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)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $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 28, 1998
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 4, 1998 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 1998 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 4, 1998
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 4, 1998, at 10:00 A.M., for the following
purposes:
1. To elect two directors to hold office until the 2001 Annual
Meeting or until their successors have been duly elected and
qualified;
2. To approve the 1998 Stock Option Plan;
3. To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending May
31, 1999; 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 10,
1998 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 28, 1998
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 4, 1998 and at any postponement or adjournment thereof (the
"Meeting"). Only stockholders of record on September 10, 1998 (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 10, 1998, the Company had outstanding 4,826,321 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 28, 1998.
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 who 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. Edgar and Puntillo as the
nominees for Class II directors, FOR Proposal No. 2 to approve the 1998 Stock
Option 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, 1998, including audited financial statements, is being mailed to
stockholders along with this proxy statement. THE COMPANY'S 1998 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
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 three (3). 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 II directors are to be elected at the Annual Meeting and will hold
office until the 2001 Annual Meeting of Stockholders, Class III directors hold
office until 1999, and Class I directors hold office until 2000 or 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 James M. Edgar and Richard D.
Puntillo as Class II directors. Messrs. Edgar and Puntillo are incumbent Class
II 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.
Edgar and Puntillo unless authority to vote for either or both of them is
withheld. If Messrs. Edgar or Puntillo 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. Edgar and
Puntillo and the continuing directors:
<TABLE>
<CAPTION>
Name Age Positions Held with Company Director Since
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nominees for Election as Class II Directors
Richard D. Puntillo 55 Chairman 1989
James M. Edgar 62 Director 1996
Continuing Directors
Rear Admiral Stuart F. Platt (Ret.) 64 Director 1988
(Class I)
Donald K. Stager (Class I) 68 Director 1996
Ross A. Anderson (Class III) 57 Director 1998
Richard S. Harding (Class III) 75 Chairman Emeritus and Director 1959
</TABLE>
The Directors and Executive Officers
Class I Directors
Rear Admiral Stuart F. Platt (USN Retired) joined the Board in 1988.
Adm. Platt is currently President and Chief Executive Officer of Western Marine
Electronics (WESMAR), a marine electronics design and manufacturing company
headquartered in Woodinville, Washington. Prior to joining WESMAR this year, he
was 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 also continues to serve on the board of DRS Technologies, Inc.
Donald K. Stager joined the Board in 1996. Mr. Stager is currently the
Chairman of the Board, President and Chief Executive Officer 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, retired
from Dillingham in 1997 while remaining Chairman of the Board, and has recently
resumed executive responsibilities.
Class II Directors
James M. Edgar, a current nominee for election, 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, a current nominee for election, joined the Board
in 1989 and was elected Chairman of the Board in 1994. He is a 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.
Class III Directors
Ross A. Anderson was elected to the Board effective September 25, 1998.
Mr. Anderson is President, Chief Executive Officer and Director of Astech, Inc.,
a manufacturer of lightweight, high-temperature metallic honeycomb used in
aerospace and defense applications, located in Santa Ana, California. Prior to
joining Astech in 1993, Mr. Anderson was group executive at Teledyne Inc. for
eight companies. Prior to that role, he was President of a Teledyne company. He
was with Teledyne from 1984 to 1993.
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, and continues to be
employed on a part-time basis.
Executive Officers
Claude Corvino, 46, 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. Mr. Corvino will become
President of the Company's infrastructure unit, Harding Lawson Associates
Infrastructure, Inc., effective October 5, 1998.
Victor R. Johnson, Jr., P.E., 54, 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 has served as the President
of GRIECO, a Mexican subsidiary of the Company in which the Company has held 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, 52, 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 does consulting work for 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., 43, 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 that includes offices in Colorado, New
Mexico, Arizona, Texas, and Utah, from 1993 to 1996.
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. On September 25,
1998, Mr. Schreuder submitted, and the Board of Directors accepted, his
resignation from the Board and from his positions of President and Chief
Executive Officer effective as of September 25, 1998.
Gregory A. Thornton, 45, 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. As of September 25, 1998, Mr. Thornton
was named interim Chief Executive Officer.
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 10, 1998 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> <C>
Heartland Advisors, Inc. (1)............................................... 794,500 16.5
Franklin Resources, Inc. (2)............................................... 440,700 9.1
The TCW Group, Inc. (3).................................................... 330,600 6.8
Dimensional Fund Advisors (4).............................................. 327,850 6.8
Directors and Executive Officers
Donald L. Schreuder (5) (6) (7)............................................ 144,591 3.0
Claude Corvino (5) (6)..................................................... 45,825 0.9
Arthur C. Riese (5) (6).................................................... 39,381 0.8
Eric G. Lappala (5) (6).................................................... 38,881 0.8
Victor R. Johnson, Jr. (5) (6)............................................. 36,843 0.8
Richard D. Puntillo (nominee) (5) (6)...................................... 33,255 0.7
Richard S. Harding......................................................... 26,222 0.5
Gregory A. Thornton (5) (6)................................................ 25,290 0.5
Stuart F. Platt (5) (6).................................................... 14,813 0.3
James M. Edgar (nominee) (5) (6)........................................... 12,986 0.3
Donald K. Stager (5) (6)................................................... 7,381 0.2
Ross A. Anderson .......................................................... 0 --
All directors and executive officers as a group (12 persons) (8)........... 911,491 18.1
<FN>
(1) As reported in a Schedule 13G as of December 31, 1997 filed on February
2, 1998 by Heartland Advisors, Inc., whose business address is 790
North Milwaukee Street, Milwaukee, WI 53202. Heartland Advisors, Inc.
reports sole voting power of 794,500 shares.
(2) As reported in a Schedule 13G as of December 31, 1997 filed on February
3, 1998 by Franklin Resources, Inc., whose business address is 777
Mariners Island Boulevard, San Mateo, CA 94403-7777. Franklin
Resources, Inc. is the parent holding company and Charles B. Johnson
and Rupert H. Johnson, Jr. are principal shareholders of the parent
holding company. Franklin Advisory Services, Inc., investment advisor,
reports sole voting power for 440,700 shares.
(3) As reported in a Schedule 13G as of December 31, 1997 filed on February
12, 1998 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. reports sole voting power for 330,600
shares.
(4) As reported in a Schedule 13G as of December 31, 1997 filed on February
6, 1998 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 229,050 shares.
