INTERGRAPH CORPORATION
Huntsville, Alabama 35894-0001
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 15, 1997
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 15, 1997, 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 consider and vote upon the Intergraph Corporation 1997
Stock Option Plan (designated as Proposal 3 in the
accompanying Proxy Statement).
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The close of business on March 24, 1997, 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, 1996, is enclosed.
By Order of the Board of Directors
JOHN R. WYNN
Secretary
Huntsville, Alabama
March 31, 1997
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 15, 1997, and at
any and all adjournments thereof (the "Meeting"). The form of
proxy permits specification, approval, disapproval or abstention
as to each of the three proposals. Proposals 1, 2, and 3 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, 2, and 3 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, 1997, 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 24, 1997, 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.
All three proposals 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 Proposals 2 and 3 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, 1997, there were outstanding 47,758,544
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,
1997, 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, 1996
(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 5,802,388 (4) 12.1%
Trimark Financial Corporation 4,479,800 (5) 9.4%
Directors and Nominees
----------------------
James W. Meadlock 1,015,030 (6) 2.1%
Robert E. Thurber 471,291 (7) 1.0%
James F. Taylor Jr. 74,964 (8) *
Larry J. Laster 22,942 (9) *
Roland E. Brown 10,776 (10) *
Keith H. Schonrock Jr. --- ---
Thomas J. Lee --- ---
Named Executive Officers
------------------------
Tommy D. Steele 87,881 (11) *
Manfred Wittler 40,849 (12) *
Allan B. Wilson 7,111 (13) *
Stephen J. Phillips 1,910 (13) *
All directors, nominees,
and executive officers as a
group (20 persons), including
the foregoing directors,
nominees, and named executive
officers 2,587,400 (14) 5.4%
______________________
* 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.
(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 5, 1997.
(6) This figure includes 197,783 shares allocated to Mr. Meadlock
under the Stock Bonus Plan and 200,000 shares owned jointly
by Mr. Meadlock and his wife as to which voting and
investment powers are shared. This figure excludes 415,601
shares owned by Mr. Meadlock's wife and 122,512 shares
allocated to his wife under the Stock Bonus Plan as to which
Mr. Meadlock expressly disclaims beneficial ownership of
these shares.
(7) This figure includes 166,288 shares allocated to Mr. Thurber
under the Stock Bonus Plan and excludes 314,431 shares owned
by Mr. Thurber's wife as to which Mr. Thurber expressly
disclaims beneficial ownership of these shares.
(8) This figure consists of shares allocated to Mr. Taylor under
the Stock Bonus Plan.
(9) 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 3,042 shares allocated to Mr. Laster under the
Stock Bonus Plan.
(10) 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.
(11) This figure includes 82,500 shares over which Mr. Steele holds
immediately exercisable stock options and 25 shares allocated
to Mr. Steele under the Stock Bonus Plan.
(12) This figure includes 20,849 shares over which Mr. Wittler
holds immediately exercisable stock options.
(13) These figures consist of shares allocated to Mr. Wilson and Mr.
Phillips under the Stock Bonus Plan.
(14) This figure includes 710,590 shares allocated to such persons
under the Stock Bonus Plan and 118,349 shares over which such
persons hold immediately exercisable stock options.
PROPOSAL 1
ELECTION OF DIRECTORS
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 1998 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 1998 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 Thomas J. Lee, 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 (63) Chairman of the Board and
Chief Executive Officer 1969
Roland E. Brown (59) Director 1979
Larry J. Laster (45) Executive Vice President,
Chief Financial Officer,
and Director 1987
Thomas J. Lee (61) --- ---
Keith H. Schonrock Jr. (56) Director 1972
James F. Taylor Jr. (52) Executive Vice President
and Director 1973
Robert E. Thurber (56) 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. Lee is a founder of LWI, LLC, an engineering services firm
specializing in guided missile systems, and has served as its
Chief Executive Officer since January 1996. He was employed for
thirty six years by NASA, and served as Special Assistant to the
NASA Administrator for Access to Space from January 1994 through
March 1995, leading NASA's efforts in defining and planning the
technology and development program for the future to help the
U.S. retain its leadership in space exploration. Mr. Lee was the
Director of the George C. Marshall Space Flight Center (MSFC),
one of the largest and most diverse research and development
centers within NASA, from June 1989 through January 1994, and was
Deputy Director of MSFC from October 1980 through June 1989. Mr.
Lee is a registered professional engineer and is a member of
numerous advisory boards and committees within his field. He has
received many awards for exceptional service and leadership
including the NASA Medal for Exceptional Service and NASA
Outstanding Leadership Medal and has received three Presidential
Commendations for his work at NASA.
BOARD COMMITTEES AND ATTENDANCE
The Board of Directors and its Audit Committee meet
periodically as meetings are deemed required. During the year
ended December 31, 1996, the Board of Directors held seven
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.
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 the 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 is charged on the principal
amount of the loan on a monthly basis at the prevailing prime
rate. Principal and interest 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 April 30, 1997.
