<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ANALYTICAL SURVEYS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of filing fee (Check the appropriate box):
[ X] No filing fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
ANALYTICAL SURVEYS, INC.
941 NORTH MERIDIAN STREET
INDIANAPOLIS, INDIANA 46204
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 17, 1999
Notice is hereby given that an Annual Meeting of Shareholders of Analytical
Surveys, Inc. ("Company" or "ASI"), a Colorado corporation, will be held on
February 17, 1999 at 3:30 p.m. MST at the Antlers Adam's Mark Hotel, 4 South
Cascade Avenue, Colorado Springs, Colorado. The purpose of the Annual Meeting
is to:
1. Elect seven Directors to serve until the next Annual Meeting of
the Shareholders and until the election and qualification of
their respective successors;
2. Ratify the selection of KPMG Peat Marwick LLP as the independent
auditors for the Company for the fiscal year ending September 30,
1999; and
3. Act upon such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The Company's Board of Directors has fixed the close of business on January
11, 1999, as the record date for determining those shareholders who will be
entitled to notice of and to vote at the Annual Meeting.
Representation of at least a majority of all outstanding shares of common
stock of the Company is required to constitute a quorum. Accordingly, it is
important that your stock be represented at the meeting.
A Proxy Statement explaining the matters to be acted upon at the meeting is
enclosed. Also enclosed is a copy of our Annual Report for the fiscal year
ended September 30, 1998.
Whether or not you plan to attend the meeting, please complete, date and
sign the enclosed proxy card and return it in the enclosed envelope. Your proxy
may be revoked at any time prior to the time it is voted.
By Order of the Board of Directors
/s/ Scott C. Benger
--------------------------
Scott C. Benger
Secretary/Treasurer
January 18, 1999
<PAGE>
ANALYTICAL SURVEYS, INC.
941 NORTH MERIDIAN STREET
INDIANAPOLIS, INDIANA 46204
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 17, 1999
This Proxy Statement is submitted with the Notice of the Annual Meeting of
Shareholders of Analytical Surveys, Inc. ("Company" or "ASI") to be held on
February 17, 1999 at 3:30 p.m. MST at Antlers Adam's Mark Hotel, 4 South Cascade
Avenue, Colorado Springs, Colorado.
The purpose of the Annual Meeting is to:
1. Elect seven Directors to serve until the next Annual Meeting of
the Shareholders and until the election and qualification of
their respective successors;
2. Ratify the selection of KPMG Peat Marwick LLP as the independent
auditors for the Company for the fiscal year ending September 30,
1999; and
3. Act upon such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Each of the foregoing proposals is described in more detail in this Proxy
Statement.
PROXIES AND VOTING AT THE ANNUAL MEETING
This solicitation of proxies is made on behalf of the Board of Directors of
the Company (the "Board of Directors" or the "Board").
The Proxy Statement and the proxies solicited hereby are being first sent
or delivered to shareholders of the Company beginning on or about January 18,
1999.
The expenses of the solicitation of proxies for the meeting will be paid by
the Company. Employees of the Company may communicate with shareholders to
solicit their proxies. Brokers, banks and others holding stock in their names,
or in names of nominees, may request and forward copies of the proxy
solicitation material to beneficial owners and seek authority for execution of
proxies, and the Company will reimburse them for their expenses in so doing at
the rates approved by the New York Stock Exchange.
The holders of record of the Company's common stock at the close of
business on January 11, 1999, will be entitled to notice of, and to vote at, the
meeting. Each share of common stock represented at the Annual Meeting is
entitled to one vote on each matter properly brought before the meeting. There
are no cumulative voting rights. Please specify your choices by marking the
appropriate boxes on the enclosed proxy card and signing it.
In the election of directors, the seven nominees who receive the highest
number of votes cast are elected to the Board of Directors. All other matters
submitted at the meeting will be determined by a majority of the votes
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cast. Shares represented by proxies that are marked "withhold authority" with
respect to the election of one or more nominees for election as directors,
proxies which are marked "abstain" on other proposals and proxies that are
marked to deny discretionary authority on other matters will not be counted in
determining the number of votes cast for such matters. If no directions are
given and the signed proxy card is returned, the shares will be voted in favor
of the election of all listed nominees, in favor of the ratification of the
selection of KPMG Peat Marwick as the independent auditors of the Company, and
at the proxies' discretion on any other matter that may properly come before the
meeting. In instances where brokers are prohibited from exercising
discretionary authority for beneficial owners who have not returned proxies to
the brokers (so-called "broker non-votes"), those shares will be counted for the
purpose of determining if a quorum is present but will not be included as votes
cast and, therefore, will have no effect on the vote. Shareholders voting by
proxy may revoke that proxy at any time before it is voted at the meeting by
delivering to the Company a proxy bearing a later date or by attending in
person and casting a ballot.
