
managed the Company's Latin America operations and served as the President of
GRIECO, a Mexican subsidiary of the Company in which the Company holds a 51%
interest since 1995. Prior to assuming his current responsibilities, Mr. Johnson
managed the Company's corporate marketing programs from 1988 until 1995.
Eric G. Lappala, 51, joined the Company in 1983 and became a Vice
President in 1986. He is currently a Senior Vice President and has led the
Company's private sector marketing and national accounts programs since 1996.
Mr. Lappala also consults with large industrial and commercial clients. Prior to
assuming his current responsibilities, Mr. Lappala led the Company's Federal
Programs group from 1992 to 1995 and prior to that, co-developed the Company's
operations on the East Coast, and provided business development and technical
expertise for the Company's environmental consulting practice.
Arthur C. Riese, Ph.D., 42, joined the Company in 1987 and became a
Vice President in 1989 and a Senior Vice President in 1992. Dr. Riese was
appointed President of the Company's principal operating subsidiary, Harding
Lawson Associates, Inc. in 1996. Prior to assuming these responsibilities, he
managed the Company's Central Region which includes offices in Colorado, New
Mexico, Arizona, Texas, and Utah, from 1993 to 1996.
Gregory A. Thornton, 44, 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.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
ownership of the Common Stock of the Company as of September 5, 1997 by (i) all
persons who to the knowledge of the Company 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 five 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 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.
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially Percent of
Name and Address of Beneficial Owners Owned Class
- ----------------------------------------------------------------------------------- --------------- ----------------
<S> <C> <C>
Heartland Advisors, Inc. (1)............................................... 693,700 14.0
The TCW Group, Inc. (2).................................................... 343,800 6.9
Dimensional Fund Advisors (3).............................................. 307,950 6.2
Directors and Executive Officers
Donald L. Schreuder (4) (5) ............................................... 141,938 2.8
Claude Corvino (4) (5)..................................................... 54,922 1.1
John G. Catts (4) (5)...................................................... 46,590 0.9
Eric G. Lappala (4) (5).................................................... 41,728 0.8
Arthur C. Riese (4) (5).................................................... 42,081 0.8
Richard S. Harding......................................................... 33,974 0.7
Gregory A. Thornton (4) (5)................................................ 23,637 0.5
Richard D. Puntillo (4) (5)................................................ 15,413 0.3
Stuart F. Platt (nominee) (4) (5).......................................... 12,674 0.3
James M. Edgar (4) (5)..................................................... 9,924 0.2
Donald K. Stager (nominee) (4) (5)......................................... 4,723 0.1
Barton W. Shackelford (4) (5).............................................. 6,223 0.1
All directors and executive officers as a group (13 persons) (6)........... 872,916 16.7
<FN>
(1) As reported in a Schedule 13G as of December 31, 1996 filed on
February 14, 1997 by Heartland Advisors, Inc., whose business address
is 790 North Milwaukee Street, Milwaukee, WI 53202. Heartland
Advisors, Inc. reports sole voting power of 641,900 shares. Subsequent
information from other sources indicates a total holding as of June
30, 1997 of 715,100 shares or 14.4%
(2) 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.
(3) As reported in a Schedule 13G as of December 31, 1996 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 228,050 shares. Subsequent information from other
sources indicates a total holding of 326,850 or 6.6%.
(4) Includes shares subject to options that are exercisable on or before
November 4, 1997 in the amounts of 48,000; 32,250; 32,500; 34,000;
37,500; 20,500; 6,000; 6,000; 2,000; 2,000; and 6,000 for Schreuder,
Corvino, Catts, Lappala, Riese, Thornton, Puntillo, Platt, Edgar,
Stager, and Shackelford, respectively.
(5) Includes shares held in trust in one or more company retirement plans
in the amounts of 6,461; 3,702; 1,712; 4,788; 793; 2,283; 3,913;
2,124; 1,174; 223; and 223 for Schreuder, Corvino, Catts, Lappala,
Riese, Thornton, Puntillo, Edgar, Platt, Stager, and Shackelford,
respectively.
(6) Includes 258,250 shares subject to options that are exercisable on or
before November 4, 1997 and 452,934 shares held in trust in a company
retirement savings plan, for which the Board of Directors exercise
voting power.
</FN>
</TABLE>
<PAGE>
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 1997 met
twice, consists of Adm. Stuart F. Platt (Chairman), James M. Edgar, 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 access to the Committee at any time.
