Exhibit 99.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
Annual Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1996
Commission file number 33-14058
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Michael Baker Corporation Employee Stock Ownership Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Michael Baker Corporation
Airport Office Park, Building 3
420 Rouser Road
Coraopolis, PA 15108
Michael Baker Corporation
Employee Stock Ownership Plan
Financial Statements and Additional Information
December 31, 1996 and 1995
Michael Baker Corporation
Employee Stock Ownership Plan
Financial Statements
December 31, 1996 and 1995
Index
- --------------------------------------------------------
Report of Independent Accountants
Financial Statements:
Statements of Financial Condition -
December 31, 1996 and 1995
Statements of Income and Changes in Participants'
Equity With Fund Information - For the Periods
Ended December 31, 1996 and 1995
Notes to Financial Statements
Additional Information:*
Schedule of Assets Held for Investment Purposes -
December 31, 1996
* Other schedules required by Section 2520.103-10 of the Department of Labor
Rules and Regulations for Reporting and Disclosure under ERISA have been
omitted because they are not applicable.
Report of Independent Accountants
March 15, 1997
To the Participants and Administrator
of the Michael Baker Employee Stock
Ownership Plan
In our opinion, the accompanying statements of financial condition and the
related statements of income and changes in participants' equity present
fairly, in all material respects, the financial position of the Michael Baker
Employee Stock Ownership Plan (the ESOP) at December 31, 1996 and 1995, and
the results of operations and the changes in participants' equity for the
years then ended, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the ESOP's Administrator;
our responsibility is to express an opinion on these statements based on our
audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for the purposes of additional
analysis and is not a required part of the basic financial statements but is
additional information required by the Employee Retirement Income Security Act
of 1974 (ERISA). The fund information in the statement of income and changes
in participants' equity is presented for purposes of additional analysis
rather than to present the changes in participants' equity of each fund. The
supplemental schedule and the fund information have been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
The plan has not presented the schedule of reportable transactions
(transactions in excess of 5 percent of the current value of plan assets at
the beginning of the year). Disclosure of this information is required by the
Department of Labor Rules and Regulations for Reporting and Disclosure under
ERISA.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Financial Condition
December 31, 1996 and 1995
December 31,
1996 1995
Assets
Investments, at quoted market value:
Investments in common stock of
Michael Baker Corporation:
Common Stock $16,661,483 $11,055,430
Series B Common Stock 7,813,775 6,129,240
Temporary investments 121,082 276,391
Investments in trust funds managed by
Putnam Investments, Inc.:
Putnam Growth and Income Fund 11,791,338 --
George Putnam Fund of Boston 8,974,703 --
Putnam New Opportunities Fund 3,338,982 --
Putnam Money Market Fund 3,284,128 --
Putnam Voyager Fund 2,069,616 --
Putnam Income Fund 746,635 --
Putnam International Growth Fund 614,208 --
Investments in trust funds managed by
Mellon Bank N.A.:
Dreyfus/Laurel Prime Money Market Fund -- 3,477,286
Premier Balanced Fund -- 8,770,757
Dreyfus Disciplined Stock Fund -- 10,778,934
Dreyfus Bond Market Index Fund -- 454,565
Participants' loan fund (market value
approximates costs) 44,782 48,440
----------- -----------
Total investments 55,460,732 40,991,043
Receivables:
Contributions receivable from Michael Baker
Corporation 300,099 233,654
Accrued interest and securities sold 274 --
----------- ----------
Total Receivables 300,373 233,654
Cash and cash equivalents 2,046 --
----------- ----------
Total Plan assets 55,763,151 41,224,697
=========== ==========
Liabilities
Accrued liabilities 119,947 --
----------- ----------
Total Plan liabilities 119,947 --
----------- ----------
Participants' equity $55,643,204 $41,224,697
=========== ===========
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1996
- -----------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1996
-------------------------------
Michael Dreyfus/
Baker Laurel Prime
Common Stock Money Market
Fund Fund
Contributions:
Participants' $ 629,166 $ 119,472
Employer's 3,392,910 --
Dividends/interest income 276 41,979
Net appreciation in market
value of investments 4,610,960 --
Interfund transfers - net (537,070) 102,309
----------- ------------
Total additions 8,096,242 263,760
Distributions to participants 1,011,910 213,895
Fees 235 --
