INTERGRAPH CORPORATION
Huntsville, Alabama 35894-0001
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
May 18, 2000
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 18, 2000, at 5:00 p.m. local time for the
following purposes:
1. To elect eight 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 consider and vote upon the 2000 Intergraph Corporation
Employee Stock Purchase Plan (designated as Proposal 2 in
the accompanying Proxy Statement).
3. To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the current year
(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, 2000, 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, 1999 is enclosed.
By Order of the Board of Directors
JOHN R. WYNN
Secretary
Huntsville, Alabama
April 6, 2000
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 18, 2000 and at any
and all adjournments thereof (the "Meeting"). The form of proxy
permits approval, disapproval or abstention as to each of the
three proposals and allows withholding of votes as to specific
nominees for director. 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 6, 2000 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, 2000 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 presented 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, 2000, there were outstanding 49,252,406
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,
2000, 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, through March 2,
2000, Chief Executive Officer of the Company, 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, 1999 (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.
Number of Percentage of Total
Shares Beneficially Common Stock
Name (1) Owned (2) Outstanding (3)
- ------------------------------- ------------------- -------------------
Intergraph Corporation Stock
Bonus Plan Trust 5,119,691 (4) 10.4%
Dimensional Fund Advisors, Inc. 3,091,600 (5) 6.3%
Zesinger Capital Group LLC 3,072,200 (6) 6.2%
Directors and Nominees
- ----------------------
James W. Meadlock 1,304,266 (7) 2.6%
Robert E. Thurber 391,474 (8) *
James F. Taylor Jr. 124,964 (9) *
Sidney L. McDonald 91,000 (10) *
Larry J. Laster 23,947 (11) *
Thomas J. Lee 4,000 (12) *
Nominees
- --------
Lawrence R. Greenwood --- ---
Joseph C. Moquin --- (13) ---
Named Executive Officers
- ------------------------
Manfred Wittler 59,359 (14) *
Wade C. Patterson 63,550 (15) *
Klaas Borgers 13,750 (16) *
Stephen J. Phillips 7,500 (17) *
All directors, nominees, and
executive officers as a group
(18 persons), including the
foregoing directors, nominees,
and Named Executive Officers (18) 2,363,564 (19) 4.8%
- --------------
* 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, MA
02108. The address of Dimensional Fund Advisors, Inc. is
1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. The
address of Zesinger Capital Group LLC is 320 Park Avenue,
30th Floor, New York, NY 10022.
(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. The Company has not made a contribution to the
Stock Bonus Plan since 1991.
(5) As set forth on a Schedule 13G filed with the Securities and
Exchange Commission on February 3, 2000.
(6) As set forth on a Schedule 13G filed with the Securities and
Exchange Commission on January 28, 2000. Zesinger Capital Group
LLC has sole voting power over 2,080,000 of these shares.
(7) This figure includes 197,787 shares allocated to Mr. Meadlock
under the Stock Bonus Plan and 489,232 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 Mrs. Meadlock and 122,513 shares allocated to
Mrs. Meadlock under the Stock Bonus Plan as to which Mr.
Meadlock expressly disclaims beneficial ownership. Mrs.
Meadlock retired from her position as an Executive Vice
President of the Company in November 1999.
(8) This figure includes 166,294 shares allocated to Mr. Thurber
under the Stock Bonus Plan and excludes 232,089 shares owned
by his wife and 35,668 shares held in trust for his
grandchildren as to which Mr. Thurber expressly disclaims
beneficial ownership.
(9) This figure includes 74,964 shares allocated to Mr. Taylor
under the Stock Bonus Plan. Mr. Taylor was elected Chief
Executive Officer of the Company March 2, 2000.
(10) This figure includes 1,000 shares over which Mr.
McDonald holds immediately exercisable stock options.
(11) This figure consists of 19,900 shares owned jointly by
Mr. Laster and his wife as to which voting and investment
powers are shared, 3,047 shares allocated to Mr. Laster under
the Stock Bonus Plan, and 1,000 shares over which Mr. Laster
holds immediately exercisable stock options.
(12) This figure includes 1,000 shares over which Mr. Lee
holds immediately exercisable stock options.
(13) This figure excludes 200 shares owned by Mr. Moquin's wife as
to which Mr. Moquin expressly disclaims beneficial ownership.
(14) This figure includes 8,510 shares over which Mr. Wittler
holds immediately exercisable stock options.
(15) This figure includes 58,496 shares over which Mr.
Patterson holds immediately exercisable stock options and
1,068 shares allocated to Mr. Patterson under the Stock Bonus
Plan. This figure excludes 899 shares allocated to his wife,
a former employee of the Company, under the Stock Bonus Plan
as to which Mr. Patterson expressly disclaims beneficial
ownership. Mr. Patterson's employment with the Company was
terminated in January 2000 and, as such, the exercisable
options included in this calculation of his beneficial
ownership will expire, if unexercised, in April 2000.
(16) This figure consists of shares over which Mr. Borgers holds
immediately exercisable stock options. Mr. Borgers'
employment with the Company was terminated in February 2000
and, as such, these exercisable options will expire, if
unexercised, in May 2000.
(17) This figure consists of shares over which Mr. Phillips holds
immediately exercisable stock options.
(18) Mr. Patterson and Mr. Borgers have been excluded from
this group due to termination of their employment with the
Company subsequent to December 31, 1999.
(19) This figure includes 565,845 shares allocated to such persons
under the Stock Bonus Plan and 69,635 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
eight nominees listed below be elected as directors to serve
until the 2001 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 eight persons. The Board of Directors has
committed to the selection of an additional independent director
for proposed election at the 2001 Annual Meeting.
