<PAGE> 1
As filed with the Securities and Exchange Commission on July 28, 1995.
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------------
LANDMARK GRAPHICS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 76-0029459
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15150 MEMORIAL DRIVE
HOUSTON, TEXAS 77079-4304
(713) 560-1000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
PATTI L. MASSARO, ESQ.
GENERAL COUNSEL
LANDMARK GRAPHICS CORPORATION
15150 MEMORIAL DRIVE
HOUSTON, TEXAS 77079-4304
(713) 560-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------
Copies to:
ROBERT E. CRAWFORD, JR., ESQ.
WINSTEAD SECHREST & MINICK P.C.
1201 ELM STREET
5400 RENAISSANCE TOWER
DALLAS, TEXAS 75270
-----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement, as determined by
the selling securityholders named herein.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
-----------------------
(Calculation table continued on next page)
<PAGE> 2
(Calculation table continued from previous page)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum Amount of
Title of shares Amount to aggregate price aggregate registration
to be registered be registered per share* offering price* fee*
- ---------------- ------------- --------------- --------------- ------------
<S> <C> <C> <C> <C>
Common Stock, 653,718 $26.1875 $17,119,240.13 $5,903.19
$0.05 par value
per share
</TABLE>
- -------------------------
*Computed pursuant to Rule 457(c), promulgated under the Securities Act
of 1933, as amended, based upon the average of the high and low prices
for the registrant's common stock on July 26, 1995, as reported on the
National Market System of the National Association of Securities
Dealers Automated Quotation System.
- ------------------------------
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 3
PROSPECTUS
653,718 SHARES
LANDMARK GRAPHICS CORPORATION
COMMON STOCK
-----------------------------
All of the 653,718 shares of common stock, $.05 par value per share
(the "Common Stock"), of Landmark Graphics Corporation ("Landmark" or the
"Company") offered hereby are offered for the account of the stockholders named
herein (the "Selling Stockholders"). See "Selling Stockholders." The shares to
be offered are those acquired by the Selling Stockholders in connection with the
acquisition by Landmark of all of the outstanding common stock in GeoGraphix,
Inc., a Colorado corporation ("GeoGraphix").
The Selling Stockholders may offer the shares of Common Stock offered
hereby from time to time to purchasers directly or through agents, underwriters
or dealers. Such shares may be sold at market prices prevailing at the time of
sale or at negotiated prices. See "Plan of Distribution." The Common Stock is
traded on the National Market System of the National Association of Securities
Dealers Automated Quotation ("NASDAQ") System under the symbol LMRK. On July 26,
1995, the last sale price for the Common Stock was $26.00 per share. The Company
will not receive any proceeds from the sale of shares by the Selling
Stockholders. See "Use of Proceeds."
------------------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES CERTAIN RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 1.
-------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------------
July 28, 1995
<PAGE> 4
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus, and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company
or the Selling Stockholders. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any securities other than the shares
of Common Stock offered by this Prospectus, or an offer to sell or a
solicitation of an offer to buy the shares of Common Stock in any jurisdiction
to any person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to the date
hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements and other information filed by the
Company with the Commission may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at its New York Regional Office, 7 World
Trade Center, 13th Floor, New York, New York 10048, and at its Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material also may be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Company has filed with the Commission in Washington, D.C. a
Registration Statement under the Securities Act with respect to the shares of
Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits thereto.
For further information with respect to the Company and the Common Stock,
reference is made to such Registration Statement and exhibits, a copy of which
may be obtained from the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus: (i)
the reports listed below (which include all reports filed by the Company with
the Commission pursuant to Sections 13(a) or 15(d) of the Exchange Act since
June 30, 1994; and (ii) the description of the Common Stock contained in the
Company's registration statement on Form 8-A under the Exchange Act
(Registration No. 0-17195) filed by the Company with the Commission, including
any amendments or reports filed for the purpose of updating such description:
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<PAGE> 5
Reports Incorporated by Reference
1. Annual Report on Form 10-K for the fiscal year ended June 30, 1994;
2. Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 1994;
3. Quarterly Report on Form 10-Q for the fiscal quarter ended December
31, 1994;
4. Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1995;
5. Current Report on Form 8-K dated September 29, 1994, as amended by
Form 8-K/A; and
6. Current Report on Form 8-K dated June 5, 1995.
In addition, all documents filed by the Company subsequent to the date
hereof pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act but
prior to the termination of the offering of the shares of Common Stock offered
hereby shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of the filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the information
incorporated herein by reference (not including exhibits to the information that
is incorporated by reference unless such exhibits are specifically incorporated
by reference into the information that this Prospectus incorporates). Requests
for such copies should be directed to: General Counsel, Landmark Graphics
Corporation, 15150 Memorial Drive, Houston, Texas 77079-4304, (713) 560-1000.
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RISK FACTORS
The following factors should be considered carefully in evaluating an
investment in the Company's Common Stock.
ENERGY INDUSTRY CONDITIONS. Landmark markets its products and services
to domestic and international oil and gas companies. Uncertainty in the oil and
gas markets due to price fluctuations, corporate restructurings, political
developments, changes in tax policy and governmental regulations and other
factors could have a material adverse impact on exploration and production
budgets of Landmark's customers and, consequently, on the business and prospects
of Landmark.
FLUCTUATIONS IN FINANCIAL PERFORMANCE. Due to the substantial unit
prices and low unit sales volume of some of Landmark's computer-aided
exploration and reservoir management ("CAEX/CARM") systems, timing and volume
differences in the shipment of such systems can produce significant fluctuations
in quarter-to-quarter and year-to-year financial performance. Factors that could
affect such timing include, among others, new product transitions, delays in new
product introductions, shortages of system components, delays in obtaining
required import/export permits and customer purchasing patterns. Past financial
performance should not be considered to be a reliable indicator of future
performance in any particular fiscal period.
NEW PRODUCTS AND TECHNOLOGICAL CHANGE. The market for CAEX/CARM systems
is characterized by continual and rapid technological developments which have
resulted in, and will likely continue to result in, substantial improvements in
product function and performance. The Company believes that its future success
is dependent upon its ability to continue to improve its existing product lines,
to address the increasingly sophisticated needs of customers, to maintain a
reputation for technological leadership, and to achieve market acceptance. The
Company also believes that its success will depend on its ability to anticipate
changes in technology and industry standards and, to the extent such changes
impact the Company's technology and products, to respond to technological
developments on a timely basis, either internally or through strategic
alliances. Current competitors or new market entrants may develop new
technologies, products or standards which could render the Company's products
obsolete. As a result of the preference of some customers for PC-based operating
systems which are less costly than the Company's traditional UNIX operating
system, the Company is adapting its products to function on other operating
systems. Technical difficulties in accomplishing this adaptation may occur.
Additionally, downward pressure on prices may occur as more low cost, lower
functionality software products enter the market. There can be no assurance that
the Company will be successful in developing and marketing, on a timely and cost
effective basis, product enhancements or new products that respond to
technological developments, address the marketplace, or comply with industry
standards, whether developed by Petrotechnical Open Software Corporation
("POSC"), Public Petroleum Data Model ("PPDM") or others. POSC, founded and
primarily funded by several major energy companies, was formed in 1990 in
response to industry recognition of the need to establish standardized
methodologies for the collection, storage and management of data in the
exploration and production process. PPDM is a Calgary, Canada-based consortium
of companies that has developed a standard relational data model currently in
use by 70 oil and service companies. The PPDM model was developed from
<PAGE> 7
an initial core of well information while the POSC data model was developed
using a broad spectrum approach across a variety of topics and business areas.
