<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
ENGINEERING ANIMATION, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(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:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(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):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / 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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
ENGINEERING ANIMATION, INC.
2321 NORTH LOOP DRIVE
AMES, IOWA 50010
March 26, 1998
Dear Stockholder:
You are cordially invited to attend the Engineering Animation, Inc. Annual
Meeting of Stockholders to be held at 1:30 P.M., Friday, May 1, 1998 at the
University Park Holiday Inn, 1800 50th Street, West Des Moines, Iowa 50266.
We are looking forward to discussing our record-setting 1997 performance. In
addition, you will have an opportunity to discuss each item of business
described in the Notice of Annual Meeting of Stockholders and proxy statement
and to ask questions about the Company and its operations.
It is important that your shares be represented and voted at the Annual
Meeting. Whether or not you plan to attend, please sign and promptly return the
enclosed proxy card, using the envelope provided. If you do attend the Annual
Meeting, you may withdraw your proxy and vote your shares in person.
Sincerely,
Matthew M. Rizai
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE
OFFICER, PRESIDENT & TREASURER
<PAGE>
ENGINEERING ANIMATION, INC.
2321 NORTH LOOP DRIVE
AMES, IOWA 50010
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
The Annual Meeting of Stockholders of Engineering Animation, Inc. will be
held on Friday, May 1, 1998 at 1:30 P.M., at the University Park Holiday Inn,
1800 50th Street, West Des Moines, Iowa 50266, for the following purposes:
1. To elect two Directors for three-year terms;
2. To consider and act upon a proposal to amend the Engineering Animation,
Inc. Certificate of Incorporation to increase the number of authorized
shares of Common Stock of the Company from 20,000,000 to 60,000,000;
3. To ratify the appointment of Ernst & Young LLP as auditors; and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on Monday, March 16,
1998 as the record date for the determination of stockholders entitled to notice
of and to vote at the Annual Meeting of Stockholders.
The Company requests that all stockholders, whether or not you expect to
attend the meeting, sign the enclosed proxy and return it as promptly as
possible in the accompanying stamped envelope. You may revoke your proxy at any
time before it is voted. If you are present at the meeting, you may vote your
shares in person and the proxy will not be used.
You are respectfully urged to read the proxy statement contained in this
booklet for further information concerning the directors, the amendment of the
Company's Certificate of Incorporation, the reappointment of Ernst & Young LLP
as auditors and the use of the proxy.
A copy of the Company's Annual Report to Stockholders for the fiscal year
ended December 31, 1997 accompanies this proxy statement.
By Order of the Board of Directors
Jamie A. Wade
SECRETARY
March 26, 1998
<PAGE>
ENGINEERING ANIMATION, INC.
2321 NORTH LOOP DRIVE
AMES, IOWA 50010
------------------------
PROXY STATEMENT
------------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 1, 1998
This proxy statement is furnished in connection with the solicitation of
proxies to be voted at the Annual Meeting of Stockholders of Engineering
Animation, Inc., to be held on Friday, May 1, 1998. This proxy statement and the
proxy are being mailed to stockholders on or about March 26, 1998.
The enclosed proxy is solicited by the Board of Directors of the Company and
will be voted at the Annual Meeting and any adjournments thereof. Shares
represented by a properly executed proxy in the accompanying form will be voted
at the Annual Meeting in accordance with any instructions specified by the
stockholder. If no instructions are given, the stockholder's shares will be
voted in accordance with the recommendations of the Board of Directors FOR each
of the proposals presented in this proxy statement. Those recommendations are
described later in this proxy statement.
The proxy may be revoked at any time before it is exercised by delivering a
written notice of revocation to the Secretary of the Company. If you attend the
Annual Meeting in person, you may revoke your proxy by either giving notice of
revocation to the inspectors of election at the Annual Meeting or by voting at
the Annual Meeting in person.
The only items of business that the Board of Directors intends to present or
knows will be presented at the Annual Meeting are the items discussed in this
proxy statement. The proxy confers discretionary authority upon the persons
named therein, or their substitutes, to vote on any other items of business that
may properly come before the meeting.
As of March 16, 1998, the record date for the Annual Meeting, the Company
had shares of Common Stock, par value $.01 per share ("Common Stock"),
issued and outstanding. Each share is entitled to one vote. A majority of the
issued and outstanding shares constitutes a quorum at the meeting.
ELECTION OF DIRECTORS
The Board of Directors of Engineering Animation, Inc. consists of five
directors, divided into three classes. At this Annual Meeting, two nominees are
to be elected, with each director to serve for a term of three years or until
his successor is duly elected and qualified. The remaining three directors will
continue to serve as set forth below, with two directors having terms expiring
on the date of the annual meeting to be held in 1999 and one director having a
term expiring on the date of the annual meeting to be held in 2000. The
nominees, Martin J. Vanderploeg and Laurence J. Kirshbaum, are currently
directors of the Company.
Directors are elected by a plurality of the votes of the shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting. Consequently, any shares not voted (whether by abstention,
broker non-vote or votes withheld) will have no effect on the election of a
director. Unless otherwise directed, proxies will be voted at the Annual Meeting
for the election of each of Dr. Vanderploeg and Mr. Kirshbaum or, in the event
of a contingency not presently foreseen, for a different person as a substitute.
The Board of Directors is recommending the election of Dr. Vanderploeg and Mr.
Kirshbaum.
The following sets forth with respect to the nominees and each director
continuing to serve, their names, ages, principal occupations and other
information, based upon information received from them.
