<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
MICHAEL BAKER CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MICHAEL BAKER CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
MICHAEL BAKER CORPORATION
P.O. BOX 12259
PITTSBURGH, PENNSYLVANIA 15231-0259
April 14, 1997
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 14, 1997
TO THE SHAREHOLDERS OF MICHAEL BAKER CORPORATION:
Notice is hereby given that the Annual Meeting of Shareholders of MICHAEL
BAKER CORPORATION (the "Company") will be held at Robert Morris College, Massey
Hall, Narrows Run Road, Coraopolis, Pennsylvania 15108 on Wednesday, May 14,
1997 at 10:00 am., local time, for the purpose of considering and acting upon
the following:
1. The election by the holders of the Common Capital Stock of the
Company of eleven directors to serve for a one-year term or until their
respective successors shall have been elected and shall have qualified as
follows:
A. The election by the holders of Common Stock and Series B Common
Stock (voting together) of eight directors; and
B. The election by the holders of Common Stock of three directors.
2. Such other matters as may properly be brought before the meeting.
The close of business on April 1, 1997 has been fixed by the Board of
Directors as the record date for the determination of shareholders entitled to
notice of and to vote at the meeting, or any adjournments thereof, and only
shareholders of record on such date are entitled to notice of and to vote at
said meeting.
If you are a holder of both Common Stock and Series B Common Stock of the
Company, you will find enclosed two proxy cards, both of which must be fully
completed and returned in order to vote all Common Stock and Series B Common
Stock which you hold. The Company's 1996 Annual Report to Shareholders is also
enclosed.
You are cordially invited to attend the Annual Meeting of Shareholders.
Whether or not you plan to attend the Meeting, we urge you to please sign, date
and promptly return the enclosed proxy card(s) in the enclosed postage paid
envelope.
By Order of the Board of
Directors,
H. JAMES MCKNIGHT
Secretary
<PAGE> 3
MICHAEL BAKER CORPORATION
PITTSBURGH, PENNSYLVANIA
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS--MAY 14, 1997
GENERAL INFORMATION
The solicitation of the proxy or proxies enclosed with this proxy statement
is made on behalf of the Board of Directors of Michael Baker Corporation (the
"Company"), P.O. Box 12259, Pittsburgh, Pennsylvania 15231-0259, for the Annual
Meeting of Shareholders to be held on May 14, 1997 at 10:00 a.m. at Robert
Morris College, Massey Hall, Narrows Run Road, Coraopolis, Pennsylvania 15108.
It is expected that this Proxy Statement and proxies will be mailed to
shareholders on or about April 14, 1997.
The Company's Common Capital Stock is divided into two series, denominated
Common Stock and Series B Common Stock. Each share of Common Stock entitles the
holder thereof to one vote on all matters submitted to the shareholders and each
share of Series B Common Stock entitles the holder thereof to ten votes on all
such matters. All matters submitted to a vote of shareholders are voted upon by
holders of Common Stock and Series B Common Stock voting together except that
(i) holders of Common Stock and holders of Series B Common Stock are each
entitled to vote separately as a series on certain extraordinary transactions
involving the Company or on certain amendments to the Company's Articles of
Incorporation, and (ii) holders of Common Stock, voting separately as a class,
are entitled to elect one-fourth of the directors to be elected at a meeting
(other than directors whom future holders of Cumulative Preferred Stock may have
the right to elect), rounded, if necessary, to the next higher whole number.
Holders of Common Stock vote together with the holders of Series B Common Stock
on the election of the remaining directors (other than those electable by future
holders of Cumulative Preferred Stock).
Holders of Common Stock and Series B Common Stock have cumulative voting
rights in the election of directors, including, in the case of the holders of
Common Stock, directors elected by such holders voting separately as a class.
Cumulative voting entitles each shareholder to that number of votes in the
election of directors as is equal to the number of shares which he holds of
record (multiplied by ten, in the case of Series B Common Stock) multiplied by
the total number of directors to be elected and to cast the whole number of such
votes for one nominee or distribute them among any two or more nominees as he
chooses. Shares represented by proxies, unless otherwise indicated on the proxy
card, will be voted cumulatively in such manner that the number of shares so
voted for each nominee (and for any substitute nominated by the Board of
Directors if any nominee listed becomes unable or is unwilling to serve) will be
as nearly equal as possible. The eight nominees receiving the highest number of
affirmative votes cast at the Annual Meeting by the holders of Common Stock and
Series B Common Stock, voting together, and the three nominees receiving the
highest number of affirmative votes cast at the Annual Meeting by the holders of
the Common Stock, voting in person or by proxy, a quorum being present, will be
elected as directors.