At January 31, 1997, James W. Meadlock was indebted to the
Company in the amount of $5,561,000 under the program. This
amount represents the maximum amount outstanding since January 1, 1996.
EXECUTIVE COMPENSATION
Information relating to compensation of certain executive
officers of the Company, the policies and practices of the
Company relative to executive compensation, and the performance
of the Company's stock are presented in this section. This
information consists of a summary compensation table, information
on stock option grants, exercises, and year end values,
information on employment contracts, a report on executive
compensation from the Board of Directors, and a graph depicting
the five year performance of the Company's stock against the
performance of a peer group of companies and the Standard &
Poor's 500 Stock Index.
Summary Compensation Table
The following table summarizes for the last three years the
compensation of the Chairman and Chief Executive Officer and the
four most highly compensated executive officers who were serving
as such at December 31, 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
----------------------------------
Other Securities
Name and Annual Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation($) Options(#) Compensation($)
- --------------------------- ---- --------- -------- --------------- ---------- ---------------
(1)
<S> <C> <C> <C> <C> <C> <C>
James W. Meadlock,
Chairman and Chief
Executive Officer (2) 1996 $300,000 --- --- --- $ 6,379
1995 $300,000 --- --- --- $ 6,401
1994 $300,000 --- --- --- $ 6,371
Manfred Wittler,
Executive Vice President(3) 1996 $268,333 $95,483 $ 57,175 --- $13,400
1995 $279,514 $98,351 $ 82,730 --- $18,454
1994 $246,933 $92,431 $ 70,997 --- $12,062
Allan B. Wilson,
Executive Vice President(4) 1996 $255,066 --- $168,302 --- $14,349
(5) 1995 $198,880 $35,000 $103,855 10,000 $11,198
1994 $145,600 --- --- --- $ 5,287
Stephen J. Phillips,
Executive Vice President(6) 1996 $228,280 --- --- --- $ 6,933
1995 $219,080 --- --- 10,000 $ 6,732
1994 $207,480 --- --- --- $ 6,685
Tommy D. Steele,
Executive Vice President(7) 1996 $197,600 --- --- --- $ 5,364
1995 $196,700 --- --- --- $ 5,057
1994 $182,000 --- $ 29,309 --- $ 4,005
</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:
1996 1995 1994
------ ------ ------
Retirement plans contribution $ 61 $ 83 $ 53
Term life insurance* 6,318 6,318 6,318
------ ------ ------
Total $6,379 $6,401 $6,371
====== ====== ======
(3)"Other Annual Compensation" for Mr. Wittler consists of the following:
1996 1995 1994
------- ------- -------
Housing allowance $36,425 $38,510 $32,787
Use of corporate vehicle 13,649 --- ---
Lease of vehicle --- 36,770 31,653
Other 7,101 7,450 6,557
------- ------- -------
Total $57,175 $82,730 $70,997
======= ======= =======
"All Other Compensation" for Mr. Wittler consists of the following:
1996 1995 1994
------- ------- -------
Retirement plans contribution $10,733 $15,970 $ 9,877
Health insurance premiums 2,667 2,484 2,185
------- ------- -------
Total $13,400 $18,454 $12,062
======= ======= =======
Mr. Wittler is paid primarily in European currencies which
fluctuate in value against the U.S. dollar.
(4)"Other Annual Compensation" for Mr. Wilson consists of the following:
1996 1995
-------- --------
Housing allowance $142,026 $ 82,634
Reimbursement of taxes 11,953 ---
Relocation expenses --- 20,641
Other 14,323 580
-------- --------
Total $168,302 $103,855
======== ========
"All Other Compensation" for Mr. Wilson consists of the
following:
1996 1995 1994
------- ------- -------
Retirement plans contribution $10,487 $ 7,142 $4,449
Health insurance premiums 3,549 3,217 ---
Term life insurance* 313 839 838
------- ------- -------
Total $14,349 $11,198 $5,287
======= ======= =======
(5)Mr. Wilson was paid a $35,000 bonus in 1996 related to his 1995
performance. This amount was not included in his 1995 compensation
as reported in the Company's Proxy Statement for the Annual Meeting
of Shareholders held on May 16, 1996, as the amount was not determinable
as of the latest practicable date for inclusion in the 1996 Proxy
Statement. Further, the amount of Mr. Wilson's bonus related to his 1996
performance could not be determined as of the latest practicable date
for inclusion in this Proxy Statement.
(6)"All Other Compensation" for Mr. Phillips consists of the following:
1996 1995 1994
------ ------ ------
Retirement plans contribution $4,589 $4,630 $4,583
Term life insurance* 2,344 2,102 2,102
------ ------ ------
Total $6,933 $6,732 $6,685
====== ====== ======
(7)"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:
1996 1995 1994
------ ------ ------
Retirement plans contribution $2,259 $2,231 $2,196
Term life insurance* 3,105 2,826 1,809
------ ------ ------
Total $5,364 $5,057 $4,005
====== ====== ======
*Premium payments for term life insurance were not made to
split-dollar insurance arrangements.
