<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
[Amendment No. ]
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
THE MACNEAL-SCHWENDLER CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
THE MACNEAL-SCHWENDLER CORPORATION
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 12, 1996
------------------------
To the Stockholders of
THE MACNEAL-SCHWENDLER CORPORATION
The Annual Meeting of Stockholders of The MacNeal-Schwendler Corporation
(the "Company") will be held at 815 Colorado Boulevard, Fifth Floor, Los
Angeles, California 90041 on Wednesday, June 12, 1996 at 2:00 p.m., Los Angeles
time, for the following purposes:
1. To elect four directors to Class II of the Company's Board of Directors
in accordance with Article III, Section 3 of the Company's By-laws.
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on April 19, 1996 as
the record date for the determination of stockholders entitled to receive notice
of and vote at the 1996 Annual Meeting or any adjournment thereof.
By Order of the Board of Directors
Louis A. Greco
SECRETARY AND CHIEF FINANCIAL OFFICER
May 1, 1996
YOUR VOTE IS IMPORTANT
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON ARE
URGED TO DATE, FILL IN, SIGN AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
THE MACNEAL-SCHWENDLER CORPORATION
815 COLORADO BOULEVARD
LOS ANGELES, CALIFORNIA 90041
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
JUNE 12, 1996
------------------------
Your proxy on the enclosed Proxy Card is solicited by the management of the
Company for use at the Annual Meeting of Stockholders (the "1996 Annual
Meeting") to be held on June 12, 1996 or at any adjournment thereof. This Proxy
Statement and the accompanying Proxy Card are being mailed to stockholders on or
about May 1, 1996.
Each properly executed proxy received prior to the 1996 Annual Meeting will
be voted as directed, but if not otherwise specified, such proxies will be voted
for the election of the nominees for Class II of the Company's Board of
Directors named in this Proxy Statement and for ratification of the appointment
of Ernst & Young LLP as the Company's independent accountants for the current
fiscal year. As for any other business which may properly come before the 1996
Annual Meeting and be submitted to a vote of stockholders, proxies received by
the Board of Directors will be voted in accordance with the best judgment of the
designated proxyholders.
Each stockholder giving a proxy may revoke it at any time before it is
exercised. A proxy may be revoked by filing with the Secretary of the Company at
815 Colorado Boulevard, Los Angeles, California 90041, a written revocation or a
properly executed proxy bearing a later date. A proxy may also be revoked if the
person who executed the proxy attends the meeting in person and so requests,
although attendance at the 1996 Annual Meeting will not in itself constitute a
revocation of the proxy.
The Company will bear the costs of preparing, assembling and mailing the
Notice, Proxy Statement and Proxy Card for the 1996 Annual Meeting. The
solicitation of proxies for the 1996 Annual Meeting will be made primarily by
mail. However, if necessary to ensure satisfactory representation at the
meeting, additional solicitation may take place by telephone, telegraph and
personal interview by officers and employees of the Company. No such officer or
employee will receive additional compensation for such services. The Company
will, upon request, reimburse persons holding shares in their names as
custodians, nominees or fiduciaries for expenses they may incur in obtaining
instructions from beneficial owners of such shares. The Company has retained
Chemical Mellon Shareholder Services, L.L.C. to assist in the solicitation of
proxies on its behalf for a fee of approximately $4,200, plus out-of-pocket
expenses.
The Company has fixed the close of business on April 19, 1996, as the record
date for the determination of stockholders entitled to notice of and to vote at
the 1996 Annual Meeting and any adjournment thereof. Shares of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), of which 13,451,806
shares were outstanding on April 19, 1996, are the only voting securities of the
Company. A majority of the Company's outstanding shares of Common Stock as of
April 19, 1996 must be represented in person or by proxy to constitute a quorum
for the 1996 Annual Meeting. Each share of Common Stock entitles the holder
thereof to one vote on each matter to be voted on at the 1996 Annual Meeting.
1. ELECTION OF DIRECTORS
One of the purposes of the 1996 Annual Meeting is the election of four
persons to Class II of the Company's Board of Directors in accordance with
Article III, Section 3 of the Company's By-laws. Pursuant to Article III,
Section 3 of the Company's By-laws, the Board of Directors have set the number
of directors on the Board at ten and have divided the Board into three classes,
designated Class I, Class II and Class III. Class II presently consists of four
directors, Bernard J. Bannan, Thomas C. Curry, Harold Harrigian and
1
<PAGE>
George M. Riordan, all of whom have been nominated to stand for reelection as
Directors at the 1996 Annual Meeting to hold office until the 1999 Annual
Meeting of Shareholders and until their successors are elected and qualified.
The Company does not contemplate that any of the following nominees will
become unavailable prior to the Annual Meeting, but if any such persons should
become unavailable, it is expected that proxies will be voted for such other
nominee or nominees as may be recommended to the Board of Directors by the
Nominating Committee.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR BERNARD J. BANNAN,
THOMAS C. CURRY, HAROLD HARRIGIAN AND GEORGE N. RIORDAN AS DIRECTORS TO HOLD
OFFICE UNTIL THE 1999 ANNUAL MEETING OF SHAREHOLDERS AND UNTIL THEIR SUCCESSORS
ARE ELECTED AND QUALIFIED. PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR PROXY A CONTRARY CHOICE.
NOMINEES FOR DIRECTORS
At the 1996 Annual Meeting, the term of incumbent directors in Class II will
expire and the directors listed below will stand for re-election in accordance
with Article III, Section 3 of the Company's By-laws. The directors elected to
Class II of the Company's Board of Directors at the 1996 Annual Meeting will
serve for a three-year term ending at the Annual Meeting of Stockholders to be
held in 1999 and until their respective successors are elected and qualified.
The following table sets forth certain information, furnished to the Company by
the respective persons named below, about the directors standing for re-election
at the 1996 Annual Meeting:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE LAST FIVE YEARS SINCE
- ----------------------- --- -------------------------------------------------------------------- ---------
<S> <C> <C> <C>
Bernard J. Bannan 75 President and director, Binley, Inc. (formerly BJB Enterprises), a 1986
privately held investment management company, since 1984. Dr.