On the record date, January 11, 1999, there were 6,774,967 shares of common
stock outstanding and entitled to vote. The presence in person or by proxy of
at least a majority of the outstanding shares will constitute a quorum.
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR MARKED PROXY CARD PROMPTLY SO
YOUR SHARES CAN BE REPRESENTED, EVEN IF YOU PLAN TO ATTEND THE MEETING IN
PERSON.
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ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES
The Board of Directors has determined that the number of Directors of the
Company shall be seven. Each Director will serve until the next Annual Meeting
of Shareholders or until a qualified successor is elected. All of the nominees
are presently Directors of the Company. We will vote your shares as specified
on the enclosed proxy card. If you do not specify how you want your shares
voted, we will vote them FOR the election of all the nominees named below. If
any such person should be unable to serve or become unavailable for any reason,
or if a vacancy should occur before the election (which events are not
anticipated), we will vote your shares FOR such other person or persons as shall
be determined by the persons named in the Proxy in accordance with their
judgment. The nominees have provided the following information about themselves
as of December 12, 1998.
Sidney V. Corder, 56, has been the President of the Company since
August 1990 and the Chief Executive Officer since 1993. He has served as a
director of the Company since November 1992 and has been the Chairman of the
Board of the Company since March 1997. From 1979 until joining the Company in
1990, Mr. Corder was employed by Cubic Corporation, a design/build manufacturer
of automated fare collection systems for mass transit, serving in various
capacities including as Vice President of Operations and as President of its
Western Data division.
Willem H. J. Andersen, 57, has served as a director of the Company since
October 1995. Since November 1998 he has served as CEO of Intermezzo Systems,
Inc., a software development company in the hospitality industry. From
February 1995 to November 1998, he was a consultant with A&S Consulting Ltd.
From 1992 to February 1995, he served as President and Chief Executive Officer
of Comlinear Corporation, a subsidiary of National Semiconductor Corporation.
From 1970 until his retirement in 1992, Mr. Andersen held various positions with
a number of divisions of Phillips N.V. of the Netherlands, including President
and Chief Executive Officer of Laser Magnetic Storage International Company, a
North American Phillips company.
Dr. Robert H. Keeley, 57, has served as a director of the Company since
December 1992. Since September 1992, Dr. Keeley has been the El Pomar Professor
of Business Finance at the College of Business and Administration, University of
Colorado at Colorado Springs, where he also is associated with the Colorado
Institute for Technology Transfer and Implementation. Dr. Keeley also currently
serves on the boards of directors of Simtek Corporation, a developer of
high-performance nonvolatile semiconductor memories, and of several private
companies.
Richard P. MacLeod, 61, has served as a director of the Company since
December 1987. From May 1985 until his retirement in April 1997, Mr. MacLeod was
President of the United States Space Foundation, a private foundation. He served
24 years in the U.S. Air Force, most recently as Chief of Staff, North American
Aerospace Defense Command, and as the first Air Force Space Command Chief of
Staff.
Sol C. Miller, 61, has served as a director of the Company since
August 1997. He was a co-founder of MSE Corporation and was Chairman of the
Board from 1960 until its acquisition by the Company in July 1997. He is the
president of SCM Real Estate Development Corporation.
Dr. James T. Rothe, 55, has served as a director of the Company since
December 1987. Dr. Rothe has been a Professor of Business at the College of
Business and Administration, University of Colorado at Colorado Springs since
August 1986, where he served as Dean until June 1994. Since 1988, Dr. Rothe has
been a principal in Phillips-Smith Specialty Retail, Inc., a venture capital
firm. He is a director of Medlogic Global Corporation, which develops medical
devices for the wound-management market. He is a director of NeoCone, LLC, an
information technology company. He is also a trustee of the Janus Funds.
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John A. Thorpe, 64, the founder of ASI, has served as a director of the
Company since February 1981. He served as Chairman of the Board of the Company
from February 1981 until March 1997. Prior to founding the Company, Mr. Thorpe
owned and operated Photosurveys (Pty.) Ltd., an aerial survey company located in
Johannesburg, South Africa. Since 1993, Mr. Thorpe has also devoted part of his
time as the Chief Technical Officer of the Company. Mr. Thorpe is a certified
photogrammetrist.
BOARD OF DIRECTORS
DIRECTOR COMPENSATION
Non-employee "outside" directors receive an annual retainer of $6,500, plus
a fee of $2,000 per meeting of the Board of Directors and $1,500 for each
meeting of a Committee of the Board that does not occur on the same day as a
Board meeting. Chairpersons of committees receive an additional annual fee of
$3,000 for serving as committee chair. Directors who are also employees of the
Company do not receive any additional compensation for their service as
directors.
