SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _______________
Commission file number 0-13111
ANALYTICAL SURVEYS, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0846389
--------------------------- -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
941 Meridian Street, Indianapolis, IN 46204
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(Address or principal executive offices) (Zip Code)
Registrant's telephone number, including area code (317) 634-1000
----------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
---------------------------------------------------------------
Securities registered pursuant to section 12(g) of the Act:
Common Stock
-----------------------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation SK is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant is $68,921,072, based on the closing price of
the Common Stock on December 28, 1999.
The number of shares outstanding of the registrant's Common Stock, as of
December 28, 1999, was 6,953,190.
DOCUMENTS INCORPORATED BY REFERENCE
None.
(i)
<PAGE>
TABLE OF CONTENTS
Page
----
PART III.
Item 10. Directors and Executive Officers of the Registrant................1
Item 11. Executive Compensation............................................4
Item 12. Security Ownership of Other Beneficial Owners and Management......8
Item 13. Certain Relationships and Related Transactions....................9
(ii)
<PAGE>
This Annual Report on form 10-K is hereby amended to add the
information required by Part III.
PART III.
Item 10. Directors and Executive Officers of the Registrant.
Directors
The following lists the directors of Analytical Surveys, Inc. ("ASI" or
the "Company"), their birth dates, and a description of their business
experience and positions held as of January 25, 1999. The Board consists of six
directors. Directors are elected to a one year term. The date the present term
of office expires for each director is the date of the Annual Meeting of the
Company's stockholders.
Willem H. J. Andersen, 58, 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, 58, 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, 62, 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, 62, has served as a director of the Company since August
1997. Since January 24, 2000, Mr. Miller has served as Chief Executive Officer
of the Company. 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, 56, has served as a director of the Company since
December 1987 and Chairman of the Board since January 24, 2000. 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.
John A. Thorpe, 65, the founder of ASI, has served as a director of the
Company since February 1981. Since January 24, 2000, he has served as Assistant
Chief Executive Officer of the Company. 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.
- 1 -
<PAGE>
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 year for the life of the
plan each outside director is granted options to purchase 9,000 shares of
Company common stock at an exercise price equal to the fair market value at the
date of grant.
Mr. Miller also received an annual consulting fee as a consultant to
the Company. 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 paid premiums on a life insurance policy
payable to his designated beneficiaries. The amounts paid by the Company
pursuant to these arrangements in fiscal 1999 were $84,165. Mr. Miller's
consulting services were concluded with the July 1999 expiration of the
agreement.
Directors' Meetings and Committees
The Board of Directors met six times during the fiscal year. Each
Director 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 Richard P. MacLeod with
Messrs. Andersen, Keeley 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 three times during fiscal 1999.
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 1999.
There is no nominating committee of the Board.
The Executive Committee of the Board of Directors is chaired by James
T. Rothe, with Mr. Miller as a member.
Executive Officers
The following lists the executive officers of the Company, their birth
dates, a description of their business experience and positions held with the
Company as of December 12, 1999 based on information furnished by them.
Information concerning Mr. Miller and Mr. Thorpe, who are also directors, is
listed under the heading "Directors," above. All officers are appointed for an
indefinite term, serving at the pleasure of the Board of Directors.
- 2 -
<PAGE>
John J. Dillon, 40
Chief Administrative Officer
Mr. Dillon 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, 41
Chief Marketing Officer
Mr. Gregory 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, 39
Chief Technical Officer
Mr. Hicks 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.
Vincent J. Otto, 40
Chief Financial Officer and Secretary/Treasurer
Mr. Otto has been Chief Financial Officer and Secretary/
Treasurer of the Company since October 1999. From May 1996 to April 1999, Mr.
Otto served as Executive Vice President and Chief Financial Officer of The USA
Group, Inc., an Indiana based originator and servicer of government guaranteed
student loans. Prior to that, Mr. Otto served in various financial and
strategic capacities with several public companies and start-up operations
including American Equity Investment Life Insurance Company and Younkers, Inc.,
a regional department store chain. Mr. Otto began his career with Ernst & Young
LLP. Mr. Otto is a Certified Public Accountant.
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 1999, all such filing
requirements were met.
- 3 -
<PAGE>
Item 11. 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 and two former executive officers whose
salary and bonus exceeded $100,000 during fiscal 1999 (the "named executive
officers") for the fiscal years ended September 30, 1999, 1998, and 1997.
