<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
Commission file number 1-6627
MICHAEL BAKER CORPORATION
-------------------------
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-0927646
------------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Airport Office Park, Building 3, 420 Rouser Road, Coraopolis, PA 15108
- ---------------------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(412) 269-6300
--------------
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of September 30, 1998:
-------------------------
Common Stock 6,836,791 shares
Series B Common Stock 1,319,826 shares
<PAGE>
FORM 10-Q
PART I
PAGE 1
MICHAEL BAKER CORPORATION
PART I. FINANCIAL INFORMATION
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Although certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, the Company believes that the
disclosures are adequate to make the information presented not misleading. The
statements reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of the results for the periods presented. All
such adjustments are of a normal and recurring nature unless specified
otherwise. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company's latest annual report and Form 10-K.
This Quarterly Report on Form 10-Q, and in particular the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
section in Part I, contains forward-looking statements concerning future
operations and performance of the Registrant. Forward-looking statements are
subject to market, operating and economic risks and uncertainties that may cause
the Registrant's actual results in future periods to be materially different
from any future performance suggested herein. Such statements are made pursuant
to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995.
<PAGE>
FORM 10-Q
PART I
PAGE 2
MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
For the three months ended
--------------------------
Sept. 30, 1998 Sept. 30, 1997
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(In thousands, except per share amounts)
Total contract revenues $135,803 $116,627
Cost of work performed 120,039 103,214
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Gross profit 15,764 13,413
Selling, general and administrative expenses 11,898 10,656
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Income from operations 3,866 2,757
Other income/(expense):
Interest expense (14) (8)
Interest income 74 140
Other, net 21 53
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Income before income taxes 3,947 2,942
Provision for income taxes 1,854 1,412
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Net income $2,093 $1,530
==============================================================================
Basic net income per share $0.26 $0.19
Diluted net income per share $0.25 $0.18
==============================================================================
The accompanying notes are an integral part of this financial statement.
<PAGE>
FORM 10-Q
PART I
PAGE 3
MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
For the nine months ended
-------------------------
Sept. 30, 1998 Sept. 30, 1997
- ------------------------------------------------------------------------------
(In thousands, except per share amounts)
Total contract revenues $374,018 $316,196
Cost of work performed 330,268 278,993
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Gross profit 43,750 37,203
Selling, general and administrative expenses 35,914 31,539
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Income from operations 7,836 5,664
Other income/(expense):
Interest expense (31) (42)
Interest income 400 407
Other, net 243 656
- ------------------------------------------------------------------------------
Income before income taxes 8,448 6,685
Provision for income taxes 3,970 3,209
- ------------------------------------------------------------------------------
Net income $4,478 $3,476
==============================================================================
Basic net income per share $0.55 $0.42
Diluted net income per share $0.54 $0.42
==============================================================================
The accompanying notes are an integral part of this financial statement.