<PAGE>
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS FOR THREE-YEAR TERMS
EXPIRING AT THE ANNUAL MEETING TO BE HELD IN 2001
MARTIN J. VANDERPLOEG, PH.D., 41. (Director since 1988). Dr. Vanderploeg
co-founded the Company in 1988. He has served as Executive Vice President since
October 1993 and as the Company's Secretary from June 1990 until November 1995.
Dr. Vanderploeg's prior experience includes serving as a faculty member in
mechanical engineering at Iowa State University and performing contract research
for a number of large corporations. Dr. Vanderploeg earned a Ph.D. in Mechanical
Engineering from Michigan State University and is a licensed Professional
Engineer.
LAURENCE J. KIRSHBAUM, 53. (Director since 1995). Mr. Kirshbaum has been
Chairman of Time Warner Trade Publishing since 1997 and was previously President
and CEO of Warner Books Inc., a subsidiary of Time Warner Inc., since 1984. Mr.
Kirshbaum earned a B.A. from the University of Michigan.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE WITH TERMS
EXPIRING AT THE ANNUAL MEETING TO BE HELD IN 1999
MATTHEW M. RIZAI, PH.D., 41. (Director since 1990). Dr. Rizai has been
Chairman, Chief Executive Officer, President and a director of the Company since
joining the Company in June 1990 and has been Treasurer since November 1995. Dr.
Rizai's prior experience includes serving as: associate with a venture capital
firm; senior research engineer with General Motors Corporation; and development
engineer with Ford Motor Company. Dr. Rizai earned a Ph.D. in Mechanical
Engineering from Michigan State University and an M.B.A. from the University of
Chicago.
MICHAEL CROW, PH.D., 42. (Director since 1991). Dr. Crow has been Vice
Provost at Columbia University since August 1991. Dr. Crow served as the
Director of the Institute for Physical Research and Technology and the Office of
Science Policy and Research at Iowa State University from July 1985 to June
1991. Dr. Crow earned a Ph.D. in Public Administration (Science and Technology
Policy) from Syracuse University.
MEMBER OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE WITH A TERM
EXPIRING AT THE ANNUAL MEETING TO BE HELD IN 2000
JAMIE A. WADE, 49. (Director since 1995). Mr. Wade has served as Vice
President of Administration and General Counsel to the Company since June 1994
and Secretary since November 1995. From 1983 to 1994, Mr. Wade was a partner
with Davis, Hockenberg, Wine, Brown, Koehn & Shors, P.C., a Des Moines law firm.
Mr. Wade earned a J.D. from Drake University Law School and a B.A. from Drake
University College of Business.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the 1997 fiscal year, there were five meetings of the Board of
Directors. Each director attended at least 75% of the aggregate total number of
the meetings of the Board of Directors and the meetings of the Board Committees
on which he served.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has standing Audit and Compensation Committees, which
deal with certain specific areas of the Board's responsibility.
The Audit Committee, which met five times during the 1997 fiscal year,
recommends the firm to be appointed as independent public accountants to audit
the Company's financial statements and oversees the
2
<PAGE>
accounting and audit functions of the Company. The members of the Audit
Committee are Matthew M. Rizai, Michael Crow and Laurence J. Kirshbaum.
The Compensation Committee, which met five times during the 1997 fiscal
year, determines executive officers' salaries, bonuses and other compensation.
The Compensation Committee also administers the Company's stock option plans.
The members of the Compensation Committee are Michael Crow and Laurence J.
Kirshbaum.
DIRECTOR COMPENSATION
Directors who are not currently officers or employees of the Company receive
a yearly retainer fee of $20,000 plus $1,000 and reimbursement of expenses for
attending each meeting of the Board of Directors and each meeting of any
committee.
The Company's directors who are not employees of the Company are eligible to
participate in the Company's Non-Employee Directors Stock Option Plan (the
"Director Option Plan"). The Director Option Plan is administered by the
Chairman of the Board of Directors along with other employee directors, if any,
selected by the Chairman. Pursuant to the Director Option Plan, non-employee
directors of the Company will receive initial options to purchase 7,500 shares
of Common Stock in the year that they join the Board and options to purchase an
additional 3,750 shares of Common Stock for each subsequent year of service. The
exercise price of the options is the fair market value of the Company's Common
Stock on the date of grant. The initial stock options granted under the Director
Option Plan vest over four years and subsequent options vest upon grant. All
such options have a term of 10 years and may not be transferred other than by
will or by the laws of descent and distribution.
INCREASE IN AUTHORIZED COMMON STOCK
The Board of Directors has approved and recommended to stockholders an
amendment to Article FOURTH of the Company's Certificate of Incorporation
increasing the total number of shares of stock of all classes that the Company
has authority to issue from 40,000,000 to 80,000,000 and the number of shares of
Common Stock that the Company has authority to issue from 20,000,000 to
60,000,000. Stockholders last approved an increase in the Company's authorized
Common Stock immediately prior to the Company's initial public offering in
February 1996. Since then, the Company issued additional shares in a second
public offering in June 1997, established a new stock option plan in October
1997, completed two stock-for-stock acquisitions in November 1997 and effected a
three-for-two stock split, by way of a stock dividend, in February 1998. As of
March , 1998, the Company had shares issued and outstanding,
shares unissued and not reserved for issuance, and shares
unissued but reserved for issuance pursuant to option plans.
The Board of Directors believes that the proposed increase in the number of
authorized shares of Common Stock will benefit the Company by improving its
flexibility in responding to future business needs and opportunities. The
additional authorized shares will be available for issuance from time to time in
connection with further financings, acquisitions, stock splits in the form of
stock dividends, employee option plans, and for other corporate purposes that
the Board of Directors may deem advisable. No further action or authorization by
the stockholders would be necessary prior to the issuance of additional shares,
except as may be required by laws or regulations applicable in particular
circumstances. Certain large issuances of shares may require stockholder
approval under rules of the Nasdaq Stock Market, Inc. ("Nasdaq").
