INTERGRAPH CORPORATION
Huntsville, Alabama 35894-0001
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 16, 1996
TO THE SHAREHOLDERS OF INTERGRAPH CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of Intergraph Corporation (the "Company") will be held at the
Intergraph Auditorium, Building 15, Intergraph Way, Huntsville,
Alabama, on May 16, 1996, at 5:00 p.m. local time for the
following purposes:
1. To elect seven directors to the Board of Directors to serve
for the ensuing year and until their successors are duly
elected and qualified (designated as Proposal 1 in the
accompanying Proxy Statement).
2. To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the current year
(designated as Proposal 2 in the accompanying Proxy
Statement).
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The close of business on March 22, 1996, has been fixed as the
record date for the determination of shareholders entitled to
notice of and to vote at the meeting.
A copy of the Annual Report to Shareholders for the year ended
December 31, 1995, is enclosed.
By Order of the Board of Directors
JOHN R. WYNN
Secretary
Huntsville, Alabama
March 31, 1996
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING. NO
POSTAGE IS NEEDED IF MAILED IN THE UNITED STATES.
INTERGRAPH CORPORATION
HUNTSVILLE, ALABAMA 35894-0001
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors (the "Board") of
Intergraph Corporation (the "Company"), to be voted at the Annual
Meeting of Shareholders to be held May 16, 1996, and at any and
all adjournments thereof (the "Meeting"). The form of proxy
permits specification, approval, disapproval or abstention as to
each of the two proposals. Proposals 1 and 2 will be presented at
the Meeting by management. If the enclosed form of proxy is
properly executed, returned, and not revoked, it will be voted in
accordance with the specifications, if any, made by the
shareholder and, if specifications are not made, will be voted in
favor of Proposals 1 and 2 set forth in the accompanying Notice of
Annual Meeting of Shareholders.
The cost of solicitation of proxies will be borne by the
Company. Proxies may be solicited by directors, officers, or
regular employees of the Company in person or by telephone or
mail. The Company may reimburse brokerage firms and others for
their expenses in forwarding solicitation material regarding the
Meeting to beneficial owners. On or about March 31, 1996, the
Company will commence mailing this Proxy Statement, the enclosed
form of proxy, and the attached Notice to holders of its common
stock.
Shareholders who sign proxies have the right to revoke them at
any time before they are voted by filing with the Secretary of the
Company either an instrument revoking the proxy, or a duly
executed proxy bearing a later date, or by attending the Meeting
and voting in person.
The close of business on March 22, 1996, has been fixed as the
record date for the determination of shareholders entitled to
notice of and to vote at the Meeting.
GENERAL
A majority of the shareholders entitled to vote must be present
in person, or be represented by proxy, to constitute a quorum and
act upon the proposed business. Failure of a quorum to be
represented at the Meeting will necessitate an adjournment and
will subject the Company to additional expense.
Both Proposal 1 and Proposal 2 discussed in this Proxy Statement
require the affirmative vote of the holders of a majority of the
outstanding shares present and entitled to vote at the Meeting.
The Board of Directors recommends that you vote FOR each nominee
for director and FOR Proposal 2 discussed in this Proxy Statement.
Votes are counted by the Company's transfer agent. The
Company's certificate of incorporation and bylaws contain no
provisions concerning the treatment of abstentions and broker non-
votes. In accordance with Delaware law, abstentions will be
treated as votes which are not cast in favor of election of a
nominee or in favor of a proposal. Delaware law does not address
the treatment of broker non-votes. Broker non-votes will be
included in the determination of the presence of a quorum, but
will not be counted for purposes of determining whether a nominee
is elected or a proposal has been approved.
COMMON STOCK OUTSTANDING AND PRINCIPAL SHAREHOLDERS
As of January 31, 1996, there were outstanding 46,889,138 shares
of the Company's common stock, $.10 par value (the "Common
Stock"). Holders of Common Stock are entitled to one vote per
share on all matters to be voted upon by shareholders.
The following table sets forth information as of January 31,
1996, as to:
(a) the only persons who were known by the Company to own beneficially
more than 5% of the outstanding Common Stock of the Company,
(b) the shares of Common Stock beneficially owned by the directors and
nominees of the Company,
(c) the shares of Common Stock beneficially owned by James W. Meadlock,
Chairman of the Board and Chief Executive Officer, who is also a
nominee, and by the four most highly compensated executive officers of
the Company who were serving as such at December 31, 1995
(collectively, Mr. Meadlock and the four most highly
compensated executive officers are the "Named Executive
Officers"), and
(d) the shares of Common Stock beneficially owned by all directors,
nominees, and executive officers of the Company as a group.