It is the intention of the persons named in the proxy to vote
the proxies for the election of the nominees listed below, six 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 (66) Chairman of the Board 1969
James F. Taylor Jr. (55) Chief Executive Officer and 1973
Director
Robert E. Thurber (59) Executive Vice President and 1972
Director
Larry J. Laster (48) Director 1987
Sidney L. McDonald (61) Director 1997
Thomas J. Lee (64) Director 1997
Lawrence R.Greenwood (60) --- ---
Joseph C. Moquin (75) --- ---
Mr. Meadlock, a founder of the Company, has served as Chairman
of the Board of Directors since the Company's inception in 1969
and served as Chief Executive Officer prior to his resignation
from that office March 2, 2000.
Mr. Taylor joined the Company in July 1969, shortly after its
formation, and is considered a founder. Mr. Taylor was elected
Chief Executive Officer March 2, 2000, upon Mr. Meadlock's
resignation. He served most recently as Chief Executive
Officer of Intergraph Public Safety, Inc., a wholly-owned
subsidiary of the Company.
Mr. Thurber is a founder of the Company and currently serves as
Executive Vice President and Chief Engineer.
Mr. Laster joined the Company in 1981 and served as Executive
Vice President and Chief Financial Officer from February 1987
through February 1998, at which time he resigned from the Company
to serve 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. He rejoined the Company in June
1998 as Chief Financial Officer of Intergraph Public Safety,
Inc., a wholly-owned subsidiary of the Company.
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. Mr.
McDonald is a founder of Deltacom Long Distance Services, Inc.
and served as its Chief Executive Officer from 1984 through 1996.
He also served as the Chief Executive Officer of Marshall
Cellular, a cellular telephone service company, from 1988
through 1996 and of Southern Interexchange Services, a fiber
optic telecommunications network, from 1990 through 1996. Mr.
McDonald has served in the Alabama Legislature and as Finance
Director for the State of Alabama.
Mr. Lee is a founder of Lee and Associates, an engineering
services firm specializing in guided missile systems, and has
served as its President since January 1997. He was employed for
thirty-six years by NASA, and was the Director of the George C.
Marshall Space Flight Center from June 1989 through January 1994.
Mr. Lee served as Special Assistant to the NASA Administrator for
Access to Space from January 1994 through March 1995. Mr. Lee is
a registered professional engineer and is a member of numerous
advisory boards and committees within his field.
Dr. Greenwood serves as Vice President of Research at the
University of Alabama in Huntsville and has served in that
capacity since August 1998. He spent fifteen years with NASA,
serving as Director of the Earth Observations Division in NASA
Headquarters and, most recently, as Manager of the Global
Hydrology and Climate Center in Huntsville from September 1994
through August 1998. He served as President of Nichols Research
Corporation, an information technology company specializing in
information solutions and services, from 1991 to 1994. He also
served as Vice President and General Manager of the General Electric
Astro Space Division from 1988 to 1991. Dr. Greenwood is a
member of the Alabama Aerospace Commission and is a registered
professional engineer and a certified financial planner.
Mr. Moquin retired from Teledyne Brown Engineering, an
aerospace corporation specializing in ballistic missile defense
and space systems, in 1989 after thirty years of service. At
the time of his retirement, he was serving as Chairman and Chief
Executive Officer. He served as Interim President of the
University of Alabama in Huntsville from September 1990 through
July 1991. He served on the Board of Directors of SCI Systems,
Inc. ("SCI"), an international electronics manufacturing services
provider, from 1992 through 1997 and currently serves as a
Director Emeritus, non-voting director, for SCI. Mr. Moquin is a
registered professional engineer and has served on numerous
advisory boards and committees within his field.
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, 1999, the Board of Directors held thirteen
meetings and the Audit Committee held five meetings. All of the
current directors were present for 75% or more of the aggregate
Board and Audit Committee meetings.
The Audit Committee consists of Mr. McDonald, Mr. Lee, and Mr.
Thurber. Mr. Thurber was appointed to the Committee in August
1999 upon the resignation of Keith Schonrock from the Board of
Directors. 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.
In October 1999, the Board formed an ad hoc Nominating
Committee consisting of Mr. Meadlock and its two independent
directors, Mr. Lee and Mr. McDonald. The Committee's purpose was
to recommend additional independent directors for nomination to
the Board. Upon the election of the two additional independent
directors nominated for election at this Annual Meeting, a
permanent Nominating Committee will be formed consisting solely
of independent directors. The Nominating Committee will consider
nominees for director, including those recommended by shareholders
of the Company. Any recommendations for a nominee should be
submitted to John R. Wynn, Secretary, Intergraph Corporation,
Huntsville, Alabama 35894-0001. Such nominees will be reviewed
by the Nominating Committee in accordance with its established
procedures.
Upon election of the two additional independent directors
nominated for election at this Annual Meeting, the Board will
form a Compensation Committee consisting solely of independent
directors. The purpose of the Compensation Committee will be
to recommend and oversee management compensation, including
that of the Chief Executive Officer.
Additionally, effective with the 2000 Annual Meeting, the Board
of Directors will appoint a lead independent director to serve as
coordinator of the activities of all independent directors on the
Board. Specific responsibilities of the lead independent
director will include advising the Chairman as to the scheduling
and agenda for Board meetings, ensuring that the quality,
quantity and timeliness of the flow of information from Company
management is sufficient to allow independent directors to
effectively and responsibly perform their duties, and
coordinating and moderating executive sessions of the Board's
independent directors. In addition, the lead independent
director will serve on the Nominating and Compensation committees
of the Board.
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, if any, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and,
in the case of the Company, with The Nasdaq Stock Market.
