<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 the
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
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
1801 California Street
Suite 295
Denver, Colorado 80202
================================================================================
PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 12, 1996
================================================================================
The Annual Meeting of Shareholders of SCIENTIFIC SOFTWARE-INTERCOMP, INC., a
Colorado corporation, will be held at the offices of the Company, Denver,
Colorado, on June 12, 1996, at 1:00 p.m. to act upon the following:
(1) To elect four (4) directors;
(2) To consider such other business as may properly come before the
Meeting.
Details relating to the above matters are set forth in the attached Proxy
Statement. Your Company's management is not aware of any other matters to come
before the Meeting. The Board of Directors has fixed May 17, 1996 as the
record date for shareholders entitled to notice of, and to vote at, the
Meeting.
IF YOU DO NOT PLAN TO ATTEND THE MEETING, YOU ARE URGED TO DATE, SIGN AND
RETURN THE ENCLOSED PROXY WITHOUT DELAY. A BUSINESS REPLY ENVELOPE IS ENCLOSED
FOR YOUR CONVENIENCE.
By Order of the Board of Directors,
/s/ RONALD J. HOTTOVY
Ronald J. Hottovy
Secretary
Denver, Colorado
May 24, 1996
<PAGE> 3
(This page intentionally left blank.)
<PAGE> 4
PROXY STATEMENT
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
1801 California Street
Suite 295
Denver, Colorado 80202
The enclosed proxy is solicited by the Board of Directors of the Company for
use at the Annual Meeting of Shareholders to be held June 12, 1996, at the
offices of the Company, Denver, Colorado, at 1:00 p.m. A person giving the
proxy may revoke it by written notice to the Secretary of the Meeting at any
time prior to the voting of the proxy. Shares represented by valid proxies
will be voted in accordance with the instructions indicated thereon. Unless
otherwise directed, votes will be cast for the election of directors herein
named.
All of the expenses involved in preparing, assembling and mailing this Proxy
Statement and the material enclosed herewith will be paid by the Company. The
Company will also supply brokers or persons holding stock in their names or in
the names of nominees with such number of proxies, proxy material and annual
reports as they may require for mailing to beneficial owners, and will
reimburse them for their reasonable expenses incurred in connection therewith.
In addition, officers and employees of the Company may communicate with
shareholders personally or by mail, facsimile transmission, telephone or
otherwise, for the purpose of soliciting such proxies, but in such event, no
additional compensation will be paid to any such officers and employees for
such solicitation.
This Proxy Statement and Notice of Annual Meeting of Shareholders, together
with the proxy enclosed herewith, was first sent or given to security holders
on May 24, 1996.
VOTING SHARES AND PRINCIPAL SHAREHOLDERS
Shareholders of record as of the close of business on May 17, 1996 will be
entitled to vote at the meeting. At such date, there were outstanding
8,290,827 shares of the Company's no par value common stock (hereinafter called
"Common Stock"), each of which is entitled to one vote. A quorum consists of
one-third of the issued and outstanding shares of the Company's Common Stock
present in person or by proxy. If a quorum is present, most shareholder
action, including election of directors, may be taken upon the affirmative vote
by the holders of a majority of the shares of Common Stock represented at the
Meeting.
The Company is not aware of any person who, on May 17, 1996 was the beneficial
owner of 5% or more of the Company's outstanding Common Stock except those
listed in the following table. The table also shows information concerning
beneficial ownership by each of the five executive officers listed in the
Summary Compensation Table, and by all directors and executive officers as a
group.
<TABLE>
<CAPTION>
Name and Address Number of Percent
of Beneficial Owner Shares of Class(1)
---------------------------------- ------------- ----------------
<S> <C> <C>
Ryback Management Corporation 1,136,000 13.70%
7711 Carondelet Avenue, Suite 700
St. Louis, MO 63105
Cumberland Associates 460,000 5.55%
1114 Avenue of the Americas
New York, NY 10036
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Name and Address Number of Percent
of Beneficial Owner Shares of Class(1)
---------------------------------- ------------- ----------------
<S> <C> <C>
E. A. Breitenbach, Ph.D. 326,581(3)(5) 3.85%
1801 California Street
Suite 295
Denver, CO 80202
Scientific Software-Intercomp, Inc. 307,327(2) 3.71%
Employees Stock
Ownership Plan and Trust
1801 California Street, Suite 295
Denver, CO 80202
Other Executive Officers
------------------------
George Steel 100,000(4)(5) *
Alain C. Gringarten, Ph.D. 77,682(5) *
Ronald J. Hottovy 58,151(5) *
Robert G. Parish, Ph.D. 68,892(5) *
All Directors and Executive Officers 743,547(2) 8.48%
as a class (7 persons)
</TABLE>
* Amount owned is less than two percent.