Stock Option Grants, Exercises and Year End Values
The Company from time to time awards stock options to executive
officers and other key employees pursuant to a stock option plan
approved by the shareholders of the Company. Members of the
Plan's administrative committee, which includes James W.
Meadlock, Chairman and Chief Executive Officer, are not eligible
to receive options under the plan currently in effect. There
were no options granted to or exercised by any of the Named
Executive Officers who are eligible to receive options under the
plan during the year ended December 31, 1996.
The following table sets forth values as of December 31, 1996,
for stock options held by the Named Executive Officers who are
eligible to receive options under the plan.
YEAR END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Year End (#) at Year End($)
-------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ ------------ ------------- ------------ -------------
Tommy D. Steele,
Executive Vice President 82,500 27,500 $195,938 $ 65,313
Manfred Wittler,
Executive Vice President 12,339 17,020 --- ---
Stephen J. Phillips,
Executive Vice President --- 10,000 --- ---
Allan B. Wilson,
Executive Vice President --- 10,000 --- ---
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 National Market for December 31,
1996 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 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 Europe,
Canada, and Latin America. 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 and its
affiliates for a period of six months following termination,
provided the Company has met its severance pay obligation as
described above.
Mr. Wilson holds separate employment agreements with the U.S.
parent company and one of the Company's international business
entities. The contracts provide Mr. Wilson a fixed base salary
and certain expense allowances for 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. During the year ended December
31, 1996, 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 and comprised of all current
members of the Board of Directors, may award both incentive stock
options and non-qualified stock options to executive officers and
other key employees. During the year ended December 31, 1996,
the Administrative Committee awarded options for a total of
290,018 shares of the Company's Common Stock. Of this total,
options for 109,018 shares were awarded to executive officers.
During the year ended December 31, 1996, 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.
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 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. Under most circumstances, 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. 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 under the option plan currently in effect
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 and James W. Meadlock
Administrative Committee, Roland E. Brown
Stock Option Plan: Larry J. Laster
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, 1996.
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 1995 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., and is unchanged from the previous year. Dataquest ranks
the Company number five among the U.S. CAD companies and number
seven among U.S. workstation manufacturers based on 1995
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,
1991 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)
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Peer Group $100 $ 75 $ 86 $110 $161 $216
S&P 500 $100 $108 $118 $120 $165 $203
INGR $100 $ 75 $ 60 $ 46 $ 89 $ 58
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, 1997. 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
appropriate 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.
PROPOSAL 3
APPROVAL OF THE INTERGRAPH CORPORATION
1997 STOCK OPTION PLAN
At the Meeting, the shareholders will be asked to approve and
adopt the Intergraph Corporation 1997 Stock Option Plan, (the
"Plan"). The Plan was unanimously approved by the Board of
Directors of the Company ("Board"), subject to its approval by
the shareholders.
The following description of the principal provisions of the
Plan is intended solely as a summary, and is subject to, and
qualified by, the full text of the Plan set forth in Exhibit "A"
attached to this Proxy Statement.
The Board believes that the Plan will encourage key employees
to increase their productivity, will motivate them to excel on
behalf of the Company, and will help the Company attract highly
qualified employees. The Plan will serve not only to attract and
retain outstanding employees, but also will enable these
employees to acquire or increase their proprietary interest in
the Company.
The stock subject to options will be shares of the Company's
authorized but unissued or reacquired ten cent ($.10) par value
common stock ("Common Stock"). Under the Plan, the Committee (as
defined below) may, in its discretion, grant options for up to
3,000,000 shares of the Company's Common Stock, approximately
6.3% of the Common Stock outstanding at January 31, 1997 (subject
to adjustment in the event of stock dividends, stock splits, and
stock consolidations of the Common Stock, or any other increase
or decrease in the number of shares effected without receipt of
consideration by the Company). The closing sale price of the
Common Stock on January 31, 1997, was $8.
Options may be granted pursuant to the Plan from June 1, 1997,
through May 31, 2002, to key employees (including officers,
employee directors, and Committee members) of the Company and its
subsidiaries (approximately 450 persons as of January 31, 1997).
The options that may be granted under the Plan or that would have
been granted under the Plan during the year ended December 31,
1996, if the Plan had been in effect, are not determinable. The
Plan will be administered by a committee (the "Committee")
composed of either the entire Board of Directors or composed
solely of two or more "non-employee directors," as defined in
Rule 16b-3 promulgated by the Securities and Exchange Commission.
As of the date of this Proxy Statement, the entire Board of
Directors constitutes the Committee. The Committee will have the
discretion to designate option recipients and the number of
options to be granted to each. The Plan permits the Committee to
grant both incentive stock options ("Incentive Options"), as
defined by Section 422 of the Internal Revenue Code of 1986, as
amended ("Code"), and options which do not qualify as Incentive
Options ("Non-Statutory Options"). The Committee may not amend
or adjust an Incentive Option in any manner that causes the
Incentive Option to fail to continue to qualify as an Incentive
Option.