The proposed increase in the number of authorized shares of Common Stock is
not intended to impede a change of control of the Company. Further, the Company
is not aware of any current efforts to acquire control of the Company. It should
be noted, however, that the additional shares could be issued in connection with
defending the Company against a hostile takeover bid. The issuance of additional
shares of Common Stock could be used to dilute the stock ownership of a person
or entity seeking to obtain
3
<PAGE>
control of the Company, or could result in a private placement with purchasers
who might side with the Board of Directors if they chose to oppose a specific
change of control.
Although the increase in the number of authorized shares of Common Stock is
not sought for anti-takeover purposes, securities rules nevertheless require
disclosure of charter and by-law provisions that arguably could have an
anti-takeover effect. Like many publicly-held companies, the Company's
Certificate of Incorporation and/or By-Laws contain the following provisions:
(1) stockholders may not take action by written consent; (2) a special meeting
of stockholders may only be called by a majority of the Board of Directors or
the President; (3) advance notice and the provision of certain information is
required for stockholder proposals and for stockholder nomination of directors
(as described below under "Deadline for Stockholder Proposals"); and (4) the
Board of Directors is dividend into three classes and directors may be removed
only for cause. These provisions could permit the Board of Directors to place
stock in friendly hands, delay or deter or otherwise make more difficult a
takeover of the Company. While permitted under Delaware law, the Company's
Certificate of Incorporation and By-Laws do not provide stockholders with
cumulative voting.
The Company has no plans, understandings, agreements or arrangements
concerning the issuance of additional shares of Common Stock not previously
authorized for issuance by the Board.
REQUIRED VOTE
The Amendment to Article FOURTH of the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock
requires the affirmative vote of a majority of the outstanding shares.
Abstentions and broker non-votes will be counted as votes against the amendment.
If the amendment is approved by the stockholders, it will become effective
upon the filing of a Certificate of Amendment in accordance with the General
Corporation Law of Delaware.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THIS PROPOSAL TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors has
selected Ernst & Young LLP as the independent auditors to examine the financial
statements of the Company for the fiscal year ending December 31, 1998. Ernst &
Young LLP has been employed to perform this function for the Company since 1990.
One or more representatives of Ernst & Young LLP will be present at the
Annual Meeting and will have the opportunity to make a statement and to respond
to appropriate questions.
Although the appointment of auditors is not required to be submitted to a
vote of stockholders, the Board of Directors believes that it is appropriate as
a matter of policy to request that the stockholders ratify the appointment. If
the stockholders should not ratify the appointment, the Audit Committee will
investigate the reasons for the stockholders' rejection and the Board of
Directors will reconsider the appointment.
REQUIRED VOTE
The affirmative vote of a majority of the shares present in person or by
proxy and entitled to vote is required to ratify the appointment of Ernst &
Young LLP as the Company's independent public auditors. An abstention will be
counted as a vote against the ratification of the appointment since it is one
less vote for approval. Broker non-votes will not affect the outcome since they
are not considered "shares present" for voting purposes.
4
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS.
SECURITY OWNERSHIP
The following table sets forth certain information regarding the beneficial
ownership of the shares of the Company's Common Stock as of February 27, 1998 by
(i) each person known by the Company to beneficially own more than 5% of the
Company's Common Stock, (ii) each director and nominee for director, (iii) the
Chief Executive Officer and the four next most highly compensated executive
officers of the Company (together, the "Named Executive Officers") and (iv) by
all directors, nominees for director and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY BENEFICIALLY
NAMED EXECUTIVE OFFICERS AND DIRECTORS OWNED OWNED (1)
- - ------------------------------------------------------------------------------ ----------- -------------
<S> <C> <C>
Matthew M. Rizai (2).......................................................... 867,154 8.45%
Martin J. Vanderploeg (3)..................................................... 867,154 8.45%
Michael Crow (4).............................................................. 75,498 *
Michael J. Jablo (5).......................................................... 41,250 *
Jamie A. Wade (6)............................................................. 39,793 *
Laurence J. Kirshbaum (7)..................................................... 8,625 *
Patricia Johnson (7).......................................................... 6,000 *
All directors and executive officers as a group (12 persons).................. 3,068,976 28.36%
OTHER 5% STOCKHOLDERS
- - ------------------------------------------------------------------------------
Jeff D. Trom (8).............................................................. 652,776 6.61%
AMVESCAP PLC (9).............................................................. 631,800 6.41%
FMR Corp. (10)................................................................ 624,450 6.33%
Dresdner RCM Global Investors LLC (11)........................................ 577,500 5.86%
</TABLE>
- - ------------------------
* Less than one percent.
(1) Except as indicated in the footnotes to this table and subject to
applicable community property laws, the persons named in this table have
sole voting and investment power with respect to all shares beneficially
owned by them. The number of shares shown as owned by, and the voting power
of, individual stockholders includes shares that are not currently
outstanding, but that such stockholders are entitled to acquire or will be
entitled to acquire within 60 days. Such shares are deemed to be outstanding
for the purpose of computing the percentage of outstanding Common Stock
owned by the particular stockholder, but are not deemed to be outstanding
for the purpose of computing the percentage ownership of any other person.
(2) Consists of 467,638 shares held by the Matthew Rizai Family Limited
Partnership and 399,516 shares issuable upon exercise of vested options and
options that will vest within 60 days. Dr. Rizai's address is c/o
Engineering Animation, Inc., 2321 North Loop Drive, Ames, Iowa 50010.