On April 1, 1997, the Company had outstanding 7,057,981 shares of Common
Stock (entitling holders to 7,057,981 votes) and 1,346,435 shares of Series B
Common Stock (entitling holders to 13,464,350 votes). Holders of Common Stock
and Series B Common Stock of record at the close of business on April 1, 1997
are entitled to notice of and to vote on all matters that may properly come
before the meeting except that holders of Series B Common Stock may not vote for
the election of directors electable solely by the holders of Common Stock.
The proxy solicited hereby may be revoked at any time before its exercise
by giving notice of revocation to the Secretary of the Company or by executing
and delivering a proxy bearing a later date or by attending and voting at the
Annual Meeting of Shareholders or any adjournment thereof. Unrevoked proxies
will be voted at the meeting in accordance with the specifications made thereon,
but in the absence of such specifications will be voted FOR each proposal.
Unsigned or undated proxies will not be voted. Votes with respect to the
election of directors will be counted as set forth above. With respect to all
other matters brought before the meeting, the affirmative vote of the holders of
shares representing the majority of the votes cast at the meeting (in person or
by proxy) will be required to approve such matter.
1
<PAGE> 4
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
If any shareholder wishes to present a proposal at the 1998 Annual Meeting
of Shareholders, the proposal must be received by the Secretary, Michael Baker
Corporation, P.O. Box 12259, Pittsburgh, Pennsylvania 15231-0259, by December
23, 1997 to be considered for inclusion in the Company's Proxy Statement and
form of proxy relating to the 1998 Annual Meeting. The 1998 Annual Meeting is
presently scheduled on or about May 13, 1998.
Section 2.01.1 of the Company's By-Laws sets forth procedures by which
shareholders may nominate candidates for election as directors.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as to the beneficial
ownership of the Company's Common Stock and Series B Common Stock as of April 1,
1997 by each person known by the Board of Directors of the Company to own
beneficially more than 5% of the outstanding shares of Common Stock or Series B
Common Stock of the Company, by each director and nominee, by each of the
executive officers named in the Summary Compensation Table included elsewhere in
this Proxy Statement (the "Summary Compensation Table"), and by all directors,
nominees and executive officers as a group. The Michael Baker Corporation
Employee Stock Ownership Plan and Trust (the "ESOP") holds 72.5% of the voting
power of the Company's outstanding Common Capital Stock. Information contained
in this Proxy Statement as to shares held by the ESOP is as of February 28,
1997, the most recent practicable date. The information in the table concerning
beneficial ownership is based upon information furnished to the Company by or on
behalf of the persons named in the table.
<TABLE>
<CAPTION>
COMMON STOCK SERIES B COMMON STOCK
------------------------------ ----------------------------
NUMBER OF NUMBER OF
SHARES AND SHARES AND
NATURE OF NATURE OF
BENEFICIAL BENEFICIAL
NAME OWNERSHIP(1) PERCENT OWNERSHIP(1) PERCENT
- ------------------------------------ ------------ ------- ------------ -------
<S> <C> <C> <C> <C>
Michael Baker Corporation 2,612,367 37.0 1,225,689 91.0
Employee Stock Ownership
Plan and Trust
Michael Baker Corporation
P.O. Box 12259
Pittsburgh, PA 15231-0259
Dimensional Fund Advisors, Inc. (2) 488,914 5.8 None --
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Robert N. Bontempo None -- None --
Glenn S. Burns 14,214(4)(6) * 1,107(5) *
William J. Copeland 1,500(6) * None --
Donald P. Fusilli, Jr. 29,916(4)(6) * 2,515(5) *
Roy V. Gavert, Jr. 1,500(6) * None --
Jack B. Hoey 11,500(3)(6) * None --
Charles I. Homan 71,747(3)(4)(6) 1.0 16,604(3)(5) 1.2
Thomas D. Larson 3,425(3)(6) * None --
John E. Murray, Jr. None -- None --
Richard L. Shaw 9,705(6) * None --
Konrad M. Weis 9,000(3)(6) * None --
J. Robert White 16,695(4)(6) * 954(5) *
Edward L. Wiley 43,566(3)(4)(6) * 12,636(5) *
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
COMMON STOCK SERIES B COMMON STOCK
------------------------------ ----------------------------
NUMBER OF NUMBER OF
SHARES AND SHARES AND
NATURE OF NATURE OF
BENEFICIAL BENEFICIAL
NAME OWNERSHIP(1) PERCENT OWNERSHIP(1) PERCENT
- ------------------------------------ ------------ ------- ------------ -------
<S> <C> <C> <C> <C>
William A. Wulf 3,500(3)(6) * None --
All Directors, Nominees and 286,246(3)(4)(6) 4.1 49,755(5) 3.7
Executive Officers as a group (21
persons)
</TABLE>
- ---------
* Less than 1%
(1) Under regulations of the Securities and Exchange Commission, a person who
has or shares voting or investment power with respect to a security is
considered a beneficial owner of the security. Voting power is the power to
vote or direct the voting of shares, and investment power is the power to
dispose of or direct the disposition of shares. Unless otherwise indicated
in the other footnotes below, each person has sole voting power and sole
investment power as to all shares listed opposite his name. The ESOP
requires the trustee to vote the shares held by the trust in accordance with
the instructions from the ESOP participants for all shares allocated to such
participants' accounts. Allocated shares for which no such instructions are
given and shares not allocated to the account of any employee are voted by
the trustee in the same proportion as the votes for which participant
instructions are given, except in the case of a tender offer, in which case
allocated shares for which no instructions are given are not voted or
tendered.
