UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-KSB
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended September 30, 1995
Commission File Number 0-13111
ANALYTICAL SURVEYS, INC.
(Name of small business issuer as specified in its charter)
Colorado
(State of incorporation)
84-0846389
(IRS Employer Identification No.)
1935 Jamboree Drive
Colorado Springs, Colorado 80920
(Address of principal executive offices)
(719) 593-0093
(telephone number)
Securities registered pursuant to Section 12(g) of the Act:
No Par Value Common Stock
Title of each 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 twelve
months and (2) has been subject to such filing requirements for
the past ninety (90) days: Yes __X__ No_____
Check if there is no disclosure of delinquent filers in response
to Items 405 of Regulation S-B in this form, and no disclosure
will 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-KSB or any amendment to
this Form 10-KSB:
Yes __X__ No_____
Issuer's revenue for its most recent fiscal year was $13,538,507.
The aggregate market value of the voting stock held by non-
affiliates computed by reference to average bid and asked prices
of such stock, as of November 27, 1995 was $16,121,841. The
number of shares of common stock outstanding as of November 27,
1995 was 2,832,349.
Item 13(a) on page 24 describes the exhibits filed with the
Securities and Exchange Commission and those exhibits
incorporated by reference to previously filed documents. Certain
sections of the definitive Proxy Statement to be filed for the
1996 Annual Meeting of Shareholders are incorporated by reference
into Part III.
Transitional Small Business Disclosure Format: Yes ____
No___X__
<PAGE>
Table of Contents
PART I
Item 1. Description of Business 2
Item 2. Description of Property 4
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote
of Security Holders 4
PART II
Item 5. Market for Common Equity and
Related Stockholder Matters 4
Item 6. Management's Discussion and Analysis
or Plan of Operation 5
Item 7. Financial Statements 9
Item 8. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 23
Part III
Item 9. Directors, Executive Officers, Promoters and
Control Persons, Compliance with Section 1G(a)
of the Exchange Act 24
Item 10. Executive Compensation 24
Item 11. Security Ownership of Certain Beneficial Owners
and Management 24
Item 12. Certain Relationships and Related Transactions 24
Item 13. Exhibits and Reports on Form 8-K 24
Signatures 27
PAGE 1
<PAGE>
PART I
Item 1. Description of Business
General
Analytical Surveys, Inc., ("ASI" or the "Company") is a Colorado
corporation formed in 1981. ASI's primary business is the
production of precision computerized maps and information files
used in Geographic Information Systems (GIS). Federal, state and
local government agencies and commercial companies use Geographic
Information Systems to manage information about features such as
utilities, natural resources, streets, land use and property
taxation.
A Geographic Information System consists of four components:
computer hardware, applications software, computerized maps and
computerized information (database) files. ASI produces the last
two components of the GIS; ASI does not manufacture or sell the
computer hardware or applications software required by GIS end
users. ASI produces maps for use on GIS computers from aerial
photography using analytical stereoplotters, computer equipment
and internally developed proprietary software. The Company also
converts existing printed maps and other information into
computerized maps and computer information files. The Company's
digital imaging department prepares digital orthophotographs by
scanning aerial photographs into the computer using a high
resolution scanner. The distortions inherent in all aerial
photography are then removed using internally developed
proprietary software and the resulting digital image is accurate
to mapping standards. The final product can be delivered either
as a computer data file or as a printed image.
ASI employs subcontractors for tasks outside its expertise such
as aerial photography and ground survey. The Company also may
use subcontractors for work similar to that performed by ASI in
order to expand capacity, meet deadlines, to manage work load and
to encourage businesses owned by women and minorities.
The Company engages in research and development activities to
develop new production process software and to improve existing
process software. Research and development expenditures were
$347,321 in fiscal year 1995 and $225,894 in fiscal year 1994.
The industry has grown over the last several years as technical
and price improvements in GIS hardware and software have expanded
the GIS market by making these systems more attractive to
potential customers.
Marketing and Sales
Virtually all of ASI's revenues are earned under fixed price
contracts which cover a specific scope of work and the Company is
dependent upon its ability to secure new contracts from new as
well as existing customers. From time to time, the revenues
earned on specific contracts may exceed ten percent of total
revenues earned in a year. Those contracts which contributed
more than ten percent of revenue in 1995 and 1994 are summarized
in the following table.
Customer 1995 1994
Montgomery County, AL 12% *
City of Omaha, NE * 14%
Prince George's County, MD * 12%
* Less than ten percent
Based on the backlog remaining on these existing contracts at
September 30, 1995, none of the existing projects for these
PAGE 2
<PAGE>
customers is expected to contribute more than ten percent of
revenue in future years.
Backlog represents the value of revenue not yet earned on
contracts awarded to the Company; it increases when new contracts
are awarded and decreases as revenue is earned. The Company's
backlog was $12,620,000 at September 30, 1995 up from $10,533,000
at the end of 1994. The backlog includes several large projects
which will extend over one to three years. These larger projects
are usually fixed price agreements which increases the Company's
risk due to inflation; however the Company receives the benefit
of the improved availability of production work.
The Company employs five sales representatives to market and sell
its three primary products throughout the United States and
Canada. The Company maintains memberships in professional and
trade associations and participates in industry conferences by
presenting exhibits and technical papers. Contracts are awarded
by customers through direct negotiation, competitive technical
evaluation, competitive bid or a combination thereof.
ASI has directed its marketing efforts towards clientele who
require high quality digital mapping. Historically, ASI's
customers have included cities, counties, engineering companies,
utility companies and federal government agencies. Well over
half of revenues have been historically derived from state and
local government contracts. These contracts may contain
termination provisions for the convenience of the customer, lack
of appropriated funds or default by the Company. Contracts with
the United States Government, which represent less than 10% of
ASI's revenues, also may be subject to renegotiation or
termination.
Advances in GIS technologies and the decline in the costs of
computers have attracted more industrial and municipal customers
into the GIS marketplace. In addition, a significant portion of
ASI's revenues are generated from utility clients, both
commercial and municipal. The Company expects that an increasing
share of its new customers will be industrial and municipal GIS
users.
The Company is pursuing an expansion of its presence in the
utility market. ASI has entered into negotiations for the
acquisition of substantially all of the net assets of a company
engaged in a similar business for a total consideration of
approximately $4,500,000.
ASI is required to furnish performance bonds to customers on some
of its contracts. The percentage of the Company's work requiring
bonds varies between 20% and 50% depending on the mix of work in
progress. Performance bonds are issued by a limited number of
insurance companies; the continued availability of bonds depends
on the Company's ability to meet the underwriting standards of
potential issuers and surety market conditions.
Competition
The Company's management believes approximately five to seven
companies are of comparable or greater size and similar
capabilities as ASI. ASI and its principal competitors
specialize in large computerized mapping projects and they
generally compete nationally rather than regionally. Certain
large companies, such as SAIC, IBM and Intergraph Corporation and
others who are systems integrators or hardware manufacturers with
experience in large scale information systems have been or are
becoming active in the GIS industry. Industry growth should help
ASI by increasing the number of GIS projects, but also may lead
to new competition in the areas of ASI's expertise.
ASI seeks to compete on the basis of the quality of its products
and the efficiency with which it can provide digital mapping
services to customers. The Company uses its internally developed
proprietary software as well as commercially available software
to automate much of the production process. The Company believes
its systematic approach enables it to achieve more consistent
quality than it could using more manually intensive methods.
In general, management believes this industry is competitive and
certain competitors may have more capital availability than does
ASI.
PAGE 3
<PAGE>
Employees
At September 30, 1995 ASI had 119 full time employees; 98 work in
production, 10 in administration and 11 in sales and marketing.
Approximately two thirds of the employees hold college degrees,
including several with masters degrees, primarily in the fields
of photogrammetry, geography, engineering and computer science.
ASI offers its employees a typical benefits package including
health, life, disability, and dental insurance, a 401-K tax
deferred retirement savings plan, vacations and holidays. The
Company does not provide any other pension plan to its employees.
ASI does not have a collective bargaining agreement with any of
its employees and generally considers relations with its
employees to be good.
Item 2. Description of Property
The Company leases office and production space (approximately
31,700 square feet) in Colorado Springs, Colorado under a ten-
year lease which expires in 2004. The existing space (plus a
right of first refusal on an additional 6,850 square feet) is
adequate for the foreseeable needs of the Company. The Company
does not require specialized facilities.
ASI also operates sales offices in Sterling, Virginia (near
Washington, D.C.), Chattanooga, Tennessee and Chicago, Illinois.
Item 3. Legal Proceedings
The Company is not the subject of any significant outstanding
legal proceedings or known claims.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the shareholders
during the fourth quarter of the year ended September 30, 1995.
PART II
Item 5.Market for Common Equity and Related Stockholder Matters
The Company's Common Stock is traded in the NASDAQ National
Market System over-the-counter market under the symbol ANLT. The
trading volume in ASI's Common stock has ranged from 128,000
shares per month to 713,000 shares per month. This range of
trading volume may contribute to stock price volatility and
limited trading liquidity.
The following table sets forth the range of high and low prices
per share for each quarterly period for the fiscal years ended
September 30, 1994 and 1995 as reported by the National
Association of Securities Dealers Automated Quotations System
(NASDAQ). On April 1, 1995 trading in the Company's Common Stock
moved from NASDAQ's Small Cap Market to NASDAQ's National Market
System. Price ranges reported in the following table represent
the range of bid quotations prior to April 1, 1995 and the
trading range after that date. These prices reflect inter-dealer
quotations without adjustments for retail markup, markdown or
commission and do not necessarily represent actual transactions.
PAGE 4
<PAGE>
Fiscal Year Ended September 30, 1994 High Low
First Quarter $ 3.38 $ 2.50
Second Quarter 3.12 2.38
Third Quarter 3.00 2.25
Fourth Quarter 3.62 2.25
Fiscal Year Ended September 30, 1995
First Quarter $ 5.25 $ 3.38
Second Quarter 6.25 4.50
Third Quarter 7.38 4.88
Fourth Quarter 8.75 6.50
American Securities Transfer, Inc., the transfer agent for the
shares of ASI's Common Stock, has reported that there were
approximately 450 shareholders of record as of September 30,
1995. This does not include an estimated 1,600 investors holding
stock in "street name."
On November 27, 1995, the closing bid and asked prices of the
Company's Common Stock as reported by NASDAQ were $7.50 and
$7.875 respectively.
Holders of the Company's Common Stock are entitled to receive
dividends as and when they may be declared by its Board of
Directors. No such dividends have ever been paid with respect to
the Company's Common Stock and none is anticipated to be paid in
the foreseeable future.
Item 6.Management's Discussion and Analysis or Plan of Operation
The following table sets forth selected financial data for the
Company and should be read in conjunction with the financial
statements and related notes included elsewhere in this document
and with the balance of this Management's Discussion and Analysis:
<TABLE>
<CAPTION>
Year ended September
1995 1994
Statement of Operations Data
<S> <C> <C>
Sales $13,538,507 11,176,165
Costs and expenses 11,519,146 9,696,442
Other expenses, net 119,184 184,106
Income tax expense 716,000 492,000
---------- ----------
Net earnings 1,184,177 803,617
========== ==========
Earnings per share $ .40 .30
=== ===
</TABLE>
PAGE 5
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet Data September 30,
1995 1994
<C> <C> <C>
Current assets $ 8,554,444 6,442,567
Current liabilities 2,816,212 2,749,378
--------- ---------
Working capital 5,738,232 3,693,189
========= =========
Total assets $10,047,675 8,016,056
Long-term debt
less current portion 408,078 391,032
Stockholders' equity 6,654,688 4,596,538
</TABLE>
Results of Operations
The following table summarizes the changes in selected operating
indicators. The percentages on the left show the relationship of
various income and expense items to net revenues. The
percentages on the right measure year to year changes.
<TABLE>
<CAPTION>
Percentage of Net Revenues* Percentage Change
Year Ended September 30
from Prior Year
1995 1994 1995 1994
<C> <C> <C> <C> <C>
100 100 Sales 21 23
Costs and expenses:
Salaries, wages and
39 40 related benefits 17 9
24 24 Subcontractor costs 23 94
16 16 General and administrative 22 (4)
6 7 Depreciation and amortization 3 1
-- --
85 87 Total costs and expenses 19 19
-- --
15 13 Earnings from operations 36 50
(1) (2) Other income (expense) (35) (8)
-- --
14 11 Earnings before income taxes 47 66
5 4 Income tax expense 46 65
-- --
9 7 Net earnings 47 66
== ==
<FN>
*Totals may not be exact due to rounding.
</TABLE>
1995 Compared to 1994
Net income from continuing operations (Net earnings) increased 47
percent to 9 percent of sales because greater production
increased sales 21 percent while costs and expenses were up by
only 19 percent as discussed below.
PAGE 6
<PAGE>
Salaries, wages and related benefits increased 17% over the
previous year. Approximately 65% of the increase was due to
increased number of employees required by increased production.
Salaries, wages and related benefits decreased from 40% to 39% of
sales because sales increased at a greater rate than salaries,
wages and related benefits.
Subcontractor costs include aerial photography, land surveying as
well as data conversion services, and are incurred as direct
costs on specific contracts. Aggregate subcontractor costs may
vary substantially from year to year depending on the mix of
project type and stage of production of projects in process
during the year. Subcontractor costs were up 23% over last year
as the Company has maintained its use of subcontractors to expand
production capacity and flexibility and to encourage businesses
owned by minorities and women.
General and Administration expenses increased 22% in absolute
dollars but were level at 16% of sales. Approximately 42% of the
increased expenses were non-salary marketing and selling expenses
and 21% of the increased expenses were non-salary research and
development expenses.