The Company intends to develop its products in compliance with POSC and/or PPDM
standards that become widely accepted in the oil and gas industry. There can be
no assurance that such compliance can be achieved in a timely or cost effective
manner.
COMPETITION. The market for CAEX/CARM systems is highly competitive.
Landmark's existing and potential competitors may have substantially greater
marketing, financial and technical resources than the Company. The Company also
experiences competition from certain of the major oil and gas companies which
have internally developed, and may continue internally developing, CAEX/CARM
systems, thereby limiting the Company's potential customer base. In addition,
new competitors are entering the market and competition is intensifying. Several
competitors have entered the data management market with currently-available
products and services. The Company is developing a data management strategy, but
until plans and solutions are finalized, the Company's ability to compete in the
data management market may be adversely affected. There can be no assurance that
sales of the Company's products will not be adversely affected if its current
competitors or new market entrants introduce new products with better
functionality, performance, price or other characteristics than the Company's
products. In addition, competitive pressures or other factors may result in
significant price erosion that could have a material adverse effect on the
Company's results of operations.
INTERNATIONAL OPERATIONS. During the nine-month period ended March 31,
1995, approximately 59% of the Company's revenues were generated by
international operations, including sales to state-owned companies.
International operations are subject to various risks not present in domestic
operations such as fluctuations in currency exchange ratios, nationalization or
expropriation of assets, import/export controls, political instability,
variations in the protection of intellectual property rights, limitations on
foreign investment, restrictions on the ability to convert currency and the
additional expenses and risks inherent in conducting operations in
geographically distant locations, with customers speaking different languages
and having different cultural approaches to the conduct of business. There can
be no assurance that the business of the Company will not be adversely affected
by these factors in the future.
VOLATILITY OF STOCK PRICE. Factors such as announcements of new
products by the Company or its competitors, quarter-to-quarter and year-to-year
variances in financial results, and changing conditions in the oil and gas
industry have caused the market price of the Company's Common Stock to fluctuate
substantially, and could continue to do so in the future. Shortfalls in revenue
or earnings from levels expected by securities analysts have had an immediate
and significant adverse effect on the trading price of the Company's Common
Stock in the past and could continue to do so in the future. The Company may not
learn of such shortfalls until late in the quarter, which could result in an
even more immediate and adverse effect on the trading price of the Company's
Common Stock. Additionally, the Company participates in the energy exploration
and high technology industries, which have been highly dynamic. As a result, the
Company may experience price and volume fluctuations in its Common Stock
unrelated to the operating performance of the Company.
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DEPENDENCE ON CORE PRODUCTS. The Company currently derives a
substantial portion of its revenues from sales of its seismic interpretation and
geologic interpretation and mapping products. As a result, any factor adversely
affecting sales of these products could have a material adverse effect on the
Company. The Company's future financial performance will depend in part on the
successful development and introduction of new and enhanced versions of these
products and customer acceptance of such new and enhanced versions.
DEPENDENCE ON KEY CUSTOMERS. A significant portion of the Company's
revenues are derived from sales to a small group of key customers, primarily
major oil and gas companies. The Company's future success is dependent upon
continued acceptance of its products by, and its continued ability to generate
sales of multiple CAEX/CARM systems to, these key customers. The loss of any one
or more of these customers could have an adverse effect on the Company's results
of operations. The Company's future success also is dependent upon its ability
to expand into new market segments, such as national oil companies and small
independent oil companies.
DEPENDENCE ON PROPRIETARY TECHNOLOGY. The Company relies on patent,
copyright and trademark laws, license and nondisclosure agreements and technical
means to protect its rights in its software products and its market position.
All employees of the Company are required to sign agreements to maintain the
confidentiality of the Company's proprietary information. If the validity of the
Company's patents, copyrights and/or trademarks is successfully challenged
and/or the Company's confidential proprietary information becomes publicly
available, the Company's financial condition and results of operations could be
materially adversely affected. In addition, substantial resources may be
required to prosecute infringement claims for unauthorized use by third parties
of the Company's proprietary rights, or to defend claims that the Company's
products infringe upon the proprietary rights of others.
DISRUPTION IN VENDOR SUPPLIES OR CHANGE IN VENDORS. The Company's
software and systems incorporate technology supplied in part by third parties.
Although Landmark is not presently experiencing and does not anticipate any
supply or quality control problems with its vendors for either hardware
components or software releases, such problems, if they were to occur, could
have a significant effect on Landmark's ability to meet production and sales
commitments. Should such problems cause production delays in the future, the
Company's financial results could be adversely affected. Redesign of Landmark's
products may be required and costly delays may result. Further, if Landmark is
unable to obtain adequate supplies of the hardware platforms utilized in its
CAEX/CARM systems (the Sun Microsystems SPARCstation, the IBM RISC System/6000
workstation and the SiliconGraphics Workstation) or is required or decides to
incorporate a different hardware platform or operating system in its CAEX/CARM
systems, the Company could experience delays or reductions in production and/or
increased expenses while the Company redesigns its CAEX/CARM systems, all of
which could have an adverse effect on the financial performance of the Company.
DEPENDENCE UPON SENIOR MANAGEMENT AND KEY PERSONNEL. Landmark believes
that its success is dependent upon its senior management and upon attracting and
retaining highly skilled professionals experienced in the energy industry,
computer and graphics technologies and marketing. Most of these personnel are
not bound by employment agreements. Failure by
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<PAGE> 9
Landmark to retain and to continue to attract senior management or such
professionals could adversely affect Landmark's ability to compete.
RECENT ACQUISITIONS. Since March of 1994 the Company has acquired four
software development companies, as well as the significant assets of a fifth
software development company. The negotiation and closing of such acquisitions,
as well as the assimilation of the personnel, products and systems of the
acquired companies, has required and will require a significant amount of
management attention. The diversion of management time and other resources to
these acquisitions and away from the business of the Company could have a
material adverse effect on the Company and the market for its Common Stock,
particularly in the short term.
REORGANIZATION. In fiscal 1995 the Company began reorganizing its
business units to deliver integrated software solutions and value added services
to meet the changing needs of the Company's customers. The reorganization
continues to require significant changes in account management responsibility,
physical transfers of key employees, recruitment of additional executives and
managers, reallocations of resources and budgets, and changes in marketing
strategy. Failure to implement the reorganization in a timely and effective
manner could cause a loss of focus on the Company's revenue generating
activities and/or create an increase in expenses without realizing expected
efficiencies, which could have an adverse effect on the Company's financial
performance.
RELIANCE ON ACQUISITIONS. Expansion through acquisition is an important
element of the Company's growth strategy and the Company believes there are
ample acquisition opportunities. However, the Company's continued ability to
grow by acquisition is dependent upon and may be limited by the availability of
acquisition candidates at reasonable prices and the Company's ability to obtain
acquisition financing on acceptable terms. The Company will likely experience
competition in making acquisitions from larger companies with significantly
greater resources. To the extent that the Company issues shares of Common Stock
to finance any acquisition, existing stockholders may experience dilution. To
the extent that the Company uses cash to finance any acquisition, the Company
may be required to incur additional debt. Further, there can be no assurance
that the Company's management will be able to maintain or enhance the
profitability of any acquired business or consolidate its operations to achieve
cost savings.