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 on written
representations that no forms were required, the Company believes
that during the year ended December 31, 1999, all Section 16(a)
filing requirements applicable to its officers, directors, and
greater than ten percent beneficial owners were met, except that
Sidney L. McDonald, a Director of the Company, filed one late
report covering one transaction.
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, director
compensation, 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, 1999.
Long Term
Compensation
Annual Compensation Awards
--------------------------------- ------------
Name and Other Securities All Other
Principal Annual Underlying Compensation
Position Year Salary($) Bonus($) Compensation($) Options(#) ($)
- ----------- ---- --------- -------- -------------- ---------- ------------
(2) (9)
James W. Meadlock,
Chairman of the
Board (1)(3) 1999 $300,000 --- --- --- $ 9,099
1998 $300,000 --- --- --- $ 11,340
1997 $300,000 --- --- --- $ 6,357
Manfred Wittler,
Chairman and Chief
Executive Officer,
Intergraph Computer
Systems (4)(8) 1999 $323,471 $ 85,266 $54,165 150,000 $ 11,912
1998 $248,529 $194,751 $48,653 --- $ 12,348
1997 $243,843 $ 82,659 $50,645 --- $ 12,512
Wade C. Patterson,
Executive Vice
President (5) 1999 $300,040 $ 26,521 --- --- $2,004,826
1998 $275,000 $ 45,368 --- --- $ 4,880
1997 $226,928 $250,000 --- --- $ 4,591
Stephen J. Phillips,
Executive Vice
President (6) 1999 $262,600 --- --- --- $ 7,986
1998 $249,170 --- --- 30,000 $ 8,163
1997 $228,280 --- --- --- $ 8,221
Klaas Borgers,
Executive Vice
President (7)(8) 1999 $198,058 $ 40,881 $56,160 --- $ 372,950
1998 $225,678 $ 17,344 --- --- $ 17,822
1997 $173,132 --- $22,175 15,000 $ 15,265
(1) James F. Taylor Jr. was elected Chief Executive Officer March 2,
2000. Prior to that time, Mr. Meadlock served in that capacity.
Effective with this change, Mr. Meadlock's annual salary was set at
$150,000 and Mr. Taylor's at $300,000. Mr. Taylor's base salary for
1999 was $182,700.
(2) "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.
(3) "All Other Compensation" for Mr. Meadlock consists of premium
payments for term life insurance.*
(4) "Other Annual Compensation" for Mr. Wittler consists of the following:
1999 1998 1997
------- ------- -------
Housing allowance $31,780 $31,212 $31,788
Use of corporate vehicle 10,762 11,380 12,703
Other 11,623 6,061 6,154
------- ------- -------
Total $54,165 $48,653 $50,645
======= ======= =======
"All Other Compensation" for Mr. Wittler consists of the following:
1999 1998 1997
------- ------- -------
Retirement plans contribution $ 8,798 $ 9,148 $ 9,306
Health insurance premiums 3,114 3,200 3,206
------- ------- -------
Total $11,912 $12,348 $12,512
======= ======= =======
(5) Mr. Patterson served as Chief Executive Officer of Intergraph
Computer Systems prior to the appointment of Mr. Wittler to
that position in January 2000. "All Other Compensation" for
Mr. Patterson consists of the following:
1999 1998 1997
---------- ------- -------
Retirement plans contribution $ 4,286 $4,286 $4,129
Term life insurance * 540 594 462
Contract termination (see page 11) 2,000,000 --- ---
---------- ------- -------
Total $2,004,826 $4,880 $4,591
========== ======= =======
(6) "All Other Compensation" for Mr. Phillips consists of the following:
1999 1998 1997
------ ------ ------
Retirement plans contribution $4,800 $4,500 $4,558
Term life insurance * 3,186 3,663 3,663
------ ------ ------
Total $7,986 $8,163 $8,221
====== ====== ======
(7) "Other Annual Compensation" for Mr. Borgers includes $17,560 for use
of a corporate vehicle in 1997. In 1999, he received a $16,400 housing
allowance, an $18,078 tax reimbursement, and a $14,400 allowance for
relocation to the Corporate office.
"All Other Compensation" for Mr. Borgers consists of the following:
1999 1998 1997
-------- ------- -------
Retirement plans contribution $ 21,258 $17,049 $14,615
Health insurance premiums 939 773 650
Term life insurance * 753 --- ---
Severance pay (see page 11) 350,000 --- ---
-------- ------- -------
Total $372,950 $17,822 $15,265
======== ======= =======
(8) Portions of Mr. Wittler's and Mr. Borgers' compensation are paid in
European currencies which fluctuate in value against the U.S. dollar.
(9) "Long-Term Compensation" excludes options granted to Mr. Patterson
and Mr. Borgers to purchase stock of Intergraph Computer Systems
("ICS"), a wholly-owned subsidiary of the Company. During 1998,
Mr. Patterson and Mr. Borgers each were granted options to purchase
100,000 shares of ICS stock at a price of $2 per share. The
Company is unable to value the options issued under the ICS plan.
During 1998, options to purchase a total of 4,368,000 shares of ICS
stock were granted to ICS employees (representing approximately 10%
ownership of ICS on a fully diluted basis), including the options
on the total of 200,000 shares granted to these two Named Executive
Officers. The options granted to Mr. Patterson and Mr.
Borgers under this plan were cancelled effective with their
respective terminations from the Company as no vesting had
occurred. Mr. Patterson and Mr. Borgers both served on the
administrative committee of the ICS option plan.
* Premium payments for term life insurance were not made to split-dollar
insurance arrangements.