Percentage of Total
Number of Shares Common Stock
Name(1) Beneficially Owned(2) Outstanding(3)
- ------------------------------- --------------------- -------------------
Intergraph Corporation
Stock Bonus Plan Trust 6,152,895 (4) 13.1%
Trimark Financial Corporation 3,408,300 (5) 7.3%
FMR Corporation 2,487,389 (6) 5.3%
Directors and Nominees
- -------------------------------
James W. Meadlock 1,135,024 (7) 2.4%
Nancy B. Meadlock 1,888,108 (8) 4.0%
Robert E. Thurber 788,438 (9) 1.7%
James F. Taylor, Jr. 74,954 (10) *
Larry J. Laster 22,932 (11) *
Roland E. Brown 10,776 (12) *
Keith H. Schonrock, Jr. --- ---
Richard K. Snelling --- ---
Named Executive Officers
- -------------------------------
Tommy D. Steele 60,373 (13) *
Manfred Wittler 12,339 (14) *
Allan B. Wilson 7,104 (15) *
Stephen J. Phillips 1,901 (15) *
All directors, nominees,
and executive officers as a
group (19 persons), including
the foregoing directors,
nominees, and named executive
officers 4,144,845 (16) 8.7%
- ----------------
* Less than 1%
(1) The address of the Stock Bonus Plan Trust is c/o Boston Safe
Deposit and Trust Company, One Boston Place, Boston,
Massachusetts 02108. The address of Trimark Financial
Corporation is One First Canadian Place, Suite 5600, Toronto,
Ontario, Canada. The address of FMR Corporation is 82
Devonshire Street, Boston, Massachusetts 02109.
(2) Unless otherwise noted, the indicated owner has sole voting
power and sole investment power.
(3) Shares issuable under immediately exercisable stock options
are considered outstanding for the purpose of calculating the
percentage of total outstanding Common Stock owned by
directors, executive officers, and by directors, nominees,
and executive officers as a group. Such shares are not
considered outstanding for the purpose of calculating the
percentage of total outstanding Common Stock owned by any
other person or group.
(4) Voting rights of the Common Stock held by the Stock Bonus Plan
Trust are passed through to participants in the Stock Bonus
Plan, which is a Company sponsored retirement plan covering
substantially all U.S. employees of the Company. Vested
participants in the Stock Bonus Plan have the right to
diversify one-half of the Common Stock allocated to their
accounts. Vested participants at age 55 have the right to
diversify all of the Common Stock allocated to their accounts.
(5) As set forth on a Schedule 13G dated February 12, 1996.
(6) As set forth on a Schedule 13G dated February 14, 1996. This
schedule discloses that FMR Corporation has sole voting power
over 667,938 shares and sole investment power over 2,487,389
shares.
(7) This figure includes 197,777 shares allocated to Mr. Meadlock
under the Stock Bonus Plan and 150,000 shares owned jointly by
Mr. Meadlock and Nancy B. Meadlock as to which voting and
investment powers are shared. Mr. Meadlock may be deemed a
"parent" of the Company as defined under the Securities Act of
1933 by virtue of his share ownership and position in the
Company.
(8) This figure includes 1,200,000 shares held in trust for a
child, 122,507 shares allocated to Mrs. Meadlock under the
Stock Bonus Plan, and 150,000 shares owned jointly by Mrs.
Meadlock and James W. Meadlock as to which voting and
investment powers are shared. By her own request, Mrs.
Meadlock will not stand for reelection to another term as
director.
(9) This figure includes 166,279 shares allocated to Mr. Thurber
under the Stock Bonus Plan and 316,836 shares owned by Mr.
Thurber's wife as to which Mr. Thurber does not have sole
voting and investment power.
(10) This figure consists of shares allocated to Mr. Taylor
under the Stock Bonus Plan.
(11) This figure consists of 19,900 shares owned jointly by
Mr. Laster and his wife as to which voting and investment
powers are shared and 3,032 shares allocated to Mr. Laster
under the Stock Bonus Plan.
(12) This figure consists of 8,856 shares allocated to Mr.
Brown under the Stock Bonus Plan and 1,920 shares as to which
voting and investment powers are shared.
(13) This figure includes 55,000 shares over which Mr. Steele
holds immediately exercisable stock options and 17 shares
allocated to Mr. Steele under the Stock Bonus Plan.