Other income (expense) consists primarily of interest expense.
Interest expense decreased 35% due to reduced term debt and a
decrease in average borrowing on the bank line of credit.
Net cash provided by operating activities was $593,956 in 1995,
down 38% from 1994 due primarily to greater investment in
accounts receivable and revenues in excess of billings. The
Company's investment in projects (accounts receivable plus
revenue in excess of billing less amounts billed in excess of
costs) increased in 1995 at a rate greater than sales growth due
to the specific progress and billing terms on the current
projects. Cash flow from operations improved due to the tax
benefit associated with the exercise of employee stock options.
It is unlikely such benefits will recur at levels experienced in 1995.
Cash flows used in investing activities represents the Company's
acquisition of new and replacement equipment, furniture and
leasehold improvements. Expenditures for equipment increased
271% in 1995 to meet current and expected production requirements.
Cash flows from financing activities include proceeds from the
financing of capital expenditures, scheduled principal payments
of term debt and cash received from the exercise of stock options
by employees. The Company made one purchase of Treasury Stock,
however there are no plans to acquire additional Treasury Stock.
The Company's backlog of signed contracts increased to
$12,620,000 at September 30, 1995 and the Company continues to
work with existing and potential customers to sign new contracts.
The Company has been awarded large projects (over $1,000,000) in
the past and is actively seeking other large projects which often
have longer sales and contract negotiation schedules than smaller
projects. The Company continues to seek and perform smaller
projects as well.
Liquidity and Capital Resources
Short term liquidity requirements are met primarily through
operating receipts supplemented by a bank line of credit with a
$1,250,000 limit. At September 30, 1995, the Company's balance
on the line of credit was nil. The cost of capital equipment is
usually financed through term debt and/or capitalized leases with
terms of from three to five years. The company has up to
$294,000 available under its line of credit for equipment
acquisitions through the end of February 1996. The Company has
not committed to any material capital purchases.
The Company has entered into negotiations for the acquisition of
substantially all of the net assets of a company engaged in a
similar business for a total consideration of approximately
$4,500,000. The Company has secured a commitment from a bank to
finance substantially all of the cash portion of this transaction
if the related negotiations with the seller are successful.
PAGE 7
<PAGE>
Management expects to meet long-term liquidity requirements
through cash flows generated by operations supplemented from time
to time by short term borrowings on a bank line of credit.
Routine capital expenditures will usually be financed with term
debt and/or capital leases.
Management believes the line of credit combined with cash flow
from operations is adequate to finance ongoing operations.
Management also believes the Company will be able to finance any
required capital expenditures from a combination of operating
cash flows and new term debt or lease arrangements. The Company
is dependent however, upon its ability to successfully deliver
acceptable products in order to maintain adequate operating cash
flows.
Other Risk Factors
The Company faces, as do all businesses, a wide range of
increasingly complex legal, regulatory and compliance
requirements. The Company is not aware of any substantial risk
of loss from product liability litigation nor from noncompliance
with environmental, labor or other laws and regulations.
The Company has been awarded several projects with contract
values in excess of $1,000,000, usually on a fixed price basis.
While these projects provide improved availability of work, the
projects may extend over two or three years. The extended
production period may increase the Company's exposure to the risk
of inflation, changes in customer expectations and customer
funding capabilities.
The Company has not paid any dividends since its inception, and
there is no intention to pay dividends in the foreseeable future.
Under its present bank loan agreement, the Company must obtain
the bank's prior written consent should the Company wish to pay a
dividend. The bank has agreed to not unreasonably withhold such
consent, however there is no assurance that the Company would
receive the bank's consent to pay a dividend.
Recent Accounting Pronouncements
Statement of Financial Accounting Standards No. 121, Accounting
for the Impairment of Long-Lived Assets to Be Disposed Of (SFAS
121) was issued in March, 1995 by the Financial Accounting
Standards Board. It requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may
not be recoverable. SFAS 121 is required to be adopted for fiscal
years beginning after December 15, 1995. Adopting this statement
by the Company is not expected to have a significant effect on
the financial statements.
Statement of Financial Accounting Standards No. 123, Accounting
for Stock-Based Compensation (SFAS 123), was issued by the
Financial Accounting Standards Board in October, 1995. SFAS 123
establishes financial accounting and reporting standards for
stock-based employee compensation plans as well as transactions
in which an entity issues its equity instruments to acquire goods
or services from non-employees. This statement defines a fair
value based method of accounting for employee stock option or
similar equity instruments, and encourages all entities to adopt
that method of accounting for all of their employee stock
compensation plans. However, it also allows an entity to continue
to measure compensation cost for those plans using the intrinsic
value based method of accounting prescribed by APB Opinion No.
25, Accounting for Stock Issued to Employees. Entities electing
to remain with the accounting in Opinion 25 must make proforma
disclosures of net income and, if presented, earnings per share,
as if the fair value based method of accounting defined by SFAS
123 had been applied. SFAS 123 is applicable to fiscal years
beginning after December 15, 1995. The Company currently accounts
for its equity instruments using the accounting prescribed by
Opinion 25. The Company does not currently expect to adopt the
accounting prescribed by SFAS 123; however, the Company will
include the disclosures required by SFAS 123 in future financial
statements.
PAGE 8
<PAGE>
Item 7. Financial Statements
Independent Auditors' Report 10
Balance Sheets 11
Statements of Operations 13
Statements of Stockholders' Equity 14
Statements of Cash Flows 15
Notes to Financial Statements 16
PAGE 9
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholders
Analytical Surveys, Inc.:
We have audited the accompanying balance sheets of Analytical
Surveys, Inc. as of September 30, 1995 and 1994, and the related
statements of operations, stockholders' equity, and cash flows
for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Analytical Surveys, Inc. as of September 30, 1995 and 1994,
and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Denver, Colorado
November 3, 1995
PAGE 10
<PAGE>
<TABLE>
<CAPTION>
Analytical Surveys, Inc.
Balance Sheets
September 30, 1995 and 1994
Assets 1995 1994
<S> <C> <C>
Current assets:
Cash $ 665,274 552,232
Accounts receivable,
net of allowance for doubtful
accounts of $20,000 in 1995 and
1994 (notes 2 and 9) 2,925,094 1,699,372
Revenue in excess of billings
(note 2) 4,705,020 3,988,270
Deferred income taxes (note 5) 49,713 60,137
Prepaid expenses and other 209,343 142,556
---------- ---------
Total current assets 8,554,444 6,442,567
---------- ---------
Equipment and leasehold improvements, at cost
(note 3):
Equipment 5,656,521 5,766,095
Furniture and fixtures 735,313 637,155
Leasehold improvements 133,711 121,918
---------- ---------
6,525,545 6,525,168
Less accumulated depreciation
and amortization (5,046,065) (4,967,046)
---------- ---------
1,479,480 1,558,122
Goodwill, net of accumulated amortization
net of $11,966 and $10,350 in 1995 and
1994, respectively 13,751 15,367
---------- ---------
$10,047,675 8,016,056
========== =========
<FN>
(Continued)
</TABLE>
PAGE 11
<PAGE>
<TABLE>
<CAPTION>
Analytical Surveys, Inc.
Balance Sheets, Continued
Liabilities and Stockholders' Equity 1995 1994
<S> <C> <C>
Current liabilities:
Current portion of long-term debt (note 3) $ 417,100 647,800
Billings in excess of costs and revenue
(note 2) 176,934 420,139
Accounts payable and other accrued liabilities 1,560,227 760,686
Accrued payroll and benefits 661,951 578,929
Income taxes payable -- 341,824
---------- ---------
Total current liabilities 2,816,212 2,749,378
Deferred income taxes (note 5) 113,290 232,065
Deferred compensation 55,407 47,043
Long-term debt, less current portion (note 3) 408,078 391,032
---------- ---------
Total liabilities 3,392,987 3,419,518
---------- ---------
Stockholders' equity (note 6):
Preferred stock - authorized
2,500,000 shares of no par value;
none issued and outstanding -- --
Common stock - authorized 100,000,000 shares,
no par value; issued 2,854,849 and
2,557,099 shares in 1995 and 1994, respectively 3,461,100 2,462,283
Treasury stock - 23,500 shares, at cost (124,844) --
Retained earnings 3,318,432 2,134,255
---------- ---------
6,654,688 4,596,538
---------- ---------
Commitments and contingencies (notes 4, 6 and 10)
$ 10,047,675 8,016,056
========== =========
<FN>
See accompanying notes to financial statements.
</TABLE>
PAGE 12
<PAGE>
<TABLE>
<CAPTION>
Analytical Surveys, Inc.
Statements of Operations
Years Ended September 30, 1995 and 1994
1995 1994
<S> <C> <C>
Sales $13,538,507 11,176,165
---------- ----------
Costs and expenses:
Salaries, wages, and related benefits 5,246,616 4,475,067
Subcontractor costs 3,244,485 2,628,652
General and administrative 2,244,207 1,833,691
Depreciation and amortization 783,838 759,032
---------- ----------
11,519,146 9,696,442
---------- ----------
Earnings from operations 2,019,361 1,479,723
---------- ----------
Other income (expense):
Interest income 1,689 1,651
Interest expense (120,462) (182,760)
Loss on sale of assets (411) (2,997)
---------- ----------
(119,184) (184,106)
---------- ----------
Earnings before income taxes 1,900,177 1,295,617
Income tax expense (note 5) 716,000 492,000
---------- ----------
Net earnings $ 1,184,177 803,617
========== ==========
Earnings per common and common
equivalent share $ .40 .30
=== ===
Weighted average outstanding common shares and
common stock equivalents 2,938,945 2,673,273
========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
PAGE 13
<PAGE>
<TABLE>
<CAPTION>
Analytical Surveys, Inc.
Statements of Stockholders' Equity
Years Ended September 30, 1995 and 1994
<S> <C> <C> <C> <C> <C> <C>
Common stock Treasury stock Retained
Shares Amount Shares Amount earnings Total
Balance at
October 1, 1993 2,533,599 $2,407,333 -- $ -- 1,330,638 3,737,971
Exercise of stock options 23,500 45,271 -- -- -- 45,271
Tax effect relating to
exercise of stock options -- 9,679 -- -- -- 9,679
Net earnings -- -- -- -- 803,617 803,617
--------- --------- ------ ------- ---------- ---------
Balance at
September 30, 1994 2,557,099 2,462,283 -- -- 2,134,255 4,596,538
Exercise of stock options 297,750 561,575 -- -- -- 561,575
Tax effect relating to
exercise of stock options -- 437,242 -- -- -- 437,242
Acquisition of treasury stock -- -- (23,500) (124,844) -- (124,844)
Net earnings -- -- -- -- 1,184,177 1,184,177
--------- --------- ------ ------- --------- ---------
Balance at
September 30, 1995 2,854,849 $3,461,100 (23,500) $(124,844) 3,318,432 6,654,688
========= ========= ====== ======= ========= =========
<FN>
See accompanying notes to financial statements.
</TABLE>
PAGE 14
<PAGE>
<TABLE>
<CAPTION>
Analytical Surveys, Inc.
Statements of Cash Flows
Years Ended September 30, 1995 and 1994
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,184,177 803,617
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 783,838 759,032
Bad debt expense -- 22,500
Loss on sale of assets 411 2,997
Deferred income tax benefit (108,351) (120,075)
Tax effect relating to exercise of
employee stock options 437,242 9,679
Changes in operating assets and liabilities:
Accounts receivable (1,225,722) (495,612)
Revenue in excess of billings (716,750) (663,142)
Prepaid expenses and other (66,787) 30,060
Billings in excess of costs and revenue (243,205) 1,889
Accounts payable and accrued liabilities 799,541 209,875
Accrued payroll and benefits 83,022 189,852
Income taxes payable (341,824) 205,980
Deferred compensation 8,364 8,363
---------- --------
Net cash provided by
operating activities 593,956 965,015
---------- --------
Cash flows used by investing activities:
Purchase of equipment and leasehold improvements (704,287) (189,642)
Proceeds from sale of equipment 296 --
---------- --------
Net cash used by investing activities (703,991) (189,642)
---------- --------
Cash flows from financing activities:
Net payments under note payable to bank -- (85,000)
Proceeds from issuance of long-term debt 520,936 143,603
Principal payments on long-term debt (734,590) (565,625)
Exercise of stock options 561,575 45,271
Purchase of treasury stock (124,844) --
---------- --------
Net cash provided (used) by
financing activities 223,077 (461,751)
---------- --------
Net increase in cash 113,042 313,622
Cash at beginning of year 552,232 238,610
---------- --------
Cash at end of year $ 665,274 552,232
========== ========
Supplemental disclosures of cash flow information:
Cash paid for interest $ 112,394 172,652
========== ========
Cash paid for income taxes $ 765,290 399,045
========== ========
<FN>
See accompanying notes to financial statements.
</TABLE>
PAGE 15
<PAGE>
Analytical Surveys, Inc.
Notes to Financial Statements
September 30, 1995 and 1994
(1) Summary of Significant Accounting Policies
(a) Revenue Recognition
The Company recognizes revenue on the percentage of
completion method using the cost-to-cost method,
whereby the percentage complete is based on costs
incurred to date in relation to total estimated costs.
Costs associated with sales of services are expensed
when incurred. The Company does not combine contracts
for purposes of recognizing revenue and, generally,
does not segment contracts.
Revenue in excess of billings represents work completed
but not billed. The Company bills customers based upon
the terms included in the contract, which is generally
upon delivery. When billed, such amounts are recorded
as accounts receivable.
The Company recognizes losses on contracts in the
period such loss is determined. The Company does not
believe warranty obligations on completed contracts are
material.