<PAGE>
FORM 10-Q
PART I
PAGE 4
MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
ASSETS Sept. 30, 1998 Dec. 31, 1997
- ------------------------------------------------------------------------------
(In thousands)
CURRENT ASSETS
Cash $5,971 $17,302
Receivables 80,341 80,204
Cost of contracts in progress and estimated
earnings, less billings 25,972 21,478
Prepaid expenses and other 4,137 5,799
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Total current assets 116,421 124,783
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PROPERTY, PLANT AND EQUIPMENT, NET 15,979 10,985
OTHER ASSETS
Goodwill and other intangible assets, net 5,844 6,521
Other assets 2,689 2,136
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Total other assets 8,533 8,657
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TOTAL ASSETS $140,933 $144,425
==============================================================================
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable $37,669 $45,868
Accrued employee compensation 7,603 7,908
Accrued insurance 5,332 4,905
Other accrued expenses 14,625 16,879
Excess of billings on contracts in
progress over cost and est. earnings 14,131 13,003
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Total current liabilities 79,360 88,563
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OTHER LIABILITIES
Notes payable 1,835 0
- ------------------------------------------------------------------------------
Total liabilities 81,195 88,563
- ------------------------------------------------------------------------------
SHAREHOLDERS' INVESTMENT
Common Stock, par value $1, authorized
44,000,000 shares, issued 7,130,548 and
7,086,623 shares at Sept. 30, 1998
and December 31, 1997, respectively 7,130 7,087
Series B Common Stock, par value $1,
authorized 6,000,000 shares, issued 1,319,826
and 1,343,983 shares at Sept. 30, 1998
and December 31, 1997, respectively 1,320 1,343
Additional paid-in capital 36,927 36,822
Retained earnings 16,344 11,866
Less 293,757 and 206,980 shares of Common
Stock in treasury, at cost, at Sept. 30,
1998 and December 31, 1997, respectively (1,983) (1,256)
- ------------------------------------------------------------------------------
Total shareholders' investment 59,738 55,862
- ------------------------------------------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' INVESTMENT $140,933 $144,425
==============================================================================
The accompanying notes are an integral part of this financial statement.
<PAGE>
FORM 10-Q
PART I
PAGE 5
MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For the nine months ended
-------------------------
Sept. 30, 1998 Sept. 30, 1997
- ------------------------------------------------------------------------------
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $4,478 $3,476
Adjustments to reconcile net income to net cash
(used in)/provided by operating activities:
Depreciation and amortization 3,553 3,265
Changes in assets and liabilities:
Increase in receivables and contracts
in progress (3,502) (7,176)
(Decrease)/increase in accounts payable
and accrued expenses (10,862) 4,772
Decrease/(increase) in other net assets 1,265 (261)
- ------------------------------------------------------------------------------
Total adjustments (9,546) 600
- ------------------------------------------------------------------------------
Net cash (used in)/prov. by operating activities (5,068) 4,076
- ------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (7,990) (1,554)
- ------------------------------------------------------------------------------
Net cash used in investing activities (7,990) (1,554)
- ------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 2,366 0
Proceeds from exercise of stock options 89 0
Payments to acquire treasury stock (728) 0
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Net cash provided by financing activities 1,727 0
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Net (decrease)/increase in cash (11,331) 2,522
Cash at beginning of year 17,302 10,480
- ------------------------------------------------------------------------------
CASH AT END OF PERIOD $5,971 $13,002
==============================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA
Interest paid $46 $40
Income taxes paid $728 $490
==============================================================================
The accompanying notes are an integral part of this financial statement.
<PAGE>
FORM 10-Q
PART I
PAGE 6
MICHAEL BAKER CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 1998
(Unaudited)
NOTE 1 - LONG-TERM DEBT AND BORROWING ARRANGEMENTS
In July 1998, the Company extended the term of its unsecured credit agreement
(the "Agreement") with Mellon Bank, N.A. through May 31, 2001. The Agreement
provides for a commitment of $25 million, which includes the sum of the
principal amount of revolving credit loans outstanding and the aggregate face
value of outstanding letters of credit. All other key terms from the previous
agreement remain unchanged. As of September 30, 1998, no borrowings were
outstanding; however, letters of credit totaling $4.6 million were outstanding
under the Agreement.
NOTE 2 - EARNINGS PER SHARE
Basic net income per share computations are based upon weighted averages of
8,181,605 and 8,211,074 shares outstanding for the three-month periods, and
8,183,798 and 8,202,454 for the nine-month periods, ended September 30, 1998 and
1997, respectively. Diluted net income per share computations are based upon
weighted averages of 8,284,173 and 8,327,289 shares outstanding for the
three-month periods, and 8,308,306 and 8,279,965 for the nine-month periods,
ended September 30, 1998 and 1997, respectively. The additional shares included
in diluted shares outstanding are entirely attributable to stock options.
