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, 1998
To Our Stockholders:
You are cordially invited to attend the 1998 Annual
Meeting of Stockholders of GeoScience Corporation to be held
on April 27, 1998, at 3:00 P.M., Houston time, in the Forum
Room of the DoubleTree Hotel, 2001 Post Oak Boulevard,
Houston, Texas 77056.
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 1997 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 27, 1998
To the Stockholders of GeoScience Corporation:
Notice is hereby given that the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of GeoScience Corporation, a Nevada Corporation
("GeoScience" or the "Company"), will be held at the Forum Room of the
DoubleTree Hotel, 2001 Post Oak Boulevard, Houston, Texas 77056 on Monday, April
27, 1998, at 3:00 P.M., Houston time, for the following purposes:
1. The election of three directors as members of Class II of the Board of
Directors.
2. Ratification of the appointment of Price Waterhouse LLP as independent
public accountants for the Company for 1998.
3. Such other business as may properly come before the meeting and any
adjournment thereof.
The Board of Directors has fixed March 13, 1998, 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.
By Order of the Board of Directors,
SHARON M. BRUNNER
SECRETARY
Houston, Texas
MARCH 27, 1998
- --------------------------------------------------------------------------------
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 1998 Annual Meeting of Stockholders (the "Annual Meeting") to be held
on Monday, April 27, 1998, at 3:00 P.M., Houston time, in the Forum Room of the
DoubleTree Hotel, 2001 Post Oak Boulevard, Houston, Texas, and at any
adjournment 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, 1998.
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 13, 1998 (the
"Record Date") are entitled to vote at the Annual Meeting and at any
adjournment thereof. On the Record Date, the issued and outstanding capital
stock of GeoScience consisted of 9,979,850 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
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. Neither 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.
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<PAGE>
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 RATIFICATION OF THE
APPOINTMENT OF PRICE WATERHOUSE LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS FOR
THE COMPANY FOR 1998 (PROPOSAL 2); 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, 1998, 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
II expires at the Annual Meeting. The terms of office of the directors in
Classes III and I will expire at the annual meetings of stockholders to be held
in 1999 and 2000, respectively. At the Annual Meeting, three Class II directors
will be elected to serve for terms expiring at the annual meeting of
stockholders to be held in 2001.
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. W. L. Creech, Richard F. Miles, and Edward R. Prince,
Jr. as Class II directors to serve until the 2001 annual meeting of stockholders
and until their successors have been duly elected and qualified. If any 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
3
<PAGE>
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.
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.
W. L. CREECH, age 70, 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., and ESEA Corporation.
RICHARD F. MILES, age 49, has been a director and the President of the
Company since March 1996. In January 1998, Mr. Miles was elected President of
Syntron, Inc., a position he also held from January 1990 until November 1995 at
which time he was elected Chairman of Syntron. In addition, Mr. Miles served as
Chairman of CogniSeis Development, Inc. from June 1995 to October 1997, and
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 served
as Chairman of the International Association of Geophysical Contractors (IAGC),
an industry trade group, from March 1997 until March 1998.
EDWARD R. PRINCE, JR., age 68, 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. Mr. Prince
also serves as a director of JetFax Inc.
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 III DIRECTOR -- TERM EXPIRING 1999
WENDELL W. GAMEL, age 68, 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 74, 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.
4
<PAGE>
RAY F. THOMPSON, age 61, 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 and Chief Financial Officer 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.
CLASS I DIRECTOR -- TERM EXPIRING 2000
MICHAEL C. FORREST, age 64, has been a director of the Company since April
1996. Mr. Forrest has been a consultant for petroleum exploration since his
retirement as the Senior Vice President of Technology and Business Development
at Maxus Energy Corporation (an oil and gas exploration and production company),
a position he held from 1994 to 1997. 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 45, has been a director, Vice President, and General
Counsel of the Company since March 1996, and served as Secretary of the Company
from March 1996 until April 1997. Mr. Tippins also has been the Secretary and
General Counsel of Tech-Sym Corporation for more than the past five years.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During 1997, the Board of Directors held ten (10) 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 three (3) meetings in 1997. 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 four (4) meetings during 1997. 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, as amended and restated
("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 1997, 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.