(5) Includes shares subject to options that are exercisable on or before
November 9, 1998 in the amounts of 46,000; 23,750; 34,500; 31,000;
30,000; 7,000; 22,000; 7,000; 3,000; and 3,000 for Schreuder, Corvino,
Riese, Lappala, Johnson, Puntillo, Thornton, Platt, Edgar, and Stager,
respectively.
(6) Includes shares held in trust in one or more company retirement plans
in the amounts of 6,614; 3,855; 946; 4,941; 3,973; 20,755; 2,436;
2,313; 4,186; and 1,881 for Schreuder, Corvino, Riese, Lappala,
Johnson, Puntillo, Thornton, Platt, Edgar, and Stager, respectively.
(7) On September 25, 1998, Mr. Schreuder submitted, and the Board of
Directors accepted, his resignation from the Board and from his
positions of President and Chief Executive Officer effective as of
September 25, 1998.
(8) Includes 207,250 shares subject to options that are exercisable on or
before November 9, 1998 and 501,046 shares held in trust in various
company retirement savings plans, for which the Board of Directors
exercises 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 1998 met
twice, consists of Adm. Stuart F. Platt (Chairman) and James M. Edgar. 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
1998 met four times, consists of Donald K. Stager (Chairman) and Adm. Stuart F.
Platt. Its functions include the review and approval of compensation levels for
the Chief Executive Officer and the Company's senior officers, administration of
the Company's plans and policies relating to executive compensation, and
administration of the Company's stock option plans.
Executive Committee: The Executive Committee, which did not meet during
1998, consists of Richard D. Puntillo (Chairman), and Richard S. Harding. Its
functions include matters of a routine nature that occurbetween regular meetings
of the Board.
Finance Committee: The Finance Committee, which during fiscal 1998 met
seven times, 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 six times during the
1998 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 5s 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.
<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, 1998 exceeded $100,000 (hereafter referred to as the named
executive officers) for fiscal years ended May 31, 1996, 1997, and 1998:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
---------------------------------- -----------------
Securities
Underlying All Other
Name and Fiscal Salary Bonus (1) Options/ SARs Compensation
Principal Position Year ($) ($) (#) ($)
--------------------------- ---------------- ----------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Donald L. Schreuder 1998 229,355 0 15,000 1,205 (4)
President and CEO (2) 1997 228,438 65,000 (3) 0 1,006 (4)
1996 228,000 0 0 1,005 (4)
Arthur C. Riese 1998 185,757 0 10,000 1,205 (4)
Senior Vice President 1997 157,728 45,000 (3) 0 1,006 (4)
1996 143,231 0 0 1,005 (4)
Claude Corvino 1998 181,050 0 7,500 1,205 (4)
Senior Vice President 1997 148,150 45,000 (3) 0 1,006 (4)
1996 143,692 0 0 1,005 (4)
Victor R. Johnson, Jr. 1998 167,600 10,000 (3) 0 1,205 (4)
Senior Vice President 1997 153,253 0 0 1,006 (4)
1996 151,375 0 0 1,005 (4)
Eric G. Lappala 1998 163,575 0 7,500 1,205 (4)
Senior Vice President 1997 155,257 45,000 (3) 0 1,006 (4)
1996 153,923 0 0 1,005 (4)
Gregory A. Thornton 1998 149,773 0 7,500 1,205 (4)
Vice President and CFO 1997 137,079 39,000 (3) 0 1,006 (4)
1996 132,846 0 0 1,005 (4)
<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) On September 25, 1998, Mr. Schreuder submitted, and the Board of
Directors accepted, his resignation from the Board and from his
positions of President and Chief Executive Officer effective as of
September 25, 1998.
(3) Twenty-five percent of the bonus was paid in the form of Common Stock
of the Company.
(4) 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 related to grants of stock
options to the named executive officers to purchase Common Stock pursuant to the
Company's 1988 Stock Option and Restricted Stock Option Plan (the "Plan").
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term (1)
----------------------------- ------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price per Expiration
Granted (2) Fiscal 1998 Share Date 5% 10%
- ------------------------- ------------- --------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Schreuder (3) 15,000 9.1% $6.75 6/11/07 $63,676 $161,366
Arthur C. Riese 10,000 6.1 6.75 6/11/07 42,450 107,578
Claude Corvino 7,500 4.5 6.75 6/11/07 31,838 80,683
Victor R. Johnson, Jr. 0 -- -- -- -- --
Eric G. Lappala 7,500 4.5 6.75 6/11/07 31,838 80,603
Gregory A. Thornton 7,500 4.5 6.75 6/11/07 31,838 80,603
<FN>
(1) The potential realizable value shown represents a hypothetical
gain that would be realized based on an assumed 5% and 10% annual
compound rate of stock price appreciation over the full ten-year
term of the option. These assumed rates of return would result in
a stock price on June 11, 2007 of $11.00 and $17.51, respectively.
These assumed realizable values are not intended to forecast
possible future appreciation of the Company's Common Stock.
(2) These options were granted at fair market value on the date of
grant and vest at 0%, 50%, 75%, and 100% on the first, second,
third, and fourth anniversary of the grant date, respectively.
(3) On September 25, 1998, Mr. Schreuder submitted, and the Board of
Directors accepted, his resignation from the Board and from his
positions of President and Chief Executive Officer effective as of
September 25, 1998.
</FN>
</TABLE>
The following table provides information with respect to the named
executive officers' stock option exercises during the fiscal year and
unexercised options held at the end of the fiscal year.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year End Fiscal Year End ($) (1)
(#)
------------------------------ -------------------------------
Shares Value
Name Acquired on Realized Exercisable Unexercisable Exercisable Unexercisable
Exercise (#) ($)
- -------------------------- ------------- ------------ -------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Schreuder (2) 4,500 7,969 43,500 17,500 $83,813 $57,813
Arthur C. Riese 4,500 8,250 33,000 11,500 $50,563 $37,813
Claude Corvino 10,000 28,750 22,250 9,000 $23,750 $30,000
Victor R. Johnson, Jr. 3,000 4,000 28,500 1,500 $33,938 $6,563
Eric G. Lappala 4,500 7,969 29,500 9,000 $38,688 $30,000
Gregory A. Thornton 0 0 20,500 9,000 $41,063 $30,000
<FN>
(1) On May 31, 1998, the fair market value of the Company's Common Stock
was $9.875, based on the closing price on The 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.
(2) On September 25, 1998, Mr. Schreuder submitted, and the Board of
Directors accepted, his resignation from the Board and from his
positions of President and Chief Executive Officer effective as of
September 25, 1998.
