<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED JUNE 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR
THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-17195
LANDMARK GRAPHICS CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 76-0029459
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
15150 MEMORIAL DRIVE
HOUSTON, TEXAS 77079-4304
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 560-1000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
PREFERRED SHARE PURCHASE RIGHTS
COMMON STOCK, $0.05 PAR VALUE PER SHARE
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by nonaffiliates
of the Registrant was $479,500,000 as of September 6, 1996 based upon the
average bid and asked prices of such stock as reported in the National Market
System of the National Association of Securities Dealers Automated Quotation
System (the "Nasdaq National Market") on that day.
There were 17,662,816 shares of common stock, $0.05 par value,
outstanding at September 6, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
None.
<PAGE> 2
EXPLANATORY NOTE
This Form 10-K/A is being filed to disclose the information required
by Part III (Items 10, 11, 12 and 13) of Form 10-K. The Form 10-K for the fiscal
year ended June 30, 1996 filed by the Company indicated that such information
would be incorporated by reference to the Company's definitive proxy statement
relating to the 1996 Annual Meeting of Stockholders. The Company will not be
conducting a 1996 Annual Meeting of Stockholders prior to the pending merger
(the "Merger") of the Company with and into Halliburton Acg. Company ("Merger
Sub"), a Delaware corporation and wholly owned subsidiary of Halliburton Company
("Halliburton"), a Delaware corporation, pursuant to that certain Agreement and
Plan of Merger (the "Merger Agreement") dated as of June 30, 1996 by and among
the Company, Merger Sub and Halliburton.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth for each director of the Company, his
age, principal occupation, position with the Company, if any, and certain other
information.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Charles L. Blackburn 68 Since May 1995, Mr. Blackburn has been an March 1993
independent consultant to energy
companies. From February 1987 to May 1995,
Mr. Blackburn was President and Chief
Executive Officer of Maxus Energy
Corporation (formerly Diamond Shamrock
Corporation) and from April 1987 to May
1995 he was Chairman of the Board of
Directors of Maxus Energy Corporation.
Mr. Blackburn also serves as a director of
Lone Star Technologies, Inc.
S. Rutt Bridges 45 Mr. Bridges has served as Vice President March 1994
of the Company since March 1994 and as
Chief Technology Officer of the Company
since July 1995. From October 1980 to
March 1994, at which time Advance
Geophysical Corporation ("Advance
Geophysical") merged into a wholly owned
subsidiary of the Company, Mr. Bridges was
Chairman of the Board and Chief Executive
Officer of Advance Geophysical, a supplier
of seismic processing software.
James A. Downing II 56 Mr. Downing has served as Chief Science March 1993
Officer and Senior Technology and Business
Advisor since September 1995. From August
1994 to August 1995, Mr. Downing was Vice
President of the Company and President of
the ZYCOR Products Group since July 1994.
From July 1992 to July 1994, Mr. Downing
served as Executive Vice President - CAEX
Product Development of the Company and
from November 1990 to July 1992, he served
as President of Landmark/ZYCOR, Inc., a
wholly owned subsidiary of the Company.
Mr. Downing co-founded ZYCOR, Inc., a
developer of geologic products for the
energy industry and the predecessor of
Landmark/ZYCOR, Inc., in June 1979.
Lucio L. Lanza 52 Since 1989, Mr. Lanza has been an January 1992
independent consultant working with chief
executive officers and top management of
semiconductor, communications and
computer-aided design companies in
strategic planning. In 1991, he became a
partner of U.S. Venture Partners, a
venture capital firm managing investments
in the high technology and biotechnology
fields. Mr. Lanza is also a consultant
to Cadence Design Systems in the areas of
strategy and business development.
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
Theodore Levitt 71 Mr. Levitt joined the faculty of the December 1993
Harvard University Graduate School of
Business Administration in 1959, where he
is the Edward W. Carter Professor of
Business Administration, Emeritus. From
1985 to 1989, Mr. Levitt served as Editor
of the Harvard Business Review. Mr.
Levitt serves as a director of Cordiant
PLC, The Stride Rite Corporation and
Sanford C. Bernstein Fund.