Outside directors also participate in the Analytical Surveys, Inc. 1993
Non-Qualified Stock Option Plan. Under this plan, each outside director is
granted options to purchase 9,000 shares of Company common stock annually for
the life of the plan.
Mr. Miller also serves as a consultant to the Company for an annual
consulting fee. In the initial agreement, such fee was $150,000 per year
beginning July 1997 for one year, plus medical benefits. In July 1998, the
agreement was extended to July 1999 and the fee was reduced to $100,000, plus
medical benefits. In addition, the Company pays premiums on a life insurance
policy payable to his designated beneficiaries. The amounts paid by the Company
pursuant to these arrangements in fiscal 1998 were $8,465.
Mr. Thorpe also serves as a consultant to the Company for an annual
consulting fee of $38,750, plus medical benefits. In addition, the Company pays
premiums on a designated life insurance policy payable to his designated
beneficiaries. The amounts paid by the Company pursuant to these arrangements
in fiscal 1998 were $7,471.
DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors met six times during the fiscal year. Each Director
standing for re-election attended at least 75 percent of the aggregate number of
meetings of the Board of Directors and each committee of which he is a member.
The Compensation Committee is chaired by Willem H.J. Andersen with Messrs.
Keeley, MacLeod and Rothe as members. The Compensation Committee reviews and
recommends to the Board salary and incentive compensation, including bonus,
stock options and restricted stock for the Chief Executive Officer; reviews and
approves the salaries and incentive compensation for all corporate officers and
senior executives; and advises the Board with respect to the incentive
compensation to be allocated to employees. The Compensation Committee does not
include any employees or former or current officers of the Company. The
Compensation Committee met six times during fiscal 1998.
The Audit Committee is chaired by Robert H. Keeley, with Messrs. Andersen,
MacLeod and Rothe as members. The Audit Committee recommends the appointment of
the Company's independent accountants; reviews the scope and results of the
audit plans of the independent accountants and the internal auditors; oversees
the scope and adequacy of the Company's internal accounting control and
record-keeping systems; reviews non-audit services to be performed by the
independent accountants; and determines the appropriateness of fees for audit
and non-audit services performed by the independent accountants. The Audit
Committee met once during fiscal 1998.
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There is no nominating committee of the Board.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is a former or current officer or
employee of the Company or any of its subsidiaries. No executive officer of the
Company serves as an officer, director or member of a compensation committee of
any entity, an executive officer or director of which is a member of the
Compensation Committee of the Company.
EXECUTIVE OFFICERS
The following is certain information concerning the executive officers of
the Company, as of December 12, 1998, based on information furnished by them.
Biographical information concerning Sidney V. Corder, Chairman of the Board,
President and Chief Executive Officer, is set forth under the heading "Election
of Directors."
Randal J. Sage, 42, has been the Chief Operations Officer of the Company
since July 1997. From January 1997 until its acquisition by the Company in
July 1997, Mr. Sage was the President of MSE Corporation. Prior to January 1997,
since 1980 Mr. Sage served in various positions of increasing responsibility
with MSE Corporation's GIS Division, including, project manager, director of
technical services, Vice President of Contracts and Vice President of
Operations.
Scott C. Benger, 49, has been the Senior Vice President, Finance of the
Company since November 1993. From January 1991 through October 1993 he was Vice
President, Finance, and has been Secretary/Treasurer since January 1991.
Mr. Benger joined the Company in September 1990 as Controller. Prior to joining
the Company, Mr. Benger served as the administrator of two private law firms.
John J. Dillon, 39, has been the Chief Administrative Officer of the
Company since July 1997. From January 1997 until its acquisition by the Company
in July 1997, Mr. Dillon was Senior Vice President of MSE Corporation. From
July 1993 until January 1997, Mr. Dillon served as the Director of the Indiana
State Lottery. From January 1993 until July 1993 he served as a legislative
liaison to the Governor of Indiana.
Timothy A. Gregory, 40, has been Chief Marketing Officer since November
1998. From 1989 until joining the Company in November 1998 Mr. Gregory served
in various marketing positions of increasing responsibility with Ernst & Young
LLP, most recently as Director, National Marketing. Prior to that he held
various positions with IBM Corporation between 1983 and 1989.
David O. Hicks, 38, has been Chief Technical Officer since August 1998.
From 1993 until joining the Company in August 1998 Mr. Hicks served in various
positions of increasing responsibility at GeoGraphix Incorporated, a developer
of Unix-based software applications for the oil and gas industry, most recently
as Senior Vice President, Product Development. Prior to that he held various
positions with Sierra Geophysics Incorporated between 1990 and 1993 and with
Exxon Company USA between 1985 and 1990.