CORPORATE INFORMATION SYSTEM IMPLEMENTATION. In the third quarter of
fiscal 1995, the Company began implementation of a new integrated corporate
information system to entirely replace its present systems. The new system
implementation has not yet been completed. The new system incorporates a suite
of business applications licensed from Systeme, Anwendungen und Produkte
("SAP"), a company based in Walldorf, Germany. The Company has been
transitioning from existing systems to the SAP system by using a phased
implementation approach. The functional areas affected primarily include
finance, manufacturing and logistics, sales and distribution and reporting.
Although Company management has carefully chosen the system software and
hardware and has retained professional consultants to assist in implementation
of the system, there is no assurance that implementation will occur in a timely
and effective manner, or that there will not be unforeseen expenses or
difficulties associated with
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<PAGE> 10
the implementation. Any such delay, expense or difficulty could have a material
adverse effect on the Company's operations. Specific risks associated with the
new system implementation include but are not limited to inability to perform
the critical processes involved in booking orders, ordering inventory, shipping
products, invoicing customers, and closing the books in a timely manner.
THE COMPANY AND ITS BUSINESS
GENERAL
Landmark was incorporated in Texas in July 1982 under the name
"Landmark Graphics Corporation" and reincorporated under the same name in
Delaware in June 1987. Unless the context otherwise requires, references in this
Prospectus to "Landmark" and the "Company" include the prior Texas corporation
as well as the current Delaware corporation and its subsidiaries. Landmark's
executive offices are located at 15150 Memorial Drive, Houston, Texas
77079-4304, and its telephone number is (713) 560-1000.
Landmark is a leading supplier of geoscience and engineering software,
systems and services used by petroleum companies worldwide to find, produce and
manage oil and gas reservoirs.
In more than 60 countries, geologists, geophysicists and petroleum
engineers use Landmark products in almost every phase of exploration and
production. The Company's applications software transforms vast quantities of
seismic, well log and other data into detailed computer models of petroleum
reservoirs. These models reveal critical information about subsurface formations
and enable oil and gas companies to boost drilling success, lower exploration
and production costs, and improve their evaluation of assets in the ground.
Landmark offers an extensive line of integrated software applications,
for seismic processing, three dimensional ("3D") and two dimensional ("2D")
seismic interpretation, geologic and petrophysical interpretation, mapping and
modeling, well log and production analysis, drilling and production engineering
and data management. Through its service and consulting business, Landmark
provides software training, on-site support and assistance in designing computer
networks and integrating applications and data.
In 1984, Landmark shipped the first commercially available
microprocessor-based interactive computer-aided exploration system for
interpretation of 3D seismic data and has continued to be a leader in the
industry with a series of innovations in 3D seismic technology. The Company also
has expanded the breadth of its applications portfolio to include geologic
interpretation and analysis, geologic mapping and modeling and seismic data
processing. The Company believes that there is a significant need in the
computer-aided exploration market for systems that enable geoscientists in
different technical disciplines to work concurrently using a common database and
integrated tools. In response to this need, the Company has introduced
OpenWorks, a software integration and data management platform that offers an
open systems computing environment for the concurrent visualization,
interpretation, analysis and management of different types of data for
exploration and production in a standardized environment.
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<PAGE> 11
OpenWorks is based on a UNIX operating system, employs standard graphical user
interfaces and networking protocols, and functions with the Oracle relational
database management system. OpenWorks enables integration of multiple
applications, including Landmark's applications as well as third party
applications.
Customers are placing increased importance on streamlining work flows
between multi-disciplinary teams. The Company believes petroleum companies are
demanding state-of-the-art software in various technical disciplines which
permit data to be easily shared and which provide the ability to access and
manage vast quantities of data. In fiscal 1995, the Company reorganized its
internal teams to respond to its customers. The Company believes arranging its
operations into entrepreneurial product and integrated solutions companies is an
important element in addressing these needs.
THE COMPANY
Landmark was the original supplier of microprocessor-based 3D seismic
interpretation products in the computer-aided exploration marketplace. The
Company remains committed to providing tools which exploit the full value of 3D
visualization, interpretation and analysis, enabling oil and gas companies to
maximize the value of their substantial investments in 3D seismic data. The
Company recognized in the early 1980's, at a time when the Company's competitors
focused on the analysis of 2D seismic data, that 3D seismic data offered
superior interpretive and analytical results. Fueled by its focus on 3D
technology, Landmark experienced rapid growth during the 1980's despite severe
reductions in exploration and production in the United States and downsizing of
the oilfield services industry.
To complement its core 3D seismic interpretation products, the Company
has developed, licensed or acquired other products that offer functionality to
geologists, geophysicists, reservoir engineers and other earth science
professionals. Geologic mapping and seismic processing software applications
have become core products along with 3D seismic interpretation and reservoir
engineering software applications, and the Company has expanded its offerings of
software to support the exploration and production geologist. Five recent
acquisitions have significantly expanded the Company's ability to meet the needs
of geologists, geophysicists and petroleum engineers in almost every phase of
exploration and production:
In March 1994, with the acquisition of Advance Geophysical Corporation
of Denver, Colorado, Landmark acquired the ProMAX family of products,
which provide seismic processors and interpreters with tools to
manipulate raw seismic data and to condense it into a form that is
ready for interpretation.
The September 1994 acquisition of Houston-based Stratamodel, Inc.
further expanded Landmark's products offerings to include reservoir
characterization and modeling software products used by geoscientists
in oil and gas exploration and production.
Also in September 1994, the Company acquired MGI Associates, Inc., a
leader in the development of personal computer-based petroleum
economics and reservoir engineering software applications.
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<PAGE> 12
In February 1995, the Company acquired certain assets of DRD
Corporation, including drilling and completion engineering software
applications.
In June 1995, the Company acquired GeoGraphix, Inc., a Denver,
Colorado-based company that designs, implements, markets and supports
technical mapping and data analysis software. These products address
unique requirements of the oil and gas exploration and production
industry. The technology which GeoGraphix has developed is used by
geoscientists, petrophysicists, petroleum engineers and land
professionals to organize, visualize, and assess data which has a
spatial context. GeoGraphix' "smaller-scale" systems for basic
geological and engineering problems complement Landmark's traditional
solutions designed for the rigorous demands of complex reservoir
characterization. The addition of GeoGraphix provides worldwide
customers with a broad range of scalable solutions across the
"complexity spectrum" from basic to complex.
Since its inception in 1982, the Company has made significant research
and development expenditures for the development of geoscience applications
software. The Company believes that its customers generally are unwilling or
unable to incur the expense or delay of developing such software and expertise
internally, and have determined that competitive pressures in exploration and
production necessitate the acquisition of geoscience systems such as those
offered by Landmark.
STRATEGY
Landmark's strategy is to provide complete computing solutions and
other information services for the exploration and production of oil and gas,
including software, services and third-party hardware. The Company executes this
strategy in the following ways:
Applications Development. The Company develops new software
applications and enhancements to existing software applications, both internally
and through joint development efforts with business partners or licensees, or
otherwise acquires software applications from third parties. To complement these
efforts, the Company configures hardware to take advantage of the full range of
functionality offered by the Company's software applications.