</FN>
</TABLE>
Compensation of Directors
Directors 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 1998, Messrs. Stager, Edgar, Platt,
and Puntillo earned $18,000, $19,000, $19,000, and $35,000, 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 1998, non-employee directors received a total of 8,944 shares
of stock, which was deferred into the Company's Non-qualified Deferred
Compensation Plan for the eventual benefit of Messrs. Edgar, Platt, Puntillo,
and Stager in the amounts of 2,244, 1,240, 4,135, and 1,198 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 that 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. On November 5, 1997, the Board granted 3,000 options
each to Messrs. Platt and Stager as a result of their re-election to the Board.
<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 (the "Committee")
was comprised of three independent directors from the beginning of the fiscal
year until Mr. Shackelford retired from the Board on November 5, 1997. Since
then the Committee has been comprised of two independent directors. The
Committee has been empowered to set the level of compensation for the Chief
Executive Officer and other senior executive officers, to administer the
Company's plans and policies relating to executive compensation, and to
administer the Company's stock plans.
The Committee believes that executive compensation should 1) be
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
1997 the Board of Directors formalized an executive stock ownership program that
requires officers of the Company to own amounts of Common Stock commensurate
with their salaries and levels of responsibility. The purpose of the program is
to promote and encourage increased stock ownership among executives. In keeping
with the intent of the program, the Committee authorizes 25% of all incentive
compensation awards to officers of the Company or its domestic subsidiaries to
be paid 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 1998, 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
the end of the fiscal year, the Committee approved increases for the four top
executive officers other than the Chief Executive Officer (the "named executive
officers") in a range of between zero and 5.7% 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 that 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 1998 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 1998, 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 an incentive
compensation award to only one of the "named executive officers" for the fiscal
year ending May 31, 1998, because the Company as a whole did not meet its annual
business plan. That officer received an award of $10,000.
Long-term Incentives. In administering the Company's stock option
plans, the Committee may determine the amount and terms of stock option grants
to the Chief Executive Officer and other senior executive officers, in order to
align the interests of the Company's senior executives with that of its
stockholders. Stock options granted are usually incentive stock options,
exercisable at a price equal to the fair market value of the underlying stock on
the date of grant, and vest over four years in order to provide an added
incentive for key individuals to remain with the Company. During fiscal 1998,
the Committee granted incentive stock option awards to the "named executive
officers" in a range between zero and 10,000 options granted at fair market
value and vesting over four years.
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 individual matching
contribution under the plan for 1998 had a fair market value of $1,205 on the
date of grant.
Chief Executive Officer. During the fiscal 1998 salary review process,
Mr. Schreuder was granted a salary increase of $10,000, which was a 4.3%
increase in his base pay. The Committee did not grant Mr. Schreuder an incentive
compensation award based on fiscal 1998 performance, as the Company did not meet
its annual business plan. At the beginning of the fiscal year, 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
Donald K. Stager (Chairman)
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of the
Company's Common Stock (The Nasdaq Stock Market under the symbol 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
---------- --------- ---------- --------- ---------- ---------
5/93 5/94 5/95 5/96 5/97 5/98
---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Harding Lawson Associates Group, Inc. 100 70 65 66 73 107
Peer Group 100 91 80 86 74 96
The Nasdaq Stock Market-U.S. 100 105 125 182 205 261
<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, 1993 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
HARDING LAWSON ASSOCIATES GROUP, INC.
1998 STOCK OPTION PLAN
In September 1998, the Board of Directors of the Company approved the
Company's 1998 Stock Option Plan ("Plan"). Options granted under the Plan may be
either incentive stock options within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended, or non-qualified stock options.
Effectiveness of the Plan is conditioned upon stockholder approval. The Plan is
designed to enhance the Company's ability to attract and retain qualified
directors, officers and employees. Approximately 1,200 employees are eligible to
be considered for the grant of options under the Plan. The 1998 Plan replaces
the 1988 Stock Option Plan which expired on August 11, 1998, with a total of
245,000 shares still available for grant, but not granted, at the time of
expiration.
The Plan will be administered and interpreted by the Compensation
Committee, which has the authority to determine recipients under the Plan, the
time of the grant of options, the number of shares covered by the grant and
certain other terms and provisions of each option granted. The Plan will
terminate on the tenth anniversary of its adoption by the Board.
The terms of options granted under the Plan will be set forth in a
stock option agreement to be entered into between the Company and each optionee,
as determined by the Committee. Unless the stock option agreement executed with
the optionee otherwise expressly provides, (i) options shall become exercisable
on a cumulative basis as to one-half of the shares covered thereby on the second
anniversary date of the grant and as to one-quarter on each of the third and
fourth anniversary dates, and (ii) an option shall expire on the tenth
anniversary of its date of grant or earlier within prescribed periods of
termination of employment, depending on the cause of such termination of
employment.
The Plan provides for the grant of options to purchase up to an
aggregate of 500,000 shares of Common Stock. The exercise price for each option
granted under the plan will be determined by the Committee, provided that the
exercise price of an incentive stock option may not be less than the fair market
value on the date of grant. On September 22, 1998, the closing sale price of the
Common Stock on the The Nasdaq Stock Market was $5.38 per share. Payment of the
exercise price is to be made in the form of cash or such other form of
consideration as is approved by the Committee, and may also be made by
delivering a copy of irrevocable instructions to a securities broker to deliver
promptly to the Company the amount of sale or loan proceeds sufficient to pay
the amount of the aggregate exercise price and any required tax.
Federal Income Tax Consequences
The grant of an incentive stock option should have no federal income
tax effect on the Company or the optionee to whom the option is granted, and
there generally is no tax on the exercise of the option (except that the
alternative minimum tax might apply). If an optionee does not dispose of shares
acquired on exercise of an incentive stock option within two years of the date
of grant of the option, nor within one year after exercise of the option, any
gain realized by the optionee on the subsequent sale of the shares is treated as
long term capital gains for federal income tax purposes. If the shares are sold
prior to the expiration of these holding periods, the difference between the
exercise price and the lower of the value of the stock on the date of exercise
and the amount realized on disposition is treated as compensation to the
optionee taxable as ordinary income. The excess gain, if any, is treated as
capital gain (which will be short term or long term depending upon the length of
time that the shares were held). The Company is allowed a deduction for tax
purposes only to the extent, and at the time, that the optionee receives
ordinary income by reason of the optionee's sale of the shares.
The grant of a non-qualified stock option also should have no federal
income tax effect on the Company or the recipient of the option. The spread
between the exercise price and the market value of the Common Stock on the date
of exercise of a non-qualified option is taxable to the optionee as ordinary
income on the date of exercise, and the Company has a corresponding deduction.