(2) Dimensional Fund Advisors Inc., a registered investment advisor, is deemed
to have beneficial ownership of 488,914 shares of common stock as of
December 31, 1996, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business trust,
or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, for all of which Dimensional
Fund Advisors Inc. serves as investment manager. Dimensional Fund Advisors
Inc. disclaims beneficial ownership of all such shares. This information has
been taken from Schedule 13G dated February 5, 1997 of Dimensional Fund
Advisors Inc.
(3) Some or all of such shares are jointly owned by such person and his spouse.
Voting and investment power as to such shares is shared by the nominee and
his spouse.
(4) Includes the number of shares of Common Stock indicated for each of the
following persons or group which are allocated to their respective accounts
as participants in the ESOP and as to which they are entitled to give
binding voting instructions to the trustee of the ESOP: Mr. Burns (4,376
shares); Mr. Fusilli (17,848 shares); Mr. Homan (38,680 shares); Mr. White
(5,414 shares); Mr. Wiley (29,285 shares); and directors and executive
officers as a group (144,226 shares). ESOP holdings have been rounded to
the nearest full share.
(5) Includes the number of shares of Series B Common Stock indicated for each of
the following persons or group which are allocated to their respective
accounts as participants in the ESOP and as to which they are entitled to
give binding voting instructions to the trustee of the ESOP: Mr. Burns
(1,107 shares); Mr. Fusilli (2,515 shares); Mr. Homan (16,604 shares); Mr.
White (954 shares); Mr. Wiley (12,636 shares); and directors and executive
officers as a group (49,755 shares). ESOP holdings have been rounded to
nearest full share.
(6) Includes indicated number of shares of Common Stock issuable pursuant to
stock options which may be exercised within 60 days of the date of this
Proxy Statement: Mr. Burns (9,837 shares); Mr. Fusilli (12,068 shares); Mr.
Homan (26,911 shares); Mr. White (11,281 shares); Mr. Wiley (11,281 shares);
and all directors and executive officers as a group (99,584 shares).
3
<PAGE> 6
PROXY PROPOSAL NO. 1
ELECTION OF DIRECTORS
Eleven directors will be elected for a one-year term expiring on the date
of the next Annual Meeting of Shareholders or until their respective successors
shall have been elected and shall have qualified. Eight directors are to be
elected by the holders of Common Stock and Series B Common Stock voting
together, and three directors are to be elected solely by the holders of Common
Stock. The persons named in the enclosed proxies intend to vote for the nominees
whose names appear below. Although it is expected that all such nominees will be
available for election, if any of them becomes unable or is unwilling to serve
at the time the election occurs, it is intended that shares represented by
proxies will be voted for the election of the other nominees named and such
substituted nominees, if any, as shall be designated by the Company's Board of
Directors.
The following table sets forth certain information regarding the nominees
as of April 1, 1997. All of the nominees, with the exception of Mr. Bontempo and
Mr. Murray, were elected directors by the Company's shareholders at the 1996
Annual Meeting. Mr. Bontempo and Mr. Murray are being proposed for election as
directors for their first term. Except as otherwise indicated, each nominee has
held the principal occupation listed or another executive position with the same
entity for at least the past five years.