(14) This figure consists of shares over which Mr. Wittler
holds immediately exercisable stock options.
(15) These figures consist of shares allocated to Mr. Wilson
and Mr. Phillips under the Stock Bonus Plan.
(16) This figure includes 706,575 shares allocated to such
persons under the Stock Bonus Plan and 76,339 shares over
which such persons hold immediately exercisable stock options.
PROPOSAL 1
ELECTION OF DIRECTORS
At the 1995 Annual Meeting of Shareholders, seven directors were
elected and currently serve in that capacity, including Nancy B.
Meadlock, Executive Vice President of the Company and Director
since 1969 (excluding the period from February 1970 to February
1972). Mrs. Meadlock, by her own request, will not stand for
reelection to another term as director but will continue to serve
as an executive vice president of the Company.
The Board of Directors has fixed the number of members of the
Board at nine by resolution pursuant to authority granted in the
bylaws of the Company. The Board of Directors proposes that the
seven nominees listed below be elected as directors to serve until
the 1997 Annual Meeting of Shareholders and until their successors
are duly elected and qualified. Although the Company has
established the number of directors at nine, proxies may not be
voted for more than seven persons. It is the desire of the Board
of Directors that the Board have the option of selecting two
additional directors to serve on the Board prior to the election
of directors at the 1997 Annual Meeting of Shareholders.
It is the intention of the persons named in the proxy to vote
the proxies for the election of the nominees listed below, all of
whom, with the exception of Richard K. Snelling, are presently
directors of the Company. If any nominee should become
unavailable to serve as a director for any reason (which is not
anticipated), the persons named as proxies reserve full discretion
to vote for such other person or persons as may be nominated.
The nominees for director, together with certain information
regarding them, are as follows:
Director of
Name and Age Positions/Offices with Company Company Since
- ------------------------- -------------------------------- -------------
James W. Meadlock (62) Chairman of the Board and
Chief Executive Officer 1969
Roland E. Brown (58) Director 1979
Larry J. Laster (44) Executive Vice President,
Chief Financial Officer,and Director 1987
Keith H. Schonrock, Jr. (55) Director 1972
Richard K. Snelling (64) --- ---
James F. Taylor, Jr. (51) Executive Vice President and Director 1973
Robert E. Thurber (55) Executive Vice President and Director 1972
Mr. Meadlock, Mr. Laster, and Mr. Thurber are principally
employed by the Company in the positions set forth above and have
been principally employed by the Company for the past five years.
Mr. Taylor joined the Company in 1969, retired as an Executive
Vice President of the Company in 1992, and returned to full-time
employment with the Company in January 1995.
Mr. Brown joined the Company in 1979 as Vice President,
Treasurer, and Chief Financial Officer and was an Executive Vice
President of the Company at the time of his retirement in 1986.
Mr. Schonrock is a founder of the Company and served in a
variety of engineering positions. At his retirement in 1987, he
was an Executive Vice President of the Company.
Mr. Snelling was elected Chairman of the Board and Chief
Executive Officer of Videoconferencing Systems, Inc., a worldwide
provider of videoconferencing systems to business, in June 1994,
and currently serves in that capacity. He was the founder of the
Georgia Center of Advanced Telecommunications Technology and
served as Chief Executive Officer and Chairman of the Board until
February 1994. Mr. Snelling was employed for thirty five years by
Southern Bell and BellSouth Telecommunications, serving as
Executive Vice President from November 1983 through December 1991.
He is a registered professional engineer and member of the Georgia
and National Society of Professional Engineers, a Fellow in the
Institute of Electrical and Electronics Engineers, a former member
of the Georgia Tech Engineering Advisory Board, and a current
member of the President's Council of the University of Florida.
Mr. Snelling currently serves as a member of the board of
directors of Boston Technology, International Wireless, and
Digital Wireless companies.
BOARD COMMITTEES AND ATTENDANCE
The Board of Directors and its Audit Committee meet periodically
as deemed required by the Board and the Audit Committee. During
the year ended December 31, 1995, the Board of Directors held
eight meetings and the Audit Committee held four meetings. All of
the directors were present for 75% or more of the aggregate Board
and Audit Committee meetings.
The Audit Committee consists of Mr. Brown, Mr. Schonrock, and
Mr. Taylor. The purpose of the Audit Committee is to oversee the
system of internal accounting control and the internal audit
function, and to ensure the objectivity of the independent audit.