Such spread is also subject to income tax withholding.
The description of federal income tax consequences is based upon
federal tax laws and regulations and does not purport to be a complete
description of the tax aspects of the Plan.
Amendment and Adjustment
The Plan may be amended, suspended or discontinued from time to time by
the Board of Directors, provided that without stockholder approval the Board may
not materially increase the number of shares eligible for option grants under
the Plan or materially modify the category of person eligible for the grant of
options under the Plan. In the event of a stock split, reverse stock split,
stock dividend or other similar distribution, the number of shares reserved for
issuance under the Plan shall be proportionately adjusted, as shall the number
of shares and option price of any the outstanding option.
Prior Option Grants
The Plan does not require that awards of any particular size, or at
all, be granted to any person or persons, and the Committee has not made any
determination with respect to future awards under the Plan. In fiscal year 1998,
stock options were granted under the Company's 1988 Stock Option and Restricted
Stock Plan to Messrs. Schreuder, Riese, Corvino, Johnson, Lappala and Thornton
to purchase 15,000, 10,000, 7,500, 0, 7,500 and 7,500 shares, respectively;
options to purchase 33,500 shares were granted to all executive officers as a
group; options to purchase 6,000 shares were granted to all current directors
who are not executive officers as a group; and options to purchase 125,500
shares were granted to all employees, including all current officers who are not
executive officers, as a group.
The foregoing summary of the principle provisions of the Plan is
qualified in its entirety by reference to the full text of the Plan attached as
Appendix A to this Proxy Statement.
<PAGE>
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, 1999. The firm
of Ernst & Young LLP served the Company as independent auditors for the fiscal
year ended May 31, 1998. Ernst & Young LLP has no interest, financial or
otherwise, in the Company. The services rendered by Ernst & Young LLP during the
fiscal year 1998 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, 1999.
STOCKHOLDERS' PROPOSALS
Subject to Securities and Exchange Commission regulations, proposals of
stockholders intended to be presented at the 1999 Annual Meeting of Stockholders
must be received by the Company not later than May 31, 1999 to be included in
the 1999 Proxy Statement. In addition, the Bylaws of the Company contain
requirements relating to the timing and content of the notice that 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 that 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 28, 1998
<PAGE>
APPENDIX A
HARDING LAWSON ASSOCIATES GROUP, INC.
1998 STOCK OPTION PLAN
1. Adoption and Purpose of the Plan. This stock option plan, to be
known as the "Harding Lawson Associates 1998 Stock Option Plan" (but referred to
herein as the "Plan") has been adopted by the board of directors (the "Board")
of Harding Lawson Associates Group, Inc., a Delaware corporation (the
"Company"), and is subject to the approval of its shareholders pursuant to
section 7 below. The purpose of this Plan is to advance the interests of the
Company and its shareholders by enabling the Company to attract and retain
qualified directors, officers, and employees with an opportunity for investment
in the Company. The options that may be granted hereunder ("Options") represent
the right by the grantee thereof (each, including any permitted transferee, an
"Optionee") to acquire shares of the Company's common stock ("Shares," which if
acquired pursuant to the exercise of an Option will be referred to as "Option
Shares") subject to the terms and conditions of this Plan and a written
agreement between the Company and the Optionee to evidence each such Option (an
"Option Agreement").
2. Certain Definitions. The defined terms set forth in Exhibit A
attached hereto and incorporated herein (together with other capitalized terms
defined elsewhere in this Plan) will govern the interpretation of this Plan.
3. Eligibility. The Company may grant Options under this Plan only to
persons who, at the time of such grant, are directors, officers and/or employees
of the Company and/or any of its Subsidiaries (collectively, "Eligible
Participants"). No person will be an Eligible Participant following his or her
Termination of Eligibility Status and no Option may be granted to any person
other than an Eligible Participant. There is no limitation on the number of
Options that may be granted to an Eligible Participant.
4. Shares Reserved for Options. The plan shall consist of 500,000
Option Shares. At all times while Options granted under this Plan are
outstanding, the Company will reserve for issuance for the purposes hereof a
sufficient number of authorized and unissued Shares to fully satisfy the
Company's obligations under all such outstanding Options.
5. Administration. This Plan will be administered and interpreted by
the Board, or by a committee consisting of two or more members of the Board,
appointed by the Board for such purpose (the Board, or such committee, referred
to herein as the "Administrator"). Subject to the express terms and conditions
hereof, the Administrator is authorized to prescribe, amend and rescind rules
and regulations relating to this Plan, and to make all other determinations
necessary or advisable for its administration and interpretation. Specifically,
the Administrator will have full and final authority in its discretion, subject
to the specific limitations on that discretion as are set forth herein and in
the Articles of Incorporation and Bylaws of the Company, at any time:
(a) to select and approve the Eligible Participants to
whom Options will be granted from time to time hereunder;
(b) to determine the Fair Market Value of the Shares as of the
Grant Date for any Option that is granted hereunder;
(c) with respect to each Option it decides to grant, to
determine the terms and conditions of that Option, to be set forth in the Option
Agreement evidencing that Option (the form of which also being subject to
approval by the Administrator), which may vary from the "default" terms and
conditions set forth in section 6 below, except to the extent otherwise provided
in this Plan, including, without limitation, as follows:
(i) the total number of Option Shares that may be
acquired by the Optionee pursuant to the Option;
(ii) if the Option satisfies the conditions under
Section 422(b) of the Code, whether the Option will be treated as an ISO;
(iii) the per share purchase price to be paid to the
Company by the Optionee to acquire the Option Shares issuable upon exercise of
the Option (the "Option Price");
(iv) the maximum period or term during which the
Option will be exercisable (the "Option Term");
(v) the maximum period following any Termination of
Eligibility Status, whether resulting from an Optionee's death, disability or
any other reason, during which period (the "Grace Period") the Option will be
exercisable, subject to Vesting and to the expiration of the Option Term;
(vi) whether to accept a promissory note or other
form of legal consideration in addition to cash as payment of all or a portion
of the Option Price and/or Tax Withholding Liability to be paid by the Optionee
upon the exercise of an Option granted hereunder;
(vii) the conditions (e.g., the passage of time or
the occurrence of events), if any, that must be satisfied prior to the vesting
of the right to exercise all or specified portions of an Option (such portions
being described as the number of Option Shares, or the percentage of the total
number of Option Shares that may be acquired by the Optionee pursuant to the
Option; the vested portion being referred to as a "Vested Option" and the
unvested portion being referred to as an "Unvested Option"); and
(d) to delegate all or a portion of the Administrator's
authority under sections 5(a), (b) and (c) above to one or more members of the
Board who also are executive officers of the Company, and subject to such
restrictions and limitations as the Administrator may decide to impose on such
delegation.
