INTERGRAPH CORPORATION
Huntsville, Alabama 35894-0001
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 28, 1998
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 28, 1998, 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
Nonemployee Director 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 April 6, 1998, 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, 1997 is enclosed.
By Order of the Board of Directors
JOHN R. WYNN
Secretary
Huntsville, Alabama
April 10, 1998
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 28, 1998, 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 April 10, 1998, 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 April 6, 1998 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, 1998, there were outstanding 48,220,459
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,
1998, 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, 1997
(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 5,549,661 (4) 11.5%
Trimark Financial Corporation 4,479,800 (5) 9.3%
Directors and Nominees
----------------------
James W. Meadlock 1,015,034 (6) 2.1%
Robert E. Thurber 457,347 (7) *
James F. Taylor Jr. 74,964 (8) *
Larry J. Laster 22,947 (9) *
Sidney L. McDonald 10,000 *
Thomas J. Lee 1,000 *
Keith H. Schonrock Jr. --- ---
Named Executive Officers
------------------------
Manfred Wittler 59,359 (10) *
Wade Patterson 20,554 (11) *
Allan B. Wilson 9,614 (12) *
Stephen J. Phillips 4,416 (13) *
All directors, nominees,
and executive officers as a
group (21 persons), including
the foregoing directors,
nominees, and named executive
officers 2,542,802 (14) 5.3%
- - -------------------
* 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/A dated February 17, 1998.
(6) This figure includes 197,787 shares allocated to Mr. Meadlock
under the Stock Bonus Plan and 200,000 shares owned jointly
by Mr. Meadlock and Nancy B. Meadlock, an Executive Vice
President of the Company, as to which voting and investment
powers are shared. This figure excludes 415,601 shares owned
by Mrs. Meadlock and 122,513 shares allocated to Mrs.
Meadlock under the Stock Bonus Plan as to which Mr. Meadlock
expressly disclaims beneficial ownership.
(7) This figure includes 166,294 shares allocated to Mr. Thurber
under the Stock Bonus Plan and excludes 286,561 shares owned
by Mr. Thurber's wife and 6,000 shares held in trust for his
grandchildren as to which Mr. Thurber expressly disclaims
beneficial ownership.
(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 3,047 shares allocated to Mr. Laster under the
Stock Bonus Plan.
(10) This figure includes 8,510 shares over which Mr. Wittler
holds immediately exercisable stock options.
(11) This figure includes 17,500 shares over which Mr.
Patterson holds immediately exercisable stock options and
1,068 shares allocated to Mr. Patterson under the Stock Bonus
Plan.
(12) This figure includes 2,500 shares over which Mr. Wilson
holds immediately exercisable stock options and 7,114 shares
allocated to Mr. Wilson under the Stock Bonus Plan.
(13) This figure includes 2,500 shares over which Mr.
Phillips holds immediately exercisable stock options and
1,916 shares allocated to Mr. Phillips under the Stock Bonus
Plan.
(14) This figure includes 700,220 shares allocated to such
persons under the Stock Bonus Plan and 54,760 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 1999 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 1999 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 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 (64) Chairman of the Board and Chief
Executive Officer 1969
Larry J. Laster (46) Director 1987
Thomas J. Lee (62) Director 1997
Sidney L. McDonald (59) Director 1998
Keith H. Schonrock Jr. (57) Director 1972
James F. Taylor Jr. (53) Executive Vice President and
Director and Chief Executive
Officer, Intergraph Public
Safety, Inc. 1973
Robert E. Thurber (57) Executive Vice President and
Director 1972
Mr. Meadlock 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. Laster joined the Company in 1981 and served as Executive
Vice President and Chief Financial Officer from February 1987
through February 1998. Mr. Laster resigned from the Company in
February 1998 and is currently serving as Chief Operating Officer
of Computerizing, Inc., a privately owned company specializing in
the development, sale and support of business systems for the
petroleum distribution and convenience store industries.
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.
Mr. McDonald serves as President of Brindlee Mountain Telephone
Company, a company providing local telephone services in North
Alabama, and has served in that capacity since 1961. He is also
the owner and Chief Executive Officer (CEO) of Cherokee Ridge
Corporation, a residential golf community in North Alabama. Mr.
McDonald is a founder of Deltacom Long Distance Services, Inc.
and served as its CEO from 1984 through 1996. He also served as
the CEO of Marshall Cellular, a cellular telephone service
company in North Alabama, from 1988 through 1996 and of Southern
Interexchange Services, an Alabama fiber optic telecommunications
network, from 1990 through 1996. Mr. McDonald currently serves
as a member of the Board of Trustees of the University of Alabama
and has served in the Alabama Legislature and as Finance Director
for the State of Alabama.