----------- ------------
Total deductions 1,012,145 213,895
----------- ------------
Net increase (decrease) in participants'
equity during the period 7,084,097 49,865
Transfer from Mellon to Putnam (Note 1) -- (3,527,151)
Participants' equity at beginning
of period 17,694,715 3,477,286
------------ ------------
Participants' equity at end of period $24,778,812 $ --
============ ============
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1996
- -----------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1996
-------------------------------
Dreyfus
Premier Disciplined
Balanced Stock
Fund Fund
Contributions:
Participants' $ 335,999 $ 486,900
Employer's -- --
Dividends/interest income 434,097 443,089
Net appreciation in market
value of investments -- --
Interfund transfers - net (239,141) 180,106
------------ --------------
Total additions 530,955 1,110,095
Distributions to participants 290,512 322,437
Fees -- --
------------ --------------
Total deductions 290,512 322,437
------------ --------------
Net increase (decrease) in participants'
equity during the period 240,443 787,658
Transfer from Mellon to Putnam (Note 1) (9,011,200) (11,566,592)
Participants' equity at beginning
of period 8,770,757 10,778,934
------------ -------------
Participants' equity at end of period $ -- $ --
============ =============
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1996
- -----------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1996
-------------------------------
Dreyfus Putnam
Bond Growth &
Market Index Income
Fund Fund
Contributions:
Participants' $ 58,271 $ 827,363
Employer's -- --
Dividends/interest income (12,582) 945,122
Net appreciation in market
value of investments -- 499,701
Interfund transfers - net 70,050 (1,595,842)
------------- -------------
Total additions 115,739 676,344
Distributions to participants 12,848 451,512
Fees -- 86
------------- -------------
Total deductions 12,848 451,598
------------- -------------
Net increase (decrease) in participants'
equity during the period 102,891 224,746
Transfer from Mellon to Putnam (Note 1) (557,456) 11,566,592
Participants' equity at beginning
of period 454,565 --
------------- ------------
Participants' equity at end of period $ -- $11,791,338
============= ============
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1996
- -----------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1996
-------------------------------
George Putnam
Putnam New
Fund of Opportunities
Boston Fund
Contributions:
Participants' $ 416,460 $ 1,386,648
Employer's -- --
Dividends/interest income 744,618 25,595
Net appreciation in market
value of investments 242,783 (103,031)
Interfund transfers - net (1,037,678) 2,125,032
------------- -------------
Total additions 366,183 3,434,244
Distributions to participants 402,629 95,196
Fees 51 66
------------- -------------
Total deductions 402,680 95,262
------------- -------------
Net increase (decrease) in participants'
equity during the period (36,497) 3,338,982
Transfer from Mellon to Putnam (Note 1) 9,011,200 --
Participants' equity at beginning
of period -- --
------------- -------------
Participants' equity at end of period $ 8,974,703 $ 3,338,982
============= =============
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1996
- -----------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1996
-------------------------------
Putnam
Money Putnam
Market Voyager
Fund Fund
Contributions:
Participants' $ 333,200 $ 965,526
Employer's -- --
Dividends/interest income 133,673 128,401
Net appreciation in market
value of investments -- (99,125)
Interfund transfers - net (448,463) 1,085,514
----------- ------------
Total additions 18,410 2,080,316
Distributions to participants 261,298 10,677
Fees 135 23
----------- ------------
Total deductions 261,433 10,700
----------- ------------
Net increase (decrease) in participants'
equity during the period (243,023) 2,069,616
Transfer from Mellon to Putnam (Note 1) 3,527,151 --
Participants' equity at beginning
of period -- --
----------- ------------
Participants' equity at end of period $3,284,128 $2,069,616
=========== ============
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1996
- -----------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1996
-------------------------------
Putnam
Putnam International
Income Growth
Fund Fund
Contributions:
Participants' $ 169,146 $ 260,009
Employer's -- --
Dividends/interest income 33,956 8,064
Net appreciation in market
value of investments 10,783 32,430
Interfund transfers - net (14,086) 316,803
------------ -------------
Total additions 199,799 617,306
Distributions to participants 10,618 3,091
Fees 2 7
------------ -------------
Total deductions 10,620 3,098
------------ -------------
Net increase (decrease) in participants'
equity during the period 189,179 614,208
Transfer from Mellon to Putnam (Note 1) 557,456 --
Participants' equity at beginning
of period -- --