6. Default Terms and Conditions of Option Agreements. Unless otherwise
expressly provided in an Option Agreement based on the Administrator's
determination pursuant to section 5(c) above, the following terms and conditions
will be deemed to apply to each Option as if expressly set forth in the Option
Agreement:
6.1 ISO. No Option will be treated as an ISO unless treatment
as an ISO is expressly provided for in an Option Agreement and such Option
satisfies the conditions of Section 422(b) of the Code.
6.2 Option Term. The Option Term will be for a period of 10
years beginning on the Grant Date (or 5 years in the case of an ISO granted to a
10% shareholder).
6.3 Grace Periods. Following a Termination of Eligibility
Status:
(a) Unless the Termination of Eligibility Status is a
result of a Qualified Retirement or Termination for Cause, that portion of the
Option that is a Vested Option will be exercisable for 30 days from the date of
termination, except in the case of death or permanent disability, when such
Vested Options will be exercisable for one year from the date of death or
determination of permanent disability;
(b) If the termination of Eligibility Status is the
result of a Qualified Retirement, that portion of the Option that is a Vested
Option will be exercisable at any time prior to the expiration of the Option
Term; and
(c) the Option will terminate, and there will be no
Grace Period, effective immediately as of the date and time of a Termination for
Cause of the Optionee, regardless of whether the Option is Vested or Unvested.
6.4 Vesting. The Option initially will be deemed an entirely
Unvested Option, but portions of the Option will become a Vested Option on the
following schedule, unless otherwise specified in the Option Agreement:
(a) fifty percent (50%) will become a Vested as of
the second anniversary of the "Grant Date" specified in the Option Agreement;
and
(b) twenty-five percent (25%) of the Option will
become a Vested Option as of the third anniversary of the Grant Date; and
(c) twenty-five percent (25%) of the Option will
become a Vested Option as of the fourth anniversary of the Grant Date;
provided that the Optionee does not suffer a Termination of Eligibility Status
prior to each such vesting date and provided further that additional vesting
will be suspended during any period while the Optionee is on a leave of absence
from the Company or its Subsidiaries, as determined by the Administrator.
6.5 Exercise of the Option; Issuance of Share Certificate.
(a) The portion of the Option that is a Vested Option
may be exercised by giving written notice thereof to the Company, on such form
as may be specified by the Administrator, but in any event stating: the
Optionee's intention to exercise the Option; the date of exercise; the number of
full Option Shares to be purchased; the amount and form of payment of the Option
Price; and such assurances of the Optionee's investment intent as the Company
may require to ensure that the transaction complies in all respects with the
requirements of the 1933 Act and other applicable securities laws. The notice of
exercise will be signed by the person or persons exercising the Option. In the
event that the Option is being exercised by the representative of the Optionee,
the notice will be accompanied by proof satisfactory to the Company of the
representative's right to exercise the Option. The Option may be exercised by a
securities broker acting on behalf of the Optionee pursuant to authorization
instructions approved by the Company. The notice of exercise will be accompanied
by full payment of the Option Price for the number of Option Shares to be
purchased, in United States dollars, in cash, by check made payable to the
Company, or by delivery of such other form of payment (if any) as approved by
the Administrator. Payment may also be made by delivering a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds sufficient to pay the Option Price and, if required, the amount
of any Tax Witholding Liability.
(b) To the extent required by applicable federal,
state, local or foreign law, and as a condition to the Company's obligation to
issue any Shares upon the exercise of the Option in full or in part, the
Optionee will make arrangements satisfactory to the Company for the payment of
any applicable Tax Withholding Liability that may arise by reason of or in
connection with such exercise. Such arrangements may include, in the Company's
sole discretion, that the Optionee tender to the Company the amount of such Tax
Withholding Liability, in cash, by check made payable to the Company, by
delivery of irrevocable instructions to a broker as described in the last
sentence of section (a) above, or in the form of such other payment as may be
approved by the Administrator, in its discretion pursuant to section 5(c)(vi)
above.
(c) After receiving a proper notice of exercise and
payment of the applicable Option Price and Tax Withholding Liability, the
Company will cause to be issued a certificate or certificates or an electronic
transfer of shares, where requested, for the Option Shares as to which the
Option has been exercised, registered in the name of the person rightfully
exercising the Option and the Company will cause such certificate or
certificates or electronic transfer to be delivered to such person.
6.6 Compliance with Law. Notwithstanding any other provision
of this Plan, Options may be granted pursuant to this Plan, and Option Shares
may be issued pursuant to the exercise thereof by an Optionee, only after and on
the condition that there has been compliance with all applicable federal and
state securities laws. The Company will not be required to list, register or
qualify any Option Shares upon any securities exchange, under any applicable
state, federal or foreign law or regulation, or with the Securities and Exchange
Commission or any state agency, or secure the consent or approval of any
governmental regulatory authority, except that if at any time the Board
determines, in its discretion, that such listing, registration or qualification
of the Option Shares, or any such consent or approval, is necessary or desirable
as a condition of or in connection with the exercise of an Option and the
purchase of Option Shares thereunder, that Option may not be exercised, in whole
or in part, unless and until such listing, registration, qualification, consent
or approval is effected or obtained free of any conditions that are not
acceptable to the Board, in its discretion. However, the Company will seek to
register or qualify with, or as may be provided by applicable local law, file
for and secure an exemption from such registration or qualification requirements
from, the applicable securities administrator and other officials of each
jurisdiction in which an Eligible Participant would be granted an Option
hereunder prior to such grant.
6.7 Restrictions on Transfer.
(a) Options Nontransferable. No Option will be
transferable by an Optionee otherwise than by will or the laws of descent and
distribution. During the lifetime of a natural person who is granted an Option
under this Plan, the Option will be exercisable only by him or her.
Notwithstanding anything else in this Plan to the contrary, no Option Agreement
will contain any provision which is contrary to, or which modifies, the
provisions of this section 6.7(a).