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EXECUTIVE COMPENSATION
Summary Compensation Table
This table sets forth a summary of certain information regarding the
compensation of Sidney V. Corder, the Chief Executive Officer of the Company
and, the three other executive officers whose salary and bonus exceeded $100,000
during fiscal 1998 (the "named executive officers") for the fiscal years ended
September 30, 1998, 1997, and 1996.
<TABLE>
<CAPTION>
Annual Compensation Long Term
Compensation
Awards
------------------------------------- ------------
Name and Other Annual Stock All Other
Principal Salary Bonus Compensation(1) Options(2) Compensation
Position Year $ $ $ (#) $
--------- ---- ------ ----- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sidney V. Corder 1998 239,393 656,040 200,000 9,470(4)
Chairman of the 1997 203,769 398,750 50,000 (3) 50,000 8,643
Board, President and 1996 163,578 102,487 22,500 7,308
Chief Executive
Officer
Randal J. Sage 1998 188,248 203,060 60,000 2,527(5)
Chief Operations 1997 N/A N/A N/A N/A
Officer 1996 N/A N/A N/A N/A
Scott C. Benger 1998 162,527 249,920 50,000 (3) 90,000 3,886(6)
Secretary/Treasurer 1997 123,154 203,000 41,000 2,608
and Senior Vice 1996 92,845 62,248 21,000 1,857
President
John J. Dillon 1998 149,950 171,820 60,000 2,695(7)
Senior Vice 1997 N/A N/A N/A N/A
President/Chief 1996 N/A N/A N/A N/A
Administrative
Officer
</TABLE>
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(1) Certain perquisites and other personal benefits did not exceed the lesser
of $50,000 or 10% of the total amounts reported in the Salary and Bonus
columns in any of the fiscal years reported, except as indicated.
(2) Long term compensation consists only of stock options. There were no
grants of restricted stock or payments from other long term incentive
plans, therefore columns for "Restricted Stock Awards" and "LTIP Payouts"
are omitted.
(3) Paid as reimbursement for expenses incurred in connection with moving from
Colorado Springs, Colorado to Indianapolis, Indiana.
(4) Other compensation for fiscal 1998 includes $3,791 in life insurance
premiums and employer's matching contributions to the 401(k) Incentive
Savings Plan of $5,679.
(5) Other compensation for fiscal 1998 includes employer's matching
contributions to the 401(k) Incentive Savings Plan of $2,527.
(6) Other compensation for fiscal 1998 includes employer's matching
contributions to the 401(k) Incentive Savings Plan of $3,886.
(7) Other compensation for fiscal 1998 includes employer's matching
contributions to the 401(k) Incentive Savings Plan of $2,695.
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Option Grants in Last Fiscal Year
This table sets forth certain information with respect to grants made by
the Company of stock options to the named executive officers during fiscal 1998.
No stock appreciation rights ("SARs") were granted to the named executive
officers during fiscal 1998.
<TABLE>
<CAPTION>
% of Total Potential Realizable
Options to Exercise Value(3) At Assumed Annual
Options Employees Price Expiration Rates of Stock Appreciation
Name Granted(1) in Fiscal Year ($/sh) Date for Option Term
---- ---------- -------------- -------- ---------- ---------------------------
5% ($) 10% ($)
------ -------
<S> <C> <C> <C> <C> <C> <C>
Sidney V. Corder 200,000 26.6 33.00 2/19/08 4,150,705 10,518,700
Randal J. Sage 60,000 8.0 33.00 2/19/08 1,245,211 3,155,610
Scott C. Benger 90,000 12.0 33.00 2/19/08 1,867,817 4,733,415
John J. Dillon 60,000 8.0 33.00 2/19/08 1,245,211 3,155,610
</TABLE>
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(1) All options vest as follows: 25% at six months; 25% at one year; 25% at
two years; and 25% at three years after date of grant.
(2) On December 10, 1998 the Compensation Committee repriced options granted on
February 19, 1998 at a price of $48.875 to be exercisable at $33.
(3) "Potential Realizable Value" is calculated based on the assumption that the
price of the common stock will appreciate at the rates shown. The 5% and
10% assumed rates are mandated by the rules of the Securities Exchange
Commission and do not reflect the Company's estimate or projection of
future stock prices. Actual gains, if any, realized upon future exercise
of these options will depend on the actual performance of the common stock
and the continued employment of the named executive officer through the
vesting period of the option.
