SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Geoscience Corporation
(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)(4) 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:
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:
4. Date Filed:
<PAGE>
[GeoScience Corporation Logo]
March 27, 1997
To Our Stockholders:
You are cordially invited to attend the 1997 Annual
Meeting of Stockholders of GeoScience Corporation to be held
on April 28, 1997, at 2:00 P.M., Houston time, at the Omni
Ballroom of the Westchase Hilton and Towers, 9999 Westheimer,
Houston, Texas 77042.
At the meeting, you will be asked to consider and vote
upon the proposals described in the attached proxy statement.
Additionally, we will report on the progress of the Company,
comment on matters of interest and respond to your questions.
A copy of the Company's 1996 Annual Report to Stockholders has
been or is being furnished to stockholders.
Whether or not you plan to attend the Annual Meeting, we
ask that you indicate the manner in which you wish your shares
to be voted and sign and return your proxy as promptly as
possible in the enclosed envelope so that your vote may be
recorded. You may vote your shares in person if you attend the
Annual Meeting, even if you send in your proxy.
We appreciate your continued interest in GeoScience
Corporation.
Sincerely,
Wendell W. Gamel
CHAIRMAN OF THE BOARD
<PAGE>
GEOSCIENCE CORPORATION
10500 WESTOFFICE DRIVE, SUITE 210
HOUSTON, TEXAS 77042
(713) 780-1881
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 28, 1997
To the Stockholders of GeoScience Corporation:
Notice is hereby given that the 1997 Annual Meeting of Stockholders (the
"Annual Meeting") of GeoScience Corporation, a Nevada Corporation
("GeoScience" or the "Company"), will be held at the Omni Ballroom of the
Westchase Hilton and Towers, 9999 Westheimer, Houston, Texas 77042 on Monday,
April 28, 1997, at 2:00 P.M., Houston time, for the following purposes:
1. The election of two directors as members of Class I of the Board of
Directors.
2. Ratification of the appointment of Price Waterhouse LLP as independent
public accountants for the Company for 1997.
3. To consider and vote on amendments to the Company's 1996 Equity
Incentive Plan.
4. Such other business as may properly come before the meeting and any
adjournment thereof.
The Board of Directors has fixed March 14, 1997 as the record date for
determining the stockholders of the Company entitled to notice of and to vote at
the meeting and any adjournment thereof.
Sincerely,
J. RANKIN TIPPINS
VICE PRESIDENT AND SECRETARY
Houston, Texas
MARCH 27, 1997
- --------------------------------------------------------------------------------
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR
PROXY AS PROMPTLY AS POSSIBLE. AN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES, IS ENCLOSED FOR THIS PURPOSE.
- --------------------------------------------------------------------------------
<PAGE>
GEOSCIENCE CORPORATION
PROXY STATEMENT
GENERAL
This Proxy Statement is being furnished to the stockholders of GeoScience
in connection with the solicitation of proxies by the Board of Directors for use
at the 1997 Annual Meeting of Stockholders (the "Annual Meeting") to be held
on Monday, April 28, 1997, at 2:00 P.M., Houston time, at the Omni Ballroom of
the Westchase Hilton and Towers, 9999 Westheimer, Houston, Texas, and at any
adjournment or postponement thereof.
This Proxy Statement, the attached Notice of Annual Meeting and the
accompanying form of proxy are first being mailed to stockholders of GeoScience
on or about March 31, 1997.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
At the Annual Meeting, including any adjournment or postponement thereof,
the stockholders of GeoScience will be asked to consider and vote upon the
proposals summarized in the attached Notice of Annual Meeting. Each proposal is
described in more detail in this Proxy Statement.
RECORD DATE; OUTSTANDING SHARES; QUORUM
Stockholders of record at the close of business on March 14, 1997 (the
"Record Date") are entitled to vote at the Annual Meeting and at any
adjournment or postponement thereof. On the Record Date, the issued and
outstanding capital stock of GeoScience consisted of 10,147,600 shares of Common
Stock (the "Common Stock"), each of which is entitled to one vote. No other
voting securities are outstanding. The presence at the meeting, in person or by
proxy, of the holders of a majority of the outstanding shares of voting stock of
GeoScience is necessary to constitute a quorum for the transaction of business
at the Annual Meeting. If there are not sufficient shares represented in person
or by proxy at the meeting to constitute a quorum, the meeting may be adjourned
or postponed in order to permit further solicitations of proxies by GeoScience.
Proxies given pursuant to this solicitation and not revoked will be voted at any
adjournment or postponement of the Annual Meeting in the manner set forth below.
VOTE REQUIRED; ABSTENTIONS AND NON-VOTES
In conformity with the corporate law of Nevada (the state of the Company's
organization) and the Company's articles of incorporation and bylaws, at any
meeting of stockholders at which a quorum is present, a majority of the shares
entitled to vote, present in person or represented by proxy, shall decide any
matter submitted to such meeting for vote, unless the matter is one upon which
by law or by express provision of the articles of incorporation or bylaws the
vote of a greater number is required, in which case the vote of such greater
number shall govern and control the decision of such matter. None of the
proposals set forth in this proxy statement require a greater vote than a
majority of shares. For purposes of determining whether a majority has been
obtained with respect to a particular matter, shares as to which there is an
abstention from voting and shares as to which a broker does not have authority
to vote on such matter will not be treated as present and entitled to vote with
respect to such matter.
VOTING BY PROXIES
SHARES REPRESENTED BY PROPERLY EXECUTED PROXIES WILL BE VOTED AS SPECIFIED.
IF NO SPECIFICATIONS HAVE BEEN GIVEN IN A PROXY AND AUTHORITY TO VOTE HAS NOT
BEEN WITHHELD, THE SHARES REPRESENTED THEREBY WILL BE VOTED: FOR THE ELECTION OF
NOMINEES LISTED HEREIN AS DIRECTORS (PROPOSAL 1); FOR THE
2
<PAGE>
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE COMPANY FOR 1997 (PROPOSAL 2); FOR THE APPROVAL OF
THE AMENDMENTS TO THE COMPANY'S 1996 EQUITY INCENTIVE PLAN (PROPOSAL 3); AND IN
THE DISCRETION OF THE PERSONS NAMED IN THE PROXY ON ANY OTHER BUSINESS THAT MAY
PROPERLY COME BEFORE THE MEETING.
Proxies may be revoked at any time prior to the exercise thereof by filing
with the President or Secretary at the Company's principal executive offices, a
written revocation or a duly executed proxy bearing a later date or by appearing
at the meeting and voting in person. The principal executive offices of the
Company are located at 10500 Westoffice Drive, Suite 210, Houston, Texas 77042.
For a period of at least ten days prior to the Annual Meeting, a complete list
of stockholders entitled to vote at the meeting will be available for inspection
by stockholders of record during ordinary business hours for proper purposes at
the Company's principal executive offices.
SOLICITATION OF PROXIES; EXPENSES
Solicitation of proxies by mail is expected to commence on or about March
31, 1997, and the cost thereof will be borne by the Company. In addition to such
solicitation by mail, certain of the directors, officers and regular employees
of the Company may, without extra compensation, solicit proxies by telephone,
telecopy, or personal interview. Arrangements also will be made with certain
brokerage houses, custodians, nominees and other fiduciaries for the forwarding
of solicitation materials to the beneficial owners of Common Stock held of
record by such persons, and such brokers, custodians, nominees and fiduciaries
will be reimbursed by the Company for reasonable out-of-pocket expenses incurred
by them in connection therewith. The Company's stock transfer agent and
registrar, Continental Stock Transfer & Trust Co., will assist in the
solicitation of proxies for no fee in addition to the monthly fee paid by the
Company for stock transfer and registrar services.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company's Articles of Incorporation provide for the classification of
the Company's Board of Directors into three classes (Class I, Class II and Class
III), having staggered terms. The current term of office of directors in Class I
expires at the Annual Meeting. The terms of office of the directors in Classes
II and III will expire at the annual meetings of stockholders to be held in 1998
and 1999, respectively. At the Annual Meeting, two Class I directors will be
elected to serve for terms expiring at the annual meeting of stockholders to be
held in 2000.
It is the intention of the persons designated as proxies in the enclosed
proxy card, unless the proxy is marked with contrary instructions, to vote for
the election of Messrs. Michael C. Forrest and J. Rankin Tippins as Class I
directors to serve until the 2000 annual meeting of stockholders and until their
successors have been duly elected and qualified. If either of these nominees
becomes unavailable for any reason, shares represented by such proxies will be
voted for such person or persons, if any, as may be designated by the Board of
Directors. At present, it is not anticipated that any nominee will be unable to
serve. Directors will be elected by a majority of the votes cast at the Annual
Meeting.
3
<PAGE>
PROPOSAL 1: THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED
BELOW.
NOMINEES
The following sets forth certain information with respect to the business
experience of each nominee during the past five years.
MICHAEL C. FORREST, age 63, has been a director of the Company since April
1996. Mr. Forrest also is the Senior Vice President of Technology and Business
Development at Maxus Energy Corporation (an oil and gas exploration and
production company), a position he has held since 1994. He originally joined
Maxus in 1992 as Vice Chairman and Chief Operating Officer and served on its
Board of Directors until it was acquired by YPF, S.A. in 1995. Previously, he
was President of Pecten International Co., a company engaged in the business of
oil and gas exploration that is a subsidiary of Shell U.S.A. During his 37 years
of service with Shell, Mr. Forrest served in various exploration and management
positions. Mr. Forrest also is a director of Tech-Sym Corporation.
J. RANKIN TIPPINS, age 44, has been a director and Vice President, General
Counsel and Secretary of the Company since March 1996. Mr. Tippins also has been
the Secretary and General Counsel of Tech-Sym Corporation for more than the past
five years.
CONTINUING DIRECTORS
The following sets forth certain information with respect to all members of
the Board of Directors whose current terms will continue after the Annual
Meeting. Information is provided concerning the business experience of each
continuing director during the past five years and the other directorships held
by each continuing director.
CLASS II DIRECTOR -- TERM EXPIRING 1998
W. L. CREECH, age 69, has been a director of the Company since April 1996.
Since his retirement from the United States Air Force as a Four Star General in
1984, General Creech has been an independent business consultant and speaker. He
is the author of THE FIVE PILLARS OF TQM. General Creech also serves as a
director of Tech-Sym Corporation, Comarco, Inc. (a service provider for the
defense and communications industries), and ESEA Corporation (an engineering
services company).
RICHARD F. MILES, age 48, has been a director and the President of the
Company since March 1996. Mr. Miles served as President of Syntron from January
1990 until November 1995 at which time he was elected Chairman of Syntron. In
addition, Mr. Miles was elected Chairman of CogniSeis in June 1995 and served as
President of CogniSeis from January 1996 to October 1996. Prior to his
association with Syntron and CogniSeis, Mr. Miles had been General Manager of
Geosource Marine starting in 1984 and, when Halliburton Geophysical Services
("HGS") acquired Geosource Marine in 1988, he became the Manager of the HGS
North America Marine and Central Marine Support, which continued the former
marine seismic data acquisition business of Geosource Marine. Mr. Miles
currently serves as Chairman of the International Association of Geophysical
Contractors (IAGC), an industry trade group.
EDWARD R. PRINCE, Jr., age 67, has been a director since September 1996.
Mr. Prince currently is Vice Chairman of Zydeco Energy Inc., an independent oil
and gas exploration company. Until 1994, Mr. Prince served as Chairman and Chief
Executive Officer of Digicon, Inc., a company he co-founded in 1965.
4
<PAGE>
CLASS III DIRECTOR -- TERM EXPIRING 1999
WENDELL W. GAMEL, age 67, has been Chairman of the Board of the Company
since April 1996. Mr. Gamel also is Chairman of the Board and President of
Tech-Sym Corporation, positions he has held for more than the past five years.
CHRISTOPHER C. KRAFT JR., age 73, has been a director of the Company since
April 1996. Dr. Kraft has been a consultant to the aerospace industry since his
retirement as Director of the NASA Johnson Space Center in 1982. He was Flight
Director for all of the Mercury missions and many of the Gemini missions. Dr.
Kraft also is a director of Tech-Sym Corporation.
RAY F. THOMPSON, age 60, has been a director and Vice President, Chief
Financial Officer and Treasurer of the Company since March 1996. Mr. Thompson
also has been the Treasurer, Controller and Chief Financial Officer of Tech-Sym
Corporation for more than the past five years. In February of 1993, he was
elected to the additional office of Vice President of Tech-Sym Corporation.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During 1996, the Board of Directors held four (4) meetings. Committees of
the Board of Directors included a Compensation Committee and an Audit Committee.