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION; OTHER
NOMINEE SINCE DIRECTORSHIPS; AGE
- ------------------------- ----------- --------------------------------------------------
<S> <C> <C>
TO BE ELECTED BY HOLDERS OF COMMON STOCK AND SERIES B COMMON STOCK
Robert N. Bontempo Associate Professor of International Business at
Columbia University since July 1994; formerly
Assistant Professor of International Business at
Columbia University from July 1989 to July 1994;
Fellow at the Center for Advanced Study at
Stanford University, Summer 1992; formerly
Personnel Research Analyst at IBM Corporate
Headquarters; Age 38
Charles I. Homan 1994 President and Chief Executive Officer since
October 1994; formerly Executive Vice President
from January 1990 to September 1994; formerly
Senior Vice President from April 1988 to December
1989; formerly President of Michael Baker Jr.,
Inc. (a subsidiary) from May 1983 to September
1994; Director of Century Financial Corporation
and Century National Bank; Age 53
Thomas D. Larson 1993 Self employed (consultant); formerly
Administrator, United States Federal Highway
Administration until January 1992; formerly
Secretary of the Pennsylvania Department of
Transportation; formerly Professor of Engineering,
The Pennsylvania State University; Age 68
John E. Murray President and Professor of Duquesne University
since July 1988; formerly University Distinguished
Service Professor at University of Pittsburgh from
July 1986 to June 1988; formerly Dean of Villanova
University School of Law; formerly Acting Dean and
Professor at Duquesne University School of Law;
Director of Federated Investors; Age 64
Richard L. Shaw 1966 Chairman of the Board; formerly Chairman of the
Board, President and Chief Executive Officer of
the Company from September 1993 through September
1994; formerly President and Chief Executive
Officer of the Company from April 1984 to May
1992; Director of L.B. Foster Company
(manufacturing); Age 69
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION; OTHER
NOMINEE SINCE DIRECTORSHIPS; AGE
- ------------------------- ----------- --------------------------------------------------
<S> <C> <C>
Konrad M. Weis 1991 Retired; formerly President and Chief Executive
Officer of Bayer USA Inc. (chemicals, health care
and imaging technologies); Director of PNC Equity
Management Corporation, Titan Pharmaceuticals,
Inc. and Dravo Corporation; Age 68
J. Robert White 1994 Executive Vice President, Chief Financial Officer
and Treasurer since July 1994; formerly Assistant
Director of Investor Relations for Westinghouse
Electric Corporation from prior to 1990 through
June 1994; formerly Adjunct Professor of
Accounting and Finance at the University of
Pittsburgh and Carnegie Mellon University; Age 54
William A. Wulf 1985 AT&T Professor of Engineering and Applied Science
at the University of Virginia; formerly Associate
Director of the National Science Foundation; Age
57
TO BE ELECTED SOLELY BY HOLDERS OF COMMON STOCK
William J. Copeland 1983 Retired; formerly Chairman of the Board of the
Company; formerly Vice Chairman of the Board of
PNC Financial Corp. and Pittsburgh National Bank;
Director or trustee of various investment
companies affiliated with Federated Investors,
Inc.; Age 78
Roy V. Gavert, Jr. 1988 President and Chief Executive Officer of Kiplivit
North America, Inc. (manufacturing) since July
1995; Managing Director of World Class Processing,
Inc. (manufacturing); principal of the Horton
Company (manufacturer of valves for household
appliances); formerly Managing Director of Gavert
Wennerholm & Co. (venture capital); formerly
Managing Director of Eagle Capital, Inc.
(investment bank and venture capital); formerly
Executive Vice President, Westinghouse Electric
Corporation; Age 63
Jack B. Hoey 1988 Retired; formerly Chairman, President and Chief
Executive Officer of Peoples Natural Gas Company
(public utility); Director of United Financial
Technologies, Inc. and Coastal Glass Distributors;
Age 69
</TABLE>
BOARD AND COMMITTEE MEETINGS
During 1996 there were six meetings of the Company's Board of Directors.
The Executive Committee of the Board of Directors, of which Messrs. Copeland,
Gavert, Shaw and Homan are members, held nine meetings. The Audit Committee of
the Board of Directors, of which Messrs. Gavert, Larson and Wulf are members,
held four meetings. The Compensation Committee, of which Messrs. Hoey, Larson
and Weis are members, held two meetings. The Nominating Committee, of which
Messrs. Copeland, Hoey and Weis are members, held three meetings. All directors
attended at least 75% of the total number of meetings of the Board of Directors
and of all committees of the Board of which they were members.
The Executive Committee was established with all the powers and the right
to exercise all the authority of the Board of Directors in the management of the
business and affairs of the Company. The functions performed by the Audit
Committee include recommending the independent accountants, reviewing with the
independent accountants the plan for, and the results of, the auditing
engagement, approving professional services provided by the independent
accountants prior to the performance of such services, reviewing the
independence of the independent accountants, and reviewing the Company's system
of internal accounting controls. The Compensation Committee reviews and
recommends to the Board the compensation of senior executive personnel and
directors. The Nominating Committee interviews and recommends to the Board
candidates to serve as executive officers and/or directors.