Stock Option Grants, Exercises and Year End Values
Grants. The Company from time to time awards stock options to
key employees, including executive officers, pursuant to a stock
option plan (the "Plan") approved by the shareholders of the
Company. Members of the Plan's administrative committee who are
also employees of the Company, including James W. Meadlock,
Chairman and former Chief Executive Officer, James F. Taylor
Jr., Chief Executive Officer, and Robert E. Thurber, an Executive
Vice President of the Company, are eligible to receive options under
the Plan.
The following table sets forth information concerning options
granted under the Plan to the Named Executive Officers during the
year ended December 31, 1999.
OPTION GRANTS (1)
- ----------------------------------------------------------------------------
Number of Percent of
Securities Total Options
Underlying Granted to Grant Date
Options Employees Exercise Expiration Present
Name Granted(#) This Year Price($/Share) Date Value($)(2)
- --------------- ---------- ----------- ------------- ---------- -----------
Manfred Wittler,
Chairman and
Chief Executive
Officer,
Intergraph
Computer
Systems 150,000 69% $5.063 8/6/2009 $367,575
(1) Options were granted at fair market value on the date of grant.
Fair market value is determined as the closing sale price of
the Company's stock as reported on The Nasdaq Stock Market.
Options first become exercisable two years from the date of grant
and vest at a rate of 25% per year from that point, with full vesting
at the fifth anniversary of the grant date. Options are granted for
a term of ten years from the date of grant.
(2) The present value of options at the date of grant was determined
using the Black-Scholes option pricing model. Estimated values
determined using this model are based on the market value of the
stock on the date of grant, the exercise price of the option, and
on assumptions as to risk free rate of return, volatility of the
Company's stock price, and expected term of the option. Dividend
yield is excluded from the calculation since it is the present
policy of the Company to retain all earnings to finance operations.
Risk free rate of return is based on quoted yields at grant date
for U.S. Treasury zero-coupon bonds with a term equal to the
expected option term. Stock price volatility is based on
weekly changes in the Company's stock price over a period equal to
the expected option term. The expected term of the option is
based on the weighted average of vested option amounts at each
vesting date plus the expected days to exercise. The expected
days to exercise is the number of days from vesting date to
exercise date determined by using actual exercise data for the
Company's options.
The actual value, if any, an executive may realize from
exercise of stock options will be determined based on the
excess of stock price over exercise price on the date the
option is exercised. There is no assurance that the value
realized by an executive will be at or near the value
estimated by the Black-Scholes model, or that any value will
be realized.
Exercises. There were no options exercised by any of the Named
Executive Officers during the year ended December 31, 1999.
Year End Values. The following table sets forth the number of
securities underlying unexercised stock options held by the Named
Executive Officers under the Plan at December 31, 1999. None of
these unexercised options were in-the-money on that date as
exercise prices exceeded the closing sale price of the Company's
common stock as reported on The Nasdaq Stock Market for each
unexercised option held by the Named Executive Officers.
Number of Securities
Underlying Unexercised
Options at Year End (#)
-----------------------
Name Exercisable Unexercisable
- ---------------------- ----------- -------------
Manfred Wittler,
Chairman and Chief
Executive Officer,
Intergraph Computer
Systems 8,510 150,000
Wade C. Patterson,
Executive Vice President 58,496 41,504
Stephen J. Phillips,
Executive Vice President 7,500 32,500
Klaas Borgers,
Executive Vice President 13,750 11,250
As with all other employee stock options granted by the Company,
the exercisable options held by Mr. Patterson and Mr. Borgers will expire
if not exercised within three months of the termination dates (January
2000 and February 2000, respectively) of their employment.
Compensation of Directors
Directors who are also employees of the Company do not receive
additional compensation for their services as directors.
Nonemployee directors receive annual compensation of $20,000,
payable in quarterly installments. Mr. Schonrock received
$15,000 in compensation for his period of service prior to his
resignation from the Board of Directors in August 1999.
The Intergraph Corporation Nonemployee Director Stock Option
Plan was approved at the 1998 Annual Shareholders' Meeting. Upon
approval of this plan, members of the Company's Board of
Directors who were not otherwise employed by the Company were
granted options to purchase 3,000 shares of the Company's common
stock. Any new nonemployee director will similarly be granted an
option to purchase 3,000 shares of the Company's common stock
upon his or her first election to the Board. At each annual
meeting of shareholders, each nonemployee director re-elected to
the Board is granted an option to purchase 1,500 shares of the
Company's common stock. The exercise price of each granted
option is the fair market value on the date of grant. Options
are not exercisable prior to one year from the date of grant or
later than ten years after the date of grant. In May 1999, Mr.
Lee, Mr. McDonald, and Mr. Schonrock were each granted options to
purchase 1,500 shares of the Company's common stock under this
plan.
The Board of Directors has committed to the selection of three
additional independent directors commencing with the proposed
election of two new independent directors at this Meeting. The
Board has committed to nomination of a third additional
independent director for proposed election at the 2001 Annual
Meeting. The Company will compensate such additional independent
directors in amounts sufficient to attract qualified candidates,
including consideration of any skills required to complement
those resident in the current Board. Common stock of the Company
will be used for a significant portion of the total compensation
of new independent 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. The contracts are open ended but may be
terminated by either party with six months written notification.
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 below. In 1999, Mr. Wittler's U. S.
contract was amended to increase his base salary by $10,000 per
month and provide for relocation costs. Additionally, the
termination provision of his contract was amended to provide for
one year of severance pay (six months severance pay prior to the
amendment) in the event of involuntary termination.