------------ ------------
Participants' equity at end of period $ 746,635 $ 614,208
============ ============
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1996
- -----------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1996
-------------------------------
Participant
Notes
Receivable Combined
Contributions:
Participants' $ -- $ 5,988,160
Employer's -- 3,392,910
Dividends/interest income 3,876 2,930,164
Net appreciation in market
value of investments -- 5,194,501
Interfund transfers - net (7,534) --
------------ ------------
Total additions (3,658) 17,505,735
Distributions to participants -- 3,086,623
Fees -- 605
------------ ------------
Total deductions -- 3,087,228
------------ ------------
Net increase (decrease) in participants'
equity during the period (3,658) 14,418,507
Transfer from Mellon to Putnam (Note 1) -- --
Participants' equity at beginning
of period 48,440 41,224,697
------------ ------------
Participants' equity at end of period $ 44,782 $55,643,204
============ ============
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1995
- -----------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1995
-------------------------------
Dreyfus/
Laurel Prime Premier
Money Market Balanced
Fund Fund
Contributions:
Participants' $ 546,251 $1,167,216
Employer's -- --
Investment income 199,749 342,998
Net appreciation in market
value of investments -- 1,649,624
Interfund transfers - net (27,937) (131,436)
----------- ------------
Total additions 718,063 3,028,402
Distributions to participants (499,835) (705,672)
----------- -----------
Total deductions (499,835) (705,672)
----------- -----------
Net increase in participants'
equity during the period 218,228 2,322,730
Participants' equity at beginning
of period 3,259,058 6,448,027
----------- -----------
Participants' equity at end of period $3,477,286 $8,770,757
=========== ===========
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1995
- ------------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1995
-------------------------------
Dreyfus Dreyfus
Disciplined Bond Market
Stock Index
Fund Fund
Contributions:
Participants' $ 1,598,206 $ 181,499
Employer's - -
Investment income 353,018 18,956
Net appreciation in market
value of investments 2,589,252 30,232
Interfund transfers - net 123,123 50,592
------------ -----------
Total additions 4,663,599 281,279
Distributions to participants (769,598) (33,694)
------------ -----------
Total deductions (769,598) (33,694)
------------ -----------
Net increase in participants'
equity during the period 3,894,001 247,585
Participants' equity at beginning
of period 6,884,933 206,980
------------ -----------
Participants' equity at end of period $10,778,934 $ 454,565
============ ==========
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Income and Changes in Participants' Equity With Fund Information
Period Ended December 31, 1995
- -----------------------------------------------------------------------------
Changes in Participants' Equity
Period Ended December 31, 1995
-------------------------------
Michael
Baker Participant
Common Stock Loan
Fund Fund Total
Contributions:
Participants' $1,088,589 $ - $4,581,761
Employer's 2,918,272 - 2,918,272
Investment income 23,442 - 938,163
Unrealized appreciation in market
value of investments 3,244,162 - 7,513,270
Interfund transfers - net (40,177) 25,835 -
------------ --------- ------------
Total additions 7,234,288 25,835 15,951,466
Distributions to participants (856,568) - (2,865,367)
------------ --------- -----------
Total deductions (856,568) - (2,865,367)
------------ --------- -----------
Net increase in participants'
equity during the period 6,377,720 25,835 13,086,099
Participants' equity at beginning
of period 11,316,995 22,605 28,138,598
------------ -------- -----------
Participants' equity at end of period $17,694,715 $ 48,440 $41,224,697
============ ======== ============
The accompanying notes are an integral part of these financial statements.
Michael Baker Corporation
Employee Stock Ownership Plan
Periods Ended December 31, 1996 and 1995
Notes to Financial Statements
- -----------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
GENERAL
The following description of the Michael Baker Employee Stock Ownership Plan
(the ESOP, or the Plan) provides only general information. Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.
The ESOP is an individual account stock bonus plan under which a participant's
distributions are based on the amount contributed to that participant's
account, including any transferred amounts from the prior retirement plan and
any gains or losses and income and expense that may be allocated to the
participant's account. The Plan is subject to provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA).
COMMON STOCK
The primary purpose of the ESOP is to enable participating employees to
acquire an equity interest in Michael Baker Corporation (the Company).