A recipient of an Incentive Option will be required to pay for
shares received pursuant to the exercise of an Incentive Option,
not less than 100% of the Fair Market Value (as defined below) of
such shares on the date the Incentive Option is granted. A
recipient of a Non-Statutory Option will be required to pay for
shares received pursuant to the exercise of a Non-Statutory
Option not less than the par value of the shares (not less than
$.10 per share). Subject to the restrictions imposed by the
Plan, the price of shares obtainable pursuant to the exercise of
both Incentive Options and Non-Statutory Options will be
established by the Committee in its sole discretion. No
Incentive Option may be granted to an employee who, immediately
after such Incentive Option is granted, owns or has rights to
stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company, unless such Incentive
Option is granted at a price which is at least 110% of the Fair
Market Value (as defined below) of the stock subject to the
Incentive Option, and such Incentive Option by its terms is not
exercisable after the expiration of five (5) years from the date
such Incentive Option is granted.
The Fair Market Value of shares will be the closing sale price
of the Common Stock as reported on the Nasdaq National Market, or
the mean between the highest and lowest per share sales price
should the stock be listed on an exchange, on a given day, or if
such stock is not traded on that day, then on the next preceding
day on which such stock was traded (the "Fair Market Value").
The aggregate Fair Market Value (determined at the time the
option is granted) of the Common Stock with respect to which
Incentive Options are exercisable for the first time by an option
recipient during any calendar year (under all such plans of the
Company and its subsidiaries) will not exceed $100,000. If any
single employee should be granted an Incentive Option which,
together with other applicable prior Incentive Option grants,
exceeds such maximum, the Incentive Option will be null and void
to the extent of such excess.
The option recipient may pay the option price in cash or by
means of unrestricted shares of the Company's Common Stock or any
combination thereof. If payment is made in the Company's Common
Stock, the shares so used will be taken at the Fair Market Value
thereof. The option recipient must pay for shares received
pursuant to an option exercise on or before the date the option
recipient takes delivery of the shares. Subject to the
requirements of rules promulgated by the Securities and Exchange
Commission and Regulation T promulgated by the Federal Reserve
Board, the Committee, in its sole discretion, may establish
procedures whereby an employee may exercise an option or a
portion thereof without making a direct payment of the option
price to the Company. If the Committee so elects to establish a
cashless exercise program, the Committee shall determine, in its
sole discretion, and from time to time, such administrative
procedures and policies as it deems appropriate and such
procedures and policies shall be binding on any option recipient
utilizing the cashless exercise program. The proceeds from all
payments pursuant to the exercise of options will be used for
general corporate purposes. The Company and its subsidiaries
will receive no cash or other payment upon the granting of
options pursuant to the Plan.
No option will be exercisable, either in whole or in part,
prior to twenty-four (24) months from the date it is granted, and
in no event will an option be exercisable after the expiration of
ten (10) years from the date it is granted. Up to one-fourth of
the total shares granted under the option may be purchased in
each of the following installment periods, each beginning from
the date the option is granted: (1) after twenty-four months;
(2) after thirty-six months; (3) after forty-eight months; and
(4) after sixty months. Option recipients may accumulate
installments not yet exercised, which may be exercised, in whole
or in part, in any subsequent period but not later than ten (10)
years from the date the option is granted. The Committee, in its
discretion, may provide for the exercise of options after the
initial twenty-four month period, either as an increased
percentage of shares per year or as to all remaining shares, if
the option recipient dies, is or becomes disabled or retires. An
option will be exercisable only by the option recipient and will
not be assignable or transferable by the option recipient other
than by will or the laws of descent and distribution.
If, for any reason other than death, an option recipient ceases
to be employed by the Company, all outstanding options held by
him under the Plan will terminate and become void and of no
effect three (3) months from the date the option recipient's
employment with the Company terminates, provided that no option
shall be exercisable after ten (10) years from the date it is
granted. If the option recipient dies while employed by the
Company, the option recipient's successors in interest, within
three (3) months of death, may exercise the unexercised portion
of any of the option recipient's exercisable, but unexercised
options; however, in no event shall an option be exercisable
after ten years from the date it is granted. Such successors in
interest, where the option is transferred to the option
recipient's estate or another such person, may not transfer such
option except to the distributees of the option recipient.
Subject to the terms and limitations of the Plan, the Committee
may modify, extend, or renew outstanding options granted under
the Plan, or accept the surrender of outstanding options and
authorize the granting of new options in substitution for such
outstanding options. The Committee may not, however, modify any
outstanding Incentive Options so as to specify a lower price, or
accept the surrender of any outstanding Incentive Options and
authorize the granting of new options in substitution therefore
specifying a lower price. The Board may, to the extent permitted
by law, from time to time, with respect to any shares at the time
not subject to options, suspend, discontinue, revise, or amend
the Plan in any respect, but may not, without shareholder
approval, change the number of shares issuable under the Plan,
change the designation of the class of employees eligible to
receive options, decrease the price at which Incentive Options
may be granted, or remove the administration of the Plan from the
Committee.
