Exhibit 10.1







                     1996 INCENTIVE COMPENSATION PLAN
                                
                                
                                
                         MICHAEL BAKER CORPORATION
                                
<PAGE>
                             INDEX
                             ------
<TABLE>
<CAPTION>
ARTICLE I - GENERAL                                         

<S>  <C>
1.1  ESTABLISHMENT OF THE PLAN 
1.2  PURPOSE 
1.3  ADMINISTRATION 

ARTICLE II - DEFINITIONS

2.1  DEFINITIONS 
2.2  GENDER AND NUMBER 

ARTICLE III - ELIGIBILITY AND PARTICIPATION

3.1  ELIGIBILITY 
3.2  PARTICIPATION 
3.3  PARTIAL PLAN YEAR PARTICIPATION 

ARTICLE IV - AWARDS

4.1  COMPONENTS OF PARTICIPATION AWARDS 
4.2  CORPORATE PERFORMANCE MEASURES AND GOALS 
4.3  BUSINESS UNIT AND PROFIT CENTER PERFORMANCE 
4.4  INDIVIDUAL PERFORMANCE 

ARTICLE V - PAYMENT OF AWARDS

5.1  PAYMENT OF AWARDS 
5.2  PLAN FUNDING 

ARTICLE VI - CHANGE IN CONTROL

6.1  CHANGE IN CONTROL 
6.2  DEFINITION OF CHANGE IN CONTROL 

ARTICLE VII - MISCELLANEOUS PROVISIONS

7.1  NON-TRANSFERABILITY 
7.2  TAX WITHHOLDING 
7.3  AMENDMENTS 
7.4  INDEMNIFICATION 
7.5  BENEFICIARY DESIGNATION 
7.6  RIGHTS OF PARTICIPANTS 
7.7  GOVERNING LAW 
7.8  EFFECTIVE DATE 

1996 INCENTIVE COMPENSATION PLAN - ATTACHMENT 1 
     ELIGIBILITY             
     OPPORTUNITY            
     PERFORMANCE MEASUREMENT              
     POTENTIAL PAYOUT (PERCENTAGE OF ANNUAL SALARY)              
     FREQUENCY OF PAYOUT 
</TABLE>
 <PAGE>
 
                      1996 INCENTIVE COMPENSATION PLAN
                          MICHAEL BAKER CORPORATION
                                

ARTICLE I

GENERAL
-------

1.1 ESTABLISHMENT OF PLAN:

Michael Baker Corporation, a Pennsylvania corporation (the "Company"), hereby
adopts this Plan, which shall be known as the MICHAEL BAKER CORPORATION 1996
INCENTIVE COMPENSATION PLAN (the "Plan").

1.2 PURPOSE:

The purpose of the Plan is to focus attention on shareholder value, drive
performance in support of this goal and other business goals, and reward
individual performance.

1.3 ADMINISTRATION:

   (a) The Plan shall be administered by the Incentive Compensation
   Committee (the "Committee"), of the Company with the concurrence of the
   Compensation Committee of the Board of Directors of the Company.  The
   members of the Committee shall be appointed by the Chief Executive
   Officer (the "CEO"), and any vacancy on the Committee shall be filled by
   an appointee of the CEO.

   (b) Subject to the limitations of the Plan, the Committee shall, subject
   to approval by the CEO and Compensation Committee of the Board of
   Directors:  (i) select from the regular, full-time exempt Employees of
   the Company, those who shall participate in the Plan (a "Participant" or
   "Participants"), (ii) make awards in such forms and amounts as the
   Committee shall determine, (iii) impose such limitations, restrictions,
   and conditions upon such awards as the Committee shall deem appropriate,
   (iv) interpret the Plan and adopt, amend, and rescind administrative
   guidelines and other rules and regulations relating to the Plan, (v)
   correct any defect or omission or reconcile any inconsistency in this
   Plan or in any award granted hereunder, and (vi) make all necessary
   determinations and take all other actions necessary or advisable for the
   implementation and administration of the Plan.  The Committee's
   determinations on matters within its authority shall be conclusive and
   binding upon the Company and all other Persons.