Bannan is also a director of Cable Design Technologies, a publicly
held company (1995 to present). Dr. Bannan previously served as a
director of Fairchild Space & Defense Corporation (1989 to 1991)
and Intercole, Inc. (1986 to 1995).
Thomas C. Curry 51 President (1994 to present) and Chief Executive Officer (March 27, 1996*
1996 to present) of the Company. Mr. Curry previously served as
President of PDA Engineering (January 1994 to August 1994) at the
time it was acquired by the Company, and as Vice President and
General Manager of the Software Products Division of PDA
Engineering (1990 to January 1994).
Harold Harrigian 61 Partner and Director of the Corporate Finance Department, Crowell, 1986
Weedon & Co., an investment banking and securities firm, since
1984. Mr. Harrigian also serves as a director and member of the
Audit and Compensation Committees of First Mortgage Corporation
(1992 to present), and as a director of Community Bank, a privately
held company and McGinn Actuaries, a privately held company.
George N. Riordan 62 Managing Director, George Riordan & Co., investment bankers 1983
(February 1991 to present); director, Pancho's Mexican Buffet, Inc.
(1993 to present) and Lewis Galoob Toys, Inc. (1994 to present).
Mr. Riordan formerly was a Managing Director of Dean Witter
Reynolds, Inc., an investment banking firm (1989 to February 1991).
</TABLE>
- ------------------------
*In accordance with the By-laws of the Company, Mr. Curry was elected by the
Board of Directors on March 27, 1996.
2
<PAGE>
CONTINUING DIRECTORS
The following table sets forth certain information, furnished to the Company
by the respective persons named below, about the directors who comprise Class I
and Class III of the Company's Board of Directors.
The following Class I directors are currently serving until the 1998 Annual
Meeting and until their respective successors are elected and qualified:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE LAST FIVE YEARS SINCE
- ---------------------- --- --------------------------------------------------------------------- ---------
<S> <C> <C> <C>
Paul B. MacCready 70 Chairman (1971 to present) and former Chief Executive Officer (1971 1992
to 1994), AeroVironment, Inc., a provider of services and products
relating to pollution control, alternative energy and
energy-efficient vehicles. Dr. MacCready also serves as a director
of National Education Corporation, a publicly held company. Dr.
MacCready previously served as director of the Lindbergh Fund and
the Museum of Flying. Dr. MacCready is the creator of the Gossamer
aircraft.
Frank Perna 58 Chief Executive Officer and director, EOS, a privately held provider 1994
of power supplies for electrical equipment and notebook computers
(1994 to present). Mr. Perna also serves as a director of Durand
Inc., a privately held Internet software company, Software.Com, a
privately held software company and EISI, a privately held
electronics distributor. Mr. Perna previously served as director of
PDA Engineering (1990 to 1994) and was a member of the Board of
Directors of PDA Engineering at the time it was acquired by the
Company. Mr. Perna was formerly President and Chief Executive
Officer of MagneTek, Inc., a publicly held provider of electrical
equipment and services to utilities and industrial customers (1990
to 1993).
Russell F. Henke 55 Vice President and General Manager of the Professional Services 1995*
Division of Mentor Graphics Corporation, a publicly held software
company, and member of the Mentor Graphics Executive Operating
Committee (1994 to present). Mr. Henke previously served as Vice
President and General Manager of the PCB division of the Mentor
Graphics Corporation (1990 to 1994).
</TABLE>
- ------------------------
*In accordance with the By-laws of the Company, Mr. Henke was elected by the
Board of Directors on September 13, 1995.
3
<PAGE>
The following Class III directors are currently serving until the 1997
Annual Meeting and until their respective successors are elected and qualified:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE LAST FIVE YEARS SINCE
- ------------------------- --- ------------------------------------------------------------------- ---------
<S> <C> <C> <C>
Richard H. MacNeal* 73 Chairman of the Board (1965 to present) of the Company. Dr. MacNeal 1963
previously served as President (September 1991 to October 1993)
and Chief Executive Officer (1991 to March 27, 1996) of the
Company.
Dale D. Myers 74 President, Dale Myers and Associates, an aerospace and energy 1990
consulting firm (1989 to present). Mr. Myers is also director of
General Science Corporation, a subsidiary of Science Applications
International Corporation, a privately held aerospace, defense and
energy firm (April 1993 to present).
Arthur H. Reidel 45 President, Chief Executive Officer, and director of PharSoft 1993
Corporation, a privately held software corporation (February 1996
to present); Private investor/consultant (March 1995 to present);
Vice President, Business Development, Viewlogic Systems, Inc., a
publicly held software firm (October 1994 to March 1995). Mr.
Reidel has also served as President and Chief Executive Officer,
Sunrise Test Systems, Inc., a privately-held software firm (1992
to September 1994) (Viewlogic Systems, Inc. acquired Sunrise Test
Systems, Inc. in September 1994); Vice President, Weitek
Corporation (1991 to 1992); and General Partner, ABS Ventures,
L.P. (1984 to 1991).
</TABLE>
- ------------------------
*Richard H. MacNeal is the father of Bruce E. MacNeal, a Vice President of the
Company.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended January 31, 1996, the Board of Directors held
six meetings. The Board of Directors has three committees: an Audit Committee, a
Compensation Committee and a Nominating Committee. Each of the three committees
is composed entirely of outside Directors.
Messrs. Harrigian, Riordan and Reidel sit on the Audit Committee, which held
3 meetings in the fiscal year ended January 31, 1996. The Audit Committee is
responsible for assisting the Board in fulfilling its responsibilities as they
relate to the Company's accounting policies, internal controls, and financial
reporting practices, and for maintaining a line of communication between the
Board and the Company's independent accountants, Ernst & Young LLP. Reports of
such meetings are provided to the Board together with any Committee
recommendations.
Dr. Bannan and Messrs. Myers and Riordan comprise the Compensation
Committee, which met 3 times in the fiscal year ended January 31, 1996. The
Compensation Committee reviews all officers' compensation and recommends to the
Board, as necessary, stock options to be awarded, changes in salary or profit
sharing, and the amount of yearly bonuses to be awarded to employees.
