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]
April 9, 1999
To Our Stockholders:
You are cordially invited to attend the 1999 Annual
Meeting of Stockholders of GeoScience Corporation to be held
on May 10, 1999, at 3:00 P.M., Houston Time, in the Omni
Ballroom of the Westchase Hilton & 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 1998 Annual Report to Stockholders on
Form 10-K 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,
/s/ WENDELL W. GAMEL
Wendell W. Gamel
CHAIRMAN OF THE BOARD
<PAGE>
GEOSCIENCE CORPORATION
10500 WESTOFFICE DRIVE, SUITE 200
HOUSTON, TEXAS 77042
(713) 780-1881
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 10, 1999
To the Stockholders of GeoScience Corporation:
Notice is hereby given that the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") of GeoScience Corporation, a Nevada corporation
("GeoScience" or the "Company"), will be held in the Omni Ballroom of the
Westchase Hilton & Towers, 9999 Westheimer, Houston, Texas 77042 on Monday, May
10, 1999, at 3:00 P.M., Houston Time, for the following purposes:
1. The election of two directors as members of Class III of the Board of
Directors.
2. Ratification of the appointment of PricewaterhouseCoopers LLP as
independent public accountants for the Company for 1999.
3. Such other business as may properly come before the meeting and any
adjournment thereof.
The Board of Directors has fixed March 26, 1999, 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,
/s/ ALICE STACY
ALICE STACY
ASSISTANT SECRETARY
Houston, Texas
APRIL 9, 1999
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 1999 Annual Meeting of Stockholders (the "Annual Meeting") to be held
on Monday, May 10, 1999, at 3:00 P.M., Houston Time, in the Omni Ballroom of the
Westchase Hilton & Towers, 9999 Westheimer, 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 April 9, 1999.
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 26, 1999 (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 9,985,350 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.
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 PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE COMPANY FOR 1999 (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 200, 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 April
9, 1999, 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
III expires at the Annual Meeting. The terms of office of the directors in
Classes I and II will expire at the annual meetings of stockholders to be held
in 2000 and 2001, respectively. At the Annual Meeting, two Class III directors
will be elected to serve for terms expiring at the annual meeting of
stockholders to be held in 2002. Dr. Christopher C. Kraft, Jr., a current Class
III director, intends to retire from the Board of Directors upon the expiration
of his term of office at the Annual Meeting. At that time, the size of the Board
of Directors shall be reduced from nine to eight members.
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. Wendell W. Gamel and Ray F. Thompson as Class III
directors to serve until the 2002 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 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.
WENDELL W. GAMEL, age 69, has been Chairman of the Board of the Company
since March 1996. Mr. Gamel is also a director and Chairman of the Board of
Tech-Sym Corporation ("Tech-Sym"), the parent company of GeoScience, a
position he has held for more than the past five years. Mr. Gamel served as
President and Chief Executive Officer of Tech-Sym from 1975 to April 30, 1998.
RAY F. THOMPSON, age 62, has been a director, Vice President, Chief
Financial Officer and Treasurer of the Company since March 1996. Mr. Thompson
also served as Vice President, Chief Financial Officer and Treasurer of Tech-Sym
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 I DIRECTORS -- TERM EXPIRING 2000
J. MICHAEL CAMP, age 49, Director since 1998. Mr. Camp has served as
President and Chief Executive Officer of Tech-Sym since May of 1998. Prior to
joining Tech-Sym, Mr. Camp served as President and Chief Executive Officer of
Olicom, Inc., a company that develops and markets computer network software and
hardware products (from 1996 to 1998). Prior thereto, he served in various
capacities at Northern Telecom Inc. including Vice President and General Manager
of the Multimedia Business Applications Division (from 1993 to 1996), Vice
President and General Manager of the Data Network Division (from 1992 to 1993),
and General Manager of the Network Integration Division (from 1991 to 1992). Mr.
Camp also serves as a director of Tech-Sym.
MICHAEL C. FORREST, age 65, 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 46, 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 for more than the past five years.
CLASS II DIRECTORS -- TERM EXPIRING 2001
W. L. CREECH, age 72, 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, Comarco, Inc., and ESEA Corporation.
4
<PAGE>
RICHARD F. MILES, age 50, has been a director and the President of the
Company since March 1996. In January 1998, Mr. Miles was elected President of
Syntron, Inc. ("Syntron"), a subsidiary of the Company, 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"), a former subsidiary of the Company, 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 69, has been a director since September 1996.