The Audit Committee currently is composed of Messrs. Creech, Forrest and
Prince. The Audit Committee held one (1) meeting in 1996. The Audit Committee
examines and considers matters relating to (i) the financial affairs of the
Company, including reviewing the Company's annual financial statements, (ii) the
scope and adequacy of the independent annual audit and internal audits, and
(iii) the effectiveness and adequacy of the Company's internal and accounting
controls, including matters addressed in the independent public accountants'
letter to management.
The Compensation Committee currently is composed of Messrs. Creech, Forrest
and Kraft. The Compensation Committee held two (2) meetings during 1996. The
functions of the Compensation Committee include (i) considering and making
recommendations to the Board of Directors with respect to programs for human
resource development and management organization and succession, (ii) approving
changes in senior executive compensation, (iii) making recommendations to the
Board of Directors regarding compensation matters and policies and (iv)
administering the Company's 1996 Equity Incentive Plan ("Stock Plan"),
including the selection of participants, the determination of the type and
number of awards to be granted and any interpretation of the Stock Plan.
During 1996, each of the directors of GeoScience attended at least 75% of
the aggregate number of meetings of the Board of Directors and the respective
committees on which he served.
COMPENSATION OF DIRECTORS
During 1996, those members of the Board who were not employees of either
the Company or Tech-Sym Corporation were paid a fee of $1,000 for attendance at
each Board meeting and a fee of $250 for attendance at each meeting of a
committee of the Board. Board members who were either employees of the Company
or Tech-Sym Corporation did not receive any fees. Members of the Board who were
not current or former employees of the Company or Tech-Sym Corporation also were
paid an annual retainer of $12,000.
Under the Stock Plan, each director of the Company who was not an employee
of either the Company or Tech-Sym Corporation automatically received an option
to purchase 10,000 shares of Common Stock at an exercise price per share equal
to the arithmetic average, without regard to number of shares, of the
5
<PAGE>
closing price on the Nasdaq National Market for thirty (30) consecutive trading
days after the closing of the Company's offering of the Company's Common Stock
effective May 17, 1996, as reported in THE WALL STREET JOURNAL ($17.55).
Thereafter, each such director of the Company who is not either an employee of
the Company or Tech-Sym Corporation receives on the day following each annual
meeting of the Company's stockholders (commencing with the 1997 Annual Meeting)
an option to purchase 1,000 shares of Common Stock at an exercise price per
share equal to the closing share price of the Common Stock on the date of grant.
Each person who becomes a director of the Company after the initial grants and
who is not either an employee of the Company or Tech-Sym Corporation receives an
initial option award to purchase 10,000 shares of Common Stock on the date of
such person's election or appointment at an exercise price per share equal to
the closing share price of the Common Stock on the date of grant. Each such
Director option becomes exercisable six months from the date of grant (or, if
earlier, the date of a Change in Control) and has a term of 10 years, subject to
earlier termination depending upon continuity of service on the Boards.
In addition to the option to purchase 10,000 shares of Common Stock and
subject to approval and ratification by the stockholders of the Company at the
Annual Meeting, each director of the Company who was not a director of the
Company or its affiliates and who was a director of the Company on December 11,
1996, will receive a one-time option to purchase 10,000 shares of Common Stock
of the Company at an exercise price of 100% of the closing price of the Common
Stock on December 11, 1996 ($12). Such options shall not be exercisable for a
period of six (6) months after December 11, 1996, but shall be immediately
exercisable in full thereafter.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and current offices of the executive officers of the
Company, who are to serve until their successors are elected and qualified, are
set forth below.
NAME AGE OFFICE
- ------------------------------------- --- ------------------------------------
Richard C. Cooper.................... 38 President of CogniSeis Development,
Inc.
Wendell W. Gamel..................... 67 Chairman of the Board of Directors
John H. Jones........................ 59 Vice President
Richard F. Miles..................... 48 President
Bruce H. Nelson...................... 45 President of Syntron, Inc.
Ray F. Thompson...................... 60 Vice President, Chief Financial
Officer and Treasurer
J. Rankin Tippins.................... 44 Vice President, General Counsel and
Secretary
A description of the business experience during the past five years for
each of the executive officers of the Company is set forth below. Unless
otherwise noted, positions are with the Company.
Richard C. Cooper has been President of CogniSeis Development, Inc. since
October 1996. He served as Vice President and General Manager of CogniSeis from
April 1996 to October 1996. From July 1992 to April 1996, Mr. Cooper served as
Manager of the office of CogniSeis in England, which services Europe, Asia and
the Middle East. Prior to his association with CogniSeis, Mr. Cooper was
Marketing Manager for Earth Search Processing, Inc. from November 1989 to July
1992.
Wendell W. Gamel has been Chairman of the Board of Directors since April
1996. Mr. Gamel also is Chairman of the Board and President of Tech-Sym
Corporation, positions he has held for more than the past five years.
6
<PAGE>
John H. Jones has been Vice President since August 1996. From February 1994
to August 1996, Mr. Jones was Manager of Contracts for Syntron, Inc. Prior to
joining Syntron, Inc., Mr. Jones was Commercial Negotiator with Halliburton
Company from 1977 to 1993, and Manager of Contracts for Halliburton Geophysical
Service, Inc. from 1990 to February 1994.
Richard F. Miles has been a director and President of the Company since
March 1996. Mr. Miles served as President of Syntron from January 1990 until
November 1995 at which time he was elected Chairman of Syntron. In addition, Mr.
Miles was elected Chairman of CogniSeis in June 1995 and served as President of
CogniSeis from January 1996 to October 1996. Prior to his association with
Syntron and CogniSeis, he had been General Manager of Geosource Marine starting
in 1984 and, when Halliburton Geophysical Services ("HGS") acquired Geosource
Marine in 1988, he became the Manager of the HGS North America Marine and
Central Marine Support, which continued the former marine seismic data
acquisition business of Geosource Marine. Mr. Miles currently serves as Chairman
of the International Association of Geophysical Contractors (IAGC), an industry
trade group.
Bruce H. Nelson has been President of Syntron since December 1995. Mr.
Nelson joined Syntron in November 1994 as Vice President of Business
Development. From August 1989 until April 1994, Mr. Nelson served as a Vice
President of Landmark Graphics (a geoscientific software company), where he also
served as General Manager Asia Pacific from August 1989 until December 1993, and
Manager of Seismic Service Business Development from December 1993 until October
1994.
Ray F. Thompson has been a director, Vice President, Chief Financial
Officer and Treasurer of the Company since March 1996. Mr. Thompson also has
been the Chief Financial Officer and Treasurer of Tech-Sym Corporation for more
than the past five years and served as Controller until July 1996. In February
of 1993, he was elected to the additional office of Vice President of Tech-Sym
Corporation.
J. Rankin Tippins has been a director, Vice President, General Counsel and
Secretary of the Company since March 1996. Mr. Tippins also has been the General
Counsel and Secretary of Tech-Sym Corporation for more than the past five years.
EXECUTIVE COMPENSATION
The following table summarizes compensation with respect to the fiscal
years ended December 31, 1996 and 1995 for services to the Company in all
capacities awarded to, earned by or paid to the Company's chief executive
officer and three other executive officers with annual compensation in excess of
$100,000 who were serving as executive officers on December 31, 1996. Messrs.
Gamel, Thompson and Tippins are full-time employees of Tech-Sym Corporation but
devote such time to the affairs of the Company as the Company's needs reasonably
require from time to time. The time and effort devoted by these individuals to
the Company's affairs is provided to the Company under a Corporate Services
Agreement between the Company and Tech-Sym Corporation. Accordingly, the
compensation for these individuals is not paid by the Company and is not
reported in the following table.
7
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------
NO. OF SHARES
UNDERLYING
ANNUAL COMPENSATION(1) OPTIONS GRANTED ALL OTHER
NAME AND ---------------------- -------------------- COMPENSATION(4)
PRINCIPAL POSITION YEAR SALARY BONUS(2) GSCI TSY(3) ($)
- ------------------------------------- ----- ---------- ---------- --------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard C. Cooper(5)................. 1996 $ 102,106 -0- 12,000 -0- $ 10,000
President of CogniSeis
John C. Jones(5)..................... 1996 $ 94,440 $ 24,973 10,000 -0- $ 5,137
Vice President
Richard F. Miles..................... 1996 $ 195,000 $ 140,350(6) 25,000 5,000 $ 6,854
President 1995 $ 183,000 $ 67,920 -0- -0- $ 5,695
Bruce H. Nelson...................... 1996 $ 140,000 $ 50,020 20,000 -0- $ 5,909
President of Syntron 1995 $ 125,000 $ 43,150 -0- -0- $ 4,233
</TABLE>
- ------------
"GSCI" -- GeoScience Corporation
"TSY" -- Tech-Sym Corporation
(1) Does not include perquisites and other personal benefits because the value
of these items did not exceed the lesser of $50,000 or 10% of reported
salary and bonus of any of the executive officers.
(2) Bonus amounts were earned during the years indicated, but paid in the first
quarter of the following year.
(3) Represents options granted in connection with services rendered to Tech-Sym
Corporation.
(4) Each of the amounts in this column are contributions by the Company to the
executive officer's account in GeoScience's Retirement (401(k)) Plan, except
for Mr. Cooper which amount represents income paid for a housing allowance.
(5) Messrs. Cooper and Jones became executive officers of the Company in October
1996 and August 1996, respectively.
(6) Includes $66,000 paid by Tech-Sym Corporation.
The following table sets forth information concerning individual grants of
stock options by the Company and Tech-Sym Corporation made during fiscal 1996 to
the executive officers in their capacities as officers of the Corporation. It
has not been the Corporation's policy to grant stock appreciation rights, and no
such rights were granted during fiscal 1996.
The GeoScience options were granted under the Company's 1996 Equity
Incentive Plan. The options were granted at market value on the date of grant
and are vested and fully exercisable four years after the date of grant. On
December 31, 1996, the closing price per share of Common Stock on the Nasdaq was
$13.00.
The Tech-Sym Corporation options included were granted under the Tech-Sym
1990 Stock Option Plan, as amended. The options vest 20% after one year and 20%
each six months thereafter. On December 31, 1996, the closing price per share on
the NYSE was $29.75.
8
<PAGE>
STOCK OPTIONS GRANTED DURING FISCAL 1996
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NO. OF STOCK PRICE
SECURITIES % OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED OPTION TERM(B)
OPTIONS TO EMPLOYEES IN EXERCISE PRICE EXPIRATION --------------------
NAME COMPANY GRANTED FISCAL YEAR PER SHARE(A) DATE 5%($) 10%($)
- ------------------------------------- ------- ---------- --------------- -------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard C. Cooper.................... GSCI 12,000 3.27 $ 12.75 6/19/06 96,240 243,840
John H. Jones........................ GSCI 10,000 2.72 $ 12.75 6/19/06 80,200 203,200
Richard F. Miles..................... GSCI 25,000 6.8 $ 12.75 6/19/06 200,500 508,000
TSY 5,000 2.2 $ 34.625 4/29/06 108,875 275,925
Bruce H. Nelson...................... GSCI 20,000 5.44 $ 12.75 6/19/06 160,400 406,400
</TABLE>
- ------------
"GSCI" -- GeoScience Corporation
"TSY" -- Tech-Sym Corporation
(a) Includes stock appreciation rights (SARs) awarded in tandem with each
Tech-Sym stock option.
(b) In-the-Money Options/SARs are those where the fair market value of the
underlying security exceeds the exercise or base price of the option or SAR.
The following table summarizes for each of the named executive officers the
number of Tech-Sym and GeoScience stock options and stock appreciation rights
(SARs), if any, exercised during the year ended December 31, 1996, the aggregate
dollar value realized upon exercise, the total number of unexercised options and
SARs, if any, held at December 31, 1996, and the aggregate dollar value of
in-the-money, unexercised options and SARs, if any, held at December 31, 1996.
Value realized upon exercise is the difference between the fair market value of
the underlying stock on the exercise date and the exercise or base price of the
option or SAR. Value of the unexercised, in-the-money options or SARs at fiscal
year-end is the difference between its exercise or base price and the fair
market value of the underlying stock on December 31, 1996, which was $29.75 per
share for Tech-Sym and $13 per share for GeoScience. THESE VALUES, UNLIKE THE
AMOUNTS SET FORTH IN THE COLUMN HEADED "VALUE REALIZED," HAVE NOT BEEN, AND
MAY NEVER BE REALIZED. THE UNDERLYING OPTIONS OR SARS HAVE NOT BEEN, AND MAY NOT
BE, EXERCISED; AND ACTUAL GAINS, IF ANY, ON EXERCISE WILL DEPEND ON THE VALUE OF
TECH-SYM AND GEOSCIENCE COMMON STOCK ON THE DATE OF EXERCISE. THERE CAN BE NO
ASSURANCE THAT THESE VALUES WILL BE REALIZED. Unexercisable options are those
which have not yet vested under the vesting schedule in the Company's 1990 Stock
Option Plan or GeoScience's 1996 Equity Incentive Plan.