Drs. Bannan and MacCready and Messrs. Myers and Perna sit on the Nominating
Committee, which met 7 times in the fiscal year ended January 31, 1996. The
Nominating Committee is responsible for nominating directors to serve on the
Board of Directors of the Company. The Nominating Committee will not consider
nominees recommended by the stockholders.
The Board of Directors also created an Ad Hoc Committee for fiscal 1996.
Messrs. Myers, Perna, Riordan, and Reidel were appointed to this committee with
the responsibility of reviewing and enhancing corporate development. The Ad Hoc
Committee met 3 times in the fiscal year ended January 31, 1996.
4
<PAGE>
Each director attended at least 75% of the total number of meetings of the
Board and committees of which he was a member, except for Mr. Henke, who was
only a director for a portion of the year, and Mr. Curry, who was elected to the
Board of Directors after the end of fiscal 1996.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 19, 1996 the names, addresses,
and holdings of those persons known to the Company to be beneficial owners of
more than 5% of its Common Stock, the names and holdings of each nominee for
director, the names and holdings of each executive officer named in the Summary
Compensation Table ("named executive officers") and the holdings of all
executive officers and directors as a group:
<TABLE>
<CAPTION>
AMOUNT BENEFICIALLY
OWNED AND NATURE OF
BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP (1) CLASS (2)
- ----------------------------------------------------------- ------------------- -----------
<S> <C> <C>
Richard H. MacNeal......................................... 1,438,100 10.7%
815 Colorado Boulevard
Los Angeles, CA 90041
Brinson Partners, Inc...................................... 839,300(3) 6.2%
209 South LaSalle
Chicago, IL 60604
The Capital Research and Management Company................ 815,000(4) 6.1%
333 South Hope Street
Los Angeles, CA 90071
Bernard J. Bannan.......................................... 27,000 *
Harold Harrigian........................................... 19,250 *
Russell F. Henke........................................... 0(5) *
Paul B. MacCready.......................................... 17,000 *
Dale D. Myers.............................................. 23,200 *
Frank Perna................................................ 12,452 *
Arthur H. Reidel........................................... 14,486 *
George N. Riordan.......................................... 19,500 *
Thomas C. Curry............................................ 132,721 *
Louis A. Greco............................................. 92,200 *
Bruce E. MacNeal........................................... 65,200 *
Dennis A. Nagy............................................. 134,980 *
All directors and executive officers as a group
(16 persons).............................................. 2,094,846(6) 15.6%
</TABLE>
- ------------------------
* Holdings represent less than 1% of all shares outstanding.
(1) Except as provided with respect to certain shares held in trust with the
person's spouse and as otherwise provided under state community property
laws, beneficial ownership is direct, and the person indicated has sole
voting and investment power over the shares of common stock indicated. The
amounts shown in this column include shares issuable upon (i) conversion of
the Company's 7 7/8% Convertible Subordinated Debentures due 2004 (the
"Debentures") or (ii) exercise of options which are exercisable on or within
60 days of April 19, 1996, in the following amounts: Richard H. MacNeal,
276,957; Bernard J. Bannan, 16,000; Harold Harrigian, 18,000; Paul B.
MacCready, 16,000; Dale D. Myers, 16,000; Frank Perna, 12,452; Arthur H.
Reidel, 14,000; George N. Riordan, 18,000; Thomas C. Curry, 131,721; Dennis
A. Nagy, 123,980; Louis A. Greco, 85,488; and Bruce E. MacNeal, 35,200.
(2) All expressions of percent of class held assume that the Debentures and
options, if any, of the particular person or group in question, and no
others, have been exercised.
5
<PAGE>
(3) Based upon information set forth in a Schedule 13G filed under the
Securities Exchange Act of 1934 by Brinson Partners, Inc. ("Brinson") in
February 1996. Brinson and Brinson Trust Company, an operating subsidiary of
Brinson, exercised, as of December 31, 1995, voting power and investment
discretion with respect to 615,047 and 224,253 shares, respectively, or a
combined total of 6.2% of the Company's outstanding Common Stock.
(4) Based upon information set forth in a Schedule 13G filed under the
Securities Exchange Act of 1934 by The Capital Group Companies Inc. and
Capital Research Management Company in February 1996. Capital Research
Management Company, a registered investment adviser and an operating
subsidiary of The Capital Group Companies, Inc., exercised as of December
29, 1995, investment discretion with respect to 815,000 shares, or 6.1% of
outstanding shares of the class, which were owned by various institutional
investors. Said subsidiary has no power to direct the vote of the above
shares.
(5) Mr. Henke was elected by the Board of Directors on September 13, 1995.
(6) Includes 862,555 shares issuable upon exercise of options granted the
directors and executive officers of the Company which are exercisable on or
within 60 days of April 19, 1996. See footnote 1 above.
MANAGEMENT CHANGES
Effective March 27, 1996, Richard H. MacNeal resigned as Chief Executive
Officer of the Company. Dr. MacNeal remains the Chairman of the Board. Thomas C.
Curry was appointed to succeed Dr. MacNeal as Chief Executive Officer of the
Company. Mr. Curry was also appointed as a director and will continue to serve
as President of the Company.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION. The following table and accompanying notes show for
the Chief Executive Officer and the four next highest paid executive officers of
the Company as of January 31, 1996, the indicated compensation paid by the
Company to such persons during the last fiscal year and, to the extent required
by applicable rules, the preceding two fiscal years.