Mr. Patterson held an employment contract with the U.S. parent
company. The contract provided Mr. Patterson a fixed base
salary, fixed annual increases, and a fixed annual bonus for
1997, with subsequent quarterly bonuses based on revenues and net
income of Intergraph Computer Systems, a wholly-owned subsidiary
of the Company. The contract provided for severance pay of
$500,000 if the Company failed, 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 provided Mr. Patterson with $2,000,000 in
severance pay in the event the Company materially breached the
employment contract, the Company's cash and cash equivalents fell
below $25,000,000, or a change in control event occurred, as
defined in the contract. In November 1998, Mr. Patterson's
contract was amended to extend to him the option to terminate the
contract on or after December 31, 1999 and to entitle him to a
$2,000,000 payment within 30 days of written notice of such
termination. On January 3, 2000, Mr. Patterson terminated his
contract and exercised this option. He received the lump sum
payment of $2,000,000 on February 3, 2000. Under the termination
provision of the contract, Mr. Patterson cannot, for a period of
one year from the date of contract termination, 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.
In addition to compensation received from the U.S. parent
company, Mr. Borgers held an employment contract with one of the
Company's international business entities. The contract was open
ended and provided Mr. Borgers a fixed base salary and allowances
for a vehicle and other personal expense items. In February
2000, the Company terminated this contract and paid Mr. Borgers a
negotiated severance benefit of $350,000.
Compensation Committee Interlocks and Insider Participation
The Company does not currently have a Compensation Committee or
other committee of the Board of Directors performing equivalent
functions, but will establish such a committee, consisting
entirely of independent directors, effective with the 2000 Annual
Meeting of Shareholders. Compensation of the Company's Chief
Executive Officer ("CEO") is currently determined by the Board of
Directors, excluding the CEO. During the year ended December 31,
1999, the Board held no deliberations regarding the compensation
of the CEO. The Board has delegated responsibility for
determination of the compensation of all other executive officers
to the CEO, pending formation of the Compensation Committee. 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 nonqualified stock options to
executive officers and other key employees. During the year
ended December 31, 1999, the Administrative Committee awarded
options for a total of 220,500 shares of the Company's common
stock. Of this total, options for 154,500 shares were awarded to
directors and executive officers of the Company, consisting of
4,500 granted under the Nonemployee Director Stock Option Plan
and 150,000 granted to Manfred Wittler, one of the Named
Executive Officers.
During the year ended December 31, 1999, 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. Pending formation of the
Compensation Committee, the 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 and revenue 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 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 CEO is determined by
the other members of the Board of Directors. The Board does not
regularly deliberate the compensation of the CEO, and the CEO has
not been awarded a salary increase or bonus since 1989. There
are no standard corporate or individual performance factors
utilized by the Board 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, James F. Taylor Jr.
Stock Option Plan: Robert E. Thurber
Larry J. Laster
Sidney L. McDonald
Thomas J. Lee
Performance Graph
The following graph sets forth, for the five year period ended
December 31, 1999, 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. The Company considers its peer group to be the top
five U.S. companies in the computer-aided-design ("CAD") industry
and the top five U.S. computer workstation manufacturing
companies, measured in terms of revenues, for which financial
information is publicly available. 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.,
Compaq Computer Corp., Cadence Design Systems, Inc., Sun
Microsystems, Inc., and Silicon Graphics, Inc., and is unchanged
from the previous year.
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,
1994 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)
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
Peer Group $100 $143 $204 $284 $436 $605
S&P 500 $100 $138 $169 $226 $290 $351
INGR $100 $194 $126 $123 $ 71 $ 58
PROPOSAL 2
APPROVAL OF THE 2000 INTERGRAPH CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
At the Meeting, the shareholders will be asked to adopt and
approve the 2000 Intergraph Corporation Employee Stock Purchase
Plan (the "Purchase Plan"), which has been unanimously approved
by the Board of Directors subject to approval by the
shareholders. The Purchase Plan is intended to replace the 1995
Intergraph Corporation Employee Stock Purchase Plan (the "1995
Stock Purchase Plan"), which will terminate on May 31, 2000.
The purpose of the Purchase Plan is to provide eligible
employees of the Company and its subsidiaries with an opportunity
to purchase shares of Intergraph Common Stock. The Purchase Plan
is designed to be an "employee stock purchase plan" as defined in
Section 423 of the Internal Revenue Code (the "Code").
The description of the Purchase Plan set forth herein is
intended solely as a summary and is subject to and qualified by
the full text of the Purchase Plan, a copy or which is attached
hereto as Exhibit A.
A total of 3,000,000 shares of Intergraph Common Stock (subject
to adjustment in the event of stock splits, stock dividends, and
other similar adjustments) will be made available for purchase
under the Purchase Plan through a series of consecutive annual
offerings beginning June 1, 2000. No offering under the Purchase
Plan may commence after May 31, 2005. Under the 1995 Stock
Purchase Plan, 3,200,000 shares of Intergraph Common Stock were
reserved for sale.
All regular, full-time employees of the Company and its
subsidiaries on or after June 1, 2000 will be eligible to
participate in the Purchase Plan (including, without limitation,
executive officers of the Company). The Purchase Plan will
terminate on the day participating employees become entitled to
purchase a number of shares equal to or greater than the number
of shares remaining available for purchase, or at any other time,
at the discretion of the Board of Directors of the Company (the
"Board"). Subject to extension or earlier termination of the
Purchase Plan, either by the terms of the Purchase Plan or at the
discretion of the Board of Directors of the Company, no offering
under the Purchase Plan will be made which will extend beyond May
31, 2005. All amounts in the accounts of participating employees
as of the date the Purchase Plan terminates will be promptly
refunded or carried forward into the employee's account under a
successor purchase plan, if any.