ARTICLE II

DEFINITIONS
-----------

2.1 DEFINITIONS:

Whenever used herein, the following terms shall have the meaning set forth
below, unless otherwise expressly provided.

<PAGE>
  (a) "Base Salary" shall mean the regular salary actually paid during a
      Plan Year to a participant while participating in the Plan.  Regular
      salary shall include any salary reduction contributions made to the
      Company's Internal Revenue Code Section 401(k) Plan or other deferred
      compensation plans, but exclusive of any awards under this Plan and of
      any other bonuses, incentive pay, or special awards.

  (b) "Board" shall mean the Board of Directors of Michael Baker
      Corporation.

  (c) "Committee" shall mean the Incentive Compensation Committee of the
      Company, which shall consist of at least three employees of the Company.

  (d) "Company" shall mean Michael Baker Corporation and its Subsidiaries.

  (e) "Corporate" shall mean relating to Michael Baker Corporation.

  (f) "Employee" shall mean a regular, full-time, exempt Employee of the
      Company who is in a position meeting the defined eligibility criteria 
      for participation in the Plan, as stated in Section 3.1.

  (g) "Participant" shall mean an Employee who is approved by the Committee
      for participation in the Plan for a specified Plan Year.

  (h) "Performance Management Process" shall mean the Company's three-step 
      performance cycle.  The cycle begins with setting individual performance
      goals, followed by performance coaching, and ending with formal 
      performance review at the end of the performance period.

  (i) "Plan Year" shall mean the Company's fiscal year.

2.2 GENDER AND NUMBER:

Except when otherwise indicted by the context, words in the masculine gender,
when used in the Plan, shall include the feminine gender, the singular shall
include the plural, and the plural shall include the singular.

ARTICLE III

ELIGIBILITY AND PARTICIPATION
-----------------------------

3.1 ELIGIBILITY:

Eligibility for participation in the Plan shall be limited to regular,
full-time exempt Employees of the Company.

3.2 PARTICIPATION:

Participation in the Plan shall be determined by the executive management of
the Company.  The CEO shall determine Corporate participants and the Business
Unit Heads shall determine Business Unit participants, in all cases with the
concurrence of the Michael Baker Corporation CEO and the Compensation
Committee of the Board of Directors of the Company.  The number of
                                
<PAGE>
 
participants in the Plan shall be influenced by the Business Unit's ability to
financially support the accrual for the projected payout opportunity.  (See
Plan Funding 5.2)  Participants are to include executive management,
business unit managers, and selected managers who are accountable for
significant contributions to Corporate, as determined by the CEO, and to the
Business Unit, as determined by the Business Unit head.

3.3 PARTIAL PLAN YEAR PARTICIPATION:

An Employee who becomes eligible after the beginning of a Plan Year may
participate in the Plan for that Plan Year.  Such situations may include, but
are not limited to (i) new hires, (ii) when an Employee is promoted from a
position which did not meet the eligibility criteria, (iii) when an Employee
is transferred from an affiliate which does not participate in the Plan, or
(iv) when job responsibilities become consistent with other Plan participants.

The CEO retains the right to prohibit or allow participation in the initial
Plan Year of eligibility for any of the aforementioned Employees.  Any so
added participant will be eligible to receive a pro-rated share based upon a
2,080 work-hour year.

Any Employee who leaves the employment of the company prior to July 1 of the
Plan Year is not eligible to receive any payout from the Plan for that year. 
Subject to the conditions of the following sentence, any employee who leaves
the employment of the Company after June 30 of the Plan Year is eligible to
receive a pro-rata payout from the Plan for that year based upon the percent
of the fiscal year employed.  Employees who are terminated for cause or
voluntarily resign their positions from the company at any time during the
Plan year are not eligible to receive any payout from the Plan that year.

ARTICLE IV

AWARDS
------

4.1 COMPONENTS OF PARTICIPANT AWARDS:

Each award may be based on (i) Corporate performance, (ii) Business Unit
performance, (iii) Profit Center performance, and (iv) individual performance.