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Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
This table provides certain information regarding the exercise of stock
options by the named executive officers during fiscal 1998, and the number and
value of unexercised stock options at September 30, 1998. The "value of
unexercised stock options" is based on the difference between the option
exercise price and $23.25, the closing price per share of common stock on
September 30, 1998 multiplied by the number of shares underlying the option. As
of that date, no SARs were outstanding.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the
Securities Underlying Money Options
Shares Value Options at FY-End (#) at FY-End ($)
Acquired on Realized ------------------------- ---------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sidney V. Corder 55,625 2,135,077 161,375 180,625 1,740,895 324,689
Randal J. Sage 0 0 59,655 89,655 424,223 424,223
Scott C. Benger 26,750 1,128,108 86,750 93,250 963,422 271,752
John J. Dillon 5,000 150,938 20,875 55,875 55,813 103,313
</TABLE>
EMPLOYMENT CONTRACTS
On June 27, 1994 the Company entered into an employment agreement with Mr.
Corder, providing for a base salary, which salary is reviewed in October of each
year. The term of the employment agreement extends until June 26, 2000 and is
automatically extended for successive two-year periods thereafter. Mr. Corder's
current salary is $300,000. While he is employed by the Company pursuant to his
employment agreement Mr. Corder is entitled to participate in the Company's
Incentive Bonus Plan and Stock Option Plan and any and all other plans, to the
extent he meets eligibility requirements, maintained by the Company for the
benefit of the Company's executives or employees generally.
Upon termination of Mr. Corder's employment without cause, Mr. Corder will
continue to receive salary and benefits for 24 months, and receive a bonus
during such period equal to the amount of bonuses received by him during the 24
months prior to termination. During such period any stock options held by Mr.
Corder will continue to vest and he will have the right to exercise such options
that are or become exercisable during such period. If Mr. Corder resigns his
employment for "cause" (as defined in the employment agreement), he will
continue to receive salary and benefits for 36 months. During such period any
stock options held by Mr. Corder will continue to vest and he will have the
right to exercise such options that are or become exercisable during such
period. If Mr. Corder is terminated by the Company for "cause" (as defined in
the employment agreement) he will not be entitled to receive any termination pay
or benefits beyond the effective date of termination. If Mr. Corder terminates
his employment without "cause" the Company may accept his resignation or require
him to continue his employment at the same salary and benefits for a period not
to exceed six months. In the event of termination upon a change of control (as
defined in the employment agreement) the aggregate amount of severance paid
under the employment agreement or otherwise (but exclusive of any amount payable
under any incentive benefit plan upon a change of control) will not include any
amount that the Company is prohibited from deducting under Section 2806 of the
Internal Revenue Code or any successor provision. If Mr. Corder dies or becomes
disabled (as defined in the employment agreement) his salary will continue to be
paid for 12 months after his death or termination by reason of disability. The
Company agreed to provide Mr. Corder with a $250,000 life insurance policy
(plus $250,000 accidental death coverage) payable to his designated
beneficiaries.
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Under the employment agreement Mr. Corder has agreed that during the term
of the employment agreement he will not, directly or indirectly, engage in any
activities in conflict with the best interests of the Company. He has further
agreed not to be employed by or otherwise engage or be interested in any other
business, whether or not in competition with the Company, except he is permitted
to have an investment in certain non-competing businesses and to provide
consulting services to non-competing businesses, if expressly approved by the
Company. In addition, Mr. Corder has agreed that he will not at any time
disclose any confidential information of the Company that he obtains as a result
of his employment with the Company.
The Company entered into an employment agreement with Mr. Benger on
September 20, 1995. Under the terms of the employment agreement, Mr. Benger was
paid a base salary, which is reviewed annually in November of each year.
Mr. Benger's current salary is $193,000. The term of the employment agreement
extends until September 20, 1999 and is automatically extended for successive
two-year periods thereafter. The remaining terms of the employment agreement
are the same as those in the previously described employment agreement of Mr.
Corder except as follows: Mr. Benger will continue to receive salary and
benefits for (i) 12 months following termination by the Company without cause;
and (ii) 18 months following termination of his employment by Mr. Benger for
cause. In addition, Mr. Benger has agreed that he will not, directly or
indirectly, own, operate, manage, consult, own shares in, be employed by or
otherwise participate in any entity whose primary business is the same or
substantially similar to the business of the Company within the territory in
which the Company does business (the "Non-Compete") during the term of the
employment agreement and for one year following the termination of employment.
Mr. Dillon is a party to an employment agreement on terms comparable to the
previously described employment agreement of Mr. Benger except as described
below. Mr. Dillon's employment agreement was entered into on July 2, 1997, for
the period through June 30, 1999. Under the terms of the employment agreement,
Mr. Dillon was paid a base salary, which is reviewed annually in January. Mr.