5
<PAGE> 8
DIRECTORS AND OFFICERS
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain information regarding compensation
received by the Chief Executive Officer and the four remaining most highly
compensated executive officers of the Company for 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------------------------------------
ANNUAL SHARES OF
COMPENSATION COMMON STOCK
----------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) COMPENSATION(1)
- ------------------------------ ---- -------- -------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Charles I. Homan 1996 $319,400 $ 54,412 12,571 $ 11,455
President and Chief 1995 302,500 29,431 27,500 10,063
Executive Officer 1994 226,600 17,876 -- 10,025
Glenn S. Burns 1996 180,000 22,500 5,236 8,234
President of Baker Mellon 1995 160,400 13,487 9,625 6,628
Stuart Construction, Inc., 1994 113,200 -- -- 5,537
a subsidiary
Donald P. Fusilli, Jr. 1996 180,000 24,750 5,236 8,658
President of Baker/MO 1995 180,000 4,216 12,600 8,349
Services, Inc., a subsidiary 1994 171,000 -- -- 8,271
J. Robert White(3) 1996 180,000 30,001 5,236 9,479
Executive Vice President 1995 165,000 19,597 11,550 7,642
and Chief Financial Officer 1994 82,500 100,000 -- 744
Edward L. Wiley 1996 180,000 35,776 5,236 9,351
Executive Vice President of 1995 165,000 17,535 11,550 6,232
Michael Baker, Jr., Inc., a 1994 150,000 12,214 -- 6,120
subsidiary
</TABLE>
- ---------
(1) Includes matching contributions made by the Company under its 401(k) plan
paid on behalf of the following individuals in 1996, 1995 and 1994,
respectively: Mr. Homan, $9,151, $7,759 and $7,721; Mr. Burns, $6,842;
$5,236 and $4,983; Mr. Fusilli, $7,873, $7,717 and $7,745; Mr. White,
$7,860, $6,092 and 0 and Mr. Wiley, $8,211, $5,178 and $5,193. Also includes
group life insurance premiums paid by the Company on behalf of the following
individuals in 1996, 1995 and 1994, respectively: Mr. Homan, $2,304; $2,304
and $2,304; Mr. Burns, $1,392, $1,392 and $555; Mr. Fusilli, $785, $632 and
$526; Mr. White, $1,619, $1,613 and $744 and Mr. Wiley, $1,140, $1,054 and
$927.
(2) Stock options were granted January 1, 1995 and February 27, 1996 under the
Company's 1995 Stock Incentive Plan.
(3) Mr. White joined the Company July 1, 1994. His annualized salary for 1994
was $165,000.
6
<PAGE> 9
OPTIONS GRANTED IN YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS APPRECIATION
NO. OF SHARES GRANTED TO EXERCISE FOR OPTION TERM
SUBJECT TO EMPLOYEES PRICE/ EXPIRATION -------------------
NAME OPTIONS GRANTED IN 1996 SHARE DATE 5% 10%
- ------------------------ --------------- ---------- --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Charles I. Homan 12,571 20.6% $ 4.8125 2/27/2006 $38,047 $96,418
Glenn S. Burns 5,236 8.6% $ 4.8125 2/27/2006 15,847 40,160
Donald P. Fusilli, Jr. 5,236 8.6% $ 4.8125 2/27/2006 15,847 40,160
J. Robert White 5,236 8.6% $ 4.8125 2/27/2006 15,847 40,160
Edward L. Wiley 5,236 8.6% $ 4.8125 2/27/2006 15,847 40,160
</TABLE>
All options were granted pursuant to the 1995 Stock Incentive Plan and vest
in four equal annual installments beginning on the date of grant. The dollar
amounts under the potential realizable value columns are the result of
calculations at assumed annually compounded rates of stock price appreciation
over the ten-year life of the options in accordance with the proxy regulations
of the Securities and Exchange Commission, and are not intended to forecast
actual future appreciation, if any, of the Company's Common Stock. The actual
value, if any, an executive may realize will depend on the excess of the market
price of the shares over the exercise price on the date the option is exercised.
COMPENSATION OF DIRECTORS
Compensation for non-employee directors is as follows: Annual
retainer--$15,000; Attendance at each regularly scheduled or special meeting of
the Board of Directors--$1,000; Attendance at a Board of Directors committee
meeting--$500; Telephonic attendance at a Board of Directors or committee
meeting--$100; Additional annual retainer for chairman of the Board of
Directors--$5,000; and Additional annual retainer for committee
chairmen--$2,500.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
and Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement in whole or in part, the following report and the
Stock Performance Graph on page 9 shall not be incorporated by reference into
any such filings.