(b) Equipment and Leasehold Improvements
Equipment and leasehold improvements are stated at
cost. Depreciation and amortization are provided using
the straight-line method over the following estimated
lives:
Equipment 3 -- 10 years
Furniture and fixtures 5 -- 10 years
Leasehold improvements 5 years
Maintenance, repairs, and renewals which neither add to
the value of the asset or extend its useful life are
charged to expense as incurred.
(c) Earnings Per Share
The computation of earnings per common share is based
on the weighted average number of shares outstanding
plus the effect of common stock equivalents.
(d) Income Tax
The Company accounts for income taxes under the
provisions of Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes (SFAS
109). SFAS 109 requires the use of the asset and
liability method of accounting for income taxes. Under
the asset and liability method of SFAS 109, deferred
tax assets and liabilities are recognized for the
future tax consequences attributable to differences
between the financial statement carrying amounts of
existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary
differences are expected to be recovered or settled.
Under SFAS 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
PAGE 16
<PAGE>
Notes to Financial Statements, Continued
(e) Research and Development Costs
The Company expenses research and development costs as
they are incurred. Research and development costs,
which are included in general and administrative
expenses in the statement of operations, totaled
$347,321 and $225,894 in 1995 and 1994, respectively.
(f) Reclassifications
Certain prior year amounts have been reclassified to
conform to the 1995 presentation.
(2) Accounts Receivable, Revenue in Excess of Billings, and
Billings in Excess of Costs and Revenue
At September 30, 1995, the time to complete contracts in process
ranges from one to thirty-six months, and the Company expects to
collect substantially all related accounts receivable and revenue
in excess of billings within one year.
Claims by the Company reflected in accounts receivable and
revenue in excess of billings at September 30, 1995 were not
material.
The following tables summarize contracts in process
at September 30:
1995 1994
Costs incurred on uncompleted contracts $15,345,767 10,731,287
Estimated earnings 10,522,603 6,747,745
---------- ----------
25,868,370 17,479,032
Less billings to date (21,340,284) (13,910,901)
---------- ----------
$ 4,528,086 3,568,131
========== ==========
Included in the accompanying balance sheets
as follows:
Revenue in excess of billings $ 4,705,020 3,988,270
Billings in excess of costs
and revenue (176,934) (420,139)
--------- ---------
$ 4,528,086 3,568,131
========== =========
PAGE 17
<PAGE>
Notes to Financial Statements, Continued
(3) Long-Term Debt
Long-term debt consists of the following at September 30:
1995 1994
Term notes payable in monthly
installments of $8,215, including
interest ranging from 7.95% to 9.40%,
final maturity in November 1996,
secured by certain equipment $ 82,209 169,680
Note payable to a bank under a $1,250,000
equipment draw-down term loan, bearing
interest at effective rates ranging from
8.13% to 12% at September 30, 1995,
monthly payments of $34,891, final
maturity in November 1998, secured by
certain equipment 742,969 488,069
Capitalized lease obligation, effective
interest rate of 17.5%, monthly
payments of $35,280, repaid in fiscal
year 1995 -- 381,083
------- ---------
825,178 1,038,832
Less current portion (417,100) (647,800)
------- ---------
$ 408,078 391,032
======= =========
Maturities of long-term debt, as of September 30, 1995, are as
follows:
Years ending September 30:
1996 $ 417,100
1997 268,646
1998 131,817
1999 7,615
-------
$ 825,178
=======
PAGE 18
<PAGE>
Notes to Financial Statements, Continued
The Company's note payable to a bank under a $1,250,000 equipment
draw-down term loan contains restrictive covenants which require,
among other things, the maintenance of certain financial ratios
and includes certain limitations on capital expenditures and
dividend payments.
The Company has a $1,250,000 revolving line of credit bearing
interest at .5% over the base rate (9.25% effective rate at
September 30, 1995). The line of credit is collateralized by the
assignment of accounts receivable and officers life insurance and
expires February 28, 1996. No borrowings were outstanding as of
September 30, 1995 and 1994.
(4) Leases
The Company leases its facilities under operating leases.
Amounts due under noncancelable operating leases with terms of
one year or more at September 30, 1995 are as follows:
Operating
leases
Years ending September 30:
1996 $ 301,631
1997 301,011
1998 295,498
1999 313,610
2000 332,990
Thereafter 1,483,514
---------
Total minimum lease payments $3,028,254
=========
Rent expense for operating leases totaled $302,303 and $276,818
for the years ended September 30, 1995
and 1994, respectively.
(5) Income Taxes
Income tax expense (benefit) for the years ended September 30 is
as follows:
1995 1994
Current:
Federal $ 712,860 530,343
State and local 111,491 81,732
------- -------
824,351 612,075
------- -------
Deferred:
Federal (93,826) (103,980)
State and local (14,525) (16,095)
------- -------
(108,351) (120,075)
------- -------
$ 716,000 492,000
======= =======
PAGE 19
<PAGE>
Notes to Financial Statements, Continued
Expected income tax expense computed at the federal statutory
rate of 34% differs from actual income tax expense for the years
ended September 30 is as follows:
1995 1994
Computed "expected"
income tax expense $ 646,000 $ 441,000
State income taxes,
net of federal tax effect 63,000 43,000
Other 7,000 8,000
------- -------
Income tax expense $ 716,000 492,000
======= =======
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and liabilities
at September 30, are presented below.
1995 1994
Current deferred tax assets and liabilities:
Accounts receivable,
principally due to allowance for
doubtful accounts $ 7,460 7,460
Accrued liabilities, principally
due to accrued compensated absences
for financial statement purposes 62,162 68,529
Deferred compensation due to expense
related to stock options issued under
the 1988 ASI Stock Option Plan 7,539 11,048
Prepaid expenses, principally due
to marketing commissions expensed
for income tax purposes (27,448) (26,900)
------ ------
Total net current
deferred tax asset $ 49,713 60,137
====== ======
Non-current deferred tax assets and liabilities:
Deferred compensation due to
expense accrued for
financial statement purposes $ 20,667 17,547
Equipment and leasehold improvements,
principally due to differences in
depreciation (133,957) (249,612)
------- -------
Total net non-current
deferred tax liability $ (113,290) (232,065)
======= =======
PAGE 20
<PAGE>
Notes to Financial Statements, Continued
(6) Stockholders' Equity and Stock Options
The Board of Directors may issue preferred stock with rates of
dividends, voting rights, redemption prices, liquidation prices,
liquidation premiums, conversion rights, and requirements as to
any sinking or purchase fund without a vote of the shareholders.
In 1989, the Company entered into a stock redemption agreement
with its founder, who is also its chairman, chief technical
officer, and a major shareholder of the Company (the
Shareholder). Under the terms of the agreement, the Company may
be required under certain events to purchase all or a portion of
the common stock owned by the Shareholder. In these instances,
the purchase price will be determined based upon the mean between
the bid and asked price of the Company's stock on the over-the-
counter market. The future events that may require purchase and
the related terms are summarized as follows:
<TABLE>
<S> <C> <C>
Minimum shares required Payment
Event (a) to be purchased terms
Death The number of shares based upon Cash from
proceeds from $1,000,000 life insuranc insurance policy
policy maintained and owned by the Company (b)
Disability The number of shares based upon Cash from
proceeds from $1,000,000 insurance policy
disability insurance policy
maintained and owned by the
Company (b)
Involuntary Up to all shares owned by Cash
termination, shareholder
except for
cause
</TABLE>
(a) In the event of voluntary termination or involuntary
termination for cause, the Company is not required to
purchase shares. In the event of voluntary
termination, the Company will have the option to
purchase up to all shares owned by the Shareholder
through the issuance of promissory notes.
(b) The Company would be required to purchase the minimum
shares based upon a request from the Shareholder or his
estate. In addition, the Company may be offered the
option to purchase all additional shares of the
Shareholder, which may be purchased by issuing
promissory notes with a three year term.
At September 30, 1995, the Shareholder owned 530,949 shares of
the Company's common stock, which represented approximately 19%
of the outstanding common stock.
The Company currently has five nonqualified stock option plans.
The Board of Directors may grant options to purchase up to
1,177,000 shares of the Company's common stock to officers,
directors, and key employees. The exercise price of the options
is established by the Board of Directors on the date of grant.
Employees may vest in their options either 100% on date of grant
or 25% on date of grant and 25% each year thereafter as
determined by the Board of Directors. The options are
exercisable in whole or in part for a period of up to ten years
from date of grant.
PAGE 21
<PAGE>
Notes to Financial Statements, Continued
The following summarizes stock option transactions under the
plans:
Shares Option
under price
option per share
Outstanding at October 1, 1993 622,000
Granted 173,000 2.39
Exercised (23,500) 1.69 to 3.13
Canceled (26,975) 2.78
-------
Outstanding at September 30, 1994 744,525
Granted 284,000 5.25 to 7.38
Exercised (297,750) 1.00 to 3.13
Canceled (19,500) 2.38 to 6.00
-------
Outstanding at September 30, 1995
711,275
=======
At September 30, 1995:
Options exercisable 320,400
=======
Options available for grant 29,975
=======
The exercise of non-qualified stock options results in state and
federal income tax deductions to the Company related to the
difference between the market price at the date of exercise and
the option price. Common stock was increased by $437,242 and
$9,679 in 1995 and 1994, respectively, related to the tax effect
of the exercise of stock options.
(7) Employee Benefit Plan
The Company sponsors a qualified tax deferred savings plan in
accordance with the provisions of section 401(k) of the Internal
Revenue Code. Employees may defer up to 15% of their
compensation, subject to certain limitations. The Company
matches 50% of the employee contributions up to 4% of their
compensation. The Company contributed $60,494 and $52,414 to the
Plan in 1995 and 1994, respectively.
(8) Major Customers
Sales to individual customers amounting to more than 10% of the
total sales were as follows:
Year ended September 30:
1995 Customer A 12%
1994 Customer B 14%, and Customer C 12%
PAGE 22
<PAGE>
Notes to Financial Statements, Continued
(9) Concentrations of Credit Risk
Financial instruments which potentially expose the Company to
concentrations of credit risk, as defined by Financial Accounting
Standards Board's Statement No. 105, Disclosure of Information
about Financial Instruments with Off-Balance-Sheet Risk and
Financial Instruments with Concentration of Credit Risk, consist
primarily of accounts receivable with the Company's various
customers.
Historically, the Company's customers have included cities,
counties, engineering companies, utility companies, and federal
government agencies. Substantially more than 50% of revenues
have historically been derived from state and local government
contracts. In addition, a significant portion of the Company's
revenues are generated from utility clients, both commercial and
municipal.
The Company's accounts receivable are due from a variety of
organizations throughout the United States. The Company provides
for uncollectible amounts upon recognition of revenue and when
specific credit and collection issues arise. Management's
estimates of uncollectible amounts have been adequate in prior
years, and management believes that all significant credit and
collection risks have been identified and adequately provided for
at September 30, 1995.
(10) Pending Transaction
The Company has entered into negotiations for the acquisition of
substantially all of the net assets of a company engaged in a
similar business for a total consideration of approximately
$4,500,000.
PAGE 23
<PAGE>
Item 8.Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
Part III
Item 9.Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act
Information required by this item is contained in the
registrant's definitive proxy statement for its 1996 Annual
Meeting of Shareholders to be filed on or before January 20, 1996
and such information is incorporated herein by reference.
Item 10. Executive Compensation
Information required by this item is contained in the
registrant's definitive proxy statement for its 1996 Annual
Meeting of Shareholders to be filed on or before January 20, 1996
and such information is incorporated herein by reference.
Item 11.Security Ownership of Certain Beneficial Owners and
Management
Information required by this item is contained in the
registrant's definitive proxy statement for its 1996 Annual
Meeting of Shareholders to be filed on or before January 20, 1996
and such information is incorporated herein by reference.
Item 12. Certain Relationships and Related Transactions
Information required by this item is contained in the
registrant's definitive proxy statement for its 1996 Annual
Meeting of Shareholders to be filed on or before January 20, 1996
and such information is incorporated herein by reference.
Item 13. Exhibits and Reports on Form 8-K
(a) Index of Exhibits
(3) The Exhibits set forth in the following Index of
Exhibits are filed as part of this report.
3. Articles of Incorporation and By-Laws
3.1 Articles of incorporation (as amended) are
incorporated by reference to the Exhibit to the
Company's Registration Statement on Form S-18,
Registration No. 2-93108-D
3.2 By-laws are incorporated by reference to the
Exhibits to the Company's Registration Statement on
Form S-18, Registration No. 2-93108-D.
4. Instruments defining the rights of Security Holders including
Indentures
Form of Stock Certificate (filed with Registration
Statement No. 2-93108-D and hereby incorporated by
reference)
10. Material Contracts
10.1 Stock Redemption and Repurchase Agreement dated
February 14, 1989 between John A. Thorpe, Chairman and
Chief Technical Officer, and the registrant,
incorporated herein by reference to registrant's Annual
Report on Form 10-K for Fiscal Year ended September 30,
1989.
PAGE 24
<PAGE>
10.2 Employment Agreement between John A. Thorpe,
Chairman and Chief Technical Officer, and the
registrant, dated June 27, 1994 incorporated herein by
reference to registrant's Quarterly Report on Form 10-
QSB for June 30, 1994.
10.3 Stock Option Agreement dated July 27, 1990 and
amended November 19, 1990 between Sidney V. Corder,
Chief Executive Officer and President. and the
registrant, incorporated herein by reference to
registrant's Annual Report on Form 10-K for Fiscal Year
ended September 30, 1990.
10.4 Employment agreement dated June 27, 1994 between
ASI and Sidney V. Corder, Chief Executive Officer and
President, incorporated herein by reference to
registrant's Quarterly Report on Form 10-QSB for June
30, 1994.