Robert P. Peebler 49 Mr. Peebler has served as Chief Executive August 1990
Officer of the Company since December 1992
and as President and Chief Operating
Officer of the Company since July 1992.
From April 1989 to July 1992, Mr. Peebler
served as Vice President of the Company.
Sam K. Smith 64 Mr. Smith has served as Chairman of the September 1989
Board since December 1992. Mr. Smith is
the Chairman of Merit Technology, Inc., a
military software company which he
co-founded in July 1984. On February 18,
1994, Merit Technology filed for
protection under Chapter 11 of the
Bankruptcy Code and on August 22, 1995, an
order confirming Merit Technology's Plan
of Reorganization was entered by the
bankruptcy court. Mr. Smith serves as a
director of Mizar, Inc., a manufacturer
of digital signal processing boards and
Sun River Corporation, a terminal
manufacturing company.
</TABLE>
Unless he sooner resigns or is removed, a director holds office from the date
elected until his successor is elected and qualifies.
<PAGE> 4
EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of the
Board of Directors and are chosen annually by the Board at its first meeting
following the annual meeting of stockholders. The following table sets forth
the names and ages of the executive officers of the Company and all positions
held with the Company by each individual.
<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Robert P. Peebler . . . . . . . . 49 Chief Executive Officer, President and Chief Operating Officer
James A. Downing II . . . . . . . 56 Chief Science Officer
S. Rutt Bridges . . . . . . . . . 45 Vice President
Daniel L. Casaccia . . . . . . . 47 Vice President - Human Resources
John W. Gibson. . . . . . . . . 38 Executive Vice President
Henry P. Holland . . . . . . . . 47 Executive Vice President
Patti L. Massaro . . . . . . . . 47 General Counsel and Corporate Secretary
Frank D. McMordie . . . . . . . . 54 Vice President
William H. Seippel . . . . . . . 39 Vice President - Finance and Chief Financial Officer
Denese D. Van Dyne . . . . . . . 41 Vice President - Corporate Communications
</TABLE>
For a description of the business experience of Messrs. Peebler,
Downing and Bridges, see Item 10 above.
Daniel L. Casaccia has served as Vice President - Human Resources
since January 1991. From September 1988 to January 1991, he was Vice
President, Human Resources/Quality and Secretary of McDATA Corporation, an
international computer networking and data communication company.
John W. Gibson has served as Executive Vice President of the Company
since February 1996. Previously Mr. Gibson was President of Zycor Products
Group from September 1995 to February 1996 and Vice President from September
1994 to September 1995. Prior to joining Landmark, Mr. Gibson was Manager,
Geological and Geophysical Imaging Research with Chevron Corporation.
Henry P. Holland has served as Executive Vice President of the Company
since March 1996 and was previously President of the Integrated Solutions Group
from January 1995 to February 1996. Prior to joining the Company, from 1990 to
1994, Mr. Holland held the positions of President and Chief Executive Officer
(1993 to 1994), Chief Operating Officer (1991 to 1993) and Executive Vice
President - Support and Development (1990 to 1991) with Dun & Bradstreet
Software, a supplier of business software, systems and services.
Patti L. Massaro has served as General Counsel and Corporate Secretary
since March 1993. Prior to joining the Company, from 1991 to 1992, Ms. Massaro
served as legal consultant to corporate clients including Landmark and other
software companies and oil field equipment and service companies. From 1989 to
1991, Ms. Massaro was General Counsel and Secretary for IMSL, Inc. (now known as
Visual Numerics, Inc.), a developer and marketer of scientific and mathematical
software.
Frank D. McMordie served as Vice President of the Company from
September 1994 to June 1996 and as President of the Munro Garrett Products
Group since July 1995. From July 1993 to September 1994, at which time Munro
Garrett International, Inc. ("Munro Garrett") became an indirect, wholly owned
subsidiary of the Company, Mr. McMordie was President and Chief Operating
Officer of Munro Garrett. From November 1986 to July 1993, at which time Munro
Engineering Inc. and Garrett Computing Systems, Inc. ("Garrett Computing")
merged to form Munro Garrett, Mr. McMordie was Chairman, President and Chief
Executive Officer of Garrett Computing. Mr. McMordie retired from the Company
in June 1996.