4.2 CORPORATE PERFORMANCE MEASURES AND GOALS:

For each Plan Year, the Committee shall recommend, and the CEO shall approve,
a range of performance goals for Corporate results.  Each performance range
shall include a level of performance at which awards shall be earned.

Measures of performance may include, but are not limited to, one or more
financial ratios such as earnings per share, profitability, return on equity
and return on assets.  Performance measures need not be the same within the
Company.

For 1996, corporate results shall be dependent upon audited corporate earnings
per share (after all incentives have been paid).

                                
<PAGE>
  
For 1996, performance level goals for earnings per share are:
<TABLE>
<CAPTION>
               Corporate
              Performance              Goal Setting        
                Level               (Earnings Per Share)       
                ------              --------------------
        <S>                                <C>
        Level 1 On Plan                    $.45     
        Level 2 Commendable                $.50 
        Level 3 Outstanding                $.55                             
</TABLE>
                                                       
New goal setting amounts for corporate profitability will be suggested to the
CEO by the Compensation Committee of the Board each year of the Plan.

4.3     BUSINESS UNIT AND PROFIT CENTER PERFORMANCE:

Business Unit and Profit Center performance shall be reflected in the final
award based on the Business Units' and/or Profit Centers' Contribution to
Corporate Overhead and Profit.  Guidelines of performance goals and percentage
weights for Business Unit and Profit Center managers are specific to each
Business Unit and are included in the Attachments to the Plan.  Any units or 
segments with an objective of a positive contribution performance (net income 
before tax plus corporate overhead) which results in a year-end negative
contribution, will not be eligible for the portion of incentive compensation 
dependent on overall corporate earnings per share performance.  Any units or 
segments with an objective of a negative contribution which results in a year-
end more favorable performance, will be eligible for the portion of incentive 
compensation dependent on overall corporate performance.

4.4     INDIVIDUAL PERFORMANCE:

Individual performance shall be reflected in the final award based on the
performance rating assigned to an Employee as part of the Performance
Management Process and is based upon a number of factors established by the
participant's manager(s) at the beginning of the Plan Year. 

Guidelines of performance goals and percentage weights for Business Unit 
managers are recommended to be:

<TABLE>
<CAPTION>
                                             % of Business Unit
                                             Performance Plans
                                             ------------------
      <S>                                         <C>
      Contribution to Corporate Overhead           35%
        and Profit
      New Work Added To The Company                45%
      TQM Goals                                    10%
      Human Resources Development                  10%
</TABLE>
<PAGE>
Guidelines of performance goals and percentage weights for Profit Center
managers are recommended to be:

<TABLE>
<CAPTION>
                                             % of Profit Center
                                             and Individual
                                             Performance Plans
                                             ------------------
     <S>                                          <C>
     Contribution to Corporate Overhead            35%
       and Profit
     New Work Added To The Company                 20%
     Implementation of New Growth Strategies       15%
     Accounts Receivable                           10%
     TQM Goals                                     10%
     Human Resources Development                   10%
</TABLE>

Individual performance measures for incentive compensation participants who
are not Business Unit or Profit Center managers are to be developed jointly
with the employee's immediate supervisor, be consistent with the participant's
respective job responsibilities, and be included on the participant's
performance plan.  The performance plans are to be submitted to the CEO by the
Business Unit head during February of the Plan year.  For individuals who
become eligible for participation in the Plan during the course of the year, a
completed performance plan is to be submitted within four weeks of the
individual becoming eligible for participation.
                                
Performance Plans of incentive compensation participants are to be submitted
to the CEO based upon timetables to be established in the respective Plan
Year.

At the end of the Plan Year, incentive compensation participants' managers
will determine the level of performance accomplished by the participant. 
Participant performance which does not meet or exceed the Competent-On Plan
Performance-3 level will result in no incentive payout for the individual's
specific performance goals.  Once performance has exceeded the Competent-On
Plan Performance-3 level, any performance beyond the 3 level will result in a
pro-rated calculation of the incremental incentive compensation earned by the
participant, until the maximum level 5 performance is achieved.