6
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS (1)
ANNUAL COMPENSATION --------------
----------------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL FISCAL COMPENSATION OPTIONS COMPENSATION
POSITION YEAR SALARY ($) BONUS ($)(2) ($)(3) (#)(4) ($)(5)
- -------------------------- ------------ ---------- ------------ ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Richard H. MacNeal, 1996 $ 325,000 59,962 -- 105,000 61,511
Chairman and Chief 1995 325,000 121,904 -- 103,500 61,546
Executive Officer (6) 1994 315,625 59,386 -- 161,457(8) 30,000
Thomas Curry, 1996 253,007 46,680 -- 105,000 45,725
President (6) 1995(7) 72,930 46,886 -- 130,000 8,111
Dennis A. Nagy, 1996 210,000 38,745 -- 30,000 38,512
Senior Vice President, 1995 210,000 78,769 -- 65,000 36,546
Operations 1994 193,542 36,105 -- 51,000(8) 21,574
Louis A. Greco, 1996 191,666 35,362 -- 55,000 34,595
Chief Financial Officer 1995 185,000 69,631 -- 45,000 33,546
1994 181,250 34,172 -- 37,488(8) 23,028
Bruce E. MacNeal, 1996 140,802 25,978 -- 30,000 24,366
Vice President 1995(7) 132,812 -- 25,000 16,374
</TABLE>
- ------------------------
(1) The Company did not make any payments or awards that would be classifiable
under the "Restricted Stock Award" and "LTIP Payout" columns otherwise
required to be included in the Table by the applicable Securities and
Exchange Commission ("SEC") disclosure rules.
(2) Annual bonus amounts are earned and accrued during the fiscal years
indicated, and paid subsequent to the end of each fiscal year.
(3) The amounts included in this column for each of the named executive officers
do not include the value of certain perquisites which in the aggregate did
not exceed the lower of $50,000 or 10% of each named executive's aggregate
fiscal 1994, 1995 or 1996 salary and bonus compensation.
(4) Unless otherwise noted, represents shares of stock underlying options
granted under the 1991 Plan. There were no individual grants of stock
options in tandem with stock appreciation rights ("SAR's") or freestanding
SAR's made during the fiscal years ended January 31, 1994, 1995 or 1996 to
the above-named executive officers.
(5) Unless otherwise noted, the amounts shown constitute Company contributions
on behalf of the named individuals to (i) The MacNeal-Schwendler Corporation
Profit Sharing Plan ("PSP") and (ii) The MacNeal-Schwendler Corporation
Supplemental Retirement and Deferred Compensation Plan ("SERP") in the
following amounts: Richard H. MacNeal -- 1996: $19,012 to PSP, $42,500 to
SERP; 1995: $19,046 to PSP, $42,500 to SERP; 1994: $30,000 to PSP, $0 to
SERP; Thomas Curry -- 1996: $19,012 to PSP, $26,714 to SERP; 1995; $5,275 to
PSP, $2,836 to SERP; Dennis A. Nagy -- 1996: $19,012 to PSP, $19,500 to
SERP; 1995: $19,046 to PSP, $19,500 to SERP; 1994: $21,574 to PSP, $0 to
SERP; Louis A. Greco -- 1996: $19,012 to PSP, $15,584 to SERP; 1995: $19,046
to PSP, $14,500 to SERP; 1994: $23,028 to PSP, $0 to SERP; Bruce E. MacNeal
-- 1996: $17,403 to PSP, $6,964 to SERP; 1995: $16,374 to PSP, $0 to SERP.
(6) Dr. MacNeal resigned as Chief Executive Officer of the Company on March 27,
1996 and was succeeded by Mr. Curry. See "Management Changes" above.
7
<PAGE>
(7) Thomas Curry and Bruce E. MacNeal were appointed executive officers of the
Company in fiscal 1995.
(8) Includes 6,000 shares of stock underlying options granted under the
Company's now expired 1983 Incentive Stock Option Plan for Key Employees.
OPTION GRANTS. The following table sets forth certain information
concerning stock options granted to the named executive officers for fiscal year
1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------------
PERCENT OF TOTAL
OPTIONS GRANTED GRANT DATE
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION PRESENT
NAME GRANTED (#) (1)(2) FISCAL YEAR 1996 PRICE ($/SH) (3) DATE VALUE ($)
- --------------------------------------------- ------------------ ---------------- ---------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Richard H. MacNeal........................... 5,000(4) 1% $ 15.375 12/6/2000 $ 18,150(5)
100,000(6) 15% 15.375 12/6/2005 418,000(7)
Thomas Curry................................. 5,000(4) 1% 15.375 12/6/2000 18,150(5)
100,000(6) 15% 15.375 12/6/2005 418,000(7)
Dennis A. Nagy............................... 5,000(4) 1% 15.375 12/6/2000 18,150(5)
25,000(8) 4% 15.375 12/6/2005 104,500(7)
Louis A. Greco............................... 5,000(4) 1% 15.375 12/6/2000 18,150(5)
50,000(8) 8% 15.375 12/6/2005 209,000(7)
Bruce E. MacNeal............................. 5,000(4) 1% 15.375 12/6/2000 18,150(5)
25,000(8) 4% 15.375 12/6/2005 104,500(7)
</TABLE>
- ------------------------
(1) Unless otherwise noted, represents options to purchase shares of Common
Stock granted on December 6, 1995 under the 1991 Plan that become
exercisable one year after the date of grant. Options under the 1991 Plan
are nontransferable other than by will or the laws of descent and
distribution or certain exceptions under Rule 16b-3 of the Securities
Exchange Act of 1934. Options are exercisable only during an optionee's term
of employment, and for three months after termination of employment if as a
result of permanent disability or retirement or resignation approved by the
Board. Vesting may be accelerated in certain events related to changes in
control of the Company, unless the Compensation Committee, prior to such
change in control, determines otherwise. Under the terms of the 1991 Plan,
the Compensation Committee retains discretion, subject to limits in the 1991
Plan, to modify the terms of outstanding options and to regrant and reprice
options. The 1991 Plan is administered by the Compensation Committee of the
Board.
(2) The 1991 Plan provides, under certain circumstances, for the grant of
"reload options" if an optionee uses already-owned shares of Common Stock to
pay for the exercise of any options. The reload provision permits the
grantee the right to purchase the same number of shares of the Company's
common stock as the grantee used to exercise any options at an exercise
price equal to the fair market value of a share of Common Stock on the date
of exercise of the initial option to which the reload relates.
(3) Options granted at an exercise price equal to the fair market value on the
date of grant.
(4) Incentive stock options.
(5) Grant Date Present Value determined under Black-Scholes Valuation Method.