William H. Seippel has served as Vice President - Finance and Chief
Financial Officer since July 1992. Prior to joining the Company, from August
1990 to July 1992, Mr. Seippel was Director of Finance for Covia, Inc., an
affiliate of United Airlines. From April 1984 to August 1990, Mr. Seippel held
the positions of Group Business Controller (1989 to 1990), Group Controller
Sales/Marketing (1986 to 1989), and Product Line Controller (1984 to 1986) with
Digital Equipment Corporation, a diversified computer manufacturer.
Denese D. Van Dyne has served as Vice President - Corporate
Communications of the Company since March 1995. From December 1994 to January
1995, Ms. Van Dyne was Vice President - Industry Relations for the Applications
Management Group of Sterling Software, a Dallas-based software developer. From
September 1993 to December 1994, at which time KnowledgeWare, Inc.
("KnowledgeWare"), a developer of application development software, was
acquired by Sterling Software, Ms. Van Dyne was Director of Communications for
KnowledgeWare. From April 1992 to August 1993, Ms. Van Dyne was Vice President
of Crescent Communications, a high-technology marketing consulting firm in
Atlanta, Georgia, and from June 1987 to December 1991, she was Marketing
Communications Manager of the Electronic Design Division of Hewlett-Packard.
<PAGE> 5
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that Company directors,
executive officers and persons who own more than 10% of the Common Stock file
initial reports of ownership and reports of changes in ownership of Common
Stock with the SEC. Officers, directors and stockholders who own more than 10%
of the Common Stock are required by the SEC to furnish the Company with copies
of all Section 16(a) reports they file.
To the Company's knowledge, based solely on the review of the copies
of such reports furnished to the Company and written representations that no
other reports were required, during the fiscal year ended June 30, 1996, all
Section 16(a) beneficial ownership reporting requirements applicable to its
officers, directors and 10% stockholders were satisfied.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
annual and long-term compensation for services in all capacities for the years
ended June 30, 1996, 1995 and 1994 paid to Robert P. Peebler, the Company's
Chief Executive Officer, and the other four most highly compensated executive
officers of the Company who were serving as such at June 30, 1996 (hereinafter
collectively referred to as the "Named Officers"):
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------
LONG-TERM
COMPENSATION
-------------------------
NUMBER OF
Restricted SECURITIES
NAME AND OTHER ANNUAL Stock UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION Awards OPTIONS COMPENSATION
------------------ ---- ------ ----- ------------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert P. Peebler, 1996 $400,000 --- --- $ --- 50,000 $5,314(2)
Chief Executive 1995 325,000 --- --- --- 130,000 4,620(2)
Officer and President 1994 237,500 $3,500 --- --- 60,000 3,836(2)
S. Rutt Bridges, 1996 200,552 --- --- --- --- 404,750(3)
Vice President 1995 219,749 --- --- --- --- 406,620(3)
1994 50,000 --- --- --- --- 101,501(3)
Henry P. Holland 1996 268,755 --- --- --- 25,000 2,375(2)
Executive Vice President 1995 114,592 --- --- 46,930(5) 100,000 2,573(2)
1994 --- --- --- --- --- ---
James A. Downing II, 1996 197,500 --- --- --- 8,000 2,375(2)
Chief Science Officer 1995 190,000 --- --- --- 10,000 4,620(2)
1994 154,750 2,590 --- --- 10,000 4,559(2)
William Trebinski, 1996 196,349 --- --- --- 20,000 53,300(4)
Vice President 1995 175,091 --- --- --- 40,000 4,620(4)
1994 119,409 17,435 --- --- 20,000 5,970(4)
William H. Seippel, 1996 186,250 --- --- 217,500(5) 15,000 2,375(2)
Vice President - 1995 175,000 --- --- --- 45,000 4,620(2)
Finance and Chief 1994 142,750 2,380 --- --- 15,000 4,559(2)
Financial Officer
</TABLE>
- -------------------
(1) No information is provided for the fiscal years ended June 30, 1995 and
June 30, 1994 for any Named Officer who was not an executive officer of
the Company during the applicable fiscal year.
(2) Consists of Company matching contributions to the Landmark Savings Plan.