Consistent with this purpose, contributions to the ESOP can be invested in the
Company's common stock (Common Stock and Series B Common Stock). At times,
however, common stock may not be available at a price acceptable to the ESOP
Committee (see Note 3), or it may be appropriate to retain some of the ESOP's
funds in a more liquid form so that the funds may be available for the payment
of benefits. In such cases, a portion of the ESOP's assets may be invested in
short-term investment funds, such as short-term corporate obligations or
short-term obligations of the U.S. government.
The ESOP's investment in the Company's common stock comprises 2,613,566(cost
of $14,016,656) and 2,211,086 (cost of $11,966,196) shares of Common Stock and
1,225,689(cost of $7,448,445) and 1,225,848 (cost of $7,440,333) shares of
Series B Common Stock at December 31, 1996 and 1995, respectively.
CONTRIBUTIONS
Participants contribute to the ESOP through a Section 401(k) Employee Salary
Redirection Election, whereby the participants may choose to have a percentage
of their salaries (including commissions, effective July 1, 1993) withheld and
contributed to the ESOP. The maximum amount of a participant's salary which
may be eligible for withholding for any Plan year can not exceed $150,000.
Additionally, the percentage may not exceed 15 percent of the participant's
salary. The ESOP also allows participants to roll over funds from a previous
employer's tax-qualified plan.
INVESTMENT OPTIONS
Each participant may direct Putnam Investments, Inc. (the Trustee) to invest
certain portions of his or her account in investment funds managed by the
Trustee.
Effective April 1, 1996, the Plan agreement was amended as a result of a
change in trustees from Mellon Bank N.A. (Mellon) to Putnam. Approximately
$44,420,000 in Plan assets (including the Michael Baker Common Stock Fund) was
transferred from Mellon to Putnam, which replaced Mellon as investment
Michael Baker Corporation
Employee Stock Ownership Plan
Periods Ended December 31, 1996 and 1995
Notes to Financial Statements
- -----------------------------------------------------------------------------
manager. As a result of this change, investment funds available to
participants are the Michael Baker Common Stock Fund (invested exclusively in
common stock of the Company), the Putnam New Opportunities Fund (invested in
long-term growth stocks within emerging industries), Putnam International
Growth Fund (invested in diversified corporate stocks outside of North
America), Putnam Voyager Fund (invested in diversified corporate stocks),
Putnam Fund for Growth and Income (invested in long-term growth stocks),
George Putnam Fund of Boston (invested in diversified capital growth and
current income stocks and bonds), Putnam Income Fund (invested in corporate
bonds) and the Putnam Money Market Fund (invested in short-term money market
securities).
Prior to April 1, 1996, the investment fund options available to employees
included the Michael Baker Common Stock Fund (invested exclusively in common
stock of the Company), managed by Mellon; the Dreyfus/Laurel Prime Money
Market Fund (invested in short-term, income producing securities); the Premier
Balanced Fund (invested in common stocks and bonds in proportions consistent
with their expected returns and risks as determined by the portfolio's
adviser); the Dreyfus Disciplined Stock Fund (invested in diversified
corporate stocks); and the Dreyfus Bond Market Index Fund (investing in U.S.
government and Securities and Exchange Commission (SEC)-registered obligations
of domestic corporations, foreign governments and supranational
organizations). During this time, Mellon served as the Adviser, Custodian,
Fund Accountant and Transfer Agent for the aforementioned investment funds.
Contributions by participants cannot be further directed within The Michael
Baker Common Stock Fund.
COMPANY MATCHING CONTRIBUTIONS AND VESTING OF BENEFITS
Under the provisions of the Plan, the Company will make a matching
contribution to the participants' accounts in an amount not less than 50
percent of the first 5 percent of the salary contributed by each participant.
Salary amounts over the 5 percent limit will not be matched by the Company.
All matching contributions can be invested only in the Company's Common Stock
or Series B Common Stock. During 1996 and 1995, the Company matched
participants' contributions on a dollar-for-dollar basis for the first 5
percent of participants' salaries contributed to the Plan.
The Board of Directors of the Company is authorized to make additional
discretionary contributions to the ESOP from time to time. However, no
discretionary contributions were made in 1996 or 1995.