In the event of an actual or anticipated change in ownership of
the Company, the Committee may take any of the following actions
that the Committee may deem appropriate in its sole and absolute
discretion: (i) cancel any option by providing for the payment
to the option recipient of the excess of the Fair Market Value of
the shares subject to the option over the exercise price of the
option, (ii) substitute a new option of substantially equivalent
value for any option, (iii) accelerate the exercise terms of any
option, or (iv) make such other adjustments in the terms and
conditions of any option as it deems appropriate.
To be entitled to the tax advantages associated with Incentive
Options, an option recipient must (i) not dispose of the stock
within two years after the option is granted and hold the stock
itself for at least one year after such shares have been
transferred to him following the consummation of his purchase,
and (ii) remain in the continuous employ of the Company, its
subsidiaries, or both at all times from the date of the grant to
the date three months prior to the date the Incentive Option is
exercised. Under such circumstances, for federal income tax
purposes, no income to the employee, and no deduction to the
Company, will result from either the issuance or exercise of the
Incentive Option, except that the difference between the exercise
price and the Fair Market Value of the stock on the date of
exercise constitutes a tax preference to the employee for
purposes of the alternative minimum tax. When the stock is sold
or exchanged, the amount by which the value of the stock at the
time of its disposition exceeds the option price will, if such
treatment is available under the Code, be treated as long-term
capital gain. If, however, the stock is disposed of prior to the
expiration of the required holding periods, the employee must
treat the gain realized on the disposition as ordinary income, to
the extent of the lesser of (a) the Fair Market Value of the
option stock on the date of exercise minus the option price, or
(b) the amount realized on disposition of the stock minus the
option price. Amounts treated as ordinary income by the employee
are deductible by the Company. Under current law, net long-term
capital gain on sales or exchanges will be taxed to the employee
in the same manner as ordinary income, subject to a maximum 28%
tax rate.
Although the Plan includes a provision permitting option
recipients to exercise Incentive Options by surrendering shares
of Common Stock of the Company having a Fair Market Value at
least equal to the exercise price of such Incentive Options, this
may constitute a disqualifying disposition of the stock
surrendered. Under Section 424(c) (3) of the Code, the transfer
of "statutory option stock" to exercise an Incentive Option will
result in a disqualifying disposition of that transferred stock
if the transferred stock has not met the requisite holding period
requirements (one (1) year after exercise and two (2) years after
grant for incentive stock options). "Statutory option stock" is
defined to include stock acquired not only upon the exercise of
incentive stock options, but also stock acquired pursuant to
qualified stock options, employee stock purchase plans, and
restricted stock options.
The taxation of Non-Statutory Options is primarily governed by
Section 83 of the Code and the Treasury Regulations issued
thereunder. No income to the employee and no deduction to the
Company will result from the granting of a Non-Statutory Option.
Upon exercise of the Non-Statutory Option, the difference between
the Fair Market Value of the Stock and the exercise price is
taxable as ordinary income. If the stock is subsequently sold,
the basis for calculating gain or loss will be the price paid for
the stock upon exercise plus the amount, if any, of taxable
income realized upon exercise of the option. If the stock is
sold after having been held for more than one (1) year after the
exercise of the option, the amount realized will be subject to
long-term capital gain or loss treatment. The Company is
entitled to a tax deduction equal to the amount of ordinary
income realized upon exercise of the Non-Statutory Option.
The Board of Directors recommends a vote FOR Proposal 3.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Shareholder proposals intended for presentation at the 1998
Annual Meeting must be received by the Company for inclusion in
its 1998 proxy material no later than December 1, 1997.
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 31,1997
Exhibit "A"
INTERGRAPH CORPORATION
1997 STOCK OPTION PLAN
1. PURPOSE
This 1997 Stock Option Plan of Intergraph Corporation (the
"Plan") is intended as an incentive for key employees which will
foster increased productivity, encourage them to remain in the
employ of Intergraph Corporation (the "Corporation"), and enable
them to acquire or increase their proprietary interest in the
Corporation. At the discretion of the Committee, as defined
below, options issued pursuant to this Plan may be either
incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended ("Incentive Options"),
or options which are not Incentive Options ("Non-Statutory
Options").
2. ADMINISTRATION
The Plan shall be administered by a committee (the
"Committee") composed of the entire Board of Directors or a
committee of the Board of Directors that is composed solely of
two or more Non-Employee Directors. For this purpose, the term
"Non-Employee Director" shall mean a person who is a member of
the Company's Board of Directors who (a) is not currently an
officer or employee of the Company or any parent or subsidiary of
the Company, (b) does not directly or indirectly receive
compensation for serving as a consultant or in any other non-
director capacity from the Company or any parent or subsidiary of
the Company that exceeds the dollar amount for which disclosure
would be required pursuant to Item 404(a) of Regulation S-K
promulgated under the Securities Act of 1933 and the Securities
Exchange Act of 1934 ("Regulation S-K"), (c) does not possess any
interest in any other transaction with the Company or any parent
or subsidiary of the Company for which disclosure would be
required pursuant to Item 404(a) of Regulation S-K, and (d) is
not engaged in a business relationship with the Company or any
parent or subsidiary of the Company which would be disclosable
under Item 404(b) of Regulation S-K. In the event the Committee
is a committee composed of two or more Non-Employee Directors,
the Board of Directors may from time to time remove members from,
add members to, and fill vacancies on, the Committee. A member
of the Committee shall be eligible to participate in the Plan and
receive options under the Plan.
