SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
Preliminary Proxy Statement Confidential, For Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
Definitive Additional Material
Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12
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HAGLER BAILLY, INC.
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid.
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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:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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Hagler Bailly, Inc.
ARLINGTON, VIRGINIA
April 7, 2000
TO OUR STOCKHOLDERS:
It is our pleasure to invite you to our 2000 Annual Meeting of Stockholders (the
"Annual Meeting") to be held at Hagler Bailly, Inc.'s corporate headquarters
located at 1530 Wilson Boulevard, Suite 400, Arlington, Virginia 22209 on May
11, 2000 at 2:00 p.m., Eastern Daylight Time.
The following Notice of Annual Meeting of Stockholders ("Notice of Meeting")
identifies each business item for your action. These items and the vote the
Board of Directors recommends are as follows:
Item Recommended Vote
1. Election of two directors. FOR
2. Ratification of Ernst & Young LLP as independent auditors. FOR
3. To consider and vote upon a proposed amendment to the Hagler Bailly, Inc. FOR
Employee Incentive and Non-Qualified Stock Option and Restricted FOR Stock
Plan to increase the number of shares authorized to be issued under the
plan from 5,000,000 to 8,000,000.
We have also included a Proxy Statement that contains more information about
these items and the Annual Meeting.
We urge you to read the Notice of Meeting and Proxy Statement so that you may be
informed about the business to come before the Annual Meeting. At your earliest
convenience, to make sure your shares will be represented, please sign and
return the Proxy Card in the postage-paid envelope, whether or not you plan to
attend the Annual Meeting.
If you attend the Annual Meeting and wish to vote in person, the ballot that you
submit at the Annual Meeting will supersede your proxy.
We look forward to seeing you at the Annual Meeting. On behalf of the management
and directors of Hagler Bailly, Inc., we want to thank you in advance for your
continued support and confidence in 2000.
/s/ William E. Dickenson /s/ Henri-Claude A. Bailly
WILLIAM E. DICKENSON HENRI-CLAUDE A. BAILLY
President and Chief Executive Officer Chairman of the Board
Hagler Bailly, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE OWNERS OF COMMON STOCK OF HAGLER BAILLY, INC.:
The Annual Meeting of Stockholders (the "Annual Meeting") of Hagler Bailly,
Inc., a Delaware corporation, will be held at Hagler Bailly, Inc.'s corporate
headquarters at 1530 Wilson Boulevard, Suite 400, Arlington, Virginia 22209 on
May 11, 2000, at 2:00 p.m., Eastern Daylight Time, for the following purposes:
1. To elect the following directors for a term of three years: Messrs.
Henri-Claude A. Bailly and Alain M. Streicher (designated as Proposal 1 in
the accompanying Proxy Statement).
2. To consider and take action upon a proposal to ratify the selection by the
Audit Committee of the Board of Directors of Ernst & Young LLP as
independent auditors to audit consolidated financial statements of Hagler
Bailly, Inc. for the year 2000 (designated as Proposal 2 in the
accompanying Proxy Statement).
3. To consider and vote upon a proposed amendment to the Hagler Bailly, Inc.
Employee Incentive and Non-Qualified Stock Option and Restricted Stock Plan
to increase the number of shares authorized to be issued under the plan
from 5,000,000 to 8,000,000 (designated as Proposal 3 in the accompanying
Proxy Statement).
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Stockholders of record of common stock, par value $0.01 per share, at the close
of business on March 31, 2000, the record date fixed by the Board of Directors,
are entitled to notice of, and to vote at, the Annual Meeting, as more fully
described in the accompanying Proxy Statement.
Stockholders who cannot attend the Annual Meeting are urged to sign, date and
otherwise complete the enclosed Proxy Card and return it promptly in the
postage-paid envelope provided. Any stockholder giving a proxy has the right to
revoke it at any time before it is voted. Any stockholder who is present at the
Annual Meeting may vote in person, thereby canceling any previous proxy.
By Order of the Board of Directors,
/s/ Geoffrey W. Bobsin
GEOFFREY W. BOBSIN
Secretary
EACH STOCKHOLDER IS URGED TO VOTE PROMPTLY BY SIGNING AND RETURNING THE ENCLOSED
PROXY CARD. IF A STOCKHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE MAY REVOKE
THE PROXY AND VOTE THE SHARES IN PERSON.
1 HAGLER BAILLY, INC.
1530 WILSON BOULEVARD
ARLINGTON, VIRGINIA 22209
APRIL 7, 2000
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 11, 2000
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Hagler Bailly, Inc. ("Hagler Bailly" or the
"Company") for use at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held on May 11, 2000 at Hagler Bailly, Inc.'s corporate headquarters
located at 1530 Wilson Boulevard, Suite 400, Arlington, Virginia, 22209
commencing at 2:00 p.m., Eastern Daylight Time, and at any adjournment or
postponement thereof, for the purpose of considering and acting upon the matters
set forth in the accompanying Notice of Annual Meeting of Stockholders ("Notice
of Meeting").
VOTING AT ANNUAL MEETING; RECORD DATE
This Proxy Statement and the accompanying Proxy Card are first being mailed to
stockholders entitled to vote at the Annual Meeting on or about April 7, 2000.
Proxies are solicited to give all stockholders of record on March 31, 2000 (the
"Record Date") an opportunity to vote on matters to be presented at the Annual
Meeting. Shares can be voted at the meeting only if the stockholder is present
or represented by proxy.
Only holders of record of common stock on March 31, 2000 will be entitled to
notice of, and to vote at, the Annual Meeting. On that date 17,297,812 shares of
common stock were issued and outstanding. Each share of common stock, par value
$0.01 per share, represented at the Annual Meeting is entitled to one vote on
each matter properly brought before the Annual Meeting.
REQUIRED VOTE
Directors are elected by a plurality of the votes cast by the stockholders
entitled to vote at a meeting at which a quorum is present. The other matters
that the Board of Directors has submitted for stockholder approval at the Annual
Meeting shall be determined by a majority of the votes cast.
The presence in person or by proxy of the holders of a majority of the votes
entitled to be cast at the Annual Meeting is necessary to constitute a quorum.
An abstention is deemed "present" but is not deemed a "vote cast." As a result,
abstention and broker "non-votes" are not included in the tabulation of the
voting results on the election of directors or issues requiring approval of a
majority of the votes cast. A broker "non-vote" occurs when a nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power on that item and has not
received instruction from the beneficial owner. Broker "non-votes" and the
shares as to which a stockholder abstains are included in determining whether a
quorum is present.