(1) Assumes the exercise of options held by the specified optionee or group of
optionees, as applicable.
(2) Includes 65,382 shares allocated under the Company-sponsored Employees
Stock Ownership Plan to executive officers.
(3) Includes 190,000 options to purchase shares of which 178,750 are
exercisable as of May 17, 1996 by Dr. Breitenbach.
(4) George Steel joined the Company on January 15, 1996.
(5) Shares owned by executive officers:
<TABLE>
<CAPTION>
Target Total Shares
Owned Owned Benefit Deferred Stock Beneficially
Directly Indirectly(1) ESOP(2) Plan(3) Comp.(4) Options Owned
=============================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
E. A. Breitenbach, Ph.D. 71,950 4,500 42,181 8,150 9,800 190,000 326,581
George Steel 100,000 100,000
Alain C. Gringarten, Ph.D. 835 7,985 3,862 65,000 77,682
Ronald J. Hottovy 4,000 1,689 2,462 50,000 58,151
Robert G. Parish, Ph.D. 1,365 13,527 55,000 69,892
William B. Nichols 85,741 0 0 0 0 15,000 100,741
Edward O. Price, Jr. 3,000 0 0 0 0 7,500 10,500
</TABLE>
(1) Shares owned by family members.
(2) Shares allocated under the Company-sponsored Employees Stock Ownership
Plan.
(3) Shares allocated under the Company-sponsored Target Benefit Plan.
(4) Shares owned through a deferred compensation arrangement with the Company.
2
<PAGE> 6
ELECTION OF DIRECTORS
At the Annual Meeting of Shareholders, four directors will be elected to hold
office for the following year pursuant to the Bylaws of the Company. Each
nominee for director has consented to be named herein and to serve if elected,
and it is the intention of the persons named in the accompanying proxy to vote
for the election as director each such nominee, unless otherwise directed. It
is not anticipated that any nominee will become unable or unwilling to accept
nomination or election, but if such should occur, the persons named in the
proxy intend to vote for the election to any so caused vacant director
positions of such other person as the Board of Directors may recommend.
The following table presents certain information regarding each nominee's
principal occupation or employment, the year when each nominee first became a
director of the Company, and the common stock of the Company beneficially
owned by each nominee as of May 17, 1996.
<TABLE>
<CAPTION>
Shares of Stock
First Beneficially Percent of
Name and Principal Became Owned as of Common Stock
Occupation or Employment Age A Director May 17, 1996(2) Outstanding(3)
========================================================================================================
<S> <C> <C> <C> <C>
E. A. Breitenbach, Ph.D. 59 1968 326,581(1) 3.85%
Chairman, Chief Executive
Officer
George Steel 50 1996 100,000 *
President, Chief Operating
Officer
William B. Nichols, Ph.D. 67 1989 100,741 *
Private Investments
Edward O. Price, Jr. 67 1993 10,500 *
Private Investor & Consultant
</TABLE>
* Amount owned is less than two percent.
(1) Includes 42,181 shares allocated to Dr. Breitenbach in the
Company-sponsored Employees Stock Ownership Plan and Trust and 8,150 shares
allocated to Dr. Breitenbach in the Company-sponsored Target Benefit Plan.
(2) Exercisable options are included in "Shares of Stock Beneficially Owned."
(3) Assumes the exercise of presently exercisable options held by each nominee.
Dr. Breitenbach, one of the founders of the Company, served as its President
from 1968 to 1981 at which time he was elected Chairman of the Board of
Directors and Chief Executive Officer. Dr. Breitenbach has been a director
since 1968. From October 1990 to January 15, 1996, Dr. Breitenbach again
assumed the office of President in addition to continuing as Chairman and Chief
Executive Officer. His petroleum and computer experience is primarily in the
areas of reservoir simulation, well logging, and economic planning, and he has
published several technical papers on these subjects. He has taught at
Stanford University and at Colorado State University. Dr. Breitenbach received
his B.S., M.S., and Ph.D. degrees in petroleum engineering from Stanford
University. He served as 1994 President of the Society of Petroleum Engineers.