The Committee shall select one of its members as Chairman, and
shall hold meetings at such times and places as it may determine.
Action taken by a majority of the Committee at which a quorum is
present, or action reduced to writing or approved in writing by a
majority of the members of the Committee, shall be valid acts of
the Committee.
The Committee may from time to time and at its discretion,
grant options to eligible employees. Subject to the terms of
this Plan, the Committee shall exercise its sole discretion in
determining which eligible employees shall receive options, and
the number of shares subject to each option granted.
The Committee's interpretation and construction of any
provision of the Plan, or any option granted under it, shall be
final. No member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or
any option granted under the Plan.
3. ELIGIBILITY
Persons eligible to receive options shall be such key
employees (including officers) of the Corporation and its
subsidiaries as the Committee shall from time to time select.
The determination of whether a company is a subsidiary of the
Corporation shall be made in accordance with Section 425(f) of
the Internal Revenue Code, as amended. An option recipient may,
subject to the terms and restrictions set forth in the Plan, hold
more than one option. No person shall be eligible to receive an
option for a larger number of shares than is granted to him by
the Committee. In selecting the individuals to whom options
shall be granted, as well as determining the number of shares
subject to each option, the Committee shall weigh the position
and responsibility of the individual being considered, the nature
of his or her services, his or her present and potential
contributions to the Corporation, and such other factors as the
Committee deems relevant to accomplish the purposes of the Plan.
4. STOCK
The stock subject to options issued under the Plan shall be
shares of the Corporation's authorized but unissued, or
reacquired, ten cent ($.10) par value common stock (hereafter
sometimes called "Capital Stock" or "Common Stock"). The
aggregate number of shares which may be issued pursuant to option
exercises under the Plan shall not exceed 3,000,000 shares of
Capital Stock. The limitations established by each of the
preceding sentences shall be subject to adjustment as provided in
Article 5(g) of the Plan.
In the event that any outstanding option under the Plan for
any reason expires or is terminated, the shares of Capital Stock
allocable to the unexercised portion of such option may again be
subjected to an option under the Plan.
5. TERMS AND CONDITIONS OF THE PLAN
No obligation to retain an option recipient as an employee of
the Corporation or its subsidiaries, or to provide or continue
providing the option recipient with, or to permit the option
recipient to retain, any incident associated with or arising, out
of employment with the Corporation or its subsidiaries, including
but not limited to tenure, salary, benefits, title or position,
shall be imposed on the Corporation or its subsidiaries by virtue
of the adoption of the Plan, the grant or acceptance of an option
granted pursuant to the Plan, or the exercise of an option under
the Plan. Stock options granted under the Plan shall be
authorized by the Committee and shall be evidenced by agreements
in such form as the Committee shall from time to time approve.
Such agreements shall conform with, and be subject to, the
following terms and conditions:
(a) Number of Shares and Form of Option
Each option agreement shall state the number of shares to
which it pertains and whether the option granted is an Incentive
Option or a Non-Statutory Option.
(b) Option Price
Each option agreement shall state the option exercise
price. The per share exercise price for shares obtainable
pursuant to an Incentive Option shall not be less than 100% of
the Fair Market Value, as defined below, of the shares of Capital
Stock of the Corporation on the date the option is granted. The
per share exercise price for shares obtainable pursuant to a Non-
Statutory Option shall not be less than the par value of the
shares. For all purposes under the Plan, Fair Market Value shall
be deemed to be the closing sale price of the Common Stock as
reported on the Nasdaq National Market (or the mean between the
highest and lowest per share sales price should the Common Stock
be listed on an exchange) on a given day, or if such stock is not
traded on that day, then on the next preceding day on which such
stock was traded (the "Fair Market Value"). Subject to the
foregoing, the Committee shall have full authority and
discretion, and shall be fully protected, with respect to the
price fixed for shares obtainable pursuant to the exercise of
options. The aggregate Fair Market Value (determined at the time
the Incentive Option is granted) of the Common Stock with respect
to which Incentive Options are exercisable for the first time by
the option recipient during any calendar year (under all such
plans of the Corporation and its subsidiary corporations) shall
not exceed $100,000. If an option recipient is granted an
Incentive Option which exceeds this limitation, the Incentive
Option shall be null and void to the extent such limitation is
exceeded. Notwithstanding the foregoing, no Incentive Option
shall be granted to an employee who, immediately after such
option is granted, owns or has rights to stock possessing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Corporation, unless such option is
granted at a price which is at least 10% greater than the Fair
Market Value of the stock subject to the Incentive Option and
such option by its terms is not exercisable after the expiration
of five (5) years from the date such option is granted.