10.5 Stock Option Plan dated December 17, 1987, and
amended on August 31, 1992 incorporated herein by
reference to registrant's Annual Report on Form 10-K
for Fiscal Year ended September 30, 1992.
10.6 1990 Non-Qualified Stock Option Plan dated
September 21, 1990 and amended and restated on December
17, 1990, and further amended on August 31, 1992
incorporated herein by reference to registrant's Annual
Report on Form 10-K for Fiscal Year ended September 30,
1992.
10.7 1991 Non-Qualified Stock Option Plan dated
December 17, 1990, and amended on August 31, 1992
incorporated herein by reference to registrant's Annual
Report on Form 10-K for Fiscal Year ended September 30,
1992.
10.8 1993 Non-Qualified Stock Option Plan dated
December 11, 1992 incorporated herein by reference to
registrant's Proxy Statement dated January 11, 1993.
10.9 Analytical Surveys, Inc. 401-K Plan dated October
1, 1988, amended and restated May 22, 1992 incorporated
herein by reference to registrant's Annual Report on
Form lO-K for Fiscal Year ended September 30, 1992.
10.10 Analytical Surveys, Inc. Incentive Bonus Plan
incorporated herein by reference to registrant's Annual
Report on Form 10-K for Fiscal Year ended September 30,
1992.
10.11 Building lease dated August 1, 1994
incorporated herein by reference to registrant's Annual
Report on Form 10-KSB for the Fiscal Year ended
September 39, 1994.
10.12 Agreement to perform mapping services between
ASI and Southern New England Telephone Company dated
September 7, 1995 (included in Section 1 of the exhibits)
10.13 Employment agreement dated September 20, 1995
between ASI and Scott C. Benger, Senior
Vice President, Finance and Secretary/Treasurer
(included in Section 2 of the exhibits)
10.14 Employment agreement dated September 20, 1995
between ASI and Raymond R. Mann , Senior Vice
President, Contracts and Business Development (included
in Section 3 of the exhibits.)
10.15 1995 Non-Qualified Stock Option Plan dated
August 22, 1995 (included in Section 4 of the
exhibits.)
24. Consent of Experts
Consent of KPMG Peat Marwick LLP (included in Section 5 of
the Exhibits).
Consent of Daniel P. Edwards, P.C. (included in Section
5 of the Exhibits).
PAGE 25
<PAGE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of
fiscal year 1995.
PAGE 26
<PAGE>
Signatures
In accordance with Section 13 or 15(d) of the Securities Exchange
Act of 1934 the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized as of the
19th day of December, 1995.
Analytical Surveys, Inc.
By
/s/ John A. Thorpe
John A. Thorpe, Chairman of the Board
In accordance with the Securities Exchange Act of 1934 this
report has been signed below by the following persons on behalf
of the registrants and in the capacities indicated as of the
19th day of December, 1995.
Signature Title
/s/ John A. Thorpe
John A. Thorpe Chairman and
Chief Technical Officer
/s/ Sidney V. Corder Director, President and
Sidney V. Corder Chief Executive Officer
/s/ Scott C. Benger
Scott C. Benger Sr. Vice President Finance
and Secretary/Treasurer
(principal financial officer)
(principal accounting officer)
/s/ Brian J. Yates
Brian J. Yates Controller
/s/ William H. Hudson
William H. Hudson Director
Richard P. MacLeod Director
/s/ James T. Rothe
James T. Rothe Director
/s/ Robert H. Keeley
Robert H. Keeley Director
/s/ Willem H. J. Andersen
Willem H. J. Andersen Director
ENGINEERING SERVICES AGREEMENT
This Agreement made this 23rd day of August 1995 is entered
into by and between THE SOUTHERN NEW ENGLAND TELEPHONE
COMPANY, (hereinafter called "NET''), a corporation
specially chartered by the General Assembly of the State of
Connecticut with its principal place of business at 227
Church Street, New Haven, Connecticut 06510 and ANALYTICAL
SURVEYS, INC., (hereinafter called "ASI"), with its
principal place of business at 1935 Jamboree Drive, Suite
100, Colorado Springs, CO 80920, (collectively referred to
herein as the "Parties").
THEREFORE, in consideration of the terms and conditions and
mutual obligations herein, the Parties agree as follows:
1. SCOPE
ASI shall provide to SNET photogrammetry services in order
to create a Geographic Information System (hereinafter
referred to as a "GIS") of SNET's Outside Plant in the
state of Connecticut in accordance with Attachment A, SNET
AM/FM GIS LANDBASE-LANDBASE COMPILATION FROM PHOTOGRAMMETRIC
SOURCES, attached and incorporated by reference herein.
2. TERM
The term of this Agreement shall commence on the above date
and shall continue in effect unless otherwise termination as
provided herein.
3. SERVICES TO BE PROVIDED
ASI shall provide SNET with Outside Plant Photogrammetric
Services ("Goods and Services") set forth in Attachment A.
4. FEES
(A) The sole compensation to be paid to ASI by SNET under
this Agreement shall be specified in Attachment B, FEES.
(B) There shall be added charges in excess of the price
above noted, an amount equal to any taxes, however
designated, hereafter levied, imposed or based upon the sale
covered by this Agreement including federal, state, local
municipal or excise taxes which taxes or amounts in lieu
thereof are charged to or payable by ASI in respect to the
foregoing sale of services, if applicable; exclusive
however, of taxes based upon the certificate of exemption or
similar document or proceeding obtained in order to exempt
the sale from a sales or use tax liability SNET has the
option of obtaining such certificate, documents, or
proceedings.
5. OWNERSHIP OF AERIAL PHOTOGRAPHY
(A) ASI and SNET acknowledge that all aerial photography of
the state of Connecticut taken by ASI under separate
agreement with the state of Connecticut, Office of Policy
and Management is open to the public as indicated by the
attached letter from the state of Connecticut, attached and
incorporated as Attachment C, herein.
(B) ASI shall use such aerial photographs in accordance
with all applicable rules, regulations imposed by the State
of Connecticut or any other governmental authority.
6. BILLING AND PAYMENT
(A) ASI shall submit a detailed invoice to SNET to Mr.
David Dickman at 555 Long Wharf Drive, 3rd Floor, New Haven,
Connecticut 06511.
(B) 80% of invoice shall be due and payable forty-five (45)
days after delivery of Goods and Services. The balance
shall be due and payable forty-five (45) days after
acceptance as defined in Attachment D, ACCEPTANCE CRITERIA,
attached and incorporated by reference herein.
7. TRAVEL EXPENSES
All travel, food, lodging, and other ASI employees' costs
and charges for the services specified in Attachment B,
FEES, are to be paid for by ASI, except for expenses
specifically stated in Attachment B, FEES, as payable by
SNET.
8. PROJECT MANAGEMENT
ASI shall provide the services, deliver any deliverables,
and complete this Agreement in the manner outlined herein.
SNET shall have the right to monitor ASI's performance
including but not limited to review of progress with ASI's
project manager.
9. PERSONNEL
(A) ASI and its personnel shall devote their best effort
and skill to the services for SNET and the personnel shall
serve subject to SNET approval.
(B) The personnel provided by ASI shall be employees of ASI
(including the Project Manager) for ninety (90) days prior
to the date of ASI's bid or the commencement of services
hereunder, and shall have a minimum of one (1) year
experience in the Mapping field.
(C) Nothing in this Agreement shall be construed to create
an employment or agency relationship between SNET and ASI or
its employees. ASI and ASI's employees shall not be
entitled to any wages, salaries, employee benefits, or other
remuneration from SNET.
(D) ASI shall replace any personnel deemed unsatisfactory
by SNET within one week after notification by SNET. ASI
will absorb all training and project learning time for ASI's
employees and replacements.
10. REQUIREMENTS OF LAW
(A) ASI shall comply, at its own expense, with applicable
provisions of all local, state, and federal laws,
ordinances, statues, rules and regulation, applicable to the
services performed or work furnished under this Agreement,
including but not limited to provisions related to worker's
compensation, equal employment opportunity, unemployment
compensation, sickness and disability, social security
occupational safety and health, wages and hours, taxation,
environmental protection, the Fair Labor Standards Act, the
Federal Occupational Safety Act, the Resource Conservation
and Recovery Act of 1976, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 and rule or
regulations promulgated under these Acts or Statutes. Upon
request from SNET, ASI shall submit evidence of compliance
with or coverage or qualification under all applicable laws
or regulations.
(B) If, in the opinion of SNET's Project Manager any
services being performed by ASI under this Agreement shall
fail to comply with the provisions of any applicable law,
ordinance, statute, rule or regulation, such failure will be
deemed a failure to comply with the provisions of the
Agreement and SNET specifications, for which SNET's Project
Manager may order the work stopped and not resumed until, in
his opinion, ASI has complied with such provisions. Failure
of SNET's Project Manager to be present or to detect such
non-compliance or to stop ASI form proceeding shall not
constitute an endorsement or ratification of ASI's non-
compliance by SNET.
11. SUBCONTRACTOR
(A) ASI shall not subcontract any part of the work without
the written consent of SNET's Project Manager as to both the
subcontracting of the work and the identity of the
subcontractor. All work performed by a subcontractor shall
be deemed work performed by ASI.
(B) All subcontracts shall provide that subcontractors
shall be subject to all contract provisions set forth in the
Agreement and documents insofar as they are applicable to
the work to be done under such subcontracts. Any
subcontract shall be immediately terminated by ASI whenever
SNET's Project Manager's opinion the work of the
subcontractor is unsatisfactory or unnecessarily delayed or
that the subcontractor has violated any of the provisions of
the Agreement or contract documents.
(C) If ASI subcontracts in violation of this provision SNET
may, at is option, and without waiving any other legal or
equitable right, terminate this Agreement and shall
thereupon be relieved from all liability hereunder to ASI of
it purported subcontractor.
(D) SNET hereby grants approval to ASI to subcontract the
airborne GPS of this project to Measurement Science, Inc.
12. PROJECT MANAGERS
(A) Both SNET and ASI shall designate a project manager on
or before commencement of services to be performed under
this Agreement.
(B) ASI's project manager shall serve subject to SNET
approval.
(C) Said project managers shall meet as is mutually agreed
to be necessary, to discuss accomplishments, plans for
future work, new requirements (if any), milestones, problems
and their resolutions.
13. WARRANTY BY ASI
(A) ASI warrants that Goods and Services delivered to SNET
under this Agreement will be at the time of delivery free
and clear of any liens and encumbrances. ASI warrants that
their services and any deliverable will conform to the
Guidelines set forth in Attachment A. ASI further warrants
the deliverables to be free from defect or deficiencies in
workmanship. The Warranties expressed herein shall be in
force for a period of one (1) year from the date of
delivery. ASI shall pay all charges for labor necessary to
diagnose, repair, and correct any error caused.
(B) ASI warrants that the Goods and Services provided
hereunder shall be performed in a professional, courteous
and lawful manner to SNET's satisfaction and in accordance
with the terms and conditions of this Agreement.
14. CONTRACTOR INTERFERENCE
ASI shall perform all operations in a manner so as not to
cause interference with other contractors or SNET employees.
If it becomes necessary during ASI's course of operations to
cause such interference, ASI shall immediately notify SNET's
Project Manager of the anticipated interference and shall
not proceed further with that phase of the work without the
prior written approval of SNET's Project Manger.
15. PATENTS, TRADEMARKS AND COPYRIGHT
ASI warrants that the sale and use of its services or
deliverables hereunder shall not infringe any patent,
trademark, or copyright issued by the United States or any
foreign country. ASI agrees to defend SNET at ASI's own
cost and expense and pay any judgment rendered in any suit
or proceeding and indemnify and hold harmless SNET of any
claim, cost, expenses, or Attorney's fees, in connection
with any allegation that any services or deliverables set
forth in Attachment A and acquired hereunder infringes a
letter patent, trademark or copyright of the United States
or any foreign country or any other rights to copyright or
proprietary information, provided that ASI is reasonably
notified in writing of any claim of infringement and
furnished with any papers received in connection therewith
and provided further that ASI shall have the sole direction
and control of the negotiations or suit which is brought and
that SNET shall assist ASI, at ASI's expense, in said
litigation.
16. PROPRIETARY INFORMATION, NONDISCLOSURE
(A) Each Party pledges that, its officers, employees and
its agents, shall treat any and all information and data
relating to or obtained through the performance of this
Agreement, including but not limited to data relating to the
other's operations, policies, procedures, source material,
techniques, accounts and personnel, (the "Confidential
Information") obtained by each Part, its officers,
employees or agents, as confidential and will not disclose
any such information or data to any employee or third Party
not involved in, or responsible for, the negotiation of or
with respect to this Agreement or effectuating the
provisions thereof. Any oral discussions between SNET and
ASI which relate to the confidential information shall be
considered and treated as "Confidential Information".
(B) Each Party shall protect the Confidential Information
of the other with the same degree of care as it affords its
own proprietary or confidential information, which shall in
no event be less than that degree of care used by a
reasonably prudent person in exercising ordinary care.
(C) Neither Party, its agents, employees, representatives,
subsidiaries, affiliates or parent companies shall, for
themselves or for the benefit of any person or entity, use
or disclose the Confidential Information of the other
whether written or oral, for any purpose, at any time
without the express prior written approval of the disclosing
Party.
(D) Notwithstanding anything to the contrary herein, the
receiving Party shall have no obligation to preserve the
confidentiality of any information which:
(1) was previously known to the receiving Party free of any
obligation to keep it confidential; or
(2) is or become publicly available, by other than
unauthorized disclosure; or
(3) is independently developed by the receiving Party and
said receiving Party can demonstrate that it has not used
the confidential information; or
(4) is disclosed to third Party by the disclosure Party
without restriction; or
(5) is lawfully received from a third Party whose
disclosure would not violate any confidentiality or other
legal obligation.