Mr. Steel joined the Company in January, 1996, and was elected President, Chief
Operating Officer and member of the Board of Directors, effective January 15,
1996. He has extensive technical and managerial experience in the
international petroleum industry. He served as General Manager of Snyder Oil
Company's affiliate, Command Petroleum, in the Bay of Bengal, India. Prior to
that, he served as Vice President of Snyder's Julesburg Rocky Mountain Business
Unit. Mr. Steel joined Geophysical Services, Inc. (GSI), the geophysical
subsidiary of Texas Instruments, in 1969. In 1992, after GSI had become part
of Halliburton Company, he was appointed President of their geophysical
subsidiary, Halliburton Geophysical Services (HGS). He has a B.S. degree in
Natural Science from St. Andrews in Scotland and holds membership in the
Society of Exploration Geophysicists, American Association of Petroleum
Geologists, Society of Petroleum Engineers, the American Society for Quality
Control and the British Deming Association.
3
<PAGE> 7
Dr. Nichols was employed by Hercules Incorporated in research and development
for thirty-five years until his retirement in 1989. For the last ten years he
held various managerial positions. He received his B.S. degree from
Massachusetts Institute of Technology in 1950, and M.S. and Ph.D. degrees from
California Institute of Technology in 1954 and 1957, respectively, all in
chemical engineering.
Mr. Price was employed by Chevron Oil Company and Saudi Aramco for over
thirty-seven years until his retirement in 1990. For the last eleven years he
held various executive positions with Saudi Aramco in Dhahran, Saudi Arabia,
including Vice President of Petroleum Engineering and Vice President of
Exploration and Production. Prior to that time he held various management
positions in Chevron's operations in the U.S., Australia and Iran. He is
currently a private investor and consultant and is a director of First National
Bank - Mexia, Texas, Paragon Wireline Services, Advanced Reservoir Technologies
and Middle East Services. He received B.S. degrees in both petroleum
engineering and geological engineering from Texas A&M University in 1951 and
completed course work for an M.S. degree from the same school in 1953.
OTHER MATTERS RELATED TO THE BOARD OF DIRECTORS
Each director who is not an employee of the Company is paid $500 per Board
meeting attended and $125 per hour for services not connected with Board
meetings including attendance at committee meetings. Directors are reimbursed
for expenses incurred in attending meetings of the Board of Directors and
committee meetings of the Board of Directors. The Board has agreed effective
April 3, 1996 to eliminate payment of Directors' fees until the financial
targets of the 1996 operating plan are met.
In 1993, the Company adopted a stock option plan for non-employee directors.
Pursuant to the plan, each non-employee director is granted an option to
purchase 5,000 shares of Common Stock upon his initial election to the board at
an exercise price equal to the fair market value of the Common Stock on the
date of the grant. Each year, upon re-election to the Board, each non-employee
director is granted an option to purchase 2,500 shares of Common Stock at an
exercise price equal to the fair market value on the date of the grant. During
1995, no options for the purchase of Common Stock were issued to directors
pursuant to this plan.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1995 the Board of Directors held nine meetings. All directors who were
members at the time of the meeting attended 100% of the meetings.
The Audit Committee has as its members Dr. Nichols (Chairman) and Mr. Price.
The Audit Committee met seven times during 1995. All directors who are members
of the Audit Committee attended the meetings.
The Compensation Committee met one time during 1995. Members of the
Compensation Committee included Dr. Breitenbach, Mr. Price and Dr. Nichols.
All directors who are members of the Compensation Committee attended each
meeting.
The Nominating Committee is composed of all members of the Board of Directors.
No separate meetings were held for the Nominating Committee outside of the
regular Board meetings.
The Board of Directors consists of E. A. Breitenbach, Chairman, George Steel,
William B. Nichols and Edward O. Price, Jr.
COMPENSATION OF EXECUTIVE OFFICERS
Compensation Policies
This Proxy Statement reflects compensation policies of Scientific
Software-Intercomp, Inc. for senior executives. These policies have been
reviewed and approved by the Board of Directors.
4
<PAGE> 8
SSI's policy regarding base salaries for senior executives recognizes each
individual's contribution toward the success of his respective area of
responsibilities and to the Company in general. All senior executives have
significant experience in the oil and gas industry and most have advanced
degrees. Accordingly, SSI uses oil and gas industry data and professional
association data to ensure that base salaries are competitive within the
Company's industry.