(3) Includes $4,750, $6,620 and $1,501 of matching contributions made by the
Company to the Landmark Savings Plan for the fiscal years ended June 30,
1996, 1995 and 1994, respectively, and $400,000, $400,000 and $100,000 of
compensation allocable to a non-competition agreement between the Company
and Mr. Bridges for the fiscal years ended June 30, 1996, 1995 and 1994,
respectively.
(4) Consists of Company matching contributions and other Company contributions
to a savings plan.
(5) Grants of restricted stock to Mr. Holland and Mr. Seippel of 2,470 shares
valued at $19.00 per share and 10,000 shares valued at $21.75 per share,
respectively. The value of Mr. Holland's and Mr. Seippel's restricted
stock at June 30, 1996 is $47,548 and $192,500, respectively. The
restrictions on Mr. Holland's restricted stock award were performance
based and have been satisfied. Therefore, Mr. Holland's restricted stock
award is now fully vested. Mr. Seippel's restricted stock award vests over
a four (4) year period with 25% of the total award vesting each year.
However, under the terms of Mr. Seippel's employment agreement (see
"Employment Contracts, Termination of Employment and Change in Control
Arrangements" below), the restricted stock award will fully vest at the
Effective Time.
<PAGE> 6
OPTION GRANTS
The following table sets forth certain information regarding options
granted to the Named Officers during the fiscal year ended June 30, 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
PERCENT OF POTENTIAL REALIZABLE VALUE AT
NUMBER OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS EXERCISE STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO PRICE FOR OPTION TERM (2)
OPTIONS EMPLOYEES IN PER EXPIRATION -----------------------------
NAME GRANTED FISCAL YEAR SHARE (1) DATE 5% 10%
- ------------------- ------- ----------- --------- ---------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert P. Peebler 50,000 5.2% $ 26.50 09/20/05 $833,285 $2,111,709
S. Rutt Bridges -- -- -- -- -- --
James A. Downing II 8,000 .8% 26.50 09/20/05 133,326 337,873
William Trebinski 20,000 2.1% 26.50 09/20/05 333,314 844,684
William H. Seippel 15,000 1.6% 26.50 09/20/05 249,986 633,513
Henry P. Holland 25,000 2.6% 26.50 09/20/05 416,643 1,055,854
</TABLE>
- -------------------
(1) The exercise price for the above options is equal to the closing market
price on the business day immediately preceding the date of grant. Except
as noted in the table below and below in "Contracts, Termination of
Employment and Change in Control Arrangements," the options vest in four
equal annual installments over a four-year term.
(2) "Potential Realizable Value" is disclosed in response to Securities and
Exchange Commission rules, which require such disclosure for illustrative
purposes only, and is based on the difference between the potential market
value of shares issuable (based upon assumed appreciation rates) upon
exercise of such options and the exercise price of such options. The
values disclosed are not intended to be, and should not be interpreted by
stockholders as, representations or projections of future value of the
Company's stock or of the stock price.
The following table sets forth the names of those directors and
executive officers of the Company who hold Landmark Options (as hereinafter
defined), the number of shares of Landmark Common Stock (as hereinafter defined)
subject to such Landmark Options, the weighted average exercise price
thereunder, the number of shares of Landmark Common Stock subject thereto that
are currently unvested, the number of such shares that will vest upon the
occurrence of the Merger by virtue of the terms of the Landmark Option, the plan
pursuant to which it was issued or contractual arrangements between Landmark and
the holder of Landmark Options, the number of shares of Halliburton Common Stock
(as hereinafter defined) to which the Landmark Options will apply at the
Effective Time (as hereinafter defined) and the weighted average exercise price
per share of Halliburton Common Stock.