REPORT OF THE COMPENSATION COMMITTEE
Introduction
Decisions regarding compensation of the Company's executives generally are
made by a three-member Compensation Committee of the Board. All decisions of the
committee relating to compensation of the Company's executive officers are
reviewed and approved by the full Board. Set forth below is a report submitted
by Messrs. Hoey, Larson and Weis in their capacity as the Board's Compensation
Committee addressing the Company's compensation policies for 1996 as they
affected executive officers of the Company, including Mr. Homan, the President
and Chief Executive Officer, and Messrs. Burns, Fusilli, White and Wiley, the
four executive officers other than Mr. Homan who were, for 1996, the Company's
most highly paid executives.
Compensation Philosophy
The Company applies a consistent philosophy toward compensation based upon
the following objectives: (i) to attract and retain executive officers and other
key employees of outstanding ability, and to motivate all employees to perform
to the full extent of their abilities; (ii) to ensure that pay is competitive
with other leading companies in the Company's industry; (iii) to reward
executive officers for corporate, group and individual performance; and (iv) to
ensure that total compensation to the executive officers as group is not
disproportionate when compared to the Company's total employee population.
7
<PAGE> 10
Compensation
The Company applies a compensation program consisting of base salary and
annual incentive compensation. In determining Mr. Homan's salary as President
and Chief Executive Officer and the remaining Executive Officers' base salaries
for 1996, the Compensation Committee reviewed the relationship of compensation
to other executive officers of the Company, the Company's current and projected
growth and profitability performance, an executive compensation report prepared
on the Company's behalf by Hewitt Associates (a compensation consulting firm)
(the "Hewitt Report") and available executive compensation studies published by
Arthur Andersen LLP and the Engineering News Record, a trade publication for the
engineering and construction industry.
Incentive compensation for Mr. Homan and the other executive officers is
determined by reference to corporate performance goals measured by financial
ratios such as profitability and earnings per share growth. Each such officer's
annual performance is measured by reviewing the return on sales, new work added,
accounts receivable, human resources development and total quality management
goals.
The Chief Executive Officer recommends to the Compensation Committee salary
adjustments for executive officers. The committee reviews these recommendations
in light of the above factors and with reference to the Hewitt Report and the
executive salary studies described above. A final comparison is made to verify
that the total percentage increase in compensation paid to the executive
officers as a group is not disproportionate to the percentage increase
applicable to other Company employee groups.
All executive employees participate in an annual incentive program. The
components of the plan are based upon corporate and individual performance.
Measures of corporate performance may include, but are not limited to, one or
more financial ratios such as earnings per share, profitability, return on
equity and return on assets. Individual performance is based on the performance
rating received as part of the annual Performance Management Process. The
Performance Management Process is a program which emphasizes performance
planning (management/employee goal setting), progress reviews and management
feedback to employees. A primary objective of the program is to enhance the
professional development of the individual employee. The rating is based upon
factors agreed to by the Chief Executive Officer and the individual executive
officer.
In 1992, the Compensation Committee retained the services of Hewitt
Associates, a compensation consulting firm, with a continuing task to assist the
committee in connection with performance of its duties in 1996. Hewitt provides
ongoing advice to the committee with respect to the reasonableness of
compensation paid to executive officers of the Company.
1995 Stock Incentive Plan
On December 15, 1994, the Board of Directors approved the 1995 Stock
Incentive Plan, which was approved by the shareholders at the 1995 Annual
Meeting and provides long-term incentive compensation to eligible employees.
Stock options are awarded based on the Compensation Committee's judgment
concerning the position and responsibilities of the employee being considered,
the nature and value of his or her services, his or her current contribution to
the success of the Company, and any other factors which the Compensation
Committee may deem relevant. Stock option awards tie the interests of employees
to the long-term performance of the Company, and provide an effective incentive
for employees to create shareholder value over the long term since the full
benefit of the compensation package cannot be realized unless an appreciation in
the Company's stock price occurs over a number of years.
1996 Nonemployee Directors' Stock Incentive Plan
On February 27, 1996, the Board of Directors approved the 1996 Non employee
Directors' Stock Incentive Plan, which was approved by the shareholders at the
1996 Annual Meeting. This plan provides long-term incentive compensation to
eligible directors. Under this plan, each member of the Board of Directors who
is not an employee of the Company or any of its subsidiaries is granted an
option to purchase 1,000 shares of Common Stock and 500 restricted shares on the
first business day following each Annual Meeting of Shareholders.