Each senior executive is eligible for a merit increase annually. The increase
is based directly on performance, as reflected in the Performance Plan and
Objectives completed during the year by the President and the executives.
Increases normally take place on the anniversary dates of the executives' last
merit increases. The increases for all other employees averaged 4.5% for U.S.
employees; 4.25% for U.K. employees and 3.5% for employees in Canada during
1995. No increases have been granted during 1996 to the senior executive
group.
Annual bonuses paid to senior executives are determined by specific annual
objectives set for each executive. In addition, the Company approved a bonus
plan in 1995 for all employees. Fifty percent of the bonus pool is based on
the profitability of the Company and fifty percent is based on the
profitability of the operating unit. Seven and one-half percent of corporate
profits are made available for distribution to employees, including senior
executives, with performance used as the criteria for allocation of bonus
money. In addition, 7.5% of the operating unit profits are made available for
distribution to the operating unit head and the employees within that operating
unit. The objective of the bonus plan is to reward success if the Company
and/or the operating unit is profitable. The Chairman's incentive bonus
compensation is based solely on the Company's earnings per share each year.
(See below.) Due to the performance of the Company in 1995, no bonuses will be
accrued or paid for the year.
In addition to the base salary and bonus plan, the Company established
guidelines in 1991 for the award of stock options to senior executives and
other key employees. These guidelines are reviewed each year by management to
determine if additional stock options should be granted to senior executives
and key contributors. Stock options totaling 35,000 shares were issued to
senior executives during 1995. The Company feels that the total compensation
package for senior executives (base salary, bonus plans and stock options) is
competitive.
Compensation for Chairman and Chief Executive Officer
Dr. E. A. Breitenbach is one of the founders of the Company and, from
September, 1990 until January, 1996, he served as Chairman of the Board,
President and Chief Executive Officer. He currently serves as Chairman of the
Board and Chief Executive Officer. His base salary, stock options and
incentive compensation are all based on his contributions to the Company.
Dr. Breitenbach's bonus is based on the financial success of the Company. The
criteria used to determine his bonus is earnings per share (EPS). The Board
of Directors approved a bonus plan for Dr. Breitenbach that rewards him on the
basis of $1,050 for each $.01 of EPS. Due to the performance of the Company in
1994 and 1995, no bonus has been accrued or paid for those years.
Compensation for President and Chief Operating Officer
George Steel joined the Company in January 1996 as President and Chief
Operating Officer. He receives a base salary of $200,000 per year. He
received a non-qualified stock option for 100,000 shares upon joining the
Company. Mr. Steel shall be entitled to a bonus with respect to 1996 of a
percentage of the foregoing annual compensation based upon the financial
performance of the Corporation in achieving its 1996 operating plan approved by
the Board of Directors as follows:
<TABLE>
<CAPTION>
Percent of Base Salary
----------------------
As to: Profit % Cash Flow Total
-------- --------- -----
<S> <C> <C> <C>
Less than 60% of Plan 0 0
100% of Plan 25% 25% 50%
Over 140% of Plan 50% 50% 100%
</TABLE>
To the extent that the achievement by the Corporation with respect to its 1996
operating plan is greater than 60 percent of profit or cash flow but less than
100 percent, Mr. Steel's bonus percent of base salary applicable to profit or
cash flow will be a pro rata portion of 25 percent determined on a linear basis
and similarly if the Corporation's
5
<PAGE> 9
achievement is greater than 100 percent but less than 140 percent, the bonus
percent will be a pro rata portion of 140 percent determined on a linear basis.