Dillon's current salary is $175,000. Mr. Dillon is provided a $150,000 life
insurance policy (plus $150,000 in accidental death coverage); if Mr. Dillon
becomes disabled, the Company will continue to pay his salary in accordance with
the Company's executive benefit plans; Mr. Dillon will continue to receive
salary and benefits for 24 months following termination by the Company without
cause or by Mr. Dillon for cause; and the term of Mr. Dillon's Non-Compete is
the term of his employment and for six months following termination of
employment.
Mr. Sage is a party to an employment agreement on terms comparable to the
previously described agreement of Mr. Dillon except as described below. The
Company entered into an employment agreement with Mr. Sage on July 2, 1997 for
the period through June 30, 1999. Under the terms of the employment agreement,
Mr. Sage will be paid an annual salary, which is reviewed annually in January.
Mr. Sage's current salary is $214,000. Mr. Sage is provided life insurance in
the amount of $250,000 (plus $250,000 in accidental death coverage).
REPORT OF THE COMPENSATION COMMITTEE
The following is the Report of the Compensation Committee describing the
compensation policies and rationales applicable to the Company's executive
officers with respect to the compensation paid to such executive officers for
the fiscal year ended September 30, 1998.
POLICY. The Compensation Committee's fundamental policy is to establish a
compensation program for executive officers that will (i) allow the Company to
attract and retain the services of highly-qualified individuals and (ii) offer
the Company's executive officers competitive compensation opportunities based
upon overall Company performance and their individual contribution to the
financial success of the Company. It is the Committee's objective to have a
substantial portion of each officer's compensation contingent upon the Company's
performance, as well as upon such officer's own level of performance.
Accordingly, each executive officer's compensation package is comprised of three
elements: (i) base salary, which reflects individual performance and is
designed to be competitive with salary levels of similar companies that compete
with the Company for executive talent; (ii) annual variable performance awards
payable in cash and tied to the Company's achievement of financial
9
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performance goals and the executive's contribution; and (iii) long-term stock
option awards, which create common interests for the executive officers and the
shareholders.
BASE SALARY. Individual salaries are determined based on individual
experience, performance and breadth of responsibility within the Company. The
Compensation Committee reviews these factors for each executive officer each
year. In addition, the Compensation Committee considers executive officers'
salaries for relative competitiveness within the Company's industry.
BONUSES. On September 26, 1991, the Compensation Committee adopted an
Incentive Bonus Plan for its executive officers. The Incentive Bonus Plan is
based on the year-to-year growth in net profit and on the return on equity. In
fiscal 1998, 13 Company officers and other executives earned total bonuses of
$1,562,000 under the plan.
STOCK OPTION PLANS. The Company has the Analytical Surveys, Inc. 1993
Non-Qualified Stock Option Plan and the Analytical Surveys, Inc. 1997 Incentive
Stock Option Plan, as amended and supplemented (the "Option Plans"). The Option
Plans are long-term incentive plans for employees. The Option Plans are
intended to align shareholder and employee interests by creating a direct link
between long-term rewards and the value of the Company's shares. The
Compensation Committee believes that long-term stock incentives for executive
officers and employees are an important factor in retaining valued employees and
in achieving growth in share value. The options utilize vesting periods that
encourage employees to continue in the employ of the Company. Because the value
of an option bears a direct relationship to the Company's stock price, the
Compensation Committee believes that options motivate executive officers and
employees to manage the Company in a manner that will benefit all shareholders.
The size of stock option grants is determined by a number of factors,
including comparable grants to executive officers and employees by other similar
companies, as well as the relative position and responsibilities of executive
officers and other employees with the Company, the individual performance of the
executive officer or employee over the previous fiscal year and the anticipated
contribution of the executive officer or employee to the attainment of the
Company's long-term strategic performance goals. The exercise price per share
of each stock option is equal to the closing market price of a share of the
Company's common stock on the date such option is granted. The Committee views
stock option grants as an important component of its long-term,
performance-based compensation philosophy. The Board, on the recommendation of
the Compensation Committee, granted to the executive officers stock options on
February 19,1998 at the market price of $45.875. The Compensation Committee
recommended these grants in order to bring the option holdings of the executive
officers as a group more in line with similar companies. On December 11, 1998,
the Board concluded that the price at which the options were originally priced
was exceptionally high due to unusually high market conditions in February 1998.
The Board also concluded that the grant had largely lost its incentive objective
and therefore re-priced those grants to $33. The new option price is
approximately the average of ASI's stock price for the year and was above the
existing market price ($25) at the date of re-pricing. See the table entitled
"Option Grants in Last Fiscal Year" on page 7 for details on these option
grants.