The Company does not have a nominating committee or compensation
committee.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers, directors, and persons owning more than
ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes in ownership
with the Securities and Exchange Commission (SEC) and The National
Association of Securities Dealers, Inc. Officers, directors, and
greater than ten percent shareholders are required by SEC
regulations to furnish the Company with copies of all Section
16(a) forms filed.
Based solely on review of the copies of such forms and any
amendments thereto furnished to the Company, or written
representations that no forms were required, the Company believes
that during the year ended December 31, 1995, all Section 16(a)
filing requirements applicable to its officers, directors, and
greater than ten percent beneficial owners were met, except that
Neil E. Keith and Lawrence F. Ayers, Jr., Executive Vice
Presidents of the Company, and Keith H. Schonrock, Jr., a Director
of the Company, each filed one late report covering one
transaction, and Robert E. Thurber, an Executive Vice President
and Director of the Company, filed one late report covering two
transactions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In order to encourage retention of Common Stock by executive
officers, the Company adopted a loan program effective January
1993, under which executive officers may borrow from the Company,
on an unsecured basis, an amount not exceeding (1) the current
market value of Common Stock owned by any such executive officer,
and/or (2) the net value (current market price less exercise
price) of currently exercisable stock options owned by any such
executive officer. Interest on the loans is charged monthly at
the prevailing prime rate. Amounts must be repaid by the earliest
to occur of termination of employment, the attainment of a
designated market price for the Company's stock or the sale of a
certain number of shares by loan recipients, or May 1, 1996.
At January 31, 1996, James W. Meadlock was indebted to the
Company in the amount of $5,197,000 under the program. This
amount represents the maximum amount outstanding since January 1,
1995.
EXECUTIVE COMPENSATION
Information relating to compensation of certain executive
officers of the Company, the policies and practices of the Company
relative to executive compensation, and the performance of the
Company's stock are presented in this section. This information
consists of a summary compensation table, information on stock
option grants, exercises, and year end values, information on
employment contracts, a report on executive compensation from the
Board of Directors, and a graph depicting the five year
performance of the Company's stock against the performance of a
peer group of companies and the Standard & Poor's 500 stock index.
Summary Compensation Table
The following table summarizes for the last three years the
compensation of the Chairman and Chief Executive Officer and the
four most highly compensated executive officers who were serving
as such at December 31, 1995.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation
----------------------------------------
Other Securities
Name and Annual Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation($) Options(#) Compensation($)
- ------------------------ ---- --------- -------- --------------- ---------- ---------------
(1)
<S> <C> <C> <C> <C> <C> <C>
James W. Meadlock,
Chairman and Chief
Executive Officer(2) 1995 $300,000 --- --- --- $ 6,401
1994 $300,000 --- --- --- $ 6,371
1993 $300,000 --- --- --- $ 6,390
Manfred Wittler,
Executive Vice President(3) 1995 $279,514 $98,351 $ 82,730 --- $18,454
1994 $246,933 $92,431 $ 70,997 --- $12,062
1993 $243,939 $72,671 $ 68,486 29,359 $11,920
Stephen J. Phillips,
Executive Vice President(4) 1995 $219,080 --- --- 10,000 $ 6,732
1994 $207,480 --- --- --- $ 6,685
1993 $200,640 --- $ 20,749 --- $ 6,474
Allan B. Wilson,
Executive Vice President(5) 1995 $198,880 --- $103,855 10,000 $11,198
1994 $145,600 --- --- --- $ 5,287
1993 $145,600 --- --- --- $ 5,271
Tommy D. Steele,
Executive Vice President(6) 1995 $196,700 --- --- --- $ 5,057
1994 $182,000 --- $ 29,309 --- $ 4,005
1993 $182,000 --- --- --- $ 3,926
</TABLE>
(1) "Other Annual Compensation" for each of the named executives
does not include the value of certain personal benefits, if
any, furnished by the Company or for which it reimburses the
named executives, including the use of corporate vehicles,
unless the value of such benefits in total exceeds the lesser
of $50,000 or 10% of the total annual salary and bonus reported
in the above table for the named executive.