All amounts in the participants' ESOP accounts that are attributable to the
transfer of funds from a terminated prior retirement plan, the rollover from a
previous employer's tax-qualified plan, participant contributions under Salary
Redirection Election and PAYSOP contributions are 100 percent vested and
nonforfeitable at all times.
All Company matching contributions to the participants' Salary Redirection
Election and discretionary contributions on behalf of the participants will
become 100 percent vested upon attainment of 3 years of service with the
Company or, if earlier, upon attainment of normal retirement date, disability
Michael Baker Corporation
Employee Stock Ownership Plan
Periods Ended December 31, 1996 and 1995
Notes to Financial Statements
- -----------------------------------------------------------------------------
or death. If a participant leaves employment with the Company before
attaining a vested interest in his or her Company matching contribution, the
contributions are forfeited and reduce future Company matching contributions.
DISTRIBUTIONS
The Plan provides for distribution of benefits upon retirement, total and
permanent disability, death, or termination of employment for any other
reason. The amount of distribution the participant or his or her beneficiary
is entitled to, based on the vesting requirements, is discussed above. A
participant may retire at age 65, or at age 55 if he or she has completed at
least 3 years of service. All distributions will be made in the form of a
single lump-sum distribution or in substantially equal installments over a
period not exceeding the life expectancy of the participant, or the joint life
expectancy of the participant and beneficiary, as the participant or his or
her beneficiary may elect. Distributions may be made in cash or shares of
common stock, at the discretion of the ESOP Committee.
PARTICIPANT LOANS
A participant may borrow money from the portion of his or her account
attributable to his or her own 401(k) plan contributions. Participant loans
may be obtained in the sole event of immediate and heavy financial need, where
the participant lacks other available resources. Loan amounts are limited to
the lower of $50,000 or 50 percent of the employee's deferred amount. All
loans will be drawn against the participant's account among the respective
investment options as directed, and are secured by the assets within the
participant's accounts. Interest rates on outstanding notes receivable range
from 9.75 percent to 12.85 percent.
PLAN TERMINATION
Although it has not expressed an intention to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions set forth in the Employee Retirement Income
Security Act of 1974 (ERISA).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Trustee performs the recordkeeping function for the ESOP and the records
are maintained on a cash basis. The financial statements included herein
include all material adjustments to place the financial statements on the
accrual basis of accounting in accordance with generally accepted accounting
principles.
The investment in common stock of the Company is stated at publicly-traded
closing market values as of December 31, 1996 and 1995. As of December 31,
1996 and 1995, the ESOP owns approximately 46 percent and 41 percent,
respectively, of the outstanding shares of the Company's common stock;
therefore, such valuation might be subject to significant fluctuation in the
event of a substantial liquidation of such holdings by the ESOP.
Michael Baker Corporation
Employee Stock Ownership Plan
Periods Ended December 31, 1996 and 1995
Notes to Financial Statements
- -----------------------------------------------------------------------------
INVESTMENTS
The difference between the cost and current market value of investment
purchases since the beginning of the period and the increase or decrease in
such stated market value of investments held at the beginning of the period
reported is included in the increase (decrease) in net appreciation
(depreciation) in market value of investments in the statements of changes in
Plan equity. A significant portion of the investments of the ESOP is
publicly-traded shares of the Company's Common Stock or are readily
convertible shares of Series B Common Stock and, therefore, have a published
market price. The accompanying financial statements should be read in
conjunction with the consolidated financial statements appearing within
Exhibit 13.1, which has been incorporated by reference into various items of
Michael Baker Corporation's Annual Report on Form 10-K.
DISTRIBUTIONS
Distributions to participants are recorded when paid.
3. PLAN ADMINISTRATOR AND TRUSTEE
The ESOP is administered by a committee consisting of nine employees who are
ESOP participants and the Chief Executive Officer and the Chief Financial
Officer of the Company, who serve as nonvoting members. The Committee is
responsible for the general day-to-day administration of the ESOP, such as
determining eligibility, participant allocation procedures and distribution of
benefits.
Under the trust agreement, the Trustee will invest the contributions to the
ESOP and make distributions of ESOP assets as directed by the ESOP Committee.
The Company provides certain administrative and accounting services to the
ESOP at no cost. In addition, the Company pays the cost of services provided
to the ESOP by the ESOP's Trustee, legal counsel and independent accountants.