PROXIES
All shares entitled to vote and represented by properly executed proxies
received prior to the Annual Meeting, and not revoked, will be voted as
instructed on those proxies. If no instructions are indicated, the shares will
be voted as recommended by the Board of Directors.
If any other matters are properly presented at the Annual Meeting for
consideration, the persons named in the enclosed form of proxy and acting
thereunder will have discretion to vote on those matters in accordance with
their own judgment to the same extent as the person signing the proxy would be
entitled to vote. In accordance with the Company's by-laws, the Annual Meeting
may be adjourned, including by the Chairman, in order to permit the solicitation
of additional proxies. The Company does not anticipate that any other matters
will be raised at the Annual Meeting.
Any proxy may be revoked at any time before it is voted by (i) filing with the
Secretary of the Company, at or before the taking of the vote at the Annual
Meeting, a written notice of revocation or a duly executed proxy, in either case
dated later than the prior proxy relating to the same shares or (ii) attending
the Annual Meeting and voting in person (although attendance at the Annual
Meeting will not of itself revoke a proxy). Any written notice of revocation or
subsequent proxy should be sent so as to be delivered to Hagler Bailly, Inc.,
1530 Wilson Boulevard, Arlington, Virginia 22209, Attention: Geoffrey W. Bobsin,
Secretary, or hand delivered to the Secretary, before the taking of the vote at
the Annual Meeting.
A copy of the Company's Annual Report to Stockholders for the year 1999,
including financial statements, is being mailed simultaneously with the Proxy
Statement to all stockholders entitled to vote at the Annual Meeting.
ELECTION OF DIRECTORS (Proposal 1)
The Board of Directors is currently divided into three classes. The terms of
Class I directors expire in 2001, those of Class II directors expire in 2002 and
those of Class III directors expire in 2003. The directors of each class are
elected for a three-year term. The Board of Directors proposes the two nominees
listed below for election as directors to serve until the 2003 Annual Meeting
and until their successors are elected and qualified or until their earlier
resignation or removal. The persons named in the enclosed proxy intend to vote
such proxy for the election of each of the two nominees named below, unless the
stockholder indicates on the proxy that the vote should be withheld from any or
all of the nominees. The terms of the other directors will expire at the Annual
Meetings of Stockholders in 2001 and 2002, as indicated above. R. Gene Brown has
notified the Company that he will not seek re-election as a director. Dr. Brown
was a Class III director and has been a director of the Company since 1998. The
Board of Directors has set the number of directors at eight, effective upon the
expiration of Dr. Brown's term on the date of the Annual Meeting.
The Company expects each nominee for election as a director at the Annual
Meeting to be able to accept such election. If any nominee is unable to accept
such election, proxies will be voted in favor of the remainder of those
nominated and may be voted for substitute nominees. A brief listing of the
principal occupation, other major affiliations and age of each nominee and each
director follows.
Nominees for Election at this Meeting to Terms Expiring in 2003
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Henri-Claude A. Bailly Director since 1995
Age 53
Mr. Bailly is chairman of the Board of Directors of the Company and chairman of
the Board of Directors of Cap Gemini Hagler Bailly, LLC and Hagler Bailly Risk
Advisors, Inc. He served as the Company's chief executive officer from its
founding in 1980 until April 1999. From 1984 to 1995, Mr. Bailly was employed by
RCG International, Inc. ("RCG") the consulting arm of Reliance Group Holdings,
in a series of management positions culminating in senior vice president of RCG
and chairman of the board and chief executive officer of RCG/Hagler Bailly,
Inc., a predecessor of the Company. Mr. Bailly holds a Masters of Business
Administration degree from Harvard University and Bachelor and Master of
Architecture degrees from the University of Washington. Mr. Bailly serves on the
Board of Directors of the United States Energy Association and was appointed as
a member of the National Coal Council.
Member of the Governance Committee of the Board of Directors.
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Alain M. Streicher Director since 1995
Age 51
Mr. Streicher is executive vice president - international operations of the
Company and PHB Hagler Bailly, Inc. Mr. Streicher has held various management
positions with the Company since its founding in 1980, including senior vice
president and acting chief operating officer and chief executive officer of
Hagler Bailly Services, Inc. He has been a member of the Company's Board of
Directors since May 1995. Mr. Streicher has over 25 years of experience,
primarily in energy markets, and has worked in over 100 countries. Prior to
joining the Company, he was an industrial energy analyst at the CEREN in Paris
(1976-1980), during which time he taught economics at the Ecole Centrale de
Paris and the Institut National Superieur de Techniques Nucleaires. He also
served as advisor to the Minister of Planning of Laos for energy and rural
development (1974-1976). Mr. Streicher holds a Bachelor of Science degree in
Physics and Chemistry from the University of Orleans (France) and a Masters
degree in Physics from the University of Grenoble (France) and a Masters degree
in Industrial Management from the Ecole des Mines in Paris (France).
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Incumbent Directors - Term Expiring 2001
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Jasjeet S. Cheema Director since 1999
Age 55
Mr. Cheema is executive president - United States and Canada operations of the
Company and PHB Hagler Bailly, Inc. Mr. Cheema joined the Company through its
merger with TB&A Group, Inc. and its wholly-owned subsidiary, Theodore Barry &
Associates (collectively, "TB&A") in February 1998. At TB&A, he held various
positions and served as president since 1980 until its merger with the Company.
Prior to joining TB&A, he worked for Getty Oil Company as a manger of its
corporate technical applications group.
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Robert W. Fri Director since 1995
Age 64
Mr. Fri has served as a member of the Board of Directors of the Company since
May 1995. Mr. Fri is currently director of the National Museum of Natural
History at the Smithsonian Institution, and Senior Fellow Emeritus at Resources
for the Future, where he served as president from 1986 to 1995. Mr. Fri is a
director of American Electric Power Company, a member of the University of
Chicago Board of Governors for the Argonne National Laboratory and a trustee of
Science Service, Inc., publisher of Science News and organizer of the
Westinghouse Science Talent Search. In 1971, Mr. Fri became the First Deputy
Administrator of the United States Environmental Protection Agency. In 1975,
President Ford appointed Mr. Fri as the Deputy Administrator of the United
States Energy Research and Development Administration. Mr. Fri served as acting
administrator of both agencies for extended periods. From 1978 to 1986, Mr. Fri
operated Energy Transition Corporation. Mr. Fri began his career with McKinsey &
Company, where he was elected a principal. Mr. Fri earned a Bachelor of Arts
degree in Physics from Rice University and a Masters degree in Business
Administration from Harvard University.