The estimated values under the Black-Scholes model are based on the
following assumptions: the risk-free rate of return is 7.5%, the expected
dividend yield is 4.5%, the expected volatility is 0.28 and the expected
term is five years. The actual value, if any, an executive may realize will
depend on the excess of the stock price over the exercise price on the date
the option is exercised. Therefore, there is no assurance that the value
realized by an executive will be at or near the value estimated by the
Black-Scholes model.
(6) Nonqualified stock options.
8
<PAGE>
(7) Grant Date Present Value determined under Black-Scholes Valuation Method.
The estimated values under the Black-Scholes model are based on the
following assumptions: the risk-free rate of return is 7.5%, the expected
dividend yield is 4.5%, the expected volatility is 0.28 and the expected
term is ten years. The actual value, if any, an executive may realize will
depend on the excess of the stock price over the exercise price on the date
the option is exercised. Therefore, there is no assurance that the value
realized by an executive will be at or near the value estimated by the
Black-Scholes model.
(8) Represents nonqualified stock options to purchase shares of Common Stock
granted on December 6, 1995 under the 1991 Plan that are exercisable in
installments, with 25% of the options becoming exercisable one year after
the date of grant and with an additional 25% of the options becoming
exercisable on each successive anniversary date, with full vesting occurring
on the fourth anniversary date.
OPTION EXERCISES. The following table sets forth information regarding
stock options exercised by the named executive officers during fiscal 1996 and
the value of in-the-money unexercised options held by the named officers as of
January 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT FY-END
AT FY-END (#) ($)(1)
VALUE ------------------- -----------------------
SHARES ACQUIRED REALIZED EXERCISABLE (E)/ EXERCISABLE (E)/
NAME ON EXERCISE (#) ($) UNEXERCISABLE (U) UNEXERCISABLE (U)
- ---------------------------------------- --------------- ---------- ------------------- -----------------------
<S> <C> <C> <C> <C>
Richard H. MacNeal...................... 0 0 276,957/105,000 327,600/0
Thomas Curry............................ 0 0 130,000/105,000 450,000/0
Dennis A. Nagy.......................... 4,000 12,500(2) 122,000/30,000 223,750/0
Louis A. Greco.......................... 0 0 85,488/55,000 142,675/0
Bruce E. MacNeal........................ 300 1,350(3) 35,200/30,000 85,150/0
</TABLE>
- ------------------------
(1) Based on the closing price of the Company's Common Stock on January 31, 1996
($14.125 per share) minus the exercise price of "in-the-money" options.
(2) Based on the closing price of the Company's Common Stock on January 31, 1996
($14.125 per share) minus the exercise price of the exercised options.
(3) Based on the price at which Dr. MacNeal sold the shares on December 5, 1995
($15.125 per share) minus the exercise price of the exercised options.
SEVERANCE AGREEMENTS. The Company has entered into severance agreements
with each of the named executive officers as well as with certain other key
employees. These severance agreements provide that, if the Company or the
employee terminates the employee's employment with the Company (other than as a
result of death or disability) for any reason within two years after a change of
control of the Company, the employee will receive a severance payment. Under the
severance agreements, a change in control is defined to include the following
transactions unless approved by a majority of the Board of Directors: (i) any
person or group becomes the beneficial owner of 20% or more of the combined
voting power of the Company's then outstanding securities, (ii) the election in
a contest for election of a majority of the Board of Directors who were not
directors prior to such contest, (iii) the stockholders approve the dissolution
or liquidation of the Company, (iv) the stockholders approve a merger,
consolidation or other reorganization of the Company, as a result of which less
than 50% of the outstanding voting securities of the resulting entity are owned
by former stockholders of the Company, or (v) the stockholders approve the sale
of all or substantially all of the assets of the Company to a person or entity
which is not a subsidiary of the Company. The amount of such severance payment,
for each of the named executive officers with severance agreements, will be a
cash payment of two and one-half times the average of the last five years of
such employee's total cash compensation. Other key employees with severance
agreements (totaling 86 employees) will receive at least one times the average
of the last five years of such employee's total cash compensation, provided the
employee has
9
<PAGE>
been employed by the Company at least five years, increasing ratably to a
maximum of two times the average of the last five years of such employee's total
cash compensation if employed by the Company for ten years or more. The
severance payments will be reduced to the extent any payment is not deductible
by the Company for federal income tax purposes under Section 280G of the Code.
The severance agreements are automatically renewed annually unless the Company
gives written notice that it does not wish to extend them. In addition, the
agreements will continue in effect for three years after a change of control of
the Company.
SEPARATION AGREEMENT. The Company has entered into a Separation Agreement
with Thomas Curry which provides for certain payments to Mr. Curry upon his
termination of employment with the Company. If Mr. Curry resigns his position,
dies or otherwise terminates his employment with the Company, or if the Company
terminates Mr. Curry's employment for "cause," Mr. Curry receives the pro rata
share of his base salary then in effect plus any accrued vacation time. "Cause"
includes dishonesty, fraud, theft, embezzlement, conviction of a misdemeanor
involving moral turpitude or of any felony, failure to perform duties in a
manner satisfactory to the Board of Directors after being advised in writing of
a performance deficiency, unauthorized absence from work for a period of five or
more consecutive work days, violation of Company policy or procedure, inability
to perform the essential functions of the job for a period of 180 days due to
any physical or mental disability, competing with the Company while in its
employ, or violation of the terms of a non-disclosure agreement signed by Mr.
Curry upon his employment. If the Company terminates for reasons other than
"cause," the Company must continue to pay Mr. Curry the base salary he was
receiving at the time of termination for a period of 18 months from the
effective date of the termination. The Company must also continue Mr. Curry's
participation in the Company's health benefit plans for up to eighteen months
after the termination date and reimburse Mr. Curry's outplacement fees (up to
$35,000). The Separation Agreement also requires the Company in such
circumstances to amend 70,000 options previously granted to Mr. Curry under the
1991 Plan to allow (i) full vesting as of the termination date and (ii) exercise
of those options for a period of twelve months from the termination date.
The 1991 Plan provides, under certain circumstances, for options to vest
upon a change in control. See "Compensation of Executive Officers -- Option
Grants in Last Fiscal Year."