NOTE 3 - CAPITAL STOCK
During 1996, the Board of Directors authorized the repurchase of up to 500,000
shares of the Company's Common Stock in the open market. During the first nine
months of 1998, the Company repurchased 87,017 treasury shares at market prices
ranging from $6.81 to $8.97 per share, for a total price of $728,000. As of
September 30, 1998, treasury shares totaling 294,717 had been repurchased under
this program.
NOTE 4 - CONTINGENCIES
The Company has reviewed the status of contingencies outstanding at September
30, 1998. Except as discussed in the following paragraph, management believes
that there have been no other significant changes to the information disclosed
in its Annual Report on Form 10-K for the year ended December 31, 1997.
<PAGE>
FORM 10-Q
PART I
PAGE 7
MICHAEL BAKER CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 1998
(Unaudited)
NOTE 4 - CONTINGENCIES (CONT.)
A subsidiary of the Company is acting as the prime contractor on a construction
project representing $46 million of revenues for the nine months ended September
30, 1998. Management is monitoring this project closely because of client and
subcontractor concerns, including the ability of the subsidiary to meet an
interim completion date of December 15, 1998. Management is aggressively
responding to these concerns in order to achieve the interim completion date. It
is not possible, at this time, to estimate the Company's liability to the
client, subcontractors and others if the project is delayed; however, such
claims that might be asserted could be material to the Company's results of
operations. The Company expects to be in a position to better estimate the
outcome of these issues by the end of 1998.
<PAGE>
FORM 10-Q
PART I
PAGE 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
TOTAL CONTRACT REVENUES
Total contract revenues increased 16% to $135.8 million for the third quarter of
1998, compared to $116.6 million for the third quarter of 1997. All of the
Company's business units experienced increases in total contract revenues for
the third quarter of 1998, with the exception of the Environmental unit which
remained relatively flat. The Buildings unit posted the largest increase of $7.8
million due to a significant construction project started in 1997. The Civil
unit's increase of $4.6 million resulted primarily from new operations &
maintenance ("O&M") contracts on which work commenced during the second half of
1997. New engineering and construction contracts awarded in the fourth quarter
of 1997 and early 1998 generated Transportation's third quarter 1998 increase in
total contract revenues.
Total contract revenues increased 18% to $374.0 million for the first nine
months of 1998 versus $316.2 million for the same period in 1997. Again, with
the exception of the Environmental unit, all units experienced increases for the
first nine months of 1998. The Transportation, Buildings and Civil units posted
the largest increases of $21.0 million, $15.9 million and $13.3 million,
respectively. Revenues from new construction projects started in late 1997 or
1998 account for the majority of the increases in the Transportation and
Buildings units. Civil's increase is again primarily attributable to revenues on
new O&M contracts which started during the second half of 1997.
GROSS PROFIT
The Company's gross profit of $15.8 million for the third quarter of 1998
represents an 18% improvement over its gross profit of $13.4 million for the
third quarter of 1997. As a percentage of total contract revenues, gross profit
remained relatively constant at 11.6% and 11.5% for the third quarters of 1998
and 1997, respectively. All units experienced absolute dollar improvements in
gross profit for the third quarter of 1998 over the same period in 1997, while
percentage improvements were also registered by the Civil, Energy and
Environmental units. The most significant improvements occurred in the Civil and
Energy units, where the aforementioned revenue growth came with the additional
benefit of higher margins.
Gross profit for the first nine months of 1998 also increased by 18% to $43.8
million from $37.2 million in the first nine months of 1997. As a percentage of
total contract revenues, gross profit remained relatively constant at 11.7% for
<PAGE>
FORM 10-Q
PART I
PAGE 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GROSS PROFIT (CONT.)
the first nine months of 1998 and 11.8% for the comparable 1997 period. Absolute
dollar improvements were achieved in all units, while percentage improvements
were registered in the Energy, Environmental and Transportation units. The
Civil, Energy and Transportation units had the greatest absolute dollar
improvements for the nine-month period, again primarily due to higher margins
associated with their revenue growth.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative ("SG&A") expenses increased to $11.9 million
for the third quarter of 1998 from $10.7 million in the third quarter of 1997.