Member of the Audit Committee, the Executive Compensation Committee, and the
Stock Option Committee of the Board of Directors.
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Howard W. Pifer III Director since 1998
Age 58
Dr. Pifer is chairman of PHB Hagler Bailly, Inc. and was chairman of the Company
from August 1998 to August 1999. He served as chairman of the Board of Directors
of Putnam, Hayes & Bartlett, Inc. ("PHB") from 1991 to August 1998, having
previously served as PHB's president and chief executive officer. Prior to
founding PHB in 1976, Dr. Pifer was a member of the Harvard Business School
faculty, where he taught courses in managerial economics, finance, public policy
and strategic planning. From 1973 to 1976, Dr. Pifer served as vice president of
the Energy & Environment Group at Temple, Baker & Sloane, Inc.
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Incumbent Directors - Term Expiring 2002
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William E. Dickenson Director since 1999
Age 51
Mr. Dickenson is president and chief executive officer of the Company. He served
as president and chief executive officer of PHB Hagler Bailly, Inc. from March
1999 to January 2000. He served as PHB's president and chief executive officer
from 1992 to August 1998 and was the managing director responsible for its
litigation support practice area from 1983 through 1991. From 1978 to 1983, Mr.
Dickenson managed major antitrust litigation and consulting assignments at
Dickenson, O'Brien & Associates, which he founded and served as president. Prior
to that he was employed at Cambridge Research Institute and also served in a
variety of positions at the Tennessee Valley Authority.
Member of the Executive Compensation Committee of the Board of Directors.
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Fred M. Schriever Director since 1995
Age 69
Mr. Schriever retired in April 1996 from RCG. Mr. Schriever was employed by RCG
in various positions since 1971, most recently as its chairman and chief
executive officer. Prior to joining RCG, Mr. Schriever was a partner of Booz
Allen & Hamilton. Since 1996, Mr. Schriever has been a consultant to various
industry groups. Mr. Schriever is a member of the Board of Directors of The
National Executive Service Corps and chairman of their operations committee. Mr.
Schriever is a Fellow of both the Institute of Directors and the Institute of
Management Consultants in the United Kingdom. Mr. Schriever is also a member of
both the United States Institute of Management Consultants and the American
Society of Mechanical Engineers, and is a Certified Management Consultant. Mr.
Schriever earned Bachelor and Masters degrees from Polytechnic University.
Member of the Audit Committee, the Executive Compensation Committee, and the
Stock Option Committee of the Board of Directors.
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Richard H. O'Toole Director since 1997
Age 53
Mr. O'Toole has served as a member of the Board of Directors of the Company
since July 1997. He is currently a member of the Boards of Directors of Esat
Telecom Group plc, Epower Limited and Sonae.com SGPS. A former diplomat, Mr.
O'Toole has held a number of posts in both the public and private sectors. From
1976 to 1979, he was Special Assistant in the Office of the Executive Director
of the Organization for Economic Co-operation and Development's (OECD)
International Energy Agency, Paris. From 1979 to 1984, he held various senior
posts in Dublin and Geneva with the Irish Foreign Ministry. From 1985 to 1989,
he was Chef de Cabinet in the European Commission, Brussels. In 1989, he joined
the aviation-leasing firm, GPA Group plc and became Managing Director of its GPA
Technologies Division. From 1993 to 1995, he served as Assistant Director
General of the General Agreement on Tariffs and Trade (GATT) and its successor
organization, the World Trade Organization. From 1996 to 2000, he has served
with the electrical engineering and technology group, ABB Limited, as Head of
Corporate Staff in Zurich responsible for Government Affairs and as a Director
of ABB Europe Limited, Brussels. Mr. O'Toole holds Bachelor and Master of
Science degrees from University College, Galway.
Member of the Audit Committee and the Governance Committee of the Board of
Directors.
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COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has designated three principal standing committees and a
standing subcommittee of one of such committees.
The AUDIT COMMITTEE, established in 1997 after the Company became a
publicly-traded company, consists of three members, all of whom are independent,
non-employee directors. Members of the committee are Messrs. R. Gene Brown
(Chairman)*, Richard H. O'Toole and Fred M. Schriever. The Audit Committee
met five times in 1999. The Audit Committee oversees all internal and external
audits of the Company and its subsidiaries, conducts inquiries and
investigations of the Company's internal controls and compliance with the law
and makes recommendations and reports to the Board of Directors. In fulfillment
of those responsibilities it reviews the qualifications of Hagler Bailly's
independent auditors, makes recommendations to the Board of Directors regarding
the selection of independent auditors, reviews the scope, fees and results of
any audit and reviews non-audit services and related fees provided by the
independent auditors.
The EXECUTIVE COMPENSATION COMMITTEE consists of four members, three of whom are
independent, non-employee directors. Members of the committee are Messrs. R.
Gene Brown*, William E. Dickenson**, Robert W. Fri and Fred M. Schriever
(Chairman). The Executive Compensation Committee met twice during 1999. This
committee is responsible for the review and approval of the compensation,
including bonuses, conditions of employment of officers of the Company and the
administration of all salary and incentive compensation plans for the officers
of Hagler Bailly, Inc. Its Report on Executive Compensation is set forth herein
under the caption "Compensation Committee Report on Compensation of Executive
Officers of the Company."
The STOCK OPTION COMMITTEE, a subcommittee of the Executive Compensation
Committee, has three members, all of whom are independent, non-employee
directors. Members of the committee are Messrs. R. Gene Brown*, Robert W.
Fri and Fred M. Schriever (Chairman). The Stock Option Committee did not meet
during 1999. This committee administers the Hagler Bailly, Inc. Employee
Incentive and Non-Qualified Stock Option and Restricted Stock Plan (the "Stock
Option Plan") and has the authority, as does the full Board of Directors, to
grant options and restricted stock thereunder.
The GOVERNANCE COMMITTEE has three members, Henri-Claude A. Bailly, Robert W.
Fri (Chairman) and Richard H. O'Toole. The Governance Committee serves as a
nominating committee for candidates for election of the Board of Directors,
screens and identifies candidates for election to management of the Company and
makes recommendations to the president and chief executive officer and the Board
of Directors for senior management positions. The Governance Committee also
reviews and makes recommendations to the Board of Directors on the compensation
of non-employee directors of the Board of Directors and makes recommendations to
the Board of Directors on corporate governance. The Governance Committee met
twice during 1999.
The Board of Directors does not have a nominating committee. The entire Board of
Directors makes the selection of nominees for the Board of Directors.
During 1999, the Board of Directors met ten times. No incumbent director
attended fewer than 75% of the total number of meetings of the Board of
Directors and the committees of which he was a member.