8
<PAGE> 11
This report is submitted by the Compensation Committee of the Company's
Board of Directors.
Jack B. Hoey Konrad M. Weis Thomas D. Larson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPANTS
The three members of the Compensation Committee in 1996, Jack B. Hoey,
Konrad M. Weis and Thomas D. Larson, are nonemployee directors. During 1996, no
executive officer of the Company served on a compensation committee (or other
board committee performing equivalent functions) or board of directors of any
entity related to any member of the Company's Board of Directors.
STOCK PERFORMANCE GRAPH
The following line graph compares, for the period of five years commencing
December 31, 1991 and ending December 31, 1996, the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock with the
cumulative total return of the S&P 500 Stock Index and with a peer group
identified by the Company to best approximate the Company's diverse business
groups.
COMPARISON OF FIVE-YEAR TOTAL RETURNS*
MICHAEL BAKER CORPORATION ("BKR"), S&P 500, AND A PEER GROUP**
(PERFORMANCE RESULTS THROUGH 12/31/96)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD MICHAEL BAKER
(FISCAL YEAR COVERED) CORPORATION PEER GROUP S&P 500
<S> <C> <C> <C>
12/91 100 100 100
12/92 110 103 108
12/93 82 109 118
12/94 28 107 120
12/95 37 151 165
12/96 47 160 203
</TABLE>
Assumes $100 invested at the close of trading on December 31, 1991 in the
Company's Common Stock, S&P 500, and Peer Group.
* Cumulative total return assumes reinvestment of dividends.
** The Peer Group was selected to include publicly traded companies engaging in
one or more of the following lines of business: engineering, construction,
and operations and maintenance. The Peer Group consists of the following
companies: Fluor Corp., Foster Wheeler Corp., Gilbert Associates, Inc.,
Morrison Knudsen Corp., Perini Corp., Stone & Webster Inc., Dames & Moore
Inc., Roy F. Weston Inc., Jacobs Engineering, Group Inc., ICF Kaiser
International Inc., Harding Lawson Associates Group. Inc., URS Corp., Guy F.
Atkinson Company of California, Granite Construction Inc., Turner Corp.,
McDermott International Inc., Oceaneering International Inc., Air & Water
Technologies Corp., and Halliburton Co.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the
9
<PAGE> 12
Company's equity securities, to file with the Securities and Exchange Commission
(the "Commission") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Such
persons are required by Commission regulation to furnish the Company with copies
of all Section 16(a) forms which they file. Phillip A. Shucet inadvertently
failed to file a Form 3 regarding his appointment as Executive Vice President.
Such appointment, however, was reported in Mr. Shucet's year end filings. Roy V.
Gavert inadvertently failed to file a Form 4 after disposing of Michael Baker
Common Stock in April 1996. Such disposition, however, was reported in Mr.
Gavert's year end report. To the Company's knowledge, no other persons were
delinquent in filing required reports in 1996. In making this disclosure the
Company has relied solely on written representations of its directors and
executive officers and copies of the reports that they have filed with the
Commission.
TRANSACTIONS WITH MANAGEMENT
The Company entered into an employment agreement with Richard L. Shaw
(formerly President and Chief Executive Officer of the Company) in April 1988,
which agreement was supplemented in March 1992 and October 1994. At the time of
his retirement as of the end of September 1994, Mr. Shaw was being compensated
at an annual salary of approximately $400,000. The agreement provides for Mr.
Shaw's performance of consulting services to the Company from October 1, 1994
until May 31, 1998, with annual compensation equal to 20% of his salary prior to
retirement. In addition, during this period, the Company will cover costs of
health insurance, reimburse actual out-of-pocket expenses and maintain a life
insurance policy for Mr. Shaw. This agreement also provides for a supplemental
retirement benefit of $2,500 per month commencing after the expiration of such
period.
AUDITORS
The Board of Directors of the Company has selected the independent
accounting firm of Price Waterhouse LLP ("PW") to examine the financial
statements of the Company for 1997.
PW audited the financial statements of the Company for 1996. The Board of
Directors expects that representatives of PW will be present at the Annual
Meeting of Shareholders and, while such representatives do not currently plan to
make a statement at the meeting, they will be available to respond to
appropriate questions.
OTHER MATTERS
The Board of Directors does not know at this time of any other or further
business that may come before the meeting, but, if any such matters should
hereafter become known or determined and be properly brought before such meeting
for action, the proxy holders will vote upon the same according to their
discretion and best judgment.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, in a limited number of instances, officers, directors and
regular employees of the Company may, for no additional compensation, solicit
proxies in person or by telephone to vote for all nominees.