(3) Includes 399,516 shares issuable upon exercise of vested options and
options that will vest within 60 days. Dr. Vanderploeg's address is c/o
Engineering Animation, Inc., 2321 North Loop Drive, Ames, Iowa 50010.
(4) Includes 18,375 shares issuable upon exercise of vested options and options
that will vest within 60 days..
(5) Includes 38,250 shares issuable upon exercise of vested options and options
that will vest within 60 days.
5
<PAGE>
(6) Consists of split shares held in Mr. Wade's individual Retirement Account
and 26,044 shares issuable upon exercise of vested options and options that
will vest within 60 days.
(7) Consists of shares issuable upon exercise of vested options and options
that will vest within 60 days.
(8) Includes 18,375 shares issuable upon exercise of vested options and options
that will vest within 60 days. Dr. Trom's address is c/o Engineering
Animation, Inc., 2321 North Loop Drive, Ames, Iowa 50010.
(9) Information provided in a Schedule 13G filed by AMVESCAP PLC ("AMVESCAP")
on February 11, 1998. AMVESCAP has shared voting and dispositive power with
respect to 631,800 shares. The Schedule 13G indicates that the shares are
held by AVZ, Inc.; AIM Management Group, Inc; AMVESCAP Group Services, Inc.;
INVESCO, Inc. and INVESCO North American Holdings, Inc., subsidiaries of
AMVESCAP. AMVESCAP's address is Devonshire Square, London EC2M 4YR, England
(10) Information provided in a Schedule 13G filed on February 10, 1998 by FMR
Corp. ("FMR"). FMR has sole voting and dispositive power with respect to
624,450 shares. The shares are held by FMR's subsidiary, Fidelity Management
and Research Company. FMR's address is 82 Devonshire Street, Boston,
Massachusetts 02109.
(11) Information provided in a Schedule 13G filed on February 6, 1998 by
Dresdner RCM Global Investors LLC ("Dresdner"). Dresdner has sole voting
power with respect to 513,750 shares and sole dispositive power with respect
to 577,500 shares. RCM Limited L.P. ("RCM") is the Managing Agent of
Dresdner. RCM General Corporation is the General Partner of RCM. Dresdner's
address is 4 Embarcadero Center, Suite 3000, San Francisco, California
94111.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to or earned by the
Named Executive Officers for the fiscal year ended December 31, 1997 and each of
the previous two fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
----------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS COMPENSATION ($)
- - ------------------------------------------ --------- ------------ --------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Matthew M. Rizai.......................... 1997 235,000 28,000(1) -- 6,404(2)
Chief Executive Officer, 1996 180,000 -- 60,000 5,805(2)
President and Treasurer 1995 150,000 70,000 105,000 14,623(2)
Martin J. Vanderploeg..................... 1997 235,000 28,000(1) -- 6,404(3)
Executive Vice President 1996 180,000 -- 60,000 5,683(3)
1995 150,000 75,000 105,000 3,000(3)
Michael J. Jablo.......................... 1997 363,777(4) --(1) -- 2,398(5)
Vice President of Software 1996 170,776(4) 25,000 18,000 2,308(5)
Sales and Marketing 1995 35,873(4) -- 56,250 --
Jamie A. Wade............................. 1997 140,000 6,000(1) -- 1,694(6)
Vice President of Administration, 1996 120,000 6,000 16,500 1,740(6)
General Counsel and Secretary 1995 90,000 25,000 19,500 450(6)
Patricia Johnson.......................... 1997 109,583 25,000(1)(7) -- 25,364(8)
Vice President of Human Resources
</TABLE>
- - ------------------------
(1) The Named Executive Officers also received the following bonuses on January
31, 1998: Dr. Rizai $205,000, Dr. Vanderploeg $205,000, Mr. Jablo $75,000,
Mr. Wade $30,000 and Ms. Johnson, $30,000.
6
<PAGE>
(2) Consists of $1,470 and $2,205 of premiums on a life insurance policy paid in
1997 and 1996, respectively, $11,395 paid in lieu of vacation in 1995 and
$4,934, $3,600 and $3,228 of matching contributions by the Company to the
Engineering Animation, Inc. Retirement Plan made in 1997, 1996 and 1995,
respectively.
(3) Consists of $1,470 and $2,083 of premiums on a life insurance policy paid in
1997 and 1996 and $4,934, $3,600 and $3,000 of matching contributions by the
Company to the Engineering Animation, Inc. Retirement Plan made in 1997,
1996 and 1995, respectively.
(4) Includes $223,777, $64,776 and $15,000 in sales commissions in 1997, 1996
and 1995, respectively.
(5) Consists of $160 and $309 of premiums on a life insurance policy paid in
1997 and 1996, respectively, and $2,238 and $1,999 of matching contributions
by the Company to the Engineering Animation, Inc. Retirement Plan made in
1997 and 1996, respectively.
(6) Consists of $234 and $480 of premiums on a life insurance policy paid in
1997 and 1996, respectively and $1,460 and $1,260 and $450 of matching
contributions by the Company to the Engineering Animation, Inc. Retirement
Plan made in 1997, 1996 and 1995, respectively.
(7) Consists of a signing bonus paid to Ms. Johnson upon her joining the
Company.
(8) Consists of expenses incurred by Ms. Johnson in connection with relocating
to Iowa, which expenses were reimbursed by the Company.
OPTION GRANTS IN 1997
None of the Named Executive Officers received option grants for the fiscal
year ended December 31, 1997.