<TABLE>
<CAPTION>
Long
Term
Compensa-
tion
Annual Compensation Awards
Name and -------------------------------------- ----------
Principal Other Annual Stock All Other
Position Salary Bonus Compensation(1) Options(2) Compensation
---------- Year $ $ $ (#) $
---- -------- ---------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Sidney V. Corder(3) ........... 1999 298,461 -- -- -- 10,917(5)
Chairman of the Board, ..... 1998 239,393 656,040 -- 200,000 9,470
President and .............. 1997 203,769 398,750 50,000(4) 50,000 8,643
Chief Executive Officer
John J. Dillon ................ 1999 174,647 -- -- -- 2,087(6)
Chief Administrative ....... 1998 149,950 171,820 -- 60,000 2,695
Officer .................... 1997 N/A N/A N/A N/A N/A
Timothy A. Gregory ............ 1999 150,384(7) 75,000 50,000(4) 25,000 --
Chief Marketing ............ 1998 N/A N/A N/A N/A N/A
Officer .................... 1997 N/A N/A N/A N/A N/A
David O. Hicks ................ 1999 135,000 50,000 -- -- 2,582(8)
Chief Technical Officer .... 1998 N/A N/A N/A N/A N/A
1997 N/A N/A N/A N/A N/A
Randal J. Sage(9) ............. 1999 213,513 -- -- -- 3,910(10)
Executive Vice ............. 1998 188,248 203,060 -- 60,000 2,527
President .................. 1997 N/A N/A N/A N/A N/A
Scott C. Benger(11) ........... 1999 145,898 -- -- -- 2,364(12)
Senior Vice President- ..... 1998 162,527 249,920 50,000(4) 90,000 3,886
Finance .................... 1997 123,154 203,000 -- 41,000 2,608
<FN>
(1) Mr. Corder served as Chairman of the Board, President and Chief Executive Officer until January 24, 2000.
(2) 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.
(3) 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.
(4) Paid as reimbursement for expenses incurred in connection with moving to Indianapolis, Indiana.
(5) Other compensation for fiscal 1999 includes $6,016 in life insurance premiums and employer's matching
contributions to the 401(k) Incentive Savings Plan of $4,901.
(6) Other compensation for fiscal 1999 includes employer's matching contributions to the 401(k) Incentive Savings Plan
of $2,087.
(7) Mr. Gregory began employment with the Company on November 2, 1998.
Accordingly, salary information included in the table represents only
salary from that date through September 30, 1999.
(8) Other compensation for fiscal 1999 includes employer's matching contributions to the 401(k) Incentive Savings Plan
of $2,582.
(9) Mr. Sage served as an executive officer during a portion of fiscal 1999.
(10) Other compensation for fiscal 1999 includes employer's matching contributions to the 401(k) Incentive Savings Plan
of $3,910.
(11) Mr. Benger served as an executive officer during a portion of fiscal 1999.
(12) Other compensation for fiscal 1999 includes employer's matching contributions to the 401(k) Incentive Savings Plan
of $2,364.
</FN>
</TABLE>
- 4 -
<PAGE>
Option Grants in Last Fiscal Year
This table sets forth certain information with respect to grants made
by the Company of stock options to the named executive officers during fiscal
1999. No stock appreciation rights ("SARs") were granted to the named executive
officers during fiscal 1999.
<TABLE>
<CAPTION>
Potential Realizable
Value(2) At Assumed Annual
% of Total Rates of Stock Appreciation
Options to Exercise for Option Term
Options Employees Price Expiration ----------------------------
Name Granted(1) in Fiscal Year ($/sh) Date 5%($) 10%($)
---- ---------- -------------- -------- ------ ----- -------
<S> <C> <C> <C> <C> <C> <C>
Sidney V. Corder --
John J. Dillon --
Timothy A. Gregory 25,000 9.7 25.13 11/2/08 395,024 1,001,069
David O. Hicks --
Randal J. Sage --
Scott C. Benger --
<FN>
(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) "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.
</FN>
</TABLE>
- 5 -
<PAGE>
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 1999, and the number and
value of unexercised stock options at September 30, 1999. The "value of
unexercised stock options" is based on the difference between the option
exercise price and $15.75, the closing price per share of common stock on
September 30, 1999 multiplied by the number of shares underlying the option. As
of that date, no SARs were outstanding.