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.
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, 1997, the Board of Directors held thirteen
meetings and the Audit Committee held three 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. Lee, Mr. McDonald, and Mr.
Schonrock. 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 who own 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 NASDAQ
Stock Market, Inc. Officers, directors, and greater than ten
percent shareholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file.
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, 1997, all Section 16(a)
filing requirements applicable to its officers, directors, and
greater than ten percent beneficial owners were met, except that
Penman R. Gilliam, an Executive Vice President of the Company,
filed one late report covering one transaction.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In order to encourage retention of Company 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 of the Company 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 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, the sale of a certain number of shares of the Company's
stock by loan recipients, or expiration of the loan program,
which occurs on April 30, 1998.
James W. Meadlock, Chief Executive Officer and Chairman of the
Board of the Company, was indebted to the Company in the maximum
amount of $6,129,000 during 1997 under this program. Mr.
Meadlock repaid his loan in full on November 21, 1997.
EXECUTIVE COMPENSATION
Information relating to compensation of certain executive
officers of the Company, the policies and practices of the
Company relative to executive compensation, and the performance
of the Company's stock are presented in this section. This
information consists of a summary compensation table, information
on stock option grants, exercises, and year end values,
information on employment contracts, a report on executive
compensation from the Board of Directors, and a graph depicting
the five year performance of the Company's stock against the
performance of a peer group of companies and the Standard &
Poor's 500 Stock Index.
Summary Compensation Table
The following table summarizes for the last three years the
compensation of the Chairman and Chief Executive Officer and the
four most highly compensated executive officers who were serving
as such at December 31, 1997.
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation
------------------------------------
<CAPTION>
Other Securities
Name and Annual Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation ($) Options (#) Compensation ($)
- - ------------------ ---- -------- ------- --------------- ------------- ----------------
(1)
<S> <C> <C> <C> <C> <C> <C>
James W. Meadlock,
Chairman and Chief
Executive Officer(2) 1997 $300,000 --- --- --- $6,357
1996 $300,000 --- --- --- $6,379
1995 $300,000 --- --- --- $6,401
Manfred Wittler,
Executive Vice
President (3) 1997 $243,843 $ 82,659 $ 50,645 --- $12,512
1996 $268,333 $ 95,483 $ 57,175 --- $13,400
1995 $279,514 $ 98,351 $ 82,730 --- $18,454
Stephen J. Phillips,
Executive Vice
President (4) 1997 $228,280 --- --- --- $ 8,221
1996 $228,280 --- --- --- $ 6,933
1995 $219,080 --- --- 10,000 $ 6,732
Wade Patterson,
Executive Vice
President, (5) 1997 $226,928 $250,000 --- --- $ 4,591
and Chief Executive 1996 $156,000 --- --- 84,018 $ 3,937
Officer and President,
Intergraph Computer
Systems
Allan B. Wilson,
Executive Vice
President (6) 1997 $197,675 --- $125,173 --- $ 6,640
(7) 1996 $255,066 $30,000 $168,302 --- $14,349
1995 $198,880 $35,000 $103,855 10,000 $11,198
</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:
1997 1996 1995
------ ------ ------
Retirement plans contribution $ 39 $ 61 $ 83
Term life insurance * 6,318 6,318 6,318
------ ------ ------
Total $6,357 $6,379 $6,401
====== ====== ======
(3) "Other Annual Compensation" for Mr. Wittler consists of
the following:
1997 1996 1995
------- ------- -------
Housing allowance $31,788 $36,425 $38,510
Use of corporate vehicle 12,703 13,649 ---
Lease of vehicle --- --- 36,770
Other 6,154 7,101 7,450
------- ------- -------
Total $50,645 $57,175 $82,730
======= ======= =======
"All Other Compensation" for Mr. Wittler consists of the
following:
1997 1996 1995
------- ------- -------
Retirement plans contribution $ 9,306 $10,733 $15,970
Health insurance premiums 3,206 2,667 2,484
------- ------- -------
Total $12,512 $13,400 $18,454
======= ======= =======
Mr. Wittler is paid primarily in European currencies which
fluctuate in value against the U.S. dollar.