9
<PAGE>
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED,
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END AT FISCAL YEAR-END
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME COMPANY EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard C. Cooper... GSCI -0- -0- -0- 12,000 -0- $ 3,000
TSY -0- -0- -0- -0- -0- -0-
John H. Jones....... GSCI -0- -0- -0- 10,000 -0- $ 2,500
TSY -0- -0- 1,600 400 $ 12,800 $ 3,200
Richard F. Miles.... GSCI -0- -0- -0- 25,000 -0- $ 6,250
TSY $ 4,000 $76,500 11,000 5,000 $ 154,000 -0-
Bruce H. Nelson..... GSCI -0- -0- -0- 20,000 -0- $ 5,000
TSY -0- -0- 3,000 2,000 $ 26,250 $17,500
</TABLE>
- ------------
"GSCI" -- GeoScience Corporation
"TSY" -- Tech-Sym Corporation
EXECUTIVE RETIREMENT AGREEMENT
Mr. Miles is a party to a retirement agreement entered into with Tech-Sym
Corporation in 1994 which provides for the payment to him of an annual
retirement benefit for the remainder of his life commencing at his retirement on
or after age 65 in an amount equal to 65% of his highest rate of base salary
payable by Tech-Sym Corporation and its subsidiaries that is in effect at any
time prior to his reaching age 61 ("Base Salary"). If Mr. Miles voluntarily
terminates his employment prior to age 65, but on or after age 62, he shall
commence receiving his retirement benefit reduced by 1.39% for each full
calendar month which his date of termination precedes his 65th birthday, unless
such reduction is waived by the Board of Tech-Sym. The applicable Base Salary of
Mr. Miles for purposes of this agreement is $195,000. The agreement further
provides for the payment of a surviving spouse's benefit equal to 37 1/2% of the
Base Salary, which is payable annually upon his death to his surviving spouse,
if any, for the lesser of ten years or the remainder of her life. Tech-Sym
Corporation's obligation under the agreement to pay the retirement benefits
terminates if Mr. Miles voluntarily leaves the employ of Tech-Sym Corporation
prior to reaching age 62 (other than due to death or total and permanent
disability) or is terminated for cause. The benefits remain payable in the event
of the termination of employment prior to age 62 because of his total and
permanent disability or his termination after reaching age 62, but in both
instances are subject to reduction for their early commencement unless such
reduction is waived by the board. Under the agreement, the surviving spouse's
benefit is not payable if Mr. Miles voluntarily leaves the employ of Tech-Sym
Corporation prior to age 62 or is terminated for cause, but is payable if the
executive dies while still in the employ of Tech-Sym Corporation, or after his
termination of employment after reaching age 62 or after his termination due to
a disability. The agreement also provides Mr. Miles with continued
company-provided health benefits after his retirement. The benefits under the
agreement become 50% vested after ten years of continuous employment with
Tech-Sym Corporation with an additional 10% each year thereafter until fully
vested.
Tech-Sym Corporation has contributed certain assets to a trust with a
commercial bank to provide for the payment of the benefits under the retirement
agreement. The amounts held in trust remain available to the claims of creditors
of Tech-Sym Corporation in the event of its bankruptcy or insolvency.
10
<PAGE>
TERMINATION AGREEMENT
Tech-Sym Corporation entered into termination agreements with Mr. Miles and
Mr. Nelson in 1991 and 1996, respectively, which provide that if the employment
of the employee is terminated during the three-year period following a Change in
Control of Tech-Sym Corporation, as defined in the agreement, other than for
cause or by the employee for other than "good reason," the employee will
continue to be paid his base salary, participate in the Bonus Plan and receive
certain other benefits for the remainder of such three-year period, reduced by
(i) any amounts payable to the employee from other employment, and additionally,
in the case of Mr. Miles only, (ii) any amounts paid pursuant to the Executive
Retirement Agreement entered into by and between Tech-Sym Corporation and Mr.
Miles.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than 10% of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission (the "Commission") and the Nasdaq
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Directors, officers and greater than
10% stockholders are required by the Commission's regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1996 all
reports required by Section 16(a) to be filed by its directors, officers and
greater than 10% beneficial owners were filed on a timely basis, except that one
Form 4 reporting a purchase by General Creech was reported late.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors has a Compensation Committee comprised of three
non-employee directors which reviews and recommends to the Board the payment of
compensation to any employee of the Company or its subsidiaries with an annual
salary of $100,000 or more. In addition, the Compensation Committee reviews and
recommends to the Board all incentive compensation plans including, without
limitation, bonus plans, stock option plans, stock purchase plans, and key
employee compensation agreements. The Board has final approval concerning the
Compensation Committee's recommendations.
The Compensation Committee also administers the Company's 1996 Equity
Incentive Plan and grants stock options and attendant stock appreciation rights
to officers and key employees under the Plan. The Board does not have any
approval or disapproval authority concerning the grants awarded by the
Compensation Committee.
The executive compensation policies and practices are designed to provide
competitive levels of compensation that integrate pay with the Company's annual
and long-term performance goals. Compensation of the executive officers of the
Company is primarily comprised of salary, incentive bonus, and stock options. In
addition, all of the executive officers are eligible to participate in the
Company's Section 401(k) Retirement Plan. Certain executive officers have
entered into Termination Agreements with Tech-Sym Corporation and Mr. Miles is
also a party to an Executive Retirement Agreement with Tech-Sym Corporation.
11
<PAGE>
SALARY
The base salaries of the executive officers are established at a level
deemed appropriate to attract and retain qualified executives. In establishing
its recommendations, the Compensation Committee considers the recommendations of
management, the amount of responsibilities of the executive officers, the
salaries of others similarly situated both within and outside of the Company,
the recent performance in the executive's area of responsibility, the relative
performance of other companies in similar businesses, and any changes in the
cost-of-living. The salaries of the executive officers are expected to be
reviewed annually with the performance of the prior year taken into account.
INCENTIVE BONUS PLANS
The Company and its subsidiaries have incentive bonus plans which provide
for incentive compensation for their officers and key employees. Under the
Company's plan, the aggregate bonus pool from which such awards were made for
1996 did not exceed 2% of the Company's consolidated earnings before federal and
state income taxes. The apportionment of that part of the Company's bonus pool
paid to the executive officers is determined by the Board of Directors, pursuant
to recommendations of the Compensation Committee, according to levels of
responsibilities and individual performance. No bonus is payable if the Company
fails to earn a profit.
Under the incentive bonus plan for the Company's subsidiaries, directors,
officers, and key employees of each of the subsidiaries are eligible to share in
a bonus pool, calculated separately for each subsidiary, amounting to not less
than 8% and not more than 15% of such subsidiary's annual earnings before state
and federal income taxes. Bonus amounts earned in excess of 8% pre-tax earnings
depend upon the degree by which each subsidiary exceeds certain performance
criteria, such as sales, net profit and return on investment. The apportionment
of the total amount of the bonus and the recipients thereof are determined by
the senior management of the Company and the respective subsidiary according to
levels of responsibility and individual performance except that approval of the
Board of Directors of the Company, pursuant to recommendations of the
Compensation Committee, is required for an award to (i) any recipient whose
annual salary is equal to or greater than $100,000 and (ii) any division or
subsidiary general manager or chief executive officer, regardless of the amount
of compensation. No bonus is payable if the subsidiary fails to earn a profit.
The amount of the bonus pool of the Company and of each subsidiary is
subject to reduction by the amount of (i) any bonuses such as year-end bonuses
paid to employees for such year, (ii) the matching contributions which each such
company would be required to make to the retirement plan, if any, on the total
bonus pool amount for the accounts of its bonus recipients and (iii) certain
marketing incentives paid to employees for such year.
EQUITY INCENTIVE PLAN
The Company's Equity Incentive Plan is designed to align the long-term
interests of key employees with shareholder interests. The exercise price of
options may not be less than 100% of the fair market value per share of the
Common Stock on the date of the grant. The employees awarded stock options
benefit only when the market price of the Company's stock increases to the
benefit of all shareholders. The number of options granted to any individual is
dependent on the individual's level of responsibility and ability to influence
the performance of the Company and its subsidiaries.
12
<PAGE>
CEO COMPENSATION
As with the other executive officers, the compensation of Mr. Miles
consists primarily of salary, incentive bonus, and stock options. Mr. Miles'
salary is reviewed on an annual basis by the Compensation Committee and the
Board of Directors at the time of the annual election of officers at the
Director's meeting held in conjunction with the annual stockholders' meeting
held in April of each year. The incentive bonus is determined after the end of
each year when financial results are available. Stock option grants are not
automatic.
The Company's initial public offering occurred on May 17, 1996. The salary
for Mr. Miles was reviewed by the Committee at its first meeting on June 20,
1996, and the Committee recommended to the Board of Directors that his salary
remain the same as that received from Syntron, Inc., before the organization of
the Corporation and the initial public offering of its shares. The Board of
Directors approved the recommendation.
At the same meeting, the Committee awarded Mr. Miles an option to purchase
25,000 shares of Common Stock of the Corporation at 100% of the closing sales
price of the stock on the date of grant. The options vest in equal installments
of 25% on the anniversary date of award over a four year period. It was the
considered opinion of the Committee that the grant, along with the stock owned
directly by Mr. Miles, would provide a financial incentive for Mr. Miles to
align his long-term interests with those of the Company's stockholders.
A major portion of Mr. Miles' compensation consists of an annual incentive
bonus and, as such, fluctuates with the financial performance of the Company.
Since the revenue of the Company was 35% greater than its proforma performance
in 1995 and the 1996 earnings of the Company were approximately 8% greater than
its proforma performance in 1995, the Committee recommended, and the Board
approved, an incentive bonus of $74,350. In addition, Mr. Miles received a bonus
of $66,000 from Tech-Sym in recognition of his successful efforts in
contributing to the increase in earnings of Tech-Sym Corporation as a result of
the initial public offering of GeoScience Corporation.
The foregoing report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporated this information by reference,
and shall not otherwise be deemed filed under such acts.
The foregoing report is given by the following members of the Compensation
Committee.
W. L. Creech Christopher C. Kraft, Jr. Michael C. Forrest
CERTAIN TRANSACTIONS WITH MANAGEMENT
The Company paid approximately $1.0 million, $1.3 million and $1.8 million
to Tech-Sym Corporation in 1994, 1995, and 1996, respectively, in connection
with management, financial, and legal services provided by Tech-Sym Corporation
to the Company. The amount of the fee payable by the Company was determined by
Tech-Sym Corporation as the allocable portion of certain general and
administrative expenses incurred by Tech-Sym Corporation based on the Company's
net sales, payroll, and capital employed (fixed assets and inventory) in
relation to the net sales, payroll and capital employed of Tech-Sym
Corporation's subsidiaries in the aggregate. In May 1996, the Company and
Tech-Sym Corporation entered into a Corporate Services Agreement that provides
for a payment of a fee by the Company to Tech-Sym Corporation for providing
management, financial, and legal services on substantially the same basis as
13
<PAGE>
Tech-Sym Corporation has been compensated for such services historically. The
Company believes that the fees paid to Tech-Sym Corporation in 1994, 1995, and
1996 for management, financial and legal services provided by Tech-Sym
Corporation to the Company were not more than those that would have been payable
to an unaffiliated third party for providing such services, and that the fees
payable to Tech-Sym Corporation under the Corporate Services Agreement for the
services to be provided thereunder for 1997 will not be more than the fees that
would be required to be paid to an unaffiliated third party to provide such
services. In addition, during 1994, 1995, and 1996 the Company paid to Tech-Sym
Corporation approximately $709,000, $1.3 million, and $1.0 million,
respectively, in interest on outstanding indebtedness owed to Tech-Sym
Corporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table indicated the beneficial ownership of Common Stock, as
well as the common stock of Tech-Sym Corporation, as of January 31, 1997, with
respect to (i) each person who was known by the Corporation to own beneficially
more than 5% of the outstanding shares of common stock, (ii) each director,
(iii) each executive officer named in the Summary Compensation Table above and
(iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
GEOSCIENCE TECH-SYM
-------------------------- --------------------------
BENEFICIAL OWNER SHARES % OF CLASS SHARES % OF CLASS
- ------------------------------------- ----------- ---------- ----------- ----------
<S> <C> <C>
Richard C. Cooper.................... -0- * -0- *
W. L. Creech......................... 50,000(1) * 6,000(3) *
Michael C. Forrest................... 12,500(1) * 10,500(3) *
Wendell W. Gamel..................... 5,000 * 120,666(4) 1.99
John H. Jones........................ 1,176(1) * 1,600(3) *
Christopher C. Kraft, Jr............. 12,000(1) * 21,500(3) *
Richard F. Miles..................... 1,823(1) * 11,826(3) *
Bruce H. Nelson...................... 13,534(2) * 3,000(3) *
Edward R. Prince, Jr................. 10,000(1) * -0- *
J. Rankin Tippins.................... 4,000 * 25,906(5) *
Ray F. Thompson...................... 2,000 * 45,944(6) *
Tech-Sym Corporation................. 7,900,000 77.02
10500 Westoffice Drive
Houston, Texas 77042
Directors and executive officers as a
group
(11 persons)....................... 112,033 1.1 246,942 4.00
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
14
<PAGE>
- ------------
* Represents ownership of less than 1.0%.