Integration of Applications and Data Management. The Company expects
that, as the exploration and production industry intensifies its use of
technology, there will be an increasing demand for software integration and data
management platforms such as OpenWorks. The Company intends to continue the
development of OpenWorks, to embrace prevailing technology standards within the
OpenWorks platform, and to intensify its marketing of OpenWorks as a means of
enabling a single geoscientist to work in multiple disciplines and
multidisciplinary teams of geoscientists to work concurrently with the same data
and applications.
Integrated Solutions and Expansion of Services. Landmark has created an
Integrated Solutions Group to provide account management, first-line support,
and consulting services across most of Landmark's product groups. In addition,
because the Company believes that offering a comprehensive range of services to
its customers is a critical aspect of its business, the Company intends to
continue enhancing and expanding its range of services to meet the evolving
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requirements of its customers. The Company's revenue generating services include
provision of on-site professionals and dedicated services as a primary support
mechanism for its larger customers.
Broadening of Customer Base. In addition to selling to its established
customer base of major multinational and large independent oil companies, the
Company intends to intensify its efforts to sell to small independent oil and
gas firms and state-owned energy companies.
Growth Through Acquisitions. The Company intends to continue to
evaluate and, if attractive opportunities arise, acquire or license products and
technologies and acquire businesses which it believes are important to achieving
its strategy.
PRODUCTS AND SERVICES
Landmark's core products are its seismic interpretation software
applications, seismic processing applications, geologic interpretation and
mapping applications, 3D reservoir modeling applications, production engineering
applications, technical mapping and data analysis applications and OpenWorks
software integration and data management platform. The Company also offers a
number of other complementary software applications.
SEISMIC INTERPRETATION APPLICATIONS
Landmark's software applications designed primarily to enhance the
visualization, interpretation and analysis of 3D and 2D seismic data include the
following:
SeisWorks/3D (3D seismic interpretation). Using this software,
geoscientists can take advantage of the extensive volume of data provided by a
3D seismic survey to map reservoirs with increased accuracy. The software
enables geoscientists to use color analysis to describe various attributes of
the data and to track subsurface horizons in detail.
3DVI (3D seismic volume interpretation). The 3DVI software application
is a suite of products designed to allow 3D seismic interpreters to view and
work with the entire 3D seismic "cube" of data in three dimensions on their
computer screens. The three applications in this suite (ZAP! III, SeisCube and
SurfCube) are tightly integrated with one another and with SeisWorks/3D.
ZAP! III (automatic horizon picking). ZAP! III allows
geoscientists to map a seismic reflection surface through an entire 3D
volume in minutes or even seconds. This task could take weeks or months
when done manually.
SeisCube (visualization and interpretation of 3D volumes). This
product allows geoscientists to select a 3D surface to map with ZAP!
III and then peel away overlying seismic data to view the surface in
three dimensions. Users of SeisCube in conjunction with SeisWorks/3D
can scan through the solid 3D cube on screen before they begin to
interpret specific surfaces, faults or other geologic features.
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<PAGE> 14
SurfCube (perspective displays of interpreted surfaces). This
software allows the user to rotate a full 3D perspective display to
check the quality of interpretations, add color and other seismic
attributes to enhance the clarity and content of surfaces and
communicate complex geological relationships to others.
VoxCube (analysis and visualization of seismic data attributes in 3D
space). This software helps users predict the presence of hydrocarbons by
adjusting the opacity and color of a 3D seismic volume to display only those
data attributes that are needed, such as phase, porosity or velocity.
SynTool (synthetic seismograms generation). SynTool creates synthetic
seismic traces from well log readings, enabling geoscientists to correlate more
effectively limited, extremely precise well log data with more extensive,
indirect seismic data.
SeisWorks/2D (2D seismic interpretation). This product is the 2D
equivalent of SeisWorks/3D. This 2D software assists geoscientists in generating
accurate maps of reservoirs using 2D seismic data, which represents a single
"line", or cross section of earth, rather than an entire cube of such data as
represented by the 3D method.
Fast Track (2D automatic horizon tracking). This product is the 2D
equivalent of ZAP! III. It allows the geoscientist to bypass the tedious
hand-tracking of a subsurface horizon over an entire 2D line. The program
automatically tracks horizon surfaces across faults, around corners if the 2D
line was not a straight line, and through areas where data quality is low.
TDQ (time-depth conversion). This product allows geoscientists to
quickly and accurately convert time-based seismic data to depth-based geological
data, and vice versa. It facilitates the use of multiple Landmark applications
in a single project.
SEISMIC PROCESSING APPLICATIONS
Seismic processing applications provide tools for geoscientists to
process complex seismic data on their own workstations, eliminating the need to
send data to outside contractors:
MicroMAX (field seismic processing). MicroMAX enables geoscientists to
use personal computers to perform various quality control tasks and test seismic
data during the data acquisition process.
ProMAX (2D/3D seismic processing). This software consists of an
extensive library of techniques that help processing specialists convert large
amounts of raw field recordings into 2D and 3D seismic images for further
analysis and interpretation. The new ProMAX version 6.0 has been expanded with
capabilities for high-volume 3D processing for very large datasets and has been
integrated with the seismic interpretation workflow.
ProMAX Prospector (post-stack processing). Prospector is a special
version of ProMAX designed for seismic interpreters, rather than processors.
This application allows geoscientists
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to analyze certain data attributes and perform simple processing on selected
seismic sections, to improve their understanding of subsurface geology.
ProMAX VSP (borehole seismic processing). This is another version of
ProMAX designed to process "vertical" seismic data acquired inside wellbores. It
enables geoscientists to match precise well information (measured in units of
depth) with seismic data (measured in units of time), to obtain a better
understanding of the subsurface geology near the borehole.
GEOLOGIC INTERPRETATION AND MAPPING APPLICATIONS
The following software applications enable geoscientists to interpret
and map a variety of geologic data:
Z-MAP Plus (geologic mapping and modeling). Z-MAP Plus provides
geoscientists with an extensive collection of geomathematical tools to compute
and model faults, horizons, fluid contacts, reservoir volumes and many other
geologic features. In addition, it provides users with a variety of specialized
tools for creating high quality plots, maps, montages and other paper displays
for use in presentations.
StratWorks (geologic interpretation). This software product is
Landmark's first application designed for routine well log correlation,
interpretation and mapping and is the Company's first product aimed primarily at
geologists and seismic interpreters who need log interpretation tools. In
addition, links between StratWorks and the Company's other applications make it
easier for users to integrate complex geological information with seismic
interpretations, resulting in better understanding of oil and gas prospects.
PetroWorks (well log analysis). PetroWorks is a new application that
allows geologists and seismic interpreters to analyze subsurface geology and
reservoir characteristics, eliminating the need to consult an expert well log
analyst.
3D RESERVOIR MODELING APPLICATIONS
The following applications create interactive three-dimensional models
of oil and gas reservoirs using a variety of subsurface data:
SGM (stratigraphic geocellular modeling). SGM is the core software
product for modeling reservoir rock and fluid properties. It provides real-time
rotation and visualization of a 3D graphic framework of cells within earth
layers, as well as mathematical calculations.
GTM (geocellular template modeling). This companion module to SGM
allows geoscientists to create "templates" of various geological features such
as buried reefs, channels, and other spatial changes in rock type. Special
lighting, shading, and transparency tools aid visualization.