(4) "All Other Compensation" for Mr. Phillips consists of the
following:
1997 1996 1995
------ ------ ------
Retirement plans contribution $4,558 $4,589 $4,630
Term life insurance * 3,663 2,344 2,102
------ ------ ------
Total $8,221 $6,933 $6,732
====== ====== ======
(5) "All Other Compensation" for Mr. Patterson consists of the
following:
1997 1996
------ ------
Retirement plans contribution $4,129 $3,669
Term life insurance * 462 268
------ ------
Total $4,591 $3,937
====== ======
(6) "Other Annual Compensation" for Mr. Wilson consists of the
following:
1997 1996 1995
-------- -------- --------
Housing allowance $ 86,573 $142,026 $ 82,634
Reimbursement of taxes 9,664 11,953 ---
Relocation expenses 10,299 --- 20,641
Other 18,637 14,323 580
-------- -------- --------
Total $125,173 $168,302 $103,855
======== ======== ========
"All Other Compensation" for Mr. Wilson consists of the
following:
1997 1996 1995
------ ------- -------
Retirement plans contribution $4,737 $10,487 $ 7,142
Health insurance premiums --- 3,549 3,217
Term life insurance * 1,903 313 839
------ ------- -------
Total $6,640 $14,349 $11,198
====== ======= =======
(7) Mr. Wilson was paid a $30,000 bonus in 1997 related to
his 1996 performance. This amount was not included in his
1996 compensation as reported in the Company's Proxy Statement
for the Annual Meeting of Shareholders held on May 15, 1997,
as the amount was not determined as of the latest practicable
date for inclusion in the 1997 Proxy Statement. Further, the
amount of Mr. Wilson's bonus related to his 1997 performance
could not be determined as of the latest practicable date for
inclusion in this Proxy Statement.
*Premium payments for term life insurance were not made to
split-dollar insurance arrangements.
Stock Option Grants, Exercises and Year End Values
The Company from time to time awards stock options to executive
officers and other key employees pursuant to a stock option plan
approved by the shareholders of the Company. Members of the
Plan's administrative committee, which include James W. Meadlock,
Chairman and Chief Executive Officer, are eligible to receive
options under the Plan as amended in 1997. There were no options
granted to any of the Named Executive Officers under the Plan
during the year ended December 31, 1997.
The following table sets forth the value realized on options
exercised during the year ended December 31, 1997 and the value
of stock options held as of this same date by the Named Executive
Officers under the Plan.
<TABLE>
OPTIONS EXERCISED DURING THE YEAR
AND YEAR END OPTION VALUES
<CAPTION>
Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised In-the-Money Options
Options at Year End (#) at Year End ($)
on Value --------------------------- --------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- - ------------------ ------------ ------------- ------------ -------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Manfred Wittler,
Executive Vice
President 20,849 $(18,243) --- 8,510 --- ---
Wade Patterson,
Executive Vice
President,and
Chief Executive
Officer and
President,
Intergraph
Computer Systems --- --- 17,500 82,500 $11,250 $56,250
Stephen J. Phillips,
Executive Vice
President --- --- 2,500 7,500 --- ---
Allan B. Wilson,
Executive Vice
President --- --- 2,500 7,500 --- ---
The value realized and the value of unexercised in-the-money
options are determined as the excess of the closing sale price of
the Company's Common Stock as reported on the NASDAQ Stock Market
on the date options were exercised or December 31, 1997 for
unexercised options, as applicable, over the price of exercised
options or options held by the Named Executive Officer.
Compensation of Directors
Directors who are also employees of the Company do not receive
additional compensation for their services as directors.
Effective July 1, 1997, nonemployee directors receive annual
compensation of $20,000, payable in quarterly installments.
Nonemployee directors serving prior to 1997 have the option to
receive medical insurance coverage with a reduction of their
directors' fees equal to the cost of the coverage. In addition,
the Company's Board of Directors is submitting a plan providing
for the automatic grant of options to nonemployee directors for
shareholder approval at the Annual Meeting. See "Proposal 3,
Approval of the Intergraph Corporation Nonemployee Director Stock
Option Plan" below.
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. Patterson holds an employment contract with the U.S. parent
company. The contract provides Mr. Patterson a fixed base salary
with fixed annual increases and a fixed annual bonus in 1997,
with future quarterly bonuses based on revenues and net income of
Intergraph Computer Systems, a wholly owned subsidiary of the
Company. The contract provides for severance pay of $500,000 if
the Company fails, upon expiration of the contract on December
31, 2002, to renew Mr. Patterson's contract with terms at least
as favorable as in the current contract. The contract further
provides Mr. Patterson with $2,000,000 in severance pay in the
event the Company materially breaches the employment contract,
the Company's cash and cash equivalents fall below $25,000,000,
or a change of control event occurs. Should the contract be
terminated by either party, Mr. Patterson can not take employment
with or act as a consultant to any competitor of the Company in
the United States in any technical field in which the Company has
a business interest for a period of one year from the date of contract
termination.