CEO COMPENSATION. The compensation of Sidney Corder, Chairman of the
Board, President and Chief Executive Officer consists of base salary, typically
an annual bonus and occasionally stock options. The Board of Directors
periodically reviews Mr. Corder's base salary and bonus and revises his
compensation based on the Board's overall evaluation of his performance toward
the achievement of the Company's financial, strategic and other goals, with
consideration given to chief executive officer compensation information at
similar companies. The Compensation Committee believes that the Company's
success is dependent in part upon the efforts of its Chief Executive Officer.
In fiscal 1998, Mr. Corder earned a base salary of $250,000 as set by the
Compensation Committee and under the Incentive Bonus Plan earned $656,040. See
"Stock Option Plans," above and the table entitled "Option Grants in Last Fiscal
Year" on page 7 for options granted to Mr. Corder in fiscal 1998.
10
<PAGE>
DEDUCTIBILITY OF EXECUTIVE COMPENSATION. The Compensation Committee is
responsible for addressing the issues raised by Internal Revenue Code Section
162(m) ("Section 162(m)"). This Section limits to $1 million the Company's
deduction for compensation paid to certain executive officers of the Company
which does not qualify as "performance-based." To qualify as performance based
under Section 162(m), compensation payments must be made pursuant to a plan that
is administered by a committee of outside directors and must be based on
achieving objective performance goals. In addition, the material terms of the
plan must be disclosed to and approved by shareholders, and the Compensation
Committee must certify that the performance goals were achieved before payments
can be awarded. The Company believes that all compensation paid to its
executive officers listed in the Summary Compensation Table in fiscal 1998 is
fully deductible and that compensation paid under the plans will continue to be
deductible. The Committee's present intention is to comply with the
requirements of Section 162(m) unless and until the Committee determines that
compliance would not be in the best interest of the Company and its
shareholders.
By the Compensation Committee
Willem H.J. Andersen, Chair
Robert H. Keeley
Richard P. MacLeod
James T. Rothe
PERFORMANCE GRAPH
This graph shows a five-year comparison of the cumulative total returns for
the Company's common stock, the index of the cumulative total return for the
Nasdaq Stock Market (U.S.) ("Total U.S.") and the index of the Nasdaq Computer
and Data Processing Services Stocks ("DP&S"). The graph assumes that $100 was
invested on October 1, 1993, and that all dividends, if any, were reinvested.
[GRAPH]
The following data points were used in constructing the Performance Graph:
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
The Company 100 107 218 480 998 1015
Nasdaq DP&S 100 111 178 221 299 390
Nasdaq Total U.S. 100 101 139 165 227 231
</TABLE>
11
<PAGE>
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The following table sets forth as of December 31, 1998, certain information
with respect to the ownership of the common stock of the Company by (i) each
person (or group of affiliated persons) known by the Company to be the
beneficial owner of more than 5% of the Company's outstanding common stock
(based on filings with the Securities and Exchange Commission), (ii) each
director of the Company, (iii) each of the Company's executive officers named
under "Management--Executive Officers and Directors," and (iv) all executive
officers and directors of the Company as a group. Except as otherwise noted in
the table, each person or group identified possesses sole voting and investment
power with respect to such shares, subject to community property laws, where
applicable, and the address of such shareholder is c/o Analytical Surveys, Inc.,
941 North Meridian Street, Indianapolis, Indiana 46204.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT OF
NAME OF BENEFICIAL OWNER OWNED CLASS
------------------------ ----- -----
<S> <C> <C>
George D. Bjurman & Associates(1)
10100 Santa Monica Boulevard, Suite 1200
Los Angeles, CA 90067 . . . . . . . . . . . . . . . . . . . . . . . 387,230 5.7%
Kennedy Capital Management Inc.
10829 Olive Boulevard
St. Louis, MO 63141 . . . . . . . . . . . . . . . . . . . . . . . . 351,500 5.2%
Sol C. Miller(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 927,250 13.7%
John A. Thorpe(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440,107 6.5%
Sidney V. Corder(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,775 3.1%
Willem H. J. Andersen(5) . . . . . . . . . . . . . . . . . . . . . . . . 31,887 *
Robert H. Keeley(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,250 *
Richard P. MacLeod(7) . . . . . . . . . . . . . . . . . . . . . . . . . . 58,352 *
James T. Rothe(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,654 *
Randal J. Sage(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,655 *
Scott C. Benger(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,950 1.6%
John J. Dillon(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,875 *
All directors and executive officers as a group (12 persons)(12) . . . . 1,972,405 26.7%
</TABLE>
- -----------
* Less than 1%
(1) As a result of their ownership interests in George D. Bjurman & Associates
("GDBA"), George D. Bjurman and Owen Thomas Barry III may be deemed to be
the beneficial owners of the shares held by GDBA.
(2) Includes 2,250 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1998. Includes 20,000 shares
held by the SCM Family Limited Partnership of which Mr. Miller and his wife
are the sole general partners.