The Purchase Plan will be administered by a committee composed
of either the entire Board of Directors or two or more non-
employee directors who do not have a material financial
relationship with the Company or any of its subsidiaries (the
"Committee"). The Committee will not permit or deny
participation in the Purchase Plan contrary to the requirements
of the Code (including, but not limited to, Sections 423(b)(3),
(4), and (8) thereof) and regulations promulgated thereunder. An
option to purchase shares under the Purchase Plan may not be
granted to an employee who, immediately prior to or after such
option is granted, owns or would own 5% or more of the total
combined voting power or value of the stock of the Company or any
subsidiary, including stock which may be purchased under
outstanding options (and as determined by Section 424(d) of the
Code).
The purchase price for each share purchased under the Purchase
Plan will be 85% of the average market price on the last pay date
of each calendar month or, if the stock was not traded on the
last pay date of such month, on the last date the stock was
traded prior to the last pay date of such month (the "Per Share
Price"). The Purchase Plan defines "average market price" as the
closing sale price of the Intergraph Common Stock as reported on
The Nasdaq Stock Market, or the mean between the highest and
lowest per share sales price should the stock be listed on an
exchange.
Eligible employees electing to participate in the Purchase Plan
may set aside, by payroll deduction, up to ten percent (10%) of
their compensation for the purpose of purchasing shares under the
Purchase Plan. On the last pay date of each calendar month, the
account balance of each employee then participating in the
Purchase Plan will be applied to the purchase of full and partial
shares at the Per Share Price for such calendar month.
A participating employee may at any time increase or decrease
his payroll deduction. Payroll deductions will continue unless
changed, discontinued, or the employee becomes ineligible to
continue participating in the Purchase Plan. No employee may be
given the right to purchase shares under the Purchase Plan if the
aggregate fair market value (as determined at the effective date
of the offering) of such shares and any other shares which such
employee has a right to acquire under any other stock purchase
plan of the Company and its subsidiaries during the same calendar
year would exceed twenty-five thousand dollars ($25,000). The
Company may use funds received or held pursuant to the Purchase
Plan for any corporate purpose. The Company may also purchase
outstanding shares pursuant to, on behalf of, or for delivery
under the Purchase Plan.
A participating employee may at any time and for any reason
withdraw all (but not less than all) of the balance accumulated
in the employee's account and thereby withdraw from participation
in an offering. Thereafter, the employee may begin participation
again at any time. In the event of the participating employee's
retirement, death, or termination of employment, no payroll
deduction will be taken from any pay due and owing to the
employee at such time, and the balance in the employee's account
will be paid to the employee or, in the event of death, to the
employee's estate. Rights under the Purchase Plan will not be
transferable by a participating employee other than by will or
the laws of descent and distribution, and are exercisable during
the employee's lifetime only by the employee.
The Board may at any time, and from time to time, amend the
Purchase Plan in any respect, except that without the requisite
approval of the shareholders, the Board of Directors may not
amend the Purchase Plan to increase or decrease the number of
shares approved for the Purchase Plan (other than for stock
splits, stock dividends and other adjustments), decrease the Per
Share Price, or change the designation of subsidiaries eligible
to participate in the Purchase Plan. The Purchase Plan may not
be amended more frequently than every six months except to comply
with the requirements of the Code.
Under the Code, no taxable income need be reported until the
year in which the employee makes a sale or other disposition of
the shares, or the year of death of the employee if no sale or
other disposition of the shares has occurred by then. The
required holding period for long-term capital gain or loss
purposes (the "capital gain holding period") is more than one
year. If the employee sells or otherwise disposes of the shares
within two years after the date of offering or before the end of
the capital gain holding period, the disposition is considered a
"disqualifying disposition" and will result in reportable
ordinary income in an amount equal to the difference between the
fair market value of the shares and the exercise price. The
excess of the average market price of the shares on the date of
purchase less the actual purchase price must be reported even if
no profit was made on the sale or the shares were given away
free. If the shares purchased under the Purchase Plan are sold
or otherwise disposed of more than two years after the date of
offering and after the end of the capital gain holding period,
the profit will be taxed as long-term capital gain, except there
must be reported as ordinary income the lesser of 15% of the
average market price of the shares on the date of offering, or an
amount, if any, equal to the net proceeds of sale (or if not a
sale, the average market price on the date of disposition) of the
shares less the actual purchase price. If no sale or disposition
of the shares has occurred by the time of the employee's death,
the ordinary income which must be reported by the employee in the
year of death (no matter how long the stock is held) is the
lesser of 15% of the average market price of the shares on the
date of offering or an amount, if any, equal to the average
market price of the shares on the date of death less the actual
purchase price. There is no capital gain or loss on a
disposition by gift or transfer at death.
If a disqualifying disposition should occur, the Company is
entitled to a deduction for its taxable year in an amount equal
to the ordinary income required to be included in the income tax
return of the employee. In the absence of a disqualifying
disposition, the Company is not allowed any deduction.
If the Purchase Plan is approved, the 3,000,000 shares of
Common Stock which will be available for purchase will represent
approximately 6% of the 49,252,406 shares outstanding at the
close of business on January 31, 2000. The average closing sale
price of the Intergraph Common Stock on that date was $5.375.
Approximately 5,600 employees of the Company are eligible to
participate in the Purchase Plan. The amount of options reserved
or to be reserved and the shares to be purchased under the
Purchase Plan by the eligible Named Executive Officers, all other
eligible current executive officers, and all other employees who
are not executive officers cannot be determined at this time or
for the Company's most recent fiscal year because participation
in the Purchase Plan is optional for each employee, and because
the actual number of shares purchased is dependent upon the
amount set aside by each employee during each offering period and
upon the price of the shares when purchased.