(1) Includes 10,000, 10,000, 10,000, and 10,000 shares issuable under options,
exercisable within 60 days of January 31, 1996, held by Messrs. Creech,
Forrest, Kraft and Prince, respectively. Also includes 176 and 223 shares
held by the Trustee of the GeoScience Retirement (401(k)) Plan and allocated
to the accounts of Messrs. Jones and Miles, respectively.
(2) Includes (a) 11,400 shares held by the B. Nelson Family Limited Partnership
Living Trust of which Mr. Nelson disclaims beneficial ownership except to
the extent of his pecuniary interests therein, (b) 2,000 shares held by Mr.
Nelson's daughter, of which Mr. Nelson disclaims beneficial ownership, and
(c) 134 shares allocated to Mr. Nelson's account in the GeoScience
Retirement (401(k)) Plan.
(3) Includes 5,000, 10,000, 1,600, 20,000, 11,000, and 3,000 shares issuable
under options, exercisable within 60 days of January 31, 1996, held by
Messrs. Creech, Forrest, Jones, Kraft, Miles, and Nelson respectively. Also
includes 826 shares held by the Trustee of the GeoScience Retirement
(401(k)) Plan and allocated to Mr. Miles' account.
(4) Includes (a) 36,000 shares issuable under options and exercisable within 60
days of January 31, 1996, (b) 5,713 shares held by the Trustee of the
Tech-Sym Retirement (401(k)) Plan and allocated to Mr. Gamel's account, and
(c) 5,000 shares held in trust for Mr. Gamel's children in which he
disclaims beneficial ownership.
(5) Includes (a) 18,000 shares issuable under options and exercisable within 60
days of January 31, 1996, and (b) 2,362 shares held by the Trustee of the
Tech-Sym Retirement (401(k)) Plan and allocated to Mr. Tippins' account.
(6) Includes (a) 25,000 shares issuable under options and exercisable within 60
days of January 31, 1996, and (b) 4,894 shares held by the Trustee of the
Tech-Sym Retirement (401(k)) Plan and allocated to Mr. Thompson's account.
15
<PAGE>
STOCKHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the percentage change in GeoScience's
cumulative total return on its Common Stock over the preceding seven-month
period with the cumulative total return of the Standard & Poor's Oil & Gas
(Drilling & Equipment) Index and with the Nasdaq Stock Market-U.S. Index. The
data presented assumes a hypothetical investment of $100 in the Company's stock
and in the underlying stocks of each of the two indices as of May 17, 1996, and
that all dividends were reinvested.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
May 17, 1996 December 31, 1996
------------ -----------------
Geoscience Corporation 100 76
Nasdaq Stock Market-US 100 109
S&P Oil and Gas 100 113
(Drilling and Equiptment)
16
<PAGE>
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 2)
By action of the Board of Directors, Price Waterhouse LLP has been selected
as independent public accountants of the Company for the year ending December
31, 1997. Price Waterhouse LLP has audited the accounts of the Company since
1967. A representative of such firm is expected to be present at the annual
meeting of stockholders with the opportunity to make a statement if he desires
to do so and will be available to answer appropriate questions.
PROPOSAL 2: THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF
PRICE WATERHOUSE LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
COMPANY FOR 1997.
APPROVAL OF AMENDMENTS TO THE GEOSCIENCE CORPORATION
1996 EQUITY INCENTIVE PLAN
(PROPOSAL 3)
The Board of Directors is proposing for stockholder approval certain
amendments to the Company's 1996 Equity Incentive Plan (the "Stock Plan"),
consisting of (i) certain revisions of the definition of the term "Management
Objectives" for the purpose of enabling certain stock-based awards to qualify
as "performance-based" compensation for tax deduction purposes under Section
162 of the Internal Revenue Code (the "Code"), (ii) an increase in the number
of shares of Common Stock subject to options that are automatically granted
annually to each director of the Company who is not an employee or consultant of
the Company or an affiliate ("Outside Directors"), without the need for any
additional action by the Board of Directors of stockholders of the Company, from
1,000 shares to 2,000 shares, (iii) the imposition, for Section 162(m) purposes,
of a limit of (x) 250,000 shares of Common Stock as to which options, stock
appreciation rights ("SARs") (but excluding SARs granted in tandem with
options), Bonus Stock, Restricted Stock and Phantom Stock awards and (y) $1
million on the value of performance units that may be granted to any person
during any calendar year, and (iv) the grant on December 11, 1996 to each
Outside Director of 10,000 options, and to each director of Tech-Sym Corporation
on such date who was not an Outside Director ("Tech-Sym Director") of 5,000
options, at an exercise price per share equal to the closing price of the Common
Stock on December 11, 1996. A copy of the amended and restated Stock Plan is set
forth as Appendix A to this Proxy Statement.
GENERAL. The Company's Stock Plan was adopted by the Board of Directors of
the Company and approved by the Company's sole stockholder in April 1996. The
Board of Directors approved an amendment to the Stock Plan on December 11, 1996,
and approved the restatement of the Stock Plan on February 19, 1997, subject to
stockholder approval, which provides for the amendments discussed above. The
Stock Plan permits the granting of any or all of the following types of awards
("Awards"): stock appreciation rights ("SARs"), stock options, restricted
stock, dividend equivalents, performance units, automatic Director options,
phantom shares, limited stock appreciation rights ("LSARs"), bonus stock and
cash tax rights.
ELIGIBILITY FOR PARTICIPATION. All officers and employees of, and any
consultants to, the Company or any affiliate of the Company will be eligible for
participation in all Awards under the Stock Plan other than Director options
with tandem LSARs. The directors of the Company who are not employees or
consultants of the Company or an affiliate will receive only automatic grants of
Director options with tandem LSAR's.
17
<PAGE>
ADMINISTRATION. The Stock Plan is administered by the Compensation
Committee of the Company's Board of Directors, which must consist solely of
non-employee directors within the meaning of Rule 16b-3 of the Exchange Act.
Except with respect to the automatic grant of Director options, the Compensation
Committee will select the participants who will receive Awards, determine the
type and terms of Awards to be granted and interpret and administer the Stock
Plan.
AMENDMENT AND TERMINATION. The Board of Directors of the Company may
terminate or amend the Stock Plan without stockholder approval, except that
stockholder approval is required for any amendment that would increase the
number of shares authorized or otherwise cause grants under the Stock Plan to
cease to satisfy the requirements of Rule 16b-3 of the Exchange Act.
TERM OF THE STOCK PLAN. Unless sooner terminated, the Stock Plan will
terminate on December 31, 2005, after which time no additional Awards may be
made under it; however all then outstanding Awards will continue pursuant to
their terms.
SHARES SUBJECT TO THE STOCK PLAN. Subject to adjustment as described
below, 1,500,000 shares of Common Stock may be awarded under the Stock Plan, of
which no more than 300,000 shares may be issued as non-performance based
restricted stock, phantom stock and/or bonus stock awards.
EMPLOYEE/CONSULTANT STOCK OPTIONS. Stock options granted under the Stock
Plan are subject to such terms and conditions as may be established by the
Compensation Committee, which may include conditioning the exercisability of an
option on the achievement of one or more performance goals, except that in all
events: (i) no stock options may be granted after the termination of the Stock
Plan; (ii) the option exercise price cannot be less than the market value per
share of the Common Stock at the date of grant; and (iii) no stock option may be
exercised more than 10 years after it is granted. Stock options may be granted
either as incentive stock options ("ISOs") under Section 422 of the Code,
non-qualified stock options or a combination thereof. However, ISOs can only be
granted to participants who are employees of the Company or Tech-Sym or a
subsidiary of the Company. In addition, the Committee may provide, with respect
to an option granted to a key employee, that such grant will have an automatic
"reload" grant feature, with such terms and conditions as the Committee may
establish for such reload, including limitations on exercisability conditioned
on the holding of the stock acquired on the exercise triggering such reload
grant.
The Compensation Committee will determine the form in which payment of the
optionee's exercise price may be made, which may include cash, shares of Common
Stock already owned by the optionee, a "cashless broker exercise" through
purchases established by the Company, or any combination thereof.
DIRECTOR STOCK OPTIONS. The Stock Plan currently provides that each
director of the Company who is neither an employee of the Company or Tech-Sym
shall automatically receive on the day following each annual meeting of the
Company's stockholders (commencing with the 1997 meeting) an option to purchase
1,000 shares of Common Stock at an exercise price per share equal to the closing
sale price of the Common Stock on the date of grant. Subject to the approval of
the first amendment to the Stock Plan, this number of shares will be increased
to 2,000. Each person who becomes a director of the Company and who is neither
an employee of the Company or Tech-Sym shall receive an initial option award to
purchase 10,000 shares of Common Stock on the date of such person's election or
appointment at an exercise price per share equal to the closing sale price of
the Common Stock on the date of grant. Neither the Compensation Committee nor
the Board of Directors has any discretion with respect to non-employee director
stock options. Each such Director option shall become exercisable six months
from the date of grant (or, if earlier, the date of a Change in Control) and
have a term of 10 years, subject to earlier termination depending upon
continuity of service on the Boards.
18
<PAGE>
STOCK APPRECIATION RIGHTS. An SAR may be granted in tandem with stock
options or separate and apart from a grant of stock options. The grant price of
an SAR shall not be less than the fair market value per share of Common Stock on
the date of grant and shall have a term not to exceed 10 years. The spread on
the exercise of an SAR may be paid in cash, Common Stock or any combination
thereof, as the Compensation Committee may determine.
RESTRICTED STOCK. The Compensation Committee may also make grants of
restricted stock, which are shares of Common Stock that may not be disposed of
by the participant until the restrictions specified in the Award expire. The
restrictions may include the achievement of specified performance goals. The
participant will have, with respect to restricted stock, the right to vote the
shares and, subject to such limitations (if any) established by the Compensation
Committee, receive any cash dividends. Except as otherwise determined by the
Compensation Committee, upon termination of a participant's employment for any
reason during the restricted period, all restricted stock will be forfeited by
the participant.
PHANTOM SHARES. The Compensation Committee may grant Awards of phantom
shares of Common Stock, which may be payable in cash, shares of Common Stock or
a combination thereof, in consideration of the fulfillment of such conditions as
the Compensation Committee may specify, which may include the achievement of
specified performance goals.
PERFORMANCE UNITS. Performance units are units equivalent to $100 (or such
other value as the Compensation Committee determines) and may consist of
payments in cash, shares of Common Stock or a combination thereof, payable upon
the achievement of specified performance goals. The Compensation Committee shall
determine the performance goals to be achieved during any performance period and
the length of any performance period.
BONUS STOCK. The Compensation Committee may deliver unrestricted shares of
Common Stock to eligible persons as additional compensation for the person's
services to the Company and its affiliates or in lieu of cash bonuses payable to
a participant.
DIVIDEND EQUIVALENTS. The Compensation Committee may provide, with respect
to a stock option (other than Director options) or phantom share Awards that
such Awards shall be credited (on an immediate or deferred basis) with dividend
equivalents, which are equal to any cash dividends paid on the Common Stock
while the Award is outstanding.
LSARS. The Plan provides for automatic tandem LSARs with respect to each
SAR, Director option and stock option. LSARs provide the participant with the
right to receive, for a limited period following a Change in Control, the
"spread" on his SARs, Director options and stock options in cash based on the
value of the consideration paid in the Change in Control.
CASH TAX RIGHTS. The Compensation Committee may grant cash tax rights in
tandem with any Award payable in shares of Common Stock. A cash tax right is a
right to receive cash upon receipt of the shares of Common Stock pursuant to the
tandem Award.