(c) Medium and Time of Payment
The option recipient may pay the option exercise price in
cash, by means of unrestricted shares of the Corporation's Common
Stock, or in any combination thereof. The option recipient must
pay for shares received pursuant to an option exercise on or
before the date of delivery of the shares to the option
recipient. Subject to the requirements of rules promulgated by
the Securities and Exchange Commission and Regulation T
promulgated by the Federal Reserve Board, the Committee, in its
sole discretion, may establish procedures whereby an option
recipient may exercise an option or a portion thereof without
making a direct payment of the option price to the Corporation.
If the Committee so elects to establish a cashless exercise
program, the Committee shall determine, in its sole discretion,
and from time to time, such administrative procedures and
policies as it deems appropriate and such procedures and policies
shall be binding on any option recipient utilizing the cashless
exercise program. Payment in currency or by check, bank draft,
cashier's check, or postal money order shall be considered
payment in cash. In the event of payment in the Corporation's
Common Stock, the shares used in payment of the purchase price
shall be taken at the Fair Market Value of such shares on the
date they are tendered to the Corporation.
(d) Term and Exercise of Options
No option shall be exercisable either in whole or in part
prior to twenty-four (24) months from the date it is granted.
Subject to the right of accretion provided in the next to last
sentence of this Article 5(d), each option shall be exercisable
in four (4) installments, as follows: (1) up to one-fourth of
the total shares covered by the option may be purchased after
twenty-four (24) months from the date the option is granted; (2)
up to one-fourth of the total shares covered by the option may be
purchased after thirty-six (36) months from the date the option
is granted; (3) up to one-fourth of the total shares covered by
the option may be purchased after forty-eight (48) months from
the date the option is granted; and (4) up to one-fourth of the
total shares covered by the option may be purchased after sixty
(60) months from the date the option is granted. The Committee
may provide, however, for the exercise of an option after the
initial twenty-four month period, either as an increased
percentage of shares per year or as to all remaining shares, if
the option recipient dies, is or becomes disabled, or, with the
permission of the Committee, retires. During the option
recipient's lifetime, the option shall be exercisable only by the
option recipient, or the option recipient's guardian or legal
representative if one has been appointed, and shall not be
assignable or transferable other than by will or the laws of
descent and distribution. To the extent not exercised, option
installments shall accumulate and be exercisable, in whole or in
part, in any subsequent period but not later than ten (10) years
from the date the option is granted. No option is exercisable
after the expiration of ten (10) years from the date it is
granted.
(e) Termination of Employment Except Death
If an option recipient's employment with the Corporation
or its subsidiaries ceases for any reason other than the option
recipient's death, all options held by him pursuant to the Plan
and not previously exercised as of the date of such termination
shall terminate and become void and of no effect three (3) months
from the date the option recipient's employment is terminated,
provided that no option shall be exercisable after the expiration
of ten (10) years from the date it is granted. Authorized leaves
of absence or absence for military service shall not constitute
termination of employment for the purposes of the Plan.
(f) Death of Option Recipient and Transfer of Option
If an option recipient dies while employed by the
Corporation or its subsidiaries and has not fully exercised all
of his exercisable options, such options may be exercised, at any
time within three (3) months after death, by the option
recipient's executors or administrators, or by any person or
persons who shall have acquired the option directly from the
option recipient by bequest or inheritance. In no event,
however, shall the option be exercisable more than ten (10) years
after the date such option is granted. An option transferred to
an option recipient's estate or to a person to whom such right
devolves by reason of the option recipient's death shall be
nontransferable by the option recipient's executor or
administrator or by such person, except that the option may be
distributed by the option recipient's executors or administrators
to the distributees of the option recipient's estate entitled
thereto.
(g) Recapitalization
Subject to any required action by the shareholders, the
aggregate number of shares which may be issued pursuant to option
exercises, the number of shares of Capital Stock covered by each
outstanding option, and the price per share applicable to shares
under such option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Capital
Stock of the Corporation resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but
only on the Capital Stock), or any other increase or decrease in
the number of such shares effected without receipt of
consideration by the Corporation.
If the Corporation is merged with or consolidated into any
other corporation, or if all or substantially all of the business
or property of the Corporation is sold, or if the Corporation is
liquidated or dissolved, or if a tender or exchange offer is made
for all or any part of the Corporation's voting securities, or if
any other actual or threatened change in control of the
Corporation occurs, the Committee, with or without the consent of
the option recipient, may (but shall not be obligated to), either
at the time of or in anticipation of any such transaction, take
any of the following actions that the Committee may deem
appropriate in its sole and absolute discretion: (i) cancel any
option by providing for the payment to the option recipient of
the excess of the Fair Market Value of the shares subject to the
option over the exercise price of the option, (ii) substitute a
new option of substantially equivalent value for any option,
(iii) accelerate the exercise terms of any option, or (iv) make
such other adjustments in the terms and conditions of any option
as it deems appropriate.
In the event of a change in Capital Stock of the
Corporation as presently constituted, which is limited to a
change of all of its authorized shares with par value into the
same number of shares with a different par value or without par
value, the shares resulting from any change shall be deemed to be
the Capital Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to
stock or securities of the Corporation, such adjustments shall be
made by the Committee, whose determination in that respect shall
be final.