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StrataMap (interactive gridding and editing). StrataMap provides
interactive mapping capabilities. Using StrataMap, geoscientists can quickly map
seismic or well data sets and incorporate the results into their 3D reservoir
models.
StrataSim (fluid flow simulator). This product provides an interactive
link between geologic modeling and reservoir engineering. Users can test static
reservoir models with simulations of dynamic fluid flows to determine the most
efficient ways to extract oil and gas.
OpenSGM (development tools). OpenSGM is an enabling technology that
allows users to incorporate third party or in-house modeling algorithms into
SGM, or develop new software applications linked to SGM.
RAVE/DV (reservoir characterization). This tool enables geoscientists
and engineers to visualize relationships among various seismic and reservoir
attributes. It allows them to correlate statistically significant clusters of
reservoir properties with existing or potential well locations in standard map
and cross section views.
PRODUCTION ENGINEERING APPLICATIONS
The following applications are designed for drilling and production
engineering and economics:
ARIES (economics and reserve management). The ARIES product line
includes three modules: one for production engineering graphics, one that
monitors petroleum reserve activities and volumes and one for economic analysis.
DIMS (drilling information management system). At the drilling site,
this application replaces inefficient manual/paper data collection and reporting
methods with a digital system using relational database technology.
WIMS (well information management system). WIMS software provides an
efficient database with tools to develop completions and workovers.
POWAR (production operators workstation). This is a system for daily
data collection and reporting on producing wells. POWAR captures data in the
field and moves it through the central production account system.
GMS (gas management system). GMS is used with POWAR to track and
allocate gas production from point-of-sale back to partners.
WELLPLAN (relational database, data analysis and engineering software
system). WELLPLAN is used for drilling, completions and well service operations.
It is utilized at the rig site and office, providing seamless integration
between reporting and engineering functions.
Although the Company does not own the technology, Landmark has the
exclusive right to license the ARGUS product for use in oil and gas exploration
and production. ARGUS is a
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geographic information system that provides many different professionals with a
common map-based method of accessing and viewing data stored in multiple
databases. It can be used by both geoscientists and managers to better
understand relationships among various types of data.
TECHNICAL MAPPING AND DATA ANALYSIS APPLICATIONS
GES (geoscientific data management and mapping). GES is an integrated
set of modules which address fundamental aspects associated with exploration and
reservoir characterization. The basic functionality includes well and seismic
data management, base mapping, surface and fault modeling, cross sectioning and
volumetric estimation.
Jaguar (petroleum engineering and economic forecasting). The Jaguar
engineering system provides a suite of petroleum engineering applications which
include functions for estimating production decline, recoverable reserves,
economic forecasting and reservoir volume.
QLA 2 (petrophysical well log analysis). The QLA 2 petrophysical system
delivers well log data processing, cross-plotting and display facilities. QLA 2
incorporates a graphical programming language developed specifically for
processing petrophysical data. QLA 2 was originally developed under a joint
marketing agreement with Schlumberger Technologies, which agreement was
terminated and superseded by an exclusive distribution license which extends
until June 30, 1996. Under the new agreement, QLA 2 is owned by Schlumberger
Technologies but Landmark has the exclusive right to sell QLA 2 under a 50% -
50% royalty arrangement for the term of the agreement. The agreement with
Schlumberger Technologies does not preclude the Company from marketing products
to customers that have previously received QLA 2 products. Upon termination of
the agreement, the Company's rights with respect to QLA 2 will terminate.
Landmark is actively engaged in the development of a replacement for QLA 2 which
is intended to provide sophisticated multi-well analysis fully integrated with
Landmark's data management and mapping products.
LeaseMap (petroleum land management). LeaseMap provides data management
and mapping functionality to assist the land professional in managing producing
and prospective properties.
THE OPENWORKS SOFTWARE INTEGRATION AND DATA MANAGEMENT PLATFORM
The OpenWorks software integration and data management platform allows
geoscientists to efficiently run multiple applications from different
disciplines in side-by-side windows and, via a common Oracle database, exchange
data among them. OpenWorks also provides a software development platform which
can enhance productivity in designing and building new applications, both for
the Company and for third party applications developers. The OpenWorks platform
is specifically designed to support modular applications, which are simpler to
build, maintain and enhance than large "monolithic" applications. Customers are
able to use the OpenWorks tool kit to integrate their own proprietary
applications with purchased applications.
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OpenWorks has been developed to provide a standards-based, open systems
technology architecture. OpenWorks is based on a UNIX operating system, employs
standard graphical user interfaces (X Window System and Motif) and networking
protocols (TCP/IP and NFS) and functions with the Oracle relational database
management system. Most of Landmark's current applications interface with its
latest release of the OpenWorks platform. Several other products are currently
being written under, or converted or linked to, the OpenWorks platform.
OpenWorks also includes several options for directly linking software
applications of third parties. Several third party software developers, on their
own, or as business partners with the Company, have developed new applications
under OpenWorks, or linking existing applications to OpenWorks, further
expanding the universe of applications capable of being run on the Company's
computer-aided exploration systems. In addition, several oil companies have
purchased copies of OpenWorks for use by their own developers.
OTHER COMPLEMENTARY SOFTWARE APPLICATIONS
In addition to its core products, the Company offers additional
computer-aided exploration products designed to enhance the ability of
geoscientists to access, interpret and analyze data, including the following:
Landmark Geo-dataWorks (geoscience data management). This product is
Landmark's first commercial application designed for graphical management and
querying of geoscience data. It provides users of Landmark's software
applications easy access to data without having to become a database expert.
SERVICES
To more fully satisfy the needs of its diverse customer base, Landmark
provides a variety of service and support programs. These programs are provided
by Company employees who are experienced geoscientists and users of CAEX/CARM
systems. Key revenue generating services and support programs include:
o Service contracts which provide the customer with hardware maintenance
and all revisions and enhancements to its software;
o Training courses for users of Landmark's software, as well as system
administrators, either at the customer's location or at the Company's
offices throughout the world;
o Telephone and on-site support options, to aid geoscientists in more
effectively using applications, and in problem solving with systems or
software;
o Customized consulting services in data loading and management to
provide access to the diverse types of information used in most
exploration and production projects;
o Consulting and networking services to help customers design, build and
integrate the most effective computer environment for their particular
needs; and
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o An Integrated Solutions Group which provides account management,
first-line support, and consulting services across most of Landmark's
product groups.
HARDWARE
The Company does not develop or manufacture computer hardware. Instead,
the Company configures standard commercially available workstations and related
hardware with the Company's software applications to satisfy customer
requirements. The Company's systems incorporate Sun SPARCstation, IBM RISC
System/6000 and Silicon Graphics, Inc. workstations, which employ derivatives of
the UNIX operating system. The Company also offers PC-based workstations, which
employ derivatives of the DOS and Windows operating systems. The typical system
consists of a CPU with memory, mass storage and imaging hardware appropriate for
Landmark's data-intensive applications. The Company evaluates other hardware
platforms on a continuing basis and supports additional hardware platforms for
certain applications, depending on the particular needs of the software and the
customer.
The Company's systems operate as stand-alone workstations or may be
integrated into a work group environment. All of the Company's UNIX workstations
support TCP/IP networking protocols and operate on Ethernet local area networks.