CERTAIN TRANSACTIONS
In connection with Thomas Curry's promotion to Chief Executive Officer and
in order to facilitate Mr. Curry's relocation of his primary residence closer to
the Company's headquarters, the Company has agreed to provide Mr. Curry with a
real estate loan in an amount up to $250,000. Mr. Curry is not obligated to
borrow from the Company and the Company is not required to provide Mr. Curry
with a loan until and unless Mr. Curry decides to relocate his primary
residence. In addition, Mr. Curry's promotion to Chief Executive Officer was not
conditioned upon relocation of his residence. In the event Mr. Curry seeks to
exercise this loan, such loan will be advanced upon, and used solely for, the
down payment of a new residence. The loan, if made, would be secured by a deed
of trust on his new residence. The proposed loan would be interest-bearing and
such interest would be payable monthly with all principal due five years after
the date the loan is executed.
COMPENSATION OF DIRECTORS
Directors who are not also officers of the Company are paid $12,500 per
year, $1,550 per Board meeting attended, and $775 per committee or telephone
meeting attended.
The Company does not additionally compensate employee directors. All other
directors are reimbursed for all expenses incurred in connection with attendance
at meetings of the Board and the performance of Board duties. Expense
reimbursement typically includes transportation costs and, when required,
overnight hotel expenses for those directors who reside outside the Los Angeles
metropolitan area.
Messrs. Reidel and Myers also perform ad hoc consulting services to the
Company on an informal basis. In fiscal 1996, the Company paid Mr. Reidel $6,000
and Mr. Myers $7,000 (plus reimbursement of each director's expenses) pursuant
to such arrangements.
10
<PAGE>
On June 10, 1992, the stockholders approved the 1991 Plan, including the
Non-Employee Director Program. The Non-Employee Director Program provides for
option grants to members of the Board of Directors who are not officers or
employees of the Company or its subsidiaries. Upon stockholder approval, each
eligible director received a non-discretionary grant of nonqualified stock
options for the purchase of 2,000 shares of the Common Stock at an exercise
price of $8.00 per share. On June 14, 1995, the stockholders approved an
amendment to the 1991 Plan (the "Amendment"). The Amendment provides that each
non-employee director receive an annual grant of options to purchase 3,000
shares of the Common Stock on the first business day of each calendar year.
There was a grant as of the first business day in calendar 1996 at an exercise
price of $15.875. Subsequent grants will occur on such day in each subsequent
year through 2001. All options granted under the Plan become exercisable in full
12 months after the award date and expire on the fifth anniversary of the award
date. Vesting may be accelerated in certain events related to changes in control
of the Company. The purchase price payable upon the exercise of a director's
option equals the fair market value of the Common Stock on the award date. In
addition, on March 15, 1995, each current non-employee director, except Mr.
Henke (see below), received a one-time nonqualified stock option to purchase
10,000 shares of Common Stock pursuant to the Amendment at an exercise price of
$12.50. On September 13, concurrent with his election to the Board of Directors,
Mr. Henke received a one-time nonqualified stock option to purchase 10,000
shares of Common Stock pursuant to the Amendment at an exercise price of
$19.375.
A maximum of 500,000 shares of Company Common Stock may be issued upon the
exercise of options under the Non-Employee Director Program.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS HAS FURNISHED THE
FOLLOWING REPORT ON EMPLOYEE COMPENSATION. SUCH REPORT WILL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING THIS PROXY
STATEMENT INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933 OR
UNDER THE SECURITIES ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE AND SHALL NOT OTHERWISE
BE DEEMED SOLICITING MATERIAL OR BE DEEMED FILED UNDER SUCH ACTS.
The Compensation Committee of the Board of Directors reviews and establishes
the general compensation policies of the Company, and administers the Company's
various compensation plans, including its stock option plans and annual salary
and bonus plans.
Each year, the Committee undertakes a comprehensive review of the
compensation plans and levels of compensation of the Company's Chief Executive
Officer and the other senior executive officers of the Company. The purposes of
this review are to assure that compensation is appropriately tied to performance
and that salary and potential bonus compensation levels are appropriate. In
undertaking this review, the Committee considers the compensation levels of the
Company's executive officers in light of the performance of the Company over the
past fiscal year and other historical periods, the performance of certain other
relevant companies and the level of compensation paid to the executive officers
of each of the other relevant companies. No particular weighting is given to the
various factors. Other relevant companies include a diversified group of
publicly traded high technology software companies providing similar products
and services, but not every company in the S&P Software/Computer Services Index.
Performance measures for the Company and relevant companies reviewed by the
Committee include return on equity and cash flow return on sales.
Members of the Committee review this information as well as compensation
surveys provided by various compensation consulting firms. Based upon extensive
discussions and a thorough review of the available data, the Committee
determines the annual salaries of the Chief Executive Officer and of the
Company's other senior executive officers, the performance targets and bonus
levels, and stock option award levels. The decisions made in calendar 1995 by
the Committee resulted in rankings for senior executives,
11
<PAGE>
including the Chief Executive Officer, within an approximate range of 50th to
75th percentile, as to cash compensation, even though the Committee did not
adopt a policy of targeting specific compensation percentile rankings against a
peer group of executives.
The compensation policy of the Company, which is endorsed by the Committee,
is that a significant portion of the compensation of upper management should be
contingent upon the performance of the Company, and/or the individual
contributions of each senior manager. As a result, the annual compensation of
all executive officers includes a bonus component subject to Company
performance. Performance is measured against the annual budgeted operating
income before the effects of capitalized software. A significant portion of
senior executive officers' compensation is therefore considered to be "at risk."
Compensation of all senior executive officers is also reviewed with the Board.
For the Chief Executive Officer and all other senior officers, approximately 37%
of total expected compensation is at risk.