By Order of the Board of
Directors,
H. JAMES MCKNIGHT
Secretary
April 14, 1997
10
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
PLEASE MARK
YOUR VOTES AS [ X ]
INDICATED IN
THIS EXAMPLE
1. ELECTION OF DIRECTORS BY HOLDERS OF Robert N. Bontempo, Charles I. Homan, Thomas D. Larson,
COMMON STOCK AND SERIES B COMMON STOCK: John E. Murray, Jr., Richard L. Shaw, Konrad M. Weis,
J. Robert White and William A. Wulf
FOR WITHHOLD
all nominees listed AUTHORITY INSTRUCTION: to withhold authority to vote for any
(except as marked to vote for all individual nominee(s) write the name of such nominee(s)
to the contrary) nominees listed in the space provided: SERIES B
[ ] [ ] _______________________________________________________ COMMON STOCK
2. In his discretion, the Proxy is authorized to
vote upon such other business as may be
properly brought before the meeting.
If you plan to attend the
Annual Meeting, please [ ]
check this box.
SIGNATURE(S)______________________________________ SIGNATURE(s)__________________________________________ DATE_____________, 1997
Please date and sign exactly as name appears hereon. When signing as Attorney, Executor, Administrator, Trustee, Guardian,
Corporate Official, etc., full title as such should be shown. For joint accounts, each joint owner should sign.
FOLD AND DETACH HERE
</TABLE>
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE PROXY
CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
<PAGE> 14
SERIES B
COMMON STOCK
MICHAEL BAKER CORPORATION
1997 ANNUAL MEETING OF SHAREHOLDERS
The undersigned does hereby appoint Richard L. Shaw and Charles I. Homan, or
any one of them, Proxies for the undersigned with full power of substitution to
vote at the Annual Meeting of the Shareholders of Michael Baker Corporation
(the "Company") to be held May 14, 1997 and at any and all adjournments of said
meeting, all the shares of Series B Common Stock of the Company which the
undersigned may be entitled to vote.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH PROPOSAL.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
(Over)
FOLD AND DETACH HERE
<PAGE> 15
<TABLE>
<S> <C> <C> <C>
PLEASE MARK
YOUR VOTES AS [ X ]
INDICATED IN
THIS EXAMPLE
1. ELECTION OF DIRECTORS BY HOLDERS OF 2. ELECTION OF DIRECTORS BY
COMMON STOCK AND SERIES B COMMON STOCK: HOLDERS OF COMMON STOCK
FOR WITHHOLD FOR WITHHOLD If you plan to attend the
all nominees listed AUTHORITY all nominees listed AUTHORITY Annual Meeting, please [ ]
(except as marked to vote for all (except as marked to vote for all check this box.
to the contrary) nominees listed to the contrary) nominees listed
[ ] [ ] [ ] [ ]
Robert N. Bontempo, Charles I. Homan, Thomas D. Larson, William J. Copeland, Roy V. Gavert, Jr.,
John E. Murray, Jr., Richard L. Shaw, Konrad M. Weis, and Jack B. Hoey COMMON STOCK
J. Robert White and William A. Wulf
INSTRUCTION: to withhold authority to vote for any INSTRUCTION: to withhold authority to vote for any
individual nominee(s) write the name of such nominee(s) individual nominee(s) write the name of such nominee(s)
in the space provided: in the space provided:
_______________________________________________________ _______________________________________________________
3. In his discretion, the Proxy is authorized to
vote upon such other business as may be
properly brought before the meeting.
SIGNATURE(S)______________________________________ SIGNATURE(s)__________________________________________ DATE_____________, 1997
Please date and sign exactly as name appears hereon. When signing as Attorney, Executor, Administrator, Trustee, Guardian,
Corporate Official, etc., full title as such should be shown. For joint accounts, each joint owner should sign.
FOLD AND DETACH HERE
</TABLE>
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE PROXY
CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
<PAGE> 16
COMMON STOCK
MICHAEL BAKER CORPORATION
1997 ANNUAL MEETING OF SHAREHOLDERS
The undersigned does hereby appoint Richard L. Shaw and Charles I. Homan, or
any one of them, Proxies for the undersigned with full power of substitution to
vote at the Annual Meeting of the Shareholders of Michael Baker Corporation
(the "Company") to be held May 14, 1997 and at any and all adjournments of said
meeting, all the shares of Common Stock of the Company which the undersigned
may be entitled to vote.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH PROPOSAL.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
(Over)
FOLD AND DETACH HERE