<TABLE>
<CAPTION>
Number of Number of
Shares of Shares of Number of
Weighted Unvested Landmark Shares of Weighted
Landmark Average Landmark Common Halliburton Average
Name of Director* or Common Exercise Common Stock to Common Exercise
Executive Officer Stock Price(1) Stock Vest(2) Stock Price
- ----------------- -------- -------- --------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Charles L. Blackburn*................ 25,000 $17.175 3,750 -- 12,198 $29.143
Daniel L. Casaccia................... 94,750 17.125 23,000 23,000 54,387 29.834
James A. Downing II*................. 98,000 15.913 18,500 18,500 56,252 27.723
John W. Gibson....................... 125,000 20.680 97,500 97,500 71,750 36.028
Henry P. Holland..................... 125,000 20.700 93,750 93,750 71,750 36.063
Lucio L. Lanza*...................... 35,000 16.482 3,750 -- 17,938 28.040
Theodore Levitt*..................... 20,000 19.750 6,250 -- 7,893 34.408
Patti L. Massaro..................... 10,000 19.719 7,500 7,500 5,740 34.354
Robert P. Peebler*................... 430,000 18.820 165,000 165,000 246,820 32.787
William H. Seippel................... 128,200 17.345 48,750 48,750 73,587 30.218
Sam K. Smith*........................ 45,000 17.931 3,750 -- 23,678 30.956
Denese D. VanDyne.................... 46,000 22.125 34,500 34,500 26,404 38.545
All Directors and Executive Officers
as a Group (12 persons)............ 1,181,950 18.650 506,000 488,500 668,397 32.340
</TABLE>
- ----------
(1) The ranges of exercise prices applicable to Landmark Options held by
James A. Downing II, Daniel L. Casaccia, Patti L. Massaro, William H.
Seippel, Charles L. Blackburn, Lucio L. Lanza, Robert P. Peebler, Sam K.
Smith, John W. Gibson, Henry P. Holland, Theodore Levitt and Denise D. Van
Dyne are $26.500 to $5.370, $26.500 to $10.250, $26.500 to $19.250,
$22.125 to $15.250, $26.500 to $10.125, $19.750 to $15.500, $25.750 to
$12.000, $26.500 to $10.250, $25.750 to $12.000, $22.000 to $10.250,
$25.750 to $12.000, $26.500 to $17.500, $26.500 to $19.250, $19.750 to
$19.750 and $26.500 to $20.750, respectively.
(2) Pursuant to the Landmark Graphics Corporation 1994 Flexible Incentive
Plan, all unvested Landmark Options granted thereunder will vest in full
at the Effective Time of the Merger. In addition, under the terms of
certain Change in Control Agreements, all Landmark Options held by
individuals who are parties to those Change in Control Agreements that are
not vested at the Effective Time will become fully vested.
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth certain information with respect to
Landmark Options exercised during the fiscal year ended June 30, 1996 by each
of the Named Officers and the value of unexercised Landmark Options held by
each of the Named Officers at June 30, 1996:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
OPTIONS EXERCISED IN FISCAL 1996 UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
-------------------------------- OPTIONS AT JUNE 30, IN-THE-MONEY OPTIONS
SHARES 1996 AT JUNE 30, 1996
ACQUIRED ON EXERCISABLE (E) EXERCISABLE (E)
NAME EXERCISE VALUE REALIZED UNEXERCISABLE (U) UNEXERCISABLE(U)(1)
- ---- -------- -------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Robert P. Peebler --- $ --- 240,000(E) $553,125(E)
190,000(U) 329,375(U)
S. Rutt Bridges --- --- --- ---
James A. Downing II --- --- 77,500(E) 450,000(E)
20,500(U) ---(U)
Henry P. Holland --- --- 25,000(E) ---(E)
100,000(U) ---(U)
William Trebinski 12,125 88,156 20,000(E) ---(E)
70,375(U) 59,031(U)
William H. Seippel 3,500 44,188 56,950(E) 293,888(E)
71,250(U) 155,313(U)
</TABLE>
- ------------------------
(1) Based on the difference between the closing price of the Landmark Common
Stock on June 30, 1996 ($19.25 per share) and the exercise price of the
Landmark Option.
COMPENSATION OF DIRECTORS
Directors who are not officers of the Company are paid a $9,000 annual
retainer and receive an additional fee of $1,000 for attending in person any
regular or special meeting of the Board of Directors. The Company reimburses
all directors for their expenses in attending meetings as well as other
expenses incurred in connection with their service as directors of the Company.
Mr. Smith also serves as consultant to the Company and received $43,000 during
the fiscal year ended June 30, 1996 for consulting services. Pursuant to an
arrangement between the Company and Mr. Smith, effective January 1, 1995, Mr.
Smith receives a total of $60,000 per year for his services as both a director
of and consultant to the Company.