Cash Compensation
The following table sets forth the cash compensation paid by the Company during
the calendar years indicated for the chief executive officer and the four
highest compensated officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------------------------------
Awards Payouts
Annual Compensation ------------- ------------------------------------
------------------------------------ Restricted
Other Annual Stock All Other
Name and Salary Bonus(3) Compensation Award(s) Options/ Compensation
Principal Position(4) Year ($) ($) ($) ($) SARs(#) ($) Total
------------------ ---- --- --- --- --- ------- --- -----
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E. A. Breitenbach 1995 248,000 0 0 0(1) 248,000
Chairman of Board, 1994 243,500 45,148 22,500 5,277(1) 293,925
Chief Executive Officer 1993 230,000 20,167 6,736(1) 256,903
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Alain C. Gringarten 1995 142,876 0 10,000 4,784(1) 155,301
Executive Vice President, 7,641(2)
WorkBench 1994 134,099 44,947 10,000 8,522(1) 201,332
13,764(2)
1993 121,435 16,738 5,000 8,679(1) 146,852
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald J. Hottovy 1995 115,000 0 10,000 3,000(1) 118,000
Executive Vice President, 1994 107,208 14,400 20,000 200(1) 121,808
Treasurer and 1993 100,750 0 10,000 1,000 101,750
Corporate Secretary
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Robert G. Parish 1995 142,876 0 10,000 5,715(1) 156,232
Executive Vice President, 7,641(2)
Pipeline and Facilities 1994 134,099 29,108 10,000 1,977(1) 181,201
Exploration & Production 16,017(2)
Consulting 1993 128,885 11,467 15,000 9,946(2) 150,298
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
William K. Savage 1995 80,000 0 79,192 0 0(1) 159,192
Vice President 1994 80,000 0 81,531 0 998(1) 162,529
E&P Consulting 1993 80,000 0 92,802 3,000 0(1) 172,802
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Executive perquisite allowance.
(2) U.K. auto allowance.
(3) Includes payment in calendar year 1994 of 1992 bonus and 50% of 1993
bonus.
(4) George Steel joined SSI January 15, 1996.
EMPLOYEE RETIREMENT PLANS
Employee Stock Ownership Plan and Trust - U.S. Employees
In May 1979 the Company established an Employee Stock Ownership Plan
and Trust ("ESOP") for the administration and distribution of contributions
made by the Company for the purpose of providing retirement, disability and
death benefits for eligible employees. The ESOP is qualified under the
Employee Retirement
6
<PAGE> 10
Income Security Act of 1974 and covers substantially all of the Company's U.S.
employees. The Company has appointed Dr. Breitenbach, its chief executive
officer and chairman of the Board of Directors, as the sole trustee of the
ESOP. After first having polled the participants, the trustee exercises all
voting powers of the qualifying Common Stock of the Company held by the ESOP,
in accordance with instructions of the participants.
Company contributions to the ESOP are made at the discretion of the
Board of Directors of the Company and may be made in the form of cash or Common
Stock of the Company. Such contributions are allocated to the accounts of each
individual participant in proportion to each participant's eligible
compensation (including overtime, bonuses and commissions) to the total
eligible compensation for all participants for the plan year. The aggregate
contributions to the ESOP for 1995 and 1994 were $124,630 and $164,888,
respectively.
Participants in the ESOP become 30% vested after three years of
employment with the Company and are fully vested after seven years of service
with the Company. The ESOP does not permit nor require participant
contributions, other than "roll-over contributions" as permitted by the
Internal Revenue Code. The Company has established similar Employee Stock
Ownership Plans for the employees of its United Kingdom and Canadian
subsidiaries.
Target Benefit Plan - U.S. Employees
In January 1980 the Company established its Target Benefit Plan (the
"Target Plan") for the purpose of providing retirement benefits for eligible
employees. The Target Plan is a defined contribution plan. The Company is the
administrator of the Target Plan and directs the investment of plan funds.
Company contributions are made annually to each participant's account in an
amount based upon certain actuarial assumptions which will, if contributed
annually, accumulate the amount necessary to provide the targeted retirement
benefit to each participant. Participants in the Target Plan become 30% vested
after three years of employment with the Company and are fully vested after
seven years of service with the Company. Aggregate contributions made to the
plan for 1994 were valued at $176,582 and were made in Company Common Stock and
cash. Aggregate contributions to the plan for 1995 are calculated to be
$188,607 and will be contributed to the plan in the near future.
The following table shows estimated annual benefits payable under the
Target Plan upon retirement in specified compensation and years of service
classifications:
ESTIMATED ANNUAL BENEFITS
<TABLE>
<CAPTION>
Highest Three Years of Service
Year Average ----------------------------------------------------------------------
Compensation 10 Years 20 Years 30 Years 40 Years
- ------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
$100,000 10,255 19,369 27,995 32,553
150,000* 16,359 31,578 46,098 53,602
200,000* 16,359 31,578 46,097 53,602
250,000* 16,399 31,578 46,097 53,602
</TABLE>
*Maximum allowable compensation for pension purposes for 1995 is $150,000.