PERFORMANCE GOALS. The Compensation Committee may, in its discretion,
subject any Award (other than Director options) to the attainment of certain
performance goals. Such performance goals, which may be described in terms of
Company-wide objectives, in terms of objectives that are related to performance
of the division, department or function within the Company or a subsidiary in
which the employee receiving the Award is employed or in individual or other
terms, and which will relate to a period of time determined by the Compensation
Committee. The performance goals that may be used include one or more of the
following: (i) net earnings; (ii) operating income; (iii) earnings before
interest and taxes ("EBIT"); (iv) earnings before interest, taxes,
depreciation, and amortization expenses ("EBITDA"); (v) earnings before
19
<PAGE>
taxes and unusual or nonrecurring items; (vi) revenue; (vii) return on
investment; (viii) return on equity; (ix) return on total capital; (x) return on
assets; (xi) total stockholder return; (xii) return on capital employed in the
business; (xiii) stock price performance; (xiv) earnings per share growth; and
(xv) cash flows. Which objectives to use with respect to an Award, the weighting
of the objectives if more than one is used, and whether the objective is to be
measured against a Company-established budget or target, an index or a peer
group of companies, shall be determined by the Compensation Committee in its
discretion at the time of grant of the Award. A performance goal need not be
based on an increase or a positive result and may include, for example,
maintaining the status quo or limiting economic losses. The Compensation
Committee must certify the performance goals have been achieved before an Award
subject to a performance goal can be paid.
ANNUAL AWARD LIMITS. The maximum number of stock options, SARs not in
tandem with stock options, Bonus Stock, Phantom Stock and Restricted Stock
awards that any person can receive during any calendar year is 250,000. In
addition, no person can receive Performance Unit grants having a value in excess
of $1 million in any calendar year.
TRANSFERABILITY. No Award under the Stock Plan that has not become payable
or earned will be transferable other than by will or the laws of descent and
distribution.
ADJUSTMENTS. The Compensation Committee may provide for adjustment of
Awards under the Stock Plan if it determines such adjustment is required to
prevent dilution or enlargement of the rights of participants in the Stock Plan
that would otherwise result from a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, reorganization or other similar
corporate transaction.
The Stock Plan permits the Company to allow an optionee, upon exercise of
an option, to satisfy an applicable federal income tax requirements in the form
of either cash or, at the discretion of the Compensation Committee, shares of
Common Stock, including shares issuable upon exercise of such option.
CHANGE IN CONTROL. The Stock Plan provides that Awards may, pursuant to
their terms, provide that upon a "change in control" of the Company the Award
would become immediately vested and exercisable or payable, as the case may be.
A "change in control" of the Company shall be deemed to occur if a person or
group acquires 25% or more of Tech-Sym's voting securities, the Directors of
Tech-Sym at the beginning of any two-year period cease to constitute a majority
of the Tech-Sym Board of Directors during such period for any reason, the
stockholders of Tech-Sym approve a merger or consolidation of Tech-Sym with any
other company (with certain exceptions), the stockholders of Tech-Sym approve an
agreement for the sale, exchange or disposition by Tech-Sym of all or a
substantial portion of Tech-Sym's assets or the stockholders of Tech-Sym adopt a
plan of complete liquidation of Tech-Sym. If the Company ceases to be a
subsidiary of Tech-Sym, "Company" is substituted for "Tech-Sym" in the above
in determining whether a "change in control" has occurred.
The Board of Directors of the Company may amend, suspend or terminate the
Plan at any time, except that any amendment that would (i) materially increase
the benefits accruing to participants under the Plan, (ii) materially increase
the number of securities which may be issued under the Plan and (iii) materially
modify the requirements as to eligibility for participation in the Plan requires
stockholder approval unless, in each case, such approval is not required to meet
the requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended. Unless the term of the Plan is extended or earlier terminated, the Plan
will terminate on December 31, 2005.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following is a brief summary
of certain of the federal income tax consequences of certain transactions under
the Stock Plan based on federal income tax laws in effect on January 1, 1997.
This summary is not intended to be exhaustive and does not describe state or
local tax consequences. Additional or different federal income tax consequences
to the employee or director or the Company may result depending upon other
consideration not described below.
In general: (i) no income will be recognized by an optionee at the time a
non-qualified stock option (an option not qualified under Section 422 of the
Code) ("NQO") is granted; (ii) at the time of exercise of a NQO, ordinary
income will be recognized by the optionee in an amount equal to the difference
between the option price paid for the shares and the fair market value of the
shares if they are nonrestricted on the date of exercise; (iii) at the time of
sale of shares acquired pursuant to the exercise of a NQO, any appreciation (or
depreciation) in the value of the shares after the date of exercise will be
treated as either short term or long term capital gain (or loss) depending on
how long the shares have been held.
No income generally will be recognized by an optionee upon the grant or
exercise of an ISO, although the excess of the fair market value on the date of
exercise over the option price is included in alternative minimum taxable income
for alternative minimum tax purposes. However, if the optionee exercises the ISO
and disposes of the shares of Common Stock in the same year and the amount
realized is less than the fair market value on the date of exercise, only the
difference between the amount realized and the adjusted basis of the stock will
be included in alternative minimum taxable income. If shares of Common Stock are
issued to an optionee pursuant to the exercise of an ISO and no disposition of
the shares is made by the optionee within two years after the date of grant or
within one year after the transfer of the shares to the optionee (the "Holding
Periods"), then, upon the sale of the shares, any amount realized in excess of
the option price will be taxed to the optionee as long term capital gain and any
loss sustained will be a long term capital loss.
If shares of Common Stock acquired upon the exercise of an ISO are disposed
of prior to the expiration of either Holding Period described above, the
optionee generally will recognize ordinary income in the year of disposition in
an amount of equal to any excess of the fair market value of the shares at the
time of exercise (or, if less, the amount realized on the disposition of the
shares in a sale or exchange) over the option price paid for the shares. Any
further gain (or loss) realized by the optionee generally will be taxed as short
term or long term capital gain (or loss) depending on the holding period.
No income will be recognized by a participant in connection with the grant
of an SAR. When the SAR is exercised, the participant normally will be required
to include as taxable ordinary income in the year of exercise an amount equal to
the amount of any cash and the fair market value of any nonrestricted shares of
Common Stock received pursuant to the exercise.
A recipient of restricted stock generally will be subject to tax at
ordinary income rates on the fair market value of the restricted stock reduced
by any amount paid by the recipient at such time as the shares are no longer
subject to a risk of forfeiture or restrictions on transfer for purposes of
Section 83 of the Code. Further, any dividends received with respect to
restricted stock that are subject at that time to a risk of forfeiture or
restrictions on transfer generally will be treated as compensation that is
taxable as ordinary income to the recipient. However, a recipient who so elects
under Section 83(b) of the Code within 30 days of the date of transfer of shares
will have taxable ordinary income on the date of transfer of the shares equal to
the excess of the fair market value of the shares (determined without regard to
the risk of forfeiture or restrictions on transfer) over any purchase price paid
for the shares and any dividend received while the shares are subject to a
substantial risk of forfeiture or restrictions will be treated as dividend
income to the recipient.
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No income generally will be recognized upon the grant of phantom shares or
performance units. Upon payment in respect of phantom shares or earned
performance units, the recipient generally will be required to include as
taxable ordinary income in the year of receipt an amount equal to the amount of
cash received and the fair market value of any nonrestricted shares of Common
Stock received less any amount paid for such award at the time of payment or
transfer pursuant to the fulfillment of the specified conditions or the
achievement of the performance goals.
The recipient of bonus stock generally will be subject to tax at ordinary
income rates on the fair market value of nonrestricted shares of Common Stock on
the date that such shares are transferred to the recipient, reduced by any
amount paid by the recipient, and the capital gain or loss holding period for
such shares will also commence on that date.
No income will be recognized upon the grant of a cash tax right. The
recipient of a cash tax right will be subject to tax at ordinary income rates on
the cash received pursuant to the Award.
To the extent that a participant recognizes ordinary income in the
circumstances described above, the Company or subsidiary for which the
participant performs services will be entitled to a corresponding deduction for
federal income tax purposes provided that, among other things, (i) the income
meets the test of reasonableness, is an ordinary and necessary business expense,
(ii) is not an "excess parachute payment" within the meeting of Section 280G
of the Code and (iii) if the $1.0 million limitation of Section 162(m) of the
Code is exceeded, the compensation qualifies as "performance based" under such
section.
NEW BENEFITS UNDER PLAN. If the amendments to the Stock Plan are approved
by the stockholders of the Company, each of the directors who is not an employee
or consultant of the Company or an affiliate ("Outside Directors") will
receive options to purchase 2,000 shares of Common Stock (rather than 1,000
shares of Common Stock as currently provided in the Stock Plan) on the day
following the 1997 annual meeting of stockholders of the Company and on the day
following each future annual meeting of the stockholders, in each case at option
exercise prices equal to the closing sales price of the Common Stock on the date
of grant. In addition, each of the Outside Directors and Tech-Sym Directors on
December 11, 1996, will receive options on that date to purchase 10,000 and
5,000 shares of Common Stock, respectively, at an exercise price of $12.00 per
share, the closing price of the Common Stock on that date. There are currently
four Outside Directors and three Tech-Sym Directors of the Company. The closing
price of the Company's Common Stock on March 14, 1997 was $12.0625 per share, as
reported in THE WALL STREET JOURNAL (Southwest Edition).
PROPOSAL 3: THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND URGES YOU
TO VOTE FOR PROPOSAL 3. PROXIES SOLICITED HEREBY WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES. THE AFFIRMATIVE VOTE OF A
MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK IS REQUIRED FOR APPROVAL OF
THIS PROPOSAL.
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OTHER MATTERS
The Board of Directors knows of no other matter to be presented at the
Annual Meeting. If any additional matter properly comes before the meeting, it
is intended that proxies in the enclosed form will be voted on the matter in
accordance with the discretion of the persons named in the proxy.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1998 annual
meeting of stockholders must be received by the Company by November 28, 1997 to
be considered for inclusion in the proxy statement and form of proxy relating to
the 1998 meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
J. RANKIN TIPPINS
VICE PRESIDENT AND SECRETARY
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APPENDIX A
GEOSCIENCE CORPORATION
1996 EQUITY INCENTIVE PLAN
(FIRST AMENDMENT)
GeoScience Corporation, a Nevada corporation (the "Company"), hereby
amends and restates this GeoScience Corporation 1996 Equity Incentive Plan (this
"Plan"), effective as of April 28, 1997, subject to stockholder approval.
1. PURPOSE. The purpose of the Plan is to promote the interests of the
Company by encouraging employees of, and consultants to, the Company and its
Affiliates and the directors of the Company and Tech-Sym Corporation, who are
not also employees of the Company or an Affiliate, to acquire or increase their
equity interests in the Company and to provide a means whereby such persons may
develop a sense of proprietorship and personal involvement in the development
and financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company, thereby advancing the
interests of the Company and its stockholders. The Plan is also contemplated to
enhance the ability of the Company and its Subsidiaries to attract and retain
the services of individuals who are believed to be essential for the growth and
profitability of the Company.
2. DEFINITIONS. As used in this Plan:
(a) "AFFILIATE" means, at any time, any corporation, partnership or
other entity in which Tech-Sym or the Company, directly or indirectly, has
a significant equity interest, as determined by the Committee.
(b) "APPRECIATION RIGHT" means a right granted pursuant to
Paragraph 5.
(c) "AWARD" means an Appreciation Right, an Option Right, a
Director Option, Phantom Shares, a Performance Unit, Bonus Stock,
Restricted Stock or a Cash Tax Right.
(d) "BOARD" means the Board of Directors of the Company.
(e) "BONUS STOCK" means unrestricted shares of Common Stock granted
pursuant to Paragraph 9.
(f) "CASH TAX RIGHT" means a right granted pursuant to Paragraph 10.