Payout for participants meeting individual performance goals will occur when
Business Unit or Profit Center (as applicable) operating profit accomplishes
threshold performance indicated in each Business Unit's or Profit Center's
Performance Plan (after all individual incentives have been paid).  Individual
performance goals are developed by each participant's manager and payout is
based on the applicable Business Unit or Profit Center performance plan.

The specific accomplishments associated with these goals are to be recorded on
each participant's annual Performance Plan at the end of the Plan Year.

In addition to individual performance incentives, a discretionary pool may be
created to selectively award those individuals who have exceeded expected
performance.  Guidelines for discretionary awards are indicated within each
Business Unit's and Profit Center's Incentive Compensation Plan Summary in the
attachments.  Discretionary awards are to be selected by the Executive Vice
President of the  Business Unit with the concurrence of the Incentive
Compensation Committee.                <PAGE>

ARTICLE V

PAYMENT OF AWARDS
-----------------

5.1     PAYMENT OF AWARDS:

At the end of each Plan Year, the CEO shall report the overall Corporate and
individual performance levels to the Compensation Committee of the Board of
Directors, who shall then approve the payment of awards.

The incentive compensation earned as a result of the Company achieving
corporate profitability goals and through the achievement of Business Unit,
Profit Center and individual goals, will be paid in cash no later than the
end of the first quarter of the year after which it was earned.

5.2     PLAN FUNDING:

Accrual for the Incentive Compensation Plan will be established annually by
the Committee, subject to the approval of the CEO.  The approved accrual for
the Incentive Compensation Plan shall pre-fund the amounts available to be
earned for incentive compensation distributions.  Any forfeitures associated
with the termination of those in the incentive compensation plan prior to
year-end will be allocated toward the funding of the incentive pool for the
following year.  In addition, if the incentive pool is not paid out in full
because of participants' failure to achieve individual goals established
under the Performance Management Process, the unearned portion would be
allocated toward the funding of the incentive pool for the following year.

Any excess pre-funding accrual based upon corporate goals which are not met
and, therefore, not earned by Incentive Compensation Plan participants, will
be removed from expense.

ARTICLE VI

CHANGE IN CONTROL
-----------------

6.1     CHANGE IN CONTROL:

In the event of a Change in Control of the Company, as defined below, a
Participant shall be entitled to, for the Plan Year in which the Change of
Control occurs, the award determined using:

   (i)   The Participant's actual Base Salary rate in effect on the date of
         the Change in Control,

   (ii)  Actual Corporate performance results to the date of Change in
         Control, and

   (iii) Participant's Individual Performance results.

The Committee as constituted immediately prior to the Change in Control shall
determine how actual Corporate performance should be measured for purposes of
the award calculation in 6.1.  The Committee's determination shall be
conclusive and final.
<PAGE>
Awards and any previously accrued awards shall be paid in cash to the
Participant promptly following any discontinuance of the Plan on or after a
Change of Control.

6.2     DEFINITION OF CHANGE IN CONTROL

A "Change in Control" will be deemed to have occurred on the first to occur of
the following:

(a)  The Company acquires actual knowledge that any Person other than the 
     Company, a Subsidiary, the Company's Stock Ownership Plan and Trust or 
     any employee benefit plan(s) sponsored by the Company has acquired the 
     Beneficial Ownership, directly or indirectly, of securities of the 
     Company entitling such Person to 20% or more of the Voting Power of the 
     Company;

(b)  A Tender Offer is made to acquire securities of the Company entitling the 
     holders thereof to 20% or more of the Voting Power of the Company; or 

(c)  A solicitation subject to Rule 14a-11 under the 1934 Act (or any 
     successor Rule) relating to the election or removal of 50% or more of the 
     members of any class of the Board shall be made by any person other than 
     the Company or less than 51% of the members of the Board shall be 
     Continuing Directors; or

(d)  The shareholders of the Company shall approve a merger, consolidation, 
     share exchange, division or sale or other disposition of assets of the 
     Company as a result of which the shareholders of the Company immediately 
     prior to such transaction shall not hold, directly or indirectly, 
     immediately following such transaction a majority of the Voting Power of 
     (i) in the case of a merger or consolidation, the surviving or resulting 
     corporation; (ii) in the case of a share exchange, the acquiring 
     corporation or (iii) in the case of a division or a sale or other 
     disposition of assets, each surviving, resulting or acquiring corporation 
     which, immediately following the transaction, holds more than 10% of the 
     consolidated assets of the Company immediately prior to the transaction.  