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, 1997, 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, 1997,
the Administrative Committee awarded options for a total of
672,250 shares of the Company's Common Stock. Of this total,
options for 40,000 shares were awarded to executive officers.
During the year ended December 31, 1997, 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.
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, Larry J. Laster
Stock Option Plan: Thomas J. Lee
Sidney L. McDonald
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, 1997.
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 1996 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 four among U.S. CAD companies and number six
among U.S. workstation manufacturers based on 1996 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,
1992 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)
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
Peer Group $100 $114 $146 $214 $286 $376
S&P 500 $100 $110 $112 $153 $189 $252
INGR $100 $ 80 $ 61 $119 $ 77 $ 75
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, 1998. 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
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
The Board of Directors adopted the Intergraph Corporation
Nonemployee Director Stock Option Plan (the "Nonemployee Director
Stock Option Plan") at its regular meeting on January 13, 1998,
subject to the approval of the shareholders of the Company.
Accordingly, at the Annual Meeting, the shareholders will be
asked to approve the Nonemployee Director Stock Option Plan.
The Board believes that the success of the Company depends in
large measure on its continued ability to attract and retain
highly qualified directors who are motivated to exert their best
efforts on behalf of the Company and its shareholders. The Board
has reviewed the Company's current arrangements for compensation
of directors, and believes that a program that permits the grant
of stock options to the Company's nonemployee directors
("Nonemployee Directors") will promote the long-term financial
success of the Company by encouraging Nonemployee Directors to
align their interests with those of shareholders generally.
The terms of the Nonemployee Director Stock Option Plan are
summarized below, and the full text of the Nonemployee Director
Stock Option Plan is set forth in Exhibit "A" to this Proxy
Statement.
PLAN SUMMARY
The Nonemployee Director Stock Option Plan applies only to
members of the Company's Board of Directors who are not also an
officer or employee of the Company or an officer or employee of a
majority-owned subsidiary or joint venture of the Company. As of
February 14, 1998, four (57%) of the Company's current directors
would be eligible to receive options under the Nonemployee
Director Stock Option Plan.
Upon approval of the Nonemployee Director Stock Option Plan by
shareholders, each current Nonemployee Director will be granted
an option to purchase 3,000 shares of the Company's common stock.
The current Nonemployee Directors serving on the Board are Larry
J. Laster, Thomas J. Lee, Sidney L. McDonald, and Keith H.
Schonrock Jr. Each new Nonemployee Director elected in the
future will be granted an option to purchase 3,000 shares of
common stock upon his or her first election to the Board, by
either shareholder vote or Board appointment. At each Annual
Meeting of shareholders thereafter, each Nonemployee Director
elected to the Board will also be automatically granted an option
to purchase 1,500 shares of the Company's common stock.
The Nonemployee Director Stock Option Plan will be administered
by the Board, but the Board will have no discretion with respect
to selection of Nonemployee Directors to receive options, the
number of shares subject to the Nonemployee Director Stock Option
Plan or to each grant, or the exercise price of the options.
The exercise price of each option granted under the Nonemployee
Director Stock Option Plan is the fair market value of the
Company's common stock on the date of grant. "Fair market value"
is the closing price of the Company's common stock reported by
the NASDAQ Stock Market on the business day immediately preceding
the date of grant. Fair market value of the Company's common
stock was $9.75 per share on February 27, 1998. The term of each
option shall be ten (10) years from the date of grant, subject to
termination by reason of cessation of membership on the Board.
The options granted under the Nonemployee Director Stock Option
Plan will vest in equal, one-third (1/3) installments over three
(3) years beginning with the first anniversary of the date of
grant. Options may not be assigned or transferred except by will
or by applicable laws of descent and distribution.
The number of shares issuable upon exercise of options granted
under the plan are 250,000 shares of the Company's common stock.
The aggregate number of shares available under the Nonemployee
Director Stock Option Plan, and the number and price of shares of
common stock subject to outstanding options, shall be
appropriately adjusted automatically in the event of any change
in the Company's common stock as a result of any stock dividend,
stock split, spin-off, split-up, merger, consolidation,
recapitalization, reclassification, combination or exchange of
shares.