(g) "CHANGE IN CONTROL" shall occur if:
(i) any "person," as such term is used in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934 (other than Tech-Sym, any trustee
or other fiduciary holding securities under an employee benefit plan of
Tech-Sym, or any company owned, directly or indirectly, by the
stockholders of Tech-Sym in substantially the same proportions as their
ownership of stock of Tech-Sym) together with its "Affiliates" and
"Associates," as such terms are defined in Rule 12b-2 of the Exchange
Act, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
Tech-Sym representing 25% or more of the combined voting power of
Tech-Sym's then outstanding securities;
(ii) during any period of two consecutive years (not including any
period prior to the effective date of this Plan), individuals who at the
beginning of such period constitute the
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Tech-Sym Board, and any new director (other than a director designated
by a person who has entered into an agreement with Tech-Sym to effect a
transaction described in clause (i), (iii) or (iv) of this definition)
whose election by the Tech-Sym Board or nomination for election by Tech-
Sym's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a
majority thereof;
(iii) the stockholders of Tech-Sym approve a merger or
consolidation of Tech-Sym with any other company other than (1) a merger
or consolidation which would result in the voting securities of Tech-Sym
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of
the surviving entity) more than 80% of the combined voting power of the
voting securities of Tech-Sym (or such surviving entity) outstanding
immediately after such merger or consolidation, or (2) a merger or
consolidation effected to implement a recapitalization of Tech-Sym (or
similar transaction) in which no "person" (as hereinabove defined)
acquires more than 25% of the combined voting power of Tech-Sym's then
outstanding securities; or
(iv) the stockholders of Tech-Sym adopt a plan of complete
liquidation of Tech-Sym or approve an agreement for the sale, exchange
or disposition by Tech-Sym of all or a significant portion of Tech-Sym's
assets. For purposes of this clause (iv), the term "the sale, exchange
or disposition by Tech-Sym of all or a significant portion of Tech-Sym's
assets"shall mean a sale or other disposition transaction or series of
related transactions involving assets of Tech-Sym or any subsidiary
(including the stock of any subsidiary) in which the value of the assets
or stock being sold or otherwise disposed of (as measured by the
purchase price being paid therefor or by such other method as the
Tech-Sym Board determines is appropriate in a case where there is no
readily ascertainable purchase price) constitutes more than 25% of the
fair market value of Tech-Sym (as hereinafter defined). For purposes of
the preceding sentence, the "fair market value of Tech-Sym" shall be
the aggregate market value of the outstanding shares of common stock of
Tech-Sym (on a fully diluted basis) plus the aggregate market value of
Tech-Sym's other outstanding equity securities. The aggregate market
value of the shares of common stock of Tech-Sym shall be determined by
multiplying the number of shares of Tech-Sym's common stock (on a fully
diluted basis) outstanding on the date of the execution and delivery of
a definitive agreement with respect to the transaction or series of
related transactions (the "Transaction Date") by the average closing
price of the shares of common stock of Tech-Sym for the ten trading days
immediately preceding the Transaction Date. The aggregate market value
of any other equity securities of Tech-Sym shall be determined in a
manner similar to that prescribed in the immediately preceding sentence
for determining the aggregate market value of the shares of common stock
of Tech-Sym or by such other method as the Tech-Sym Board shall
determine is appropriate.
On and after the date the Company ceases to be a subsidiary (within the
meaning of Code Section 424) of Tech-Sym, the terms "Company" and
"Board"shall replace "Tech-Sym" and "Tech-Sym Board", respectively,
wherever such terms are used in this definition of Change in Control.
(h) "CODE" means the Internal Revenue Code of 1986, as in effect
from time to time.
(i) "COMMITTEE" means the Compensation Committee of the Board.
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(j) "COMMON STOCK" means the Common Stock, $0.01 par value, of the
Company or any security into which such Common Stock may be changed by
reason of any transaction or event of the type described in Paragraph 14.
(k) "DATE OF GRANT" means (i) with respect to an Award other than a
Director Option, the date specified by the Committee on which such Award
will become effective (which date will not be earlier than the date on
which the Committee takes action with respect thereto) and (ii) with
respect to a Director Option, the automatic date of grant as provided in
Paragraph 11.
(l) "DIRECTOR" means a director of the Company who is not also an
employee of, or consultant to, the Company or an Affiliate.
(m) "DIRECTOR OPTION" means the right to purchase a share of Common
Stock upon exercise of an option granted pursuant to Paragraph 11.
(n) "DIVIDEND EQUIVALENT" means, with respect to an Option Right or
Phantom Share, an amount equal to the amount of any dividends that are
declared and become payable after the Date of Grant for such Award and on
or before the date such Award is exercised, paid or forfeited, as the case
may be.
(o) "GRANT PRICE" means the price per share of Common Stock at
which an Appreciation Right not granted in tandem with an Option Right is
granted.
(p) "MANAGEMENT OBJECTIVES" means the objectives, if any,
established by the Committee that are to be achieved with respect to an
Award granted under this Plan, which may be described in terms of
Company-wide objectives, in terms of objectives that are related to
performance of a division, Subsidiary, department or function within the
Company or a Subsidiary in which the Participant receiving the Award is
employed or in individual or other terms, and which will relate to the
period of time (Performance Cycle) determined by the Committee. The
Management Objectives intended to qualify under Section 162(m) of the Code
shall be with respect to one or more of the following (i) net earnings;
(ii) operating income; (iii) earnings before interest and taxes ("EBIT");
(iv) earnings before interest, taxes, depreciation, and amortization
expenses ("EBITDA"); (v) earnings before taxes and unusual or
nonrecurring items; (vi) revenue; (vii) return on investment; (viii) return
on equity; (ix) return on total capital; (x) return on assets; (xi) total
stockholder return; (xii) return on capital employed in the business;
(xiii) stock price performance; (xiv) earnings per share growth; and (xv)
cash flows. Which objectives to use with respect to an Award, the weighting
of the objectives if more than one is used, and whether the objective is to
be measured against a Company-established budget or target, an index or a
peer group of companies, shall be determined by the Committee in its
discretion at the time of grant of the Award. A Management Objective need
not be based on an increase or a positive result and may include, for
example, maintaining the status quo or limiting economic losses. The
Committee, in its sole discretion and without the consent of the
Participant, may amend (i) any stock-based Award to reflect (1) a change in
corporate capitalization, such as a stock split or dividend, (2) a
corporate transaction, such as a corporate merger, a corporate
consolidation, any corporate separation (including a spinoff or other
distribution of stock or property by a corporation), any corporate
reorganization (whether or not such reorganization comes within the
definition of such term in Section 368 of the Code), (3) any partial or
complete corporate liquidation, or (4) a change in accounting rules
required by the Financial Accounting Standards Board and (ii) any Award
that is not intended to meet the requirements of Section 162(m) of the
Code, to reflect significant event that the Committee, in its sole
discretion, believes to be appropriate to reflect the original intent in
the grant of
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the Award. With respect to an Award that is subject to Section 162(m) of
the Code, the Committee must first certify that the Management Objectives
have been achieved before the Award may be paid.
(q) "MARKET VALUE PER SHARE" means, at any date, the closing sale
price per share of the Common Stock on that date (or, if there are no sales
on that date, the last preceding date on which there was a sale) in the
principal market in which the Common Stock is traded.
(r) "OPTION PRICE" means the purchase price per share payable on
exercise of an Option Right or Director Option.
(s) "OPTION RIGHT" means the right to purchase a share of Common
Stock upon exercise of an option granted pursuant to Paragraph 4.
(t) "PARTICIPANT" means an employee of, or consultant to, the
Company or any of its Affiliates who is selected by the Committee to
receive an Award under any of Paragraphs 4 through 10 and shall also
include a Director or Tech-Sym Director who has received an automatic grant
of Director Options pursuant to Paragraph 11.
(u) "PERFORMANCE UNIT" means a unit equivalent to $100 (or such
other value as the Committee determines) awarded pursuant to Paragraph 8.
(v) "PHANTOM SHARES" means notional shares of Common Stock awarded
pursuant to Paragraph 7.
(w) "RESTRICTED STOCK" means shares of Common Stock granted or sold
pursuant to Paragraph 6 as to which neither the ownership restrictions nor
the restriction on transfers referred to therein has expired.
(x) "RULE 16B-3" means Rule 16b-3 of the Securities and Exchange
Commission (or any successor rule to the same effect) as in effect from
time to time.
(y) "SPREAD" means the amount determined by multiplying (i) the
excess of the Market Value per Share on the date when an Appreciation Right
is exercised over the Option Price provided for in the related Option Right
or, if there is no tandem Option Right, the Grant Price provided for in the
Appreciation Right by (ii) the number of shares of Common Stock in respect
of which the Appreciation Right is exercised.
(z)" "SUBSIDIARY" means, at any time, any corporation in which at
the time the Company then owns or controls, directly or indirectly, not
less than 50% of the total combined voting power represented by all classes
of stock issued by such corporation.
(aa) "TECH-SYM" means Tech-Sym Corporation, a Delaware corporation.
(bb) "TECH-SYM DIRECTOR" means a director of Tech-Sym who is not
also (1) an employee of, or consultant to, the Company or an Affiliate or
(2) a Director.
3. SHARES AVAILABLE UNDER PLAN. Subject to adjustments as provided in
Paragraph 14, 1,500,000 is the maximum number of shares of Common Stock which
may be issued or transferred and covered by all outstanding Awards under this
Plan, of which number no more than 300,000 shares may be issued or transferred
as Restricted Stock and/or Phantom Shares, the vesting of which is not subject
to the achievement of Management Objectives, and/or as Bonus Stock. Such shares
may be shares of original issuance or treasury shares or a combination of the
foregoing. Upon exercise of any Appreciation Rights or the payment of any
Phantom Shares, there will be deemed to have been delivered under this Plan for
purposes of this Paragraph 3 the number of shares of Common Stock covered by the
Appreciation Rights or
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equal to the Phantom Shares, as applicable, regardless of whether such
Appreciation Rights or Phantom Shares were paid in cash or shares of Common
Stock. Subject to the provisions of the preceding sentence, any shares of Common
Stock which are subject to Option Rights, Appreciation Rights, or Phantom Shares
awarded or sold as Restricted Stock that are terminated unexercised, forfeited
or surrendered or which expire for any reason will again be available for
issuance under this Plan, unless, with respect to Restricted Stock, the
Participant has received benefits of ownership with respect to such shares, such
as dividends, but not including voting rights. No person may receive
Appreciation Rights, Option Rights, Phantom Shares, Bonus Stock and Restricted
Stock awards with respect to more than 250,000 shares during any calendar year;
but disregarding any Appreciation Rights granted in tandem with any Option
Rights granted that year. Similarly, the maximum value of Performance Units that
may be granted to any person during any calendar may not exceed $1 million.
4. OPTION RIGHTS. The Committee may from time to time authorize grants to
any Participant (other than a Director or Tech-Sym Director) of options to
purchase shares of Common Stock upon such terms and conditions as it may
determine in accordance with the following provisions:
(a) Each grant will specify the number of shares of Common Stock to
which it pertains and whether Dividend Equivalents are awarded with respect
to the option, and; if awarded, the payment or crediting of such Dividend
Equivalents.
(b) Each grant will specify its Option Price, which may not be less
than 100% of the Market Value per Share on the Date of Grant.
(c) Each grant will specify that the Option Price will be payable (i)
in cash or by check payable and acceptable to the Company or (ii) subject
to the approval of the Committee, (a) by tendering to the Company shares of
Common Stock owned by the optionee having an aggregate Market Value Per
Share as of the date of exercise and tender that is not greater than the
full Option Price for the shares with respect to which the option is being
exercised and by paying any remaining amount of the Option Price as
provided in (i) above (provided that the Committee may, upon confirming
that the optionee owns the number of shares being tendered, authorize the
issuance of a new certificate for the number of shares being acquired
pursuant to the exercise of the option less the number of shares being
tendered upon the exercise and return to the optionee (or not require
surrender of) the certificate for the shares being tendered upon the
exercise) or (b) by the optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions to a broker
to promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the Option Price and any required tax withholding
amounts; provided that in the event the optionee chooses to pay the Option
Price as provided in (ii)(b) above, the optionee and the broker shall
comply with such procedures and enter into such agreements of indemnity and
other agreements as the Committee shall prescribe as a condition of such
payment procedure, or (iii) by a combination of such payment methods.
Payment instruments will be received subject to collection.
(d) Successive grants may be made to the same Participant whether or
not any Option Rights previously granted to such Participant remain
unexercised.
(e) Each grant will specify the required period or periods of
continuous service by the Participant with the Company and the Affiliates
and/or the Management Objectives (if any) to be achieved before the Option
Rights or installments thereof will become exercisable, and any grant may
provide for the earlier exercise of the Option Rights in the event of a
Change in Control or other corporate transaction or event or upon
termination of the Participant's employment due to death, disability,
retirement or otherwise, including an involuntary termination other than
for cause.
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(f) Each grant the exercise of which, or the timing of the exercise
of which, is dependent, in whole or in part, on the achievement of
Management Objectives may specify a minimum level of achievement in respect
of the specified Management Objectives below which no Options Rights will
be exercisable and may set forth a formula or other method for determining
the number of Option Rights that will be exercisable if performance is at
or above such minimum but short of full achievement of the Management
Objectives.
(g) Option Rights granted under this Plan may be (i) options which
are intended to qualify as incentive stock options under Section 422 of the
Code, provided, however, such options may only be granted to employees of
the Company, its parent corporation and subsidiaries of the Company, (ii)
options which are not intended to so qualify or (iii) combinations of the
foregoing.