Under the Company's Directors' Stock Option Plan (the "Directors' Plan"),
each director who is a disinterested person within the meaning of Section
16(b)-3(c)(2)(i) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and who has served on the Board of Directors for one full year
is granted an option for 5,000 shares immediately following each annual meeting
of stockholders. New directors are granted an option to purchase 15,000 shares
immediately following the first annual meeting following election to the Board
of Directors. The per share exercise price of each option granted under the
Directors' Plan is equal to the closing price per share of Landmark Common
Stock, as reported by the National Association of Securities Dealers Automated
Quotation System (the "Nasdaq Stock Market"), for the business day immediately
preceding the date of grant of an option. Fifty percent of the shares subject
to each option vest on June 30 following the date of grant and 25% of the
shares vest on June 30 of each of the two succeeding years. An option may be
exercised only with respect to that portion of shares that has vested.
Directors who act as consultants to the Company may be eligible for the
grant of options under the Company's Consultants' Stock Option Plan. During
the last fiscal year, no options were granted to directors under such plan.
<PAGE> 7
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Each of the executive officers of the Company is a party to a Change
in Control Agreement (herein so called) with the Company that existed prior to
the initiation of discussions that led to the execution and delivery of the
Merger Agreement. Pursuant to the Change in Control Agreements, any options
("Landmark Options") to purchase shares of the common stock, $.05 par value per
share ("Landmark Common Stock") held by such executive officers that were not
fully vested prior to the effective time of the Merger (the "Effective Time")
will become fully vested at the Effective Time. In addition, such executive
officers would, pursuant to such agreements, become entitled to certain benefits
as a result of the Merger and to certain payments upon a termination of their
employment after consummation of the Merger in certain circumstances. The rights
to these benefits and payments have been terminated or otherwise modified
pursuant to the agreements described below.
Robert P. Peebler, President and Chief Executive Officer of the
Company, has entered into an Executive Employment Agreement (the "Peebler
Employment Agreement") with both the Company and Halliburton that will become
effective only if the Merger is consummated. The Peebler Employment Agreement,
the term of which is the period from the Effective Time until December 31,
1999, provides that Mr. Peebler will be employed as the Chief Executive Officer
of the corporation surviving the Merger. For his services in such capacity, Mr.
Peebler will be paid a base annual salary of not less than $400,000, will
receive an annual deferred compensation allocation of not less than $100,000
and will be granted at the outset a nonqualified option to purchase 20,000
shares of the common stock, $2.50 par value per share, of Halliburton
("Halliburton Common Stock"). Under the Peebler Employment Agreement, Mr.
Peebler will be entitled to be paid a lump sum of $800,000 if his employment is
terminated during the term of such agreement under certain circumstances. The
Peebler Employment Agreement further provides that, at the time the agreement
becomes effective, Mr. Peebler's rights under his Change in Control Agreement
with the Company will be terminated, except that all outstanding Landmark
Options held by Mr. Peebler that were not fully vested prior to the Effective
Time will become fully vested at the Effective Time pursuant to the terms of
Mr. Peebler's Change in Control Agreement. By virtue of the Merger, all such
outstanding Landmark Options will be converted into options to purchase
Halliburton Common Stock.
In addition, five other executive officers of the Company have entered
into Executive Employment Agreements (the "Employment Agreements") with both
the Company and Halliburton that will become effective only if the Merger is
consummated and will have terms from the Effective Time until December 31,
1999. Each of the Employment Agreements provides for the payment of an annual
base salary of not less than a certain amount, the grant of a nonqualified
stock option to purchase a specified number of shares of Halliburton Common
Stock and the grant of a certain number of restricted shares of Halliburton
Common Stock. Under each of the Employment Agreements, the executive officer
party thereto will be entitled to a lump sum payment equal to two times such
officer's minimum base salary if his or her employment is terminated during the
Term for any reason other than by death or permanent disability, by the
employer for "cause" or by the officer in a "Voluntary Termination." Each of
the Employment Agreements also provides that the officer's employment will not
be terminated by the employer prior to six months after the Effective Time,
except for "cause." In addition, each of the Employment Agreements contains a
noncompetition covenant by the executive officer party thereto commencing on
termination of such agreement and continuing for one year thereafter. The
following table sets forth the name and title of each of the Landmark executive
officers who is a party to an Employment Agreement and certain information with
respect to such Employment Agreement.