<TABLE>
<CAPTION>
Name Number of Unexercised Value of Unexercised In-the
- ---- Shares Securities Underlying Money Options
Acquired Options at FY-End (#) at FY-End ($)
on Value ------------------------- -------------------------
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
-------- ----------- ------------- ----------- -------------
(#) ($)
--- ----
<S> <C> <C> <C> <C> <C> <C>
Sidney V. Corder 69,500 1,492,926 160,000 112,500 208,133 34,375
John J. Dillon 5,875 71,969 35,437 35,438 10,874 10,876
Timothy A. Gregory -- -- 6,250 18,750 -- --
David O. Hicks -- -- 12,500 12,500 -- --
Randal J. Sage -- -- 96,982 52,328 133,964 44,656
Scott C. Benger 4,500 124,469 120,250 55,250 471,611 27,063
</TABLE>
Option Repricing
The table below sets forth certain information concerning the repricing
of stock options held by any executive officer of the Company which occurred
December 11, 1998. Further explanation concerning these repricings is included
in the Report of the Compensation Committee below.
<TABLE>
<CAPTION>
Length of
Original
Option
Securities Market Price Term
Underlying of Stock at Exercise Price New Remaining
Options Time of at Time of Exercise at Date of
Name Date Repriced (#) Repricing ($) Repricing ($) Price ($) Repricing
---- ---- ------------ ------------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sidney V. Corder 12/11/98 200,000 25.00 48.88 33.00 9 yrs, 2 mos
Scott C. Benger 12/11/98 90,000 25.00 48.88 33.00 9 yrs, 2 mos
John J. Dillon 12/11/98 60,000 25.00 48.88 33.00 9 yrs, 2 mos
Randal J. Sage 12/11/98 60,000 25.00 48.88 33.00 9 yrs, 2 mos
</TABLE>
Employment Agreement and Severance Arrangements
On June 27, 1994 the Company entered into an employment agreement with
Mr. Corder for a term until June 26, 2000. On January 24, 2000 Mr. Corder
retired from the Company. Base salary payable under the agreement at the time
of his retirement was $300,000. Mr. Corder's employment agreement provided for
the following:
Upon termination of Mr. Corder's employment without cause, Mr. Corder
would continue to receive salary and benefits for 24 months, and receive a bonus
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 would
continue to vest and he would have
- 6 -
<PAGE>
the right to exercise such options that are or become exercisable during such
period. If Mr. Corder resigned his employment for "cause" (as defined in the
employment agreement), he would continue to receive salary and benefits for 36
months. During such period any stock options held by Mr. Corder would continue
to vest and he would have the right to exercise such options that were or became
exercisable during such period. If Mr. Corder were terminated by the Company for
"cause" (as defined in the employment agreement) he would not be entitled to
receive any termination pay or benefits beyond the effective date of
termination. If Mr. Corder terminated his employment without "cause" the Company
could 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) would 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 died or became disabled (as defined in the
employment agreement) his salary would continue to be paid to his designee for
12 months after his death or termination by reason of disability. The Company
also provided Mr. Corder with a $250,000 life insurance policy (plus $250,000
accidental death coverage) payable to his designated beneficiaries.
Under the employment agreement Mr. Corder agreed that during the term
of the employment agreement he would not, directly or indirectly, engage in any
activities in conflict with the best interests of the Company. He 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, with certain
exceptions. In addition, Mr. Corder agreed that he would not at any time
disclose any confidential information of the Company that he obtained as a
result of his employment with the Company.
The Company is in the process of negotiating a severance agreement with
Mr. Corder.
Report of the Compensation Committee
The Compensation Committee follows established rationale and policies
for compensating the Company's executive officers. The following Report of the
Compensation Committee describes these policies and rationales with respect to
the compensation paid to such executive officers for the fiscal year ended
September 30, 1999.
Policy. The Compensation Committee's fundamental policy is to provide a
compensation program for executive officers that will (i) enable 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 is designed to be competitive with salary
levels of similar companies that compete with the Company for executive talent
and reflects individual performance; (ii) annual variable performance awards
payable in cash and tied to the Company's achievement of financial 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.
- 7 -
<PAGE>
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 1999, two executive officers were paid bonuses in an aggregate of
$100,000 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 and are intended to align
shareholder and employee interests by establishing a direct link between
long-term rewards and the value of the Company's stock. 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 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.