This increase is due primarily to the Company's investments in technological
support costs and new transportation markets, anticipated higher 1998 payouts
for incentive compensation, and its international marketing initiative started
during the third quarter of 1997. Expressed as a percentage of total contract
revenues, SG&A expenses decreased slightly to 8.8% for the third quarter of 1998
from 9.1% in the third quarter of 1997.
SG&A expenses increased to $35.9 million for the first nine months of 1998 from
$31.5 million for the same period in 1997. Expressed as a percentage of total
contract revenues, SG&A expenses decreased to 9.6% for the first nine months of
1998 from 10.0% in the comparable period of 1997. The 1998 increase in absolute
dollars is attributable to the reasons cited above.
OTHER INCOME
Other income for the first nine months of 1998 included $0.2 million of income
from a joint venture related to work in the Gulf of Mexico, whereas the
comparable 1997 amount included a gain of $0.5 million from the sale of an
investment in preferred stock.
INCOME TAXES
The Company had provisions for income taxes of 47% for the first nine months of
1998 and 48% for the comparable period in 1997. The slightly lower 1998
provision rate primarily reflects management's expectations of lower payments of
foreign taxes and a higher level of income before taxes for the full year of
1998.
<PAGE>
FORM 10-Q
PART I
PAGE 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTRACT BACKLOG
The funded backlog of work to be performed reached a record high of $498 million
as of September 30, 1998, compared to funded backlog of $393 million at December
31, 1997. Funded backlog represents that portion of work supported by signed
contracts and for which the procuring agency has appropriated and allocated the
funds to pay for the work.
Total backlog, which incrementally includes that portion of contract value for
which options are still to be exercised ("unfunded backlog"), also reached a
record high of $754 million at September 30, 1998, as compared to $649 million
as of December 31, 1997.
During the third quarter of 1998, the Company added to its funded and total
backlog in the Civil, Environmental and Transportation units, while the
Buildings and Energy units experienced reductions in funded and total backlog.
The most significant third quarter backlog growth came from the Transportation
unit, which added two new major contracts to provide heavy & highway
construction services. The Environmental unit also reassessed and significantly
increased the unfunded backlog associated with its Navy CLEAN II contract.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $5.1 million for the first nine months
of 1998, compared to cash provided by operating activities of $4.1 million for
the same period in 1997. The 1998 cash usage resulted primarily from the timing
of certain normal and recurring payments to subcontractors during the first
quarter of 1998, following substantial cash collections from clients during the
fourth quarter of 1997.
Net cash used in investing activities was $8.0 million for the first nine months
of 1998, compared to $1.6 million for the first nine months of 1997. These
amounts solely comprise capital expenditures for both periods. The 1998 amount
includes computer equipment and software purchases totaling $3.4 million as
compared with $0.8 million in 1997. During the first nine months of 1997, the
Company leased additional computer equipment valued at $1.2 million; no computer
equipment was leased during the comparable 1998 period. The remaining 1998
increase is primarily attributable to updated computer equipment needed in
connection with certain software upgrades. Another $2.6 million of the 1998
increase is attributable to the purchase of heavy & highway construction
equipment needed for new projects added during 1998.
<PAGE>
FORM 10-Q
PART I
PAGE 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONT.)
Net cash provided by financing activities totaled $1.7 million for the first
nine months of 1998 and zero for the same period in 1997. During the third
quarter of 1998, the Company financed the purchase of $2.4 million of
construction equipment with long-term debt, thereby providing cash from
financing activities. Pursuant to a stock repurchase program announced in late
1996, the Company paid $0.7 million to acquire approximately 87,000 additional
treasury shares during the first nine months of 1998.