<TABLE>
<CAPTION>
Number of
Number of Shares of Restricted
Minimum Halliburton Common Shares of
Base Stock Underlying Halliburton
Name and Title Salary Option Common Stock
- -------------- ------- ------------------- ------------
<S> <C> <C> <C>
Daniel L. Casaccia . . . . . . . . . . . . . . . . $160,000 12,000 2,500
Vice President -- Human Resources
John W. Gibson . . . . . . . . . . . . . . . . . . 210,000 17,000 4,000
Executive Vice President -- Integrated
Products Group
Henry P. Holland . . . . . . . . . . . . . . . . . 300,000 17,000 5,000
Vice President -- Integrated Solutions Group
Patti L. Massaro . . . . . . . . . . . . . . . . . 110,000 12,000 1,000
General Counsel and Secretary
Denese D. VanDyne . . . . . . . . . . . . . . . . 150,000 12,000 2,000
Vice President -- Corporate Marketing and
Communications
</TABLE>
Mr. Peebler and each of the other executive officers of the Company
who is a party to an Employment Agreement will continue to be entitled to all
of his or her rights under outstanding Landmark Options held by such officer
prior to the Effective Time, which by virtue of the Merger will be converted
into options to purchase Halliburton Common Stock. The Peebler Employment
Agreement and each of the Employment Agreements provides that, at the Effective
Time, the Change in Control Agreement to which the Company and such officer are
parties will be terminated, except that all outstanding Landmark Options held
by such officer that were not fully vested prior to the Effective Time will
become fully vested at the Effective Time pursuant to such officer's Change in
Control Agreement.
The Company has also entered into employment agreements with William H.
Seippel, Vice President, Finance and Chief Financial Officer, and James A.
Downing II, Chief Science Officer, that will become effective only if the
Merger is consummated, and will have terms from the Effective Time until the
date on which Halliburton has publicly announced results of operations covering
a period of not less than 30 days of combined operations for the Company and
Halliburton, unless earlier terminated by the employee party thereto. During
the terms of such agreements, Messrs. Seippel and Downing will be entitled to
compensation of $3,958.33 and $4,166.67, respectively, on a semi-monthly basis,
in arrears and to continue to receive certain employee benefits. After the
Effective Time, Messrs. Seippel and Downing will cease to be officers of the
Company. Pursuant to such agreements, Mr. Seippel has agreed to a lump sum
payment of $405,064 in settlement of all of his rights under his Change in
Control Agreement and Mr. Downing has agreed to a lump sum payment of $373,751
in settlement of all of his rights to cash compensation under his Change in
Control Agreement. Mr. Downing will continue to be entitled to certain employee
benefits under his Change in Control Agreement after termination of his
employment agreement. These payments will be made at the time that the
employment of Messrs. Seippel and Downing terminates.
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table and the notes thereto set forth certain
information with respect to the beneficial ownership of shares of Landmark
Common Stock, as of September 6, 1996 (except as noted in the footnotes to such
table), by each person or group within the meaning of Section 13(d)(3) of the
Exchange Act who is known to the management of the Company to be the
beneficial owner of more than five percent of the outstanding Landmark Common
Stock as of September 6, 1996:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP (1) OF CLASS
------------------- --------------- --------
<S> <C> <C>
S. Rutt Bridges . . . . . . . . . . . . . . . . . 1,971,263 (2)(3) 11.16%
7409 South Alton Court, Suite 100
Englewood, Colorado 80112
Halliburton Company . . . . . . . . . . . . . . . 1,971,263 (3) 11.16%
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Merrill Lynch Growth Fund for
Investment and Retirement (4) . . . . . . . . . . 2,010,700 11.38%
P.O. Box 9011
Princeton, New Jersey 08543-9011
</TABLE>
- ---------------
(1) Except as otherwise indicated, (i) the persons named in this table have
sole voting and investment power with respect to all shares of Landmark
Common Stock shown as beneficially owned by them, and (ii) none of the
shares shown in this table or referred to in the footnotes hereto are
shares of which the persons named in this table have the right to acquire
beneficial ownership as specified in Rule 13d-3(d)(1) promulgated
under the Exchange Act.