If a Nonemployee Director ceases to be a member of the Board
for any reason other than misconduct, the Nonemployee Director,
or his/her legal representative, as appropriate, may exercise
outstanding options in accordance with the following conditions,
provided that no option may be exercised after its term has
expired:
If a Nonemployee Director has served on the Board for 5
or more years, all of his or her options become
immediately exercisable (a) for 36 months from his or
her last day as a Board member, or (b) if death occurs
before the 36 month period has expired, for 12 months
from the date of his or her death.
If a Nonemployee Director has served on the Board for
less than 5 years, all of his or her options which are
already vested on his or her last day as a Board member
are exercisable (a) for 30 days from the last day as a
Board member, or (b) if death occurs before the 30 day
period has expired, for 12 months from the date of his
or her death.
If a Nonemployee Director dies while serving as a
member of the Board, all of his or her options which
are already fully vested on the date of death are
exercisable for 12 months from the date of his or her
death.
If a Nonemployee Director ceases to be a director of the
Company due to an act of fraud, intentional
misrepresentation, embezzlement, misappropriation,
conversion or any other gross or willful misconduct, as
determined by the Board, all of his or her outstanding
unexercised options will be immediately forfeited as of the
date of the misconduct.
Payment of the option price may be made in cash, common stock
of the Company held for at least six months, or by delivery to
the Company of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the
Company the amount required to pay the exercise price from sale
or loan proceeds.
The Board may amend or discontinue the Nonemployee Director
Stock Option Plan at any time without shareholder approval, but
no amendment or discontinuation may be made which would impair
the rights of an optionee without the optionee's consent; and
provided, further, amendments that would materially increase the
maximum number of shares that may be issued under the Nonemployee
Director Stock Option Plan or materially modify the requirements
for eligibility for participation or extend the term of the
Nonemployee Director Stock Option Plan may not be made without
shareholder approval.
FEDERAL INCOME TAX CONSEQUENCES
Options granted under the plan are non-statutory stock options
("NSO") and are not entitled to favorable tax treatment under
either Section 421 or Section 422 of the Internal Revenue Code.
The grant of an option under the plan will not result in income
to the optionee or in a deduction for the Company. The exercise
of an option will generally result in ordinary income to the
Nonemployee Director in the year in which the option is exercised
equal to the excess of the fair market value of the purchased
shares on the date of exercise over the exercise price. On
ultimate sale of the shares, the Nonemployee Director will
generally recognize as capital gain or loss the difference
between the fair market value of the shares on the date of
exercise and the ultimate sale price.
The Company will be entitled to an income tax deduction equal
to the amount of ordinary income recognized generally by the
Nonemployee Director in connection with the exercise of an
option. The deduction will generally be allowed for the taxable
year of the Company in which occurs the last day of the calendar
year in which the Nonemployee Director recognizes ordinary income
in connection with such exercise and purchase. The Nonemployee
Director may not recognize income for up to 6 (six) months after
the option exercise, due to an applicable matching transaction
under special rules under Section 16(b) of the Securities
Exchange Act of 1934.
The Board of Directors recommends a vote FOR Proposal 3.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Shareholder proposals intended for presentation at the 1999
Annual Meeting must be received by the Company for inclusion in
its 1999 proxy material no later than December 11, 1998.
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: April 10, 1998
Exhibit A
INTERGRAPH CORPORATION
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
--------------------------------------
1. Purpose
The purpose of the Intergraph Corporation Nonemployee Director
Stock Option Plan (the "Plan") is to secure for Intergraph
Corporation (the "Company") and its shareholders the benefits
of the long-term incentives inherent in increased common stock
ownership by the members of the Board of Directors (the
"Board") of the Company who are not employees of the Company or
its Affiliates, by strengthening the identification of
Nonemployee Directors with the interests of all Intergraph
Corporation shareholders.
2. Definitions
The terms defined in this Section 2 shall have the following
meanings, unless the context otherwise requires.
a. "Affiliate" shall mean any corporation, partnership, joint
venture or other entity in which the Company holds an
equity, profit or voting interest of more than fifty
percent (50%).
b. "Annual Meeting of Shareholders" shall mean the annual
meeting of shareholders of the Company held each calendar
year.
c. "Code" shall mean the Internal Revenue Code of 1986, as
amended to date and as it may be amended from time to
time.
d. "Company" shall mean Intergraph Corporation, a Delaware
corporation.
e. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended to date and as it may be amended
from time to time.
f. "Fair Market Value" per Share shall mean as of any day
(1) The fair market value of a share of the Company's
common stock is the closing price reported by the
NASDAQ Stock Market on the business day immediately
preceding the date as of which fair market value is
being determined or, if there were no sales of shares
of the Company's common stock reported on such day,
on the most recently preceding day on which there
were sales, or
(2) if the shares of the Company's stock are not listed
on the NASDAQ Stock Market on the day as of which the
determination is made, the amount determined by the
Board or its delegate to be the fair market value of
a share on such day.