The Board of Directors recommends a vote FOR Proposal 2.
PROPOSAL 3
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, if appropriate, for the year ending December
31, 2000. Such appointment will be presented to the shareholders
for ratification at the Meeting. If the shareholders do not
ratify the appointment, the selection of another firm will be
considered by the Board. A representative of Ernst & Young LLP
is expected to be present at the Meeting to respond to questions
from shareholders and will be given the opportunity to make a
statement if so desired.
The Board of Directors recommends a vote FOR Proposal 3.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Shareholder proposals intended for presentation at the 2001
Annual Meeting must be received by the Company no later than
December 7, 2000 to be considered for inclusion in its 2001 proxy
material. In addition, the proxies solicited by the Board of
Directors for the 2001 Annual Meeting will confer discretionary
authority to vote on any shareholder proposal presented at that
meeting, unless notice of such proposal is received by the
Company no later than February 20, 2001.
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 FOR THE YEAR ENDED DECEMBER
31, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
By Order of the Board of Directors
JOHN R. WYNN
Secretary
DATED: April 6, 2000
EXHIBIT "A"
2000 INTERGRAPH CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
The purpose of this 2000 Intergraph Corporation Employee
Stock Purchase Plan (the "Plan") is to provide employees of
Intergraph Corporation (the "Corporation"), and employees of its
subsidiaries (as defined in Section 10 below), an opportunity to
purchase shares of Intergraph Corporation ten cent ($. 10) par
value common stock ("Intergraph Stock") through annual offers to
be made during a five-year period commencing June 1, 2000. A
total of 3,000,000 shares in the aggregate have been approved for
this purpose.
1. 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 Corporation's Board of Directors who (a) is
not currently an officer or employee of the Corporation or any
parent or subsidiary of the Corporation, (b) does not directly or
indirectly receive compensation for serving as a consultant or in
any other non-director capacity from the Corporation or any
parent or subsidiary of the Corporation 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 an interest in any other transaction with
the Corporation or any parent or subsidiary of the Corporation
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 Corporation or any parent or subsidiary of the
Corporation 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 will have the
authority to make rules and regulations relating to Plan
administration. The interpretations and decisions of the
Committee with regard to the Plan and its administration shall be
final and conclusive.
2. Eligibility. All regular, full-time employees of the
Corporation and its subsidiaries are eligible to participate in
the Plan, in accordance with such rules as the Committee may
prescribe from time to time; provided that such rules shall
neither permit nor deny participation in the Plan contrary to the
requirements of the Internal Revenue Code (including, but not
limited to, Sections 423(b)(3),(4) and (8) thereof) and
regulations promulgated thereunder. No employee may be granted an
option to purchase shares under the Plan if the employee, either
before or immediately after the option is granted, owns or would
own 5% or more of the total combined voting power or value of the
stock of the Corporation or any subsidiary. For purposes of the
preceding sentence, the rules of Section 424(d) of the Internal
Revenue Code shall apply in determining the stock ownership of an
employee, and stock which the employee may purchase under
outstanding options shall be treated as stock owned by the
employee.
3. Offerings. The Corporation may make up to five annual
offerings to employees to purchase Intergraph Stock under the
Plan. Each offering period shall be of 12 months duration, during
which (or during such portion thereof as an employee may elect to
participate) the amounts received as compensation by an employee
shall constitute the basis for measuring such employee's
participation in the offering, to the extent participation is
based on compensation.
4. Participation. An employee eligible on the effective
date of any offering may participate in such offering at any time
by completing and forwarding a payroll deduction authorization
form to the Human Resources Department. The form will authorize
a regular payroll deduction from the employee's compensation.
5. Deductions. The Corporation will maintain payroll
deduction accounts for all participating employees. With respect
to any offering made under this Plan, an employee may authorize a
payroll deduction in terms of whole number percentages up to a
maximum of 10% of the compensation an employee receives during
the offering period (or during such portion thereof as an
employee may elect to participate).
No employee may have the right to purchase stock under
this Plan if, when aggregated with the employee's right to
purchase shares under any other stock purchase plan of the
Corporation and its subsidiaries, such rights accrue at a rate
which exceeds $25,000 of the fair market value of such stock
(determined at the effective date of the offering) for each
calendar year in which the option is outstanding at any time.
6. Deduction Changes. An employee may at any time increase
or decrease the employee's payroll deduction by filing a new
payroll deduction authorization form. The change may not become
effective sooner than the next pay period after receipt of the
form.
7. Withdrawal of Funds. An employee may at any time and
for any reason permanently withdraw all (but not less than all)
of the balance accumulated in the employee's Plan account, and
thereby withdraw from participation in an offering. The employee
may at any time thereafter renew participation in the Plan.
8. Purchase of Shares. Each employee participating in any
offering under this Plan will be granted an option, on the
effective date of such offering, to purchase as many full and
partial shares of Intergraph Stock as the employee may elect to
purchase with up to 10% of compensation received during the
specified offering period (or during such portion thereof as an
employee may elect to participate), to be paid by payroll
deductions during such period.
The offering price for each share purchased will be 85%
of the average market price (as defined in Section 10 below) on
the last pay date of each calendar month or, if the Intergraph
Stock was not traded on the last pay date of such month, on the
last date the Intergraph Stock was traded prior to the last pay
date of such month. As of the last day of the pay period
immediately preceding the last pay date of each calendar month
during any offering, the Plan account of each participating
employee shall be totaled, and the employee shall be deemed to
have exercised an option to purchase such number of full and
fractional shares as may be purchased at such offering price with
the amounts then held in such employee's Plan account. The amount
of the purchase shall be charged against the employee's Plan
account, and a stock certificate shall be issued to the employee
as of such date, or the ownership of such shares shall be
otherwise appropriately evidenced on the books of the
Corporation.