Compensation Committee: The Compensation Committee, which during fiscal
1997 met once, consists of Barton W. Shackelford (Chairman), Adm. Stuart F.
Platt, and Donald K. Stager. 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, which during fiscal 1997
met once, 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.
Finance Committee: The Finance Committee was formed in fiscal 1997 and
consists of James M. Edgar (Chairman), Richard D. Puntillo, and Donald K.
Stager. Its functions include matters relating to the management of the
Company's financial resources and such other assets that affect the liquidity
and capital structure of the Company.
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.
The Board of Directors of the Company formally met eight times during
the 1997 fiscal year. All directors attended at least 75% of the meetings of the
Board of Directors and of the committees on which they served, except Rear
Admiral Stuart F. Platt.
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, except for one Form 4 filing by Eric G. Lappala that was
filed approximately 21 business days late.
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table provides certain summary information concerning the
compensation paid or accrued by the Company and its subsidiaries to or on behalf
of the Company's Chief Executive Officer and each of the five other most highly
compensated executive officers of the Company whose salary and bonus for the
year ended May 31, 1997 exceeded $100,000 (hereafter referred to as the named
executive officers) for fiscal years ended May 31, 1995, 1996, and 1997:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
---------------------------------- -----------------
Securities
Underlying All Other
Name and Fiscal Salary Bonus (1) Options/ SARs Compensation
Principal Position Year ($) ($) (#) ($)
--------------------------- ---------------- ----------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Donald L. Schreuder 1997 228,438 65,000 (2) 0 1,006 (3)
President and CEO 1996 228,000 0 0 1,005 (3)
1995 210,385 75,000 10,000 1,005 (3)
Arthur C. Riese 1997 157,728 45,000 (2) 0 1,006 (3)
Senior Vice President 1996 143,231 0 0 1,005 (3)
1995 135,154 52,000 6,000 1,005 (3)
Eric G. Lappala 1997 155,257 45,000 (2) 0 1,006 (3)
Senior Vice President 1996 153,923 0 0 1,005 (3)
1995 149,699 37,000 6,000 1,005 (3)
Claude Corvino 1997 148,150 45,000 (2) 0 1,006 (3)
Senior Vice President 1996 143,692 0 0 1,005 (3)
1995 134,039 55,000 6,000 1,005 (3)
John G. Catts 1997 140,080 36,000 (2) 0 1,006 (3)
Vice President 1996 137,308 0 0 1,005 (3)
1995 131,231 50,000 6,000 1,005 (3)
Gregory A. Thornton 1997 137,079 39,000 (2) 0 1,006 (3)
Vice President 1996 132,846 0 0 1,005 (3)
1995 109,231 45,000 6,000 1,005 (3)
<FN>
(1) Bonuses are based on service during the fiscal year although paid
during the first quarter following the end of the fiscal year.
(2) Twenty-five percent of the bonus was paid in the form of Common Stock
of the Company.
(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
date of grant.
</FN>
</TABLE>
<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 1997.
<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 ($) (1)
(#)
------------------------------ -------------------------------
Shares Value
Name Acquired on Realized Exercisable Unexercisable Exercisable Unexercisable
Exercise (#) ($)
- -------------------------- ------------- ------------ -------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Schreuder 0 0 55,500 8,500 $17,750 $6,250
Arthur C. Riese 0 0 37,250 6,250 $3,750 $3,750
Eric G. Lappala 0 0 44,000 5,000 $3,750 $3,750
Claude Corvino 0 0 37,250 5,500 $9,500 $3,750
John G. Catts 0 0 19,000 5,000 $3,750 $3,750
Gregory A. Thornton 0 0 16,750 5,250 $3,750 $3,750
<FN>
(1) On May 31, 1997, the fair market value of the Company's Common Stock
was $6.75, 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 plus incentive
compensation awards at the discretion of the Board. In November 1994 the
Compensation Committee increased the annual salary to $228,000. The employment
agreement allows for participation by Mr. Schreuder in all Company benefit plans
and programs, including stock option plans, available to the Company's principal
officers. 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 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. Upon any termination
of his employment, he would be prohibited from soliciting clients of the Company
for a period of one 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 year following the termination of employment.