g. "Nonemployee Director" shall mean a member of the Board of
Directors of the Company who is not also an officer or
other employee of the Company or an Affiliate.
h. "Nonstatutory Stock Option" ("NSO") shall mean a stock
option, which does not qualify for special tax treatment
under Sections 421 or 422 of the Internal Revenue Code.
i. "Option" shall mean either a First Option or an Annual
Option granted pursuant to the provisions of Section 4 of
this Plan.
j. "Participant" shall mean any person who holds an Option
granted under this Plan.
k. "Plan" shall mean this Intergraph Corporation Nonemployee
Director Stock Option Plan.
3. Administration
a. The Plan shall be administered by the Board. The Board
may, by resolution, delegate part or all of its
administrative powers with respect to the Plan.
b. The Board shall have all of the powers vested in it by the
terms of the Plan, such powers to include the authority,
within the limits prescribed herein, to establish the
form of the agreement embodying grants of Options made
under the Plan.
c. The Board shall, subject to the provisions of the Plan,
have the power to construe the Plan, to determine all
questions arising thereunder and to adopt and amend such
rules and regulations for the administration of the Plan
as it may deem desirable, such administrative decisions of
the Board to be final and conclusive.
d. The Board shall have no discretion to select the
Nonemployee Directors to receive Option grants under the
Plan, to determine the number of shares of the
Company's common stock subject to the Plan or to each
grant, nor the exercise price of the Options granted
pursuant to the Plan.
e. The Board may authorize any one or more of their number or
the Secretary or any other officer of the Company to
execute and deliver documents on behalf of the Board. The
Board hereby authorizes the Secretary to execute and
deliver all documents to be delivered by the Board
pursuant to the Plan.
f. The expenses of the Plan shall be borne by the Company.
4. Automatic Grants to Nonemployee Directors
a. As of the date of adoption of this Plan by the
shareholders of the Company, each current Nonemployee
Director shall be granted an option to purchase three
thousand (3,000) shares of the Company's common stock
under the Plan (the "First Option"). Thereafter, as of
the day upon which shareholders vote to elect directors at
each annual meeting of the Company, each Nonemployee
Director of the Board shall be granted an additional
option to purchase fifteen hundred (1,500) shares of the
Company's common stock under the Plan (the "Annual
Option"); provided, however, that a Nonemployee Director
who has not previously been elected as a member of the
Board of Directors of the Company shall also be granted an
option to purchase three thousand (3,000) shares of the
Company's common stock under the Plan, on the first
business day of the Nonemployee Director's election to the
Board, including election by the Board of Directors to
fill a vacancy on the Board.
b. The automatic grants to Nonemployee Directors shall not be
subject to the discretion of any person.
c. Each Option granted under the Plan shall be evidenced by a
written Agreement. Each Agreement shall be subject to,
and incorporate, by reference or otherwise, the applicable
terms of this Plan.
d. During the lifetime of a Participant, each Option shall be
exercisable only by the Participant. No Option granted
under the Plan shall be assignable or transferable by the
Participant, except by will or by the laws of descent and
distribution.
5. Shares of Stock Subject to the Plan
a. Subject to adjustment as provided in Section 10 of the
Plan, an aggregate of two hundred fifty thousand (250,000)
shares of the Company's common stock, $.10 par value,
shall be available for issuance to Nonemployee Directors
under the Plan. No fractional shares shall be issued.
b. First Option Grants and Annual Option Grants shall reduce
the shares available for issuance under the Plan by the
number of shares subject thereto. The shares deliverable
upon exercise of any First Option Grant or Annual Option
Grant may be made available from authorized but unissued
shares or shares reacquired by the Company, including
shares purchased in the open market or in private
transactions. If any unexercised First Option Grant or
Annual Option Grant shall terminate for any reason, the
shares subject to, but not delivered under, such First
Option Grant or Annual Option Grant shall be available for
other First Option Grants or Annual Option Grants.
6. Nonstatutory Options
All Options granted to Nonemployee Directors pursuant to the
Plan shall be NSOs.