(E) The obligations hereunder shall survive the
cancellation, termination, or completion of this Agreement.
(F) Upon termination of this Agreement each Party will
immediately return all Confidential Information which may be
demanded by the other as the other's property or certify to
the other Party to the destruction of said Confidential
Information.
17. INSPECTION, AUDIT
(A) SNET, or its representative, shall have the right to
inspect all services hereunder and specifically reserves the
right to conduct on-site visits and perform audits or
operational reviews as SNET deems appropriate and necessary.
Any inspection, audit, review or lack thereof shall not
relieve ASI of responsibility for performance. ASI shall
maintain a true and correct set of records to include, but
not be limited to, referred accounts, invoices and internal
records for all charges and sufficient other detail to
permit reasonable verification or correction of charges and
performance in accordance with this contract.
(B) ASI shall maintain such records in accordance with
generally accepted accounting principles, for the period of
six (6) years. SNET or its representative may, from time to
time, audit any and all such records and ASI agrees to
permit SNET, or its representative, access to examine and
audit these records at all reasonable times and without
additional cost to SNET. ASI shall furnish SNET with
service status and progress reports as SNET may request.
The results of any SNET audit herein shall be determinative
of any matter contested concerning billings by ASI to SNET.
18. INDEMNITY
ASI agrees to indemnify, defend and hold SNET harmless from
and against any claims, damages or expenses (including
attorney's fees) resulting from or arising out of the acts,
omissions, or services of ASI, its agents, servants,
employees, representatives or attorneys, whether or not the
same are made or brought against SNET individually, or
jointly against both parties herein, in the performance of
this Agreement. SNET shall notify ASI in writing of any
such claims made against SNET. Notwithstanding its right to
protection, defense, reimbursement and indemnification by
ASI, and without limiting or restricting the other terms and
provisions contained in this Paragraph, SNET reserves for
itself, at its own option, the exclusive right to settle,
compromise and pay any and all claims, demands, proceedings,
suits, actions or causes of actions which are brought
against either party herein under the terms and provisions
of this Paragraph.
19. TERMINATION
(A) In the event ASI fails t comply with any of the terms
of this Agreement, SNET shall notify ASI in accordance with
Section 26, NOTICES, of said noncompliance. ASI shall then
have thirty (30) calendar days to cure said noncompliance.
If ASI fails to cure said noncompliance, SNET may, without
waiving any other rights it may have, terminate this
Agreement upon written notice to ASI.
(B) Either party may terminate this Agreement at any time,
with or without justification or cause, by giving written
notice to the other party not less than thirty (30) days
prior to the effective date of such termination. No such
termination shall affect or impair the obligation of SNET to
pay ASI amounts on all services completed by ASI prior to
the effective date of termination.
20. INSURANCE
ASI shall carry such insurance covering all its employees as
shall protect it from all claims under Worker's Compensation
in the states where the work in this Agreement shall be
performed and Unemployment Compensations Laws in effect that
may be applicable to it. ASI shall also carry liability
insurance consistent with its indemnification obligations
under Section 18, INDEMNITY, (by name or as a member of an
expressly named covered class) and SNET shall be names as an
additional insured under the general liability insurance and
comprehensive automobile insurance. Such insurance coverage
shall have combined single limits of not less than one
million dollars ($1,000,000.00) for general liability
insurance, one million dollars ($1,000,000.00) for
comprehensive automobile liability and one million dollars
($1,000,000.00) for professional liability insurance. ASI
shall provide SNET proof of such insurance through
certificates of insurance on an annual basis.
21. CONTINGENCY
It is mutually agreed by the parties hereto that neither
party shall be held responsible for any delay or failure in
performance hereunder caused by revolution or other
disorder, war embargoes, government requirements, civil or
military authorities, strikes (even if a party could settle
a labor dispute), floods, acts of nature, inability to
secure material or transportation facilities because of
aforementioned causes, or without limiting the foregoing, by
any other cause not within the control of the party whose
performance is interfered with, and which by the exercise of
reasonable diligence, said party is unable to prevent
whether of the class of causes hereinbefore enumerated or
not.
22. BANKRUPTCY
Either party may terminate this contract by notice in
writing, in the event that the other makes an assignment for
the benefit of creditors, or admits in writing inability to
pay debts as they mature; or a trustee or receiver of the
other, or of any substantial part of the other's assets, is
appointed by any court; or a proceeding is instituted under
any provision of the Federal Bankruptcy Act by the other, or
against the other and is acquiesced in or is not dismissed
within sixty (60) days or results in an adjudication in
bankruptcy.
23. BREACH
SNET may, on ASI's breach of or noncompliance with Paragraph
3 of Attachment D, ACCEPTANCE CRITERIA, where no other
remedy exists herein, terminate this Agreement and at SNET's
option because damages are difficult to ascertain recover
liquidated damages and not as a penalty of one thousand
dollars ($1,000.00) per day until the breach is cured or ASI
is in compliance herewith.
24. NON-WAIVER OF BREACH
Failure of SNET at any time or from time to time, to enforce
or require the strict keeping and performance by ASI of any
of the terms and provisions of this Agreement shall not
constitute a waiver by SNET of a breach of any such terms or
provisions and shall not affect or impair such terms or
provisions in any way or the right of SNET at any time to
avail itself of rights or remedies as it may have at any
time. A waiver by SNET shall only be effective if such
waiver is in writing and executed by SNET.
25. ASSIGNMENT
(A) Any assignment of the service to be performed by ASI,
in whole or in part, or of any other interest hereunder
without written consent of SNET, except an assignment
confined solely to monies due or to become due shall be
void. It is expressly agreed that any such assignment of
monies shall be void to the extent that it attempts to
impose upon SNET obligations to the assignee additional to
the payment of such monies or to preclude SNET from dealing
solely and directly with ASI in all matters pertaining
hereto, including the negotiation of amendments or
settlements of amounts due.
(B) The foregoing shall not limit SNET's right to assign
this Agreement to any Company affiliated with SNET, which
right is expressly affirmed.
26. NOTICES
Any and all notices permitted or required to be given herein
shall be deemed duly given (1) upon actual delivery, if
delivery is by hand (2) upon receipt by the transmitting
party of confirmation or answer back if delivery is by telex
or telegram; or (3) upon delivery into the United States
mail if delivery is by postage paid registered or certified
return receipt requested mail. Each such notice shall be
sent to the respective party at the address indicated below
or to any other address as the respective party may
designate in writing delivered pursuant to this paragraph.
if to SNET, and of a legal nature, including price change:
The Southern New England Telephone Company
48 Boston Post Road
Orange, Connecticut 06477
ATTN: Manager-Technical Procurement
if to SNET, and of an administrative nature:
The Southern New England Telephone Company
555 Long Wharf Drive
New Haven, Connecticut 06511
ATTN: Mr. David Dickman
if to ASI:
Analytical Surveys, Inc.
1935 Jamboree Drive, Suite 100
Colorado Springs, CO 80920
ATTN: Mr. Raymond R. Mann
27. PUBLICITY
ASI shall not commercially use SNET's name without SNET's
express written consent. The foregoing shall not apply to
ASI's inclusion of SNET within a listing of ASI's clients.
28. SEVERABILITY
In the event that any one or more of the provisions
contained herein shall for any reason be held to be
unenforceable in any respect under the law of Connecticut or
the United States of America, such unenforceability shall
not affect any other provision of this Agreement; but this
Agreement shall then be construed as if such unenforceable
provision or provisions had never been contained herein.
29. SURVIVAL
The terms, provisions, representations, and warranties
contained herein shall survive delivery, payment, and
acceptance. This Agreement shall bind the parties hereto
and their legal representatives, successors, assigns, and
heirs (if ASI is a natural person).
30. MODIFICATION OF AGREEMENT
The whole Agreement between the parties hereto is stated
herein and may only be changed by amendment signed by both
parties or their duly authorized agents.
31. AFFILIATED COMPANIES
For the purpose of this Agreement, an Affiliate is (I) a
company owning all outstanding voting shares of SNET (such
company being hereinafter called the "Parent"): (ii) a
company owned by or whose majority of voting stock is owned
by the Parent; or (iii) a company owned by or whose majority
of voting stock is owned by SNET. SNET may from time to
time designate Affiliates to be eligible under this
Agreement or may withdraw any of those presently designated,
by a written notice to this effect, given to ASI thirty (30)
days in advance.
32. WAIVER
The waiver of strict compliance of any of the terms of this
contract or of any breach thereof on the part of SNET shall
not be held or deemed to be a waiver of any subsequent
failure to comply with or perform the same or any other term
or condition of this contract or of any breach thereof.
33. SNET STANDARDS OF CONDUCT
(A) ASI agrees to comply with Attachment E, SNET SUPPLIER
POLICY STATEMENT ON ETHICS, and SNET SUPPLIER STANDARDS OF
CONDUCT, which are attached hereto and incorporated herein
by reference.
(B) ASI shall comply with all applicable Federal, State,
County, and Local laws, regulations, and codes in the
performance of this Agreement.
34. NO EXCLUSIVE RIGHT
Nothing herein contained shall be construed as the grant of
any exclusive right by SNET to ASI, and nothing herein
contained shall be construed as a requirement that SNET
refer any account or accounts to ASI, but any referred
account shall be subject to all terms of this Agreement.
35. LAW GOVERNING
This Agreement is made in and shall be governed by the laws
of the State of Connecticut.
36. COMPLIANCE WITH LAWS
ASI agrees to comply with all applicable federal, state and
local laws and regulations in the performance of this
Agreement. Without in any way limiting the foregoing, ASI
agrees to comply with the Fair Labor Standards Act and
Occupational Safety and Health Act as amended as wall as
SNET's Equal Employment Opportunity Certificate which ASI
shall recertify upon SNET's request.
37. ENTIRE AGREEMENT
This contract including Attachments A through F, which are
incorporated by reference herein, constitute the entire
contract and Agreement between SNET and ASI. No
conversations, understandings or agreements varying,
extending or affecting in any way, the terms or provisions
of this contract shall be binding on either party unless
reduced to writing and duly executed by an authorized
representative of each party.
IN WITNESS WHEREOF, this contract is executed this 7th day
of September, 1995.
ANALYTICAL SURVEYS, INC.
BY /s/ Raymond R. Mann
ITS Senior Vice President
DATE August 23, 1995
THE SOUTHERN NEW ENGLAND TELEPHONE COMPANY
BY /s/ Charlotte G. Denenberg
ITS Vice President-Network Technology and CTO
DATE September 7, 1995
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective for all
purposes and in all respects as of the 20th day of
September, 1995, by and between ANALYTICAL SURVEYS, INC., a
Colorado corporation (hereinafter referred to as the
"employer" or the "Corporation"), and SCOTT C. BENGER
(hereinafter referred to as the "employee").
WITNESSETH THAT:
WHEREAS, Employee has been employed by Employer since
September of 1990; and
WHEREAS, Employer and Employee desire to state in
writing the terms and conditions of their agreements and
understandings, and to continue the term of Employee's
employment hereunder;
NOW, THEREFORE, in consideration of the foregoing of
the mutual promises herein contained, and of other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties, intending legally to
be bound, agree as follows:
1. Term of Employment.
This Employment Agreement shall supersede and replace
any prior understandings with respect to Employee's
employment. The term shall commence on September 20,
1995, and shall continue until September 20, 1997, unless
sooner terminated in accordance with the provisions of
Paragraph 6, and shall be automatically renewed for
additional, successive periods of two (2) years each
thereafter.
2. Duties of Employee.
2.1 It is understood and agreed that Employee's
principal duties on behalf of Employer at the date of
execution hereof are and shall be as Sr. Vice President -
Finance of the Corporation. In accepting employment by
Employer, Employee shall undertake and assume the
responsibility of performing for and on behalf of Employer
whatever duties are necessary and required in his position
as Secretary, Treasurer and Sr. Vice President - Finance of
the Corporation.
2.2 Employee covenants and agrees that at all times
during the term of this Agreement, Employee shall devote his
full-time efforts to his duties as an employee of the
Employer. Employee further covenants and agrees that he
will not, directly or indirectly, engage or participate in
any activities at any time during the term of this Agreement
in conflict with the best interests of Employer.
3. Compensation.
3.1 Salary. As compensation for the services to be
rendered by Employee for Employer under this Agreement,
Employee shall be paid not less than the following base
annual salary, on a monthly basis, during the term hereof:
$84,000.00, plus annual increases and bonuses, if any, voted
him by the Board of Directors of employer.
3.2 Bonus. Employee shall be a participant in the
Analytical Surveys, Inc. Incentive Bonus Plan and Stock
Option Plan as approved by the Board of Directors; provided,
that a change in tax rules and regulations or required
accounting principles shall not negatively impact the amount
of Employee's bonus.
3.3 Salary Review. Employee's salary will be reviewed
annually in November, commencing November, 1995.
4. Additional Benefits.
In addition to, and not in limitation of, the
compensation referred to in Paragraph 3, Employee shall be
paid the following additional benefits during the term
hereof:
4.1 Reimbursement. Reimbursement of all reasonable
expenses incurred by him in connection with performance of
his duties as Secretary, Treasurer and Sr. Vice President -
Finance of the Corporation, upon submission of vouchers.
Reasonable expenses shall include, but not be limited to all
out-of-pocket expenses for entertainment, travel, meals,
lodging, automobile expenses, professional fees,
professional dues and the like incurred by him in the
interest of the Employer.