(3) Includes 34,125 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1998. Includes 204,262 shares
of common stock held by the Thorpe Family Limited Partnership of which Mr.
Thorpe and his wife are the sole general partners and 52,000 shares of
common stock held by a charitable remainder trust of which Mr. Thorpe is a
trustee.
12
<PAGE>
(4) Includes 211,375 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1998.
(5) Includes 26,437 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1998.
(6) Includes 15,750 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1998 and 4,500 shares held by
Dr. Keeley's wife.
(7) Includes 56,252 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1998.
(8) Includes 43,404 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1998.
(9) Includes 74,655 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1998.
(10) Includes 109,250 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1998.
(11) Includes 35,875 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1998.
(12) Includes 615,623 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1998.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(ITEM 2 ON PROXY CARD)
Pursuant to the Bylaws of the Company, shareholders will be asked to ratify
the selection of KPMG Peat Marwick LLP as independent auditors of the Company
for the year ending September 30, 1999. KPMG Peat Marwick LLP has no
relationship with the Company except in its capacity as the Company's auditors.
A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting and will be available to respond to appropriate inquiries.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION
OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP.
COMPLIANCE WITH SECTION 16(a) OF THE 1934 SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and any persons who own more than 10 percent
of the Company's common stock, to file with the Securities and Exchange
Commission ("SEC") reports of ownership and changes of ownership of the
Company's common stock.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company during fiscal 1998, all such filing
requirements were met except Mr. Thorpe and Mr. Dillon, who each filed one late
Form 4 report.
13
<PAGE>
SHAREHOLDER PROPOSALS
ASI's 2000 Annual Meeting is expected to be held in February 2000. Any
shareholder who intends to submit a proposal for inclusion in the Company's
proxy materials for the 2000 Annual Meeting of Shareholders must submit a
proposal by September 20, 1999. Such proposals may be included in next year's
Proxy Statement if they comply with certain rules and regulations promulgated by
the SEC.
Shareholders who intend to present a proposal to be considered at the 2000
Annual Meeting of Shareholders without inclusion of such proposal in the
Company's proxy materials are required to provide notice of such proposal to the
Company not later than December 4, 1999.
All notices should be sent to the Secretary at the address on the cover of
this Proxy Statement.
ANNUAL REPORT
THE ANNUAL REPORT FOR ANALYTICAL SURVEYS, INC., FOR THE YEAR ENDED
SEPTEMBER 30, 1998, IS MAILED WITH THIS PROXY STATEMENT. COPIES OF THE ANNUAL
REPORT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K,
INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO MAY BE OBTAINED BY REQUEST
FROM SCOTT C. BENGER, SECRETARY, 941 NORTH MERIDIAN STREET, INDIANAPOLIS,
INDIANA 46204.
OTHER MATTERS
Management is not aware of any matters to come before the meeting which
will require the vote of shareholders other than those matters indicated in the
Notice of Shareholder Meeting and this Proxy Statement. However, if any other
matter calling for shareholder action should properly come before the meeting or
any adjournments thereof, those persons named as proxies in the enclosed Proxy
Form will vote thereon according to their best judgment.
By Order of the Board of Directors
/s/ Scott C. Benger
-------------------------------------
January 18, 1999 Scott C. Benger
Secretary/Treasurer
14
<PAGE>
FORM OF PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANALYTICAL SURVEYS, INC.
941 NORTH MERIDIAN STREET
INDIANAPOLIS, INDIANA 46204
The undersigned appoints Sidney V. Corder and Scott C. Benger and each of
them, with full power of substitution, the proxies of the undersigned to vote
all shares of common stock of Analytical Surveys, Inc., which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of the Corporation
to be held at Antlers Adam's Mark Hotel, 4 South Cascade Avenue, Colorado
Springs, Colorado, on February 17, 1999, at 3:30 p.m.
ANNUAL MEETING FEBRUARY 17, 1999
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote
(except as marked to the contrary below) for all nominees listed below
Willem H.J. Andersen Sidney V. Corder Robert H. Keeley Richard P. MacLeod
Sol C. Miller James T. Rothe John A. Thorpe
INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH OR OTHERWISE STRIKE THE NOMINEE'S NAME IN THE LIST ABOVE.
PLEASE CONTINUE ON REVERSE SIDE
<PAGE>
2. PROPOSAL TO RATIFY THE SELECTION OF KPMG PEAT MARWICK LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1999:
/ / FOR / / AGAINST / / ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 and 2.
Dated _________________, 1999 Signed
-----------------------------
Signed
-----------------------------
NOTE: Signature should agree with name on Stock Certificate as printed
thereon. Executors, administrators, trustees and other fiduciaries should so
indicate when signing.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