DIRECTOR COMPENSATION
Directors who are not executive officers of the Company are paid an annual
retainer of $10,000 and a fee of $1,000 for each meeting of the Board of
Directors and each meeting of a committee or subcommittee of the Board of
Directors attended in person or by telephone. All directors are reimbursed for
travel expenses incurred in connection with attending Board of Directors and
committee meetings. Each committee chairman is paid an additional annual stipend
of $3,000. Directors are not entitled to additional fees for serving on
committees of the Board of Directors. Messrs. Brown, Fri, O'Toole and Schriever,
each non-employee directors of the Company, were granted options to purchase
10,500, 7,500, 7,500 and 7,500 shares of Common Stock, respectively, in 1999.
Pursuant to the terms of the Stock Option Plan, each director of the Company who
is not otherwise employed by the Company is entitled annually to an automatic
grant of an option to purchase 7,500 shares.
*R. Gene Brown has notified the Company that he will not seek re-election
as a director.
**Mr. Dickenson replaced Mr. Bailly, who served as a memeber of the
Executive Compensation Committee of the Board of Directors of the Company
from January 1, 1999 to March 30, 1999.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below is the name, address, stock ownership and voting power of each
person or group of persons known by the Company to own beneficially more than
five percent (5%) of the outstanding shares of the Company's common stock as of
March 1, 2000.
Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent of Class
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Cap Gemini S.A. 2,596,243(1) 14.48
11, rue de Tilsitt
75017 Paris, France
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T. Rowe Price Associates, Inc. 1,350,800(2) 7.53
100 E. Pratt Street
Baltimore, Maryland 21202
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Henri-Claude A. Bailly 908,486(3) 5.07
c/o Hagler Bailly, Inc.
1530 Wilson Boulevard, Suite 400
Arlington, Virginia 22209
============================================== ================================================= ====================
(1) On January 7, 2000, Cap Gemini S.A. and Cap Gemini America, Inc. (formerly
named Cap Gemini Holding, Inc.) filed an amendment to a Schedule 13D with
the Securities and Exchange Commission reporting beneficial ownership of
2,125,268 and 470,975 shares of the Company's Common Stock, respectively.
(2) On February 14, 2000, T. Rowe Price Associates, Inc. (Price Associates)
filed a Schedule 13G with the Securities and Exchange Commission reporting
beneficial ownership of 1,350,800 shares of the Company's Common Stock.
These securities are owned by various individual and institutional
investors including T. Rowe Price New Horizons Fund, Inc. (which owns
1,250,000 shares, representing 6.97% of the shares outstanding), which
Price Associates serves as an investment advisor with power to direct
investments and/or sole power to vote the securities. For purposes of the
reporting requirements of the Securities Exchange Act of 1934, Price
Associates is deemed to be a beneficial owner of such securities; however,
Price Associates expressly disclaims that it is, in fact, the beneficial
owner of such securities.
(3) Includes 72,500 shares of common stock held in trust by Mr. Bailly and Mr.
Streicher on the behalf of Mr. Streicher's children, and options to
purchase 153,300 shares of common stock.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Hagler Bailly Common Stock at December 31, 1999, by (i) each
director and director nominee, (ii) the chief executive officer and the four
most highly paid executive officers who earned more than $100,000 during the
year ended December 31, 1999 (the "Named Executive Officers") and (iii) all
executive officers and directors as a group.
Amount and Nature of Percent of Class
Beneficial Ownership
Name of Beneficial Owner
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Henri-Claude A. Bailly 908,486(1) 5.07
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R. Gene Brown 23,618(2) *
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John C. Butler III 283,795(3) 1.58
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Jasjeet S. Cheema 69,612(4) *
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William E. Dickenson 515,810(5) 2.88
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Robert W. Fri 26,200(6) *
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William H. Hieronymus 209,513(7) 1.17
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Richard H. O'Toole 13,500(8) *
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Howard W. Pifer III 515,810(9) 2.88
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Fred M. Schriever 84,748(10) *
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Alain M. Streicher 512,677(11) 2.86
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Walter H. A. Vandaele 252,645(12) 1.42
=================================================================== =========================== ===================
All Directors and Executive Officers as a Group 6,566,614 36.66
=================================================================== =========================== ===================
* Less than one percent (1%) of the outstanding shares.
(1) Includes 72,500 shares of common stock held in trust by Mr. Bailly and
Mr. Streicher on the behalf of Mr. Streicher's children and options to
purchase 153,300 shares of common stock.
(2) Includes options to purchase 10,500 shares of common stock.
(3) Includes options to purchase 28,600 shares of common stock.
(4) Includes options to purchase 19,500 shares of common stock.
(5) Includes options to purchase 69,216 shares of common stock.
(6) Includes options to purchase 18,687 shares of common stock.
(7) Includes options to purchase 18,116 shares of common stock.
(8) Consists of options to purchase 13,500 shares of common stock.
(9) Includes options to purchase 69,216 shares of common stock.
(10) Includes options to purchase 18,686 shares of common stock.
(11) Includes 72,500 shares of common stock held in trust by Mr. Bailly and
Mr. Streicher on the behalf of Mr. Streicher's children and options to
purchase 22,000 shares of common stock.
(12) Includes options to purchase 27,450 shares of common stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent
(10%) of a registered class of the Company's equity securities, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). SEC regulations require the Company's executive officers,
directors and greater than ten percent (10%) stockholders to furnish the Company
with copies of the reports they are required to file. Based solely on a review
of the copies of such reports furnished to the Company, the Company believes
that during 1999, its executive officers, directors, and greater than ten
percent (10%) beneficial owners complied with all applicable Section 16(a)
filing requirements, except that one report with respect to each of Messrs.
Stephen A. Mitnick and Alain M. Streicher was filed late.
COMPENSATION INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee of the Company in 1999 was composed of
three independent, non-employee directors, R. Gene Brown, Robert W. Fri and Fred
M. Schriever, and William E. Dickenson, president and chief executive officer.
EXECUTIVE COMPENSATION SUMMARY TABLE
The following table sets forth compensation awarded or earned by the Named
Executive Officers during the year ended December 31, 1999.