401(k) Retirement Savings Plan - U.S. Employees
The Company established a 401(k) Retirement Savings Plan in July 1990. All
employees in the United States are eligible to participate in this plan. The
Company does not currently contribute to this plan, but does pay for all
administrative costs. The Company withholds employee contributions and
forwards those contributions via wire transfer each pay day to the First
Interstate Bank of Denver, N.A., as trustee. All contributions are made on a
before-tax basis, and all earnings on the investments are sheltered from
taxation until a distribution is made to the participant.
7
<PAGE> 11
Canadian Pension Plans
All employees in the Company's Canadian subsidiary are eligible to participate
in the Employees Stock Ownership Plan (ESOP) and the Registered Retirement
Savings Plan (RRSP). The Company contributes to the ESOP 2% of the
participant's salary (including bonus and commission income) in the form of
shares of Common Stock. Participants become 30% vested after three years of
service and are fully vested after seven years of service with the Company.
The Company also makes monthly contributions into the RRSP for each employee.
The current contribution is 10% of the employee's base monthly salary and is
administered by Canada Trust.
U.K. Pension Plans
The Company's United Kingdom subsidiary maintains individual pension
arrangements covering all employees. The pension plans are approved by the
Board of Inland Revenue and use the same percentage level of contribution for
all employees. The current rate of contribution is 10% paid by the Company and
5% by the employee. Initially, 10% of salary is contributed into a registered
pension plan. After the third year of participation, the Company begins to
contribute to the U.K. Employees Stock Ownership Scheme ("ESOS") (2% of salary)
and reduces the contribution to the registered pension scheme (8% of salary).
It then further increases the contribution to the U.K. ESOS and reduces the
contribution to the pension plan until 5% of salary is contributed to the ESOS
and 5% of salary is contributed to the pension plan. Participants are
immediately fully vested in both plans. In addition, in 1995 the Company
established an Additional Voluntary Contribution (AVC) scheme for all U.K.
employees to make additional voluntary contributions to a retirement scheme on
a tax favored basis.
STOCK OPTIONS
The Board of Directors, at its discretion, may grant options to purchase shares
of the Company's Common Stock to key employees or to members of the Board of
Directors. Prior to 1984 the options granted were non-statutory and, depending
on the terms of individual grants, either vested over a three-year period, or
were exercisable at any time for a five-or ten-year period after the date of
grant. During 1984 the Company established an Incentive Stock Option Plan for
key employees, pursuant to which options to purchase up to 350,000 shares of
Common Stock were reserved for grant.
As of December 31, 1995, options to purchase 58,875 shares of Common Stock were
outstanding under the Incentive Stock Option Plan and options to purchase
506,437 shares of Common Stock were outstanding pursuant to non-statutory stock
options.
The following table sets forth information regarding the fiscal year end value
of unexercised options for the Company's Chief Executive Officer and each of
the other officers identified in the Summary Compensation Table above. None of
these individuals exercised any options during 1995.
AGGREGATED FISCAL YEAR END OPTIONS VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options at Options at
Fiscal Year End (#) Fiscal Year End ($)
------------------------------------- -------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- --------------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C>
E. A. Breitenbach 178,750 11,250 --- ---
Alain C. Gringarten 48,750 13,750 4,250 3,750
Ronald J. Hottovy 30,000 20,000 1,250 3,750
Robert G. Parish 38,750 16,250 1,250 3,750
William K. Savage 11,334 666 --- ---
</TABLE>
All options were granted at exercise prices equal to fair market value at date
of grant. No options were exercised by senior executive officers of the
Company during 1995.
At December 31, 1995, options to purchase an aggregate of 272,625 shares of
Common Stock were held by 44 employees of the Company other than officers and
directors at an average exercise price of $3.89.
8
<PAGE> 12
CORPORATE PERFORMANCE GRAPH
The following table compares the Company's total stockholder return over the
last five years to the Standard & Poors 500 Stock Index ("S&P 500") and the
Standard & Poors Energy Composite Index ("S&P Energy Composite"). Cumulative
total return values for the S&P 500, S&P Energy Composite and the Company are
based on annual total return values that assume reinvestment of dividends. The
stockholder return shown on the graph below is not necessarily indicative of
future performance.