7. Exercise Price
a. The price per share of the shares of the Company's common
stock which may be purchased upon exercise of an Option
("Exercise Price") shall be one hundred percent (100%) of
the Fair Market Value per Share on the date the Option is
granted and shall be payable in full at the time the
Option is exercised as follows:
(1) in cash or by certified check,
(2) by delivery of shares of common stock to the Company
which shall have been owned by the Nonemployee
Director for at least six (6) months and have a Fair
Market Value per Share on the date of surrender equal
to the Exercise Price, or
(3) by delivery to the Company of a properly executed
exercise notice together with irrevocable
instructions to a broker to promptly deliver to the
Company from sale or loan proceeds the amount
required to pay the exercise price.
b. Such price shall be subject to adjustment as provided in
Section 10 hereof.
8. Duration and Vesting of Options
a. The term of each Option granted to a Nonemployee Director
shall be for ten (10) years from the date of grant,
unless terminated earlier pursuant to the provisions of
Section 9 hereof.
b. Each Option shall vest and become exercisable according to
the following schedule:
(1) thirty-three and one-third (33-1/3) of the total
number of shares covered by the Option shall become
exercisable beginning with the first anniversary date
of the grant of the Option;
(2) thirty-three and one-third (33-1/3) of the total
number of shares covered by the Option shall become
exercisable on each subsequent anniversary date of
the grant of the Option until the third anniversary
date of the grant of the Option upon which the total
number of shares covered by Option shall become
exercisable.
9. Effect of Termination of Membership on the Board
The right to exercise an Option granted to a Nonemployee
Director shall be limited as follows, provided the actual date
of exercise is in no event after the expiration of the term of
the Option:
a. If a Nonemployee Director ceases being a director of the
Company for any reason other than the reasons identified
in subparagraph b. of this Section 9, the Nonemployee
Director shall have the right to exercise the Options as
follows, subject to the condition that no Option shall be
exercisable after the expiration of the term of the
Option:
(1) If the Nonemployee Director was a member of the Board
of Directors of the Company for five (5) or more
years, all outstanding Options become immediately
exercisable upon the date the Nonemployee Director
ceases being a director. The Nonemployee Director
may exercise the Options for a period of thirty-six
(36) months from the date the Nonemployee Director
ceased being a director, provided that if the
Nonemployee Director dies before the thirty-six (36)
month period has expired, the Options may be
exercised by the Nonemployee Director's legal
representative or any person who acquires the right
to exercise an Option by reason of the Nonemployee
Director's death for a period of twelve (12) months
from the date of the Nonemployee Director's death.
(2) If the Nonemployee Director was a member of the Board
of Directors of the Company for less than five (5)
years, the Nonemployee Director may exercise the
Options, to the extent they were exercisable at the
date the Nonemployee Director ceases being a member
of the Board, for a period of thirty (30) days
following the date the Nonemployee Director ceased
being a director, provided that, if the Nonemployee
Director dies before the thirty (30) day period has
expired, the Options may be exercised by the
Nonemployee Director's legal representative, or any
person who acquires the right to exercise an Option
by reason of the Nonemployee Director's death, for a
period of twelve (12) months from the date of the
Nonemployee Director's death.
(3) If the Nonemployee Director dies while a member of
the Board, the Options, to the extent exercisable by
the Nonemployee Director at the date of death, may be
exercised by the Nonemployee Director's legal
representative, or any person who acquires the right
to exercise an Option by reason of the Nonemployee
Director's death, for a period of twelve (12) months
from the date of the Nonemployee Director's death.
(4) In the event any Option is exercised by the
executors, administrators, legatees, or distributees
of the estate of a deceased optionee, the Company
shall be under no obligation to issue stock
thereunder unless and until the Company is satisfied
that the person or persons exercising the Option are
the duly appointed legal representatives of the
deceased optionee's estate or the proper legatees or
distributees thereof.
b. If a Nonemployee Director ceases being a director of the
Company due to an act of
(1) fraud or intentional misrepresentation or
(2) embezzlement, misappropriation or conversion of
assets or opportunities of the Company or any
Affiliate of the Company or
(3) any other gross or willful misconduct as determined
by the Board, in its sole and conclusive discretion,
all Options granted to such Nonemployee Director shall
immediately be forfeited as of the date of the misconduct.
10. Adjustments and Changes in the Stock
a. If there is any change in the common stock of the Company
by reason of any stock dividend, stock split, spin-off,
split-up, merger, consolidation, recapitalization,
reclassification, combination or exchange of shares, or
any other similar corporate event, the aggregate number of
shares available under the Plan, and the number and the
price of shares of common stock subject to outstanding
Options shall be appropriately adjusted automatically.
b. No right to purchase fractional shares shall result from
any adjustment in Options pursuant to this Section 10. In
case of any such adjustment, the shares subject to the
Option shall be rounded down to the nearest whole share.
c. Notice of any adjustment shall be given by the Company to
each holder of any Option which shall have been so
adjusted and such adjustment (whether or not such notice
is given) shall be effective and binding for all purposes
of the Plan.