Summary Compensation Table
Annual Long-Term
Compensation Compensation
---------------------------------------- -------------
All Other Securities
Year Salary Bonus Compensation Underlying Other Annual
Name and Principal Position ($) ($) ($) Options (#) Compensation ($)
- ----------------------------------
William E. Dickenson 1999 348,036 -- -- 77,100 23,754 (1)
Chief Executive Officer, Hagler 1998 119,628 (12) -- 16,798 (10) 92,000 3,034 (6)
Bailly, Inc. 3/31/99 to 12/31/99
- ----------------------------------
- ---------------------------------- ------- ------------- ------------ ---------------- --------------- ------------------
Henri-Claude A. Bailly 1999 412,582 -- 45,351 (11) 30,000 23,906 (2)
President and Chief Executive 1998 393,759 -- -- -- 864 (3)
Officer, Hagler Bailly, Inc. 1997 376,184 200,000 -- 172,876 16,733 (4)
from 1/1/99 to 3/30/99
Vice Chairman, Hagler Bailly,
Inc. from 4/1/99 to 8/31/99
Chairman, Hagler Bailly, Inc. as
of 9/1/99
- ---------------------------------- ------- ------------- ------------ ---------------- --------------- ------------------
John C. Butler III 1999 296,556 242,000 -- 37,200 22,993 (5)
Senior Vice President, PHB 1998 99,576 (12) -- 23,565 (13) 30,000 1,658 (6)
Hagler Bailly
- ---------------------------------- ------- ------------- ------------ ---------------- --------------- ------------------
William H. Hieronymus 1999 296,556 225,000 -- 27,900 25,968 (7)
Senior Vice President, PHB
Hagler Bailly, Inc.
- ---------------------------------- ------- ------------- ------------ ---------------- --------------- ------------------
Howard W. Pifer III 1999 348,036 300,000 -- 77,100 26,976 (8)
Chairman, PHB Hagler Bailly, Inc. 1998 119,628 (12) 141,921 63,494 (10) 92,000 3,537 (6)
- ---------------------------------- ------- ------------- ------------ ---------------- --------------- ------------------
Walter H. A. Vandaele 1999 296,556 320,000 -- 34,900 25,106 (9)
Senior Vice President, PHB
Hagler Bailly, Inc.
- ---------------------------------- ------- ------------- ------------ ---------------- --------------- ------------------
(1) Represents $20,000 in profit sharing under the Company's Profit Sharing
Plan and $3,754 in life insurance premium payments.
(2) Represents $20,000 profit sharing under the Company's Profit Sharing Plan
and $3,906 in life insurance premium payments.
(3) Represents $864 in life insurance premium payments.
(4) Represents $14,357 in matching and profit sharing under the Company's
Profit Sharing Plan and $2,376 in life insurance premium payments.
(5) Represents $20,000 in profit sharing under the Company's Profit Sharing
Plan and $2,993 in life insurance premium payments.
(6) Represents parking or life insurance payments or both pro-rated from August
29, 1998, the effective date of the officer's employment, to year-end 1999.
(7) Represents $20,000 in profit sharing under the Company's Profit Sharing
Plan and $5,968 in life insurance premium payments.
(8) Represents $20,000 in profit sharing under the Company's Profit Sharing
Plan and $6,976 in life insurance premium payments.
(9) Represents $20,000 in profit sharing under the Company's Profit Sharing
Plan and $5,106 in life insurance premium payments.
(10) Represents payment for total accrued leave pro-rated from August 29,1998,
the effective date of each officer's employment with the Company, to
year-end 1998.
(11) Represents payment for leave over and above carry-over limit.
(12) Represents base salary, pro-rated from August 29, 1998, the effective date
of each officer's employment agreement with the Company, to the year-end
1999.
(13) Represents $19,709 in total accrued leave, pro-rated from August 29, 1998,
the effective date the officer's employment with the Company, to year-end
1998 and $3,856 in deferred compensation pro-rated from August 29, 1998,
the effective date of the officer's employment agreement with the Company,
to year-end 1998.
STOCK OPTION GRANTS DURING 1999
The following table presents information with respect to stock option grants
during the year ended December 31, 1999 to the Named Executive Officers.
Option Grants in Last Fiscal Year
Individual Grants
------------------------------------------------------------------
Number of % of Total Potential Realizable
Securities Options Granted Value At Assumed Annual
Underlying to Employees in Exercise Rate of Stock Price
Options Fiscal Year Or Base Price Expiration Appreciation for Option
Name Granted (#) ($/Sh) Date Term
- ----------------------------- ---------------- ----------------- ---------------- -------------- -------------------------
5% ($) 10% ($)
----------- ----------
William E. Dickenson 51,100 (1) 3.0 6.250 3/23/09 200,853 509,001
26,000 (2) 1.5 7.625 8/4/09 124,678 315,959
- ----------------------------- ---------------- ----------------- ---------------- -------------- ----------- -- ----------
Henri-Claude A. Bailly 30,000 (2) 1.8 7.625 8/4/09 143,860 364,569
- ----------------------------- ---------------- ----------------- ---------------- -------------- ----------- -- ----------
John C. Butler III 37,200 (1) 2.2 6.250 3/23/09 146,218 370,545
- ----------------------------- ---------------- ----------------- ---------------- -------------- ----------- -- ----------
William H. Hieronymus 27,900 (1) 1.7 6.250 3/23/09 109,664 277,909
- ----------------------------- ---------------- ----------------- ---------------- -------------- ----------- -- ----------
Howard W. Pifer III 51,100 (1) 3.0 6.250 3/23/09 200,853 509,001
26,000 (2) 1.5 7.625 8/4/09 124,678 315,959
- ----------------------------- ---------------- ----------------- ---------------- -------------- ----------- -- ----------
Walter H. A. Vandaele 34,900 (1) 2.1 6.250 3/23/09 137,178 347,635
============================= ================ ================= ================ ============== =========== == ==========
(1) These options become exercisable in two equal installments on October
1, 1999 and October 1, 2000.
(2) These options become exercisable in two equal installments on January
1, 2000 and January 1, 2001.
STOCK OPTION EXERCISES AND VALUES IN 1999
The following table sets forth information regarding options of Named Executive
Officers that were exercised during or held on December 31, 1999.
Aggregate Option Exercises During 1999 and Values on December 31, 1999
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End (#) at FY-End ($)(1)
Shares
Acquired upon
Exercise (#) Value
Name Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------- -------------- -------------- -------------- ----------------- -------------- -----------------
William E. Dickenson -- -- 56,216 112,884 -- --
- ----------------------------- -------------- -------------- -------------- ----------------- -------------- -----------------
Henri-Claude A. Bailly 219,542 1,332,620 (2) 103,725 99,151 -- --
- ----------------------------- -------------- -------------- -------------- ----------------- -------------- -----------------
John C. Butler III -- -- 28,600 37,450 -- --
- ----------------------------- -------------- -------------- -------------- ----------------- -------------- -----------------
Howard W. Pifer III -- -- 56,216 112,884 -- --
- ----------------------------- -------------- -------------- -------------- ----------------- -------------- -----------------
Walter H. A. Vandaele -- -- 27,450 37,450 -- --
- ----------------------------- -------------- -------------- -------------- ----------------- -------------- -----------------
William H. Hieronymus -- -- 18,116 22,284 -- --
============================= ============== ============== ============== ================= ============== =================
(1) Options are in-the-money if the market value of the shares covered
thereby is greater than the option exercise price. Options are
out-of-the-money if the market value of the shares covered thereby is
less than the option exercise price.
