Exhibit 10.1

     
 
  Michael Baker Corporation
 
   
 
  Airside Business Park
 
  100 Airside Drive
 
  Moon Township, PA 15108
 
   
 
  (412) 269-6300

January 1, 2009
Craig O. Stuver
Senior Vice President, Acting Chief Financial Officer and Treasurer
Michael Baker Corporation
Airside Business Park
100 Airside Drive
Moon Township, PA 15108
Dear Craig:
Since the arrangement we entered into on September 18, 2008 for you to continue
to work with us through December 31, 2008 has now expired, we have agreed to a
new arrangement for you to continue to work with us through March 31, 2009. In
acknowledgement of your willingness to continue to assist us during this period
with an orderly transition, Baker is prepared to offer you the following
arrangement:

1. For each month (or part of a month exceeding two weeks) you stay with the
Corporation beginning January 1, 2009, the Corporation will pay you an
additional two and one-half months’ compensation and the Cobra cost of your
medical insurance for two and one-half months. The payments for Cobra cost will
be grossed up to cover your Federal and state tax liability on such payments.
For example, if you stay with the Corporation through February 28, 2009, you
will receive an additional five months’ compensation plus five months’ Cobra
cost. This benefit will be capped based upon three months of additional service
or service through March 31, 2009, so while you may elect to stay with the
Corporation thereafter, you will only be eligible for up to seven and one-half
months of such supplementary compensation and Cobra payments under this
arrangement, whether you are leaving at that time or have decided to stay on
longer. Subject to paragraph 8 of this letter, if and as applicable, the
supplementary compensation and the Cobra costs of your medical insurance will be
paid in a single lump-sum on the first regularly scheduled payroll date
following March 15, 2009. Any gross-up payments will be made on the same date as
the underlying taxable payment, provided however in all events, all such amounts
payable by the Corporation shall be paid by the end of the taxable year next
following the taxable year in which you remit the related taxes or, in the case
of a tax audit or litigation addressing the existence or amount of a tax
liability, by the end of the taxable year following the taxable year in which
the taxes that are the subject of audit or litigation are remitted to the taxing
authority (or where as a

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      result of such audit or litigation no taxes are remitted, the end of the
taxable year following the taxable year in which the audit is completed or there
is a final and nonappealable settlement or other resolution of the litigation).

  2.   In addition, you will remain eligible for any bonus payments you would
otherwise have received for 2008 performance. Subject to paragraph 8 of this
letter, if and as applicable, such payment, if any, will be made at the same
time the Corporation makes 2008 bonus payments to its other eligible employees
and in all events within the first 21/2 months following the year in which you
obtain the vested right to receive payment.     3.   Any payments you receive
under this letter agreement shall be in addition to any severance payments to
which you may be entitled under the Corporation’s Policy regarding Reductions in
Force, which appears at Section 5.1.3 of the Corporation’s Policy Manual. I have
attached a copy of this Section as Exhibit A to this letter for your ready
reference. Based upon your qualifying years of service, if you are otherwise
entitled to severance under the Policy, you will receive a severance payment
equal to nine (9) weeks of compensation based upon your compensation on the day
you cease to be employed by the Corporation. The amount, time and form of
payment of benefits described elsewhere herein shall not affect the amount, time
or form of severance payments provided pursuant to the Corporation’s Policy
regarding Reductions in Force. Any such severance payments shall be paid at the
time and in the form described in the Policy Manual.     4.   You will continue
to be an employee at will and may be terminated by the Corporation with or
without cause at any time. However, you will be provided with two weeks advance
notice of any termination without cause, and in such event will receive the same
payments under this letter agreement that you would receive if you had continued
with the Corporation through March 31, 2009. You may be terminated for cause at
any time without advance notice. In the event you are terminated for cause, you
will receive only the payments previously earned under this letter agreement,
unless you are terminated by the Corporation for fraud or the commission of a
felony or crime involving moral turpitude, in which case you will not be
entitled to any such payments. All payments will be paid at the time and in the
form specified herein. For purposes of this Agreement, the term “termination”
when used in the context of a condition to, or timing of, payment hereunder
shall be interpreted to mean a “separation from service” as that term is used in
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).    
5.   In the event you elect to leave the Corporation or are terminated without
cause, you may keep your current laptop computer and blackberry. Subject to
paragraph 8 of this letter, if and as applicable, ownership of these items will
be transferred to you on the first day following your separation from service.  
  6.   In the event that you leave the Corporation without having obtained a new
position, the Corporation will consider providing formal outplacement services,
not in lieu of severance or other amounts, at a to-be-determined level in order
to assist you in transitioning to a new employer and to benefit the
Corporation’s business. In the event that the Corporation provides for or
reimburses outplacement service