4.2 Participation in Benefit Plans. Employee shall be
a participant, to the extent he meets all eligibility
requirements of general application to senior executives of
the Corporation, in any and all plans maintained by the
Corporation to provide benefits for its employees, as
specified in the Corporation's Employee Handbook, revised
January 2, 1990, a copy of which has been given to Employee,
including, but not limited to, group term life insurance,
hospitalization, medical, disability, profit sharing and
retirement plans; provided however, that reasonable employee
contributions may be required and reasonable increases my be
made in deductible amounts, similar to those then in effect
for all other officers of the Corporation.
4.3 Vacations. Employee shall be entitled to
vacations of not less than four (4) weeks per year. Employee
may accrue any unused vacation time from year to year, and
upon termination of employment will be compensated for any
unused vacation time. Any specific vacation of more than
two (2) weeks' duration shall be approved in advance by the
President.
4.4 Other Perquisites. Employee shall be entitled to
such additional perquisites as may be customarily granted by
the Corporation to senior executives, as determined by the
President of the Corporation.
4.5 Death or Disability Payments. In the event of the
Employee's disability or death, Employee's salary in effect
at the time of his death or disability shall continue to be
paid to Employee, or to his designee, for a period of twelve
(12) calendar months from the date of death or from the date
of Employee's termination by reason of disability. For the
purposes of this Employment Agreement, the obligations of
the Employer make the payments upon the disability of
Employee shall not become effective unless and until all of
the following conditions are met, as determined by an
independent physician selected by the Board of Directors and
agreed to by Employee: (1) Employee shall become physically
or mentally incapable (excluding infrequent and temporary
absences due to ordinary illnesses) of properly performing
the services required of him in accordance with his
obligations under Paragraph 2 hereof or similar provisions
of any renewal agreement; (2) such incapacities shall exist
or be reasonably expected to exist for more than ninety (90)
days in the aggregate during the period of twelve (12)
consecutive months; and (3) either Employee or Employer
shall have given the other thirty (30) days' written notice
of his or its intention to terminate the active employment
of Employee because of such disability. The benefits
payable hereunder shall be in addition to, and shall not be
offset against, any amounts paid to Employee or his designee
by reason of insurance benefits pursuant to Paragraph 4.2
above.
4.6 Life Insurance. Employee shall be provided with a
life insurance policy in the amount of $100,000 (provided he
can meet the medical conditions for such coverage), payable
to such beneficiaries as he shall designate, with an
additional $100,000 of accidental death coverage.
5. Disclosure of Information.
Employee acknowledges that in and as a result of his
employment hereunder, he will be making use of, acquiring,
and/or adding to confidential information of a special and
unique nature and value relating to such matters as
Employer's trade secrets, systems, procedures, manuals,
confidential reports, and lists of clients. As a material
inducement to Employer to enter into this Agreement and to
pay to Employee the compensation stated in Paragraph 3, as
well as any additional benefits stated in Paragraph 4,
Employee covenants and agrees that he shall not, other than
in the ordinary course of business, at any time during or
following the term of his employment, directly or indirectly
divulge or disclose for any purpose whatsoever or
appropriate to his own use or to the use of others any
confidential information that has been obtained by, or
disclosed to him, as a result of his employment by Employer.
6. Termination.
6.1 Termination By Either Party Without Cause. At any
time during the term hereof, this Employment Agreement may
be terminated "without cause" by either Employer or Employee
upon written notice to the other party.
(A) In the event of such termination "without cause"
by Employee, Employer shall have the option either (a) to
accept Employee's resignation, effective immediately on
receipt of such notice; or (b) to require Employee to
continue to perform his duties hereunder, for a period not
to exceed six (6) months from the date of receipt of such
written notice. In either event, the Employee's
compensation and benefits hereunder shall continue only
until the effective date of termination, as defined in
Paragraph 6.4 below.
(B) In the event of such termination "without cause"
by Employer, Employee shall be continued on the payroll for
twelve (12) months, and shall receive bonuses equal to those
received by him during the twelve (12) months prior to
termination. Such severance pay shall be paid in twelve
(12) equal, successive monthly payments, beginning on the
1st day of the month immediately following the effective
date of termination. Employee shall also be continued under
all group benefit plans for a period of twelve (12) months
from the effective date of termination, as defined in
Paragraph 6.4(A) below. In addition, Employee's stock
options shall continue to vest, and he shall have the
continuing right to exercise such options during the period
of twelve (12) months from the effective date of
termination.
6.2 Termination by Employer For Cause.
Notwithstanding any other provision hereof, Employer may
terminate Employee's employment under this Agreement at any
time for cause. The termination shall be effective by
written notice thereof to the Employee, which shall specify
the cause for termination. For purposes hereof, the term
"cause" shall mean the failure of Employee for any reason,
within thirty (30) days after receipt by Employer of written
notice from Employee, to correct, cease, or otherwise alter
any action or omission to act that constitutes a material
and willful breach of Agreement likely to result in material
damage to the Corporation.
Upon such termination for cause by Employer, Employee
shall not receive termination pay or benefits beyond the
effective date of termination, as defined in Paragraph
6.4(B) below.
6.3 Termination by Employee for Cause.
Notwithstanding any other provision hereof, Employee may
resign his employment under this Agreement at any time for
cause. The termination may be by written notice thereof to
Employer, which shall mean the failure of Employer for any
reason, within thirty (30) days after receipt by Employer of
written notice from Employee, to correct, cease or otherwise
alter any material adverse change in the conditions of
Employee's employment caused by (a) a change in ownership of
Corporation; or (b) any change in Employee's position as Sr.
Vice President - Finance, or the duties assigned to him by
the President of the Company, unless Employee consents to
such change, on terms as mutually agreed.
Upon such termination for cause by Employee, Employee
shall be continued on the payroll for eighteen (18) months
from the effective date of termination (as defined in
Paragraph 6.4(B) below) at his then current salary without
further responsibilities to the Corporation. Employee shall
also be continued under all group benefits plans for a
period of eighteen (18) months from the effective date of
termination. Employee's stock options shall continue to
vest, and he shall have the continuing right to exercise
such options during the period of eighteen (18) months from
the effective date of termination.
6.4 Effective date of Termination.
(A) The effective date of termination, as used in
Paragraph 6.1 with respect to termination "without cause",
shall be the date on which Employee actually ceases to
perform his duties hereunder.
(B) The effective date of termination, as used in
Paragraph 6.2 and 6.3 with respect to termination "for
cause", shall be thirty (30) calendar days after the date on
which Employee receives or gives written notice of
termination.
6.5 Limitation on Severance Compensation.
Notwithstanding any other provision of the Agreement, solely
in the event of a Termination Upon a Change In Control, the
aggregate of the amount of severance compensation paid to
the Employee under the Agreement or otherwise, but exclusive
of any payments to the Employee by virtue of the Employee's
exercise of any right or payment of any kind under any
incentive or benefit plan upon a change in control, shall
not include any amount that the Employer is prohibited from
deducting for federal income tax purposes by virtue of
Section 280G of the Internal Revenue Code or any successor
provision.
7. Covenant Not to Compete. The parties hereto agree that
the Employee shall not directly or indirectly own, control,
operate, manage, consult, own shares in, be employed by, or
otherwise participate in any sole proprietorship,
corporation, partnership or entity whose primary business is
the same or similar to the business of the Corporation
during the term of his employment hereunder, nor for a
period of one (1) years after his termination of employment,
within the territory (North America) in which the
Corporation does business.
The parties hereto recognize that Employee has been
retained in the position of Secretary, Treasurer and Sr.
Vice President - Finance for the Corporation, and that in
said position he is considered to be part of the
professional, management and executive staff of the
Corporation.
In the event Employee violates this covenant of non-
competition, both parties acknowledge and agree that the
Corporation shall have the right to bring a lawsuit to
enforce this covenant against Employee, and to obtain
equitable relief in the form of an injunction and, where
applicable, damages at law; that the District Court for El
Paso County, Colorado shall have venue, and exclusive
jurisdiction in such lawsuit; and that Colorado law shall
apply.
In the event the Corporation must bring such a lawsuit
by reason of Employee's breach of this covenant of non-
competition, the Corporation shall be entitled to recover
its reasonable attorneys fees, costs, and expenses of
litigation, in the event it prevails in such lawsuit.
This covenant of non-competition has been negotiated
and agreed to by and between the Corporation and Employee
with full knowledge of, and pursuant to the requirements of
Section 8-2-113 (2) of Colorado Revised Statutes, as amended
from time to time, and is deemed by both parties to be fair
and reasonable under the terms of that statute.
8. Other Business Activities.
During the period of his employment under this
Agreement, the Employee shall not be employed by or
otherwise engage or be interested in any business whether or
not in competition with the Corporation, or with any of its
subsidiaries or affiliates, with the following exceptions:
(A) Employee's investment in any business shall not be
considered a violation of this paragraph, provided that such
business is not in competition with the Corporation and so
long as any services rendered to such business by Employee
do not in any way interfere with Employee's duties under
this Agreement.
(B) Employee may consult with other businesses not in
competition with the Corporation, provided that each such
consulting job shall be expressly considered and approved or
disapproved in advance by the audit committee of the Board
of Directors.
9. Indemnification.
So long as Employee is not found by a court of law to
be guilty of willful and material breach of this Agreement,
or to be guilty of willful gross misconduct, he shall be
indemnified from and against any and all losses, liability,
claims and expenses, damages, or causes of action,
proceedings or investigations, or threats thereof (including
reasonable attorney fees and expenses of counsel
satisfactory to and approved by Employee) incurred by
Employee, arising out of, in connection with, or based upon
Employee's services and the performance of his duties
pursuant to this Employment Agreement, or any other matter
contemplated by this Employment Agreement, whether or not
resulting in any such liability; and Employee shall be
reimbursed by Employer as and when incurred for any
reasonable legal or other expenses incurred by Employee in
connection with investigating or defending against any such
loss, claim, damage, liability, action, proceeding,
investigation or threat thereof, or producing evidence,
producing documents or taking any other action in respect
thereto (whether or not Employee is a defendant in or target
of such action, proceeding or investigation).
10. Burden and Benefit.
This Agreement shall be binding upon, and shall inure
to the benefit of, Employer and Employee, and their
respective heirs, personal and legal representatives,
successors, and assigns and shall be expressly binding upon
and inure to the benefit of any person or entity assuring
the Corporation, by merger, consolidation, purchase of
assets or stock, or otherwise; provided, however, that the
interests of the Employee hereunder are not subject to the
claims of his creditors, and may not be voluntarily or
involuntarily assigned, alienated or encumbered.
11. Governing Law.
It is understood and agreed that the construction and
interpretation of this Agreement shall at all times and in
all respects be governed by the laws of the State of
Colorado.
12. Severability.
The provisions of this Agreement, including
particularly but not solely, the provisions of Paragraphs 5
and 6, shall be deemed severable, and the invalidity or
unenforceability of any one or more of the provisions of
this Agreement shall not affect the validity and
enforceability of the other provisions.
13. Notice.
Any notice required to be given shall be sufficient if
it is in writing and sent by certified or registered mail,
return receipt requested, first-class postage prepaid, to
this residence in the case of Employee, and to its principal
office in the case of Employer.
14. Entire Agreement.
This Agreement contains the entire agreement and
understanding by and between Employer and Employee with
respect to the employment of Employee, and no
representations, promises, agreements, or understandings,
written or oral, not contained herein shall be of any force
or effect. No change or modification of this Agreement
shall be valid or binding unless it is in writing and signed
by the party against whom the waiver is sought to be
enforced. No valid waiver of any provision of this
Agreement at any time shall be deemed a waiver of any other
provision of this Agreement at such time or at any other
time.
15. Counterparts.
The Agreement may be executed in two or more
counterparts, any one of which shall be deemed the original
without reference to the others.
IN WITNESS WHEREOF, Employer and Employee have duly
executed this Agreement as of the day and year first above
written.
EMPLOYER:
ATTEST: ANALYTICAL SURVEYS, INC.
a Colorado corporation
/s/Brian J. Yates by: /s/ Sidney V. Corder
Notary President
EMPLOYEE:
/s/ Scott C. Benger
SCOTT C. BENGER
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective for all purposes
and in all respects as of the 20th day of September, 1995, by and
between ANALYTICAL SURVEYS, INC., a Colorado corporation
(hereinafter referred to as the "employer" or the "Corporation"),
and RAYMOND R. MANN (hereinafter referred to as the "employee".
WITNESSETH THAT:
WHEREAS, Employee has been employed by Employer since March
of 1992; and
WHEREAS, Employer and Employee desire to state in writing
the terms and conditions of their agreements and understandings,
and to continue the term of Employee's employment hereunder;
NOW, THEREFORE, in consideration of the foregoing of the
mutual promises herein contained, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending legally to be bound, agree
as follows:
1. Term of Employment.
This Employment Agreement shall supersede and replace any
prior understandings with respect to Employee's employment. The
term shall commence on September 20, 1995, and shall continue
until September 20, 1997, unless sooner terminated in accordance
with the provisions of Paragraph 6, and shall be automatically
renewed for additional, successive periods of two (2) years each
thereafter.
2. Duties of Employee.
2.1 It is understood and agreed that Employee's principal
duties on behalf of Employer at the date of execution hereof are
and shall be as Sr. Vice President - Business Development and
Contracts of the Corporation. In accepting employment by
Employer, Employee shall undertake and assume the responsibility
of performing for and on behalf of Employer whatever duties are
necessary and required in his position as Sr. Vice President -
Business Development and Contracts of the Corporation.
2.2 Employee covenants and agrees that at all times during
the term of this Agreement, Employee shall devote his full-time
efforts to his duties as an employee of the Employer. Employee
further covenants and agrees that he will not, directly or
indirectly, engage or participate in any activities at any time
during the term of this Agreement in conflict with the best
interests of Employer.