CEO Compensation. The compensation of Sidney Corder, Chairman of the
Board, President and Chief Executive Officer during fiscal 1999 consisted of
base salary, typically an annual bonus and occasionally stock options. The Board
of Directors periodically reviews the Chief Executive Officer'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 1999, Mr. Corder earned a base salary of $300,000 as
recommended by the Compensation Committee and approved by the Board of
Directors. Application of the Incentive Bonus Plan was deferred. No stock
options were granted to Mr. Corder in fiscal 1999.
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.
- 8 -
<PAGE>
Option Repricing. On December 11, 1998, upon the recommendation of the
Compensation Committee, the Board met to consider repricing of options granted
in fiscal 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 time when the options were granted. The Board also
concluded that the grant had largely lost the incentive the outstanding options
were intended to create. The Board considered the market prices of the common
stock for the year and determined to re-price those grants to $33. The new
option price was approximately the average of ASI's stock price for the year and
was above the market price ($25) at the date of re-pricing.
By the Compensation Committee
Richard P. MacLeod, Chair
Willem H.J. Andersen
Robert H. Keeley
James T. Rothe
Item 12. Security Ownership of Other Beneficial Owners and Management
The following table sets forth as of December 31, 1999, 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 named executive officers
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 each holder of more than 5%
of the Company's common stock is c/o Analytical Surveys, Inc., 941 North
Meridian Street, Indianapolis, Indiana 46204.
<TABLE>
<CAPTION>
Name of Beneficial Owner Shares Percent
- ------------------------ ------ -------
Beneficially of Class
------------ --------
Owned
-----
<S> <C> <C>
Sol C. Miller 848,750(1) 12.2%
John A. Thorpe 383,489(2) 5.5%
Sidney V. Corder 218,400(3) 3.0%
Willem H. J. Andersen 41,550(4) *
Robert H. Keeley 29,250(5) *
Richard P. MacLeod 67,352(6) *
James T. Rothe 52,654(7) *
Scott C. Benger 145,450(8) 2.0%
John J. Dillon 50,437(9) *
Timothy A. Gregory 12,500(10) *
David O. Hicks 12,900(11) *
Randal J. Sage 111,982(12) 1.6%
All directors and executive officers as a 1,975,714 (13) 25.6%
group (13 persons)
- -----------
* Less than 1%
- 9 -
<PAGE>
<FN>
(1) Includes 6,750 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1999. Includes 37,000 shares
held by the SCM Family Limited Partnership of which Mr. Miller and his
wife are the sole general partners.
(2) Includes 43,125 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1999. Includes 122,249 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.
(3) Includes 210,000 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1999.
(4) Includes 38,250 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1999.
(5) Includes 24,750 shares of common stock underlying options that are
exercisable within 60 days of December 31, 1999 and 4,500 shares held by
Mr. Keeley's wife.
(6) Includes 61,500 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1999.
(7) Includes 50,404 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1999.
(8) Includes 142,750 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1999.
(9) Includes 50,437 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1999.
(10) Includes 12,500 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1999.
(11) Includes 12,500 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1999.
(12) Includes 111,982 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1999.
(13) Includes 764,948 shares of common stock underlying options which are
exercisable within 60 days of December 31, 1999.
</FN>
</TABLE>
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<PAGE>
Item 13. Certain Relationships and Related Transactions.
Mr. Miller, a director of the company, received an annual consulting
fee as a consultant to the Company. 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 paid premiums on a
life insurance policy payable to his designated beneficiaries. The amounts paid
by the Company pursuant to these arrangements in fiscal 1999 were $84,165. Mr.
Miller's consulting services were concluded with the July 1999 expiration of the
agreement.
The Company's headquarters facilities are leased from MSE Realty, LLC,
a company owned by Mr. Miller, under an operating lease which expires June 30,
2002. Rental expense for this lease was $1,334,160 in fiscal 1999. The Company
has guaranteed the repayment of the mortgage loan that MSE Realty, LLC has on
the facilities it leases to the Company. As of December 31, 1999, the mortgage
was $1,073,084.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
Analytical Surveys, Inc.
By: /s/ Dr. James T. Rothe Date: January 28, 2000
----------------------------------------
Dr. James T. Rothe
Chairman of the Board of Directors
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