Compensation of Directors
Director who are not officers or employees of the Company receive
director fees based on the number of Committees on which they serve and the
number of Committees they chair. In fiscal 1997, Stager, Edgar, Platt,
Shackelford, and Puntillo earned $15,292, $16,666, $18,000, $18,000, and
$32,500, respectively. In 1996, the Board of Directors approved the Non-employee
Director Compensation Stock Plan, which allows for all, or a portion, of
directors' compensation to be paid in the form of Common Stock of the Company in
lieu of cash compensation. During fiscal year 1997, non-employee directors
received a total of 5,072 shares of stock, which was deferred into the Company's
Non-qualified Deferred Compensation Plan for the eventual benefit of Messrs.
Edgar, Platt, Puntillo, Shackelford, and Stager in the amounts of 1,407, 777,
2,592, 148, and 148 shares, respectively. Directors who are also officers or
employees of the Company receive no fees for their services as such.
On April 19, 1994, the Board of Directors approved an amendment to the
1988 Stock Option and Restricted Stock Option Plan (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 as of the date of 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.
<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 directors during fiscal 1997, (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 the Company's executive officers is comprised of
three elements: base salary, incentive compensation, and long-term incentives as
discussed below. Incentive compensation primarily consists of cash bonuses, if
earned, and long-term incentives consisting of 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. In fiscal
1995 the Board of Directors established executive stock ownership guidelines to
promote and encourage increased stock ownership among executives. In keeping
with these guidelines, the Committee recommended that 25% of all incentive
compensation awards to officers of the Company or its domestic subsidiaries for
the fiscal year ended May 31, 1997, be in the form of 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 1997, 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. At
mid-year Dr. Riese, who was a senior vice president and regional manager of the
Company, was appointed president of the Company's Domestic Environmental
subsidiary and as such received a salary increase at that time appropriate to
the increased responsibilities he had assumed. At the end of the fiscal year,
the Committee approved increases for the "named executive officers" in a range
of between zero and 9.5% based on the above-mentioned salary survey data and the
individual executive's responsibilities.
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 ties a considerable portion of total
compensation to performance. 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 return on net assets) and certain
non-financial goals (e.g., risk management, business and program development).
The Board of Directors approved the 1997 business plan for the Company
containing a provision for an incentive compensation plan and the establishment
of a corresponding incentive compensation pool. The plan provided that incentive
compensation would accrue during the year based on the Company's attainment of
planned financial milestones and would be payable after the end of the fiscal
year. The incentive compensation pool was subject to increases or decreases
based on the degree to which the Company exceeded or fell short of its
pre-established financial goals. In fiscal 1997, the incentive compensation pool
was generated by a pre-designed formula based on the Company's achievement of
certain of its business plan goals. The Committee granted incentive compensation
awards to the "named executive officers" ranging from $36,000 to $45,000, which
equates to between 26% and 29% of base salary. Each of the "named executive
officers" received 25% of his incentive compensation award in the form of common
stock of the Company.
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.
The Committee also approved a matching contribution, payable in common
stock of the Company, under the Company's 401(k) plan to all eligible employees
participating in the Company's 401(k) plan. The maximum number of shares
contributed as an individual matching contribution under the plan for 1997 had a
fair market value of $1,006 on the date of grant.
Chief Executive Officer. During the fiscal 1997 salary review process,
Mr. Schreuder recommended and the Board concurred that no increase be made to
his base salary at that time. The Committee granted Mr. Schreuder an incentive
compensation award of $65,000 based on fiscal 1997 performance, which was
approximately 29% of his base salary. As stated above, 25% of the award was
payable in common stock of the Company. Subsequent to year end, the Committee
granted 15,000 incentive stock options to Mr. Schreuder, with an exercise price
equal to the fair market value of the underlying stock on the date of grant with
a four-year vesting schedule.
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
Barton W. Shackelford (Chairman)
Donald K. Stager
<PAGE>
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)
<TABLE>
<CAPTION>
Cumulative Total Return
---------- --------- ---------- --------- ---------- ---------
5/92 5/93 5/94 5/95 5/96 5/97
---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Harding Lawson Associates Group, Inc. 100 84 59 55 56 45
Peer Group 100 70 64 56 59 66
NASDAQ Stock Market-U.S. 100 141 149 177 257 247
<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).
(2) Assumes that $100 was invested on May 31, 1992 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>
<PAGE>
PROPOSAL NO. 2
NON-EMPLOYEE DIRECTOR COMPENSATION STOCK PLAN
The Board of Directors has approved the Non-employee Director
Compensation Stock Plan (the "Director Plan") as a method to further align the
interests of the non-employee directors of the Company with the long term
interests of the Company's stockholders through the use of shares of Common
Stock in lieu of cash for all or some portion of directors' fees. The Director
Plan became effective for fees earned beginning in January 1997.