BASE SALARY. The base salary of Dr. Richard MacNeal, who served as Chief
Executive Officer of the Company during fiscal 1996, was set at $325,000 per
annum and was determined by the Committee in connection with the comprehensive
review described above. The Committee subjectively considered the Company's
performance, the performance of Dr. MacNeal, compensation of CEO's of other
relevant companies discussed above and the performance of such companies and the
proportion of compensation that would be "at risk" in setting Dr. MacNeal's
salary. No particular weighting was given to the various factors, but the
Committee strove to achieve fair and reasonable compensation based upon such
factors. The base salaries for the period from June 1, 1995 to May 31, 1996 for
the remaining senior executive officers were similarly reviewed and set, with
consideration also given to the relationship of such salaries to the salary of
Dr. MacNeal.
On March 27, 1996, the Board of Directors appointed Thomas Curry to succeed
Dr. MacNeal as Chief Executive Officer. In connection with his appointment as
Chief Executive Officer, Mr. Curry's base salary was increased to $275,000 per
annum for the period from March 27, 1996 to May 31, 1996. The increase in Mr.
Curry's base salary was determined in part by reference to the comprehensive
compensation review (described above) conducted in fiscal 1996.
ANNUAL BONUS. For fiscal 1996, based upon the comprehensive review of other
relevant companies described above, the Committee established an expected annual
compensation objective for Dr. MacNeal and the other senior executive officers
consisting of a base salary component and an incentive component. Under the
Company's Executive Bonus Plan, Dr. MacNeal and the other senior executive
officers' expected bonus was set at 37.5% of their annual base salary with a
range of potential bonus payouts varying from zero to 75% of base salary
dependent upon Company performance. The actual bonus earned by Dr. MacNeal and
the other senior executive officers in fiscal 1996 amounted to 18% of base
salary and was based on the Company's performance for the fiscal year ended
January 31, 1996.
The Company's performance is generally measured for purposes of bonus
determination against annual budgeted operating income, before the effects of
capitalized software. The annual budget is approved by the Board at the
beginning of the fiscal year. Dr. MacNeal's bonus and that of the other
executive officers for the next fiscal year is expected to be based 100% upon
the performance of the total company as described above.
STOCK OPTIONS. During fiscal 1996, the Committee authorized all stock
option grants under the 1991 Plan. In conjunction with the comprehensive review
of Company performance versus the performance of other relevant companies
discussed above, in December 1995 the Committee assigned option awards to Dr.
MacNeal and other executive officers based on their respective expected fiscal
1996 compensation levels, their individual performance during the 1995 fiscal
year, and their length of service with the Company.
In December 1995, the United States Internal Revenue Service issued final
regulations affecting all publicly held United States corporations (the
"Regulations") interpreting the statutory limitation on the tax deductibility of
compensation in excess of $1 million for certain executive officers. In general,
the Compensation Committee considers the anticipated tax treatment to the
Company and to its executives of various payments and benefits. However, the
Committee will not necessarily limit executive compensation to that
12
<PAGE>
which is deductible under the Regulations. The Committee will consider various
alternatives for preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent with
its other compensation objectives.
No member of the Committee is a former or current officer or employee of the
Company or any of its subsidiaries, or is employed by a company whose Board of
Directors includes a member of the management of the Company.
Compensation Committee:
Dale D. Myers, Chairman
Bernard J. Bannan
George N. Riordan
13
<PAGE>
PERFORMANCE GRAPH
The following graph provides a five year comparison of cumulative total
returns for the Company, the Standard & Poor's Software/Computer Services Index
and American Stock Exchange (AMEX) Market Value Index. The comparison covers the
five-year period from the first day of the Company's 1992 fiscal year (February
1, 1992) to the last day of the Company's 1996 fiscal year (January 31, 1996)
and assumes that $100 was invested at the beginning of the five-year period in
the Company's Common Stock and in each index.
THE MACNEAL-SCHWENDLER CORPORATION
STOCK PRICE PERFORMANCE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 FY 1996
<S> <C> <C> <C> <C> <C> <C>
MACNEAL SCHWENDLER CP 100 85.28 124.11 109.53 100.96 131.22
INDUSTRY INDEX 100 149.13 186.17 226.15 256.74 392.43
BROAD MARKET 100 123.29 121.08 144.58 126.18 161.74
</TABLE>
Cumulative total returns assumes reinvestment of dividends on the date such
dividends were declared.
THE STOCK PRICE PERFORMANCE DEPICTED IN THE ABOVE GRAPH IS NOT NECESSARILY
INDICATIVE OF FUTURE PRICE PERFORMANCE. THE PERFORMANCE GRAPH WILL NOT BE DEEMED
TO BE INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING THIS
PROXY STATEMENT INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933
OR UNDER THE SECURITIES ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED SOLICITING MATERIAL OR BE DEEMED FILED UNDER SUCH ACTS.
2. RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Company's Board of Directors has selected Ernst & Young LLP to serve as
the Company's independent accountants during the current fiscal year. A
representative of Ernst & Young LLP is expected to be present at the 1996 Annual
Meeting to make such statements as he or she may desire and will be available to
answer appropriate questions from stockholders.
Services provided by Ernst & Young LLP to the Company and its subsidiaries
during the fiscal year ended January 31, 1996 included the examination of the
Company's consolidated financial statements and consultation on various tax and
accounting matters.
Ratification of the appointment of Ernst & Young LLP will require the
affirmative vote of at least a majority of the shares of the Company's Common
Stock represented in person or by proxy and entitled to vote at the 1996 Annual
Meeting, assuming the presence of a quorum.
14
<PAGE>
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS.
VOTES REQUIRED
The nominees for election as directors who receive the vote of a plurality
of the shares entitled to be voted at the Annual Meeting, a quorum being
present, shall become directors at the conclusion of the tabulation of the
votes. Approval and ratification of the appointment of the auditors each
requires the vote of a majority of the shares represented at the Annual Meeting
and entitled to vote on any matter. A majority of the Company's outstanding
shares of Common Stock as of April 19, 1996 must be represented in person or by
proxy to constitute a quorum for the 1996 Annual Meeting.
Votes cast by proxy or in person at the annual meeting will be counted by
the persons appointed by the Company to act as election inspectors for the
meeting. The election inspectors will treat shares represented by proxies that
reflect abstentions as shares that are present and entitled to vote for purposes
of determining the presence of a quorum and for purposes of determining the
outcome of any matter submitted to the stockholders for a vote. Abstentions,
however, do not constitute a vote "for" or "against" any matter and thus will be
disregarded in the calculation of a plurality.