The term "person" shall mean and include any individual, corporation, 
partnership, company, association or other "person," as such term is used in
Section 14(d) of the Exchange Act, other than the Company or any employee
benefit plans sponsored by the Company.

"Continuing Directors" shall mean a director of the Company who either (a) was 
a director of the Company on the effective date of the Plan or (b) is an 
individual whose election, or nomination for election, as a director of the 
Company was approved by a vote of at least two-thirds of the directors then 
still in office who were Continuing Directors (other than an individual whose 
initial assumption of office is in connection with an actual or threatened 
election contest relating to the election of directors of the Company which 
would be subject to Rule 14a-11 under the 1934 Act, or any successor Rule).

<PAGE>
ARTICLE VII

MISCELLANEOUS PROVISIONS
------------------------

7.1     NON-TRANSFERABILITY:                 

No right of interest of any Participant in this Plan shall be assignable or
transferable, or subject to any lien, directly, by operation of law or
otherwise, including execution, levy, garnishment, attachment, pledge, and
bankruptcy.

7.2     TAX WITHHOLDING:

The Company shall have the right to deduct from all payments under this Plan
any foreign, Federal, state, or local taxes required by law to be withheld
with respect to such payments.

7.3     AMENDMENTS:

The Company, in its absolute discretion, without notice, at any time and from
time to time, may modify or amend, in whole or in part, any or all other
provisions of this Plan, or suspend or terminate it entirely; provided, that
no such modification, amendment, suspension, or termination may reduce the
right of a Participant (or his beneficiary as the case may be) to a payment or
distribution in accordance with the provisions contained in this Plan or
change to the detriment of a Participant of any potential rights in that Plan
Year pursuant to Section 6.1 of this Plan.

7.4     INDEMNIFICATION:

Each person who is or shall have been a member of the Committee or the Board
or who is or shall have been an Employee of the Company shall be indemnified
and held harmless by the Company against and from any loss, cost, liability,
or expense, including, without limitation, fees and expenses of legal counsel,
that may have been imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit, or proceeding to which he may
be a party or in which he may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him in settlement thereof, with the Company's approval, or paid by him in
satisfaction of any judgment in any such action, suit, or proceeding against
him provided he shall give the Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it on his
own behalf.  The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such person may be entitled under
the Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.

7.5     BENEFICIARY DESIGNATION:

Each Participant under the Plan may name, from time to time, beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his death before he receives
any or all of such benefit.  Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
<PAGE>
with the Company during his lifetime.  In the absence of any such designation,
or if the designated beneficiary is no longer living, benefits shall be paid
to the surviving member(s) of the following classes of beneficiaries, with
preference for classes in the order listed below:

(a)     Participant's spouse (unless the parties were divorced or legally
        separated by court decree);

(b)     Participant's children (including children by adoption);or

(c)     Participant's executor or administrator.

Payment of benefits shall be made exclusively to the member(s) of the first
class, in the order listed above, which has surviving member(s).  If that
class have more than one member, benefit payment shall be made in equal shares
among members of that class.

7.6     RIGHTS OF PARTICIPANTS:

Nothing in this Plan shall interfere with or limit in any way the right of the
Company to terminate or change a Participant's employment at any time, nor
confer upon any Participant, any right to continue in the employment of the
Company for any period of time or to continue his present or any other rate of
compensation.  No Participant in a previous Plan Year, or other Employee at
any time, shall have a right to be selected for participation in a current or
future Plan Year.

7.7     GOVERNING LAW:

The Plan shall be construed in accordance with and governed by the laws of the
State of Pennsylvania.

7.8     EFFECTIVE DATE:

The Plan shall be deemed effective as of January 1, 1996.