(2) "All Other Compensation" for Mr. Meadlock consists of the
following:
1995 1994 1993
------ ------ ------
Retirement plans contribution $ 83 $ 53 $ 72
Term life insurance * 6,318 6,318 6,318
------ ------ ------
Total $6,401 $6,371 $6,390
====== ====== ======
(3) "Other Annual Compensation" for Mr. Wittler consists of
the following:
1995 1994 1993
------- ------- -------
Housing allowance $38,510 $32,787 $32,432
Lease of vehicle 36,770 31,653 28,765
Other 7,450 6,557 7,289
------- ------- -------
Total $82,730 $70,997 $68,486
======= ======= =======
"All Other Compensation" for Mr. Wittler consists of the
following:
1995 1994 1993
------- ------- -------
Retirement plans contribution $15,970 $ 9,877 $ 9,758
Health insurance premiums 2,484 2,185 2,162
------- ------- -------
Total $18,454 $12,062 $11,920
======= ======= =======
Mr. Wittler is paid primarily in European currencies which
fluctuate in value against the U.S. dollar.
(4) "Other Annual Compensation" for Mr. Phillips for 1993 includes
$16,744 for use of a corporate apartment. "All Other
Compensation" for Mr. Phillips consists of the following:
1995 1994 1993
------ ------ ------
Retirement plans contribution $4,630 $4,583 $4,585
Term life insurance * 2,102 2,102 1,889
------ ------ ------
Total $6,732 $6,685 $6,474
====== ====== ======
(5) "Other Annual Compensation" for Mr. Wilson for 1995 includes
$82,634 for housing allowance and $20,641 for reimbursement of
relocation expenses.
"All Other Compensation" for Mr. Wilson consists of the
following:
1995 1994 1993
------- ------- -------
Retirement plans contribution $ 7,142 $ 4,449 $ 4,432
Health insurance premiums 3,217 --- ---
Term life insurance * 839 838 839
------- ------- -------
Total $11,198 $ 5,287 $ 5,271
======= ======= =======
(6) "Other Annual Compensation" for Mr. Steele for 1994 includes
$26,074 for reimbursement of relocation expenses and related
income tax payments. "All Other Compensation" for Mr. Steele
consists of the following:
1995 1994 1993
------ ------ ------
Retirement plans contribution $2,231 $2,196 $2,117
Term life insurance * 2,826 1,809 1,809
------ ------ ------
Total $5,057 $4,005 $3,926
====== ====== ======
*Premium payments for term life insurance were not made to
split-dollar insurance arrangements.
Stock Option Grants, Exercises and Year End Values
The Company from time to time awards stock options to executive
officers and other key employees pursuant to a stock option plan
approved by the shareholders of the Company. Members of the
Plan's administrative committee, which includes James W. Meadlock,
Chairman and Chief Executive Officer, are not eligible to receive
options under the plan.
The following table sets forth information concerning options
granted during the year ended December 31, 1995 to the Named
Executive Officers who are eligible to receive options under the
plan.
<TABLE>
OPTION GRANTS
<CAPTION>
Individual Grants (1)
- -----------------------------------------------------------------------------------
Number of Percent of
Securities Total Options
Underlying Granted to Grant Date
Options Employees Exercise Expiration Present
Name Granted(#) This Year Price ($/Share) Date Value ($)
- ------------------------ ---------- ------------- --------------- ---------- ----------
(2)
<S> <C> <C> <C> <C> <C>
Stephen J. Phillips,
Executive Vice President 10,000 .7% $11.125 8/10/2005 $45,257
Allan B. Wilson,
Executive Vice President 10,000 .7% $11.125 8/10/2005 $45,257
</TABLE>
(1) Options were granted at fair market value on the date of grant
under the Company's incentive stock option plan. Fair market
value is determined as the closing sale price of the Company's
stock as reported on The NASDAQ Stock Market. Options become
exercisable two years from the date of grant at a rate of 25%
per year, with full vesting at the fifth anniversary of the
grant date. Options were granted for a term of ten years from
the date of grant.
(2) The present value of options at the date of grant was
determined using the Black-Scholes option pricing model.
Estimated values determined using this model are based on the
market value of the stock on the date of grant, the exercise
price of the option, and on assumptions as to risk free rate
of return, volatility of the Company's stock price, and
expected term of the option. Dividend yield is excluded from
the calculation since it is the present policy of the Company
to retain all earnings to finance operations. Risk free rate
of return is based on quoted yields at grant date for U.S.
Treasury zero-coupon bonds with a term equal to the expected
option term. Stock price volatility is based on weekly
changes in the Company's stock price for the three year period
preceding the month the option was granted. The expected term
of the option is based on the weighted average of vested
option amounts at each vesting date plus the expected days to
exercise. The expected days to exercise is the number of days
from vesting date to exercise date determined by using actual
exercise data for the Company's options for the three year
period preceding the month the option was granted.