1997 YEAR-END OPTION VALUES
The following table provides information regarding stock options held by the
Named Executive Officers as of December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES VALUE YEAR-END(#) FISCAL YEAR-END($)(1)
ACQUIRED ON REALIZED -------------------------- ---------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------------ ------------- ----------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Matthew M. Rizai -- -- 399,516 54,000 11,076,636 976,500
Martin J. Vanderploeg -- -- 399,516 54,000 11,076,636 976,500
Michael J. Jablo -- -- 38,250 36,000 1,018,500 845,250
Jamie A. Wade 7,500 222,500 23,944 27,055 646,822 690,678
Patricia Johnson -- -- 6,000 24,000 95,000 380,000
</TABLE>
- - ------------------------
(1) Value is calculated by subtracting the exercise price per share from the
last reported market price at December 31, 1997 and multiplying the result
by the number of shares subject to the option.
7
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors is composed of two
outside directors. The Board of Directors sets the compensation for the
Company's executive officers, after consideration of the Compensation
Committee's recommendations. The Compensation Committee is also responsible for
approving the terms of executive employment and severance agreements,
administering the Company's 1994 Employee Stock Option Plan and 1997
Non-Qualified Stock Option Plan and approving the grant of options under that
plan, including grants to executive officers of the Company.
COMPENSATION OBJECTIVES
The goals of the Compensation Committee are to: (i) motivate executive
officers to create added value for the Company's stockholders through
compensation incentives that are tied to the Company's operating and stock
market performance; (ii) reward executive officers for their individual
performance and the performance of the Company; (iii) provide compensation and
benefits at levels that enable the Company to attract and retain high-quality
professionals; and (iv) align the interests of the Company's officers and
directors with the interests of the Company's stockholders through potential
stock ownership.
EXECUTIVE COMPENSATION PROGRAMS
The Company's executive compensation programs, which contain no special
perquisites, consist of three principle elements: base salary, cash bonus and
stock options. The Company emphasizes incentive compensation in the form of
bonuses and stock option grants, rather than base salary. The Board of Directors
sets the annual base salary for executives, after consideration of the
recommendations of the Compensation Committee and subject to the terms of the
executives' employment agreements. Prior to making its recommendations, the
Compensation Committee reviews historical compensation levels of the executives,
evaluations of past performance of the executives and assessments of expected
future contributions of the executives. In making the determinations regarding
base salaries, the Company considers generally available information regarding
salaries prevailing in the industry, but does not utilize any particular
indices.
In addition to base salary, the Company pays cash bonuses to its executives
subsequent to the end of each fiscal year. These bonuses are dependent primarily
on the Company's financial performance and achievement of corporate objectives
established by the Board of Directors at the beginning of each fiscal year.
Certain executives, who are involved in the Company's sales and marketing
activities, also receive commissions on sales of the Company's products and
services.
In determining bonuses for the 1997 fiscal year, the Committee considered
individual performance goals, Company net income, revenues and unit sales. These
factors were then weighted for relative importance and used to determine each
executive's bonus. The Board of Directors set various elements of the bonus
calculation formula, after consideration of the Compensation Committee's
recommendation.
In addition to base salary and cash bonus, total compensation for executives
includes long-term incentives offered by stock options. These options are
generally provided through initial stock option grants at the date of hire and
periodic additional stock option grants. It has been the Company's practice to
fix the exercise price of options at 100% of the fair market value on the date
of grant. The Company believes that stock options are an important tool in
aligning the long-term interests of the Company's executives and stockholders
since the executives realize gains only if the stock price increases over the
fair market value at the date of grant and the executives then exercise their
options.
No options were granted to Named Executive Officers in fiscal 1997. In
determining the amount of option grants, the Compensation Committee evaluates
the job level of the executive, responsibilities to be assumed in the upcoming
fiscal year, responsibilities of the executive in prior years and the size of
awards
8
<PAGE>
made to each such executive officer in prior years relative to the Company's
overall performance. Options generally become exercisable over a period of
years, beginning on the first anniversary of their issuance. However, the
Company does, from time to time, issue to executive officers options that are
immediately exercisable.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer's performance was evaluated, and his
compensation was determined, in accordance with the factors described above
applicable to executive officers generally. Prior to the Company's initial
public offering in February 1996, the Company paid performance bonuses to its
executive officers immediately prior to the end of each fiscal year for
performance during that fiscal year. However, following the initial public
offering, the Company changed its bonus procedure for executive officers.
Executive officers will now receive any bonus for performance in a fiscal year
following the end of that fiscal year. In accordance with the change in
procedure, the Chief Executive Officer received a bonus payment in 1997 for his
performance in 1996, another in 1998 for his performance in 1997. The Chief
Executive Officer's base salary for fiscal 1997, as reflected in the Summary
Compensation Table, represented a 31% increase over fiscal 1996. This increase
was based on the Chief Executive Officer's increased responsibilities, which
resulted from the Company becoming a public company and from the growth in the
Company's revenues, earnings and number of employees.
COMPENSATION DEDUCTIBILITY
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), imposes a limit on tax deductions for annual compensation in excess of
one million dollars paid by a corporation to its chief executive officer and the
other four most highly compensated executive officers of the corporation. This
provision excludes certain forms of "performance based compensation" from the
compensation taken into account for purposes of the limit. The Committee
believes that it has structured its current compensation programs in a manner to
preserve full deductibility to the Company of executive compensation under the
Code. The Committee will continue to assess the impact of Section 162(m) of the
Code on its compensation practices and determine what further action, if any, is
appropriate.
Compensation Committee
Michael Crow, Ph.D.