From 1994 to March of 1999, Mr. Prince served as Vice Chairman and a director 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 eFax.com.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During 1998, the Board of Directors held five regular meetings and one
special meeting. 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 meetings in 1998. 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 meetings during 1998. The
Compensation Committee (i) considers and makes recommendations to the Board of
Directors with respect to programs for human resource development and management
organization and succession, (ii) approves changes in senior executive
compensation, (iii) makes recommendations to the Board of Directors regarding
compensation matters and policies over which the Board of Directors has final
approval, and (iv) administers 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 1998, 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
Those members of the Board who are not employees of either the Company or
Tech-Sym are 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, and
(iii) a fee of $500 for attendance at each meeting of a committee of the Board
which they chair. Board members who are either employees of the Company or
Tech-Sym do not receive any fees. Members of the Board who are not current or
former employees of the Company or Tech-Sym also are paid an annual retainer of
$12,000.
5
<PAGE>
Under the Stock Plan, each director of the Company who is not an employee
of the Company or Tech-Sym automatically receives on the day following the
regular annual meeting of the Company's stockholders, 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. Each director who is
elected or appointed to the Board for the first time shall automatically
receive, on the date of such director's election or appointment, an option to
purchase 10,000 shares of Common Stock at an exercise price equal to the closing
share price 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.............. 69 Chairman of the Board
Richard F. Miles.............. 50 President and Chief Executive Officer
Ray F. Thompson............... 62 Vice President, Chief Financial Officer
and Treasurer
J. Rankin Tippins............. 46 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 March
1996. Mr. Gamel also is Chairman of the Board of Tech-Sym, a position he has
held for more than the past five years. He served as President and Chief
Executive Officer of Tech-Sym from 1975 to April 30, 1998.
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 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 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 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 a Vice President, Chief Financial Officer and Treasurer of Tech-Sym for
more than the past five years.
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 for more than the past five years. He is a member of the
State Bar of Texas and The Florida Bar.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes compensation with respect to the fiscal
years ended December 31, 1998, 1997 and 1996 for services to the Company in all
capacities awarded to, earned by or paid to the Company's chief executive
officer. The remaining executive officers, Messrs. Gamel, Thompson and Tippins,
are full-time employees of Tech-Sym 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. Accordingly, the cash 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
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(2) GSCI TSY(3) ($)(4)
- ------------------------------------- ----- ----------- ------------- --------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Richard F. Miles..................... 1998 218,333 75,000 40,000 -0- 7,200
President and Chief Executive 1997 201,667 35,000 12,500 -0- 7,179
Officer 1996 195,000 140,350(5) 25,000 5,000 6,854
</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 Mr. Miles.
(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.
(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.
(5) Includes $66,000 paid by Tech-Sym.
7
<PAGE>
The following table sets forth information concerning an individual grant
of stock options by the Company made during fiscal 1998 to Mr. Miles. It has not
been the Corporation's policy to grant stock appreciation rights, and no such
rights were granted during fiscal 1998.
STOCK OPTIONS GRANTED DURING FISCAL 1998
<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 F. Miles......... 40,000 16 $13.75 4/26/2008 $365,560
</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 $9.139 for each option share as of the grant date
of 4/27/98. 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 56%, (iii)
dividend yield of zero, (iv) and risk-free rate of return of 5.70%.
8
<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, 1998, the aggregate dollar
value realized upon exercise, the total number of unexercised options and SARs,
if any, held at December 31, 1998, and the aggregate dollar value of
in-the-money, unexercised options and SARs, if any, held at December 31, 1998.
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, 1998, which was $22.25 per
share for Tech-Sym and $10.9375 per share for GeoScience. These values, unlike
the amounts set forth in the column headed "value realized," have not been,
and may never be realized. The underlying options or SARs have not been, and may
not be, exercised; and actual gains, if any, on exercise will depend on the
value of Tech-Sym and GeoScience Common Stock on the date of exercise. There can
be no assurance that these values will be realized. Unexercisable options are
those which have not yet vested under the vesting schedule in Tech-Sym's 1990
Stock Option Plan or GeoScience's 1996 Equity Incentive Plan.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED,
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS
UNEXERCISED OPTIONS AT AT FISCAL
SHARES FISCAL YEAR-END(#)(a) YEAR-END($)(b)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME COMPANY EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------- ------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard F. Miles......... GSCI -0- -0- 15,625 61,875 4,883 14,648
TSY 5,000 73,750 -0- 5,000 -0- 5,000
</TABLE>
- ------------
"GSCI" -- GeoScience Corporation
"TSY" -- Tech-Sym Corporation
(a) Includes 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.
EXECUTIVE RETIREMENT AGREEMENT
Mr. Miles is a party to a retirement agreement entered into with Tech-Sym
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
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 $225,000. 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's obligation under the agreement to
pay the retirement benefits terminates if Mr. Miles voluntarily leaves the
employ of Tech-Sym 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
9
<PAGE>
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 prior to age 62 or is terminated for
cause, but is payable if he dies while still in the employ of Tech-Sym, 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 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 in
the event of its bankruptcy or insolvency.
TERMINATION AGREEMENT
Tech-Sym 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 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 Exchange Act 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, 1998, 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 Mr.
Camp was late in reporting his election as a Director.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
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, the named executive officer is eligible to participate in the
Company's 401(k) Retirement Plan. Certain executive officers, including Mr.