The actual value, if any, an executive may realize from
exercise of stock options will be determined based on the
excess of stock price over exercise price on the date the
option is exercised. There is no assurance that the value
realized by an executive will be at or near the value
estimated by the Black-Scholes model, or that any value will
be realized.
The following table sets forth the value realized on options
exercised by the Named Executive Officers during the year ended
December 31, 1995, and values as of December 31, 1995, for stock
options held by the Named Executive Officers who are eligible to
receive options under the plan.
<TABLE>
OPTION EXERCISES AND YEAR END OPTION VALUES
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired Options at Year End (#) at Year End ($)
On Value -------------------------- --------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Manfred Wittler,
Executive Vice President 20,000 $85,000 12,339 17,020 $ 49,356 $ 68,080
Stephen J. Phillips,
Executive Vice President 10,000 $30,315 --- 10,000 --- $ 46,250
Allan B. Wilson,
Executive Vice President --- --- --- 10,000 --- $ 46,250
Tommy D. Steele,
Executive Vice President --- --- 55,000 55,000 $433,125 $433,125
</TABLE>
The value of unexercised in-the-money options is determined as the
excess of the closing sale price of the Company's Common Stock as
reported on The NASDAQ Stock Market for December 29, 1995 over the
exercise price of the options held by the Named Executive Officer.
Compensation of Directors
Directors of the Company are not compensated for their services
as directors.
Employment Contracts
Mr. Wittler holds employment contracts with the U.S. parent
company and with three of the Company's international business
entities. The contracts provide Mr. Wittler a fixed base salary,
certain expense allowances for housing, a leased vehicle, and
other personal expense items, and annual incentive bonus payments
for achievement and overachievement of certain sales order,
revenue, and profitability goals of the Company's operations in
the Americas and Europe. The contracts are open-ended but may be
terminated by either party with six months written notification.
The contracts provide for six months severance pay in the event of
involuntary termination of employment, and for relocation of Mr.
Wittler at the Company's expense in the event of voluntary
termination of employment. Should the contracts be terminated by
either of the parties, Mr. Wittler is obligated to refrain from
direct competition with the Company or its affiliates for a period
of six months following termination, provided the Company has met
its severance pay obligation as described above.
Mr. Wilson entered into separate employment agreements with the
U.S. parent company and one of the Company's international
business entities as of May 3, 1995. The contracts provide Mr.
Wilson a fixed base salary, certain expense allowances for
relocation and housing, and other personal expense items. The
contracts are open-ended but may be terminated by either party
with two months written notification. The contracts provide for
relocation of Mr. Wilson at the Company's expense in the event of
termination of employment.
Compensation Committee Interlocks and Insider Participation
The Company does not have a compensation committee or other
committee of the Board of Directors performing equivalent
functions. Mr. Meadlock's compensation is determined by the
Board, excluding Mr. Meadlock and Nancy B. Meadlock. During the
year ended December 31, 1995, the Board held no deliberations
regarding the compensation of Mr. Meadlock. The Board has
delegated responsibility for determination of the compensation of
all other executive officers to Mr. Meadlock. The Administrative
Committee of the Company's stock option plan (the "Administrative
Committee"), which is appointed by the Board of Directors and
currently consists of Messrs. Meadlock, Schonrock, Taylor, and
Thurber, and Mrs. Meadlock, may award both incentive stock options
and non-qualified stock options to executive officers and other
key employees. During the year ended December 31, 1995, the
Administrative Committee awarded options for a total of 1,392,718
shares of the Company's Common Stock. Of this total, options for
45,000 shares were awarded to executive officers, including 10,000
to Stephen J. Phillips and 10,000 to Allan B. Wilson, two of the
Named Executive Officers.
During the year ended December 31, 1995, no executive officer of
the Company served as a director or as a member of the
compensation committee or committee performing equivalent
functions of another business entity, and no executive officer of
another business entity served as a member of the Board of
Directors of the Company.
Board of Directors' Report on Executive Compensation
Executive Officer Compensation. The Chairman and Chief
Executive Officer (CEO) subjectively determines the compensation
of all other executive officers of the Company based on the
authority and discretion granted him by the Board of Directors.