Laurence J. Kirshbaum
THE REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS SHALL NOT
BE DEEMED TO BE INCORPORATED INTO ANY FILING UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED (THE "EXCHANGE ACT"), NOTWITHSTANDING ANY GENERAL STATEMENT CONTAINED IN
ANY SUCH FILING INCORPORATING THIS PROXY STATEMENT BY REFERENCE, EXCEPT TO THE
EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE.
9
<PAGE>
COMPANY PERFORMANCE
The following graph compares the cumulative total stockholder return on the
Common Stock of Engineering Animation, Inc. from February 29, 1996 (the date the
Common Stock was first offered to the public at an initial public offering price
of $18.00 per share) through December 31, 1997 with the cumulative total return
on the Nasdaq Stock Market-U.S. and the cumulative total return on the stock of
a group of public companies in the H&Q Computer Software Index. The Company did
not pay any dividends during this period. The Nasdaq Stock Market-U.S. and the
H&Q Computer Software indices are published daily.
The graph assumes an investment of $100 in each of Engineering Animation,
Inc., the Nasdaq Stock Market-U.S. and the H&Q Computer Software Index on
February 29, 1996. The comparison also assumes that all dividends are
reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ENGINEERING ANIMATION,
INC. NASDAQ STOCK MARKET - U.S. H&Q COMPUTER SOFTWARE INDEX
<S> <C> <C> <C>
02/29/96 $100 $100 $100
03/31/96 $116 $100 $105
06/30/96 $111 $109 $114
09/30/96 $133 $112 $117
12/31/96 $135 $118 $117
03/31/97 $129 $112 $106
06/30/97 $188 $131 $126
09/30/97 $212 $154 $152
12/31/97 $256 $145 $141
</TABLE>
THE COMPARISONS IN THIS TABLE ARE REQUIRED BY THE SECURITIES AND EXCHANGE
COMMISSION AND ARE NOT INTENDED TO FORECAST OR BE INDICATIVE OF POSSIBLE FUTURE
PERFORMANCE OF THE COMPANY'S COMMON STOCK. THE STOCK PRICE PERFORMANCE GRAPH
SHALL NOT BE DEEMED TO BE INCORPORATED INTO ANY FILING UNDER THE SECURITIES ACT
OR THE EXCHANGE ACT, NOTWITHSTANDING ANY GENERAL STATEMENT CONTAINED IN ANY SUCH
FILING INCORPORATING THIS PROXY STATEMENT BY REFERENCE, EXCEPT TO THE EXTENT
THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE.
10
<PAGE>
EMPLOYMENT AND SEVERANCE ARRANGEMENTS
The Company entered into employment agreements with Dr. Rizai, Dr.
Vanderploeg and Mr. Wade as of January 1, 1996, each of which expire on December
31, 1999. Dr. Rizai's agreement provides that he will be employed as the
Company's Chairman, Chief Executive Officer and President at an annual salary of
$180,000. Dr. Vanderploeg's agreement provides that he will be employed as the
Company's Executive Vice President at an annual salary of $180,000. Mr. Wade's
agreement provides that he will be employed as the Company's Vice President of
Administration, General Counsel and Secretary at an annual salary of $120,000.
Each of the agreements provides that the base salary will be reviewed annually
and that the executive will receive an annual performance bonus as determined by
the Board of Directors and, for Dr. Rizai and Dr. Vanderploeg, a car allowance.
The employment agreements also include certain non-competition and
confidentiality provisions.
The Company has also entered into severance agreements with each of Dr.
Rizai, Dr. Vanderploeg and Mr. Wade, each dated as of the effective date of the
respective officer's employment agreement. The severance agreements provide for
payment of a lump sum equal to two times the sum of the employee's base salary
and the bonus paid to the employee in the prior year for Dr. Rizai and Dr.
Vanderploeg (one times that sum for Mr. Wade) and continuation of benefits for
two years (one year in the case of Mr. Wade) upon (i) termination of employment
by the Company without cause, (ii) termination of employment by the employee for
good reason (including change in control of the Company), (iii) death or (iv)
permanent disability. The Company may terminate the employment of the executive
at any time for cause without the payment of severance. The agreements with Dr.
Rizai and Dr. Vanderploeg also provide that, upon termination by the Company
without cause or by the executive for good reason, the Company upon demand by
the executive would be required to file a registration statement for all shares
of Common Stock that the executive then owned or had the right to acquire upon
exercise of options then held and would be required to include any such shares
in any other registration statement filed by the Company.
The Company entered into an employment agreement with Mr. Jablo as of
September 18, 1995 that terminates (i) by mutual agreement of the Company and
Mr. Jablo, (ii) upon Mr. Jablo's death or disability, (iii) at the option of the
Company for cause or (iv) upon the dissolution or bankruptcy of the Company.
This agreement provides that Mr. Jablo will be employed as the Company's Vice
President of Sales and Marketing at an initial annual salary of $106,000 per
year and a car allowance. In addition to base salary, the agreement provides for
the payment of commissions on sales of the Company's 3D visualization software
products at rates established by the Company's President to Mr. Jablo. The
agreement also contains certain non-competition and confidentiality provisions.
Mr. Jablo's employment agreement contains severance provisions that require the
payment by the Company to Mr. Jablo of (i) an amount equal to the total
compensation paid to Mr. Jablo during the first year of the agreement if the
agreement were terminated following a merger, sale or change of control of the
Company and (ii) an amount equal to one-half of the total compensation paid to
Mr. Jablo during the first year of the agreement if the agreement were
terminated for cause (as defined in the agreement) by the Company after the
first anniversary of the agreement.