5
<PAGE>
COMPENSATION OF DIRECTORS
During 1997, those members of the Board who were not employees of either
the Company or Tech-Sym Corporation were paid (i) a fee of $1,000 for attendance
at each Board meeting, (ii) a fee of $250 for attendance at each meeting of a
committee of the Board prior to February 20, 1997, and (iii) a fee of $500 for
attendance at each meeting of a committee of the Board on and after February 20,
1997. 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 either an
employee of the Company or Tech-Sym Corporation received on the day following
the 1997 annual meeting of the Company's stockholders, April 29, 1997, an option
to purchase 2,000 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.
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
- ------------------------------- --- ----------------------------------------
Wendell W. Gamel............... 68 Chairman of the Board
John H. Jones.................. 60 Vice President
Richard F. Miles............... 49 President
Ray F. Thompson................ 61 Vice President, Chief Financial Officer
and Treasurer
J. Rankin Tippins.............. 45 Vice President and General Counsel
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.
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.
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, 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. In January 1998, Mr. Miles was elected President of Syntron, a
position he also held from January 1990 until November 1995 at which time he was
elected Chairman of Syntron. In addition, Mr. Miles served as Chairman of
CogniSeis Development, Inc. ("CogniSeis") from June 1995 to October 1997, and
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
6
<PAGE>
of Geosource Marine. Mr. Miles served as Chairman of the International
Association of Geophysical Contractors (IAGC), an industry trade group, from
March 1997 until March 1998.
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, and General Counsel
of the Company since March 1996, and served as Secretary of the Company from
March 1996 until April 1997. Mr. Tippins also has been the General Counsel and
Secretary of Tech-Sym Corporation for more than the past five years.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes compensation with respect to the fiscal
years ended December 31, 1997, 1996 and 1995 for services to the Company in all
capacities awarded to, earned by or paid to (i) the Company's chief executive
officer, (ii) two other executive officers with annual compensation in excess of
$100,000 who were serving as executive officers on December 31, 1997, and (iii)
one other individual who would have been in (ii) above but for the fact that he
was not serving as an executive officer on December 31, 1997 (together, the
"Named Officers"). Messrs. Gamel, Thompson and Tippins are full-time employees
of Tech-Sym Corporation but devote such time to the affairs of the Company as
the Company's needs reasonably require from time to time. The time and effort
devoted by these individuals to the Company's affairs is provided to the Company
under a Corporate Services Agreement between the Company and Tech-Sym
Corporation. Accordingly, the compensation for these individuals is not paid by
the Company and is not reported in the following table.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------
NO. OF SHARES
UNDERLYING
ANNUAL COMPENSATION(1) OPTIONS GRANTED ALL OTHER
NAME AND ---------------------- -------------------- COMPENSATION(4)
PRINCIPAL POSITION YEAR SALARY BONUS(2) GSCI TSY(3) ($)
- ------------------------------------- ----- ---------- ---------- --------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Cooper(8)................. 1997 $ 111,647 -0- -0- -0- $ 12,500
President of CogniSeis 1996 $ 102,106 -0- 12,000 -0- $ 10,000
John H. Jones(5)..................... 1997 $ 98,217 $ 11,962 20,000 -0- $ 5,496
Vice President 1996 $ 94,440 $ 24,973 10,000 -0- $ 5,137
Richard F. Miles..................... 1997 $ 201,667 $ 35,000 12,500 -0- $ 7,179
President 1996 $ 195,000 $ 140,350(6) 25,000 5,000 $ 6,854
1995 $ 183,000 $ 67,920 -0- -0- $ 5,695
Bruce H. Nelson(7)................... 1997 $ 155,000 -0- 20,000 -0- -0-
President of Syntron 1996 $ 140,000 $ 50,020 20,000 -0- $ 5,909
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 Named 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 for 1996 represents income paid for a housing
allowance, and which amount for 1997 represents compensation paid to Mr.
Cooper under a Termination and Incentive Agreement between CogniSies
Development, Inc., the Company and Mr. Cooper.
(5) Mr. Jones became an executive officer of the Company in August 1996.
(6) Includes $66,000 paid by Tech-Sym Corporation.
(7) Mr. Nelson ceased serving as an executive officer of GeoScience in January
1998.
(8) Mr. Cooper became an executive officer of the Company in October 1996. In
connection with the sale of CogniSies, Mr. Cooper ceased serving as an
executive officer of GeoScience in October 1997.
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<PAGE>
The following table sets forth information concerning individual grants of
stock options by the Company made during fiscal 1997 to the Named 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 1997.