There are no standard performance factors, either corporate or
directly applicable to the executive whose salary is being
considered, that serve as specific measures of performance in the
CEO's determination of executive salaries. In arriving at his
decision, the CEO may form a subjective judgment as to the
executive's overall contribution to the Company, consider his or
her level of experience, and subjectively consider the Company's
overall financial performance. Relative weights are not formally
assigned to these factors, but some factors, particularly the
Company's financial performance as measured by revenue and
earnings, may be subjectively considered more important than
others in arriving at compensation for individual executive
officers. Specific quantifiable performance objectives are not
used in determining the individual's contribution to the Company,
with the exception of sales personnel, who are assigned sales
dollar goals. Evaluation of executives whose principal duties are
technical in nature is based principally on the CEO's subjective
judgment of the technical design and timeliness of development of
new products. Salaries for executives performing administrative
functions are based primarily on a subjective determination of
contribution to the Company by the CEO. The Company does not
perform formal salary surveys. The CEO has a general awareness of
industry compensation practices by virtue of his experience and
position in the industry, but specific industry or competitor
compensation data (including that of the peer group of companies
in the performance graph following this report) is not utilized.
There is no formal bonus plan for executive officers, but
exceptional individual performance, as subjectively determined by
the CEO, has occasionally been rewarded by a cash bonus at the
discretion of the CEO. Overall corporate performance neither
guarantees nor precludes the award of bonuses, but may influence
the amount of such bonuses. Sales executives are paid a base
salary that approximates 70% of the executives' total potential
annual compensation. The base salary amount may be supplemented
in amounts up to an additional 30% of total potential compensation
if certain order, revenue, and profitability objectives are met.
The occurrence and amount of bonus awards are not based on
standard criteria or quantifiable performance factors applicable
either to the individual or the financial performance of the
Company.
The granting of stock options to purchase shares of the
Company's stock over a ten-year period at a specified price is the
primary means of providing long-term incentive to executive
officers to perform in a manner that benefits themselves, the
Company, and the Company's shareholders. There are no standard
performance factors, applicable to either the individual and his
or her job performance or the financial performance of the
Company, utilized in the option award decisions of the
Administrative Committee. Decisions to award stock options are
based upon subjective evaluations of job performance and expected
contribution to the Company. Stock options may also be used to
attract new employees. Previous option awards are considered when
awarding new options. With respect to incentive stock options,
such options may not exceed the amounts permitted under applicable
Internal Revenue Code provisions.
The Company at times enters into short-term employment
agreements with key executives that specify the terms of
employment including compensation arrangements. The agreements
generally provide for employment at will but may also provide for
severance payments under certain circumstances excluding
termination for cause. Such severance amounts do not exceed the
balance of compensation due for the remaining unfulfilled term of
the agreement. Executives without employment agreements
terminated through a workforce reduction or job elimination
receive severance pay based on years of service up to a maximum of
twenty-six weeks pay under a Company policy applicable to all
employees.
CEO Compensation. The compensation of the Chairman and CEO is
determined by the other members of the Board of Directors, with
the exception of Nancy B. Meadlock. Since 1989 the Board has not
deliberated the compensation of the CEO, and the CEO has not been
awarded a salary increase or bonus. There are no standard
corporate or individual performance factors utilized by the Board
in evaluation of CEO compensation. The Board believes that,
because of Mr. Meadlock's large beneficial holding of Company
stock, the interests of Mr. Meadlock are aligned with those of the
Company's other shareholders, making salary less a factor than
return on common stock in evaluation of CEO compensation. Mr.
Meadlock is not eligible to receive grants of stock options
because of his participation on the Administrative Committee of
the option plan.
The above report on executive compensation is given by the
Company's Board of Directors and the Administrative Committee of
its stock option plan.
Board of Directors: James W. Meadlock
Roland E. Brown
Larry J. Laster
Nancy B. Meadlock
Keith H. Schonrock, Jr.
James F. Taylor, Jr.
Robert E. Thurber
Administrative Committee,
stock option plan: James W. Meadlock
Nancy B. Meadlock
Keith H. Schonrock, Jr.
James F. Taylor, Jr.
Robert E. Thurber
Performance Graph
The following graph sets forth a comparison of the cumulative
total shareholder return to the Company's shareholders with that
of a group of peer companies and that of the Standard & Poor's 500
Stock Index for the five year period ended December 31, 1995. The
Company considers its peer group to be the top five U.S. companies
in terms of sales to the computer-aided design (CAD) industry and
the top five U.S. computer workstation manufacturing companies for
which financial information is publicly available, as determined
on the basis of 1994 revenues by Dataquest, Incorporated, a
leading market research firm in the computer industry. The
composition of the peer group may change annually due to changes
in revenues of companies in the industry. In addition, the number
of companies comprising the peer group may total less than ten,
since it is possible that some competitors appear in the top five
rankings for both sales to the CAD industry and workstation
revenues. The Company's current year peer group consists of IBM,
Hewlett-Packard Corp., Digital Equipment Corp., Sun Microsystems,
Inc., and Silicon Graphics, Inc. Autodesk, Inc., which was
included in the top five U.S. CAD companies based on 1993 revenues
and thus was included in the Company's prior year peer group, was
replaced in the current year peer group by Silicon Graphics, Inc.
based on 1994 revenues. Dataquest ranks the Company number five
among the U.S. CAD companies and number seven among U.S.
workstation manufacturers based on 1994 revenues.