(2) Value is calculated based on the fair market value of the Company's
common stock at March 23, 1999 (date of exercise) of $6.25 (as reported
on The Nasdaq Stock Market), less the exercise price.
EMPLOYMENT ARRANGEMENTS
The Company has entered into employment agreements with Messrs. Bailly,
Dickenson and Pifer, and Messrs. Butler, Hieronymus and Vandaele.
Mr. Bailly originally entered into an employment agreement on May 25, 1995 in
connection with the management repurchase of the Company from RCG. Such
agreement was amended and restated effective upon consummation of the Company's
initial public offering and was amended and restated again, to become effective
on August 28, 1998, in connection with the acquisition of PHB. Each of Mr.
Dickenson's and Mr. Pifer's employment agreements became effective upon the
Company's acquisition of PHB. Mr. Bailly's agreement ends, unless earlier
terminated, on July 3, 2000. Messrs. Dickenson's and Pifer's agreements end,
unless earlier terminated, on August 29, 2001.
Under the terms of their respective agreements, Messrs. Bailly, Dickenson and
Pifer each receives a base salary in 2000 at an annual rate of $434,400,
$381,576 and $381,576, respectively. This rate is increased each January 1 by an
amount that is not less than 5.0% over the annual rate of base salary in effect
the preceding year, or the increase in the Consumer Price Index for the year,
whichever is greater. Each is entitled to a bonus for each calendar year equal
to an amount determined by the Executive Compensation Committee of the Board of
Directors. Each is also entitled to participate in all of the benefit programs
provided by the Company. Upon a change in control as defined in the employment
agreement, each is entitled to a lump sum payment of four times his base salary
as well as payments for thirty-six months at an annual rate equal to his base
salary in effect on the date of termination. The definition of change in control
in the employment agreements includes not only certain changes in ownership of
the stock of the Company (in connection with a merger or other corporate
reorganization or otherwise), a sale of all or substantially all of the assets
of the Company or dissolution or liquidation of the Company but also when, other
than the result of death, disability or termination for cause (i) Mr. Dickenson
shall cease to serve as chief executive officer of PHB Hagler Bailly or as
executive vice president and chief operating officer of the Company before
January 1, 2000, or after January 1, 2000, as chief executive officer of the
Company or as a member of the Company's Board of Directors; (ii) Dr. Pifer shall
cease to serve as chairman of the Company's Board of Directors before January 1,
2000 or as a member of the Company's Board of Directors; or (iii) Mr. Bailly
shall cease to serve as chief executive officer of the Company before January 1,
2000, or after January 1, 2000, as chairman of the Company's Board of Directors.
On March 31, 1999, the Company's Board of Directors elected Mr. Dickenson
president and chief executive officer of the Company. At the same time, the
Board of Directors determined that Mr. Bailly would become chairman of the Board
of Directors on September 1, 1999. Dr. Pifer served as chairman of the Board of
Directors until September 1, 1999. Each of Messrs. Bailly, Dickenson and Pifer
has construed the Board of Directors' actions on March 31, 1999 to have caused a
change in control of the Company within the meaning of that term under his
employment agreement. Each of Messrs. Bailly, Dickenson and Pifer each has
agreed not to exercise his right to terminate his employment agreement as a
result of the Board of Directors' actions on March 31, 1999 for so long as the
other two individuals exercise such powers and perform such duties as are set
forth for their respective offices in the current by-laws of the Company. None
of Messrs. Bailly, Dickenson and Pifer has terminated his employment agreement.
Any such terminations, if valid under the employment agreement, would entitle
the executive to the payments referred to above.
Messrs. Butler, Hieronymus and Vandaele each entered into an employment
agreement with a subsidiary of the Company for a term of three years.
Under the terms of their employment agreements, which became effective upon the
Company's acquisition of Putnam, Hayes & Bartlett, Inc. ("PHB") on August 28,
1998, for the calendar year 1998 each received an initial base salary at an
annual rate of $287,664, and bonus in accordance with PHB's compensation
policies then in effect. For the calendar year 1999 and each calendar year
thereafter, their employment agreements provide that each of Messrs. Butler,
Hieronymus and Vandaele's base salary and bonus are determined by the Company in
accordance with compensation policies of the Company for officers of comparable
rank but in no event shall the base salary be less than $287,664. Under their
employment agreements, Messrs. Butler and Vandaele each was granted an option to
purchase 30,000 shares of common stock of the Company and Mr. Hieronymous was
granted an option to purchase 12,500 shares. These options had an exercise price
of $20.125, a term of ten years and vest in equal amounts over three years on
the anniversary dates of the date of grant. The employment agreements also
entitle Messrs. Butler, Hieronymous and Vandaele to participate in all of the
benefit programs provided by the Company.
COMPENSATION COMMITTEE REPORT ON COMPENSATION OF EXECUTIVE OFFICERS OF THE
COMPANY
The responsibilities of the Executive Compensation Committee of the Company's
Board of Directors (the "Committee") include (i) establishing compensation
programs for executive officers of the Company designed to attract, motivate and
retain key executives responsible for the Company's success; (ii) administering
and maintaining such programs in a manner that will benefit the long-term
interests of the Company and its stockholders; and (iii) determining the
compensation of the Company's chief executive officer. The Committee is composed
of three directors who have never served as employees of the Company and the
Company's chief executive officer. The Company's chief executive officer does
not vote on matters relating to his own compensation.
Compensation Philosophy
The Committee has furnished this report on executive compensation to clearly
describe the philosophy that underlies the cash and equity-based components of
the Company's executive compensation program. It also describes the details of
each element of the program, as well as the rationale for compensation paid to
the Company's chief executive officer and its executive officers in general.
o The Committee considers it essential to the vitality of the Company that
the total compensation opportunity for executive officers remains
competitive with similar companies in order to attract and retain the
talent needed to manage and build the Company's business.
o Compensation is tied to performance. A significant part of the total
compensation opportunity is at risk, to be earned only if specific goals
are met. Incentive compensation is designed to reinforce the achievement of
both short- and long-term corporate objectives.
o Executives' interest in the business should be directly linked to the
interests and benefits received by the Company's stockholders.