STOCK OPTIONS GRANTED DURING FISCAL 1997
<TABLE>
<CAPTION>
NO. OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED
OPTIONS TO EMPLOYEES IN EXERCISE PRICE EXPIRATION GRANT DATE
NAME GRANTED FISCAL YEAR PER SHARE DATE PRESENT VALUE(A)
- ------------------------------------- ---------- --------------- -------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Richard C. Cooper.................... -0- -0- -0- -0- -0-
John H. Jones........................ 5,000 1.3 $ 9.375 4/27/2007 $ 31,190
15,000 4.0 $ 11.625 12/9/2007 $113,445
Richard F. Miles..................... 12,500 3.3 $ 9.375 4/27/2007 $ 77,795
Bruce H. Nelson...................... 10,000 2.6 $ 9.375 4/27/2007 $ 62,380
10,000 2.6 $ 11.625 12/9/2007 $ 75,630
</TABLE>
- ------------
(a) In accordance with Securities and Exchange Commission rules, the
Black-Scholes option pricing model was used to estimate the value of the
GeoScience options to be $6.238 and $7.563 for each option share as of the
grant date of 4/28/1997 and 12/10/1997, respectively. The model's
mathematical formula primarily is used to value traded stock options and is
premised on immediate exercisability and transferability of the options.
This is not true for the GeoScience options granted to executive officers
and other employees. Therefore, the values shown are theoretical and are not
intended to reflect the actual values the recipients eventually may realize,
if any. Any ultimate value will depend on the excess of the stock price over
the exercise price on the date the optionee, in his sole discretion,
exercises the options. The following assumptions were used for the purpose
of estimating the Grant Date Present Value: (i) option term of eight years,
(ii) volatility of .54, (iii) dividend yield of zero, (iv) and risk-free
rate of return of 6.49%.
9
<PAGE>
The following table summarizes for each of the Named Officers the number of
Tech-Sym and GeoScience stock options and stock appreciation rights (SARs), if
any, exercised during the year ended December 31, 1997, the aggregate dollar
value realized upon exercise, the total number of unexercised options and SARs,
if any, held at December 31, 1997, and the aggregate dollar value of
in-the-money, unexercised options and SARs, if any, held at December 31, 1997.
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, 1997, which was $25.4375
per share for Tech-Sym and $11.75 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 Corporation 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 Tech-Sym Corporation's 1990 Stock Option Plan or GeoScience's 1996
Equity Incentive Plan.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED,
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS
UNEXERCISED OPTIONS AT AT FISCAL
SHARES FISCAL YEAR-END YEAR-END
ACQUIRED ON VALUE --------------------------- -----------
NAME COMPANY EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------- ------- ----------- ----------- ----------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Cooper.................... GSCI -0- -0- 3,000 -0- -0- -0-
TSY -0- -0- -0- -0- -0- -0-
John H. Jones........................ GSCI -0- -0- 2,500 27,500 -0- $13,750
TSY -0- -0- 2,000 -0- $ 7,375 -0-
Richard F. Miles..................... GSCI -0- -0- 6,250 31,250 -0- $29,688
TSY 6,000 $ 112,875 7,000 3,000 $48,438 -0-
Bruce H. Nelson...................... GSCI -0- -0- 8,000 32,000 -0- $25,000
TSY -0- -0- 5,000 -0- $22,188 -0-
</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 $205,000. The agreement further
provides for the payment of a surviving spouse's benefit equal to 37% 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
10
<PAGE>
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 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.
TERMINATION AGREEMENT
Tech-Sym Corporation entered into a termination agreement with Mr. Miles in
1991 which provides that if Mr. Miles' employment 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 Mr. Miles for other than
"good reason," Mr. Miles 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. Such payments to Mr. Miles would be reduced by (i) any
amounts payable to Mr. Miles from other employment, and (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, 1997, 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 Mr. Gamel 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.
11
<PAGE>
The Compensation Committee also administers the Company's 1996 Equity
Incentive Plan, as amended and restated, and grants stock options 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 primarily is 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 also
is a party to an Executive Retirement Agreement with Tech-Sym Corporation.
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
1997 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
12
<PAGE>
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.
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
Directors' 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.
At its April 28, 1997 meeting, the Committee determined that a 5% salary
increase for Mr. Miles, effective May of 1997, was appropriate in light of the
Company's 35% increase in revenue and 8% increase in net income during 1996 from
the prior year. The Board of Directors approved the recommendation.