(2) Includes 217,634 shares held directly by Mr. Bridges' wife, Barbara Ann
Bridges, with respect to which Mr. Bridges disclaims beneficial
ownership or voting power.
(3) Pursuant to an agreement between S. Rutt Bridges, Barbara Ann Bridges
and Halliburton, the voting power, but not the dispositive power,
associated with the 1,971,263 shares of Landmark Common Stock held
beneficially by S. Rutt Bridges and Barbara Ann Bridges is shared
with Halliburton. As a result of obtaining such shared voting power,
Halliburton has filed a Schedule 13D with the Commission on July 25,
1996 with respect to such 1,971,263 shares of Landmark Common Stock.
(4) Includes 1,300,000 shares of Landmark Common Stock held by ML Global
Allocation Fund, Inc. ("Allocation"); 40,000 shares of Landmark Common
Stock held by ML Global Smallcap Fund, Inc. ("Smallcap"); and 587,700
shares of Landmark Common Stock held by ML Global Special Value Fund,
Inc. ("Special Value"). Merrill Lynch Asset Management L.P. ("MLAM"),
a registered investment adviser under the Investment Advisers Act of
1940, is the investment adviser to Allocation and Smallcap and may be
deemed to be a beneficial owner of such shares. Fund Asset Management
L.P. ("FAM"), a registered investment adviser under the Investment
Advisers Act of 1940, is the investment adviser to Special Value and
may be deemed to be a beneficial owner of such shares. In addition,
MLAM has voting and dipositive power over an additional 83,000 shares
of Landmark Common Stock. This information was obtained from the
Schedule 13G of Merrill Lynch Growth Fund for Investment and Retirement
dated December 31, 1995.
<PAGE> 9
SECURITY OWNERSHIP OF MANAGEMENT
The following table and the notes thereto set forth certain
information with respect to the beneficial ownership of shares of Landmark
Common Stock of the Company, as of August 29, 1996, by each director, each
Named Officer and by all executive officers and directors as a group:
<TABLE>
<CAPTION>
OPTIONS PERCENT
EXERCISABLE OF
ON OR BEFORE COMMON STOCK COMMON
COMMON STOCK NOVEMBER 15, BENEFICIALLY STOCK
NAME OF INDIVIDUAL OWNED (1) 1996 OWNED OWNED
------------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C>
Charles L. Blackburn 2,000 21,250 23,250 *
S. Rutt Bridges 1,971,263 (2) 0 1,971,263 (2) 11.2%
James A. Downing II 38,240 79,500 117,740 *
Henry P. Holland 2,470 31,250 33,720 *
Lucio L. Lanza 0 31,250 31,250 *
Theodore Levitt 1,000 13,750 14,750 *
Robert P. Peebler 7,000 265,000 272,000 1.5%
William H. Seippel 10,800 (3) 79,450 90,250 *
Sam K. Smith 4,400 41,250 45,650 *
All executive officers and directors
as a group (14 persons) . . . . . 2,037,173 (2)(3) 675,950 2,713,123 (2)(3) 15.4%
</TABLE>
- ------------------
* Represents less than one percent of the Common Stock outstanding.
(1) Except as otherwise indicated, (i) the persons named in this table have
sole voting and investment power with respect to all shares of capital
stock shown as beneficially owned by them, and (ii) none of the shares
shown in this table or referred to in the footnotes hereto are shares of
which the persons named in this table have the right to acquire beneficial
ownership as specified in Rule 13d-3(d)(1) promulgated under the Exchange
Act.
(2) Includes 217,634 shares held directly by Mr. Bridges' wife with respect to
which Mr. Bridges disclaims dispositive or voting power.
(3) Includes 100 shares indirectly and beneficially owned by Mr. Seippel
through his son as to which Mr. Seippel disclaims beneficial ownership.
<PAGE> 10
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item appears in Item 11. Executive
Compensation included elsewhere herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LANDMARK GRAPHICS CORPORATION
Date: September 12, 1996 By: /s/ William H. Seippel
-----------------------------
William H. Seippel
Vice President, Finance
and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