Total shareholder return for the peer group, the Standard &
Poor's 500, and the Company was determined by adding a) the
cumulative amount of dividends for a given year, assuming dividend
reinvestment, and b) the difference between the share price at the
beginning and at the end of the year, the sum of which was then
divided by the share price at the beginning of such year. The
graph assumes $100 was invested on December 31, 1990 in the peer
group, in the Standard & Poor's 500 companies, and in the Company.
Comparative Five-Year Total Returns
Peer Group, Standard & Poor's 500 Stock Index,
and Intergraph Corporation (INGR)
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
Peer Group $100 $ 95 $ 72 $ 82 $104 $153
S&P 500 $100 $130 $140 $155 $157 $215
INGR $100 $129 $ 96 $ 77 $ 59 $115
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Ernst &
Young LLP as the Company's independent auditors to audit the
financial statements of the Company and to perform other
accounting services as appropriate for the year ending December
31, 1996. Such appointment will be presented to the shareholders
for ratification at the Meeting. If the shareholders do not
ratify the appointment, the selection of another firm will be
considered by the Board. A representative of Ernst & Young LLP is
expected to be present at the Meeting to respond to questions from
shareholders and will be given the opportunity to make a statement
if so desired.
The Board of Directors recommends a vote FOR Proposal 2.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Shareholder proposals intended for presentation at the 1997
Annual Meeting must be received by the Company for inclusion in
its 1997 proxy material no later than December 2, 1996.
OTHER
Management does not know of any other matters to be presented at
the Meeting for action by shareholders. However, if any other
matters are properly brought before the Meeting or any adjournment
thereof, votes will be cast pursuant to the proxies in accordance
with the best judgment of the proxy holders with respect to such
matters.
UPON WRITTEN REQUEST OF ANY SHAREHOLDER TO JOHN R. WYNN,
SECRETARY, INTERGRAPH CORPORATION, HUNTSVILLE, ALABAMA 35894-0001,
THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.
By Order of the Board of Directors
JOHN R. WYNN
Secretary
DATED: March 31,1996
INTERGRAPH CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE INTERGRAPH
CORPORATION
BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS,
MAY 16, 1996
The undersigned hereby appoints James W. Meadlock and
John R. Wynn, or either of them, as Proxies, each with the
power to appoint his substitute, and hereby authorizes them
to represent and to vote, as designated below, all the
shares of Common Stock of Intergraph Corporation which the
undersigned would be entitled to vote if personally present
at the Annual Meeting of Shareholders to be held on May 16,
1996, or any adjournment(s) thereof. In their discretion,
the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any
adjournment(s) thereof.
This proxy when properly executed will be voted in the
manner directed herein by the undersigned shareholder. IF
NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
ELECTION OF ALL NOMINEES LISTED BELOW AND FOR PROPOSAL 2.
The Board of Directors recommends a vote FOR election of
all nominees listed below and FOR Proposal 2.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
1. Election of Directors
[ ]FOR all nominees [ ]WITHHOLD AUTHORITY [ ]FOR ALL nominees listed below
listed below to vote for all (Except as marked to the
nominees listed below contrary below)
Nominees: James W. Meadlock; Roland E. Brown;
Larry J. Laster; Keith H. Schonrock, Jr.; Richard
K. Snelling; James F. Taylor, Jr.; Robert E.
Thurber.
INSTRUCTION: To withhold authority to vote for any
individual nominee strike a line through the nominee's
name in the list above.
2. Proposal to ratify the appointment of Ernst & Young LLP
as the Company's auditors for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
COM*
ESP*
ESB*
Please sign exactly as your
name appears at left. If
registered in the names of
two or more persons, each
should sign. Executors,
administrators, trustees,
guardians, attorneys, and
corporate officers should
show their titles.
Signature:____________ Date:________ , 1996
Signature:____________ Date:_________, 1996
* COM = Common Stock Shares; ESP = Employees Stock Purchase
Plan Shares; ESB = Employees Stock Bonus Plan Shares.