(b) Prohibited Transfers. No Holder of any Option
Shares may Transfer such Shares, or any interest therein: (i) except as
expressly provided in this Plan; and (ii) in full compliance with all applicable
securities laws and any applicable restrictions on Transfer provided in the
Company's Articles of Incorporation and/or Bylaws, which will be deemed
incorporated by reference into this Plan. All Transfers of Option Shares not
complying with the specific limitations and conditions set forth in this section
6.7 are expressly prohibited. Any prohibited Transfer is void and of no effect,
and no purported transferee in connection therewith will be recognized as a
Holder of Option Shares for any purpose whatsoever. Should such a Transfer
purport to occur, the Company may refuse to carry out the Transfer on its books,
attempt to set aside the Transfer, enforce any undertakings or rights under this
Plan, or exercise any other legal or equitable remedy.
(c) Conditions to Transfer. It will be a condition to
any Transfer of any Option Shares that:
(i) the transferee of the Shares will
execute such documents as the Company may reasonably require to ensure that the
Company's rights under this Plan, and any applicable Option Agreement, are
adequately protected with respect to such Shares, including, without limitation,
the transferee's agreement to be bound by all of the terms and conditions of
this Plan and such Agreement, as if he or she were the original Holder of such
Shares; and
(ii) the Company is satisfied that such
Transfer complies in all respects with the requirements imposed by applicable
state and federal securities laws and regulations.
(d) Market Standoff. If in connection with any public
offering of securities of the Company (or any Successor Entity), the underwriter
or underwriters managing such offering so requests, then each Optionee and each
Holder of Option Shares will agree to not sell or otherwise Transfer any such
Shares (other than Shares included in such underwriting) without the prior
written consent of such underwriter, for such period of time as may be requested
by the underwriter commencing on the effective date of the registration
statement filed with the Securities and Exchange Commission in connection with
such offering.
6.8 Change of Control Transactions. Except as otherwise
provided in the Option Agreement, or any contract of employment or engagement
between Optionee and the Company, in the event of a Change of Control
Transaction, the Company shall endeavor to cause the Successor Entity in such
transaction either to assume all of the Options which have been granted
hereunder and which are outstanding as of the consummation of such transaction
("Closing"), or to issue (or cause to be issued) in substitution thereof
comparable options of such Successor Entity (or of its parent or its
Subsidiary). If the Successor Entity is unwilling to either assume such Options
or grant comparable options in substitution for such Options, on terms that are
acceptable to the Company as determined by the Board in the exercise of its
discretion, then with respect to each outstanding Option, that portion of the
Option which remains Unvested will become Vested immediately prior to such
Closing; and the Board may cancel all outstanding Options, and terminate this
Plan, effective as of the Closing, provided that it will notify all Optionees of
the proposed Change of Control Transaction a reasonable amount of time prior to
the Closing so that each Optionee will be given the opportunity to exercise the
Vested portion of his or her Option (after giving effect to the acceleration of
such vesting discussed above) prior to the Closing. For purposes of this section
6.8, the term "Change of Control Transaction" means (a) the sale of all or
substantially all of the assets of the Company to any person or entity that,
prior to such sale, did not control, was not under common control with, or was
not controlled by, the Company, or (b) a merger or consolidation or other
reorganization in which the Company is not the surviving entity or becomes owned
entirely by another entity, unless at least fifty percent (50%) of the
outstanding voting securities of the surviving or parent corporation, as the
case may be, immediately following such transaction are beneficially held by
such persons and entities in the same proportion as such persons and entities
beneficially held the outstanding voting securities of the Company immediately
prior to such transaction, or (c) the sale or other change of beneficial
ownership of the outstanding voting securities of the Company such that any
person or "group" as that term is defined under the Securities Exchange Act of
1934, as amended becomes the beneficial owner of more than 50% of the
outstanding voting securities of the Company.
6.9 Additional Restrictions on Transfer; Investment Intent. By
accepting an Option and/or Option Shares under this Plan, the Optionee will be
deemed to represent, warrant and agree that, unless a registration statement is
in effect with respect to the offer and sale of Option Shares: (i) neither the
Option nor any such Shares will be freely tradeable and must be held
indefinitely unless such Option and such Shares are either registered under the
1933 Act or an exemption from such registration is available; (ii) the Company
is under no obligation to register the Option or any such Shares; (iii) upon
exercise of the Option, the Optionee will purchase the Option Shares for his or
her own account and not with a view to distribution within the meaning of the
1933 Act, other than as may be effected in compliance with the 1933 Act and the
rules and regulations promulgated thereunder; (iv) no one else will have any
beneficial interest in the Option Shares; (v) the Optionee has no present
intention of disposing of the Option Shares at any particular time; and (vi)
neither the Option nor the Shares have been qualified under the securities laws
of any state and may only be offered and sold pursuant to an exception from
qualification under applicable state securities laws.
6.10 Stock Certificates; Legends. Certificates representing
Option Shares will bear all legends required by law and necessary or appropriate
in the Administrator's discretion to effectuate the provisions of this Plan and
of the applicable Option Agreement. The Company may place a "stop transfer"
order against Option Shares until full compliance with all restrictions and
conditions set forth in this Plan, in any applicable Option Agreement and in the
legends referred to in this section 6.10.
6.11 Notices. Any notice to be given to the Company under the
terms of an Option Agreement will be addressed to the Company at its principal
executive office, Attention: Secretary, or at such other address as the Company
may designate in writing. Any notice to be given to an Optionee will be
addressed to him or her at the address provided to the Company by the Optionee.
Any such notice will be deemed to have been duly given if and when enclosed in a
properly sealed envelope, addressed as aforesaid, deposited, postage prepaid, in
a post office or branch post office regularly maintained by the local postal
authority.
6.12 Other Provisions. Each Option Agreement may contain such
other terms, provisions and conditions, including restrictions on the Transfer
of Option Shares, and rights of the Company to repurchase such Shares, not
inconsistent with this Plan and applicable law, as may be determined by the
Administrator in its sole discretion.
6.13 Specific Performance. Under those circumstances in which
the Company chooses to timely exercise its rights to repurchase Option Shares as
provided herein or in any Option Agreement, the Company will be entitled to
receive such Shares in specie in order to have the same available for future
issuance without dilution of the holdings of other shareholders of the Company.
By accepting Option Shares, the Holder thereof therefore acknowledges and agrees
that money damages will be inadequate to compensate the Company and its
shareholders if such a repurchase is not completed as contemplated hereunder and
that the Company will, in such case, be entitled to a decree of specific
performance of the terms hereof or to an injunction restraining such holder (or
such Holder's personal representative) from violating this Plan or Option
Agreement, in addition to any other remedies that may be available to the
Company at law or in equity.