The process used by the Committee in determining chief executive officer
compensation levels for all of these components is based upon the Committee's
subjective judgment and takes into account both qualitative and quantitative
factors. No weights are assigned to such factors with respect to any
compensation component. Although the chief executive officer makes the
compensation decisions for the Company's other key executive officers, the
Committee as a whole may make recommendations concerning the compensation for
such officers.
The compensation program has three elements: annual base salary; annual bonuses,
which are based on both the Company and the individual attaining certain
performance objectives; and awards under a long-term incentive compensation
plan, which are based on both Company performance and individual performance.
The Committee has approved these elements of compensation to ensure the
Company's total compensation program is comparable to and competitive with that
of other companies of similar size.
Annual Compensation
Annual compensation for the executive officers at Hagler Bailly is comprised of
base salary and bonus, an approach consistent with the compensation programs of
most leading management consulting firms. The Committee determines the terms of
employment for executive officers of Hagler Bailly on an annual basis.
In addition to their base salaries, the executive officers may also be awarded
bonuses based on the attainment of certain financial and non-financial
performance criteria. The Committee determines bonus awards for executive
officers of Hagler Bailly annually upon the recommendation of the Company's
chief executive officer. See "1999 Annual Bonus Determinations" below.
Payment of any bonus may be in cash or stock options, generally in the first
quarter. The chief executive officer's salary, bonus and long-term awards follow
the policies set forth above. With respect to his performance in the 1999 fiscal
year, Mr. Dickenson received $348,036 in base salary payments and 51,000 and
26,000 in stock options which were granted March 23, 1999 and August 4, 1999,
respectively, pursuant to the Stock Option Plan. The exercise price of the
options is $6.250 and $7.625, respectively, and the options vest in equal
portions on October 1, 1999 and October 1, 2000, and January 1, 2000 and January
1, 2001, respectively.
The Committee also approved the compensation of the Company's other executive
officers with respect to their performance in 1999, following the principles and
procedures outlined in this report.
1999 Annual Bonus Determinations
Each year Hagler Bailly sets aside a percentage of its consolidated income
before bonuses and taxes ("IBBT") to fund a Company-wide bonus pool. All
full-time and part-time regular employees who have at least six months of
service are eligible for a bonus.
Annual cash bonuses are funded from a pool whose size depends on the overall
financial performance of Hagler Bailly, and management reserves the right not to
award any bonuses in any year. Starting in 1997, the Board of Directors
determined that up to a maximum of 40.0% of IBBT would be set aside for bonuses.
On December 29, 1999, the Board of Directors made an exception to this policy
for the amounts to be paid out as 1999 bonuses. The Board may in the future make
exceptions to this policy. Management determines the extent of any award made to
employees other than executive officers based on certain performance criteria.
Stock Options
The Board of Directors has adopted the Stock Option Plan. The Stock Option Plan
is designed to enhance the long-term profitability and stockholder value of the
Company by offering its common stock to those individuals who are key to the
growth and success of the Company. The Stock Option Plan also helps to attract
and retain executives with experience and ability on a basis competitive with
industry practice, and to encourage executives to acquire and maintain stock
ownership in the Company.
The Stock Option Committee of the Board of Directors administers the Stock
Option Plan. The Stock Option Committee has authority (i) to grant Awards (as
defined below) under the Stock Option Plan; (ii) to make all interpretations and
determinations affecting the Stock Option Plan; and (iii) to determine the
individuals to whom Awards are granted, the amount of such Award, any applicable
vesting schedule, and any other terms of an Award. Awards may consist of
incentive stock options qualified under Section 422 of the Internal Revenue
Code, "nonqualified" stock options, and restricted stock.
The maximum number of shares that may be issued and sold under the Stock Option
Plan is 5,000,000 shares. On February 2, 2000, the Board of Directors approved
an amendment to the Stock Option Plan, subject to stockholder approval, which
would increase the number of shares authorized to be issued under the Stock
Option Plan from 5,000,000 to 8,000,000 (see Proposal 3 for further information)
Stock Option Committee Executive Compensation Committee
R. GENE BROWN WILLIAM E. DICKENSON
ROBERT W. FRI R. GENE BROWN
FRED M. SCHRIEVER ROBERT W. FRI
FRED M. SCHRIEVER
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the Company's acquisition of Washington International Energy
Group Limited ("WIEG") on April 30, 1999, Roger Gale, an executive officer of
the Company, received 144,210 shares of the Company's common stock and $850,000
in cash in exchange for his shares of the stock of WIEG. Of these shares, 26,210
shares were placed into escrow. The Company has the right to repurchase up to
26,210 of these shares for $0.01 per share if the price of the Company's stock
meets certain price targets during the three-year period following the
acquisition.
In connection with the Company's acquisition of all of the outstanding shares of
GKMG, Inc. ("GKMG") on August 12, 1999, Morris R. Garfinkle and James F. Miller,
executive officers of the Company, received 545,280 and 444,460 shares of the
Company's common stock in exchange for their shares of GKMG. Under the terms of
the Share Exchange Agreement among the Company, GKMG and the former shareholders
of GKMG, the Company is obligated to issue shares valued at up to $15 million to
the former shareholders of GKMG if GKMG meets certain earnings targets during
the annual periods ending June 30, 2000 and June 30, 2001. In addition, the
Company is obligated to issue up to 192,857 additional shares of its common
stock to the former shareholders of GKMG if certain stock price performance
contingencies are not met. Mr. Garfinkle's and Mr. Miller's pro rata shares of
these additional stock issuances is 38.4% and 31.3%, respectively.
Hagler Bailly Services, Inc. ("Services"), a wholly owned subsidiary of the
Company, entered into a contract with Adsavers.com, Inc. ("Adsavers") on
November 1, 1999, whereby Adsavers is obligated to pay $25,000 per month to
Services for consulting services through June 1, 2000. Henri-Claude A.
Bailly, chairman of the Board of Directors of the Company, and Kenneth I.
Rubin, an executive officer of the Company, each are shareholders of
Adsavers. Mr. Bailly is also a director of Adsavers.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
Set forth below is a graph comparing the percentage change in the cumulative
total stockholder return on Hagler Bailly common stock against the Nasdaq Stock
Market ("Nasdaq") and a group that includes the following peer issuers: Navigant
Consulting, Inc. (f/k/a Metzler Group, Inc.), Forrester Research, Inc., and
Superior Consultant Holdings Corp.