Working capital increased during the first nine months of 1998 to $37.1 million
at September 30, 1998 from $36.2 million at December 31, 1997. The current ratio
was 1.47:1 at the end of the third quarter of 1998, compared to 1.41:1 at
year-end 1997.
In July 1998, the Company extended the term of its unsecured credit agreement
with Mellon Bank, N.A. through May 31, 2001. This agreement provides for a
commitment of $25 million, which covers borrowings and letters of credit. As of
September 30, 1998, no borrowings were outstanding; however, letters of credit
totaling $4.6 million were outstanding under the agreement. Management believes
that the credit agreement will be adequate to meet its borrowing and letter of
credit requirements for at least the next year.
The Company is required to provide bid and performance bonding on certain
construction contracts, and has a $500 million bonding line available through
Travelers Casualty and Surety Company of America. Management believes that its
bonding line will be sufficient to meet its bid and performance needs for at
least the next year.
Short and long-term liquidity is dependent upon appropriations of public funds
for infrastructure and other government-funded projects, capital spending levels
in the private sector, and the demand for the Company's services in the oil and
gas markets. Additional external factors such as price fluctuations in the
energy industry and the effects of interest rates on private construction
projects could affect the Company. The new federal transportation legislation
(TEA-21) will provide a significant increase in funding for transportation
infrastructure projects in 1999 and beyond. At this time, management believes
that its funds generated from operations and its existing credit facility will
be sufficient to meet its operating and capital expenditure requirements for at
least the next year.
<PAGE>
FORM 10-Q
PART I
PAGE 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
YEAR 2000 COMPLIANCE
The Company has completed an assessment of its information systems relative to
the arrival of the 21st century. For internal systems, the Company generally
utilizes modern technologies supplied and supported by leading hardware and
software providers suited to Baker's areas of business. Year 2000 compliance is
primarily being achieved through the normal and recurring process of system
upgrades, the software costs of which are covered under related maintenance
agreements. Vendors have asserted that the financial and project management
systems for the Company's engineering and construction businesses are Year 2000
compliant. Validation testing of these systems has not yet been completed, but
is expected to be finished during the first quarter of 1999. One financial and
project management system in the Energy business unit is planned for Year 2000
compliance by the end of 1998, while the other such system is currently being
assessed and scheduled to be compliant by the end of the second quarter of 1999.
The systems for the Company's Baker Support Services (BSSI) subsidiary are
currently in the preliminary stages of normal upgrades that are expected to make
them Year 2000 compliant by the end of the first quarter of 1999. Over 90% of
the Company is served by a human resources system which the vendor has stated to
be Year 2000 compliant. Validation testing of the Energy, BSSI and human
resources systems is expected to be completed during the second quarter of 1999.
The Company's interrelated systems (e.g., e-mail, file sharing) are linked by a
network of servers. Upgrades to compliant versions are already in place for
approximately 90% of the network. The remaining servers are scheduled to be
upgraded to compliant versions during the first quarter of 1999. The Company is
in the process of evaluating other less critical operational support systems
being used in all business units (e.g., mapping, CADD, cost estimating) to
identify any remaining issues for resolution. Any related issues are scheduled
for resolution during the second quarter of 1999.
The Company is a service-based organization and, as such, has little reliance on
embedded technology (e.g., microcontrollers) for its key business processes. The
relevance of embedded technology is limited to such items as elevators, HVAC,
security, etc., which are components of the Company's leased facilities.
Embedded technology is also integral to some client facilities which the Company
operates and maintains under customer contracts.
To assess the Year 2000 compliance of significant third parties, the Company has
initiated a survey process to gather and evaluate information from significant
business customers, vendors and sub-contractors. Mailing of the survey has begun
and is expected to be completed during the fourth quarter of 1998. The majority
of responses are expected to be received by the end of the first quarter of
1999.
<PAGE>
FORM 10-Q
PART I
PAGE 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
YEAR 2000 COMPLIANCE (CONT.)