PRODUCT DEVELOPMENT
Landmark is committed to providing computer-aided tools which enhance
the visualization and characterization of the subsurface and which permit the
integration of different data types and of different interpretations. The
Company has focused and will continue to focus research and development efforts
on helping oil and gas companies maximize the value of their substantial
investment in seismic, well log and reservoir data through CAEX/CARM products
and services.
The Company is focusing research and development efforts on integrating
all its principal applications under the OpenWorks software integration and data
management platform to provide the broadest suite of integrated applications in
the industry. In addition, the Company has taken an open systems approach to the
development and marketing of OpenWorks to encourage other software vendors to
develop new applications or modify existing applications to run on OpenWorks.
The Company believes that its open systems approach is consistent with
the efforts of POSC and PPDM to develop industry standards for the
computerization of the exploration and production process. The Company intends
to continue to develop its products in compliance with POSC and/or PPDM
standards that become widely accepted in the oil and gas industry. Landmark
plans to release an additional version of OpenWorks on PPDM to provide an
intermediate PPDM-based project data management and integration platform
addressing customers' immediate needs. The Company plans a subsequent major
release of OpenWorks which is intended to be fully POSC-compliant based on the
PPDM subset of Epicentre.
The Company's existing customers are active in determining development
ideas and prioritizing enhancements and future products. Through user groups,
focus groups and a
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computerized system of tracking requests received from daily interactions with
customer support personnel, the Company is in close contact with the needs and
requirements of its customers and their innovative uses of technology.
Landmark's software developers and systems engineers work closely with hardware
vendors to configure hardware systems to take advantage of the full range of
functionality offered by the Company's software, including client-server
functionality and graphics visualization capabilities.
During the nine months ended March 31, 1995, and the fiscal years ended
June 30, 1994, 1993 and 1992, the Company expended approximately $13,360,000,
$16,503,000, $13,721,000 and $14,263,000, respectively, on product design and
development (which figures are net, respectively, of capitalized software
development costs of $2,439,000, $2,488,000, $1,701,000 and $2,251,000). The
amount of capitalized software development costs amortized was $2,324,000,
$2,100,000, $1,593,000 and $1,154,000 for the nine months ended March 31, 1995,
and the fiscal years ended June 30, 1994, 1993 and 1992, respectively.
MARKETING AND SALES
The Company believes that personal customer contact is an important
factor in marketing its CAEX/CARM systems and therefore sells its systems
through a direct sales force located in more than 20 sales and technical support
centers worldwide. Sales personnel generally have either a geoscience education
or expertise in selling advanced technology-based systems.
The Company sells products and services to major multinational energy
companies, such as Amoco, British Petroleum, Chevron, Mobil Oil, Phillips
Petroleum, Royal Dutch/Shell, Texaco and Unocal, and to large independent oil
and gas companies, such as Amerada Hess, Marathon Oil, Maxus Energy and
Pennzoil. Landmark also has increased the sale of products and services to
national and small independent oil and gas companies. For the nine-month period
ended March 31, 1995, approximately 59% of the Company's total revenues were
generated by international sales.
GOVERNMENT REGULATION
The Company must obtain validated export licenses from the U.S.
government prior to selling its products in certain foreign countries. To date,
the Company has not experienced any unusual difficulty in obtaining the required
export licenses; however, there can be no assurance that it will not experience
difficulty in obtaining such licenses in connection with future export sales.
COMPETITION
The market for CAEX/CARM systems is highly competitive. The Company's
existing and potential competitors may have substantially greater marketing,
financial and technical resources than the Company. The Company's existing
competitors include a division of Schlumberger, Ltd. and specialized software
companies. The Company also experiences competition from certain of the major
oil and gas companies which have internally developed, and may continue
internally developing, CAEX/CARM systems, thereby limiting the Company's
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<PAGE> 21
potential customer base. In addition, new competitors are entering the market
and competition is intensifying. There can be no assurance that sales of the
Company's products will not be adversely affected if its current competitors or
new market entrants introduce new products with better functionality,
performance, price or other characteristics than the Company's products.
The Company believes that the principal competitive factors in the
CAEX/CARM market are first-to-market advantage, installed base size, product
functionality and performance, software integration, the relationship of product
price and performance, and customer support and consulting services. The Company
believes that it competes effectively with respect to each of these factors.
PATENTS, COPYRIGHTS, TRADEMARKS AND LICENSES
The Company generally relies on patent, copyright and trademark laws,
license and nondisclosure agreements, and technical measures to protect its
rights in its software products. All employees of the Company are required to
sign an agreement that they will maintain the confidentiality of the Company's
proprietary information. The Company's products generally are licensed to
customers pursuant to an agreement that restricts the use of the products to the
customer's internal purposes.
The Company has applied for U.S. and foreign patents for several of its
existing and future products. A U.S. patent covering an invention in the
Company's TurboZAP! was issued October 8, 1991 as U.S. Patent 5,056,066. Another
patent was issued October 6, 1992 as U.S. Patent 5,153,858 which covers an
innovative method for picking horizons in 3D seismic data. Two additional
patents (U.S. Patents 4,821,164 and 4,991,095) relating to processes for
three-dimensional mathematical modeling of underground geologic volumes were
issued on April 11, 1989 and February 5, 1991, respectively. U.S. Patent
5,432,751, which was issued July 11, 1995, covers a computerized method of
automatically picking horizons from a 3D volume of seismic data traces. The
above patents will expire 17 years after the issuance date. Other patents are
pending seeking coverage for inventions in the Company's new generation of ZAP!
products. Still other patents are pending seeking coverage for Company's
OpenWorks method of information communication between concurrently operating
computer programs. Software products originated by the Company's employees are
covered by copyright.
The Company has trademark rights in the marks applied to its software
products. U.S. trademark registrations have been issued for the marks LANDMARK,
LANDMARK and pyramid logo, OPENWORKS, STRATWORKS, SEISWORKS, PETROWORKS, ZAP!,
WELLBASE, GEOGRAPHIX, ISOMAP, SEISMAP and LEASEMAP. Canadian trademark
registrations have been issued for POGO, DIMS and WIMS. Trademark registration
applications are pending for other marks of the Company.
The Company has acquired licenses from third party software vendors to
sell licenses to certain software applications developed by those vendors. In
addition, the Company has acquired licenses from other software vendors for
networking, utilities, and other software products. These licenses typically
provide for an initial fee which covers a certain number of copies and for
payment thereafter on a per copy basis.
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PERSONNEL
At June 30, 1995, the Company had approximately 836 employees. The
Company's future success will depend in large part on its continued ability to
attract and retain highly skilled employees. None of its employees is
represented by a collective bargaining agreement, and the Company believes that
its relations with its employees are very good.
USE OF PROCEEDS
The Selling Stockholders will receive all of the net proceeds from the
sale of the shares of Common Stock owned by such Selling Stockholders and
offered hereby. The Company will not receive any of the net proceeds from the
sale of such shares.
SELLING STOCKHOLDERS
The following table sets forth with respect to the Selling
Stockholders: (i) the name of each of the Selling Stockholders; (ii) the nature
of any position, office or other material relationship which the Selling
Stockholders have had within the past three years with Landmark or any of its
predecessors or affiliates; (iii) the number of shares of Common Stock owned by
each Selling Stockholder as of July 26, 1995; and (iv) the number of shares of
each of the Selling Stockholders to be offered hereby.