PERFORMANCE GRAPH (1)
7/3/97 9/30/97 12/31/97 3/31/98 6/30/98 9/30/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99
Hagler Bailly (2) 100.000 149.265 132.353 147.059 152.206 114.706 117.647 47.059 60.294 40.441 29.412
Nasdaq 100.000 114.860 107.001 125.080 129.104 115.415 149.406 167.715 183.027 187.118 277.275
Peer Issuers (3) 100.000 108.664 98.668 129.754 148.495 142.115 168.196 118.975 95.66 118.579 117.345
(1) Assumes that the value of the investment in Hagler Bailly common stock,
the Nasdaq Stock Market, and the Peer Issuers was $100 on July 3, 1997
and that all dividends were reinvested. The stock performance graph above
is not necessarily indicative of future stock performance.
(2) Hagler Bailly's common stock trades on the Nasdaq Stock Market under the
symbol HBIX. Hagler Bailly's common stock began trading on the Nasdaq
Stock Market on July 3, 1997, the date of the Hagler Bailly's initial
public offering.
(3) The Peer Issuers are weighted by market capitalization.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS (Proposal 2)
The Audit Committee of the Board of Directors each year selects and engages on
behalf of the Company independent auditors to audit the consolidated financial
statements of the Company for such year. The Board of Directors has directed
that the Audit Committee's selection of independent auditors for the fiscal year
ending December 31, 2000 shall be submitted for ratification or rejection at the
Annual Meeting. Stockholder approval is not required for the appointment of
independent auditors, since the Board of Directors has the responsibility for
selecting independent auditors. The appointment is, however, being submitted for
approval at the Annual Meeting. If the stockholders should reject the selection
of the Audit Committee, the Board of Directors would reconsider the selection.
The Audit Committee has selected Ernst & Young LLP as independent auditors to
audit the consolidated financial statements of the Company for the year 2000.
This firm has audited the Company's financial statements since the Company's
inception and is considered well qualified. Representatives of Ernst & Young LLP
are expected to be present at the meeting with the opportunity to make a
statement and to respond to appropriate questions.
The Company will present to the meeting the following resolution:
"RESOLVED, that the selection, by the Audit Committee of the
Board of Directors, of Ernst & Young LLP as independent
auditors to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 2000 be and
hereby is ratified."
Spaces are provided in the accompanying form of proxy for specifying approval,
disapproval or abstention as to this proposal, which is identified as Proposal
2.
Recommendation of the Board of Directors
The Board of Directors of the Company recommends a vote FOR the proposal to
ratify the appointment of Ernst & Young LLP as independent auditors of the
Company for 2000 fiscal year. Proxies received by the Board of Directors will be
voted FOR the proposal unless stockholders specify a contrary choice in their
proxies or attend the Annual Meeting and vote against the proposal.
THE STOCK OPTION PLAN AMENDMENT (Proposal 3)
The Board of Directors has approved and is proposing for stockholder approval
the Stock Option Plan Amendment which would increase the number of shares of
Hagler Bailly common stock reserved for issuance under the Stock Option Plan by
3,000,000 shares (from 5,000,000 to 8,000,000 shares). As of March 1, 2000,
options with to respect to 3,126,107 shares of Hagler Bailly were outstanding
under the Stock Option Plan. Hagler Bailly management believes that stock
options have been and will continue to be one of the most important methods of
attracting and retaining key personnel responsible for the development and
growth of Hagler Bailly's business. In order to permit Hagler Bailly to continue
to use stock options as an incentive to its officers and key personnel and as a
means to promote increased stockholder value, the Board of Directors believes
that the Stock Option Plan needs to be amended to increase the number of shares
reserved for issuance. The Board of Directors has determined that the Stock
Option Plan Amendment is advisable and in the best interest of Hagler Bailly and
its stockholders, and recommends that stockholders approve it.
Spaces are provided in the accompanying form of proxy for specifying approval,
disapproval or abstention as to this proposal, which is identified as Proposal
3.
Recommendation of the Board of Directors
The Board of Directors of the Company recommends a vote FOR the proposal to
amend the Stock Option Plan. Proxies received by the Board of Directors
will be voted FOR the proposal unless stockholders specify a contrary
choice in their proxies or attend the Annual Meeting and vote against the
proposal.
EXPENSES OF SOLICITATION
The cost of soliciting proxies in the accompanying form will be borne by the
Company. The Company does not expect to pay any compensation for the
solicitation of proxies, but may pay brokers, nominees, fiduciaries and other
custodians their reasonable fees and expenses for sending proxy material to
principals and obtaining their instructions. In addition to solicitation by
mail, proxies may be solicited in person, or by telephone, facsimile
transmission or other means of electronic communication, by directors and by
officers and other regular employees of the Company.
STOCKHOLDER PROPOSALS
Any stockholder proposal submitted under SEC Rule 14a-8 for inclusion in the
Proxy Statement for the 2001 Annual Meeting of Stockholders should submit the
proposal in writing to Geoffrey W. Bobsin, Secretary, Hagler Bailly, Inc., 1530
Wilson Boulevard, Arlington, Virginia, 22209 so that it is received no later
than December 9, 2000 to be eligible for inclusion in the Company's Proxy
Statement and proxy relating to that meeting. Pursuant to the rules of the
Securities Exchange Act of 1934, the Company may use discretionary authority to
vote with respect to stockholder proposals presented in person at the 2001
Annual Meeting of Stockholders if the stockholder making the proposal has not
given notice to the Company by February 22, 2001.
OTHER MATTERS TO COME BEFORE MEETING
Neither the Company nor any member of its Board of Directors knows of any matter
or intends to bring before the meeting any matter other than those referred to
in the accompanying Notice of Meeting. However, if any other matters properly
come before the meeting, the persons appointed as proxies in the enclosed form
of proxy/voting instruction card intend to vote in accordance with their
judgment.
OTHER INFORMATION
A COPY OF THE ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SEC FOR THE YEAR
ENDED DECEMBER 31, 1999 (EXCLUDING EXHIBITS) WILL BE FURNISHED, WITHOUT CHARGE,
BY WRITING TO: MARGARET M. RAY, INVESTOR RELATIONS, HAGLER BAILLY, INC., 1776
EYE STREET, NW, WASHINGTON, DISTRICT OF COLUMBIA 20006.
The above Notice of Annual Meeting and Proxy Statement are sent by order of the
Company's Board of Directors.
/s/ Geoffrey W. Bobsin
GEOFFREY W. BOBSIN
Secretary
Arlington, Virginia
April 7, 2000