<PAGE>
1996 Michael Baker Corporation Incentive Compensation Plan - Summary
Attachment 1                                                 March 20, 1996
<TABLE>
<CAPTION>
          Eligibility for Incentive Compensation Plan  
-------------------------------------------------------------------------- 
<S>                                   <C>
 Number of Participants               Tier 1:  approximately 50
                                      Tier 2:  approximately 50   
                                      Tier 3:  Discretionary        
</TABLE>
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
Participants                                 
<S>                              <C>
Tier 1                             
Corporate                        Executive Management, Officers and Directors  

Business Units                   Business Unit Head             
                                 Selected Staff who support the functions of
                                 the entire Business Unit
                                 (Designated by Business Unit Head)          

Business Units-Engineering       Profit Center Managers with greater than
and Design                       $ 2.5 Million net revenue responsibility 
                                 (Designated by Business Unit Head)      

Business Units-Construction      Profit Center Managers with greater than 
and Heavy/Highway and Baker      $ 60 Million gross revenue responsibility
Support Services, Inc.           (Designated by Business Unit Head)      

Tier 2                             
Corporate                        Selected Functional Unit Managers
                                             
Business Units                   Selected Staff who support the functions of
                                 the entire Business Unit
                                 (Designated by Business Unit Head)
      
Business Units-Engineering and   Selected Managers, Other Profit Center  
 Design                          Managers, and selected Senior Project Managers
Business Units -Construction and (Designated by Business Unit Head)
 Heavy/Highway
Baker Support Services, Inc.            
                                             
Tier 3                             Discretionary
</TABLE>
---------------------------------------------------------------------------
<TABLE>
<S>                                <C>
Participant Recommendation         Corporate participants and Business Unit
                                   Heads (CEO)
                                   Within Business Units (Head of Business
                                   Unit)
----------------------------------------------------------------------------
Participant Approval               President and Chief Executive Officer  
                                   <PAGE>
      
----------------------------------------------------------------------------
Participants Added During Year?    Yes, Pro-rata
----------------------------------------------------------------------------
Ineligible Employees               Termination for Cause/Voluntary Resignation 
</TABLE>
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
          Incentive Compensation Opportunity           

                                   Tier 1    Tier 2    Tier 3
<S>                                <C>       <C>     <C>                       
Total % of Annual Salary           0-25%     0-15%   Discretionary
                                             
First Level (total maximum)        8.333%    5%      (Accumulative
                                                     15 % of Total
Second Level (total maximum)       16.667%   10%     Unit
                                                     Incentive
Third Level (total maximum)        25.000%   15%     Payout)
</TABLE>
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
          Performance Measurement                      

Corporate Participants, Heads of Business Units & Staff and all Environmental
Business Unit Participants                                     
<S>                                <C> 
Corporate Profitability Goals      50 % of Potential Award

Business Unit Performance Goals    50 % of Potential Award
(Departmental Goals for Corporate Participants)      
</TABLE>
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Business Unit-Segments and Profit Center Managers    
<S>                                         <C>                                
Corporate Profitability Goals               25 % of Potential Award     

Business Unit Performance Goals             25 % of Potential Award          

Profit Center/Individual Performance Goals  50 % of Potential Award
</TABLE>
---------------------------------------------------------------------------
<TABLE>
<CAPTION>        
    Performance Goals                            

Corporate Profitability Goals                
-----------------------------                             
Audited Corporate Earnings Per Share         % of Payout Based      Earnings
(After All Incentives Have Been Paid)        Upon Corporate Plan    Per Share
                                              -------------------   ---------
<S>                                                  <C>               <C> 
1st Level (On-Plan Performance)                      33%               $.45
2nd Level (Commendable)                              33%               $.50
3rd Level (Outstanding)                              34%               $.55
</TABLE>                              <PAGE>
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
          Performance Goals                            

Business Units, Segments, Profit Centers,     
and Individual Performance Goals Guidelines        
(Number of goals and % for each specific goal 
is to be customized for each participant based
upon Operating Objective, Marketing driven        % of Business Unit
orientation and level of accountability.          Profit Center/Individual
% is not to be less than 10% for any goal)        Performance Plans
     ---                                          ------------------------