COMPARISON OF FIVE-YEAR CUMULATIVE
TOTAL SHAREHOLDER RETURN
[GRAPH]
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Scientific Software-Intercomp, Inc. $100.00 $117.39 $134.78 $165.22 $226.09 $104.35
S&P 500 100.00 130.47 140.41 154.56 156.60 215.45
S&P Energy Composite 100.00 107.53 109.72 126.98 131.85 172.41
</TABLE>
The comparison of total return on investment (change in year end stock price
plus reinvested dividends) assumes that $100 was invested on December 31, 1988
in each of SSI, the S&P 500 and the S&P Energy Composite with investment
weighted on the basis of market capitalization. The S&P Energy Composite has
been utilized because a significant portion of the Company's products are used
primarily by the energy industry and therefore the Company's performance is
largely dependent on that industry.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Management and the Board of Directors of the Company have not yet contracted
with an independent public accounting firm to conduct the audit for the year
ending December 31, 1996. It is expected that the Board will retain Ehrhardt
Keefe Steiner & Hottman PC, the Company's independent public accountants for
the year ended December 31, 1995, to conduct the 1996 audit. Representatives
of Ehrhardt Keefe Steiner & Hottman PC will be present at the Annual Meeting of
Shareholders with the opportunity to make a statement if they desire and to
respond to appropriate questions.
OTHER BUSINESS
The Board of Directors of the Company is not aware of any other matters that
are to be presented at the Meeting. However, if any other matters should
properly come before the Meeting, the persons named in the proxy shall vote on
such matters in accordance with their judgment.
9
<PAGE> 13
PROPOSALS OF SECURITY HOLDERS
Any shareholder who intends to submit a proposal to be acted upon at the
Company's 1997 Annual Meeting of Shareholders should submit such proposal to
the Company not later than December 31, 1996, for inclusion in the Company's
Proxy Statement.
The Board of Directors will consider director nominations for the Company's
1997 Annual Meeting of Shareholders that are submitted on or before April 15,
1997.
COMPLIANCE WITH SECTION 16(A)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
The Company's executive officers and directors are required to file reports of
ownership and changes in ownership of the Company's securities with the
Securities and Exchange Commission as required under the provisions of the
Securities Exchange Act of 1934. Based solely on the information provided to
the Company by individual directors and executive officers, the Company
believes that during the last fiscal year all directors and all executive
officers have complied with applicable filing requirements.
OTHER INFORMATION
The Company will make available to shareholders at no cost, upon request, a
copy of the Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1995. Requests should be directed
to Corporate Secretary, Scientific Software-Intercomp, Inc., 1801 California
Street, Suite 295, Denver, Colorado 80202, telephone number (303) 292-1111.
The Annual Report on Form 10-K for the year ended December 31, 1995, is being
mailed herewith to shareholders of the Company of record at the close of
business on May 17, 1996.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
/s/ RONALD J. HOTTOVY
Ronald J. Hottovy
Secretary
Denver, Colorado
May 24, 1996
10
<PAGE> 14
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11
<PAGE> 15
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12
<PAGE> 16
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
1801 California Street, Suite 295
Denver, Colorado 80202
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
<TABLE>
<S> <C> <C>
The undersigned appoints E. A. Breitenbach and Edward O. Price, Jr., or either of them, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote, as designated below, all the shares of Common Stock
of Scientific Software-Intercomp, Inc. held of record by the undersigned on May 17, 1996, at the Annual Meeting of
Shareholders to be held on June 12, 1996 or any and all adjournments thereof.
1. ELECTION OF DIRECTORS: FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary to vote for all nominees listed below
below)
E. A. Breitenbach, George Steel, William B. Nichols, Edward O. Price, Jr.
(Instruction: To withhold authority to vote for any individual nominee, write that nominee's name on the space
provided.)
--------------------------------------------------------------------------------------------------------------------
2. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Meeting.
It is understood that this Proxy, when properly executed, will be voted as specified herein and that WHERE NO CHOICE IS
SPECIFIED, THE PROXY WILL BE VOTED FOR ALL DIRECTORS, AND FOR ALL OF THE OTHER MATTERS SET FORTH ABOVE.
Dated: 1996
------------------------------------------------
---------------------------------------------------------------
Signature
---------------------------------------------------------------
Signature if held jointly
Please sign exactly as the name appears above. When signing
as partner, corporate officer, attorney, executor,
administrator, trustee, guardian, etc., give full title as
such and sign your own name as well. If stock is held jointly,
each joint owner should sign.
</TABLE>