The Director Plan permits non-employee directors to elect in December
of each year, what portion of the fees for the following year will be paid in
the form of stock. The number of shares that are awarded in lieu of cash would
be determined by dividing the portion of the fees to be paid in the form of
stock by the fair market value per share of the Common Stock on the date the
Board specifies for payment of such fees. Each non-employee director other than
the Chairman presently receives an annual fee of between $16,000 and $18,000
depending on Committee membership and the Chairman receives an annual fee of
$35,000, which amounts would, therefore, be the maximum annual amounts that the
non-employee directors could use to purchase shares under the Director Plan.
A director may elect to defer stock which he receives under the
Director Plan to the Company's Non-qualified Deferred Compensation Plan. Any
such election must be made by December 31 of the calendar year prior to the year
in which an award of stock under the Director Plan is made. Any stock deferred
by a director will be issued by the Company and held by the trustees of a "rabbi
trust," which has been established by the Company in connection with the
Non-qualified Deferred Compensation Plan. Deferred stock held by such trust will
be voted by the trustees at the direction of the directors for whose benefit the
stock is held.
All non-employee directors are eligible to participate in the Director
Plan. A total of 5,072 shares have been issued under the Director Plan during
the fiscal year ended May 31, 1997.
Section 1. Purpose
This Non-employee Director Compensation Stock Plan (the "Plan") is
intended to encourage stock ownership by Non-employee Directors of Harding
Lawson Associates Group, Inc., a Delaware corporation (the "Company") so that
they may increase their proprietary interest in the success of the Company. The
Non-employee Directors may be issued shares of the common stock of the Company
("Shares") in lieu of cash compensation as part of their annual compensation and
they may choose, at their discretion, to receive all, or any portion of the
balance of their Director's Compensation in the form of Shares. In this way, the
Company will be assisted in its efforts to attract and retain highly qualified
independent directors and to further align the directors' interest with that of
the Company's stockholders.
Section 2. Administration
The Plan shall be administered by the Company through the Salary
Deferral Committee (the "Committee") which is appointed by the Board of
Directors, or such other committee as may be specified by the Company and whose
membership shall be appointed or ratified by the Board of Directors.
Section 3. Participation in the Plan
(a) Participation in the Plan shall be limited to Non-employee
Directors of the Company.
(b) No member of the Board of Directors who is 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 maximum number of Shares that may be issued pursuant to the
Plan shall be Two Hundred Thousand (200,000). Such Shares shall be reserved for
this purpose. The limitation on the number of Shares which may be issued under
the Plan shall be subject to adjustment as provided in Section 4(b), below. The
Shares to be issued pursuant to the Plan may be unissued shares or treasury
shares. All shares issued under the Plan will be validly issued, fully paid, and
non-assessable shares of Common Stock of the Company. Notwithstanding anything
to the contrary contained herein, no more than Twenty-five Thousand (25,000)
Shares may be issued pursuant to the Plan unless and until the Plan has been
approved by the affirmative vote of the holders of a majority of the shares of
the common stock of the Company present in person or by proxy and entitled to
vote at a duly held meeting of shareholders.
(b) In the event of any merger, consolidation, reorganization, stock
dividend, stock split, or other change in corporate structure or capitalization
affecting the Company, the Board of Directors shall make such adjustments as
shall be just and equitable in the number and kind of Shares to be issued under
the Plan (including the aggregate number of Shares which may be issued under the
Plan).
Section 5. Elections; Delivery of Shares
(a) Each Non-employee Director may elect, in such person's sole
discretion, to receive in the form of Shares rather than in cash all or any
portion of any compensation that would otherwise be payable in cash to such
person for services as a director of the Company. To make such an election with
respect to fees earned during the 1997 calendar year, a Non-employee Director
shall provide written notice of election to the Company within 30 days of the
effective date of the Plan. To make such an election with respect to any other
calendar year, a Non-employee Director shall provide written notice of election
to the Company in the month of December of the immediately preceding year. Such
notice shall designate the amount of compensation which the Non-employee
Director elects to receive in Shares ("Designated Compensation").