<S>                                                      <C>                   
Contribution to Corporate Overhead and Profit            35%       

New Work Added to the Company                            20%          

Strategic Initiatives                                    15%                   
  
Accounts Receivable                                      10%          

TQM Goals                                                10%     

Human Resources Development                              10%
</TABLE>
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
          Potential Payout         Corporate      Business Unit
                                   Profitability  Performance
(% of Annual Salary)               Goals          Goals
                                   -----          -----                   
Tier 1 Corporate and Business Unit Heads and Staff
<S>                                <C>             <C>
1st Level (On-Plan Performance)    4.167%          4.167%  
2nd Level (Commendable)            8.334%          8.334%  
3rd Level (Outstanding)            12.500%         12.500% 
</TABLE>
<TABLE>
<CAPTION>
                                                               Segment,
                                                               Profit        
                                                  Business     Center,
                                   Corporate      Unit         Individual
                                   Profitability  Performance  Performance
                                   Goals          Goals        Goals
                                   ------         ------       ------
Tier 1 Business Unit-Segments                
<S>                                <C>             <C>        <C>
1st Level (On-Plan Performance)    2.084%          2.084%     4.167%
2nd Level (Commendable)            4.167%          4.167%     8.334%
3rd Level (Outstanding)            6.250%          6.250%     12.500%
</TABLE>
--------------------------------------------------------------------------

                                      
<PAGE>
<TABLE>
<CAPTION>
                                   Corporate        Business Unit
(% of Annual Salary)               Profitability    Performance
                                   Goals            Goals
                                   ------           ------  
Tier 2 Corporate and Business Unit Staff    
<S>                                <C>               <C> 
1st Level (On-Plan Performance)    2.50%             2.50%   
2nd Level (Commendable)            5.00%             5.00%   
3rd Level (Outstanding)            7.50%             7.50%
</TABLE>
------------------------------------------------------------------------
<TABLE>
<CAPTION>
     Potential Payout (continued)
                                                              Segment  
                                                  Business    Profit Center,
                                   Corporate      Unit        Individual
                                   Profitability  Performance Performance
                                   Goals          Goals       Goals
                                   ------         ------      ------
Tier 2 Business Unit-Segments                
<S>                                <C>            <C>         <C>
1st Level (On-Plan Performance)    1.25%          1.25%       2.50%
2nd Level (Commendable)            2.50%          2.50%       5.00%
3rd Level (Outstanding)            3.75%          3.75%       7.50%
</TABLE>
--------------------------------------------------------------------------
          Threshold                                    
Corporate                                    
Minimum earnings per share for any Potential Payout  $0.45     
on Corporate Component (after all incentives have been paid)

Business Units, Business Unit-Segments and Profit Centers
Minimum Contribution to Overhead and Profit (After Accrual for Incentive
Compensation Payments and Internal Interest Charges)
<TABLE>
<CAPTION>
                                   Contribution      
                                   ------------    
<S>                                <C>
Civil Business Unit                $3,812,625             
Civil-Engineering                  $5,436,079             
Baker Support Services, Inc.       $ (161,528)             
                                             
Buildings Business Unit            $2,039,454             
Buildings-Design                   $  924,777     
Buildings-Construction             $2,163,477      

Transportation Business Unit       $4,534,144             
Transportation-Engineering         $6,068,072             
Transportation-Heavy/Highway       $  629,918        
                                             
Environmental Business Unit        $1,760,394             
                                             
Energy Business Unit               $2,720,261             
Energy/Baker MO                    $1,155,213
</TABLE>                        <PAGE>
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<TABLE>
          <S>                      <C>
          Type of Payout           Cash              
---------------------------------------------------------------------------
          Frequency of Payout      Annually, with payment by the end of
                                   the following year's first quarter
---------------------------------------------------------------------------
          Funding                  Pre-funding accrual in the year earned      
-----------------------------------------------------------------------------
          Forfeitures              Allocated toward next year's funding
</TABLE>
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<PAGE>