(h) Option Rights granted to a Participant who is an officer of the
Company, Tech-Sym or a Subsidiary may, in the discretion of the Committee,
provide for an automatic "reload" grant upon the exercise of the Option
Right, with such terms and conditions on any such reload grant as the
Committee may choose, provided, however, the Option Price may not be less
than 100% of the Market Value per Share on the Date of Grant of the reload
option and its term may not exceed the remaining term for the exercised
option.
(i) Each grant may, in the discretion of the Committee, provide that
the Common Stock acquired upon exercise of the Option Right shall remain
subject to a "substantial risk of forfeiture", within the meaning of
Section 83 of the Code and the regulations thereunder, with such
restrictions as the Committee may determine.
(j) Each grant shall specify the period during which the Option Right
may be exercised, but no Option Right will be exercisable more than ten
years from the Date of Grant.
(k) Each grant of Option Rights will be evidenced by an agreement
executed on behalf of the Company by any officer and delivered to the
Participant and containing such terms and provisions, consistent with this
Plan, as the Committee may approve.
5. APPRECIATION RIGHTS. The Committee may also from time to time
authorize grants to any Participant (other than a Director or Tech-Sym Director)
of Appreciation Rights upon such terms and conditions as it may determine in
accordance with this Paragraph. Appreciation Rights may be granted in tandem
with Option Rights or separate and apart from a grant of Option Rights. An
Appreciation Right will be a right of the Participant granted such Award to
receive from the Company, upon exercise, an amount which will be determined by
the Committee at the Date of Grant and will be expressed as a percentage of the
Spread (not exceeding 100%) at the time of exercise. An Appreciation Right
granted in tandem with an Option Right may be exercised only by surrender of the
related Option Right. Each grant of an Appreciation Right may utilize any or all
of the authorizations, and will be subject to all of the limitations, contained
in the following provisions:
(a) Each grant will state whether it is made in tandem with Option
Rights and, if not made in tandem with any Option Rights, will specify the
number of shares of Common Stock in respect of which it is made.
(b) Each grant made in tandem with Option Rights will specify the
Option Price and each grant not made in tandem with Option Rights will
specify the Grant Price, which in either case will not be less than 100% of
the Market Value per Share on the Date of Grant.
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(c) Any grant may specify that the amount payable on exercise of an
Appreciation Right may be paid by the Company in (i) cash or Company check,
(ii) shares of Common Stock having an aggregate Market Value per Share
equal to the Spread or (iii) any combination thereof, as determined by the
Committee in its sole discretion.
(d) Any grant may specify that the amount payable on exercise of an
Appreciation Right may not exceed a maximum specified by the Committee at
the Date of Grant (valuing shares of Common Stock for this purpose at their
Market Value per Share at the date of exercise).
(e) Each grant will specify the required period or periods of
continuous service by the Participant with the Company and its Affiliates
and/or Management Objectives to be achieved before the Appreciation Rights
or installments thereof will become exercisable, and will provide that no
Appreciation Right may be exercised except at a time when the Spread is
positive and, with respect to any grant made in tandem with Option Rights,
when the related Option Right is also exercisable. Any grant may provide
for the earlier exercise of the Appreciation Rights in the event of a
Change in Control or other corporate transaction or event or upon the
Participant's termination due to death, disability or retirement, including
an involuntary termination other than for cause.
(f) Each grant the exercise of which, or the timing of the exercise
of which, is dependent, in whole or in part, on the achievement of
Management Objectives may specify a minimum level of achievement in respect
of the specified Management Objectives below which no Appreciation Rights
will be exercisable and may set forth a formula or other method for
determining the number of Appreciation Rights that will be exercisable if
performance is at or above such minimum but short of full achievement of
the Management Objectives.
(g) Each grant of an Appreciation Right will be evidenced by an
agreement executed on behalf of the Company by any officer and delivered to
and accepted by the Participant receiving the grant, which agreement will
describe such Appreciation Right, identify any Option Right granted in
tandem with such Appreciation Right, state that such Appreciation Right is
subject to all the terms and conditions of this Plan and contain such other
terms and provisions, consistent with this Plan, as the Committee may
approve.
6. RESTRICTED STOCK. The Committee may also from time to time authorize
grants or sales to any Participant (other than a Director or Tech-Sym Director)
of Restricted Stock upon such terms and conditions as it may determine in
accordance with the following provisions:
(a) Each grant or sale will constitute an immediate transfer of the
ownership of shares of Common Stock to the Participant in consideration of
the performance of services, entitling such Participant to voting and other
ownership rights, but subject to the restrictions hereinafter referred to.
Each grant or sale may limit the Participant's dividend rights during the
period in which the shares of Restricted Stock are subject to any such
restrictions.
(b) Each grant or sale will specify the Management Objectives, if
any, that are to be achieved in order for the ownership restrictions to
lapse. Each grant or sale that is subject to the achievement of Management
Objectives will specify a minimum acceptable level of achievement in
respect of the specified Management Objectives below which the shares of
Restricted Stock will be forfeited and may set forth a formula or other
method for determining the number of shares of Restricted Stock with
respect to which restrictions will lapse if performance is at or above such
minimum but short of full achievement of the Management Objectives.
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(c) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is
less than the Market Value per Share at the Date of Grant.
(d) Each such grant or sale will provide that the shares of
Restricted Stock covered by such grant or sale will be subject, for a
period to be determined by the Committee at the Date of Grant, to one or
more restrictions, including, without limitation, a restriction that
constitutes a "substantial risk of forfeiture" within the meaning of
Section 83 of the Code and the regulations thereunder, and any grant or
sale may provide for the earlier termination of such period in the event of
a Change in Control or other corporate transaction or event or upon
termination of the Participant's employment due to death, disability,
retirement or otherwise, including an involuntary termination other than
for cause.
(e) Each such grant or sale will provide that during the period for
which such restriction or restrictions are to continue, the transferability
of the Restricted Stock will be prohibited or restricted in a manner and to
the extent prescribed by the Committee at the Date of Grant (which
restrictions may include, without limitation, rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Stock to
continuing restrictions in the hands of any transferee).
(f) Each grant or sale of Restricted Stock will be evidenced by an
agreement executed on behalf of the Company by any officer and delivered to
and accepted by the Participant and containing such terms and provisions,
consistent with this Plan, as the Committee may approve.
(g) Unless otherwise approved by the Committee, certificates
representing shares of Common Stock transferred pursuant to a grant of
Restricted Stock will be held in escrow pursuant to an agreement
satisfactory to the Committee until such time as the restrictions on
transfer have expired or the shares have been forfeited.
7. PHANTOM SHARES. The Committee may also from time to time authorize
grants to any Participant (other than a Director or Tech-Sym Director) of
Phantom Shares upon such terms and conditions as it may determine in accordance
with the following provisions:
(a) Each grant will specify the number of Phantom Shares to which it
pertains and the payment or crediting of any Dividend Equivalents with
respect to such Phantom Shares.
(b) Each grant will specify the Management Objectives, if any, that
are to be achieved in order for the Phantom Shares to be earned. Each grant
that is subject to the achievement of Management Objectives will specify a
minimum acceptable level of achievement in respect of the specified
Management Objectives below which the Phantom Shares will be forfeited and
may set forth a formula or other method for determining the number of
Phantom Shares to be earned if performance is at or above such minimum but
short of full achievement of the Management Objectives.
(c) Each grant will specify the time and manner of payment of Phantom
Shares which have been earned, which payment may be made in (i) cash, (ii)
shares of Common Stock or (iii) any combination thereof, as determined by
the Committee in its sole discretion.
(d) Each grant of Phantom Shares will be evidenced by an agreement
executed on behalf of the Company by any officer and delivered to and
accepted by the Participant and containing such terms and provisions,
consistent with this Plan, as the Committee may approve, including
provisions relating to a Change in Control or other corporate transaction
or event or upon the Participant's termination due to death, disability or
retirement or otherwise, including an involuntary termination other than
for cause.
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8. PERFORMANCE UNITS. The Committee may also from time to time authorize
grants to any Participant (other than a Director or Tech-Sym Director) of
Performance Units upon such terms and conditions as it may determine in
accordance with the following provisions:
(a) Each grant will specify the number of Performance Units to which
it pertains.
(b) Each grant will specify the Management Objectives that are to be
achieved in order for the Performance Units to be earned. Each grant will
specify a minimum acceptable level of achievement in respect of the
specified Management Objectives below which no payment will be made and may
set forth a formula or other method for determining the amount of payment
to be made if performance is at or above such minimum but short of full
achievement of the Management Objectives.
(c) Each grant will specify the time and manner of payment of
Performance Units which have become payable, which payment may be made in
(i) cash, (ii) shares of Common Stock having an aggregate Market Value per
Share equal to the aggregate value of the Performance Units which have
become payable or (iii) any combination thereof, as determined by the
Committee in its sole discretion at the time of payment.
(d) Each grant of a Performance Unit will be evidenced by an
agreement executed on behalf of the Company by any officer and delivered to
and accepted by the Participant and containing such terms and provisions,
consistent with this Plan, as the Committee may approve, including
provisions relating to a Change in Control or other corporate transaction
or event or upon the Participant's termination of employment due to death,
disability, retirement or otherwise, including an involuntary termination
other than for cause.
9. BONUS STOCK. The Committee may also from time to time authorize grants
to any Participant (other than a Director or Tech-Sym Director) of Bonus Stock,
which shall constitute a transfer of shares of Common Stock, without other
payment therefor, as additional compensation for the Participant's services to
the Company or its Affiliates.
10. CASH TAX RIGHTS. (a) The Committee may also from time to time
authorize grants to any Participant (other than a Director or Tech-Sym Director)
of Cash Tax Rights upon such terms and conditions as it may determine in
accordance with this Paragraph. Cash Tax Rights may be granted in tandem with
any Award that is payable in shares of Common Stock. A Cash Tax Right will be
the right of the Participant granted such Award to receive from the Company,
upon receipt of shares of Common Stock pursuant to the tandem Award, an amount
of cash, which will be determined by the Committee at the Date of Grant and will
be expressed as a percentage of the Market Value per Share (not exceeding 100%)
of each share of Common Stock received upon payment of the tandem Award.
(b) Each grant of a Cash Tax Right will (i) state the Award it is made in
tandem with and will specify the percentage of the Market Value per Share that
shall be payable in cash and (ii) be evidenced by an agreement extended on
behalf of the Company by any officer and delivered to and accepted, by the
Participant and containing such terms and provisions, consistent with this Plan,
as the Committee may approve, including provisions relating to a Change in
Control or other corporate transaction or event or upon the Participant's
termination of employment due to death, disability, retirement or otherwise,
including an involuntary termination other than for cause.
11. DIRECTOR OPTIONS. (a) Each Director and Tech-Sym Director who serves
in such capacity on the 30th trading day following the date of the closing of
the initial public offering of the Common Stock (the "IPO") shall
automatically receive, on such date, a Director Option for 10,000 and 5,000
shares of Common Stock, respectively. Each Director who is elected or appointed
to the Board for the first time after
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such 30th trading day shall automatically receive, on the date of his or her
election or appointment, a Director Option for 10,000 shares of Common Stock. In
addition, each person who is a Director or Tech-Sym Director on December 11,
1996 shall receive on such date a Director Option for 10,000 and 5,000 shares of
Common Stock, respectively ("Special Director Options").
(b) On the day following the regular Annual Meeting of the Stockholders of
the Company in each year that this Plan is in effect (commencing with the 1997
Annual Meeting of Stockholders), each Director who is in office on that day and
who was not elected for the first time at such annual meeting shall
automatically receive a Director Option for 2,000 shares of Common Stock.
(c) Each Director Option will be subject to all of the limitations
contained in the following provisions:
(i) Each Director Option shall become exercisable (vested) on the
earlier of the first day that is more than six months following its Date of
Grant or the date of a Change in Control; provided that in no event shall
any Director Option be exercisable prior to the approval of this Plan by
the Company's stockholders.
(ii) The Option Price of each Director Option shall be the Market
Value per Share on its Date of Grant; except, however, with respect to (A)
Director Options granted on the 30th trading day following the date of the
closing of the IPO, the Option Price shall be the arithmetic average,
without regard to number of shares, of the closing price of the Common
Stock on the NASDAQ National Market for the 30 trading days after the date
of the closing of the IPO, as reported in THE WALL STREET JOURNAL, and (B)
Special Director Options, the Option Price shall be $12.