11
<PAGE>
EXECUTIVE OFFICERS AND KEY EMPLOYEES
Following is certain information concerning the executive officers and
certain other key employees of Engineering Animation, Inc., based on information
furnished by them.
EXECUTIVE OFFICERS
MATTHEW M. RIZAI, PH.D., 41
Chairman, Chief Executive Officer, President and Treasurer
Dr. Rizai has been Chairman, Chief Executive Officer, President and a
director of the Company since joining the Company in June 1990 and has been
Treasurer since November 1995. Dr. Rizai's prior experience includes serving as:
associate with a venture capital firm; senior research engineer with General
Motors Corporation; and development engineer with Ford Motor Company. Dr. Rizai
earned a Ph.D. in Mechanical Engineering from Michigan State University and an
M.B.A. from the University of Chicago.
MARTIN J. VANDERPLOEG, PH.D., 41
Executive Vice President and Director
Dr. Vanderploeg has served as a director since co-founding the Company in
1988, as Executive Vice President since October 1993 and as the Company's
Secretary from June 1990 until November 1995. Dr. Vanderploeg's prior experience
includes serving as a faculty member in mechanical engineering at Iowa State
University and performing contract research for a number of large corporations.
Dr. Vanderploeg earned a Ph.D. in Mechanical Engineering from Michigan State
University and is a licensed Professional Engineer.
JAMIE A. WADE, 49
Vice President of Administration, General Counsel, Secretary and Director
Mr. Wade has served as Vice President of Administration and General Counsel
to the Company since June 1994 and Secretary since November 1995. From 1983 to
1994, Mr. Wade was a partner with Davis, Hockenberg, Wine, Brown, Koehn & Shors,
P.C., a Des Moines law firm. Mr. Wade earned a J.D. from Drake University Law
School and a B.A. from Drake University College of Business.
JEROME M. BEHAR, 40
Vice President of Finance and Chief Financial Officer
Mr. Behar has served as Vice President of Finance and Chief Financial
Officer since August 1997. Prior to joining the Company in May 1997, Mr. Behar
had served since April 1996 as director of finance at MagiNet Corporation, a
Silcon-Valley based, international supplier of on-demand video systems. Mr.
Behar's prior experience includes serving as vice president of finance and
administration at Western Lodging Corporation from September 1994 to April 1996
and as controller of Matrix Pharmaceutical, Inc. from March 1992 to September
1994. Executive and management positions were held at International Risk
Control, Inc. and the Cooper Companies, Inc. Mr. Behar is a Certified Public
Accountant. He earned an M.B.A. from Stanford University and a B.A. in business
administration from Michigan State University.
JAY E. SHANNAN, PH.D., 35
Vice President of Operations
Dr. Shannan is a co-founder of the Company and has served as Vice President
of Operations since June 1990. Dr. Shannan earned a Ph.D. in Mechanical
Engineering from Iowa State University.
12
<PAGE>
JEFF D. TROM, PH.D., 37
Vice President of Software Development
Dr. Trom is a co-founder of the Company and has served as Vice President of
Software Development since June 1990. Dr. Trom served as the Company's Treasurer
from June 1990 to November 1995. Dr. Trom earned a Ph.D. in Mechanical
Engineering from Iowa State University.
MICHAEL J. JABLO, 45
Vice President, Co-General Manager Software Division
Mr. Jablo has served in his current capacity since joining the Company in
October 1995. From January 1990 to October 1995 Mr. Jablo was employed by Mentor
Graphics Corporation where he ultimately served as North Central area sales
manager. Mr. Jablo earned an M.B.A. from the University of Detroit as well as a
B.S. in Mechanical Engineering and a B.S. in Business Management from Bradley
University.
ADRIAN SANNIER, 36
Vice President of Interactive Production
Mr. Sannier has served as Vice President of Interactive Production since
February 1997 and prior to that served as the Company's Vice President of New
Product Development since February 1996. From 1990 until joining the Company,
Mr. Sannier was employed in a variety of positions by CIMLINC Incorporated, a
provider of business process execution software to the aerospace industry and
heavy equipment manufacturers, most recently as Vice President, Product
Development. Mr. Sannier earned a Ph.D. and a B.S. in Electrical Engineering and
Systems Science from Michigan State University.
PATRICIA JOHNSON, 46
Vice President of Human Resources
Patricia Johnson has served as Vice President of Human Resources since
December 1997. Prior to joining EAI, Ms. Johnson worked at Disney Feature
Animation, where she was director of human resources for three years. Ms.
Johnson has also served as director of human resources for NBC Entertainment,
and worked twelve years for Digital Equipment Corporation in various human
resources management roles. She holds a B.A. from University of Northern
Colorado, Greeley.
MICHAEL N. BARRY, 54
Vice President, Co-General Manager Software Division
Mike Barry has served as Vice President, Co-General Manager Software
Division since joining the Company in November 1997 upon the Company's
acquisition of Rosetta Technologies, Inc. ("Rosetta"). Mr. Barry had served as
President of Rosetta since co-founding that company in February 1986. Mr. Barry
has also worked at Computervision in several senior management positions.
OTHER KEY EMPLOYEES
KENNETH VARTANIAN, 51
Vice President of North American Sales
Mr. Vartanian has served as Vice President of North American Sales since the
Company's acquisition of Rosetta in November 1997. Mr. Vartanian had served as
vice president of marketing of Rosetta since January 1993 and was a co-founder
of Rosetta. Mr. Vartanian has also served as director of marketing for
Computervision. Mr. Vartanian holds a M.B.A. from Northeastern University.