(b) Any Shares issuable with respect to Designated Compensation shall
be issued to the Non-employee Director during the first month of the calendar
quarter in which the Payment Date, as defined below, occurs, or at such other
time as the Board of Directors may specify and approve. Notwithstanding the
preceding sentence, Non-employee Directors may elect to defer their receipt of
Shares pursuant to the terms of the Company's Non-qualified Deferred
Compensation Plan (the "Deferred Compensation Plan"), and, in the event of such
an election, the Shares will be issued in accordance with the terms of the
Deferred Compensation Plan. "Payment Date" with respect to any Designated
Compensation means the day on which the Designated Compensation would have been
paid assuming that the recipient had not elected either to receive the
compensation in Shares or to defer receipt of the compensation pursuant to the
Deferred Compensation Plan.
(c) The number of Shares to be issued with respect to any Designated
Compensation shall be calculated by dividing the amount of the Designated
Compensation by the Fair Market Value of a Share. The Fair Market Value of a
Share shall be deemed to equal the closing price of the Shares on the business
day preceding the payment date in respect of which the Shares are issued. If no
trades took place on the business day preceding the payment date, the Fair
Market Value of a Share shall be deemed to equal the closing price on the latest
preceding day that the Shares traded.
Section 6. Securities Law Considerations
Neither the Plan nor the Company shall be obligated to issue any Shares
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 the Nasdaq Stock Market or any
other stock exchange upon which the common stock may be listed, have been fully
met. As a condition precedent to any issuance of Shares and delivery of
certificates or proof of electronic transmission evidencing such shares pursuant
to the Plan, the Committee may require Non-employee Directors to take any such
action and to make any such representation as the Committee or the Board of
Directors in its discretion deems necessary or advisable to insure compliance
with such requirements. Non-employee Directors 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 by them of any
Shares issued pursuant to the Plan or any interest therein.
Section 7. Amendment
The Board of Directors may suspend or discontinue the Plan or revise or
amend it in any respect whatsoever; provided, however, that without approval of
the shareholders no revision or amendment shall change the number of Shares
subject to the Plan (except as provided in Section 4(b)), change the designation
of the class of persons eligible to receive Shares, or materially increase the
benefits accruing to participants under the Plan.
Section 8. Withholding Taxes
All taxes, if any, required to be withheld and payable with respect to
the issuance of Shares will be deducted from the Non-employee Director's
compensation. 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 9. Effectiveness of the Plan
The Plan shall become effective on the date the Board of Directors of
the Company approve the Plan. The Plan will terminate ten (10) years after the
effective date unless sooner terminated by the Board.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE `FOR'
PROPOSAL NO. 2 TO APPROVE THE NON-EMPLOYEE DIRECTOR COMPENSATION STOCK PLAN.
Date Plan approved by Board: April 27, 1997
PROPOSAL NO. 3
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, 1998. The firm
of Ernst & Young LLP served the Company as independent auditors for the fiscal
year ended May 31, 1997. Ernst & Young LLP has no interest, financial or
otherwise, in the Company. The services rendered by Ernst & Young LLP during the
fiscal year 1997 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE `FOR'
PROPOSAL NO. 3 TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING MAY 31, 1998.
<PAGE>
STOCKHOLDERS' PROPOSALS
Subject to Securities and Exchange Commission regulations, proposals of
stockholders intended to be presented at the 1998 Annual Meeting of Stockholders
must be received by the Company not later than June 2, 1998 to be included in
the 1998 Proxy Statement. In addition, the Bylaws of the Company contain
requirements relating to the timing and content of the notice which stockholders
must provide to the Secretary of the Company for the nomination of Directors at
a stockholders meeting or for any other matter to be properly presented at a
stockholders' meeting.
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 24, 1997
<PAGE>
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
NOVEMBER 5, 1997
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 20, 1997, 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 1997 Annual Meeting of the Stockholders of
Harding Lawson Associates Group, Inc. to be held at 90 Digital Drive, Novato,
California, on November 5, 1997 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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE SIDE]
[ X ] Please mark
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: Stuart F. Platt, Donald K. Stager
----- -----
FOR WITHHELD
BOTH FROM BOTH
----- NOMINEES ----- NOMINEES
- -----
- ---------------------------------------
For both nominees except as noted above
FOR AGAINST ABSTAIN
2. To ratify the appoint of
Ernst & Young LLP as inde-
pendent auditors of the Company.
FOR AGAINST ABSTAIN
3. To approve the Non-employee
Director Compensation Stock Plan.
MARK HERE ----- MARK HERE -----
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE BELOW ----- 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:
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