7. Term of the Plan. This Plan will become effective on the date of its
adoption by the Board. This Plan will expire on the tenth (10th) anniversary of
the date of its adoption by the Board or its approval by the shareholders of the
Company, whichever is earlier, unless it is terminated earlier pursuant to
section 11 of this Plan, after which no more Options may be granted under this
Plan, although all outstanding Options granted prior to such expiration or
termination will remain subject to the provisions of this Plan, and no such
expiration or termination of this Plan will result in the expiration or
termination of any such Option prior to the expiration or early termination of
the applicable Option Term.
8. Adjustments Upon Changes in Stock. In the event of any change in the
outstanding Shares of the Company as a result of a stock split, reverse stock
split, stock bonus or distribution, recapitalization, combination or
reclassification, appropriate proportionate adjustments will be made in: (i) the
aggregate number of Shares that are reserved for issuance in the Option Pool
pursuant to section 4 above, under outstanding Options or future Options granted
hereunder; (ii) the Option Price and the number of Option Shares that may be
acquired under each outstanding Option granted hereunder; and (iii) other rights
and matters determined on a per share basis under this Plan or any Option
Agreement evidencing an outstanding Option granted hereunder. Any such
adjustments will be made only by the Board, and when so made will be effective,
conclusive and binding for all purposes with respect to this Plan and all
Options then outstanding. No such adjustments will be required by reason of the
issuance or sale by the Company for cash or other consideration of additional
Shares or securities convertible into or exchangeable for Shares.
9. Modification, Extension and Renewal of Options. Subject to the terms
and conditions and within the limitations of this Plan, the Administrator may
modify outstanding Options granted under this Plan, but under no circumstances
may the shares be repriced or surrendered and replaced with other options
bearing a lower exercise price. Notwithstanding the foregoing, however, no
modification of any Option will, without the consent of the Optionee, alter or
impair any rights or obligations under any outstanding Option.
10. Governing Law. The internal laws of the State of Delaware
(irrespective of its choice of law principles) will govern the validity of this
Plan, the construction of its terms and the interpretation of the rights and
duties of the parties hereunder and under any Option Agreement.
11. Amendment and Discontinuance. The Board may amend, suspend or
discontinue this Plan at any time or from time to time; provided that no action
of the Board will, without the approval of the shareholders of the Company,
materially increase (other than by reason of an adjustment pursuant to section 8
hereof) the maximum aggregate number of Option Shares in the Option Pool, or
materially modify the category of, or eligibility requirements for, persons who
are Eligible Participants. However, no such action may alter or impair any
Option previously granted under this Plan without the consent of the Optionee,
nor may the number of Option Shares in the Option Pool be reduced to a number
that is less than the aggregate number of Option Shares (i) that may be issued
pursuant to the exercise of all outstanding and unexpired Options granted
hereunder, and (ii) that have been issued and are outstanding pursuant to the
exercise of Options granted hereunder.
12. No Shareholder Rights. No rights or privileges of a shareholder in
the Company are conferred by reason of the granting of an Option. No Optionee
will become a shareholder in the Company with respect to any Option Shares
unless and until the Option has been properly exercised and the Option Price
fully paid as to the portion of the Option exercised.
13. Copies of Plan. A copy of this Plan will be delivered to each
Optionee at or before the time he, she or it executes an Option Agreement.
Date Plan Adopted by Board of Directors: September 25, 1998
Date Plan Approved by the Shareholders: _____________________, 199__
<PAGE>
EXHIBIT A
DEFINITIONS
1. "10% shareholder" means a person who owns, either directly or
indirectly by virtue of the ownership attribution provisions set forth in
Section 424(d) of the Code at the time he or she is granted an Option, stock
possessing more than 10% of the total combined voting power or value of all
classes of stock of the Company and/or of its Subsidiaries.
2. "1933 Act" means the Securities Act of 1933, as amended.
3. "Administrator" has the meaning set forth in section 5 of the Plan.
4. "Board" has the meaning set forth in section 1 of the Plan.
5. "Business Combination" has the meaning set forth in section 6.8 of
the Plan.
6. "Change of Control Transaction" has the meaning set forth in section
6.8 of the Plan.
7. "Closing" has the meaning set forth in section 6.8 of the Plan.
8. "Code" means the Internal Revenue Code of 1986, as amended
(references herein to Sections of the Code are intended to refer to Sections of
the Code as enacted at the time of the Plan's adoption by the Board and as
subsequently amended, or to any substantially similar successor provisions of
the Code resulting from recodification, renumbering or otherwise).
9. "Company" has the meaning set forth in section 1 of the Plan.
10. "Disability" means any physical or mental disability that results
in a Termination of Eligibility Status under applicable law, except that for
purposes of section 6.1(c) of the Plan, the term "disability" means permanent
and total disability within the meaning of Section 22(e)(3) of the Code.
11. "Donative Transfer" with respect to Option Shares means any
voluntary Transfer by a transferor other than for value or the payment of
consideration to the transferor.
12. "Eligible Participants" has the meaning set forth in section 3 of
the Plan.
13. "Fair Market Value" means, with respect to the Shares and as of the
date that is relevant to such a determination (e.g., on the Grant Date), the
market price per share of such Shares determined by the Administrator,
consistent with the requirements of Section 422 of the Code and to the extent
consistent therewith, as follows: (a) if the Shares are traded on a stock
exchange on the date in question, then the Fair Market Value will be equal to
the closing price reported by the applicable composite-transactions report for
such date; (b) if the Shares are traded over-the-counter on the date in question
and are classified as a national market issue, then the Fair Market Value will
be equal to the last-transaction price quoted by The Nasdaq Stock Market for
such date; (c) if the Shares are traded over-the-counter on the date in question
but are not classified as a national market issue, then the Fair Market Value
will be equal to the mean between the last reported representative bid and asked
prices quoted by The Nasdaq Stock Market for such date; and (d) if none of the
foregoing provisions is applicable, then the Fair Market Value will be
determined by the Administrator in good faith on such basis as it deems
appropriate.
14. "Grace Period" has the meaning set forth in section 5(c)(v) of the
Plan.
15. "Grant Date" means, with respect to an Option, the date on which
the Option Agreement evidencing that Option is entered into between the Company
and the Optionee, or such other date as may be set forth in that Option
Agreement as the "Grant Date" which will be the effective date of that Option
Agreement.
16. "Holder" means the holder of any Option Shares.