Except as otherwise expressly provided in this Article
5(g), the option recipient shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class, or
the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, or by
reason of any dissolution, liquidation, merger or consolidation
or spin-off of assets or stock of another corporation. Any issue
by the Corporation of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Capital Stock subject to the
option.
The grant of an option pursuant to the Plan shall not
affect in any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations, or changes of
its capital or business structure, or to merge, consolidate,
dissolve, liquidate, sell, or transfer all or any part of its
business or assets.
(h) Rights as a Stockholder
An option recipient or a transferee of an option shall
have no rights as a stockholder with respect to any shares
subject to his option until a stock certificate is issued to him
for such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities, or other
property), distributions, or other rights for which the record
date is prior to the date such stock certificate is issued,
except as provided in Article 5(g) of the Plan.
(i) Modification, Extension, and Renewal of Options
Subject to the terms of the Plan, the Committee may
modify, extend, or renew outstanding options granted under the
Plan, or accept the surrender of outstanding options (to the
extent not theretofore exercised) and authorize the granting of
new options in substitution therefor (to the extent not
theretofore exercised). The Committee shall not, however, modify
any outstanding Incentive Options so as to specify a lower price,
or accept the surrender of outstanding Incentive Options and
authorize the granting of new options in substitution therefor
specifying a lower price. Notwithstanding the foregoing,
however, no modification of an option shall, without the consent
of the option recipient, alter or impair any rights or
obligations under any option theretofore granted under the Plan.
(j) Withholding
Whenever the Corporation proposes or is required to issue
or transfer shares of Capital Stock under the Plan, the
Corporation shall have the right to require the option recipient,
prior to the issuance or delivery of any certificates for such
shares, to remit to the Corporation, or provide indemnification
satisfactory to the Corporation for, an amount sufficient to
satisfy any federal, state, local, and foreign withholding tax
requirements incurred as a result of an option exercise under the
Plan by such option recipient.
(k) Other Provisions
The option agreements authorized under the Plan shall
contain such other provisions, including, without limitation,
restrictions upon the exercise of the option, as the Committee
shall deem advisable. Limitations and restrictions shall be
placed upon the exercise of Incentive Options, in the Incentive
Option agreement, so that such option will be an "incentive stock
option" as defined in Section 422 of the Internal Revenue Code of
1986.
6. TERM OF PLAN
Incentive Options and Non-Statutory Options may be granted
pursuant to the Plan from time to time within a period of five
(5) years commencing on June 1, 1997, and continuing through May
31, 2002.
7. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they
may have as directors or as members of the Committee, the members
of the Committee shall be indemnified by the Corporation against
the reasonable expenses, including, attorney's fees, actually and
necessarily incurred in connection with the defense of any
action, suit, or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of
any action taken or failure to act under or in connection with
the Plan or any option granted hereunder, and against all amounts
paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any
such action, suit, or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit, or
proceeding, that such Committee member is liable for willful
misconduct in the performance of his duties; provided, that
within sixty (60) days after institution of any such action,
suit, or proceeding a Committee member shall in writing offer the
Corporation the opportunity, at its own expense, to handle and
defend the same.
8. AMENDMENT OF THE PLAN
The Board of Directors, insofar as permitted by law, shall
have the right from time to time with respect to any shares at
the time not subject to options, to suspend or discontinue the
Plan or revise or amend it in any respect whatsoever, except that
without approval of the shareholders of the Company, no such
revision or amendment shall: (a) change the number of shares for
which options may be granted under the Plan either in the
aggregate or to any individual employee, (b) change the
provisions relating to the determination of employees to whom
options shall be granted, (c) remove the administration of the
Plan from the Committee, or (d) decrease the price at which
Incentive Options may be granted.
9. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of
Capital Stock pursuant to the exercise of options will be used
for general corporate purposes.
10. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the
option recipient to exercise such option.
11. APPROVAL OF STOCKHOLDERS
This Plan shall take effect on June 1, 1997, subject to
approval by the affirmative vote of the holders of the majority
of the outstanding shares of Capital Stock of the Corporation
present, or represented, and entitled to vote at a meeting of the
shareholders, which approval must occur within the period
beginning twelve (12) months before and ending twelve (12) months
after the date the Plan is adopted by the Board of Directors.
INTERGRAPH CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE INTERGRAPH CORPORATION
BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 15,1997
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 15, 1997, 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 PROPOSALS 2 AND 3.
The Board of Directors recommends a vote FOR election of all
nominees listed below and FOR Proposals 2 and 3.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
1.Election of Directors
[ ]FOR all nominees listed [ ]WITHHOLD AUTHORITY [ ]FOR ALL nominees listed
to vote for all (Except as marked to
nominees listed the contrary)
Nominees: James W. Meadlock; Roland E. Brown; Larry J. Laster;
Thomas J. Lee; Keith H. Schonrock Jr.; 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
3. Proposal to approve the Intergraph Corporation 1997 Stock Option Plan.
[ ]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:________,1997
Signature:_____________________Date:________,1997
* COM = Common Stock Shares; ESP = Employees Stock Purchase Plan Shares;
ESB = Employee Stock Bonus Plan Shares.