At the same meeting, the Committee awarded Mr. Miles an option to purchase
12,500 shares of Common Stock of the Company 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 in 1997 was 4% greater than in 1996 and the
1997 earnings of the Company were approximately 77% less than in 1996, the
Committee recommended, and the Board approved, an incentive bonus of $35,000,
which was a 75% reduction from his bonus the prior year.
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 Exchange Act, 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
13
<PAGE>
CERTAIN TRANSACTIONS WITH MANAGEMENT
The Company paid approximately $1.3 million, $1.8 million and $1.7 million
to Tech-Sym Corporation in 1995, 1996 and 1997, 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
Tech-Sym Corporation has been compensated for such services historically. The
Company believes that the fees paid to Tech-Sym Corporation in 1995, 1996 and
1997 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 1998 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 1995, 1996 and 1997 the Company paid to Tech-Sym
Corporation approximately $1.3 million, $1.0 million and $700,000, respectively,
in interest on outstanding indebtedness owed to Tech-Sym Corporation.
14
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table indicates the beneficial ownership of Common Stock, as
well as the common stock of Tech-Sym Corporation, as of January 31, 1998, with
respect to (i) each person who was known by the Company 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
------------------------------------ --------------------------------------
SOLE VOTING OPTIONS SOLE VOTING OPTIONS
AND EXERCISABLE AND EXERCISABLE
INVESTMENT WITHIN 60 % OF INVESTMENT WITHIN 60 % OF
BENEFICIAL OWNER POWER DAYS CLASS POWER DAYS CLASS
- ------------------------------------- ------------ ----------- ----- ------------ ----------- -----
<S> <C> <C> <C> <C> <C> <C>
Richard C. Cooper.................... -0- -0- -0- -0- -0- -0-
W. L. Creech......................... 41,000 22,000 * 1,000 6,000 *
Michael C. Forrest................... 2,500 22,000 * 1,500 11,000 *
Wendell W. Gamel..................... 6,000 6,250 * 84,826(a)(b) 46,000 2.14
John H. Jones........................ 1,456(a) 2,500 * -0- 2,000 -0-
Christopher C. Kraft, Jr. ........... 2,000 22,000 * 3,500 16,200 *
Richard F. Miles..................... 2,615(a) 6,250 * 826(a) 7,000 *
Bruce H. Nelson...................... 11,831(a) 5,000 * -0- 5,000 *
Edward R. Prince, Jr. ............... -0- 22,000 * -0- -0- *
J. Rankin Tippins.................... 5,000 3,750 * 7,900(a) 24,000 *
Ray F. Thompson...................... 4,000 3,750 * 21,097(a) 31,000 *
Tech-Sym Corporation................. 7,900,000 -0- 79.16
10500 Westoffice Drive
Houston, Texas 77042
Directors and executive officers as a
group (11 persons)................. 76,402 115,500 1.9% 120,649 148,200 3.89%
</TABLE>
- -----------
* Represents ownership of less than 1.0%.
(a) Includes shares allocated to the employee through his participation in the
GeoScience Retirement Plan or the Tech-Sym Retirement Plan. For Mr. Nelson,
also includes 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) Includes 5,000 shares held in trust for Mr. Gamel's children in which he
disclaims beneficial ownership.
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 nineteen-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. The May 17, 1996 date was used since this
was the date the GeoScience stock first traded on the Nasdaq Stock Market.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
12/96 12/97
----- -----
Geoscience Corporation 76 69
Nasdaq Stock Market (U.S.) 109 133
S&P Oil & Gas 113 173
(Drilling Equipment)
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, 1998. 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 1998.
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 1999 ANNUAL MEETING OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1999 annual
meeting of stockholders must be received by the Company by November 28, 1998, to
be considered for inclusion in the proxy statement and form of proxy relating to
the 1999 meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
SHARON M. BRUNNER
SECRETARY
17
<PAGE>
FRONT SIDE OF PROXY
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 27, 1998, 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 AND 2.
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 II: W. L. Creech, Richard F. Miles, Edward R. Prince, Jr.
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
(continued and to be signed on other side)
BACK SIDE OF PROXY
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 AND 2. ANY PRIOR PROXY IS HEREBY REVOKED.
Dated: ___________________, 1998
________________________________
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.