A participating employee may not purchase a share under
any offering period after termination of such offering period.
9. Registration of Certificates. Certificates may be
registered only in the name of the employee or, if the employee
so indicates on the employee's payroll deduction authorization
form, in the employee's name and another person's name jointly
with right of survivorship.
10. Definitions. The term "average market price" shall be
deemed to be the closing sale price of the Intergraph Stock as
reported on The Nasdaq Stock Market (or the mean between the
highest and lowest per share sales price should the stock be
listed on an exchange). Subject to the foregoing, the Committee
shall have full authority and discretion, and shall be fully
protected, in connection with fixing the purchase price.
The term "subsidiary" means a subsidiary of the
Corporation within the meaning of Section 424(f) of the Internal
Revenue Code and the regulations promulgated thereunder.
11. Rights as a Stockholder. None of the rights or
privileges of a stockholder of the Corporation shall exist with
respect to shares purchased under this Plan unless and until
certificates representing such shares shall have been issued, or
such shares shall have been otherwise appropriately evidenced on
the books of the Corporation.
12. Rights on Retirement, Death, or Termination of
Employment. In the event of a participating employee's retirement
or death, or termination of a participating employee's
employment, no payroll deduction shall be taken from any pay due
and owing to an employee at such time, and the balance in the
employee's Plan account (if any) shall be paid to the employee
or, in the event of the employee's death, to the employee's
estate.
13. Rights Not Transferable. Rights under this Plan are not
transferable by a participating employee other than by will or
the laws of descent and distribution, and are exercisable during
the employee's lifetime only by the employee.
14. Application of Funds. All funds received or held by the
Corporation under this Plan may be used for any corporate
purpose.
15. Adjustment in Case of Changes Affecting Intergraph
Stock. In the event of a subdivision of the outstanding shares of
the Corporation, or the payment of a stock dividend, the number
of shares approved for this Plan shall be increased
proportionately, and such other adjustment shall be made as may
be deemed equitable by the Board of Directors. In the event of
any other change affecting Intergraph Stock, the Board of
Directors may make such adjustments, including but not limited to
adjusting the number of shares approved for this Plan, as it
deems necessary or appropriate to properly reflect such event.
16. Amendment of the Plan. The Board of Directors may at
any time, and from time to time, amend this Plan in any respect
(including but not limited to amendments intended to facilitate
participation by those eligible employees who are subject to
Section 16 of the Securities Exchange Act of 1934, and the rules
and regulations promulgated thereunder), except that, without the
approval of the shareholders of the Corporation, no amendment
shall be made (a) increasing or decreasing the number of shares
approved for this Plan (other than as provided in Section 15
above), (b) decreasing the offering price per share, or (c)
changing the designation of subsidiaries eligible to participate
in the Plan. The Plan may not be amended more frequently than
every six months except to comply with the requirements of the
Internal Revenue Code.
17. Termination of the Plan. This Plan and all rights of
employees under any offering made pursuant to this Plan shall
terminate:
(a) on the day that participating employees become
entitled to purchase a number of shares equal to or greater than
the number of shares remaining available for purchase (if the
number of shares subscribed for is greater than the number of
remaining shares, the available shares shall be allocated by the
Committee among such participating employees in such a manner as
it deems fair); or
(b) at any time, at the discretion of the Board of
Directors.
No offering hereunder shall be made which will extend
beyond May 31, 2005. Upon termination of this Plan all amounts in
the Plan accounts of participating employees shall be carried
forward into the employee's payroll deduction account under a
successor plan, if any, or promptly refunded.
18. Governmental Regulations. The Corporation's obligation
to sell and deliver Intergraph Stock under this Plan is subject
to the approval of any governmental authority required in
connection with the authorization, issuance, or sale of such
stock.
19. Purchase of Shares. Purchases of outstanding shares may
be made pursuant to and on behalf of this Plan, upon such terms
as the Corporation may approve, for delivery under this Plan.
PROXY INTERGRAPH CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE INTERGRAPH CORPORATION
BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 18, 2000
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 May 18, 2000, 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.
(Continued and to be signed on reverse side.)
- -------------------------------------------------------------------------------
INTERGRAPH CORPORATION
PLEASE MARK YOUR VOTE WITH AN "X" IN THE OVAL USING DARK INK ONLY.
1.Election of
Directors -- FOR all nominees listed WITHHOLD AUTHORITY FOR ALL nominees
Nominees: to vote for all listed (Except
James W. nominees listed as marked to the
Meadlock; James contrary)
F. Taylor Jr;
Robert E. Thurber;
Larry J. Laster;
Sidney L. McDonald;
Thomas J. Lee;
Lawrence R. Greenwood;
Joseph C. Moquin [ ] [ ] [ ]
INSTRUCTION:
To withhold authority
to vote for any
individual nominee
strike through the
nominee's name in the
list above.
2.Proposal to approve the
2000 Intergraph
Corporation Employee FOR AGAINST ABSTAIN
Stock Purchase Plan. [ ] [ ] [ ]
3.Proposal to ratify the
appointment of Ernst &
Young LLP as the
Company's auditors for
the current fiscal FOR AGAINST ABSTAIN
year. [ ] [ ] [ ]
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: , 2000
---------------- -------
Signature: Date: , 2000
---------------- -------
* COM = Common Stock Shares; ESP = Employees Stock Purchase Plan Shares; ESB =
Employee Stock Bonus Plan Shares.