4. QUALIFICATION OF THE PLAN
By a determination letter from the IRS dated December 30, 1994, the Company
was notified that the Plan and related trust are designed in accordance with
applicable sections of the Internal Revenue Code. Therefore, no provision for
income taxes has been included in the Plan's financial statements. This
determination letter is applicable for amendments adopted through October 27,
1993. The Plan has been amended since receiving the determination letter;
however, the Plan Administrator and the Plan's counsel believe that the Plan
is currently designed and being operated in compliance with applicable
requirements of the Code. Therefore, they believe the Plan was qualified and
the related trust was tax-exempt as of the financial statement date.
Michael Baker Corporation
Employee Stock Ownership Plan
Periods Ended December 31, 1995 and 1994
Notes to Financial Statements
- -----------------------------------------------------------------------------
5. DISTRIBUTIONS TO PARTICIPANTS
At December 31, 1996 and 1995, the Plan had distributions to employees that
had been authorized but not paid of $103,234 and $314,453, respectively. The
following table is a reconciliation of participants' equity at December 31,
1996 and 1995 per the financial statements to the Plan's Form 5500,
respectively:
December 31,
1996 1995
Participants' equity per the
financial statements $55,643,205 $41,224,697
------------ ------------
Amounts allocated to withdrawing
participants:
Michael Baker Common Stock Fund (94,277) (110,060)
Putnam Money Market Fund (8,063) --
Putnam New Opportunities Fund (894) --
Dreyfus/Laurel Prime Money Market Fund -- (115,740)
Dreyfus Premier Balanced Fund -- (52,745)
Dreyfus Disciplined Stock Fund -- (31,039)
Dreyfus Bond Market Index Fund -- (4,869)
----------- ------------
(103,234) (314,453)
----------- ------------
Participants' equity per Form 5500 $55,539,971 $40,910,244
============ ============
The following is a reconciliation of distributions to employees per the
financial statements to the Plan's Form 5500 for the period ended December 31,
1996:
December 31,
1996
Distributions to employees per the
financial statements $3,086,623
Add: Distributions to employees
authorized but not paid as of
December 31, 1996 103,234
Less: Distributions to employees
authorized but not paid as of
December 31, 1995 (314,453)
-----------
Distributions to employees per
Form 5500 $2,875,404
===========
Michael Baker Corporation
Employee Stock Ownership Plan
Schedule of Assets Held for Investment Purposes - Form 5500, Item 27a
December 31, 1996
Additional Information - Schedule I
- ---------------------------------------------------------------------
Cost of Current
Shares Description asset value
*Michael Baker Corporation
2,613,566 Common Stock $14,016,656 $16,661,483
*Michael Baker Corporation
1,225,689 Common Stock - Series B 7,448,445 7,813,775
121,082 *Putnam Temporary Investments 121,082 121,082
547,238 *George Putnam Fund of Boston 8,764,343 8,974,703
654,347 *Putnam Growth & Income Fund 11,345,809 11,791,338
106,510 *Putnam Income Fund 735,342 746,635
128,388 *Putnam Voyager Fund 2,170,262 2,069,616
82,180 *Putnam New Opportunities Fund 3,438,892 3,338,982
40,865 *Putnam International Growth Fund 581,895 614,208
3,284,128 *Putnam Money Market Fund 3,284,128 3,284,128
N/A *Participant notes receivable:
9.75% to 12.85%, due April 18,
1998 to August 28, 2000 44,782 44,782
---------- -----------
$51,951,636 $55,460,732
=========== ===========
*Party-in-interest
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Chairman of the Plan Administrative Committee appointed by the Board of
Directors of Michael Baker Corporation has duly caused this annual report to
be signed by the undersigned thereunto duly authorized.
MICHAEL BAKER CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
Date: March 28, 1997 By:/s/ Michael J. Hegarty
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Michael J. Hegarty
Chairman of the Plan
Administrative Committee
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Form 11-K of our report dated
March 15, 1997, appearing on page 1 of the Annual Report of the Michael Baker
Corporation Employee Stock Ownership Plan as an exhibit to the registrant's
Form 10-K for the year ended December 31, 1996. We also consent to the
incorporation by reference of our report in this Form 11-K into the
registrant's Registration Statement on Form S-8 (no. 33-14058).
/s/ Price Waterhouse LLP
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Price Waterhouse LLP
Pittsburgh, Pennsylvania
March 28, 1997