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costs, all payments or reimbursements for costs incurred for outplacement
services shall be paid or provided in accordance with the Corporation’s standard
payroll and reimbursement procedures, provided further that such expenses must
be incurred before the end of your second taxable year following the taxable
year in which your separation from service occurs and must be paid or reimbursed
before the end of your third taxable year following your taxable year in which
the separation from service occurs. The amount of payments or reimbursable
expenses incurred in one taxable year shall not affect the amount of payments or
reimbursable expenses in a different taxable year and such payments or
reimbursements shall not be subject to liquidation or exchange for another
benefit.

7. Once you have decided upon the date you intend to leave the Corporation, you
agree to provide the Corporation two weeks’ advance notice of your departure
addressed to the attention of Mike Ziemianski, Chief Resource Officer.   8. If
you are a Specified Employee under Section 409A of the Internal Revenue Code of
1986, as amended, on the date of separation from service then such amounts
payable by reason of separation from service shall be paid on the first business
day following the six month anniversary of your separation from service.

I trust you find this arrangement satisfactory. Again, I appreciate your
willingness to work with us in making any necessary transition of your
responsibilities as smooth as possible. Assuming you agree, kindly countersign
this letter and the enclosed copy in the space provided and return one
fully-signed original to my attention. The other fully-signed original is for
your records.

     
Very truly yours,
   
 
   
MICHAEL BAKER CORPORATION
   
 
   
/s/ Bradley L. Mallory
 
Bradley L. Mallory
   
President and Chief Executive Officer
   
 
   
ACKNOWLEDGED AND AGREED:
   
 
   
/s/ Craig O. Stuver
 
 Craig O. Stuver
   
 
   
Date: January 1, 2009
   

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EXHIBIT A
5.1.3 Reduction in Force (RIF)
Baker may implement a reduction in force and may choose to terminate or lay off
employees due to changes in duties, organizational changes, and lack of funds,
lack of work or other reasons deemed appropriate by Baker.
All full time and part time employees (not temporary) are eligible to receive
severance pay based on years of service. Human Resources will provide the
specific details in relation to severance pay due to a reduction in force,
credit for service with re-hires following a reduction in force (or repeated
hires and reductions in force). Severance payments are detailed below.

      YEARS OF SERVICE   SEVERANCE PAY 0-2   2 weeks 3-5   3 weeks 6-8   4 weeks
9-10   5 weeks 11-12   6 weeks 13-14   7 weeks 15-16   8 weeks 17-18   9 weeks
19-20   10 weeks Over 20   12 weeks

Part time employees will receive severance pay at a prorated amount based on
their regularly
scheduled work hours.
Years of service is determined by the employee’s adjusted service date. Any
partial year of
service will count as a full year for the purpose of calculating severance.
The total of all cash benefits payable hereunder, including payments in lieu of
notice, and other Baker separation pay plan payments made by Baker (a) shall not
exceed two times the lesser of (i) the sum of the Employee’s annualized
compensation based upon the annual rate of pay for services provided to Baker
for the taxable year of the Employee preceding the taxable year in which the
Employee has a separation from service or (ii) the compensation limit set forth
in Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, for the
year in which the separation from service occurs, and (b) all amounts shall be
paid no later than the last day of the Employee’s second taxable year following
the taxable year of the employee in which the separation from service occurred.
The term “Termination Date”, when used in the context of a condition to, or
timing of, payment hereunder shall be interpreted to mean a “separation from
service” as that term is used in Section 409A of the Internal Revenue Code of
1986, as amended.
If an employee has received severance pay, is re-hired by Baker and then
subsequently terminated again, additional severance pay will be calculated based
on the employee’s rehire date.
Employees terminated due to a reduction in force will be paid for all accrued
unused vacation time (in accordance with, and as limited by, Baker’s Vacation
Policy).

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