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<PAGE> 23
<TABLE>
<CAPTION>
Number of Shares
of Common Stock
Owned as of Number of Shares
Name and Relationship (1) July 26, 1995 Offered Hereby(2)
------------------------- ---------------- -----------------
<S> <C> <C>
David L. Armitage(3) 191,214 191,214
Gina G. Armitage(4) 191,214 191,214
Minnowburn Corporation 146,891 146,891
Meredyth R. Armitage 31,509 31,509
Galen P. Robbins 20,526 20,526
The Estate of Peter B. Seaman 15,362 15,362
William B. Whitaker, II 14,316 14,316
Catherine S. Armitage 14,055 14,055
Antrim Resources, Inc.(6) 10,459 10,459
First Trust, Trustee for the benefit of 10,459 10,459
Dirk W. McDermott
Marc C. McKinley 7,713 7,713
------- -------
Totals 653,718 653,718
======= =======
</TABLE>
(1) Each of the relationships is with GeoGraphix, a wholly-owned subsidiary
of the Company acquired by the Company on June 5, 1995. Each of the
Selling Stockholders received the shares of Common Stock set forth in
this table in connection with such acquisition. None of the Selling
Stockholders is an officer or director of the Company.
(2) After completion of the offering contemplated hereby, none of the
Selling Stockholders will own any shares of the Common Stock (assuming
that all shares of Common Stock that may be offered hereby are sold,
and assuming that the Selling Stockholders do not acquire any
additional shares of Common Stock subsequent to July 26, 1995).
(3) Mr. Armitage was President, Chief Executive Officer and a member of the
Board of Directors of GeoGraphix prior to its acquisition by the
Company. Since June 5, 1995, Mr. Armitage has been employed by the
Company as President of the Geographix business unit.
(4) Ms. Armitage was Secretary and a member of the Board of Directors of
GeoGraphix prior to its acquisition by the Company.
(5) Mr. McDermott was a member of the Board of Directors of GeoGraphix
prior to its acquisition by the Company.
(6) Alex Cranberg, a principal of Antrim Resources, Inc., was a member of
the Board of Directors of GeoGraphix prior to its acquisition by the
Company.
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<PAGE> 24
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby may be sold from time to time
by the Selling Stockholders, or by the Selling Stockholders' pledgees, donees,
transferees or other successors in interest, either directly by the Selling
Stockholder owning such shares or such Selling Stockholder's successors in
interest or through agents, underwriters or dealers. Such sales may be effected
in transactions in the NASDAQ National Market System, on any exchange on which
the Common Stock may from time to time be traded, in independent, negotiated
transactions or otherwise. The shares of Common Stock offered hereby may be sold
at market prices prevailing at the time of sale or at negotiated prices. Without
limiting the generality of the foregoing, the shares offered hereby may be sold
in the following manner: (i) a block trade in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (ii) a purchase
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (iii) an ordinary brokerage transaction; or
(iv) a transaction in which the broker solicits purchasers.
Any broker, dealer or underwriter to be utilized by a Selling
Stockholder will be selected by such Selling Stockholder. Any compensation
payable to such persons by a Selling Stockholder will be negotiated in the
future. The Selling Stockholders and any underwriters, dealers or agents that
participate in distribution of the shares offered hereby may be deemed to be
underwriters, and any profit on sale of the shares by the Selling Stockholders
and any discounts, commissions or concessions received by any underwriter,
dealer or agent may be deemed to be underwriting discounts and commissions under
the Securities Act of 1933 (the "Securities Act").
The Company has agreed under certain circumstances to indemnify certain
of the Selling Stockholders against certain liabilities arising under the
Securities Act and the Securities Exchange Act of 1934, as amended.
The securities covered hereby may be sold pursuant to the registration
statement of which this Prospectus is part, pursuant to Rule 144 promulgated by
the Commission under the Securities Act or pursuant to an exemption from
registration under the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Winstead Sechrest & Minick P.C., Dallas, Texas.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K have been audited by various independent
accountants. The companies and periods covered by these audits are indicated in
the individual accountants' reports. Such
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<PAGE> 25
financial statements have been so incorporated in reliance on the reports of the
various independent accountants given on the authority of such firms as experts
in auditing and accounting.
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<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Company in connection with the
registration of the Common Stock offered hereby are as follows:
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . $ 5,903.19
NASD filing fee . . . . . . . . . . . . . . . . . Not applicable
"Blue Sky" fees and expenses . . . . . . . . . . Not applicable
Printing and engraving expenses . . . . . . . . . Not applicable
Legal fees and expenses . . . . . . . . . . . . . $ 25,000.00
Accounting fees and expenses . . . . . . . . . . $ 22,000.00
Transfer agent and registrar fees . . . . . . . . Not applicable
Miscellaneous expenses . . . . . . . . . . . . . . $ 3,000.00
------------------
Total . . . . . . . . . . . . . . . . . . . $ 55,903.19
==================
</TABLE>
All expenses (other than discounts and commissions incurred in
effecting any sales of shares of Common Stock offered hereby), including,
without limitation, those itemized above, shall be borne by the Company;
provided, however, that (i) discounts and commissions attributable to sales by
the Selling Stockholders shall be borne by the Selling Stockholders, and (ii)
the fees of any attorneys, accountants or other professionals retained by the
Selling Stockholders shall be paid by the Selling Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The General Corporation Law of the State of Delaware permits the
Company and its stockholders to limit directors' exposure to liability for
certain breaches of the directors' fiduciary duty, either in a suit on behalf of
the Company or in an action by stockholders of the Company. The Company's
Restated Certificate of Incorporation provides that no director of the Company
will be personally liable to the Company or any of its stockholders for monetary
damages arising from the director's breach of fiduciary duty as a director.
However, this does not apply with respect to any action in which the director
would be liable under Section 174 of Title 8 of the General Corporation Law of
Delaware nor does it apply with respect to any liability resulting from (i) a
director's breach of his or her duty of loyalty to the Company or its
stockholders; (ii) acts or omissions of a director not in good faith; (iii) acts
or omissions of a director involving intentional misconduct or a knowing
violation of law; or (iv) a transaction from which a director derived an
improper personal benefit.
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<PAGE> 27
The Company's Restated Certificate of Incorporation further provides
that, other than with respect to an action or proceeding brought by or on behalf
of the Company, the Company will indemnify its officers and directors and former
officers and directors against any expenses, judgments or settlement payments
sustained or paid by such persons as a result of having acted as an officer or
director of the Company, or at the request of the Company, as an officer,
director, agent or employee of another business entity. Such right of
indemnification is conditioned upon such person having (i) acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Company, and (ii) with respect to criminal matters, no
reasonable cause to believe his or her conduct was unlawful.
The Company's Restated Certificate of Incorporation also provides for a
similar right of indemnification with respect to actions brought by or on behalf
of the Company. However, in connection with an action brought by or on behalf of
the Company, no right of indemnification exists with respect to amounts paid in
settlement or satisfaction of any claim for which the person seeking indemnity
has been adjudged to have been liable to the Company, unless a court determines
that, despite the adjudication of liability and in view of all the circumstances
of the case, such person is fairly entitled to indemnity for expenses deemed
proper by the court.
Any indemnification will be made by the Company only upon a
determination that indemnification is proper under the circumstances because the
party seeking indemnity has met the applicable standard of conduct. Such
determination will be made by the stockholders or by majority vote of a
disinterested quorum of the Board of Directors, or, if the Board of Directors so
directs, by independent counsel.