Management currently believes that its "most reasonably likely worst case Year
2000 scenario" poses the potential for payment delays from some customers due to
their lack of readiness for the new century. A formal assessment of the
potential impact of this scenario has not yet been evaluated and is dependent
upon completion of the aforementioned customer survey process. The Company has
not yet established a contingency plan to address the potential impact; however,
upon completion of the survey, a contingency plan will be considered, dependent
on the perceived compliance risks of the significant third parties.
Based upon information currently available, management does not believe that the
estimated incremental costs associated with Year 2000 compliance will be
material to the Company's consolidated results of operations or financial
position.
<PAGE>
FORM 10-Q
PART II
PAGE 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) The following exhibits are included herewith as a part of this
Report:
10.1 First Amendment to Loan Agreement by and among Michael Baker
Corporation and Subsidiaries and Mellon Bank, N.A. dated as
of July 24, 1998, filed herewith.
(b) Reports on Form 8-K
During the quarter ended September 30, 1998, the Company filed
no reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MICHAEL BAKER CORPORATION
Dated: November 13, 1998 By: /s/ J. Robert White
--------------------------------------
J. Robert White
Executive Vice President, Chief
Financial Officer and Treasurer
<PAGE>
EXHIBIT 10.1
FIRST AMENDMENT TO LOAN AGREEMENT
---------------------------------
Amendment, dated as of the 24th day of July, 1998, by and among Michael
Baker Corporation, a Pennsylvania corporation, Michael Baker Jr., Inc., a
Pennsylvania corporation, Baker Environmental, Inc., a Pennsylvania corporation,
Baker/MO Services, Inc., a Texas corporation, Baker Support Services, Inc., a
Texas corporation, Baker/Mellon Stuart Construction, Inc., a Pennsylvania
corporation, Baker Heavy & Highway, Inc., a Pennsylvania corporation, and
Baker/OTS, Inc., a Delaware corporation (individually, a "Borrower" and
collectively, jointly and severally the "Borrowers"), and Mellon Bank, N.A., a
national banking association (the "Bank") ("First Amendment").
WITNESSETH:
WHEREAS, the Borrowers and the Bank entered into that certain Loan
Agreement, dated as of June 12, 1997, by and among the Borrowers and the Bank
(as amended from time to time, the "Agreement") pursuant to which the Bank has
extended to the Borrowers a revolving credit loan facility in the original
principal amount not to exceed Twenty-Five Million and 00/100 Dollars
($25,000,000.00); and
WHEREAS, the Borrowers desire to extend the Expiry Date (as defined in the
Agreement) for a period of one (1) year, and the Bank desires to permit such an
extension pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises contained herein and
other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. All capitalized terms used herein, which are defined in the Agreement,
should have the same meaning herein as in the Agreement unless the context
clearly indicates otherwise.
2. The definition of "Expiry Date" in Section 1.01 of the Agreement is
hereby deleted in its entirety and in its stead is inserted the following:
"Expiry Date" shall mean May 31, 2001 or such earlier date on which the
Revolving Credit Facility Commitment shall have been terminated pursuant to this
Agreement.
3. The Borrowers and Bank hereby reconfirm and reaffirm all
representations and warranties, agreements and covenants made by and pursuant to
the terms and conditions of the Agreement, except as such representations and
warranties, agreements and covenants may have heretofore been amended, modified
or waived in writing in accordance with the Agreement.
4. The Borrowers hereby represent and warrant to Bank that (a) the
Borrowers have the legal power and authority to execute and deliver this First
Amendment; (b) the officers of each Borrower executing the First Amendment have
<PAGE>
been duly authorized to execute and deliver same and bind the respective
Borrower with respect to the provisions hereof; (c) the execution and delivery
hereof by the Borrowers and the performance and observance by the Borrowers of
the provisions hereof and of the Agreement and all documents executed or to be
executed therewith, do not violate or conflict with the organizational
agreements of any Borrower or any law applicable to Borrowers or result in a
breach of any provision of or constitute a default under any other agreement,
instrument or document binding upon or enforceable against any Borrower; (d)
this First Amendment, the Agreement and the documents executed or to be executed
by the Borrowers in connection herewith or therewith constitute valid and
binding obligations of the Borrowers in every respect, enforceable in accordance
with their respective terms.