The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares held by brokers or nominees as to which instructions have not been
received from the beneficial owners or persons entitled to vote that the broker
or nominee does not have discretionary power to vote on a particular matter) as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum. However, for purposes of determining the outcome of any
matter as to which the broker has physically indicated on the proxy for such
shares that it does not have discretionary authority to vote on a particular
subject, those shares will be treated as not present and not entitled to vote
with respect to that matter (even though those shares are considered entitled to
vote for quorum purposes and may be entitled to vote on other matters).
Any unmarked proxies, including those submitted by brokers or nominees, will
be voted as indicated in the accompanying proxy card and as summarized elsewhere
in this Proxy Statement.
OTHER MATTERS
OTHER BUSINESS
The Board of Directors has no present intention of bringing before the 1996
Annual Meeting any matters for action other than those listed in the Notice of
Annual Meeting and discussed above in this Proxy Statement, and management is
not aware of any matters which may be presented by others. If any other business
properly comes before the meeting, however, the proxy confers discretionary
authority to vote with respect to such matters, and the persons named in the
Proxy Card will vote on such matters, if any, in accordance with their best
judgment.
PROPOSALS OF SECURITY HOLDERS
It is expected that the Company's 1997 Annual Meeting will be held on or
about June 11, 1997. Stockholders desiring to submit proposals for inclusion in
the Company's proxy materials for, and for action at, that meeting will be
required to submit them to the Company on or before December 30, 1996 (120 days
before April 29, 1997). Any such stockholder proposal must also be proper in
form and substance in accordance with the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, in order to be so
included. Proposals should be submitted to Mr. Louis A. Greco, Secretary, The
MacNeal-Schwendler Corporation, 815 Colorado Boulevard, Los Angeles, California
90041.
15
<PAGE>
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 and directors and persons who own more than 10% of a registered class
of the Company's equity securities (collectively, the "Reporting Persons") to
file reports of ownership and changes in ownership with the SEC and the American
Stock Exchange and to furnish the Company with copies of these reports.
Based on the Company's review of the copies of these reports received by it,
and written representations received from Reporting Persons, the Company
believes that all filings required to be made by Reporting Persons for the
period February 1, 1995 through January 31, 1996 were made on a timely basis
except one report concerning one transaction by Bruce MacNeal and one report
concerning one transaction by Edward Stanton, Vice President, Science and
Technology, filed subsequent to the applicable due dates.
ANNUAL REPORT TO SHAREHOLDERS
Enclosed with this Proxy Statement is the Annual Report of the Company for
the fiscal year ended January 31, 1996. The enclosed Annual Report is included
for the convenience of stockholders only and should not be viewed as part of the
proxy solicitation material.
EXHIBITS TO ANNUAL REPORT ON FORM 10-K
If any person who was a beneficial owner of Common Stock of the Company on
the record date for the 1996 Annual Meeting desires additional information, a
copy of the exhibits to the Company's Report on Form 10-K will be furnished upon
receipt of a written request and payment of copying charges. The request should
identify the person requesting the exhibits as a stockholder of the Company as
of April 19, 1996. Requests should be directed to Mr. Louis A. Greco, Secretary,
The MacNeal-Schwendler Corporation, 815 Colorado Boulevard, Los Angeles,
California 90041.
By Order of the Board of Directors
Louis A. Greco
SECRETARY AND CHIEF FINANCIAL OFFICER
May 1, 1996
16
<PAGE>
- -------------------------------------------------------------------------------
THE MACNEAL-SCHWENDLER CORPORATION
ANNUAL MEETING OF STOCKHOLDERS JUNE 12, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE MACNEAL-SCHWENDLER CORPORATION
The undersigned hereby appoints R.H. MacNeal and George N. Riordan, and
each of them, proxyholders, each with full power of substitution to vote for
the undersigned at the Annual Meeting of Stockholders of The
MacNeal-Schwendler Corporation to be held on June 12, 1996, and at any
adjournments thereof, with respect to the following matters, which were more
fully described in the Proxy Statement dated May 1, 1996 (the "Proxy
Statement"), receipt of which is hereby acknowledged by the undersigned.
THIS PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, THIS
PROXY WILL BE VOTED FOR THE REELECTION OF THE FOUR DIRECTOR NOMINEES AND FOR
THE SECOND PROPOSAL.
See Reverse
Side
- -------------------------------------------------------------------------------
s FOLD AND DETACH HERE s
<PAGE>
Please mark
- ---------- your votes as X
COMMON indicated in
this example
The Board of Directors recommends that you vote FOR the nominees on
Proposal 1 and FOR Proposal 2
FOR all nominees WITHHOLD AUTHORITY
listed below to vote for
(except as marked all nominees
to the contrary below) listed below
1. The election of the nominees
for director specified in the
Proxy Statement to Class II
of the Board of Directors. / / / /
Bernard J. Bannan, Thomas C. Curry,
Harold Harrigian, George N. Riordan
(INSTRUCTION: TO WITHOLD AUTHORITY TO VOTE FOR
ANY NOMINEE, LINE THROUGH HIS NAME)
FOR AGAINST ABSTAIN
2. Ratification of Accountants. To ratify the
appointment of Ernst & Young to serve as the
Company's independent accountants for the
fiscal year ending January 31, 1997. / / / / / /
3. Such other matters as may properly come before the meeting or any
adjournment thereof. As to such other matters, the undersigned hereby
confers discretionary authority.
Dated:_________________________, 1996
_____________________________________
(Please Print Name)
_____________________________________
(Signature of Holder of Common Stock)
_____________________________________
(Signature if Held Jointly)
NOTE: Please sign exactly as your name
is printed. Each joint tenant should
sign. Executors, administrators,
trustees and guardians should give
full titles when signing. Corporations
and partnerships should sign in full
corporate or partnership name by
authorized person. Please mark, sign,
date and return your Proxy promptly
in the enclosed envelope, which
requires no postage if mailed in
the United States.
- -------------------------------------------------------------------------------
s FOLD AND DETACH HERE s