Pursuant to the Restated Certificate of Incorporation, the Company will
advance litigation expenses to any officer or director upon receipt of an
undertaking by such person to repay such advances in the event no right of
indemnification is subsequently shown. The Company also may obtain insurance at
its expense on behalf of any person who might be entitled to indemnification,
regardless of whether the Company would have the power to indemnify such person
against liability under the Restated Certificate of Incorporation.
The Company's bylaws provide that the Company will indemnify its
officers and directors in accordance with the Company's Restated Certificate of
Incorporation. Any right of indemnification granted by the Certificate of
Incorporation or the bylaws is in addition to, and not in lieu of, any other
right of indemnification to which an officer or director may be entitled under
any agreement, vote of stockholders or disinterested directors or law of
Delaware.
The Company enters into indemnification agreements with each of its
executive officers and directors. Each such Indemnification Agreement provides
for indemnification of officers and directors of the Company to the greatest
extent permitted by the General Corporation Law of Delaware and additionally
provides (i) that such persons shall be indemnified for amounts paid in
settlement of derivative actions, (ii) for advances of investigation and
litigation expenses subject to repayment if indemnification is disallowed, (iii)
that indemnification is available unless the board of directors or independent
legal counsel or the stockholders determine that the relevant standards of
conduct were not satisfied, with the Company bearing the burden of proving same
in any suit for indemnification, and (iv) for payment to such persons of
expenses incurred in
II-2
<PAGE> 28
connection with the successful prosecution of an action for indemnification, in
whole or in part, of any amount not timely paid (generally within 30 days of
demand) by the Company.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Incorporated by Reference
Exhibit Number and Description (if Applicable)
------------------------------ ------------------------------------
Form Date File No. Exhibit
---- ---- -------- -------
<S> <C> <C> <C> <C>
(4) Instruments defining the
rights of security holders,
including debentures
4.1 Specimen Common
Stock certificate S-1 08/22/88 33-23957 4.1
(5) Opinion regarding legality
5.1 Opinion of Winstead
Sechrest & Minick P.C N/A N/A N/A N/A
(23) Consents of experts and
counsel
23.1 Consent of Price N/A N/A N/A N/A
Waterhouse LLP
23.2 Consent of Ernst &
Young LLP N/A N/A N/A N/A
23.3 Consent of Levine,
Hughes & Mithuen, Inc N/A N/A N/A N/A
23.4 Consent of Winstead
Sechrest & Minick P.C
(See Exhibit 5.1) N/A N/A N/A N/A
(24) Power of attorney
24.1 Power of attorney N/A N/A N/A N/A
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
II-3
<PAGE> 29
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b), in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange
II-4
<PAGE> 30
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-5
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on July 26, 1995.
LANDMARK GRAPHICS CORPORATION
By:/s/ Robert P. Peebler
--------------------------------------
Robert P. Peebler, Director, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Robert P. Peebler and William H.
Seippel, or either of them, his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and on his behalf and in his name, place and
stead, in any and all capacities, to sign, execute, and file any and all
documents relating to this Registration Statement, including any and all
amendments, post-effective amendments, exhibits and supplements thereto, with
any regulatory authority, granting unto said attorneys, and each of them, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as he himself might or could do if
personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done.
II-6
<PAGE> 32
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature and Title Date
- ------------------- ----
<S> <C>
/s/ Robert P. Peebler July 26, 1995
- -----------------------------------
Robert P. Peebler
Director, President, and Chief
Executive Officer (Principal
Executive Officer)
/s/ William H. Seippel July 26, 1995
- -----------------------------------
William H. Seippel
Vice President, Finance and
Chief Financial Officer
(Principal Financial and Accounting
Officer)
/s/ Sam K. Smith July 26, 1995
- -----------------------------------
Sam K. Smith
Chairman of the Board
/s/ Lucio Lanza July 26, 1995
- -----------------------------------
Lucio Lanza
Director
/s/ James A. Downing, II July 26, 1995
- -----------------------------------
James A. Downing, II
Director
/s/ Charles L. Blackburn July 26, 1995
- -----------------------------------
Charles L. Blackburn
Director
/s/ Theodore Levitt July 26, 1995
- -----------------------------------
Theodore Levitt
Director
/s/ S. Rutt Bridges July 26, 1995
- -----------------------------------
S. Rutt Bridges
Director
</TABLE>
II-7
<PAGE> 33
EXHIBIT INDEX
Exhibit
No. Description
- --------- -----------
5.1 Opinion of Winstead Sechrest & Minick P.C
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Levine, Hughes & Mithuen, Inc
23.4 Consent of Winstead Sechrest & Minick P.C (See Exhibit 5.1)
<PAGE> 1
EXHIBIT 5.1
[WINSTEAD SCHREST & MINICK LETTERHEAD]
July 27, 1995
Landmark Graphics Corporation
Attn: Mr. Robert P. Peebler
333 Cypress Run, Suite 100
Houston, Texas 77094
Gentlemen:
We have acted as counsel for Landmark Graphics Corporation, a Delaware
corporation (the "Company"), in connection with the offer and sale by certain
stockholders of the Company (the "Selling Stockholders") of 653,718 shares (the
"Stockholder Shares") of the common stock, par value $0.05 per share (the
"Common Stock"), of the Company pursuant to the Company's Registration Statement
on Form S-3 being filed with the Securities and Exchange Commission (the
"Registration Statement"). Capitalized terms used but not otherwise defined
herein shall have the respective meanings set forth in the Registration
Statement.
We have examined originals, or copies identified to our satisfaction as
being true copies, of (a) the Company's Restated Certificate of Incorporation
and all amendments thereto, (b) the Company's Bylaws, as amended, (c) minutes of
meetings or unanimous consents in lieu of meetings of the Company's board of
directors and stockholders, and (d) such other corporate records and documents,
certificates of corporate and public officials and statutes as we have deemed
necessary for the purpose of this opinion.
Based upon such examination and in reliance thereon, we are of the
opinion that the Stockholder Shares are validly issued, fully paid, and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the references to this Firm in the Registration
Statement and the Prospectus included therein.
Very truly yours,
WINSTEAD SECHREST & MINICK P.C.
By: /s/ ROBERT E. CRAWFORD, JR.
----------------------------
Robert E. Crawford, Jr.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
July 27, 1994 appearing on page 23 of Landmark Graphics Corporation's Annual
Report on Form 10-K for the year ended June 30, 1994. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Houston, Texas
July 26, 1995
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Landmark Graphics
Corporation for the registration of 653,718 shares of its common stock and to
the incorporation by reference therein of our report dated July 28, 1993, except
for Note 21, as to which the date is May 17, 1994, with respect to the
consolidated financial statements and schedules as of June 30, 1993 and for each
of the two years then ended, of Landmark Graphics Corporation included in its
Annual Report (Form 10-K) for the year ended June 30, 1994, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Houston, Texas
July 27, 1995
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Landmark Graphics
Corporation pertaining to the registration of 653,718 shares of its common stock
and to the incorporation by reference therein of our report dated December 16,
1992, with respect to the consolidated financial statements and schedules of
Landmark Graphics Corporation included in its Annual Report on Form 10-K for the
fiscal year ended June 30, 1994.
/s/ Levine, Hughes & Mithuen, Inc.
Englewood, Colorado
July 11, 1995