13
<PAGE>
JAMES L. RYAN, 42
Vice President of Marketing
Mr. Ryan has served as Vice President of Marketing since the Company's
acquisition of Rosetta in November 1997. Mr. Ryan had served as the Vice
President of Services of Rosetta since July 1997. Mr. Ryan also served as
director of IBM's Worldwide Product Data Management Solutions from January 1993
to September 1997.
GUIDO T. PERSCH, 43
Vice President of Engineering Software
Mr. Persch has served as Vice President of Engineering Software since the
Company's acquisition of Rosetta in November 1997. Mr Persch had been Vice
President of Engineering and led the Rosetta product development organizations
since January 1994. Mr Persch has also held senior development management
positions at Cadre Technologies from January 1993 to December 1993 and prior to
that at Software AG and Siemens/Intel. Mr. Persch holds a Ph.D. in Computer
Science from University of Karlsruhe, Germany.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's executive
officers, directors and beneficial owners of 10% or more of the Company's Common
Stock file initial reports of ownership and of changes of ownership with the
Securities and Exchange Commission and Nasdaq. Executive officers, directors and
10% beneficial owners are required by securities regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Due to a clerical error, the Form 5's filed by Drs. Rizai, Vanderploeg,
Shannan and Trom and Messrs. Wade, Jablo and Sannier with respect to the year
ended December 31, 1996, each understated the number of shares subject to
options granted in 1996. This misstatement was corrected on the Form 5's filed
by these individuals with respect to the year ended December 31, 1997. Based
solely on a review of the copies of Section 16(a) forms furnished to the Company
and written representations from the Company's executive officers and directors,
the Company believes that all other filing requirements were met during fiscal
year 1997.
DEADLINE FOR STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the Company's proxy
statement relating to the 1999 Annual Meeting must be received at the Company's
offices, addressed to the attention of the Secretary, not less than 120 days nor
more than 150 days prior to the 1999 Annual Meeting (e.g., assuming that the
1999 Annual Meeting is held on the first Friday in May, stockholder proposals
must be received by the Secretary of the Company after December 2, 1998 and
prior to January 1, 1999). The Company's by-laws require that a stockholder's
notice set forth as to each matter the stockholder proposes to bring before the
Annual Meeting (i) a brief description of the business desired to be brought
before the Annual Meeting, (ii) the name and address of the stockholder
proposing such business, as they appear on the Company's stockholders records,
(iii) the class and number of shares of the Company that are beneficially owned
by the stockholder, and (iv) any material interest of the stockholder in such
business. In addition, any stockholder proposal must comply with Rule 14a-8 of
Regulation 14A of the proxy rules of the Securities and Exchange Commission.
14
<PAGE>
ADDITIONAL INFORMATION
The expenses in connection with the solicitation of proxies will be borne by
the Company. Solicitation will be made by mail, but may also be made by
telephone or personal call by officers, directors or employees of the Company
who will not be specially compensated for such solicitation. The Company may
request brokerage houses and other nominees or fiduciaries to forward copies of
the Company's proxy statement and Annual Report to Stockholders to beneficial
owners of stock held in their names and the Company may reimburse them for
reasonable out-of-pocket expenses incurred in doing so.
By Order of the Board of Directors
Jamie A. Wade
SECRETARY
15
<PAGE>
ENGINEERING ANIMATION, INC.
PROXY CARD
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 1, 1998.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
P
R
O
X
Y
The undersigned hereby constitutes and appoints Matthew M. Rizai and Jamie A.
Wade, and each of them, true and lawful agents and proxies of the undersigned,
with full power of substitution, to represent the undersigned and to vote all
shares of stock which the undersigned is entitled to vote at the Annual Meeting
of Stockholders of Engineering Animation, Inc. to be held on May 1, 1998, and at
any and all adjournments and postponements thereof, on all matters before such
meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. HOWEVER, IF NO VOTE
IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" EACH NOMINEE FOR DIRECTOR, "FOR"
THE PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION AND "FOR" THE PROPOSAL TO
RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS; ALL OF
WHICH MATTERS ARE MORE FULLY DESCRIBED IN THE PROXY STATEMENT OF WHICH THE
UNDERSIGNED STOCKHOLDER ACKNOWLEDGES RECEIPT.
THIS PROXY GRANTS DISCRETIONARY AUTHORITY TO VOTE IN ACCORDANCE WITH THE BEST
JUDGMENT OF THE NAMED PROXIES ON OTHER MATTERS THAT MAY COME BEFORE THE
MEETING.
PLEASE VOTE, SIGN AND DATE THIS PROXY ON THE OTHER SIDE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
______________________________ _____________________________________
______________________________ _____________________________________
______________________________ _____________________________________
- - ------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
PLEASE MARK YOUR
/X/ VOTES AS IN THIS
EXAMPLE.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR each proposal
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS.
1 .Election of FOR WITHHELD
Directors. / / / /
Nominees: Martin J. Vanderploeq
Lawrence J. Kirshbaum
For both nominees, except vote withheld from the following:
________________________________________________________
2. Approval of Amendment to Certificate of Incorporation
For Against Abstain
/ / / / / /
3. Ratification of the appointment of Ernst & Young LLP as independent
accountants.
For Against Abstain
/ / / / / /
4. In the discretion of the proxies named herein, the proxies are authorized to
vote upon other matters as are properly brought before the meeting.
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
YES NO
I PLAN TO ATTEND / / / /
THE MEETING
Signature(s) ______________________________ DATE ____________________________
Note: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- - -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
ENGINEERING ANIMATION, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 1, 1998
1:30 P.M.
UNIVERSITY PARK HOLIDAY INN
1800 50TH STREET
WEST DES MOINES, IOWA 50266