(iii) Each Director Option that is vested may be exercised in full at
one time or in part from time to time by giving written notice to the
Company, stating the number of shares of Common Stock with respect to which
the Director Option is being exercised, accompanied by payment in full of
the Option Price for such shares, which payment may be (1) in cash by check
acceptable to the Company, (2) by tendering to the Company shares of Common
Stock owned by the optionee having an aggregate Market Value Per Share as
of the date of exercise and tender that is not greater than the full option
exercise price for the shares with respect to which the Option is being
exercised and by paying any remaining amount of the option exercise price
as provided (1) above (provided that the Committee may, upon confirming
that the optionee owns the number of shares being tendered, authorize the
issuance of a new certificate for the number of shares being acquired
pursuant to the exercise of the option less the number of shares being
tendered upon the exercise and return to the optionee (or not require
surrender of) the certificate for the shares being tendered upon the
exercise), (3) by the optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions to a broker
to promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the option exercise price and any required tax
withholding amounts; provided that in the event the optionee chooses to pay
the exercise price in this manner, the optionee and the broker shall comply
with such procedures and enter into such agreements of indemnity and other
agreements as the Committee shall prescribe as a condition of such payment
procedure or (4) by a combination of such methods of payment. Payment
instruments will be received subject to collection.
(iv) Each Director Option shall expire 10 years from the Date of
Grant thereof, but shall be subject to earlier termination as follows:
Director Options, to the extent exercisable as of the date the Director or
Tech-Sym Director ceases to serve as a director of the Company and, if
applicable, Tech-Sym, must be exercised within one year of such date unless
such termination results from the Director's or Tech-Sym Director's death,
disability or retirement, in which case the Director Options
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<PAGE>
shall be fully vested and may be exercised by the optionee or the
optionee's legal representative or the person to whom the Director's or
Tech-Sym's Director's rights shall pass by will or the laws of descent and
distribution, as the case may be, within three years from the date of
termination; provided however, that no such event shall extend the normal
expiration date of such Director Options.
(v) In the event that the number of shares of Common Stock available
for grants under this Plan is insufficient to make all automatic grants
provided for in this Paragraph 11 on the applicable date, then all
Directors and Tech-Sym Directors who are entitled to a grant on such date
shall share ratably in the number of shares then available for grant under
this Plan, and shall have no right to receive a grant with respect to the
deficiencies in the number of available shares and all future grants under
this Paragraph 11 shall terminate.
(vi) Grants made pursuant to this Paragraph 11 shall be subject to
all of the terms and conditions of this Plan; however, if there is a
conflict between the terms and conditions of this Paragraph 11 and the
terms and conditions of any other Paragraph, then the terms and conditions
of this Paragraph 11 shall control. The Committee may not exercise any
discretion with respect to this Paragraph 11 which would be inconsistent
with the intent that this Plan meet the requirements of Rule 16b-3.
(d) Notwithstanding the foregoing, no further Director Options shall be
granted to a Tech-Sym Director after the date the Company ceases to be a
subsidiary (within the meaning of Section 424 of the Code) of Tech-Sym and such
date shall be treated, for purposes of paragraph (c)(iv) above, as the date a
Tech-Sym Director ceases to serve as a director of Tech-Sym.
12. LSARS. Notwithstanding anything in Paragraphs 4, 5 or 11 above to the
contrary, if during the 60-day period following the date of a Change in Control
or, with respect to an option, Appreciation Right or Director Option granted to
a Participant who is subject to Section 16(b) of the Exchange Act, the 60-day
period following the earlier of the date that Section 16(b) of the Securities
Exchange Act of 1934 ceases to apply to such person or six months following the
date of grant of such option, Appreciation Right or Director Option (but not to
exceed the remaining term of such option, Appreciation Right or Director
Option), a Participant (or beneficiary thereof) elects to exercise an option,
Appreciation Right or Director Option, as applicable, the holder shall receive
in cash whichever of the following amounts is applicable:
(i) with respect to an acquisition of Common Stock described in clause
(i) of the definition of Change in Control, an amount equal to the
Acquisition Spread (as defined below);
(ii) with respect to a change in composition of the Board described in
clause (ii) of the definition of Change in Control, an amount equal to the
Spread (as defined below); or
(iii) with respect to stockholder approval of an agreement or adoption
of a plan described in clause (iii) or (iv) of the definition of Change in
Control, an amount equal to the Merger Spread (as defined below).
As used in this Paragraph 12, the following terms shall have the
meaning indicated:
(1) The term "Acquisition Price Per Share" shall mean the greater
of (i) the highest price paid by a person (or an Affiliate or Associate
thereof) for any share of Common Stock acquired prior to, but in connection
with, a Change in Control described in clause (i) of the definition of a
Change in Control or (ii) the highest Market Value per Share for any day
during the 60-day period ending on the date the option, Appreciation Right
or Director Option is exercised.
(2) The term "Acquisition Spread" shall mean an amount equal to the
product obtained by multiplying (i) the excess of (A) the Acquisition Price
Per Share over (B) the price per share of
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Common Stock at which the option, Appreciation Right or Director Option is
exercisable, by (ii) the number of shares of Common Stock with respect to
which such option, Appreciation Right or Director Option is being
exercised.
(3) The term "Merger Price Per Share" shall mean the greater of (i)
the fixed or formula price for the acquisition of shares of Common Stock
specified in such agreement or adoption, if such fixed or formula price is
determinable on the date on which such option, Appreciation Right or
Director Option is exercised, and (ii) the highest Market Value per Share
for any day during the 60-day period ending on the date on which such
option, Appreciation Right or Director Option is exercised.
(4) The term "Merger Spread" shall mean an amount equal to the
product obtained by multiplying (i) the excess of (A) the Merger Price Per
Share over (B) the price per share of Common Stock at which the option,
Appreciation Right or Director Option is exercisable, by (ii) the number of
shares of Common Stock with respect to which such option, Appreciation
Right or Director Option is being exercised.
(5) The term "Spread" shall mean an amount equal to the product
obtained by multiplying (i) the excess of (A) the highest Market Value per
Share for any day during the 60-day period ending on the date the option,
Appreciation Right or Director Option is exercised over (B) the price per
share of Common Stock at which the option, Appreciation Right or Director
Option is exercisable, by (ii) the number of shares of Common Stock with
respect to which such option, Appreciation Right or Director Option is
being exercised.
The Company intends that this Paragraph 12 shall comply with the
requirements of Rule 16b-3 and any future rules promulgated in substitution
therefor ("the Rule") under the Exchange Act during the term of the Plan.
Should any provision of this Paragraph 12 not be necessary to comply with the
requirements of the Rule or should any additional provisions be necessary for
this Paragraph 12 to comply with the requirements of the Rule, the Board may
amend the Plan to add to or modify the provisions of the Plan accordingly.
13. TRANSFERABILITY. No Award will be transferable by a Participant other
than by will or the laws of descent and distribution. Director Options, Option
Rights or Appreciation Rights will be exercisable during the Participant's
lifetime only by the Participant or by the Participant's guardian or legal
representative.
14. ADJUSTMENTS. The Board may make or provide for such adjustments in
the maximum number of shares specified in Paragraph 3, in the numbers of shares
of Common Stock covered by outstanding Director Options, Option Rights,
Appreciation Rights and Phantom Shares granted hereunder, in the Option Price or
Grant Price applicable to any such Director Options, Option Rights and
Appreciation Rights, and/or in the kind of shares covered thereby (including
shares of another issuer), as the Board, in its sole discretion exercised in
good faith, may determine is equitably required to prevent dilution or
enlargement of the rights of Participants that otherwise would result from any
stock dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Company, merger, consolidation,
reorganization, partial or complete liquidation, issuance of rights or warrants
to purchase securities or any other corporation transaction or event having an
effect similar to any of the foregoing.
15. FRACTIONAL SHARES. The Company will not be required to issue any
fractional share of Common Stock pursuant to this Plan. The Committee may
provide for the elimination of fractions for the settlement of fractions in
cash.
16. WITHHOLDING OF TAXES. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any grant or
payment made to a Participant or any other person
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<PAGE>
under this Plan, or is requested by a Participant to withhold additional amounts
with respect to such taxes, and the amounts available to the Company for such
withholding are insufficient, it will be a condition to the receipt of such
grant or payment that the Participant or such other person make arrangements
satisfactory to the Company for the payment of the balance of the such taxes
required or requested to be withheld, which arrangements in the discretion the
Committee may include relinquishment of a portion of such Award or payment. With
respect to any Participant who is subject to Rule 16b-3 at the time withholding
is required with respect to an Award payable in Common Stock (other than an
Option Right), the Company shall automatically withhold from such Award, to the
extent such withholding is not satisfied by a tandem Cash Tax Right, if any, a
number of shares of Common Stock having an aggregate Market Value per Share
equal to the amount of taxes required to be withheld by the Company.
17. PARACHUTE TAX GROSS-UP. To the extent that the acceleration of
vesting or any payment, distribution or issuance made to a Participant under the
Plan (a "Benefit") is subject to a golden parachute excise tax under Section
4999(a) of the Code (a "Parachute Tax"), the Company shall pay such
Participant an amount of cash (the "Gross-up Amount") such that the "net"
Benefit received by the Participant under this Plan, after paying all applicable
Parachute Taxes (including those on the Gross-up Amount) and any federal or
state income taxes on the Gross-up Amount, shall be equal to the Benefit that
such Participant would have received if such Parachute Tax had not been
applicable.
18. ADMINISTRATION OF THE PLAN. (a) This Plan will be administered by the
Committee, which at all times will consist entirely of not less than three
directors appointed by the Board, each of whom will be a "disinterested
person" within the meaning Rule 16b-3 and an "outside director" within the
meaning of Section 162(m) of the Code. A majority of the Committee will
constitute a quorum, and the action of the members of the Committee present at
any meeting at which a quorum is present, or acts unanimously approved writing,
will be the acts of the Committee.
(b) The interpretation and construction by the Committee of any provision
of this Plan or of any agreement, notification or document evidencing the grant
of an Award and any determination by the Committee pursuant to any provision of
this Plan or of any such agreement, notification or documentation will be final
and conclusive. No member of the Committee will be liable for any such action or
determination made in good faith or in the absence of gross negligence or
willful misconduct on the part of such member.
19. AMENDMENTS, ETC. (a) This Plan may be amended from time to time by
the Board but may not be amended by the Board without further approval by the
stockholders of the Company if such amendment would result in this Plan no
longer satisfying the requirements of Rule 16b-3; provided, however, that the
provisions of Paragraphs 11 and 12 (as they relate to Director Options) may not
be amended more than once every six months other than to comport with changes in
the Code, the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder.
(b) This Plan will not confer upon any Participant any right with respect
to continuance of employment or other service with the Company or any Affiliate,
nor will it interfere in any way with any right the Company or any Affiliate
would otherwise have to terminate such Participant's employment or other service
at any time.
20. TERM. This Plan shall be effective as of April 30, 1996, subject to
approval by the Company's stockholders; provided, however, no Award shall be
exercisable or payable prior to the date of such stockholders' approval. In the
event that this Plan is not approved by the stockholders of the Company within
twelve months after the date of its adoption by the Board, this Plan and all
Awards made under this Plan shall be automatically null and void. Unless sooner
terminated, this Plan shall terminate on December 31, 2005, and no further
Awards shall be made, but all outstanding Awards on such date shall remain
effective in accordance with their terms and the terms of this Plan.
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<PAGE>
PROXY GEOSCIENCE CORPORATION PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) WENDELL W. GAMEL, RICHARD F. MILES and J.
RANKIN TIPPINS, or any of them, lawful attorneys and proxies of the undersigned
to vote as Proxy at the Annual Stockholders' Meeting of GeoScience Corporation
(herein the "Company") to be held on April 28, 1997, and any adjournment(s)
thereof, according to the number of votes owned by the undersigned as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS NUMBERED 1, 2 AND 3.
PROPOSAL 1.
The Election of Directors:
[ ] FOR nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to vote for all nominees
to the contrary below) listed below
Class I: Michael C. Forrest, J. Rankin Tippins
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME HERE:
- -------------------------------------------------------------------------------
PROPOSAL 2: Ratification of the appointment of Price Waterhouse LLP as the
independent public accountants of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 3: Approval and ratification of amendments to the GeoScience
Corporation 1996 Equity Incentive Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued and to be signed on other side)
In accordance with their discretion, said Attorneys and Proxies are authorized
to vote upon such other matters or proposals not known at the time of
solicitation of this proxy which may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3. ANY PRIOR PROXY IS HEREBY REVOKED.
Dated: ___________________, 1997
--------------------------------
Signature
--------------------------------
(Signature if held jointly)
Please sign exactly as your name
appears at the left. When shares
are held by joint tenants, both
should sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by president or other
authorized person. If a
partnership, please sign in
partnership name by authorized
person.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD
PROMPTLY, USING THE ENCLOSED ENVELOPE. THANK YOU.