17. "Involuntary Transfer" with respect to Option Shares includes,
without limitation, any of the following: (A) an assignment of the Shares for
the benefit of creditors of the transferor; (B) a Transfer by operation of law;
(C) an execution of judgment against the Shares or the acquisition of record or
beneficial ownership of Shares by a lender or creditor; (D) a Transfer pursuant
to any decree of divorce, dissolution or separate maintenance, any property
settlement, any separation agreement or any other agreement with a spouse
(except for bona fide estate planning purposes) under which any Shares are
Transferred or awarded to the spouse of the transferor or are required to be
sold; or (E) a Transfer resulting from the filing by the transferor of a
petition for relief, or the filing of an involuntary petition against the
transferor, under the bankruptcy laws of the United States or of any other
nation.
18. "ISO" means an "incentive stock option" as defined in Section 422
of the Code.
19. "Option Agreement" has the meaning set forth in section 1 of the
Plan.
20. "Option Price" has the meaning set forth in section 5(c)(iii) of
the Plan.
21. "Option Shares" has the meaning set forth in section 1 of the Plan,
provided that for purposes of section 6.7 of the Plan, the term "Option Shares"
includes all Shares issued by the Company to a Holder (or his, her or its
predecessor) by reason of such holdings, including any securities which may be
acquired as a result of a stock split, stock dividend, and other distributions
of Shares in the Company made upon, or in exchange for, other securities of the
Company.
22. "Option Term" has the meaning set forth in section 5(c)(iv) of the
Plan.
23. "Optionee" has the meaning set forth in section 1 of the Plan.
24. "Options" has the meaning set forth in section 1 of the Plan.
25. "Plan" has the meaning set forth in section 1 of the Plan.
26. Qualified Retirement shall mean the voluntary termination of an
employee or director of the Company after the individual has reached age 55 with
not less than 10 years of service with the Company. In order for such
termination to remain a Qualified Retirement under the Plan, the individual must
withdraw from the profession in which that individual was employed with the
Company and shall not during the time of the Grace Period, directly engage in or
have any interest in, any person, firm, corporation or business (whether as an
employee, officer, director, agent, security holder, creditor, consultant or
otherwise) that engages in any activity or service which is the same as, similar
to or competitive with, in whole or in part, the Company.
27. "Shares" has the meaning set forth in section 1 of the Plan.
28. "Subsidiary" has the same meaning as "Subsidiary Corporation" as
defined in Section 424(f) of the Code.
29. "Successor Entity" means a corporation or other entity that
acquires all or substantially all of the assets of the Company, or which is the
surviving or parent entity resulting from a Business Combination, as that term
is defined in section 6.8 of the Plan.
30. "Tax Withholding Liability" in connection with the exercise of any
Option means all federal and state income taxes, social security tax, and any
other taxes applicable to the compensation income arising from the transaction
required by applicable law to be withheld by the Company.
31. "Termination of Eligibility Status" means (i) in the case of any
employee of the Company and/or any of its Subsidiaries, a termination of his or
her employment, whether by the employee or employer, and whether voluntary or
involuntary, including without limitation as a result of the death or disability
of the employee, and (ii) in the case of any director of the Company and/or any
of its Subsidiaries, the death of or resignation by the director or his or her
removal from the board in the manner provided by the articles of incorporation,
bylaws or other organic instruments of the Company or Subsidiary or otherwise in
accordance with applicable law.
32. "Termination for Cause" means (i) in the case of an Optionee who is
an employee of the Company and/or any of its Subsidiaries, a termination by the
employer of the Optionee's employment for "cause" as defined by any applicable
contract of employment, or if not defined therein (or following termination of
any such contract of employment), pursuant to the "For Cause Standard" set forth
below, (ii) in the case of an Optionee who is or which is an advisor, consultant
or independent contractor to the Company and/or any of its Subsidiaries, a
termination of the services relationship by the hiring party for "cause" or
breach of contract, as defined by any applicable contract of engagement between
the parties, or if not defined therein (or following termination of any such
contract of engagement), pursuant to the "For Cause Standard" set forth below,
and (iii) in the case of an Optionee who is a director, but not an employee, of
the Company, removal of him or her from the board of directors by action of the
shareholders or, if permitted by applicable law and the articles, bylaws or
other organic documents of the Company, by the other directors, in connection
with the good faith determination of the board of directors (or of the Company's
shareholders if so required, but in either case excluding the vote of the
subject individual if he or she is a director or a shareholder) that the "For
Cause Standard" set forth below has been satisfied. For purposes hereof, the
"For Cause Standard" means that one or more of the following has occurred: (a)
the commission by Optionee of any act materially detrimental to the Company,
including fraud, embezzlement, theft, bad faith, gross negligence, recklessness
or willful misconduct; (b) incompetence or repeated failure or refusal to
perform the duties required of Optionee by the Company; (c) conviction of a
felony or of any crime of moral turpitude to the extent materially detrimental
to the Company; or (d) any material misrepresentation by Optionee to the Company
regarding the operation of the business, provided that the action or conduct
described in clause (b) above will constitute "Cause" only if such action or
conduct continues after the Company has provided Optionee with written notice
thereof and a reasonable opportunity (to be not less than 30 days) to cure the
same.
33. "Transfer" with respect to Option Shares, includes, without
limitation, a voluntary or involuntary sale, assignment, transfer, conveyance,
pledge, hypothecation, encumbrance, disposal, loan, gift, attachment or levy of
those Shares, including any Involuntary Transfer, Donative Transfer or transfer
by will or under the laws of descent and distribution.
34. "Unvested Option" has the meaning set forth in section 5(c)(vii) of
the Plan.
35. "Vested Option" has the meaning set forth in section 5(c)(vii) of
the Plan.
<PAGE>
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
NOVEMBER 4, 1998
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 28, 1998, and revoking any proxy heretofore given,
hereby constitutes and appoints Richard D. Puntillo, Chairman of the Board, and
Richard S. Harding, Chairman Emeritus, 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 1998 Annual Meeting of the Stockholders of Harding Lawson
Associates Group, Inc. to be held at 90 Digital Drive, Novato, California, on
November 4, 1998 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: Richard D. Puntillo and James M. Edgar
FOR WITHHELD
[ ] BOTH [ ] FROM BOTH
NOMINEES NOMINEES
- --------------------------------------
For both nominees except as noted above
FOR AGAINST ABSTAIN
2. To approve the 1998 Stock [ ] [ ] [ ]
Option Plan.
FOR AGAINST ABSTAIN
3. To ratify the appointment of [ ] [ ] [ ]
Ernst & Young LLP as independent
auditors of the Company.
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:_________