5. Borrowers represent and warrant that no Event of Default (as defined in
the Agreement) exists under the Agreement, nor will any occur as a result of the
execution and delivery of this First Amendment or the performance or observance
of any provision hereof.
6. Each reference to the Agreement that is made in the Agreement or any
other document executed or to be executed in connection therewith shall
hereafter be construed as a reference to the Agreement as amended hereby.
7. Except as amended hereby, all of the terms and conditions of the
Agreement shall remain in full force and effect. This First Amendment amends the
Agreement and is not a novation thereof.
8. This First Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused the First Amendment to be duly executed as of the date first
above written.
ATTEST: Michael Baker Corporation
By: /s/ H. James McKnight By: /s/ J. Robert White
- ------------------------- -----------------------
Print Name: H. James McKnight Print Name: J. Robert White
- ----------------------------- ---------------------------
Title: Senior Vice President Title: Executive Vice President
- ---------------------------- -------------------------------
ATTEST: Michael Baker Jr., Inc.
By: /s/ H. James McKnight By: /s/ J. Robert White
- ------------------------- -----------------------
Print Name: H. James McKnight Print Name: J. Robert White
- ----------------------------- ---------------------------
Title: Senior Vice President Title: Executive Vice President
- ---------------------------- -------------------------------
<PAGE>
ATTEST: Baker Environmental, Inc.
By: /s/ H. James McKnight By: /s/ J. Robert White
- ------------------------- -----------------------
Print Name: H. James McKnight Print Name: J. Robert White
- ----------------------------- ---------------------------
Title: Senior Vice President Title: Executive Vice President
- ---------------------------- -------------------------------
ATTEST: Baker/MO Services, Inc.
By: /s/ H. James McKnight By: /s/ J. Robert White
- ------------------------- -----------------------
Print Name: H. James McKnight Print Name: J. Robert White
- ----------------------------- ---------------------------
Title: Senior Vice President Title: Executive Vice President
- ---------------------------- -------------------------------
ATTEST: Baker Support Services, Inc.
By: /s/ H. James McKnight By: /s/ J. Robert White
- ------------------------- -----------------------
Print Name: H. James McKnight Print Name: J. Robert White
- ----------------------------- ---------------------------
Title: Senior Vice President Title: Executive Vice President
- ---------------------------- -------------------------------
ATTEST: Baker/Mellon Stuart Construction, Inc.
By: /s/ H. James McKnight By: /s/ J. Robert White
- ------------------------- -----------------------
Print Name: H. James McKnight Print Name: J. Robert White
- ----------------------------- ---------------------------
Title: Senior Vice President Title: Executive Vice President
- ---------------------------- -------------------------------
ATTEST: Baker Heavy & Highway, Inc.
By: /s/ H. James McKnight By: /s/ J. Robert White
- ------------------------- -----------------------
Print Name: H. James McKnight Print Name: J. Robert White
- ----------------------------- ---------------------------
Title: Senior Vice President Title: Executive Vice President
- ---------------------------- -------------------------------
<PAGE>
ATTEST: Baker/OTS, Inc.
By: /s/ H. James McKnight By: /s/ J. Robert White
- ------------------------- -----------------------
Print Name: H. James McKnight Print Name: J. Robert White
- ----------------------------- ---------------------------
Title: Senior Vice President Title: Executive Vice President
- ---------------------------- -------------------------------
Mellon Bank, N.A.
By: /s/ Mark Latterner
----------------------
Title: Vice President
---------------------
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<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
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0
0
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