11. Effective Date of the Plan
a. The Plan shall become effective on the date it is approved
by the shareholders of the Company.
b. Any amendment to the Plan shall become effective when
adopted by the Board, unless specified otherwise, but no
Option granted under any increase in shares authorized to
be issued under this Plan shall be exercisable until the
increase is approved in the manner prescribed in Section
12 of this Plan.
12. Amendment of the Plan
a. The Board of Directors may amend, suspend or terminate the
Plan at any time, but without shareholder approval, no
amendment shall materially increase the maximum number of
shares which may be issued under the Plan (other than
adjustments pursuant to Section 10 hereof), materially
increase the benefits accruing to Participants under the
Plan, materially modify the requirements as to
eligibility for participation or extend the term of the
Plan. Approval of the shareholders may be obtained, at a
meeting of shareholders duly called and held, by the
affirmative vote of a majority of the holders of the
Company's voting stock who are present or represented by
proxy and are entitled to vote on the Plan.
b. It is intended that the Plan meet the requirements of Rule
16b-3 or any successor thereto promulgated by the
Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, including any applicable
requirements regarding shareholder approval. Amendments
to the Plan shall be subject to approval by the
shareholders of the Company to the extent determined by
the Board of Directors to be necessary to satisfy such
requirements as in effect from time to time.
c. Rights and obligations under any Option granted before any
amendment of this Plan shall not be materially and
adversely affected by amendment of the Plan, except with
the consent of the person who holds the Option, which
consent may be obtained in any manner that the Board or
its delegate deems appropriate.
d. The Board of Directors may not amend the provisions of
Sections 4, 6, 7, 8 and 9 hereof more than once every six
(6) months, other than to comport with changes in the
Code, ERISA, or the rules thereunder.
13. Termination of the Plan
a. The Plan, unless sooner terminated, shall terminate at the
end of ten (10) years from the date the Plan is approved
by the shareholders of the Company. No Option may be
granted under the Plan while the Plan is suspended or
after it is terminated.
b. Rights or obligations under any Option granted while the
Plan is in effect, including the maximum duration and
vesting provisions, shall not be altered or impaired by
suspension or termination of the Plan, except with the
consent of the person who holds the Option, which consent
may be obtained in any manner that the Board or its
delegate deems appropriate.
14. Registration, Listing, Qualification, Approval of Stock and
Options
If the Board shall determine, in its discretion, that it is
necessary or desirable that the shares of common stock subject
to any Option
a. be registered, listed or qualified on any securities
exchange or under any applicable law, or
b. be approved by any governmental regulatory body, or
c. approved by the shareholders of the Company, as a
condition of, or in connection with, the granting of such
Option, or the issuance or purchase of shares upon
exercise of the Option,
then the Option may not be exercised in whole or in part unless
such registration, listing, qualification or approval has been
obtained free of any condition not acceptable to the Board of
Directors.
15. No Right to Option or as Shareholder
a. No Nonemployee Director or other person shall have any
claim or right to be granted an Option under the Plan,
except as expressly provided herein. Neither the Plan nor
any action taken hereunder shall be construed as giving
any Nonemployee Director any right to be retained in the
service of the Company.
b. Neither a Nonemployee Director, the Nonemployee Director's
legal representative, nor any person who acquires the
right to exercise an Option by reason of the Nonemployee
Director's death shall be, or have any of the rights or
privileges of, a shareholder of the Company in respect of
any shares of common stock receivable upon the exercise of
any Option granted under this Plan, in whole or in part,
unless and until certificates for such shares shall have
been issued.
16. Governing Law
The validity, construction, interpretation, administration and
effect of this Plan and any rules, regulations and actions
relating to this Plan will be governed by and construed
exclusively in accordance with the laws of the State of
Delaware.
INTERGRAPH CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE INTERGRAPH CORPORATION
BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 28, 1998
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 28, 1998, 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
to vote for all listed (Except as
nominees listed marked to the
contrary)
Nominees: James W. Meadlock; Larry J. Laster; Thomas J. Lee; Sidney L.
McDonald; 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 Nonemployee
Director 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:_________, 1998
Signature:_____________ Date:_________, 1998
* COM = Common Stock Shares; ESP = Employees Stock Purchase Plan Shares;
ESB = Employee Stock Bonus Plan Shares.
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