3. Compensation.
1
3.1 Salary. As compensation for the services to be rendered
by Employee for Employer under this Agreement, Employee shall be
paid not less than the following base annual salary, on a monthly
basis, during the term hereof: $84,000.00, plus annual increases
and commissions, if any, voted him by the Board of Directors of
employer.
3.2 Stock Options. Employee shall be a participant in the
Analytical Surveys, Inc. Stock Option Plan as approved by the
Board of Directors.
3.3 Commissions. Employee shall, on an annual basis,
receive commissions based on a percentage of the Corporation's
annual sales, and based upon a predetermined annual sales goal,
to be set forth in a separate memorandum as determined by the
President of the Corporation after consultation with Employee;
provided that the amount of such commissions shall be determined
by and at the sole discretion of the President of the
Corporation.
3.4 Salary Review. Employee's salary will be reviewed
annually in November, commencing November, 1995.
4. Additional Benefits
In addition to, and not in limitation of, the compensation
referred to in Paragraph 3, Employee shall be paid the following
additional benefits during the term hereof:
4.1 Reimbursement. Reimbursement of all reasonable
expenses incurred by him in connection with performance of his
duties as Sr. Vice President - Business Development and Contracts
of the Corporation, upon submission of vouchers. Reasonable
expenses shall include, but not be limited to all out-of-pocket
expenses for entertainment, travel, meals, lodging, automobile
expenses, professional fees, professional dues and the like
incurred by him in the interest of the Employer.
4.2 Participation in Benefit Plans. Employee shall be a
participant, to the extent he meets all eligibility requirements
of general application to senior executives of the Corporation,
in any and all plans maintained by the Corporation to provide
benefits for its employees, as specified in the Corporation's
Employee Handbook, revised January 2, 1990, a copy of which has
been given to Employee, including, but not limited to, group term
life insurance, hospitalization, medical, disability, profit
sharing and retirement plans; provided however, that reasonable
employee contributions may be required and reasonable increases
may be made in deductible amounts, similar to those then in
effect for all other officers of the Corporation.
4.3 Vacations. Employee shall be entitled to vacations of
not less than four (4) weeks per year. Employee may accrue any
unused vacation time from year to year, and upon termination of
employment will be compensated for any unused vacation time. Any
2
specific vacation of more than two (2) weeks' duration shall be
approved in advance by the President.
4.4 Other Perquisites. Employee shall be entitled to such
additional perquisites as may be customarily granted by the
Corporation to senior executives, as determined by the President
of the Corporation.
4.5 Death or Disability Payments. In the event of the
Employee's disability or death, Employee's salary in effect at
the time of his death or disability shall continue to be paid to
Employee, or to his designee, for a period of twelve (12)
calendar months from the date of death or from the date of
Employee's termination by reason of disability. For the purposes
of this Employment Agreement, the obligations of the Employer to
make the payments upon the disability of Employee shall not
become effective unless and until all of the following conditions
are met, as determined by an independent physician selected by
the Board of Directors and agreed to by Employee: (1) Employee
shall become physically or mentally incapable (excluding
infrequent and temporary absences due to ordinary illnesses) of
properly performing the services required of him in accordance
with his obligations under Paragraph 2 hereof or similar
provisions of any renewal agreement; (2) such incapacities shall
exist or be reasonably expected to exist for more than ninety
(90) days in the aggregate during the period of twelve (12)
consecutive months; and (3) either Employee or Employer shall
have given the other thirty (30) days' written notice of his or
its intention to terminate the active employment of Employee
because of such disability. The benefits payable hereunder shall
be in addition to, and shall not be offset against, any amounts
paid to Employee or his designee by reason of insurance benefits
pursuant to Paragraph 4.2 above.
4.6 Life Insurance. Employee shall be provided with a life
insurance policy in the amount of $100,000 (provided he can meet
the medical conditions for such coverage), payable to such
beneficiaries as he shall designate, with an additional $100,000
of accidental death coverage.
5. Disclosure of Information.
Employee acknowledges that in and as a result of his
employment hereunder, he will be making use of, acquiring, and/or
adding to confidential information of a special and unique nature
and value relating to such matters as Employer's trade secrets,
systems, procedures, manuals, confidential reports, and lists of
clients. As a material inducement to Employer to enter into this
Agreement and to pay to Employee the compensation stated in
Paragraph 3, as well as any additional benefits stated in
Paragraph 4, Employee covenants and agrees that he shall not,
other than in the ordinary course of business, at any time during
or following the term of his employment, directly or indirectly
divulge or disclose for any purpose whatsoever or appropriate to
his own use or to the use of others any confidential information
3
that has been obtained by, or disclosed to him, as a result of
his employment by Employer.
6. Termination.
6.1 Termination By Either Party Without Cause. At any time
during the term hereof, this Employment Agreement may be
terminated "without cause" by either Employer or Employee upon
written notice to the other party.
(A) In the event of such termination "without cause" by
Employee, Employer shall have the option either (a) to accept
Employee's resignation, effective immediately on receipt of such
notice; or (b) to require Employee to continue to perform his
duties hereunder, for a period not to exceed six (6) months from
the date of receipt of such written notice. In either event, the
Employee's compensation and benefits hereunder shall continue
only until the effective date of termination, as defined in
Paragraph 6.4 below.
(B) In the event of such termination "without cause" by
Employer, Employee shall be continued on the payroll for twelve
(12) months, and shall receive bonuses equal to those received by
him during the twelve (12) months prior to termination. Such
severance pay shall be paid in twelve (12) equal, successive
monthly payments, beginning on the 1st day of the month
immediately following the effective date of termination.
Employee shall also be continued under all group benefit plans
for a period of twelve (12) months from the effective date of
termination, as defined in Paragraph 6.4(A) below. In addition,
Employee's stock options shall continue to vest, and he shall
have the continuing right to exercise such options during the
period of twelve (12) months from the effective date of
termination.
6.2 Termination by Employer For Cause. Notwithstanding any
other provision hereof, Employer may terminate Employee's
employment under this Agreement at any time for cause. The
termination shall be effective by written notice thereof to the
Employee, which shall specify the cause for termination. For
purposes hereof, the term "cause" shall mean the failure of
Employee for any reason, within thirty (30) days after receipt by
Employee of written notice thereof from Employer, to correct,
cease, or otherwise alter any action or omission to act that
constitutes a material and willful breach of this Agreement
likely to result in material damage to the Corporation, or
willful gross misconduct likely to result in material damage to
the Corporation.
Upon such termination for cause by Employer, Employee shall
not receive any termination pay or benefits beyond the effective
date of termination, as defined in Paragraph 6.4(B) below.
6.3 Termination by Employee For Cause. Notwithstanding any
other provision hereof, Employee may resign his employment under
this Agreement at any time for cause. The termination may be by
4
written notice thereof to Employer, which shall specify the cause
for Employee's resignation. For purposes hereof, the term
"cause" shall mean the failure of Employer for any reason,
within thirty (30) days after receipt by Employer of written
notice from Employee, to correct, cease or otherwise alter any
material adverse change in the conditions of Employee's
employment caused by (a) a change in ownership of Corporation; or
(b) any change in Employee's position from Sr. Vice President -
Business Development and Contracts, or the duties assigned to him
by the President of the Company, or any change in Employee's
right to hire and fire the sales staff for the Company within the
predetermined budget and with the knowledge and consent of the
President of the Corporation, unless Employee consents to such
change, on terms as mutually agreed.
Upon such termination for cause by Employee, Employee shall
be continued on the payroll for eighteen (18) months from the
effective date of termination (as defined in Paragraph 6.4(B)
below) at his then current salary without further
responsibilities to the Corporation. Employee shall also be
continued under all group benefits plans for a period of eighteen
(18) months from the effective date of termination. Employee's
stock options shall continue to vest, and he shall have the
continuing right to exercise such options during the period of
eighteen (18) months from the effective date of termination.
6.4 Effective date of Termination.
(A) The effective date of termination, as used in Paragraph
6.1 with respect to termination "without cause", shall be the
date on which Employee actually ceases to perform his duties
hereunder.
(B) The effective date of termination, as used in Paragraph
6.2 and 6.3 with respect to termination "for cause", shall be
thirty (30) calendar days after the date on which Employee
receives or gives written notice of termination.
6.5 Limitation on Severance Compensation. Notwithstanding
any other provision of the Agreement, solely in the event of a
Termination Upon a Change In Control, the aggregate of the amount
of severance compensation paid to the Employee under the
Agreement or otherwise, but exclusive of any payments to the
Employee by virtue of the Employee's exercise of any right or
payment of any kind under any incentive or benefit plan upon a
change in control, shall not include any amount that the Employer
is prohibited from deducting for federal income tax purposes by
virtue of Section 280G of the Internal Revenue Code or any
successor provision.
7. Covenant Not to Comptete.
The parties hereto agree that the
Employee shall not directly or indirectly own, control, operate,
manage, consult, own shares in, be employed by, or otherwise
participate in any sole proprietorship, corporation, partnership
or entity whose primary business is the same or similar to the
business of the Corporation during the term of his employment
5
hereunder, nor for a period of two (2) years after his
termination of employment, within the territory (North America)
in which the Corporation does business.
The parties hereto recognize that Employee has been retained
in the position of Sr. Vice President - Business Development and
Contracts for the Corporation, and that in said position he is
considered to be part of the professional, management and
executive staff of the Corporation.
In the event Employee violates this covenant of non-
competition, both parties acknowledge and agree that the
Corporation shall have the right to bring a lawsuit to enforce
this covenant against Employee, and to obtain equitable relief in
the form of an injunction and, where applicable, damages at law;
that the District Court for El Paso County, Colorado shall have
venue, and exclusive jurisdiction in such lawsuit; and that
Colorado law shall apply.
In the event the Corporation must bring such a lawsuit by
reason of Employee's breach of this covenant of non-competition,
the Corporation shall be entitled to recover its reasonable
attorneys fees, costs, and expenses of litigation, in the event
it prevails in such lawsuit.
This covenant of non-competition has been negotiated and
agreed to by and between the Corporation and Employee with full
knowledge of, and pursuant to the requirements of Section 8-2-113
(2) of Colorado Revised Statutes, as amended from time to time,
and is deemed by both parties to be fair and reasonable under the
terms of that statute.
8. Other Business Activities.
During the period of his employment under this Agreement,
the Employee shall not be employed by or otherwise engage or be
interested in any business whether or not in competition with the
Corporation, or with any of its subsidiaries or affiliates, with
the following exceptions:
(A) Employee's investment in any business shall not be
considered a violation of this paragraph, provided that such
business is not in competition with the Corporation and the
Employee does not render management or other personal services to
such business;
(B) Employee may consult with other businesses not in
competition with the Corporation, provided that each such
consulting job shall be expressly considered and approved or
disapproved in advance by the audit committee of the Board of
Directors.
9. Indemnification.
So long as Employee is not found by a court of law to be
guilty of willful and material breach of this Agreement, or to be
6
guilty of willful gross misconduct, he shall be indemnified from
and against any and all losses, liability, claims and expenses,
damages, or causes of action, proceedings or investigations, or
threats thereof (including reasonable attorney fees and expenses
of counsel satisfactory to and approved by Employee) incurred by
Employee, arising out of, in connection with, or based upon
Employee's services and the performance of his duties pursuant to
this Employment Agreement, or any other matter contemplated by
this Employment Agreement, whether or not resulting in any such
liability; and Employee shall be reimbursed by Employer as and
when incurred for any reasonable legal or other expenses incurred
by Employee in connection with investigating or defending against
any such loss, claim, damage, liability, action, proceeding,
investigation or threat thereof, or producing evidence, producing
documents or taking any other action in respect thereto (whether
or not Employee is a defendant in or target of such action,
proceeding or investigation).
10. Burden and Benefit.
This Agreement shall be binding upon, and shall inure to the
benefit of, Employer and Employee, and their respective heirs,
personal and legal representatives, successors, and assigns and
shall be expressly binding upon and inure to the benefit of any
person or entity assuring the Corporation, by merger,
consolidation, purchase of assets or stock, or otherwise;
provided, however, that the interests of the Employee hereunder
are not subject to the claims of his creditors, and may not be
voluntarily or involuntarily assigned, alienated or encumbered.
11. Governing Law.
It is understood and agreed that the construction and
interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Colorado.
12. Severability
The provisions of this Agreement, including particularly but
not solely, the provisions of Paragraphs 5 and 6, shall be deemed
severable, and the invalidity or unenforceability of any one or
more of the provisions of this Agreement shall not affect the
validity and enforceability of the other provisions.
13. Notice.
Any notice required to be given shall be sufficient if it is
in writing and sent by certified or registered mail, return
receipt requested, first-class postage prepaid, to this residence
in the case of Employee, and to its principal office in the case
of Employer.
14. Entire Agreement.
7
This Agreement contains the entire agreement and
understanding by and between Employer and Employee with respect
to the employment of Employee, and no representations, promises,
agreements, or understandings, written or oral, not contained
herein shall be of any force or effect. No change or
modification of this Agreement shall be valid or binding unless
it is in writing and signed by the party against whom the waiver
is sought to be enforced. No valid waiver of any provision of
this Agreement at any time shall be deemed a waiver of any other
provision of this Agreement at such time or at any other time.
15. Counterparts.
The Agreement may be executed in two or more counterparts,
any one of which shall be deemed the original without reference
to the others.
IN WITNESS WHEREOF, Employer and Employee have duly executed
this Agreement as of the day and year first above written.
EMPLOYER:
ATTEST: ANALYTICAL SURVEYS, INC.
a Colorado corporation
by: /s/ Sidney V. Corder
/s/Scott C. Benger
Secretary
EMPLOYEE:
/s/ Raymond R. Mann
RAYMOND R. MANN
8
Analytical Surveys, Inc.