Miles, have entered into Termination Agreements and Executive Retirement
Agreements with Tech-Sym.
10
<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
1998 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 Committee
recommended, and the Board approved, a 1998 bonus pool exceeding such
limitations due to the unusual write down of inventory by a subsidiary. 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.
11
<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
Directors' meeting held in conjunction with the annual stockholders' meeting
usually 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 27, 1998 meeting, the Compensation Committee determined that a
10% salary increase for Mr. Miles, effective May of 1998, was appropriate in
light of the Company's 4% increase in revenue and his assumption of the
additional duties associated with his re-election as President of the Company's
major subsidiary. The Board of Directors approved the recommendation.
At the same meeting, the Compensation Committee awarded Mr. Miles an option
to purchase 40,000 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 Compensation 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 1998 was 30% greater than in 1997 and the
1998 earnings of the Company were more than eight times greater than in 1997,
the Committee recommended, and the Board approved, an incentive bonus of
$75,000, which was more than twice 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
12
<PAGE>
CERTAIN TRANSACTIONS WITH MANAGEMENT
The Company paid approximately $1.8 million, $1.7 million and $2.0 million
to Tech-Sym in 1996, 1997 and 1998, respectively, in connection with management,
financial, and legal services provided by Tech-Sym to the Company. The amount of
the fee payable by the Company was determined by Tech-Sym as the allocable
portion of certain general and administrative expenses incurred by Tech-Sym
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's subsidiaries in the aggregate. In May of 1996, the Company and
Tech-Sym entered into a Corporate Services Agreement that provides for a payment
of a fee by the Company to Tech-Sym for providing management, financial, and
legal services on substantially the same basis as Tech-Sym has been compensated
for such services historically. The Company believes that the fees paid to
Tech-Sym in 1996, 1997 and 1998 for management, financial and legal services
provided by Tech-Sym 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 under the Corporate Services Agreement for the
services to be provided thereunder for 1999 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 1996, 1997 and 1998 the Company paid to Tech-Sym
approximately $1.0 million, $700,000 and $400,000, respectively, in interest on
outstanding indebtedness owed to Tech-Sym.
13
<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, as of February 28, 1999, 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>
J. Michael Camp...................... -0- -0- * -0- -0- *
W. L. Creech......................... 41,000 24,000 * 1,000 10,000 *
Michael C. Forrest................... 2,500 24,000 * 1,500 15,000 *
Wendell W. Gamel..................... 7,000 25,000 * 84,995(a)(b) 36,000 1.92
Richard F. Miles..................... 3,200(a) 28,750 * 826(a) -0- *
Edward R. Prince, Jr. ............... -0- 24,000 * -0- -0- *
Ray F. Thompson...................... 4,000 12,500 * 21,295(a) 25,000 *
J. Rankin Tippins.................... 6,000 12,500 * 11,260(a) 15,000 *
Tech-Sym Corporation................. 7,900,000 -0- 79.12
10500 Westoffice Drive
Houston, Texas 77042
Directors and executive officers as a
group (8 persons).................. 63,700 150,750 2.12 120,876 101,000 3.59%
</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.
(b) Includes 5,000 shares held in trust for Mr. Gamel's adult children in which
he disclaims beneficial ownership.
14
<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 thirty-one 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.
COMPARISON OF 31 MONTH CUMULATIVE TOTAL RETURN*
AMONG GEOSCIENCE CORPORATION, THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S & P OIL & GAS (DRILLING & EQUIPMENT) INDEX
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
5/17/96 12/31/96 12/31/97 12/31/98
-------- -------- -------- --------
Geoscience Corporation........... 100 76 69 64
Nasdaq Stock Market (U.S.)....... 100 108 133 187
S & P Oil & Gas (Drilling &
Equipment)..................... 100 113 173 99
* $100 INVESTED ON 5/17/96 IN STOCK OR ON 4/30/96
IN INDEX - INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
15
<PAGE>
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 2)
By action of the Board of Directors, PricewaterhouseCoopers LLP has been
selected as independent public accountants of the Company for the year ending
December 31, 1999. A representative of such firm is expected to be present at
the annual meeting of stockholders with the opportunity to make a statement if
such person 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 PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE COMPANY FOR 1999.
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 2000 ANNUAL MEETING OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 2000 annual
meeting of stockholders must be received by the Company by November 26, 1999, to
be considered for inclusion in the proxy statement and form of proxy relating to
the 2000 meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ ALICE STACY
ALICE STACY
ASSISTANT SECRETARY
16
<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 May 10, 1999, 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.
<TABLE>
<S> <C> <C>
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
</TABLE>
Class III: Wendell W. Gamel and Ray F. Thompson
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME HERE:
__________________________________________________________________
PROPOSAL 2: Ratification of the appointment of PricewaterhouseCoopers 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: ___________________, 1999
________________________________
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.