1995 Stock Option Plan
1. Purpose.
The 1995 Analytical Surveys, Inc. Stock
Option Plan (the "Plan" or the "1995 Plan") is intended to
advance the interests of Analytical Surveys, Inc. (the "Company")
and its shareholders by encouraging and enabling selected
officers, directors and other key employees upon whose judgment,
initiative and effort the Company is largely dependent for the
successful conduct of its business, to acquire and retain a
proprietary interest in the Company by ownership of its stock.
Options granted under the Plan are intended to be Options which
do not meet the requirements of Section 422A of the Internal
Revenue Code of 1986 (the "Code").
2. Definitions.
(a) "Board" means the Board of Directors of the
Company.
(b) "Committee" means the body administering the Plan.
(c) "Common Stock" means the Company's Common Stock.
(d) "Date of Grant" means the date on which an option
is granted under the plan.
(e) "Disinterested Person" means a director, officer
or other person who has not been granted equity
securities pursuant to the Plan during the year prior
to their service as a plan administrator, unless (i)
the plan under which they were awarded securities was a
formula plan or a broad-based participant - directed
plan or (ii) the plan they are administering does not
permit participation by directors.
(f) "Option" means an option granted under the Plan.
(g) "Optionee" means a person to whom an option, which
has not expired, has been granted under the Plan.
(h) "Successor" means the legal representative of the
estate of a deceased optionee or the person or persons
who acquire the right to exercise an option by bequest
or inheritance or by reason of the death of any
optionee.
3. Administration of the Plan; Disinterested Administrators.
(a) The Plan shall be administered by a Committee of three
or more outside directors appointed from time to time by the
Board; provided, however, that all Committee members
administering the Plan must be "disinterested persons" as that
term is herein defined.
(b) Subject to the provisions of subparagraph (c) below,
the Committee shall have full and final authority in its
discretion to determine the individuals to whom and the time or
times at which options shall be granted and the number of shares
and purchase price of Common Stock covered by each option; to
construe and interpret the Plan; to determine the terms and
provisions of the respective option agreements, which need not be
identical, including, but without limitation, terms covering the
payment of the option price; and to make all other determinations
and take all other actions deemed necessary or advisable for the
proper administration of the Plan. All such actions and
determinations shall be conclusively binding for all purposes and
upon all persons.
(c) If the selection of any director or officer of the
Company to whom stock options may be granted pursuant to the
Plan, or the determination of the maximum number of shares of
stock which may be allocated to any such director or officer or
which may be covered by stock options granted to any such
director or officer pursuant to the Plan is subject to the
discretion of any person, then such discretion shall be exercised
only as follows:
(1) With respect to the participation of directors:
(i) By the board of directors, a majority of which board
and a majority of the directors acting in the matter are
disinterested persons;
(ii) By, or only in accordance with the recommendation of,
the Committee; or
(iii) Otherwise in accordance with the Plan, if the Plan (A)
specifies the number or maximum number of shares of stock
which directors may acquire or which may be subject to stock
options granted to directors pursuant to the Plan and the
terms upon which, and the times at which, or the periods
within which, such stock may be acquired or such options may
be acquired and exercised; or (B) sets forth, by formula or
otherwise, effective and determinable limitations with
respect to the foregoing based upon earnings of the Company,
dividends paid, compensation received by participants,
option prices, market value of shares, outstanding shares or
percentages thereof outstanding from time-to-time or similar
factors.
(2) With respect to the participation of officers who are
not directors:
(i) By the board of directors or a committee of three or
more directors;
(ii) By, or only in accordance with the recommendations of
the Committee; or
(iii) Otherwise in accordance with the Plan, if the Plan (A)
Specifies the number or maximum number of shares of stock
which directors may acquire or which may be subject to stock
options granted to directors pursuant to the plan and the
terms upon which, and the times at which, or the periods
within which, such stock may be acquired or such options may
be acquired and exercised; or (B) sets forth, by formula or
otherwise, effective and determinable limitations with
respect to the foregoing based upon earnings of the Company,
dividends paid, compensation received by participants,
option prices, market value of shares, outstanding shares or
percentages thereof outstanding from time-to-time or similar
factors.
4. Common Stock Subject to Options. The aggregate number
of shares of the Company's Common Stock which may be issued upon
the exercise of options granted under the Plan shall not exceed
120,000.00, subject to adjustment under the provisions of
Paragraph 8. The shares of Common stock to be issued upon the
exercise of options may be authorized but unissued shares, shares
issued and reacquired by the company or shares bought on the
market for the purposes of the Plan. In the event any option
shall, for any reason, terminate or expire or be surrendered
without having been exercised in full, the shares subject to such
option but not purchased thereunder shall again be available for
options to be granted under the Plan.
5. Participants. Options may be granted under the Plan to
any person who is or who agrees to become a director, officer, or
employee (including officers and employees who are also
directors) of the Company.
6. Terms and Conditions of Options. Any option granted
under the Plan shall be evidenced by an agreement executed by the
Company and the applicable officer or employee and shall contain
such terms and be in such form as the Board may from time to time
approve, subject to the following limitations and conditions.
7. Option Price.
(a) The option price per share with respect to each
option shall be determined by the Board but shall in no
instance be less than one-hundred percent (100%) of the
fair market value to a share of the Common Stock on
August 22, 1995. For the purposes hereof, fair market
value shall be the bid price of the Common Stock on the
OTC market as reported by NASDAQ. The bid price of the
Common Stock, as reported by NASDAQ, on August 22, 1995
was $ 7.375.
(b) Period of Option. The expiration date of each
option shall be fixed by the Board, but,
notwithstanding any provision of the Plan to the
contrary, such expiration date shall not be more than
ten (10) years from the Date of Grant.
(c) Vesting of Shareholder Rights. Neither an
optionee nor his successor shall have the rights of a
shareholder of the company until the certificate
evidencing the shares purchased are properly delivered
to such optionee or his successor.
(d) Exercise of Option; Sale of Underlying Security.
Each option shall be exercisable from time to time over
a period commencing the date of Grant and ending upon
the expiration or termination of the option. An option
shall not be exercisable in whole or in part prior to
the date of Board approval of the Plan. Any underlying
security issued pursuant to the exercise of an option
under the Plan must be held for at least six months
from the date of grant of the exercise of the option,
before such security can be sold.
(e) Nontransferability of Option. No option shall be
transferable or assignable by an optionee, otherwise
than by will or the laws of descent and distribution
and each option shall be exercisable, during the
optionee's lifetime, only by him. No option shall be
pledged or hypothecated in any way and no option shall
be subject to execution, attachment, or similar process
except with the expressed consent of the Board.
(f) Termination of Employment. Upon termination of an
optionee's employment with the Company, his option
privileges shall be terminated in accordance with the
terms of the option agreement between the Company and
the Optionee. The granting of an option to an eligible
person does not alter, in any way, the Company's
existing rights to terminate such person's employment
at any time for any reason, nor does it confer upon
such person any rights or privileges except as
specifically provided for in the Plan.
(g) Death of Optionee. If an optionee dies while in
the employ of the company or any subsidiary, his option
privileges shall be limited to the shares which were
immediately purchasable by him at the date of death and
such option privileges shall expire unless exercised by
his successor within one hundred-eighty (180) days
after the date of death.
8. Adjustments.
(a) In the event that the outstanding shares of Common
Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different
number or kind of shares or other securities of the
Company or of another corporation, by reason of a
recapitalization, reclassification, stock split-up,
combination of shares, or dividend or other
distribution payable in capital stock, appropriate
adjustment shall be made by the Board in the number and
kind of shares for the purchase of which options may be
granted under the Plan. In addition, the Board shall
make appropriate adjustment in the number and kind of
shares as to which outstanding options, or portions
thereof then unexercised, shall be exercisable, to the
end that the proportionate interest of the holder of
the option shall, to the extent practicable, be
maintained as before the occurrence of such event.
Such adjustment in outstanding options shall be made
without change in the total price applicable to the
unexercised portion of the option but with a
corresponding adjustment in the option price per share.
(b) In the event of the dissolution or liquidation of
the Company, any option granted under the Plan shall
terminate as of a date to be fixed by the Board,
provided that no less than thirty (30) days' written
notice of the date so fixed shall be given to each
optionee and each such optionee shall have the right
during such period to exercise his option as to all or
any part of the shares covered thereby including shares
as to which such option would not otherwise be
exercisable by reason of an insufficient lapse of time.
(c) In the event of a Reorganization (as hereinafter
defined) in which the Company is not he surviving or
acquiring company, or in which the Company is or
becomes a wholly owned subsidiary of another company
after the effective date of the Reorganization, then:
(1) If there is no plan or agreement respecting
the Reorganization ("Reorganization Agreement") or
if the Reorganization Agreement does not
specifically provide for the change, conversion,
or exchange of the shares under outstanding and
unexercised stock options for securities of
another corporation, then the Board shall take
such action, and the options shall terminate, as
provided in subparagraph (b) of the Paragraph 7;
or
(2) If there is a Reorganization Agreement and if
the Reorganization Agreement specifically provides
for the change, conversion, or exchange of the
shares under outstanding and unexercised stock
options for securities of another corporation,
then the Board shall adjust the shares under such
outstanding and unexercised stock options (and
shall adjust the shares remaining under the Plan
which are then available to be optioned under the
plan if the Reorganization Agreement makes
specific provision (therefore) and in a manner
consistent with the provisions of the
Reorganization Agreement for the adjustment,
change, conversion, or exchange of such stock and
such options.
The term "Reorganization as used in this subparagraph (c) of
the Paragraph 8 shall mean any statutory merger, statutory
consolidation, sale of all or substantially all of the assets of
the Company, or sale, pursuant to an agreement with the Company
of securities of the Company pursuant to which the Company is or
become s a wholly owned subsidiary of another company after the
effective date of the Reorganization.
(d) Adjustments and determination under this
Paragraph 8 shall be made by the Board, whose
decisions as to what adjustments or determinations
shall be made, and the extent thereof, shall be
final, binding, and conclusive.
9. Restriction of Issuing Shares. The exercise of each
option shall be subject to the condition that if at any time the
Company shall determine in its discretion that the satisfaction
of withholding tax or other withholding liabilities, or that the
listing, registration, or qualification of any shares otherwise
deliverable upon such exercise upon any securities exchange or
under any state or federal law, or that the consent or approval
of any shall have been effected or obtained free of any condition
not acceptable to the Company.
10. Use of Proceeds. The proceeds received by the Company
from the sale of Common Stock pursuant to the exercise of options
granted under the Plan shall be added to the Company's general
funds and used for general corporate purposes.
11. Terms of the Plan. Unless the Plan shall theretofore
have been terminated by the Board or as provided in Paragraph 12,
the Plan shall terminate ten (10) years after the effective date
of the Plan.
12. Amendment, Suspension, and Termination of the Plan.
The Board may at any time suspend or terminate the plan or may
amend it from time to time in such respects as the Board may deem
advisable in order that the options granted thereunder may
conform to any changes in the law or in any other respect which
the Board may deem to be in the best interest of the Company. No
option may be granted during any suspension or after the
termination of the Plan. No amendment, suspension, or
termination of the Plan shall, without an optionee's consent,
alter or impair any of the rights or obligations under the option
theretofore granted to such optionee under the Plan.
13. Effective Date of Plan; Shareholder Approval. The
effective date of the Plan is August 22, 1995, the date of this
approval by the Board. It shall be subject to approval and
ratification by the Shareholders of the Company at its next
regularly scheduled meeting in February, 1996; provided, that
grants of stock options may be made by the Committee prior to
such Shareholder approval, but that no exercise of the options
will be allowed prior to such Shareholder approval.
Consent of Independent Auditors
The Board of Directors
Analytical Surveys, Inc.:
We consent to incorporation by reference in the registration
statements (No. 33-24142, No. 33-33948, No. 33-53950, and
No. 33-59940) on Form S-8 of Analytical Surveys, Inc. of our
report dated November 3, 1995, relating to the balance
sheets of Analytical Surveys, Inc. as of September 30, 1995
and 1994, and the related statements of operations,
stockholders' equity, and cash flows for the years then
ended which report appears in the September 30, 1995 Annual
Report on Form 10-KSB of Analytical Surveys, Inc.
KPMG Peat Marwick LLP
Denver, Colorado
November 3, 1995
CONSENT OF COUNSEL
I hereby consent to the use of my name as legal counsel in
the Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended
September 30, 1995 filed by Analytical Surveys, Inc. on
Form 10-KSB.
DANIEL P. EDWARDS, P.C.
BY: /s/ Daniel P. Edwards
President
Colorado Springs, CO
December 27, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from SEC Form 10-QSB and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<CIK> 0000753048
<NAME> ANALYTICAL SURVEYS INC
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 665274
<SECURITIES> 0
<RECEIVABLES> 7650114
<ALLOWANCES> 20000
<INVENTORY> 0
<CURRENT-ASSETS> 8554444
<PP&E> 6525545
<DEPRECIATION> 5046065
<TOTAL-ASSETS> 10047675
<CURRENT-LIABILITIES> 2816212
<BONDS> 0
<COMMON> 3336256
0
0
<OTHER-SE> 3318432
<TOTAL-LIABILITY-AND-EQUITY> 10047675
<SALES> 0
<TOTAL-REVENUES> 13538507
<CGS> 0
<TOTAL-COSTS> 11519146
<OTHER-EXPENSES> (1278)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 120462
<INCOME-PRETAX> 1900177
<INCOME-TAX> 716000
<INCOME-CONTINUING> 1184177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1184177
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
</TABLE>
